Release Date: May 13, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Transact Technologies Inc (TACT, Financial) reported record Boha terminal sales, with 2,350 units sold, surpassing the previous quarter's 1,639 units.
- Total FST revenue increased by 49% year over year, reaching $14.9 million, driven largely by hardware sales.
- The company achieved positive net income and adjusted EBITDA for the quarter, demonstrating effective operational and cost discipline.
- TACT secured a major Boha Terminal 2 upgrade order with a leading national convenience store chain, showcasing growing traction in the convenience store vertical.
- Casino and gaming revenue increased by 18% year over year and 41% sequentially, driven by improving market demand and a new OEM partnership.
Negative Points
- Recurring FST revenue remained stable, with a slight 3% sequential decline in recurring FST sales.
- Gross margin decreased to 48.7% from 52.6% in the prior year period, due to a higher mix of FST hardware sales with lower margins.
- POS automation sales declined by 5% from the prior year, reflecting a strong competitive environment.
- TSG sales decreased by 22% year over year, attributed to strong demand for legacy spare parts in the prior year that did not repeat.
- The strategic review process was suspended due to macroeconomic uncertainties, potentially delaying strategic growth initiatives.
Q & A Highlights
Q: Can you provide an update on the FST pipeline and the markets where you're seeing the most traction?
A: John Dillon, CEO: The FST pipeline is stable, and we're seeing significant traction in the grab-and-go market and food service management. The grab-and-go market requires sophisticated labeling for nutritional information, and we're doing well with national sushi providers. In food service management, we're working with companies like Sodexo and Aramark to automate large facilities. Additionally, we're exploring opportunities in the medical field, providing temperature and sensor capabilities for senior living homes.
Q: How is the pipeline conversion for FST progressing?
A: John Dillon, CEO: We closed six new clients last quarter with a potential of about 1,800 units over time. We're refining our metrics for customer acquisition cost and lifetime customer value. Our pipeline management is becoming more sophisticated, and we're improving yield through various steps in the sales cycle.
Q: Regarding the QSR rollout, where are you in terms of fulfilling the 40,000 legacy units?
A: John Dillon, CEO: We're in the early stages, possibly the second or third inning. We now have global permission to sell in every country where the QSR is present, which is a significant market opportunity. The uptake has been positive and successful.
Q: Can you provide insights into the revenue guidance range of $47 to $52 million for the year?
A: John Dillon, CEO: We expect to improve year-over-year performance, but the business remains somewhat lumpy. Orders can be large and sporadic, affecting quarterly results. However, we anticipate continued improvement quarter over quarter.
Q: What are the key drivers for the growth in casino and gaming revenue?
A: John Dillon, CEO: The growth was driven by improving market demand and a new win with a major OEM. Our new Epic PR80 thermal roll printer is gaining momentum, and our partnership with Casino Track continues to drive sales. We see no systemic challenges in the midterm for our casino and gaming business.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
