CTLP - Earnings call transcript Q2 2025

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Operator

Hello. Thank you for standing by. Welcome to the Cantaloupe Second Quarter Fiscal Year 2025 Conference Call. [Operator Instructions] Also, please be reminded that this call is being recorded. I would now like to turn the conference over to your speaker for today, [ Megna Mayva ].

begin. now may You

Unknown Attendee

Chief afternoon, Call. to call With Chief Scott Ravi Good Quarter today Cantaloupe Earnings Venkatesan, Stewart, and Officer; Conference me Executive Officer. everyone. you. the Welcome Second is Financial Thank on the

certain in those like statements nature. Before that including remind financial differ Actual factors, call, than results all we facts the uncertainties because earlier today. historical press are and from this you statements is in could of management's to results of conditions. forward-looking forward-looking limited we release contemplated cautioned included the are actual not call, Listeners forward-looking to statements as begin undue reflect and place other are market today's which of A by to such would the to statements views discussion forward-looking and detailed made. differ but the included materially any in in risks business, only with reliance economic of the could from they statements, filings on such that issued materially our not cause SEC date the

financial useful would of the been non-GAAP to financial this afternoon of that Cantaloupe Ravi. most between as reconciliation will measures, like directly with found our a I measures financial future turn presentation these new issued include non-GAAP This GAAP operating and GAAP events well that, otherwise. comparable forward-looking those a obligation Relations not section call release such update has posted call we measures certain can the believe financial for, or measures financial net to measures, at discussion Details whether Cantaloupe's substitute among are www.cantaloupe.com. of information, And because non-GAAP our or over the be non-GAAP most measures website a financial press in a to GAAP comparable financial of as undertakes on other statements, as which results. are Investor for the These measures things, no evaluating and of supplemental to loss. also income any

Ravi Venkatesan

afternoon, [ high-level Thank our XXXX performance. second dive you, the thank half of everyone, first a talk I'll priorities over with our quarter turning second it joining us and for then to Megna QX fiscal year into ]. you our fiscal start year view Good and numbers to Scott call. today I'll deeper our for 'XX before outlook. about

QX financial highlights.

revenue XX.X% adjusted compared subscription XX% was continued revenue to prior increased XX.X% the driven in During gross last of a to Total expanding by the with increase to transaction XX% XX% our reflecting QX year. $XX.X Adjusted $XX.X million, for success strategy total for revenue year-over-year growth. compared same the margin operating second year-over-year XX% leverage. and quarter EBITDA was year, our million, quarter quarter, year-over-year growth

our Now QX on operating highlights. to

competitive signed see of software micro all continue existing An micro new signed Cantaloupe in going who software. markets in Food We with to all customers to momentum is Seed go up gained replace Premier an growth example with strong as with Service, and us. Seed in all in markets to solution with agreement customers. and with as parallel penetration We well

set an markets to supports who markets, an in several kiosk-based our some innovations at order include interestingly, ever-expanding solutions the newest furniture including full-service placed located vending wins continue stores, provide location and customer more Southwest for hypothesis store modern kiosks to like restaurant This smart our that New EVS of micro types. self-service a to a replace region.

America. Our lead premier in acceptance self-service and to telematics and the market devices payment are continuing North

to is key combo amusement. retail such drive Foods one evidencing greater engage with trusted with engage We're growing reliable our automated replaced and recently their continues to Foods our solutions, solutions seeing and payment business other Berkshire example, cashless verticals devices see For efficiencies. partner competitive as grow units. Berkshire for also many a

Group secured of for Entertainment number example, For a pulse machines. large Solutions devices their amusement

Another number new GXX our solutions placed devices distribution Rhino example be Lowe's centers to machines. on acquired is of at who serial a propane outdoor significant vending self-service

Park This be implementation On in runs the Engage Jose and is the all a to at experience the multiple at newest to guest Engage includes site but for entire a changer amusement for single their not our allowing we already wins also for provider the an QX implementation work season. games app highlight be units, our San win large through some launch indirect entertainment, in point-of-sale Earthquakes and side, AVS in across for upcoming device. latest solutions, the sports to in events management transaction To channel stadium. credits play on sector with purchase the will our interactive progress only game enterprise The added the that we Pulse that the space, in will stadium. platform secure PayPal we the customers and in XXXX point-of-sale a

of integration with in performing and Our are SP wins line expectations. cross-sell Software

software debited Refresh Vendex new event U.K. first the and customer of implemented that a in generation our North Collective of November, we We Vendmanager, for integrated platform. serves as them Vendmanager as Ireland time stores, and smart the successfully the example, showcased next For secured customers a onto and premier market. along with solution the solution that for enterprise unveiling

and large Smart with In of secured markets customers. In addition, win for we we them. secured a variety customers deploying our U.K. cashless of Mexico, multiple across micro one vending devices a Store

is well we've connections sold volumes Our that focus and transactions across executed our to region. QX was deployments the in maximize objective deploy in cash transaction and very growing on this from previously,

this which U.S. beyond and traditional inclusive our is Sandoz, exceeding Smart maintaining at retailers Store Jars of niche. President market experience. the XXX consumer Patriot a We been with Military a at solution These innovative our product Gold solution vendors are Vice stated, to commerce into has and example perfect deployed we new Golf is additional changer expectations. us, Store of solutions Operations seamless beverage diverse series, all smart our A Cantaloupe to partners on Smart into maintaining of awareness XXX. challenges, for parent retail revolutionize side. range models reduce Moving a also launched address extend leveraging way a are self-service takes costs retailers the advanced designed able for food a game of opportunities theft stock key security. and to shrinkage each shortages, broader the as and customized Smart to high retail store. can us as including Store labor This We marketing while products how and reps create of on with our the well standard company and XXX while labor well self-service brand We're

response incredibly from and success, more. Because of expand appreciate to plan our smart customers like U.S. an its seen Patriot on-demand batteries, to the products who across access caps, tapes, our We've all positive we SOC cores notepad, flashlights, headlamps, locations.

stores more living and launching auto sold quad clients as configurations our the hundred this expanded few public smart universities facilities, we dealerships, product, additional with first where store environments, solutions more. senior residential Within of and or complexes several in such colleges months placed trial

more micro with Fundbox. launch in our we of develop of SMB part services and our serve Cantaloupe under As customers, lending strategy partnership products brand in add-on launched to our that the particular, Capital

within which to expand program, them customers We access get We're program's devices. consumers to approval deploy The and at its online campaign our go the easily Cantaloupe all was card allows partnership devices more that to and engage X business the Cantaloupe million and they and of ran launched touchscreen supporting first quick rates. the a enabling priceless XX Advantage million point-of-sale Mastercard process with next advertising trees at location funds market objective micro in first need to across planet digital a world. help our over delivering at micro their markets, weeks. readers The with XXX collaboration to kiosks through secure plant their the competitive through brands coalition around to variety aimed impressions

expanding XXXnd allow scaling. more year in America to be rapid priorities Europe half Latin to fiscal support internationally, Our will and specifically continue operational

more to also a global want I'm execute and second leader powers I quarter our continued future of year excited Cantaloupe in thank remain detail the with Cantaloupe our the results across well channels Scott direct our for entire We our indirect fiscal organically results our as team quarter. vision Scott? review to as customer now go-to-market base both solid continue on to focus pleased to expand self-service we to for their the as that, fiscal led will year about and our commerce. acquisitions. strategic technology that 'XX. execution, QX which outlook With will refine on strategy and through be

Scott Stewart

Thanks, Ravi.

another As quarter. Ravi we delivered strong mentioned,

to compared XX% $XX.X Our QX up revenue 'XX was XXXX. million, QX

was This by combined revenue of Our of year-over-year by XX% be of micro in an to the to due Subscription revenue, QX average subscription transaction driven subscription the mix growth continues XX% in ticket higher million which increase sizes includes product markets, increase million million transaction $XX.X revenue revenue of move overall our fastest-growing largely trend transaction during of compared the cashless $XX.X payments increase $XX.X cash driven segment. a The to revenue, grew from 'XX. continued XX% to our shift. and and to was strength quarter.

the of XX% and X.X X%, The year. prior up XX% prior had active average QX an per December or period. and to customers XXXX, of the devices, As unit we XX, ARPU from over $XXX, compared was XX,XXX increase 'XX active for year and revenue respectively, million

as total period. active for and a the this by defined As XX trailing is fees the transaction our divided devices months subscription average reminder, for total the same

a gross Our Total versus the transaction was continued by for XX.X% compared 'XX. in adjusted margin the This driven by to versus year, X% XX.X% year. quarter gross margin year million, last compared margin increase in driven was transaction of QX was XX.X% to was in quarter of cost prior equipment management revenue. XX.X% decrease improved expansion prior Subscription same our and revenue gross margin. the and FY better transaction the $X.X XX% was XX.X%

the quarter of in the with ended shares an million 'XX. to period the months, in CHEQ increase in Adjusted in second quarter earnings and period. $X.XX compared earnings share by Software. in diluted XX income million million. net $XX.X 'XX the million common companies We operating X.X% FY to acquired year. to the to increased applicable on for increase This due million QX FY $XX.X $XX.X past was we QX Total margin equipment the revenue was Gross million compared to XX%. million $XX.X in QX per the was expenses diluted income from of FY and in to $X expenses the prior increased largely Net cash prior compared second of 'XX equivalents to for cash EBITDA X.X% $X.X $X.X quarter or $X.XX per SB incurred year share prior or

payments in due XX, As we the call, ending year our of balance to XXXX, to processing. customers our decrease our the to previous transaction timing is of mentioned made compared in cash June balance our for as

to experienced allowed The very competitive uses million. The recently for 'XX, against We the million anticipate strengthens we for This and cash with loan, rest term revolving repay QX under $XX secure the growth delayed provides borrowings year, used growth normalized in facility. loan The capital. delayed To guidance loan the has not proceeds a our $XX and term facility. the credit and cash facility have a date, and a term the balance the throughout new draw our million refinanced to from our and the with had credit the balance quarter. term past facility has with in we for sheet credit facility of grow provided. a facility This loan. the $XXX future a revolving previous new of $XX draw operating of have $XX loan we borrowed flexibility million to rates. profitability balance several from million revolving upsized and us total sheet, the the in provides our credit term activities we for were or line company slight over years operating Continuing

fiscal XXXX Now year turning guidance. to our

representing based see we what XX% are As growth earnings we our following: of the call we revenue to said be million, and reaffirming XX%. $XXX total between on $XXX to million on last today, and

XX% expect revenue We XX%. subscription of in also transaction range the be to to

session. the flow Operator? net income total between to million, million, million million to $XX U.S. Q&A be $XX the $XX and like total million. would is adjusted EBITDA back million $XX expect be and between to GAAP for $XX and cash be operating expected to over to We With operator we turn that, call and the $XX now between

Operator

The William first that will the Instructions] of [Operator line question Cris Blair. we coming be from of today have Kennedy

Cristopher Kennedy

unit the average to supplement. detail your that's of all about revenue kind business, the the it's just the evolved, mix business be talk got you please? price about gone going smart by from just talk how new appreciate and and traditional how your stores, micro driven average per has Can have you you vending what to I up. evolution in and ticket markets of your Can

Scott Stewart

Yes.

Sorry, thanks the Cris, for question. happy to do And so.

get to $XXX every could little more that gone It have XXXX, out seen of average offer back and and the that a transaction we we some little product up at that processing buy that Pick go is released lot growth It's past like price. holds off fact and would still over of if Seed due based significantly the years. analytics. out ticket list a Investor shifted true. overall, more our product we up listed of the to then to that up easy our a unit, the related to a December was probably size are processing. the we've bit laid with So has It higher at our of transaction software we couple in we When new per customer our processing bit Day

Ravi Venkatesan

strategy add us. are what when a deploying is consequently where just we've for customers not are had sales but we locations you those and revenue, solutions very for locations into Cris, about to intentional And maximize are our our also can that, the we be

been revenue it part potential sure has to So customers we going marginal and locations. after make are lower not of

Cristopher Kennedy

Understood. And mix on And business strategy? you then can international update any what international? remind U.S. us your your just versus is

Ravi Venkatesan

on well well of able steps and international in could those had robust track transactions be to were of did sold of bit very possibly and some couple take to working We number America, of little fairly nice in as deals, forward. particular, the all through the case But we to continue make to from sure we and we came a side. that back deployments Yes, the as wanted leap a we were Latin that those they that maximizing locations.

been that's a tweak. So

accelerate the of that of markets second Other kind business. segment is expanding And quarter last have than we terms also well, same on of footprint. as largely in America in appealing stage Latin in same. some X%. the of passed mix, it's priorities. you in of know, we We it's our Now we an really tracking mix, EMEA, of kind again the the wins kind and micro that, which in as our where But stayed think we've further half to now, as of mode the it had execute under been both new nice as has which will are

Operator

And Gary be Barrington. our of will next from the question coming line Prestopino of

Gary Prestopino

here. of Ravi a couple and questions Scott,

are, whatever that Could this that Or lending through lending loan write down on name you all, originating or you how doing paper? micro to you this it's works? you're for holding equipment couldn't Capital do whatever. of you First partner would new that I the sell your Are that Cantaloupe explain -- I you're there. assume

Ravi Venkatesan

to of get is don't as offer out, partner partner, paper, go-to and done ERP a loan. through, us. and really approved we you they don't there way trust, way go very And click few in We a software, is from coming point their a to hold to underwrite the and through customers Yes. that particular, rightly which are and to questions, for the seed able A as kind convenient system. loans. even their of then a are pointed this any the nuance is who we through used The is

of us So knowledge business adds also to it's and our our sort process and gateway of of a the easier makes this it to being lot comfort of of their knowledge reputation. and customers our brand their because

Gary Prestopino

you're clients help you constrained, finding your and particular this smaller them were their maybe going Were on as of upstream Okay. they the capital more equipment grow to at some times business? side, would that

Ravi Venkatesan

nail head. You on we is you the Yes, did the exactly the That the nail this. hit on head. hit why

cashless customers our especially when And that In you more was up can micro was a couple which right markets, right -- segment. right yes, and payment constraints to the seed has to get working road matters fact, really the devices been software. been small for That's that We've medium partner, a heck solution our more the of user map ultimately just and initiative our the subscribe on this it business so to years. goal. more hard aim free to almost of and capital experience, a lot, find buy

Gary Prestopino

And make on that. for anything then. sure hook the I'm to you're on want not I Okay. just clear

Ravi Venkatesan

is That correct.

Gary Prestopino

just markets that here then Okay. And from way. driven -- is strikes I me in Ravi, is of big narrative, it really your the being just growth some micro by a

just smart maybe You it of you are product some you're could micro of your with mean, it the a lay stores what segment where and drivers key out, out then I success could Seed just lines? lot software? markets, is growth having

Ravi Venkatesan

got, revenue. as as seen transaction processing as you've healthy growth subscription revenue, the we've components our payment in So both recurring well the of

call largely On our in product, a products by new of newer the but in micro locations? Smart are mix shift also revenue, expanded driven Store locations markets, the is footprint the an what subscription placed. the growth I And where would

earlier, potato becomes from location becomes earn we cop mentioned valuable to location I chips the we from what then go as more So that when and salads, valuable. more

higher, and apply deploy ARPU transaction per as improving. that's on that again, and keeps we generated the revenue the maglev marketplaces, location improving, significantly because, processing factors similar payment the smart more stores The transactions is to

growth in that's driver a that's itself. So

historically, corporate with location break now, other some cases, which addressed We certain locations were that have rooms, particularly that types Smart Store, are drastically expanded. in seeing we the also

Now are universities. in we

We are we dealerships. have in hospitals, in car

assisted We are centers. in living

exciting in the really are boards well future for all kinds of We of me locations, which is and new to Cantaloupe.

Gary Prestopino

Okay. Great.

Operator

from Capital And be Capital. the I'm line will Northland next the of of coming -- North sorry, Mike question Latimore

Mike Latimore

here. the job great EBITDA again on A growth margins and

and transaction gross margin level? improve. On subscription this a to the sustainable Is continues of kind

Scott Stewart

for question. thanks yes, Mike, the

sustainable absolutely So feel is we a level.

the at it what margin. when the increases, look It's with months up, When quarter. increase pretty as take that was makes even seen over we've -- to transaction to XX our past see you is it continue it's where look last you at relates We rate. especially in it sequentially, gross

kind continue take we've out we benefits think measures on and we've cost to I from then also tapped is the of little routing to to we of that and get but increasing a reduction see higher the fee from. our the rate. there, increase savings the help there as done we've continue is taken cost fixed that benefit ticket lot component And the bit that because price average pricing, margins. will a a

Mike Latimore

Okay. of to subscription stores micro improved this Excellent. growth. imagine and And smart that. benefit I kind further bit then subscription a driver subscription. The quarter. growth rate by think here? improving would rate mean markets It will we a from enhanced little on continue micro is should growth good about subscription of then like markets sounds I

Scott Stewart

Yes.

XX.X% Last that provided. we at year-over-year this good The So guide XX%-plus, that in that acceleration with and we're see were this still did this was quarter, growth year quarter. guide for XX.X%. line we quarter gave in we at we

Mike Latimore

Great.

Scott Stewart

year. the Throughout

Mike Latimore

think, XX.X% And the improved tied also was maybe micro similar, dollar growth, that markets I guess first well? just from Is volume that I quarter. to transaction as but

Scott Stewart

really ticket And higher our And that's got markets that Smart more food. to a Stores, that, correct, are price. fresh and -- mostly. with pushing Micro operators sell we've has

Ravi Venkatesan

sure a micro pharmaceuticals, And will. stores. should vending we volumes. call as smart contributes a just and of of over-index also or et sizes smart if smart Mike, category, headphones phenomenon ticket don't the I values and internally and generation selling And higher the and markets that is new smarter, out is well more to and machines retail on as newer higher we There transaction make cosmetics which electronics vending, -- and to cetera, there you

Operator

coming be Instructions] And [Operator line George of of Sutton Craig-Hallum. next from our the question will

George Sutton

clarification look changes have just do you that Just given a customer X would One. Does any curious, program, micro on a I'm certain Cantaloupe in scenario to the this suggest where other? lending is One? you versus the Cantaloupe there

Ravi Venkatesan

good use very a different George. really cases. and are Thanks, at That's question these clarification, aimed

best somebody goes to and our we way So solution XXX% micro way put of that. can that launched scale The lending that have product their without One beyond well aimed at using finding stretching primarily sheet balance Cantaloupe is sort the of it. I a is

to to that use So working fund They new our our can can fund capital. customers equipment that purchases. use

just they markets, things so several our that go And can payment devices, our beyond cashless micro cetera. for it use et

And so you that in canvas, broader a sense, it's if will.

George Sutton

Understand.

had helpful. very mentioned you Vendex And I Okay. believe, North. That's Vendex

you of that can sense customers them? just from got with partners you give So showed you and product both a feedback the the us new

Ravi Venkatesan

positive. anticipated. exceedingly ahead Well, we of It's where a product where a of rare far is demand the scenario

of with they've now better been And is especially been markets right and scaling. is form been North And it real in feedback The though machines it received, has as America has driver so historical vending pace micro the phenomenal factors theft. that pace as driver challenge been old, even we're other the for of in been perceived -- is challenge with the now Vendex sorry, And solves the to great the vending the coil-based historically one in Europe has almost well. modern the for But working that has ensure solves are machine. scaling test.

these theft. And high retail more of has clicking and in they more up more very that's trust but Smart the as corporate a where trust solution in low like So poorly received locations do now well all for have Store like locations kind do station, tendency theft transit a with there's very et to break they cetera, been solved rooms constraints. well

George Sutton

Got you.

you the benefit of the -- give that you to Can Just you one How you sense us do is advertising your X mentioned a what program you other launched, from economic thing that? relative the that? and impressions. that charge Cantaloupe million for you to

Ravi Venkatesan

Yes.

or models. -- So we charge different X on are a there X

to formulas wants are another based or pricing customers to we manufacturer and it's share those locations. with is And will as who catharize model business the reach are it's it are where them. There it's are where machines. walking And and an audiences marketplaces that and fairly revenue on streams custom a advertising, it's operate to out on model impression, actually the there, that's locations of bespoke we relatively number a be based products either location more per there of there, So impressions and valuable -- of And highly of those can sold interested tends automated more screens. on campaigns custom it. those deals through because well list bespoke that the more a party who standard our from people

V-Go their And we publisher impressions. sell cases, so a marketplace-based a out But increase the custom bolts model advertising both a our ultimately the the models. there on it's platform. those from as and derive revenue the customers to use existing of broad models. are is this In way There's X

Operator

be And our question B. Nichols will of line next Josh from coming Riley. the of

Josh Nichols

but terms reaffirmed and kind relatively of just see wide on top line growth to know at least the you could guidance, the there of you quarter-over-quarter. bit a the a subscription X, provide the equipment Is little transaction between fee by was if of color. more if between acceleration I'm a those for I range, Good curious going in the what's driven end. high little you elaborate mostly delta the in half back bit, that sales low happen year? like and And the of please? could the what's to kind like

Scott Stewart

Sure. Yes.

sales mostly half year. is in right. by is that of So the back larger equipment driven It the the

With the store Stores the we're selling that itself. entire Smart we launched,

in half a expecting It's as the back not $XX,XXX to it's transaction ramp Smart So growing that get keeping Store. up $XXX and a somewhere as equipment XX%. the we're still of subscription the with But point-of-sale those ramp fourth we up, XX% especially in the quarter. revenue $XX,XXX year, to And device. revenue to mind, between to the

Josh Nichols

like for the to you've makes the you the given of end of come seems up trying last given those over which significantly like know pressed quarters the last at expectations guys think it'd like profitability few few seeing, profile you lower be to over significantly continually above look been But margins trend pretty I'm XX%. in XX% terms the That Got EBITDA the it. are sense. margin then And reaffirmed profitability. about about it EBITDA just When profile, up improved I that of to you the quarters. the how the for the come in guidance the to range. think hard year has near remainder has

Scott Stewart

expecting the as well. the through we've gone guidance our end year, to the the we're And Yes. we're tracking of that right and towards midpoint of year as

the we to still of midpoint the So now, the get to going we we towards have that everything seen see the we're us benefit the of But a end increase year. in the be margins that as guidance. could right

Operator

conclude remarks. call This to the turn over the ahead would Please like Q&A I and to go session. ahead. closing does go for Ravi

Ravi Venkatesan

penetrate the adoption both Again, the software of very conclude to launched we'll and and with terms well as in seed of as that Cantaloupe this continue Thank the and you, to our We that as we've market that, the operator. are payment engagement our new best-in-class telematics with products solutions. Thank be call. And continuing rates as investors. seeing future excited about well cashless of you. I interest appreciate we devices

Operator

today's much for so conference Thank call. you joining

disconnect. all may You

Cantaloupe (CTLP) 6 Feb 252025 Q2 Earnings call transcript