Third Quarter Revenue of $60.4 Million, a 20%
Year over Year Increase
Third Quarter U.S. GAAP Net Income of $6.7
million
Record Adjusted EBITDA of $10.1 Million, a 176%
Increase Compared to Q322
Reiterates Fiscal Year 2023 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 third quarter ended March 31, 2023.
“We experienced strong financial results in Q3, with record
revenue in transaction fees and subscription fees, which
demonstrates progress on our strategic initiatives and the adoption
of our new products,” said Ravi Venkatesan, chief executive
officer, Cantaloupe. “We also reported a record quarter of Adjusted
EBITDA, illustrating our ability to unleash operating leverage. The
integration of Three Square Market (“32M”) is going very well and
we are seeing an acceleration of our micro markets business as both
existing and new customers are migrating their kiosks to the 32M
platform.”
Third Quarter 2023 Key Financial Results:
- Revenue of $60.4 million, an increase of 20% year over year.
- Transaction fees of $33.4 million, an increase of 21% year over
year
- Subscription fees of $17.9 million, an increase of 22% year
over year
- Equipment sales of $9.1 million, an increase of 12% year over
year
- Total Dollar Volumes of Transactions were $653.6 million, an
increase of 16% year over year
- Transactions totaled 268 million at the end of the third
quarter of 2023 compared to 259 million at the end of the third
quarter of 2022, an increase of 4%
- Gross margin of 37.9% compared with 32.2% in the prior year
quarter
- Subscription and transaction fees margins of 42.3% compared to
40.0% in the prior year quarter
- Equipment sales margins of 13.4% compared to negative 8.0% in
the prior year quarter
- U.S. GAAP Net income applicable to common shares of $6.7
million, or $0.09 per share, compared to Net income applicable to
common shares of $1.8 million, or $0.03 per share, in in the prior
year quarter
- Adjusted EBITDA[1] of $10.1 million, an increase of 176%,
compared to $3.7 million in in the prior year quarter
Third Quarter 2023 Business Highlights:
- Active Customers totaled 27,598 at the end of the third quarter
of 2023 compared to 22,818 at the end of the third quarter of 2022,
an increase of 21%.
- Active Devices totaled 1.15 million at the end of the third
quarter of 2023 compared to 1.13 million at the end of the third
quarter of 2022, an increase of 2%.
- Following the acquisition of 32M in December of 2022, the
Company has seen a successful acceleration in the micro market
business as both existing and new customers are migrating their
kiosks to the 32M platform.
- Continued to see significant customer interest and growth in
the newly launched Cantaloupe ONE Platform, a bundled subscription
model, which provides operators the flexibility and predictability
of a monthly, fixed subscription amount covering the hardware and
service fees.
Fiscal Year 2023 Outlook:
For the full fiscal year 2023, the Company reiterates the
following:
- Revenue to be between $240 million and $250 million
- U.S. GAAP Net income to be between $(2) million and $3
million
- Adjusted EBITDA1 to be between $12 million and $17 million
- Total Operating Cash Flow to be between $10 million and $15
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.
Please note that there is a new system to access the live call
in order to ask questions. To join the live call, 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.
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 loss before (i)
interest income (ii) interest expense on debt and 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, and (viii) certain other
significant, infrequent or unusual losses and gains that are not
indicative of our core operations such as acquisition and
integration expenses.
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 and public health emergencies
such as COVID-19; 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; whether our current or future
customers purchase, lease, rent or utilize ePort devices, Seed’s
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 satisfy our trade
obligations included in accounts payable and accrued expenses; 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 retain key 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; 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 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; risks
associated with the recently settled 2019 Investigation, which
remains subject to the SEC’s issuance of its final Order; 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, 2022. 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.
_____________________________ 1Adjusted
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.
-F--CTLP
Cantaloupe, Inc.
Condensed Consolidated Balance
Sheets
($ in thousands, except share
data)
March 31, 2023
(Unaudited)
June 30, 2022
Assets
Current assets:
Cash and cash equivalents
$
46,676
$
68,125
Accounts receivable, net
29,219
37,695
Finance receivables, net
7,477
6,721
Inventory, net
29,837
19,754
Prepaid expenses and other current
assets
5,035
4,285
Total current assets
118,244
136,580
Non-current assets:
Finance receivables due after one year,
net
13,870
14,727
Property and equipment, net
22,790
12,784
Operating lease right-of-use assets
2,799
2,370
Intangibles, net
27,817
17,947
Goodwill
92,772
66,656
Other assets
4,804
4,568
Total non-current assets
164,852
119,052
Total assets
$
283,096
$
255,632
Liabilities, convertible preferred
stock and shareholders’ equity
Current liabilities:
Accounts payable
$
51,019
$
48,440
Accrued expenses
25,732
28,154
Current obligations under long-term
debt
787
692
Deferred revenue
1,894
1,893
Total current liabilities
79,432
79,179
Long-term liabilities:
Deferred income taxes
258
186
Long-term debt, less current portion
38,314
13,930
Operating lease liabilities,
non-current
2,641
2,366
Total long-term liabilities
41,213
16,482
Total liabilities
120,645
95,661
Commitments and contingencies
Convertible preferred stock:
Series A convertible preferred stock,
900,000 shares authorized, 385,782 and 445,063 issued and
outstanding, with liquidation preferences of $22,144 and $22,115 at
March 31, 2023 and June 30, 2022, respectively
2,720
3,138
Shareholders’ equity:
Common stock, no par value, 640,000,000
shares authorized, 72,509,261 and 71,188,053 shares issued and
outstanding at March 31, 2023 and June 30, 2022, respectively
475,015
469,918
Accumulated deficit
(315,284
)
(313,085
)
Total shareholders’ equity
159,731
156,833
Total liabilities, convertible preferred
stock and shareholders’ equity
$
283,096
$
255,632
Cantaloupe, Inc.
Condensed Consolidated
Statements of Operations
(Unaudited)
Three months ended
Nine months ended
March 31,
March 31,
($ in thousands, except per share
data)
2023
2022
2023
2022
Revenues:
Subscription and transaction fees
$
51,245
$
42,143
$
147,252
$
123,956
Equipment sales
9,111
8,157
32,216
23,215
Total revenues
60,356
50,300
179,468
147,171
Costs of sales:
Cost of subscription and transaction
fees
29,577
25,291
90,149
76,234
Cost of equipment sales
7,886
8,809
33,823
23,871
Total costs of sales
37,463
34,100
123,972
100,105
Gross profit
22,893
16,200
55,496
47,066
Operating expenses:
Sales and marketing
3,154
1,937
8,888
6,021
Technology and product development
4,594
5,532
16,757
16,701
General and administrative
7,041
6,788
25,179
21,724
Investigation, proxy solicitation and
restatement expenses
(1,000
)
—
(453
)
—
Integration and acquisition expenses
—
—
2,787
—
Depreciation and amortization
2,364
1,062
5,029
3,197
Total operating expenses
16,153
15,319
58,187
47,643
Operating income (loss)
6,740
881
(2,691
)
(577
)
Other income (expense):
Interest income from leases
540
445
1,985
1,363
Interest income (expense)
(263
)
852
(1,258
)
(100
)
Other income (expense)
(13
)
(7
)
(112
)
(83
)
Total other income
264
1,290
615
1,180
Income (loss) before income taxes
7,004
2,171
(2,076
)
603
Provision for income taxes
(56
)
(35
)
(123
)
(226
)
Net income (loss)
6,948
2,136
(2,199
)
377
Preferred dividends
(289
)
(334
)
(623
)
(668
)
Net income (loss) applicable to common
shares
$
6,659
$
1,802
$
(2,822
)
$
(291
)
Net earnings (loss) per common share
Basic and diluted
$
0.09
$
0.03
$
(0.04
)
$
—
Weighted average number of common shares
outstanding used to compute net earnings (loss) per share
applicable to common shares
Basic
72,491,373
71,083,044
71,771,135
71,076,022
Diluted
72,866,221
71,486,718
71,771,135
71,076,022
Cantaloupe, Inc.
Condensed Consolidated
Statements of Cash Flows
(Unaudited)
Nine months ended
March 31,
($ in thousands)
2023
2022
Cash flows from operating
activities:
Net income (loss)
$
(2,199
)
$
377
Adjustments to reconcile net income (loss)
to net cash provided by (used) in operating activities:
Stock based compensation
2,889
4,624
Amortization of debt issuance costs and
discounts
87
68
Provision for expected losses
1,823
2,519
Provision for inventory reserve
25
334
Depreciation and amortization included in
operating expenses
5,029
3,197
Depreciation included in costs of sales
for rental equipment
852
738
Other
6
402
Changes in operating assets and
liabilities:
Accounts receivable
9,589
(4,415
)
Finance receivables
(653
)
(627
)
Inventory
(8,245
)
(8,691
)
Prepaid expenses and other assets
(746
)
(1,909
)
Accounts payable and accrued expenses
(2,868
)
(206
)
Operating lease liabilities
183
(547
)
Deferred revenue
1
207
Net cash provided by (used in) operating
activities
5,773
(3,929
)
Cash flows from investing
activities:
Acquisition of business, net of cash
acquired
(35,855
)
(2,966
)
Purchase of property and equipment
(12,634
)
(7,198
)
Net cash used in investing activities
(48,489
)
(10,164
)
Cash flows from financing
activities:
Payment of third-party debt issuance
costs
—
(107
)
Proceeds from long-term debt
25,000
738
Repayment of long-term debt
(580
)
(437
)
Contingent consideration paid for
acquisition
(1,000
)
—
Proceeds from exercise of common stock
options
—
849
Repurchase of Series A Convertible
Preferred Stock
(2,153
)
—
Net cash provided by financing
activities
21,267
1,043
Net decrease in cash and cash
equivalents
(21,449
)
(13,050
)
Cash and cash equivalents at beginning of
year
68,125
88,136
Cash and cash equivalents at end of
period
$
46,676
$
75,086
Supplemental disclosures of cash flow
information:
Interest paid in cash
$
1,869
$
542
Common stock issued in business
combination
$
3,942
$
—
Cantaloupe, Inc.
Reconciliation of U.S. GAAP
Net Loss to Adjusted EBITDA
(Unaudited)
Three months ended March
31,
($ in thousands)
2023
2022
U.S. GAAP net income
$
6,948
$
2,136
Less: interest income
(540
)
(445
)
Plus: interest expense
263
(852
)
Plus: income tax provision
56
35
Plus: depreciation expense included in
costs of sales for rentals
297
220
Plus: depreciation and amortization
expense in operating expenses
2,364
1,062
EBITDA
9,388
2,156
Plus: stock-based compensation (a)
1,410
1,495
Plus: investigation, proxy solicitation
and restatement expenses (b)
(1,000
)
—
Plus: severance expenses (c)
273
—
Adjustments to EBITDA
683
1,495
Adjusted EBITDA
$
10,071
$
3,651
(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 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. During the three
months ended March 31, 2023, we incurred costs of $1.0 million
relating to the settlement of the 2019 Investigation, but received
a $2.0 million D&O insurance reimbursement for legal fees and
expenses incurred in connection with the 2019 Investigation.
Accordingly, Adjusted EBITDA contains a $1.0 million negative
adjustment.
(c)
As an adjustment to EBITDA, we have
excluded expenses incurred in connection with a one-time,
non-recurring severance charges related to work force
reduction.
Nine months ended March
31,
($ in thousands)
2023
2022
U.S. GAAP net (loss) income
$
(2,199
)
$
377
Less: interest income
(1,985
)
(1,363
)
Plus: interest expense
1,258
100
Plus: income tax provision
123
226
Plus: depreciation expense included in
costs of sales for rentals
852
738
Plus: depreciation and amortization
expense in operating expenses
5,029
3,197
EBITDA
3,078
3,275
Plus: stock-based compensation (a)
2,889
4,624
Plus: investigation, proxy solicitation
and restatement expenses (b)
(453
)
—
Plus: integration and acquisition expenses
(c)
2,787
—
Plus: severance expenses (d)
273
—
Adjustments to EBITDA
5,496
4,624
Adjusted EBITDA
$
8,574
$
7,899
(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 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. During the nine months
ended March 31, 2023, we incurred additional costs relating to the
settlement of the 2019 Investigation, but received a $2.0 million
D&O insurance reimbursement for legal fees and expenses
incurred in connection with the 2019 Investigation. Accordingly,
Adjusted EBITDA contains a negative adjustment.
(c)
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.
(d)
As an adjustment to EBITDA, we have
excluded expenses incurred in connection with a one-time,
non-recurring severance charges related to work force
reduction.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230504006010/en/
Investor Relations: ICR, Inc. CantaloupeIR@icrinc.com
Media: Jenifer Howard | 202-273-4246
jhoward@jhowardpr.com media@cantaloupe.com
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