First Quarter 2024 Revenue Increased 8%
Year-Over-Year, to $62.7 million
First Quarter 2024 GAAP Net income applicable
to common shares of $1.7 million and Adjusted EBITDA of $7.8
million
Reiterates Fiscal Year 2024 Guidance
Cantaloupe, Inc. (Nasdaq: CTLP) (“Cantaloupe” or the “Company”),
a digital payments and software services company that provides
end-to-end technology solutions for self-service commerce, today
reported results for the first quarter ended September 30,
2023.
“Our fiscal year started off with continued expansion of
operating leverage and strong profitability,” said Ravi Venkatesan,
chief executive officer, Cantaloupe. “We continue to prioritize
margin expansion by driving subscription revenue, optimizing COGS
and disciplined management of operating expenses. In addition,
we’ve made meaningful progress on our international expansion
efforts, especially in Europe and Mexico with multiple customer
acquisitions. I’m excited about the future of Cantaloupe as we
execute on our vision to be the global technology leader that
powers self-service commerce.”
First Quarter 2024 Key Financial Results:
- Revenue of $62.7 million, an increase of 8% year over year
- Transaction fees of $37.0 million, an increase of 18% year over
year
- Subscription fees of $18.1 million, an increase of 15% year
over year
- Equipment sales of $7.5 million, a decrease of 30% year over
year
- Total Dollar Volumes of Transactions were $724.8 million, an
increase of 13% year over year
- Transactions totaled 283.6 million at the end of the first
quarter of 2024
- Gross margin of 38.8% compared with 24.5% in the prior year
quarter
- Subscription and transaction fees margins grew to 42.5%
compared to 35.5% in the prior year quarter
- Equipment sales margins grew to 12.2% compared to negative
23.8% in the prior year quarter
- U.S. GAAP Net income applicable to common shares of $1.7
million, or $0.02 per share, compared to Net loss applicable to
common shares of $8.9 million, or $(0.13) per share, in the prior
year quarter
- Adjusted EBITDA[1] of $7.8 million compared to negative $5.4
million in the prior year quarter
______________ 1 Adjusted earnings before income taxes,
depreciation, and amortization, stock-based compensation expense,
and certain other significant infrequent or unusual losses and
gains that are not indicative of our core operations (“Adjusted
EBITDA”) is a non-GAAP financial measure which is not required by
or defined under GAAP. We use this non-GAAP financial measure for
financial and operational decision-making purposes and as a means
to evaluate period-to-period comparisons. See Reconciliations of
Non-GAAP Measures for a reconciliation U.S. GAAP net income to
Adjusted EBITDA.
Recent Business Highlights:
- Active Customers totaled 29,670 at the end of the first quarter
of 2024 compared to 25,019 at the end of the first quarter of 2023,
an increase of 19%.
- Active Devices totaled 1.19 million at the end of the first
quarter of 2024 compared to 1.15 million at the end of the first
quarter of 2023, an increase of 4%.
- The Company showcased its full suite of solutions for the
European market at Cantaloupe LIVE in the U.K. With over 100 people
in attendance, customers, partners and industry professionals were
able to see the latest technology for self-service retail.
Fiscal Year 2024 Outlook:
For the full fiscal year 2024, the Company reiterates the
following:
- Total Revenue to be between $275 million and $285 million
- The combination of Transaction and Subscription revenue to be
between $234 million and $242 million
- Total U.S. GAAP net income to be between $9 million and $15
million
- Adjusted EBITDA[1] to be between $28 million and $34
million
- Total Operating Cash Flow to be between $28 million and $38
million
Webcast and Conference Call:
Cantaloupe will host a live webcast at 5:00 p.m. Eastern Time
today which may be accessed in the Investor Relations section of
the Company’s website at
https://cantaloupeinc.gcs-web.com/events-and-presentations.
To join the live call in order to ask questions, please register
here. A dial in and unique PIN will be provided to join the
conference call.
A replay of the conference call will also be available in the
Investor Relations section of the Company’s website.
About Cantaloupe, Inc.
Cantaloupe, Inc. is a software and payments company that
provides end-to-end technology solutions for self-service commerce.
Cantaloupe is transforming the self-service commerce industry by
offering one integrated solution for payments processing,
logistics, and back-office management. The Company’s
enterprise-wide platform is designed to increase consumer
engagement and sales revenue through digital payments, digital
advertising and customer loyalty programs, while providing
retailers with control and visibility over their operations and
inventory. As a result, customers ranging from vending machine
companies, to operators of micro-markets, car charging stations,
laundromats, metered parking terminals, kiosks, amusements and
more, can run their businesses more proactively, predictably, and
competitively. For more information, please visit our website at
www.cantaloupe.com.
Discussion of Non-GAAP Financial Measures:
This press release contains discussion of Adjusted EBITDA, a
non-GAAP financial measure which is not required or defined under
U.S. GAAP (Generally Accepted Accounting Principles). Generally, a
non-GAAP financial measure is a numerical measure of a company's
performance, financial position or cash flows that either excludes
or includes amounts that are not normally excluded or included in
the most directly comparable measure calculated and presented in
accordance with GAAP. Reconciliations between non-GAAP financial
measures and the most comparable GAAP financial measures are set
forth below. However, we do not provide forward-looking guidance
for certain financial measures on a GAAP basis because we are
unable to predict certain items contained in the U.S. measures
without unreasonable efforts. These items may include acquisition
and integration related costs, severance expenses, litigation
charges or settlements, and certain other unusual adjustments.
We use Adjusted EBITDA for financial and operational
decision-making purposes and as a means to evaluate
period-to-period comparisons. We believe that this non-GAAP
financial measure provides useful information about our operating
results, enhances the overall understanding of past financial
performance and future prospects and allows for greater
transparency with respect to metrics used by our management in its
financial and operational decision making. The presentation of this
financial measure is not intended to be considered in isolation or
as a substitute for the financial measures prepared and presented
in accordance with GAAP, including our net income or net loss or
net cash used in operating activities. Management recognizes that
non-GAAP financial measures have limitations in that they do not
reflect all of the items associated with our net income or net loss
as determined in accordance with GAAP, and are not a substitute for
or a measure of our profitability or net earnings. Adjusted EBITDA
is presented because we believe it is useful to investors as a
measure of comparative operating performance. Additionally, we
utilize Adjusted EBITDA as a metric in our executive officer and
management incentive compensation plans.
We define Adjusted EBITDA as U.S. GAAP net income (loss) before
(i) interest income from leases, (ii) interest expense on debt and
sales tax reserves, (iii) income tax provision, (iv) depreciation,
(v) amortization, (vi) stock-based compensation expense, (vii) fees
and charges, net of reimbursement from insurance proceeds, that
were incurred in connection with the 2019 Investigation and
financial statement restatement activities as well as proxy
solicitation costs that are not indicative of our core operations,
(viii) one-time project expense, one-time severance expenses, and
infrequent integration and acquisition expense, and (ix) certain
other significant infrequent or unusual losses and gains that are
not indicative of our core operations including asset impairment
charges, gain on extinguishment of debt.
Forward-looking Statements:
All statements other than statements of historical fact included
in this release, including without limitation Cantaloupe’s future
prospects and performance, the business strategy and the plans and
objectives of Cantaloupe's management for future operations, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. When used in this
release, words such as “may,” “could,” “expect,” “intend,” “plan,”
“seek,” “anticipate,” “believe,” “estimate,” “guidance,” “predict,”
“potential,” “continue,” “likely,” “will,” “would” and variations
of these terms and similar expressions, or the negative of these
terms or similar expressions, as they relate to Cantaloupe or its
management, may identify forward-looking statements. Such
forward-looking statements are based on the reasonable beliefs of
Cantaloupe's management, as well as assumptions made by and
information currently available to Cantaloupe's management. Actual
results could differ materially from those contemplated by the
forward-looking statements as a result of certain factors,
including but not limited to general economic, market or business
conditions unrelated to our operating performance, including
inflation, rising interest rates, financial institution
disruptions, public health emergencies and declines in consumer
confidence and discretionary spending; our ability to compete with
our competitors and increase market share; failure to comply with
the financial covenants in the Amended JPMorgan Credit Facility;
our ability to raise funds in the future through sales of
securities or debt financing in order to sustain operations in the
normal course of business or if an unexpected or unusual event were
to occur; disruptions in or inefficiencies to our supply chain
and/or operations; the risks related to the availability of, and
cost inflation in, supply chain inputs, including labor, raw
materials, packaging and transportation; weather, climate
conditions, natural disasters or other unexpected events, whether
our current or future customers purchase, lease, rent or utilize
our devices, software solutions or our other products in the future
at levels currently anticipated; whether our customers continue to
utilize the Company’s transaction processing and related services,
as our customer agreements are generally cancellable by the
customer on thirty to sixty days’ notice; our ability to acquire
and develop relevant technology offerings for current, new and
potential customers and partners; risks and uncertainties
associated with our expansion into and our operations in Europe,
Latin America and other foreign markets, including general economic
conditions, policy changes affecting international trade, political
instability, inflation rates, recessions, sanctions, foreign
currency exchange rates and controls, foreign investment and
repatriation restrictions, legal and regulatory constraints, civil
unrest, armed conflict, war and other economic and political
factors; our ability to satisfy our trade obligations included in
accounts payable and accrued expenses; our ability to attract,
develop and retain key personnel, or our loss of the services of
our key executives; the incurrence by us of any unanticipated or
unusual non-operating expenses, which may require us to divert our
cash resources from achieving our business plan; our ability to
predict or estimate our future quarterly or annual revenue and
expenses given the developing and unpredictable market for our
products; our ability to integrate acquired companies into our
current products and services structure; our ability to add new
customers and retain key existing customers from whom a significant
portion of our revenue is derived; the ability of a key customer to
reduce or delay purchasing products from us; our ability to obtain
widespread commercial acceptance of our products and service
offerings; whether any patents issued to us will provide any
competitive advantages or adequate protection for our products, or
would be challenged, invalidated or circumvented by others; our
ability to operate without infringing the intellectual property
rights of others; the ability of our products and services to avoid
disruptions to our systems or unauthorized hacking or credit card
fraud; geopolitical conflicts, such as the ongoing conflict between
Russia and Ukraine and the conflict between Israel and Hamas;
whether we are able to fully remediate our material weaknesses in
our internal controls over financial reporting or continue to
experience material weaknesses in our internal controls over
financial reporting in the future, and are not able to accurately
or timely report our financial condition or results of operations;
the ability to remain in compliance with the continued listing
standards of the Nasdaq Global Select Market ("Nasdaq") and
continue to remain as a member of the US Small-Cap Russell 2000®;
whether our suppliers would increase their prices, reduce their
output or change their terms of sale; and the risks associated with
cyber attacks and data breaches; or other risks discussed in
Cantaloupe’s filings with the U.S. Securities and Exchange
Commission, including but not limited to its Annual Report on Form
10-K for the year ended June 30, 2023. Readers are cautioned not to
place undue reliance on these forward-looking statements. Any
forward-looking statement made by us in this release speaks only as
of the date of this release. Unless required by law, Cantaloupe
does not undertake to release publicly any revisions to these
forward-looking statements to reflect future events or
circumstances or to reflect the occurrence of unanticipated events.
If Cantaloupe updates one or more forward-looking statements, no
inference should be drawn that Cantaloupe will make additional
updates with respect to those or other forward-looking
statements.
Unaudited Results:
As the audit of the 2024 Form 10-K is yet to be finalized, the
Company’s results presented herein are unaudited and represent the
most current information available to the Company’s management. The
unaudited results included herein have been prepared by, and are
the responsibility of, the Company’s management. The Company’s
independent registered public accounting firm has not yet expressed
an opinion or any other form of assurance with respect to these
financial results. The Company’s actual results may differ from the
results presented in this release due to the completion of the
year-end financial closing procedures, review and audit and final
adjustments and other developments that may arise between the date
of this press release and the time that the Company files its
fiscal year Form 10-K with the SEC.
-F--CTLP
Cantaloupe, Inc.
Condensed Consolidated Balance
Sheets
($ in thousands, except share
data)
September 30, 2023
(Unaudited)
June 30,
2023
Assets
Current assets:
Cash and cash equivalents
$
54,597
$
50,927
Accounts receivable, net
36,998
30,162
Finance receivables, net
6,439
6,668
Inventory, net
32,216
31,872
Prepaid expenses and other current
assets
3,741
3,754
Total current assets
133,991
123,383
Non-current assets:
Finance receivables due after one year,
net
12,362
13,307
Property and equipment, net
26,683
25,281
Operating lease right-of-use assets
3,963
2,575
Intangibles, net
26,236
27,812
Goodwill
92,380
92,005
Other assets
5,080
5,249
Total non-current assets
166,704
166,229
Total assets
$
300,695
$
289,612
Liabilities, convertible preferred
stock, and shareholders’ equity
Current liabilities:
Accounts payable
$
59,591
$
52,869
Accrued expenses
24,831
26,276
Current obligations under long-term
debt
977
882
Deferred revenue
1,940
1,666
Total current liabilities
87,339
81,693
Long-term liabilities:
Deferred income taxes
318
275
Long-term debt, less current portion
37,278
37,548
Operating lease liabilities,
non-current
4,153
2,504
Total long-term liabilities
41,749
40,327
Total liabilities
129,088
122,020
Commitments and contingencies
Convertible preferred stock:
Series A convertible preferred stock,
900,000 shares authorized, 385,782 issued and outstanding, with
liquidation preferences of $22,433 and $22,144 at September 30,
2023 and June 30, 2023, respectively
2,720
2,720
Shareholders’ equity:
Common stock, no par value, 640,000,000
shares authorized, 72,695,265 and 72,664,464 shares issued and
outstanding at September 30, 2023 and June 30, 2023,
respectively
479,332
477,324
Accumulated deficit
(310,445
)
(312,452
)
Total shareholders’ equity
168,887
164,872
Total liabilities, convertible preferred
stock, and shareholders’ equity
$
300,695
$
289,612
Cantaloupe, Inc.
Condensed Consolidated
Statements of Operations
(Unaudited)
Three months ended
September 30,
($ in thousands, except share and per
share data)
2023
2022
Revenues:
Subscription and transaction fees
$
55,135
$
47,075
Equipment sales
7,548
10,707
Total revenues
62,683
57,782
Costs of sales:
Cost of subscription and transaction
fees
31,728
30,370
Cost of equipment sales
6,627
13,250
Total costs of sales
38,355
43,620
Gross profit
24,328
14,162
Operating expenses:
Sales and marketing
4,142
2,525
Technology and product development
4,168
6,865
General and administrative
10,438
11,578
Investigation, proxy solicitation and
restatement expenses, net of insurance recoveries
—
397
Integration and acquisition expenses
78
—
Depreciation and amortization
2,747
1,315
Total operating expenses
21,573
22,680
Operating income (loss)
2,755
(8,518
)
Other income (expense):
Interest income from leases
517
567
Interest expense
(1,107
)
(477
)
Other expense
(77
)
(120
)
Total other expense
(667
)
(30
)
Income (loss) before income taxes
2,088
(8,548
)
Provision for income taxes
(81
)
(26
)
Net income (loss)
2,007
(8,574
)
Preferred dividends
(289
)
(334
)
Net income (loss) applicable to common
shares
$
1,718
$
(8,908
)
Net earnings (loss) per common share
Basic
$
0.02
$
(0.13
)
Diluted
0.02
(0.13
)
Weighted average number of common shares
outstanding used to compute net earnings (loss) per share
applicable to common shares
Basic
72,717,965
71,207,750
Diluted
74,305,512
71,207,750
Cantaloupe, Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Three months ended
September 30,
($ in thousands)
2023
2022
Cash flows from operating
activities:
Net income (loss)
$
2,007
$
(8,574
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Stock based compensation
1,932
1,318
Amortization of debt issuance costs and
discounts
32
29
Provision for expected losses
1,000
1,436
Provision for inventory reserve
—
200
Depreciation and amortization included in
operating expenses
2,747
1,315
Depreciation included in cost of
subscription and transaction fees for rental equipment
342
242
Other
443
657
Changes in operating assets and
liabilities:
Accounts receivable
(7,784
)
(4,693
)
Finance receivables
1,122
(346
)
Inventory
(344
)
(3,948
)
Prepaid expenses and other assets
171
(70
)
Accounts payable and accrued expenses
5,152
3,596
Operating lease liabilities
(391
)
(369
)
Deferred revenue
274
175
Net cash provided by (used in) operating
activities
6,703
(9,032
)
Cash flows from investing
activities:
Capital expenditures
(2,916
)
(4,956
)
Net cash used in investing activities
(2,916
)
(4,956
)
Cash flows from financing
activities:
Repayment of long-term debt
(193
)
(193
)
Contingent consideration paid for
acquisition
—
(1,000
)
Proceeds from exercise of common stock
options
76
—
Repurchase of Series A Convertible
Preferred Stock
—
(2,151
)
Net cash used in financing activities
(117
)
(3,344
)
Net increase (decrease) in cash and cash
equivalents
3,670
(17,332
)
Cash and cash equivalents at beginning of
year
50,927
68,125
Cash and cash equivalents at end of
period
$
54,597
$
50,793
Supplemental disclosures of cash flow
information:
Interest paid in cash
$
889
$
248
Income taxes paid in cash
$
13
$
44
Cantaloupe, Inc.
Reconciliation of U.S. GAAP
Net Income (Loss) to Adjusted EBITDA
(Unaudited)
Three months ended September
30,
($ in thousands)
2023
2022
U.S. GAAP net income (loss)
$
2,007
$
(8,574
)
Less: interest income from leases
(517
)
(567
)
Plus: interest expense
1,107
477
Plus: income tax provision
81
26
Plus: depreciation included in cost of
subscription and transaction fees for rental equipment
342
242
Plus: depreciation and amortization in
operating expenses
2,747
1,315
EBITDA
5,767
(7,081
)
Plus: stock-based compensation (a)
1,932
1,318
Plus: integration and acquisition expenses
(b)
78
—
Plus: remediation expenses (c)
44
—
Plus: investigation, proxy solicitation
and restatement expenses, net of insurance recoveries (d)
—
397
Adjustments to EBITDA
2,054
1,715
Adjusted EBITDA
$
7,821
$
(5,366
)
(a)
As an adjustment to EBITDA, we have
excluded stock-based compensation, as it does not reflect our
cash-based operations.
(b)
As an adjustment to EBITDA, we have
excluded expenses incurred in connection with business acquisitions
as it does not represent recurring costs or charges related to our
core operations.
(c)
As an adjustment to EBITDA, we have
excluded expense incurred in connection with a one-time project
related to remediating previously identified material weakness in
our internal control over financial reporting from the prior
year.
(d)
As an adjustment to EBITDA, we have
excluded the costs and corresponding reimbursements related
to the 2019 Investigation, because we believe that they represent
charges that are not related to our core operations. The 2019
Investigation has been fully resolved as of fiscal year 2023.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231109359254/en/
Investor Relations: ICR, Inc. CantaloupeIR@icrinc.com
Media: Jenifer Howard | 202-273-4246
jhoward@jhowardpr.com media@cantaloupe.com
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