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CI

CANTALOUPE, INC. (CTLP)·Q2 2025 Earnings Summary

Executive Summary

  • Revenue grew 12.8% year-over-year to $73.7 million; adjusted gross margin expanded to 41.7% and adjusted EBITDA rose 25.7% to $10.7 million, reflecting operating leverage from mix shift and cost actions .
  • Subscription and transaction revenue remained the engine (+14.1% and +17.2% YoY) while equipment sales declined 7.4% YoY; ARPU increased 11.2% to $202.20 on higher average ticket sizes and micro market/Smart Store adoption .
  • Guidance reiterated for FY25 (Revenue $308–$322M, Adjusted EBITDA $44–$52M, Net income $22–$32M, Operating cash flow $24–$32M), signaling confidence in the trajectory despite equipment variability .
  • Strategic catalysts: Smart Store launches and Engage Pulse in amusement, plus a new $100M credit facility (term/revolver/delayed draw) improving flexibility for scaling and potential M&A .

What Went Well and What Went Wrong

What Went Well

  • “Continued success increasing operating leverage through margin expansion,” with adjusted gross margin up to 41.7% and adjusted EBITDA up 25.7% YoY .
  • Strong recurring growth: transaction fees +17.2% YoY and subscription fees +14.1% YoY; ARPU up 11.2% to $202.20 on mix shift to micro markets and Smart Stores .
  • Management highlighted product adoption: “We continue to see strong growth in micro markets… and momentum with customers going all in with us” (Premier Food Service, Berkshire Foods; expanding into universities, hospitals, car dealerships, assisted living) .

What Went Wrong

  • Equipment revenue down 7.4% YoY, reflecting demand timing and mix; equipment margin improved but remains low at 9.1% .
  • Operating expenses increased to $24.6M (+$3.8M YoY) largely due to consolidation of acquired companies (CHEQ and SB Software) .
  • Payments “take rate” lever largely maximized; future margin gains rely more on cost reductions/routing and higher average ticket sizes rather than further take rate increases .

Financial Results

Summary Financials vs Prior Periods

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Millions)$72.657 $70.836 $73.722
Net Income Applicable to Common ($USD Millions)$2.206 $3.283 $4.974
Diluted EPS ($USD)$0.03 $0.04 $0.07
Adjusted EBITDA ($USD Millions)$7.466 $8.952 $10.668
Gross Margin (GAAP, %)34.9% 38.3% 38.6%
Adjusted Gross Margin (%)37.3% 40.7% 41.7%

YoY Comparison (Q2 2025 vs Q2 2024)

MetricQ2 2024Q2 2025YoY Change
Total Revenue ($USD Millions)$65.359 $73.722 +12.8%
Transaction Fees ($USD Millions)$37.892 $44.392 +17.2%
Subscription Fees ($USD Millions)$18.137 $20.694 +14.1%
Equipment Sales ($USD Millions)$9.330 $8.636 -7.4%
Diluted EPS ($USD)$0.04 $0.07 +$0.03
Adjusted Gross Margin (%)37.2% 41.7% +450 bps
Adjusted EBITDA ($USD Millions)$8.487 $10.668 +25.7%

Segment Revenue Breakdown

SegmentQ4 2024Q1 2025Q2 2025
Transaction Fees ($USD Millions)$41.126 $43.792 $44.392
Subscription Fees ($USD Millions)$19.999 $20. + see combined below$20.694
Subscription + Transaction Fees ($USD Millions)$61.126 $63.792 $65.086
Equipment Sales ($USD Millions)$11.531 $7.044 $8.636
Total Revenue ($USD Millions)$72.657 $70.836 $73.722

Segment Margins (Q2 YoY)

Segment MarginQ2 2024Q2 2025
Transaction Gross Margin (%)21.1% 25.6%
Subscription Adjusted Gross Margin (%)89.0% 89.7%
Equipment Gross Margin (%)1.8% 9.1%

KPIs

KPIQ4 2024Q1 2025Q2 2025
Transaction Dollar Volume ($USD Millions)$815.7 $826.7 $843.1
Transaction Volume (Millions)290.4 293.7 299.8
Active Customers (Units)31,466 32,338 32,909
Active Devices (Units, Millions)1.22 1.23 1.27
ARPU ($)—$198.31 $202.20

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Revenue ($USD Millions)FY 2025$308–$322 $308–$322 Maintained
Subscription + Transaction Revenue Growth (%)FY 202515%–20% 15%–20% Maintained
Net Income Applicable to Common ($USD Millions)FY 2025$22–$32 $22–$32 Maintained
Adjusted EBITDA ($USD Millions)FY 2025$44–$52 $44–$52 Maintained
Operating Cash Flow ($USD Millions)FY 2025$24–$32 $24–$32 Maintained

Management reaffirmed ranges; on the call, they indicated tracking to the midpoint into year-end .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Product innovation (Smart Stores, micro markets)FY24: expanding self-service; FY25 Q1: reacceleration and new launches (Suites; SB Software acquisition) Smart Store 600/700 launched; strong initial demand; deployments broadening beyond break rooms to universities/hospitals/dealerships/assisted living Accelerating adoption and TAM expansion
Payments mix and ARPUFY24: cashless secular trend; FY25 Q1: subscription+transaction adjusted margin 44.0% ARPU up 11.2%; higher average ticket size; transaction margin 25.6% as cost routing savings persist Sustained margin improvement; take rate lever largely capped
International footprintFY24: SB Software acquisition for Europe ; FY25 Q1: Europe expansion EMEA and LATAM deployments proceeding; temporary “step back” to optimize deployments then re-accelerate; mix still <5% Foundation-building; gradual scale-up
Credit facility / balance sheetFY24: cash build and operations cash flow up ; FY25 Q1: cash down from timing of customer payments New $100M facility (term + revolver + delayed draw); cash normalization in Q2; facility enhances flexibility Improved liquidity and optionality
New initiatives (Engage Pulse; Cantaloupe Capital)N/AEngage Pulse launched; early operators saw +85% YoY sales on crane games; micro-lending with Fundbox to ease SMB capital constraints Additional monetization vectors beyond core

Management Commentary

  • CEO: “In the second quarter, we saw increased adoption of new products and accelerated growth in subscription and transaction revenue… pleased with our continued success increasing operating leverage through margin expansion” .
  • CEO on growth drivers: “We continue to see strong growth in micro markets and penetration of Seed software… customers going all in with us” .
  • CFO: “Total gross margin for the quarter was 41.7%… transaction gross margin was 25.6%… driven by better cost management and improved transaction revenue” .
  • CFO on financing: “New facility provides for a $40M term loan, $30M revolver, $30M delayed draw… strengthens our balance sheet and provides flexibility for future uses of capital” .
  • CFO on guidance: “We are reaffirming… tracking right to the midpoint of our guidance” .

Q&A Highlights

  • ARPU evolution driven by business mix shift (micro markets/Smart Stores), higher average ticket size; intentional focus on high-revenue locations to maximize per-location economics .
  • Micro-lending (Cantaloupe Capital) relieves SMB capital constraints; Cantaloupe does not underwrite or hold loans, acting as a trusted gateway via Fundbox .
  • Subscription growth acceleration expected to continue, aided by micro markets and Smart Stores; tracking to 15%+ for FY25 .
  • Transaction margin sustainability: take rate increases largely tapped; continued benefits from routing/cost reduction and fixed-fee economics as average tickets rise .
  • Equipment outlook: Smart Store units ($12–$15k/unit) to drive back-half equipment revenue ramp while keeping recurring growth 15%–20% .

Estimates Context

  • Wall Street consensus (S&P Global) for Q2 FY2025 revenue and EPS was not available due to access limitations at the time of retrieval. Values could not be compared against estimates; we recommend revisiting once available to assess any beat/miss.
  • Note: We attempted to fetch S&P Global consensus via GetEstimates; request failed due to provider daily limit. Estimates unavailable at time of analysis.

Key Takeaways for Investors

  • Recurring revenue momentum and margin expansion continue to compound operating leverage; adjusted gross margin and EBITDA progression support near-term earnings resilience .
  • ARPU growth and higher average tickets from micro markets/Smart Stores are durable drivers; with take rate lever capped, cost routing and mix are key to sustaining margins .
  • Equipment revenue variability persists, but Smart Store ASPs should lift hardware contribution in the back half; monitor conversion from pipeline to shipments .
  • Liquidity and capital flexibility improved materially with the $100M facility; enhances capacity for selective M&A and product scaling without stressing the balance sheet .
  • International remains a call option: disciplined deployment in EMEA/LATAM suggests measured ramp; mix still sub-5%, but growing addressable market .
  • New initiatives (Engage Pulse, Cantaloupe Capital) add incremental monetization and customer stickiness; early amusement results noteworthy; micro-lending addresses SMB friction points .
  • With estimates unavailable, traders should focus on qualitative momentum (product adoption, margin sustainability) and upcoming equipment ramps as near-term catalysts; PMs should emphasize recurring mix and cash generation trends into FY25.