• Total Revenue: $73.7 million, up 13% year over year.
• Transaction Revenue: $44.4 million, an increase of 17% year over year.
• Subscription Revenue: $20.7 million, a 14% increase year over year.
• Adjusted Gross Margin: 41.7%, up from 37.2% in the prior year.
• Adjusted EBITDA: $10.7 million, a 26% increase from the previous year.
• Net Income: $5 million, or $0.07 earnings per share.
• Cash and Cash Equivalents: $27.7 million at the end of the quarter.
• Active Customers: Over 32,000, a 10% increase year over year.
• Active Devices: 1.3 million, a 4% increase year over year.
• Average Revenue Per Unit (RPO): $202, up 12% from the prior year period.
• Equipment Revenue: $8.6 million, a decrease of 7% year over year.
• Total Operating Expenses: $24.5 million, up from $20.7 million in the prior year.
• Fiscal Year 2025 Revenue Guidance: $308 to $322 million, representing 15% to 20% growth.
• Fiscal Year 2025 Adjusted EBITDA Guidance: $44 million to $52 million.
• Fiscal Year 2025 Operating Cash Flow Guidance: $24 million to $32 million.

• Warning! GuruFocus has detected 4 Warning Signs with CTLP.

Release Date: February 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Cantaloupe Inc (NASDAQ:CTLP) reported a 13% year-over-year increase in total revenue for Q2, reaching $73.7 million.
• Transaction revenue grew by 17% and subscription revenue by 14% year-over-year, indicating strong performance in these segments.
• The company achieved a total adjusted gross margin of 41.7%, up from 37.2% in the same quarter last year.
• Adjusted EBITDA increased by 26% year-over-year, reflecting successful expansion of operating leverage.
• Cantaloupe Inc (NASDAQ:CTLP) continues to see strong growth in micro markets and penetration of seed software with both existing and new customers.

Negative Points

• Equipment revenue decreased by 7% compared to Q2 FY24, indicating potential challenges in this segment.
• Total operating expenses increased to $24.5 million from $20.7 million in Q2 FY24, largely due to expenses from recent acquisitions.
• The cash balance decreased compared to the year-end balance as of June 30, 2024, due to timing of payments for transaction processing.
• The international business mix remains under 5%, suggesting limited growth in international markets.
• The guidance range for total revenue is relatively wide, indicating uncertainty in achieving the higher end of the forecast.

Q & A Highlights

Q: Can you discuss the evolution of your average revenue per unit and how your business mix is changing? A: Scott Stewart, CFO: We've seen significant growth in transaction processing, with average ticket sizes increasing. At our Investor Day in December 2022, we projected that if a customer purchased every product at list price, revenue could reach $400 per unit. This remains true, with potential for further increase due to new software releases and strategic sales targeting high-revenue locations.

Q: Any updates on your international strategy and current business mix between the US and international markets? A: Ravi Venkatesan, CEO: We are progressing well internationally, particularly in Latin America, where we've focused on robust deployments to maximize transactions. Our international business mix remains under 5%, but we expect acceleration as we execute our second-half priorities.

Q: How does the new micro-lending service through Cantaloupe Capital work, and are you holding any of the loans? A: Ravi Venkatesan, CEO: We do not hold or underwrite the loans. The service is offered through a partner, providing a convenient way for customers to secure loans via our platform. This initiative aims to alleviate capital constraints for our customers, enabling them to expand their business without us being financially liable.

Q: What are the key growth drivers for Cantaloupe, particularly regarding micro markets and smart stores? A: Ravi Venkatesan, CEO: Growth is driven by expanded micro market footprints, smart store products, and strategic location placements. We're also seeing increased transaction values from new location types like universities and hospitals, contributing to higher average revenue per unit.

Q: Is the improvement in subscription and transaction gross margins sustainable? A: Scott Stewart, CFO: Yes, we believe the current margin levels are sustainable. We've seen an increase in our take rate and continue to benefit from cost reduction measures and improved transaction routing. The higher average ticket price also supports margin improvements.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.