Financial Data and Key Metrics Changes - Total revenue increased by 11% year over year to $75.4 million, driven by 10% growth in both transaction and subscription revenue [5][13] - Equipment revenue was $10.2 million, an 18% increase compared to the same quarter last year [6][16] - Adjusted EBITDA for Q3 was $13.9 million, reflecting a 37% increase compared to the prior year [7][19] - Total adjusted gross margin expanded to 41.6% from 39.6% in the same quarter last year [6][16] - Net income applicable to common shares was $48.9 million, or $0.65 diluted earnings per share, significantly up from $4.4 million or $0.06 diluted earnings per share in the prior year [18] Business Line Data and Key Metrics Changes - Subscription revenue reached $21.2 million, a 10% year-over-year increase, while transaction revenue was $44 million, also up 10% [14][16] - The average revenue per unit (ARPU) for Q3 was $2.06, an 11% increase from the prior year [16] - Equipment revenue growth was attributed to the success of the SmartStore offering [16] Market Data and Key Metrics Changes - As of March 31, 2025, the company had over 34,000 active customers and 1.26 million active devices, representing a 114% increase year over year [15] - International revenue is expected to be around 3% to 4% as the company exits FY 2025, with growth anticipated in FY 2026 [50] Company Strategy and Development Direction - The company aims to scale its business in Europe and Latin America while refining its go-to-market strategy across direct and indirect channels [12] - The SmartStore product is seen as a significant growth driver, with expectations of substantial sales increases in the fourth quarter [25][36] Management's Comments on Operating Environment and Future Outlook - Management noted that transaction revenue was impacted by adverse weather events, estimating a $2 million loss primarily in January and February [15][23] - There is optimism regarding a rebound in equipment sales due to settling economic uncertainties and improved market conditions [42][43] - The company is unlocking benefits from accumulated losses, which will positively impact income and free cash flow in upcoming quarters [55] Other Important Information - The company launched Cantaloupe Capital, providing customers with flexible access to cash flow for equipment investments [11] - The Engage Pulse cashless device has been well received, with significant sales increases reported by customers [10] Q&A Session Summary Question: Impact of weather on transaction revenue - Management quantified the weather impact on transaction revenue at approximately $2 million, primarily in January and February [23] Question: Demand for SmartStore product - Management indicated a strong ramp-up in SmartStore demand, noting it as the hottest selling product [25] Question: Updates on international markets - Management provided positive updates on scaling efforts in Europe and Latin America, with more details expected soon [26] Question: Revenue opportunities between different product lines - Management discussed the evolution of self-service commerce, highlighting the growth potential of SmartStores compared to traditional vending and micro markets [30][34] Question: Equipment sales and economic uncertainty - Management confirmed that the slowdown in equipment sales was due to economic uncertainty, but noted a rebound in sales in the fourth quarter [43][44] Question: Expectations for international revenue - Management anticipates international revenue to be around 3% to 4% as they exit FY 2025, with continued growth expected [50] Question: Free cash flow expectations - Management projected free cash flow for the fourth quarter to be in the range of $15 million to $18 million [51]

Financial Data and Key Metrics Changes - Total revenue increased by 11% year over year to $75.4 million, driven by 10% growth in both transaction and subscription revenue [5][14] - Equipment revenue was $10.2 million, an 18% increase compared to Q3 FY24, although lower than anticipated due to weather events and economic uncertainty [6][17] - Adjusted EBITDA for Q3 was $13.9 million, a 37% increase compared to the prior year, reflecting improved margins and operating leverage [7][20] - Total adjusted gross margin expanded to 41.6% from 39.6% in the same quarter last year [6][17] - Net income applicable to common shares for Q3 was $48.9 million, or $0.65 diluted earnings per share, significantly impacted by a tax benefit [19] Business Line Data and Key Metrics Changes - Subscription revenue reached $21.2 million, a 10% year-over-year increase, while transaction revenue was $44 million, also up 10% [14] - The average revenue per unit (ARPU) for Q3 was $2.06, an 11% increase from the prior year [16] - Subscription adjusted gross margin improved to 90.7% from 89.6% in the prior year, while transaction gross margin increased to 24.8% from 22.8% [17] Market Data and Key Metrics Changes - As of March 31, 2025, the company had over 34,000 active customers and 1.26 million active devices, representing a 114% increase year over year [15] - The company is seeing strong growth in micro markets and penetration of seed software among both existing and new customers [7][8] Company Strategy and Development Direction - The company aims to scale its business in Europe and Latin America while refining its go-to-market strategy across direct and indirect channels [13] - The introduction of Cantaloupe Capital aims to provide customers with flexible access to cash flow for equipment investments and business growth [12] Management's Comments on Operating Environment and Future Outlook - Management noted that transaction revenue was materially impacted by adverse weather events, estimating a $2 million loss primarily in January and February [15][23] - The company has revised its fiscal year 2025 guidance, expecting total revenues between $302 million and $308 million, representing growth of 13% to 15% [21] - Management expressed optimism about a rebound in equipment sales in the fourth quarter, driven by improved market conditions [42] Other Important Information - The company released a valuation allowance of $42.2 million associated with deferred tax assets, reflecting sustained profitability and anticipated future earnings [19] - Cash and cash equivalents at the end of Q3 were $46.3 million, representing a sequential growth of $18.6 million [20] Q&A Session Summary Question: What was the impact of weather on transaction revenue? - Management quantified the weather impact on transaction revenue at approximately $2 million, primarily in January and February [23] Question: What are the early indications of SmartStore product demand? - Management indicated a strong ramp-up in SmartStore demand, noting it as the hottest selling product at the NAMMA show [26] Question: Any updates on international revenue, particularly in Latin America? - Management mentioned exciting updates in Latin America but stated it was premature to share specific details [27] Question: How does revenue opportunity compare between traditional vending, smart stores, and other verticals? - Management explained that SmartStore is expected to significantly outperform traditional vending and micro markets in terms of sales and margins [32][35] Question: What is the expected international revenue percentage exiting this year? - Management anticipates international revenue to be in the 3% to 4% range as they exit FY25 [49] Question: What is the expected free cash flow for the upcoming quarter? - Management expects free cash flow to be in the range of $15 million to $18 million for the fourth quarter [50]

Financial Data and Key Metrics Changes - Total revenue increased by 13% year over year to $73.7 million, driven by 17% growth in transaction revenue and 14% growth in subscription revenue [7][17] - Adjusted gross margin for the quarter was 41.7%, up from 37.2% in the same quarter last year [7][19] - Adjusted EBITDA for Q2 was $10.7 million, a 26% increase compared to the prior year [7][20] - Net income applicable to common shares for the quarter was $5 million, or $0.07 diluted earnings per share, compared to $3.1 million, or $0.04 diluted earnings per share in the prior period [20] Business Line Data and Key Metrics Changes - Subscription revenue grew by 14% year over year to $20.7 million, while transaction revenue increased by 17% to $44.4 million [17][19] - Equipment revenue decreased by 7% to $8.6 million compared to Q2 FY 2024 [19] - The average revenue per unit (ARPU) for Q2 was $2.00, up 12% from the prior year [18] Market Data and Key Metrics Changes - As of December 31, 2024, the company had over 32,000 active customers and 1.3 million active devices, representing increases of 104% respectively compared to the prior year [18] - The company is expanding its international presence, particularly in Europe and Latin America, with recent wins in micro markets [30] Company Strategy and Development Direction - The company aims to continue expanding operational support internationally and refine its go-to-market strategy across both direct and indirect channels [16] - New product launches, such as the SmartStore series, are designed to address challenges like labor shortages and theft, while expanding into new retail opportunities [13][14] - The company is focusing on enhancing its micro lending services to help customers overcome capital constraints [15][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, particularly in micro markets and smart stores, which are driving higher transaction values [41][52] - The company reaffirmed its fiscal year 2025 guidance, expecting total revenue to be between $308 million and $322 million, representing growth of 15% to 20% [23][24] Other Important Information - The company has recently refinanced and upsized its credit facility to $100 million, providing flexibility for future capital uses [21] - The Cantaloupe Advantage program aims to engage consumers through digital advertising at point-of-sale devices, generating over 1 million impressions in the first ten weeks [16][62] Q&A Session Summary Question: Can you talk about the average revenue per unit and its evolution? - Management noted significant growth in transaction processing and an increase in average ticket size due to product mix shifts [25][26] Question: Any update on your international strategy and business mix? - Management confirmed ongoing international expansion efforts, particularly in Latin America and EMEA, with a current mix of under 5% international revenue [30] Question: How does the new microlending program work? - The company clarified that it does not hold any loans but partners with a trusted provider to facilitate loans for customers [34][35] Question: What are the key growth drivers among product lines? - Growth is driven by micro markets, smart stores, and a shift in product placement to higher-value locations [41][42] Question: Is the current margin level sustainable? - Management expressed confidence that the current margin levels are sustainable due to cost reduction measures and increased average ticket prices [46][47] Question: Can you elaborate on the guidance range for revenue and EBITDA? - The guidance range is primarily driven by larger equipment sales expected in the back half of the year, with a focus on maintaining transaction and subscription revenue growth [66][68]