Fubotv earnings beat by $0.10, revenue topped estimates
TransAct Technologies reported its second-quarter 2025 earnings, revealing an unexpected beat in earnings per share (EPS) and stronger-than-anticipated revenue. Despite this, the company’s stock declined slightly by 1.04% in after-hours trading, closing at $3.82. The EPS came in at -$0.01, significantly better than the forecasted -$0.07, marking an 85.71% surprise. Revenue reached $13.8 million, surpassing expectations of $12.1 million by 14.05%. According to InvestingPro data, the company maintains a strong balance sheet with more cash than debt, providing financial flexibility during its growth phase.
Key Takeaways
- TransAct Technologies achieved a notable EPS beat, improving operational efficiency.
- Revenue increased by 19% year-over-year, exceeding forecasts.
- Stock declined by 1.04% post-earnings, indicating mixed investor sentiment.
- Full-year revenue guidance was raised, showing confidence in future growth.
Company Performance
TransAct Technologies demonstrated robust performance in the second quarter of 2025, with a 19% year-over-year revenue increase to $13.8 million. The company reduced its net loss to $143,000 from $319,000 a year prior, reflecting improved cost management. Key growth areas included the casino and gaming segment, which saw a 42% increase in revenue.
Financial Highlights
- Revenue: $13.8 million (up 19% YoY)
- EPS: -$0.01 (better than forecasted -$0.07)
- Adjusted EBITDA: $478,000 (up from $89,000 YoY)
- Cash and cash equivalents: nearly $18 million
Earnings vs. Forecast
TransAct Technologies delivered an EPS of -$0.01, significantly surpassing the forecast of -$0.07, resulting in an 85.71% surprise. This performance marks a continuation of the company’s trend in narrowing losses, with the magnitude of the beat being substantial compared to previous quarters.
Market Reaction
Despite the positive earnings report, TransAct’s stock declined by 1.04% in after-hours trading, closing at $3.82. The stock remains near its 52-week low of $3.115, reflecting cautious investor sentiment. This movement contrasts with broader market trends, suggesting mixed reactions to the earnings results. InvestingPro analysis indicates the stock is currently undervalued, with additional insights available through their comprehensive Pro Research Report, part of their coverage of over 1,400 US stocks.
Outlook & Guidance
The company raised its full-year revenue guidance to a range of $49 to $53 million, indicating confidence in continued growth. The acquisition of the BOHA! software source code is expected to generate incremental revenue, while the company anticipates maintaining its current run rate in casino and gaming sales.
Executive Commentary
CEO John Dillon emphasized the importance of discipline and process in achieving the company’s progress, stating, "Good process, discipline and resolve is probably really key to the progress we’re making." CFO Steve P. Martina projected a positive long-term outlook, noting, "We expect the P&L impacts to become net positive within four to five years."
Risks and Challenges
- Continued net losses could affect investor confidence.
- Decline in POS automation sales poses a challenge to diversification efforts.
- Market volatility and economic pressures may impact future performance.
- Competition in the casino and gaming sector remains intense.
- Dependence on new product launches for revenue growth.
Q&A
During the earnings call, analysts inquired about the company’s Food Service Technology (FST) growth strategy and new client acquisition efforts. Executives confirmed ongoing discussions with a large quick-service restaurant chain regarding additional software components, highlighting potential for future expansion.
Full transcript - TransAct Technologies Incorporated (TACT) Q2 2025:
Conference Operator: Hello, and welcome everyone joining today’s TransAct Technologies Second Quarter twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. Later, you will have an opportunity to ask questions during the question and answer session. Please note this call is being recorded. I am standing by should you need any assistance.
It is now my pleasure to turn the program over to Ryan Gardella from Investor Relations. Please go ahead.
Ryan Gardella, Investor Relations, TransAct Technologies: Thank you. Good afternoon, and welcome to the TransAct Technologies Second Quarter twenty twenty five Earnings Call. Today, we’ll be discussing the results announced in our press release issued after market close. Joining us from the company is CEO, John Dillon and President and CFO, Steve P. Martina.
Today’s call will include a discussion of the company’s key operating strategies, the progress on these initiatives and details on the second quarter financial results. We’ll then open the call to participants for questions. As a reminder, this conference call contains statements about future events and expectations, which are forward looking in nature. Statements on this call may be deemed as forward looking, and actual results may differ materially. For a full list of risks inherent to the business and the company, please refer to the company’s SEC filings, including its reports on Form 10 ks and 10 Q.
TransAct under applicable law provides or update any forward looking statements to reflect events or circumstances that occur after the call. Today’s call and webcast will include non GAAP financial measures from the meaning of SEC Regulation G. When required, reconciliation of all non GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today’s press release, as well as on the company website. And with that, I’d like to turn the call over to John.
John Dillon, CEO, TransAct Technologies: Thanks, Ryan, and good afternoon, everyone, and thank you for joining us today. I’m delighted to report that TRANZACT delivered a solid quarter, building momentum from a good strong start to the year. We sold nineteen forty two BOHA! Terminals in Q2, which is a 32% increase year over year. That brings the total sold in the first six months to 4,292.
I’m really happy about this number. It shows progress for sure. The continued strength in the foodservice business, and we call it FST, foodservice technology, underscores the effectiveness of what I refer to as a GTM or go to market initiatives. We believe this trajectory positions us for sustainable progress and improving results. It’s really just continued good process, discipline and resolve, really not too much more than that.
There’s a lot of low hanging fruit and we’re trying to be focused as we execute. But good process, discipline and resolve is probably really key to the progress we’re making. The focus is to build a business with good execution, consistent results, and with a goal to make Transact a formidable competitor in what we see as a growing valuable and somewhat transitional market. So before we dive into the results, let me mention today that we announced that we have acquired perpetual license to a copy of the source code for the BOHA! Software for a consideration of 2,550,000.00, plus approximately 1,000,000 of professional services fees in connection with the in housing transition that we’ll undertake.
We see this as a very important step in the life of Transact and frankly, a decision that should generate significant benefits for the company in the coming years. It’s a pretty big deal. So first, let me talk about why this was the correct move at this time. As many of you were already aware, the BAHA software was initially developed by a small third party software development shop, but was then acquired by a much larger company. And for many years, we have been licensing the software for use, but paying royalty fees as a percentage of the software sales.
Further, since we didn’t own the software and it was not operating in our environment, we had to rely on third party support for implementing changes, bug fixes, enhancements to the code. This was, as you’d expect, time consuming, a complex process that didn’t really allow us what I would consider direct control over the results. Part of the new agreement we have is that we will now host the code in our own cloud environment, giving us full control over when and what has changed. We expect to fully be deployed on the version of the code in the 2027. While we expect to incur some incremental costs associated with the hosting and maintaining the code ourselves, we believe the freedom and agility to modify it and use it in perpetuity at our discretion is certainly worth the price.
This agreement also gives us the ability to sublicense the code, which is an important potential benefit for the company in the future. Taken altogether, we believe this move unlocks significant value for Transact and gives us an important opportunity to generate incremental revenue. Finally, let me quickly talk through the financial impact of this strategic move. First and later, Steve will cover the balance sheet implications in more detail. But in summary, we expect to capitalize 3,550,000.00 of the purchase price, which is the purchase and the services to get all this done, and we will capitalize that and then begin to amortize it in early twenty twenty seven when our hosted version will go live.
And over that period of time, we’ll also see some cost savings as we no longer will be required to pay royalties. And once our version is live, we expect to incur some additional costs in R and D beyond the royalty savings at first, as we will now be operating and modifying the code ourselves. So next, let me dive into our FST highlights for the quarter. Total FST revenue rose to $4,800,000 up 14% year over year, fueled by a mix of higher hardware sales and growing recurring revenue. Recurring FST revenue climbed to $3,000,000 for the quarter showing solid gains both sequentially and year over year, but we also saw a small gain in the ARPU, that’s the average revenue per unit to seven ninety two dollars again, up on both fronts.
And we feel these metrics reflect our discipline and focus on the sales process and its improvements combined with continued focus on operational efficiency. And this has resulted in our second consecutive quarter of positive adjusted EBITDA and building on our success from the last quarter. The main takeaway is that we’re executing against our operational priorities and moving the needle in a meaningful way on the FST side of the business. We’re seeing strong momentum and we believe the changes we’ve made in the GTM, again, that’s go to market, are yielding tangible results for the business. The rollouts we mentioned last quarter are progressing according to plan and our existing base of approximately 40,000 Accudate 9,700 units along with first generation BOHA!
Terminals represent a ripe opportunity for us for upgrades and expansions, and we are making sure that we focus on that as well as new clients and customer expansions. We continue to drive the conversions and the expansions with key customers in the second quarter, including further upgrades across multiple T1 key accounts. These include additional rollouts with a major quick service restaurant and convenience store chains and where the Terminal 2 is being recognized for its value in enhancing food safety, labeling and improving overall efficiency. We’re getting really good traction with a lot of our clients and they see the value here and that’s great news. Feedback’s positive, reinforcing our optimism for ongoing adoption.
The sales team has refined its processes for lead tracking and nurturing leads that has maintained a solid and sufficient well scrubbed pipeline that basically holds steady quarter over quarter, even though we closed deals from the pipeline and then we add more back in. And that’s been yielding improving revenue results. In Q2, we closed two new logos, but we also focus on expansion from the land and expand strategy that we use, and that seems to be working well. We’d like to get the initial, if you will, bite of the apple, and then adding more product over time is easier than trying to land a huge deal upfront, And that’s a much more strategic yet tactical way to approach new client additions. Shifting over to casino and gaming, we’re still experiencing the rebound we anticipated.
We expect these positive results to persist at around current levels throughout the rest of the year. Total casino and gaming revenue reached $7,600,000 up 42% year over year and 14% sequentially from $6,700,000 in the first quarter. These results were primarily driven by improved market demand as we highlighted in the last call with all of our major U. S. OEM partners remaining in buying positions after we work with them to resolve the prior inventory oversupply.
We also benefited from sales to a new OEM for casino, that’s what we call it, non casino charitable gaming applications. It’s a segment of the gaming market that we believe may present a sizable growth opportunity as states move to regulate this previously unregulated portion of the market. These are opportunities where there’s a charity that basically sort of like if you think about state lottery systems, where some of the money goes to the lottery system providers, some of it goes to the lottery player and some of it goes to the state. There are charitable gaming systems that where it could be in an Elks Lodge, it could be in VFW home, and they have essentially gaming systems in there. And the market has previously was unregulated and now states are getting into the mix, and we’ve had some good wins there and it’s making a difference for us.
We’re also seeing good initial results from our EPYC TR80, the thermal roll printer, which fully entered the market last quarter and is gaining traction in sports betting kiosks, video lottery terminals, and other applications. And though sales in the TR-eighty were modest in the second quarter, we expect sales to ramp in the second quarter or 2025 and be a larger contributor to our overall casino and gaming markets over time. Also, I’ll add that our partnership with Casino Track also continues to thrive with Epicentral integrated into their slot suite offering to drive player engagement and generate steady subscription income. We’re going to stay vigilant about the broader economic factors surrounding casino and gaming. That industry is going through a bit of a bumpy time right now, but we don’t see any long term or mid midterm concerns about the market.
I think everybody kind of recovered from the pandemic, and they had a little bit of a hangover. And I think things are stabilizing out, but it’s kind of been up and down. But we’re still seeing good good sourcing from the casinos and demand from the casino from the slot manufacturers. Clearly, we are excited about the consistent improving results here, but for both FSG and casino and gaming, it speaks to the streamlining and improved processes that we’ve been putting in place throughout the business. The board and management remain committed, as you would hope, to maximizing shareholder value and prioritizing incremental initiatives, disciplined investments and execution of our corporate plan.
We’ll revisit strategic options if conditions improve or compelling opportunities emerge, but for now, we believe our internal momentum is the best path to building long term shareholder value. And before handing the call over to Steve, let me update our financial outlook for 2025. Based on the strong first half, we’re raising our full year guidance to between $49,000,000 and $53,000,000 in revenue, reflecting confidence in continued FST expansion and casino stability. Adjusted EBITDA is now expected to range from zero, also known as breakeven, to a positive 1,500,000.0, which is an improvement from last quarter’s guidance assuming no major disruptions in supplier demand. Our robust balance sheet with ample working capital provides flexibility and a proven cost discipline positions to deliver enhanced profitability.
So we’re in pretty good shape there. In summary, we’re delighted with the second quarter results and the progress across the business. We drove significant BOHA! Terminal sales growth, achieved higher FST revenue with strong recurring contributions and maintained positive adjusted EBITDA. The BOHA!
Platform is expanding successfully in convenience stores, healthcare and beyond fueled by our land and expand strategy. The casino and gaming rebound is delivering as expected with key wins from OEM partners and momentum in products like the Epic TR80. We continue our focus on execution, operational improvements and fiscal discipline, drive shareholder value. And I’ll tell you, I’m very excited about the transaction of acquiring the actual source code and software for the BOHA! Suite of products.
That’s gonna give us a huge amount of additional momentum. And I’m very excited about the potential that we now have our hands around. So summing it up, I’m very proud of the team’s performance, optimistic about the 2025 and into 2026 to streamline the business and anticipate beginning to produce more consistent growth across all markets. And with that, I’ll turn the call over to Steve for a detailed review of the financials. Steve?
Steve P. Martina, President and CFO, TransAct Technologies: Thanks, John, and thanks everyone for joining us today. Let’s take a look at the second quarter results in a little more detail. Total net sales for the second quarter were 13,800,000.0 That was up 6% sequentially, and also up 19% compared to $11,600,000 in the prior year period. Sales from our food service technology market, or FST, for the second quarter were 4,700,000.0 That was down slightly by 3% sequentially, but up 14% compared to $4,200,000 in the prior year period. Our recurring FST sales, which include software and service subscriptions, as well as consumable label sales for the second quarter were $3,000,000 and that was up 11% sequentially and 7% compared to $2,800,000 in the prior year period.
Our ARPU for the ’5 was $792 That was up 10% year over year. As I remind you each quarter, we continue to sell a number of BOHA! Terminals to a large QSR with non recurring revenue attached to start. While this presents an opportunity to sell recurring elements in the future, for now they continue to represent a drag on our ARPU number. In the quarter, a large number of our terminals fell into this category again, and we expect this to continue into the near future.
Our casino and gaming sales were $7,600,000 and that was up 14% sequentially and 42% year over year. This reflects normalized buying levels from almost all our major OEMs, as well as a new OEM win for non casino charitable gaming applications, which could represent a sizable growth opportunity over time. We believe sales from the casino and gaming market should maintain a similar run rate through at least the ’5. POS automation sales for the second quarter declined 49% from the prior year to $590,000 As we’ve discussed in the past, we believe that the Ithaca nine thousand sales have now reached normalized levels. We expect sales for POS automation to remain in about the $500,000 to $600,000 range per quarter for the remainder of ’twenty five.
Moving to Transact Services Group, or TSG, for the second quarter. TSG sales were down 10% year over year to 818,000 This decrease was largely due to lower demand for legacy spare parts and service on a year over year basis. We expect TSG sales to remain approximately at this quarterly run rate going forward, consistent with normalized demand. Moving down the income statement now, our second quarter gross margin was 48.2%, and that was down from 52.7% in the prior year period, but only down 50 basis points sequentially. This is the result of a higher mix of FST hardware sales, which carry lower margins than casino and gaming products, and to a lesser extent, increased overhead costs, inflation, and lower prices on our POS automation printer due to increased competitive pressure.
Going forward, we expect our gross margin to remain in the mid to high 40% range for the remainder of ’25. I also want to give a brief update on our tariff situation. Last quarter, we added a small tariff surcharge to our applicable imported items, which was generally received well by our customers. Based on the further tariff modifications announced last week, we expect to incur another increase in tariff costs on our imports. As a result, we expect to take a second pricing action with customers in the coming weeks to cover the incremental cost.
As you can imagine, this is a fluid situation that we’ll continue to closely monitor and update you as needed. Our total operating expenses for the second quarter increased by 6% from the prior year second quarter to 6,900,000.0. Our engineering and R and D expenses for the second quarter were down 4% year over year to 1,700,000.0. Our selling and marketing expenses were also down 4% to $2,100,000 and our G and A expenses were up 21% to $3,100,000 The increase in G and A was largely a result of higher incentive and share based compensation expenses from our improved year over year results. For the second quarter, we had an operating loss of $258,000 or negative 1.9% of net sales, and that compares to an operating loss of $438,000 or negative 3.8% of net sales in the prior year period.
On the bottom line, we recorded a net loss of $143,000 or negative 1¢ per share, and that compares to a net loss of $319,000 or negative $03 per share in the year ago period. Our adjusted EBITDA for the quarter remained positive at $478,000 and that was up from positive $89,000 in the prior year period. And lastly, turning to our balance sheet, it continues to remain solid. We had cash and cash equivalents of almost $18,000,000 with only the $3,000,000 of required minimum borrowings outstanding under our $10,000,000 credit facility at the end of the second quarter. Before I finish my remarks, I wanted to take a few minutes to discuss the expected financial impact from the acquisition of the license for our BOHA!
Source code. As John discussed, we expect this to be a largely balance sheet event until we go live with our own hosted version, which we expect will be in early ’twenty seven. To that end, we expect to capitalize substantially all of the $3,550,000 of total consideration to be paid, plus any additional costs we incur related to in housing the source code through the go live date. These costs will appear as an intangible asset on our balance sheet. At the go live point, we expect to begin to amortize the total amount of the capitalized cost to cost of sales on our income statement over about a five to seven year period.
From a cash perspective, we expect to fund the $2,550,000 purchase price, plus the $1,000,000 of professional services fees and any other related costs from the approximate $18,000,000 of cash that we currently have on our balance sheet. The $3,550,000 of total consideration is expected to be paid in installments, with about $1,350,000 to be paid in the ’5, and the remaining approximately $2,200,000 to be paid during calendar ’twenty six. From a P and L perspective, we expect three items to impact our P and L related to the Source Code acquisition. First, cost savings realized from the elimination of the royalty fees that we currently pay on our BOHA! Software subscriptions.
Second, amortization expense of the capitalized costs. And third, incremental costs we incur after go live that will be expensed versus being capitalized prior to go live. Based on our projections, we expect the P and L impacts from these items to become net positive to our P and L within four to five years. The point at which we estimate the royalty fee savings on our expected growing software subscriptions will outpace the combination of amortization expense and the incremental expenses needed to support the software in house. And lastly, from an EBITDA perspective, we expect it to be accretive immediately due to the add back of projected amortization expense.
And with that, I’d like to turn the call back over to the operator for questions. Operator?
Conference Operator: Thank And we’ll take our first question from Jeff Martin with ROTH Capital Partners. Please go ahead. Your line is open.
Jeff Martin, Analyst, ROTH Capital Partners: Thanks. Good afternoon. John, I was wondering if you could dive in a little bit on, you know, FST excluding the QSR, how, you know, how satisfied you are, maybe detail some of the progress into selling into, you know, the the newer client base. I know you mentioned two new logos in the quarter, but, give us a gauge of of, you know, how you’re looking at that.
Steve P. Martina, President and CFO, TransAct Technologies: John, are you on mute?
John Dillon, CEO, TransAct Technologies: Yeah, I didn’t want the background noise to get interfered with the call. So my apologies, Jeff. Listen, it’s a great question. I’m excited about the progress we’ve made. It’s it’s progress in, as I mentioned, it’s sort of like discipline process and execution.
And we are making good progress there. We have more to make. The good thing about the GTM, the go to market is it’s almost an area where no matter how good your product is, you can always improve your customer engagement, how you engage, you know, how do you find clients, how do you engage with them and how do you execute against that engagement and ultimately land business. So I think the progress is good. It’s still lumpy because customers, we do this land and expand thing that I mentioned where the goal is to try to get the camel’s nose into the tent.
And if the product works well, which it does, the customer’s delighted and then it’s a lot easier to sell more product than trying to get a very large order upfront. The other thing that we’re doing in addition to focusing on that is we’ve targeted specifically the clients that can make the sales effort worthwhile, in other words, they have the potential to buy enough or spend enough money with us over time, that the economics of the sales process is more than covered, the CAC, the customer acquisition cost is covered. So we’re pretty focused on that and the numbers there are getting better and better. And then the kind of the final thing I’ll say is that, we’ve done a lot in the area of sales training where we’re not so much training the people how to sell stuff, but more, you know, what is the value, the ROI to the customer? Why should the client care?
And then how do we express that? We have to express that both in literature, the website, and then in the narrative that our salespeople engage with their clients. And so I guess kind of a long answer here. It’s lots of little things added together. And generally speaking, I’m I’m quite pleased with the progress.
The good news is there’s lot more progress to be made.
Jeff Martin, Analyst, ROTH Capital Partners: Great. And on on the, sale of terminals to the large QSR, are you having dialogue today about potentially adding software components to that? I know that would be a nice incremental benefit to the business longer term.
John Dillon, CEO, TransAct Technologies: The answer to that question is yes.
Jeff Martin, Analyst, ROTH Capital Partners: Excellent. That’s great to hear. And then on on the casino and gaming side, I know you mentioned q three would be similar to q two, which is great to hear. I think that exceeded, you know, people’s expectations. Is this kind of a new level of market share?
And do you think you’ve do you think you’ve gained that market share on a on an ongoing basis?
John Dillon, CEO, TransAct Technologies: I’ll say a few things and then Steve’s going to be closer to the specific numbers we might be expecting in the next quarter or two. I think we’re executing with a greater degree of focus and a greater degree of passion. I wouldn’t say we’ve whipped the sales team into a frenzy, but I mean our expectation is that gradually we want to erode the positions that other large vendors have in our marketplace. And that’s got to be a focus on where new opportunities are emerging. Are we there?
Are we present? Are we suited up? Are we in the playing field? When we show up, what do we do when we get there? What what are our differentiators?
How do we win and why do we win? It’s basically, if you will, an injection of additional discipline, in including even adjusting the compensation plans to create a focus on winning and landing new business, paying the sales team more money for taking a customer away or expanding a new customer as opposed to follow on replacement units in existing client. All those things are sort of adding up. And I would say slowly, we’re gradually making incursions into the installed base of some of our customer other of our competitors. And I like that.
And if there’s a new casino that’s gonna being open, I want our team to be there. I want them to be suited up, ready for battle and expect them to win. And, I think we’re just bringing in a greater degree of intensity to that market. And then as I pointed out, we have some exciting progress. The Casino Track partnership is going quite well.
And we had one of our, innovative, and creative sales individuals bring that deal to the table, which is great. And then that’s encouraging the sale of Epic Central and it generates recurring software revenue, SaaS revenue, which is good for us. We like that, high margin. And the other thing is, this area of this non casino based gambling is an area that seems to be on the cusp of a pretty big upsell, not upsell, but kind of an updraft. And, we kind of got in there early and we’re taking a look at that.
And we think there’s probably an opportunity for machines to go into marketplaces that really were not much of a focus for us, but frankly for the industry. So that’s exciting as well. And I think our attention to the market dynamics, has improved, and I’m pleased with that progress. And I think you’re gonna see more of that sort of finding its way into our results.
Jeff Martin, Analyst, ROTH Capital Partners: Great. Thank you.
Conference Operator: Thank you. It appears we have no further questions on the line. I will turn the program back over to John Dillon for any additional or closing remarks.
John Dillon, CEO, TransAct Technologies: Alright, everybody. Well, listen. Thanks so much for joining us today. We appreciate your time and attention. Steve and I are always willing to take a call even between cycles in these quarterly reports.
So I appreciate your support and continued attention to our progress. And with that, I’d like to wish you fair winds in following speed and farewell until next time.
Conference Operator: Thank you. At this time, thank you. That brings us to the end of today’s meeting. We appreciate your time and participation. You may now disconnect.
Thank you.
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