Sign in

    CANTALOUPE (CTLP)

    CTLP Q4 2024: Guides 15–20% Growth, Equipment Margin Falls to 7%

    Reported on Jul 7, 2025 (After Market Close)
    Pre-Earnings Price$6.39Last close (Sep 10, 2024)
    Post-Earnings Price$5.96Open (Sep 11, 2024)
    Price Change
    $-0.43(-6.73%)
    • Robust Revenue Growth and Margin Improvement: The company is experiencing strong subscription and transaction revenue growth with guidance for FY '25 of 15%-20% growth and continued increases in revenue per connection, which reached $194 in Q4 2024. This indicates a healthy demand and upward pricing momentum.
    • Strategic International Expansion: With successful initiatives in Europe and Latin America, including the acquisition of SB Software—which is expected to contribute less than 1% of revenue now but provides significant cross-sell opportunities—CTLP is well-positioned to leverage growth in new markets.
    • Operational Efficiency Gains: Improvements in operational processes, such as reducing the implementation cycle back to a 6-week timeframe (from as long as 4 months previously) and enhanced internal controls, set a solid foundation for profitable and scalable growth.
    • Margin Pressure: The equipment revenue margin dropped from 21% in Q4 '23 to 7% in Q4 '24, which highlights potential pressure on profitability in that segment.
    • Limited Contribution from Acquisitions: The acquisition of SB Software is expected to contribute less than 1% to overall revenue, posing risks around integration and relying on a technology asset that may not materially boost growth.
    • Exposure to Consumer Spending Variability: There was a noticeable decline in transaction revenue in June, attributed to weaker consumer spending, raising concerns that revenue could be vulnerable to fluctuations in consumer behavior if the trend persists.
    1. Revenue Guidance
      Q: Guidance for sub/transaction revenue growth?
      A: Management revised guidance to 15–20% sub and transaction revenue growth, noting a midrange position compared to earlier 18% expectations.

    2. Revenue Mix
      Q: Mix: subscription vs. transaction growth?
      A: They expect subscription revenue to grow around 15% while transaction revenue is forecast in the 18%+ range, reflecting solid momentum.

    3. Acquisition Strategy
      Q: SB Software acquisition impact details?
      A: The acquisition is primarily a technology play, representing less than 1% of revenue, but it opens significant cross-sell opportunities in Europe.

    4. Growth Drivers
      Q: What factors are driving overall growth?
      A: Growth is driven by international expansion, strong micromarket performance, and a reacceleration in subscription revenue, all contributing to healthy topline expansion.

    5. Margin Outlook
      Q: How will gross margins perform?
      A: Transaction margins have modest expansion potential, subscription margins remain stable, and for equipment revenue the target is to improve to 10–15%.

    6. International Outlook
      Q: What is the view on international markets?
      A: Management is bullish on both Europe and Latin America, driven by the adoption of smart stores and expanding micromarket penetration.

    7. Revenue per Connection
      Q: Expected evolution of revenue per connection?
      A: The average revenue per connection, currently at $194, is expected to continue rising with new add-on modules launching in FY '25.

    8. Implementation Timelines
      Q: Any updates on installation timeframes?
      A: The implementation cycle has normalized back to an average 6-week timeframe, a notable improvement from previous delays of up to 4 months.

    9. Software Localization
      Q: Adjustments for SB Software in Europe?
      A: The company is localizing and translating SB Software for Continental Europe, leveraging its enhanced sales channels while maintaining core product strengths.

    Research analysts covering CANTALOUPE.