TransAct Technologies’ Earnings Call Highlights Robust Growth

Transact Technologies ((TACT)) has held its Q1 earnings call. Read on for the main highlights of the call.

TransAct Technologies’ recent earnings call painted a picture of robust growth and positive momentum as the company kicked off 2025. The sentiment was largely optimistic, driven by record sales in BOHA! Terminals and significant growth in the casino and gaming segment. Positive financial metrics, including net income and adjusted EBITDA, underscored effective cost management. However, the company acknowledged challenges such as declining sales in POS automation and TSG, alongside a decrease in gross margin and ARPU. Despite these hurdles, the overall outlook remains positive, buoyed by strong financial improvements.

Record BOHA! Terminal Sales

TransAct Technologies reported a remarkable achievement in BOHA! Terminal sales, with 2,350 units sold, surpassing previous quarter results. This contributed to a total Foodservice Technology (FST) revenue of $14.9 million, marking a 49% year-over-year increase. This record performance highlights the strong demand and successful market penetration of their BOHA! product line.

Casino and Gaming Revenue Growth

The casino and gaming segment also experienced substantial growth, with revenue climbing to $6.7 million. This represents an 18% year-over-year increase and a 41% sequential rise, driven by improving market demand and a significant new OEM win. This growth underscores the company’s strategic focus on expanding its presence in the gaming industry.

Positive Net Income and Adjusted EBITDA

TransAct Technologies reported a positive net income of $19,000 and adjusted EBITDA of $544,000, showcasing a significant turnaround from a net loss of $1 million and negative adjusted EBITDA of $701,000 in the prior year. This improvement reflects the company’s effective cost discipline and operational efficiency.

Strong Balance Sheet

The company maintained a robust balance sheet, with cash and cash equivalents totaling $14.2 million and debt remaining steady at $3 million. This financial stability provides a solid foundation for future growth and investment.

Decline in POS Automation and TSG Sales

Despite the positive momentum, TransAct faced challenges with a 5% decline in POS automation sales, which fell to $618,000, and a 22% drop in TSG sales, which decreased to $808,000. These declines were attributed to strong prior year demand that did not repeat in the current period.

Gross Margin Decrease

The gross margin for the first quarter was 48.7%, down from 52.6% in the prior year period. This decrease was primarily due to a higher mix of lower-margin FST hardware sales, which impacted overall profitability.

ARPU Decline

The average revenue per user (ARPU) for the first quarter was $761, down 13% sequentially. This decline was due to sales of BOHA! terminals to a large quick-service restaurant (QSR) with no initial recurring revenue attached.

Forward-Looking Guidance

Looking ahead, TransAct Technologies maintained its full-year revenue guidance at $47 million to $52 million, driven by positive momentum from the FST and Casino and Gaming segments. The company projected adjusted EBITDA for 2025 to range from breakeven to negative $1.5 million, slightly improving the lower end of the range based on the strong first quarter performance. This guidance reflects confidence in continued growth and strategic execution.

In conclusion, TransAct Technologies’ earnings call highlighted a strong start to 2025, with record sales and significant growth in key segments. While challenges remain, the company’s positive financial metrics and strategic focus suggest a promising outlook. Investors and stakeholders can be optimistic about TransAct’s potential for sustained growth and profitability in the coming quarters.