CTLP - Earnings call transcript Q3 2021

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Cantaloupe Inc.

Third Quarter Fiscal Year 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. I would now like to hand the conference over to your first speaker today, Alicia Nieva-Woodgate, VP of Corporate Communications and Investor Relations for Cantaloupe Inc. ahead. go Please

Alicia Nieva-Woodgate

Officer. good quarter and on Welcome the Revenue Chief to call and Financial Thank Agrawal, Anant XXXX afternoon earnings third Chief Executive Feeney, Sean fiscal afternoon me Jackson, conference Cantaloupe Chief this Officer you Officer. are everyone. Wayne call. the With

over such are as would conditions. statements but could differ included in statements, risks could forward-looking Before only this from statements result than materially earlier call undertakes discussion cause date I which things, reliance remind forward-looking a the nature. of that financial and release or undue presentation these been statements for other found the the our actual reflect with well of a forward-looking of Details results result press place not business, including financial this by of financial filings to obligation no issued the and like are such comparable facts income contemplated measures supplemental a like among that reconciliation those SEC view such Actual new Listeners management's non-GAAP Investor information, our loss. the measures, be directly statements that, the These GAAP they GAAP any Cantaloupe's to financial in posted factors, is has comparable release measures update on non-GAAP website non-GAAP these a Relations not begin as materially financial, are certain financial are results whether not as now turn to we future forward-looking call, the all This the press GAAP afternoon, you in today. call financial most from a differ measures for certain to of substitute as can and And non-GAAP with issued to measures financial would other of of www.cantaloupe.com. measures, net measures, discussion to Feeney. uncertainties Officer, most useful and the Executive events on to today's statements we Sean our I call of in events historical also include cautioned our which market operating or as A made. to will otherwise. that between Sean? limited with any of forward-looking are Chief and economic section results. believe as evaluating included detailed and at Cantaloupe

Sean Feeney

for at hope proud we'll Alicia, thank one company. and joining everyone I my year Thank days safe us the everyone few you, today. you, I'm now and is A anniversary well. mark from months for of growth. Cantaloupe the innovation my accomplishments marks look forward plans as past time. and Today over team's our and on first the for the execute reporting of milestone we XX

we closing name our changed ringing and As NASDAQ in April you know officially person. bell by at in celebrated the

on to third our results. Now to move quarter fiscal

as compared has quarter sequentially. Our to compared quarter compared of of to March to schools, to pandemic country to of balance XX% existing in transaction and placement during shareholders flat compared combination XX% included JP XG as quarter This began of the better. us businesses and million the new $X.X E-port of largest a of our margin third to saw more to $X.X our of we the with in January active XG devices. loss EBITDA roughly $XX XXXX XXXX. adjusted customer This effects of results second increased quarter transaction Morgan sheet future for for their But last when was sequentially agreement Operationally, the E-ports customer third resurgence other all we the remaining year, of a when third well a the the quarter Gross for lead made with as Craig-Halum. three committed the positions the during in strengthens years. XX% Northland of quarter. improved XXXX, closed February. million progress as importantly, along renewed significantly for quarter financial and We pipe agent and Revenue also and across the and and also organizations growth. We was quarter further upgrading the the million reopen of

our we renewed increase and to well XG an successfully as on as focus with we the new upgrading devices in hardware During as our Visa. quarter, devices to adding continue saw agreement existing we orders customers

and the time our will some to initiatives it with pleased the review strategic in position are these outcome validates confirms the payments as beginning against laid progress now out our fiscal of the take relationship We our I long year. at standing we ecosystem.

more base First, customer our drive We success detail on our few sustainable a will organic deepening quarter both fronts. Anant customer wins. on to growth. during by into of and expand adding look in the go relationships these moments new existing

great this announced goal week to best best and with We look provide come. our customers. resources in class order in the to be to innovative relationship market products to leverage also fruitful look serve Castles It in things new forward technology. the partnership we significant We our will to and to customers. This is a believe our

buy speaks payments or step credit, today first commitment enabling what to It's crypto. with it whether offer. back our be of choose to earlier they to debit, towards maximizing consumers with the form can announcement any customers it Our digital our

quarter, Wizards, connection vending and seamless X the e-commerce new a online the The with announced During creates integration the ordering launch Supply systems. sites Tech between of new management our Success. we integration along and partners

provides an fingertips of of and sale with under updated insights broad points medium and platform new Cashless+. enhanced services on user This technology efficiency class Innovation with what and few additional streamlined next introduce scheduling, better at launch experience new looking along what part position customers pre-kidding, in over service. us We use. for offers is announced of Seed tailored best also our unattended as to software is pay the It's sized their a with and features small to XXX of and to and whether businesses in with ease a the is time or real the we're seed just keeps that ways in of leadership alerts, years. interface whiteboard for a merchandising

Another into reinvest achieve people to capital initiative culture is to in order and excellence.

CIO [indiscernible] us in continue that We recently Comcast joins strategies the our as team She innovator to technology to Venkatesan. enhance Ravi quarter is operations. during and an from and hiring business strengthen reporting

Officer our welcome business will on I We give board. her turn over Chief the more color quarters to Anant? you are Revenue to now call performance. the on to excited Anant

Anant Agrawal

will Thanks, Sean. today. touch I areas on three focus

market. This First, a time insight into It's their platform for our service. to to quick as a to easy it's the it's implement, operation. operate, it customers flexible unattended business single retail integrate, platform gives real is our

ROI to result, a high provides it customers. our As

our relationships business based platform that land as a and a and customers We in of customers have XX% seed XX% reported to us immediate of platform to observed provides XX% digital OpEx provides a offer many existing on at our implementation our that revenue XX% deepens are strategy after customers used. with reduction our at great Also What's onto increase leveraging E-port machines is have complete points entry by their technology needs. payments compelling our expand where solutions. service, our this

the One provider of global coffee and its connect is quarter, of we network. micromarkets affiliate upgrade During example services cells. vending, such this office many through with had operator a

northeast, over companies to several largest have seed their conversion vending the We the coming is strategic which the Caring, in of agreement a as deployed affiliates of to one the XG seed. into well and entered across on to and are upgraded years. CRH has facilitate of clients on several seed. of Pepsi XG is fully And our deployed bottler have to of country the upgraded on

Pepsi launch and will the fully and the market we operator Seed excited during mentioned, including deploying with parlor are both number customers quarter. Texas also We the of the who with as e-port operations, mind are independent we SMB all designed product will during early Star across And well Cashless+ quarter, This platform sizes digital Texas, in who traction payments we are deploying of about is their seeing. be software. added Sean pleased an vendor a new in the the in full as be our southeast Refreshments, as of seed a

the devices The we've amusement unattended in and our works, penetrate CTN; of efforts second vending. broader in market area two additional And the expanded with the operators or Timeless CSC retail outside National service Creating largest and cashless our U.S. laundry at air-vac We machines to at cashless of operator traditional the unintended Network business also largest additional NEN of highlight to is business Memories with Entertainment expanded U.S. the or

to the in about to space. are talk customer within accelerate our to base. our transactions Lastly, Cashless I want payments we shift continue digital witnessing exciting

up end of XX% at just year the pandemic of ago transaction of just As to a April volume is our XX% the of before compared customers hit. machines made cashless sales

are to I'd full frictionless increasingly to Wayne? results and quarter shopping With experiences retailers to customers. digital positioned We like to well our over help review as provide it third in to detail. need they that, their Wayne turn to

Wayne Jackson

afternoon XX% predominantly million $XX.X everyone. flat Revenue increase third QX, a relatively And Anant. good FYXX sequentially. the a Thanks totaled and of for FYXX to pre-COVID quarter

revenue second of compared and devices million $XX.X totaled increase the the the for year-over-year, third prior a active During transaction year, quarter quarter FYXX. quarter, increased flat from X% X%. sequential and of a X% and was decrease License relatively the to

as during our a the down in which customers prior QX, QX third XX% the margin million license of was revenue quarter total a QX our quarter revenue from revenue Equipment current as in margin of FYXX prior the the slightly year year of sales transaction experienced customer and for quarter XX% for year, we compared current third $X.X compared improved flat significant grow new FYIXX FYXX. in as XX% was QX includes quarter in the margin count. year. in shipment Equipment third FYXX. year. number of with XX% to very Even for from X% XX% XX% prior the as the latter this compared part of to prior for of last to QX License the quarter year, Equipment of for converting sequentially, continue quarter increased positive in XG, increase on gross higher XX% the of Total were second as to XX% in gain quarter year was and the third negative than this transaction negative contract of devices momentum into from up in quarter. was well the entered margin fiscal we to new the active to customer our the devices

that revenue we During this in quarter, period of million the prior company recorded related years. recognized $X.X for out equipment a to adjustments cost

of out the would equipment Excluding margin X% been for negative quarter. this have period adjustment

well reminder, negative customer a current totaled proxy charges As no the totaled which the quarter driven larger by during by totaled contract in year-over-year. related expenses prior million FYXX restatement as the decrease year. in earlier. and the the XX% expenses as year current QX SG&A expenses the was mentioned large equipment a third expenses, margin last to solicitations over of lower related driven million, QX Operating investigations, XX% $XX.X a in million decrease year $XX.X quarter year SG&A to in discounts $X.X last

prior a increase expense as and $X.X placements share, of exited basic period. prior $X.X and to in year. lower million entertainment $X.X cash million legal loss prior $XX.X and of to the quarter in spin basic a our With the related the was was continued loss Net million to to $XX.X or by reserves year travel the the expenses. our employee the and million equivalents to with in liquidity $X.X share Operating compared to we loss compared of compensation other quarter versus had $X.XX third private or applicable million quarter on in our common cash current growth strong we of invest contingency million offset net the very we flow loss the million of quarter stock position proceeds the are as and accruals compensation quarter million and focus the shareholders the for third Relating $XX.X a decrease in well quarter from of in future third of loss for million. $X.X year During per in cash $X.XX $X sheet initiatives. per balance

we our guidance reiterating on Finally, are FYXX.

We the million be range $XXX between expect in revenue $XXX and to million.

of range adjusted will the common in expect Sean Our the now for over to loss is be EBITDA net remarks. million $XX the closing And we million million. to applicable million. Sean? between shares I $X expected to be call to turn $X $XX and to

Sean Feeney

and value up months pleased Thanks for chapter heading us and drive about in by help and year incredibly safe the the of will buying with experience. are retail we our Wayne. To propelled excited an quarter This opportunities few increasingly momentum new that into the fiscal a company's future wrap life Cantaloupe. for last of other significant to the new industry our our has stakeholders, customers create shopper expectation forward tapping secure seen shift the and served self pandemic the

We are and company flexibility retail that chain. their a payments scale value technology gives customers and in our

cash a We sale call questions. to the will to employee and put go. a resources once We to to the have are every service the the or buy their enable that self need be manage don't uniquely partner you a workflow. procurement over to world positioned businesses of point turn for I help now for operator solution an Operator? at experience

Operator

open will Northland first take Instructions] will We question Latimore questions. her Capital. the Mike to now We [Operator from from of call line now the coming

is line open. Your

Mike Latimore

little you in March. solely natural great. Great, around quarter any a school be sort seasonality volumes there I little guess just of of guess would can seeing some reopenings? on the color too? is kind Is that improvement Or there. thank there? of you. in bit then talked seen great April kind you've color And related I transaction the about on to you Congratulations that? some a nice Looks provide more

Sean Feeney

thanks. a That's good Mike, question. Yes.

what travel, So see number number vaccines has it the to kind states of beginning New April. the not remain week to to from of back of last to kind work. January and hasn't at last people relatively what yet come began and all saw we business is week February that come reopening, see of every York the are that probably remaining back of flat our saw pandemic kind that be banks getting as very year We to end much vaccines because their into optimistic saying of offices. sequentially That's really and We going pleasure in operators out, the we thing this and beginning then was as that continued. February see solutions. transactions to some the do We that March And serve we're improvement and unattended at in people fully that the the people who improved back continued continue quarter attribute their in to primarily travel and office. and urban in we that fall more to confident come of locations we'll with retail see to we're the trend in the returning

Mike Latimore

in guess and Great, margin XXs gross great. Nice sustainable the to transaction back see I here license into low is that your the view?

Sean Feeney

Wayne let will Mike. one, I answer that

Sean Feeney

Hi, Mike.

the that is little percentage just And of total. a mentioned, was prepared much higher of So that time, higher. a get revenue things course, along. that that those next will on license doing have the the as we're a up margins But little I the bit transaction in year But the part bit that as remarks higher optimistic the fact bit some news margins of than we're comes over transactions. ,

Mike Latimore

and here. it very Got just one last

sequentially. bit reiterated a might of suggests the including there? guidance EBITDA year factor that what be down the your the is quarter I little EBITDA, You've EBITDA be guidance fourth would end kind upper of guess

Sean Feeney

before We're see last right goes. get stuck talked want to quarter I comfortable some how to our that here. think the make with the range we've we've like guidance sure we with there fourth probably we that just that now customers. and devices XG out we we We'd our quarter got guided about

Mike Latimore

All very right. much. it. Thanks Got

Wayne Jackson

Thank you.

Operator

comes of from question the Sutton next line Craig-Hallum. Your George from

Your line is open.

George Sutton

can a referenced you us how of and Sean, I'm you. give of deployment you out? that that of hardware, XG that of the margins the largest of has Thank lot a customer I'm the customer. low rolls with contract? of that's assuming given just curious, resigning your you How the franchisees a Thanks. into largest guts mentioned sense fits that them.

Sean Feeney

out question [indiscernible] call. with open the you you'd the guy on crypto thought the you really last I are to since Thanks. crypto first called the

George Sutton

just and clear. My that’s then be up question to second my follow

Sean Feeney

Okay.

with probably that they're XX all XG, first their or excited two or renewal E-port to They we're the So those FYXX. the the devices, XG deploy flat essentially agreement. will of quarters will, of over we three [indiscernible]. margin will And for be

George Sutton

over maintain was to a customer period in in But done so that, a this multiyear obviously the sizeable effort basically very Okay. customer. important an

Sean Feeney

Yes.

we sales. things additional their of very some drive E-port We and will with there agreement have some upside seed kind think the good in that franchisees and

George Sutton

Understand. of tagline end wondered, Sean it and the help don't I comment? of up end official the the just your is if of at world that that mentioned By an sort prepared a we is line the remarks or way, you know go. buy a I made at

Sean Feeney

our official buy it statement. No, think world and the with vision And helping pretty well fits go. we that's

George Sutton

you. Got

on the to see follow will [indiscernible] you question you that my structurally So think I'm be transactions? curious is Do customer relationship, and how up just working? incremental that

Sean Feeney

I with them from we'll over with how it. question is on kind that think think of rate nobody It crypto knows, CTOs leveraged momentum quarter take be our adoption see. will what we October. work But the roll I I kind back of of around your coming think out. and we from and devices And it kind on available will and to in last the will of see

George Sutton

component one with there other loyalty this? question is Can I associated ask that, a related to

Sean Feeney

we'll And move and call. There conference towards that the now we're announcing on there. things the, we more will our our things of program some in be loyalty talk big not announcements some we as next [indiscernible] and kind do card areas. focused number of very a if loyalty and a have in a number quarterly more We in with about of

George Sutton

you. Got

Thank Super. you. Okay.

Sean Feeney

Thanks George.

Operator

next from Cris question the Your Blair. William of comes line from Kennedy

open. is line Your

Cris Kennedy

thanks term margin at of the kind questions. year any or you targets Hey, the after guess have do for taking long I guys, could first the you about? company objectives for growth being one, either that a talk

Sean Feeney

being here really FY And more I've feel day. some a got we've after things about be much And I'm FY kind ‘XX. excited for the to got for every We're ‘XX. year, excited continuing of coming better Cris, cool really company.

the like on I'd coming we some think that run the guidance that feel confident We as are about I'm will good are to what really are I'm people of And to going things two said, as got there. And or coming. good you'll continuing of what back COVID in but a we growth much call back for looks confident on and give very we've next to offices like forward. for seeing quarter I've see that but and ‘XX we and the business focused go kind transactions without excited stuff we're some kind

I think will growth So be good.

to We efficiencies and the the the improving believe drive of we in are of we some will operating business that are, that put are margin some we that growth we investing but in place.

You'll fruit begin I next ‘XX. really we'll bear really to in see and see, year think

to future. we investments talked the that goal So that in making the progress towards that in that strong we We're the the there yet. But drive of about XX. is are I've rule not like sheet have growth balance I and we're my making aspirational

Cris Kennedy

you of on any And opportunities are update what market? you lot in grow What U.S. the guys? great. seeing the a just guys. Okay, are of initiatives the kind to for Thanks then outside

Sean Feeney

Sure.

America. action on plan developing making are We of progress Latin in a

before in And there. last there our are towards talked the We team in Asia a about board specifically get And to vending ‘XX, development one partnership making a has we've there and that excited we Japan. into briefed other as market Our made progress as large opportunity down about progress. very well. we're markets week. in hire business looking we're That's people we

Cris Kennedy

Thank you.

Operator

time. over participating. all today's concludes conference for are the line This And this there phone thank call. questions at We further no you

Have disconnect. great now may You a day.

Cantaloupe (CTLP) 9 May 212021 Q3 Earnings call transcript