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TRANSACT TECHNOLOGIES INC (TACT)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a clean inflection: net sales rose to $13.1M (+28% q/q, +22% y/y), gross margin was 48.7%, and the company posted positive net income ($0.00 EPS) with adjusted EBITDA of $0.54M; BOHA! Terminal sales set an all-time quarterly high at 2,350 units, while Casino & Gaming revenue rebounded to $6.7M (+41% q/q, +18% y/y) .
  • Versus consensus, TACT beat Q1 revenue ($13.05M vs $11.04M*) and EPS ($0.00 vs -$0.10*); EBITDA surprised positively (reported $0.22M vs -$0.60M*). Management maintained FY25 revenue guidance at $47–$52M and improved the bottom end of adjusted EBITDA guidance to breakeven to -$1.5M (from -$2.0M) .
  • Record BOHA! deployments were underpinned by a full-fleet 1,400-unit upgrade at a national convenience store chain completed in Q1 and new wins in healthcare foodservice, expanding use cases and future recurring monetization opportunities .
  • The Board suspended the strategic review to focus on organic execution amid macro uncertainty and improving momentum in FST and Casino & Gaming; this pivot is a narrative catalyst centered on operational discipline and growth execution .
  • CFO commentary flagged tariff dynamics as manageable (surcharges applied where needed; BOHA! terminals currently exempt), and gross margin is expected to remain mid-to-high 40% for 2025, supporting sustained profitability trajectory if volume and mix hold .

What Went Well and What Went Wrong

What Went Well

  • Record BOHA! Terminal sales (2,350 units) drove 49% y/y FST revenue growth; management emphasized a “land-and-expand” playbook with improving pipeline quality and conversion, citing wins in convenience stores and healthcare foodservice: “The product is probably the best salesperson we have…Once we get that unit in the store…customers easily see the advantage” .
  • Casino & Gaming recovered: revenue reached $6.7M (+41% q/q, +18% y/y), OEM partners returned to buying, and a new OEM win plus TR80 rollout support momentum and subscription income via CasinoTrac .
  • Cost discipline showed through: OpEx fell 8% y/y, operating loss was essentially breakeven (-$15k), net income was positive ($19k), and adjusted EBITDA turned positive ($544k) on strengthening sales mix and prior cost actions totaling ~$5M annualized .

What Went Wrong

  • Gross margin compressed to 48.7% from 52.6% y/y on higher FST hardware mix; ARPU fell sequentially to $761 as terminals sold to a large QSR initially carry no recurring revenue, delaying subscription uplift .
  • FST recurring revenue was flat-sequential and only +10% y/y ($2.7M), signaling near-term mix headwinds as hardware-led growth outruns subscription attachment; TSG revenue also declined y/y to $0.8M .
  • POS automation remains competitive and soft: Q1 revenue dipped to $0.62M (-5% y/y), with pricing adjustments required to stay active; gross margin guide mid-to-high 40% suggests limited near-term expansion without improved mix .

Financial Results

Quarterly Financials (oldest → newest)

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Net Sales ($USD)$10.687M $10.867M $10.231M $13.053M
Gross Profit ($USD)$5.624M $5.227M $4.521M $6.359M
Gross Margin %52.6% 48.1% 44.2% 48.7%
Operating (Loss)/Income ($USD)$(1.301)M $(0.837)M $(1.050)M $(0.015)M
Net Income ($USD)$(1.036)M $(0.551)M $(7.957)M $0.019M
Diluted EPS ($USD)$(0.10) $(0.06) $(0.79) $0.00
EBITDA ($USD)$(0.966)M $(0.533)M $(0.989)M $0.221M
Adjusted EBITDA ($USD)$(0.701)M $(0.204)M $(0.705)M $0.544M

Q1 2025 vs S&P Global Consensus

MetricActualConsensus*Surprise
Revenue ($USD)$13.053M $11.039M*+$2.014M / +18.2%
Diluted EPS ($USD)$0.00 $(0.10)*+$0.10
EBITDA ($USD)$0.221M $(0.597)M*+$0.818M

Values marked with * retrieved from S&P Global.

Segment Net Sales ($USD, oldest → newest)

SegmentQ1 2024Q4 2024Q1 2025
Food Service Technology (FST)$3.300M $4.302M $4.908M
POS Automation$0.651M $0.411M $0.618M
Casino & Gaming$5.696M $4.759M $6.719M
TransAct Services Group$1.040M $0.759M $0.808M
Total Net Sales$10.687M $10.231M $13.053M

KPIs (units and operating metrics)

KPIQ3 2024Q4 2024Q1 2025
BOHA! Terminals Sold (units)1,355 1,639 2,350
ARPU ($)—$875 $761
FST Recurring Revenue ($USD)$2.9M $2.7M $2.7M
Casino & Gaming Revenue ($USD)$4.534M $4.759M $6.719M

Non-GAAP: Adjusted EBITDA excludes share-based compensation and other non-core items as defined by the company .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Sales ($USD)FY 2025$47–$52M $47–$52M Maintained
Adjusted EBITDA ($USD)FY 2025$0 to $(2.0)M $0 to $(1.5)M Raised bottom end
Gross Margin % (commentary)FY 2025Mid-to-high 40% expected Mid-to-high 40% expected Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q1 2025)Trend
FST momentum & BOHA! Terminal 2Q3: 1,355 units; +12 new FST accounts (~2,400 potential units) ; Q4: 1,639 units; 1,400-unit C-store upgrade initiated Record 2,350 units; 1,400-unit upgrade completed; new healthcare foodservice win Accelerating
Casino & Gaming normalizationQ3: Normalization underway; OEMs returning ; Q4: All domestic OEMs back to buying; TR80 roll-out $6.7M (+41% q/q, +18% y/y); new OEM win; TR80 gaining traction; CasinoTrac subscription Improving
Tariffs/macroQ3/Q4: Macro uncertainty noted Tariff surcharge on applicable imported items; BOHA! terminals currently tariff-exempt Manageable
Strategic reviewQ3/Q4: Process active Suspended to focus on organic growth amid momentum Paused
Cost disciplineQ4: ~$5M annualized savings; OpEx down materially OpEx down 8% y/y; positive adjusted EBITDA Sustained
ARPU dynamicsQ4: ARPU $875; benefited q/q ARPU $761; QSR units with no initial recurring revenue pressure ARPU Near-term pressure

Management Commentary

  • CEO Dillon: “We started the year with a solid first quarter, achieving an all-time, quarterly high of 2,350 BOHA! terminal unit sales…Our BOHA! platform is gaining traction…We’re pleased with the positive net income and adjusted EBITDA” .
  • CEO Dillon on strategy: “The Board…determined to suspend the Company’s strategic review process for now…focus on incremental organic growth initiatives…” .
  • CFO DeMartino: “Gross margin was 48.7%, down from 52.6% in the prior year…largely a result of a higher mix of FST hardware sales…we expect our gross margin to remain in the mid- to high 40% range for the remainder of ’25” .
  • CFO DeMartino on tariffs: “We have added a small tariff surcharge…currently, our BOHA! Terminals are exempt from any tariffs” .
  • CEO Dillon on Casino & Gaming: “All of our major U.S. OEM partners have returned to…buying positions…A new win with a major OEM…TR80 is gaining momentum” .

Q&A Highlights

  • FST pipeline conversion: 6 new clients closed with ~1,800-unit potential; detailed funnel management is improving yields across ~15 stages .
  • QSR upgrade cycle: Early innings with global authorization expanding the addressable footprint; sustained deployments expected .
  • Quarterly revenue cadence: Expect lumpiness due to large hardware rollouts; management still targets y/y improvement each quarter .
  • Casino OEM demand: Domestic OEMs back to buying; international OEMs likely normalize in 2H25; TR80 opportunity cited, notably in sports betting .

Estimates Context

  • Q1 2025 beat consensus on revenue ($13.05M vs $11.04M*) and EPS ($0.00 vs -$0.10*), reflecting stronger FST hardware volumes and Casino OEM demand normalization; EBITDA surprised to positive ($0.22M vs -$0.60M*) .
  • FY 2025 consensus revenue sits near $51.38M*, with management maintaining $47–$52M guidance; adjusted EBITDA guide improved bottom end to -$1.5M, implying a narrower loss than models previously contemplated .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Hardware-led FST acceleration with record BOHA! units and the completed 1,400-unit C-store upgrade provides near-term revenue momentum; recurring monetization should lag but builds optionality as installed base expands .
  • Casino & Gaming recovery is underway with OEMs back to buying, a new OEM win, and TR80 entering the market; subscription via CasinoTrac adds recurring revenue leverage over time .
  • Gross margin mix headwinds from FST hardware are offset by disciplined OpEx, yielding breakeven operating results and positive adjusted EBITDA—sustained mid-to-high 40% margins support path to profitability at current volumes .
  • Guidance constructively tightened: revenue range maintained; adjusted EBITDA loss narrowed—execution against BOHA! deployments and Casino normalization are the key swing factors for bridging to breakeven .
  • Strategic review pause shifts the narrative from corporate action to operating performance; catalysts now tied to BOHA! wins (contract foodservice, healthcare, convenience) and subscription attach rates .
  • Watch ARPU trends and recurring attach in QSR deployments; near-term ARPU pressure is expected, but successful upsell of subscriptions and labels will be critical to margin and cash flow durability .
  • Tariff dynamics currently manageable (BOHA! exemption); pricing surcharges help maintain margins—monitor policy shifts and input costs as potential volatility drivers .