Cantaloupe, Inc. Reports First Quarter Fiscal Year 2023 Results
Cantaloupe, Inc. (Nasdaq: CTLP) reported a 26% year-over-year revenue increase for Q1 2023, totaling $57.8 million. Key drivers included record transaction revenue of $31.3 million, up 18%, and equipment sales soaring 108% to $10.7 million. However, gross margin decreased to 24.5% due to costs related to AWS migration and higher component prices. Cantaloupe reiterates its FY 2023 revenue guidance of $225 million to $235 million, projecting growth in transaction fees and subscription fees.
Despite a net loss of $8.9 million, the company noted a 21% rise in active customers, totaling 25,019.
- Revenue increased by 26% year-over-year to $57.8 million.
- Transaction fees rose 18% year-over-year, reaching $31.3 million.
- Equipment sales surged 108% year-over-year to $10.7 million.
- Active customers grew by 21%, totaling 25,019.
- Net loss applicable to common shares increased to $8.9 million, compared to $1.6 million loss in the same quarter last year.
- Gross margin declined to 24.5% from 32.5% year-over-year.
- Adjusted EBITDA fell to $(5.4) million from $1.9 million year-over-year.
First Quarter Revenue of
Reiterates Fiscal Year 2023 Guidance
“Our revenue grew
First Quarter 2023 Key Financial Results:
-
Revenue of
, an increase of$57.8 million 26% year over year. The increase was led by a sixth consecutive quarter of record transaction revenue.-
Transaction fees of
, an increase of$31.3 million 18% year over year -
Subscription fees of
, an increase of$15.8 million 11% year over year -
Equipment sales of
, an increase of$10.7 million 108% year over year
-
Transaction fees of
-
Total Dollar Volumes of Transactions in the first quarter were
, an increase of$639.5 million 16% year over year -
Gross margin of
24.5% compared with32.5% in the prior year quarter-
Subscription and transaction fees margins of
35.5% compared to35.9% in the prior year quarter -
Equipment sales margins of (23.8)% compared to
5.3% in the prior year quarter
-
Subscription and transaction fees margins of
-
U.S. GAAP Net loss applicable to common shares of , or$8.9 million per share, compared to Net loss applicable to common shares of$(0.13) , or$1.6 million per share, in the prior year period$(0.02) -
Adjusted EBITDA1 of
compared to$(5.4) million in the prior year period$1.9 million
First Quarter 2023 Business Highlights:
-
Active Customers totaled 25,019 at the end of the first quarter of 2023 compared to 20,738 at the end of the first quarter of 2022, an increase of
21% . -
Active Devices totaled 1.15 million at the end of the first quarter of 2023 compared to 1.11 million at the end of the first quarter of 2022, an increase of
3% . - The Company finalized its migration of payment processors to Fiserv which is expected to deliver future cost savings.
-
In
July 2022 , the Company migrated its cloud hosting services toAmazon Web Services (AWS) platform. The completion of the migration is a major milestone as the Company continues to focus on ensuring it has a reliable, resilient and scalable infrastructure to support its growing network of devices and customers. -
Completed the upgrade of the vast majority of non 4G/EMV devices, including most large enterprise clients, as the
12/31/22 upgrade deadline approaches.
Fiscal Year 2023 Outlook:
For full fiscal year 2023, the Company reiterates the following:
-
Revenue to be between
and$225 million , representing year-over-year growth of$235 million 10% to15% .- Transaction fees revenue growth is expected to be in the high teens
- Subscription fees revenue growth is expected to be in the low teens
- Equipment sales revenue growth is expected to be relatively flat
-
U.S. GAAP Net income to be between and$1 million $5 million -
Adjusted EBITDA1 to be between
and$12 million $17 million -
Total Operating Cash Flow to be between
and$10 million $15 million
Webcast and Conference Call:
Cantaloupe will host a live webcast at
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
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
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
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 the impact of the ongoing COVID-19 pandemic; potential mutations of COVID-19 and the efficacy of vaccines and treatment developments and their deployment; 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; our ability to compete with our competitors and increase market share; disruptions in or inefficiencies to our supply chain and/or operations including the impacts of the COVID-19 pandemic; 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
____________________________
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
-F--CTLP
|
||||||||
Condensed Consolidated Balance Sheets |
||||||||
($ in thousands, except share data) |
|
|
|
|
||||
|
|
|
|
|
||||
Assets |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
50,793 |
|
|
$ |
68,125 |
|
Accounts receivable, net |
|
|
41,353 |
|
|
|
37,695 |
|
Finance receivables, net |
|
|
6,594 |
|
|
|
6,721 |
|
Inventory, net |
|
|
23,503 |
|
|
|
19,754 |
|
Prepaid expenses and other current assets |
|
|
4,306 |
|
|
|
4,285 |
|
Total current assets |
|
|
126,549 |
|
|
|
136,580 |
|
|
|
|
|
|
||||
Non-current assets: |
|
|
|
|
||||
Finance receivables due after one year, net |
|
|
14,809 |
|
|
|
14,727 |
|
Property and equipment, net |
|
|
16,640 |
|
|
|
12,784 |
|
Operating lease right-of-use assets |
|
|
2,076 |
|
|
|
2,370 |
|
Intangibles, net |
|
|
17,126 |
|
|
|
17,947 |
|
|
|
|
66,656 |
|
|
|
66,656 |
|
Other assets |
|
|
4,608 |
|
|
|
4,568 |
|
Total non-current assets |
|
|
121,915 |
|
|
|
119,052 |
|
|
|
|
|
|
||||
Total assets |
|
$ |
248,464 |
|
|
$ |
255,632 |
|
|
|
|
|
|
||||
Liabilities, convertible preferred stock and shareholders’ equity |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
51,780 |
|
|
$ |
48,440 |
|
Accrued expenses |
|
|
27,376 |
|
|
|
28,154 |
|
Current obligations under long-term debt |
|
|
693 |
|
|
|
692 |
|
Deferred revenue |
|
|
2,069 |
|
|
|
1,893 |
|
Total current liabilities |
|
|
81,918 |
|
|
|
79,179 |
|
|
|
|
|
|
||||
Long-term liabilities: |
|
|
|
|
||||
Deferred income taxes |
|
|
195 |
|
|
|
186 |
|
Long-term debt, less current portion |
|
|
13,757 |
|
|
|
13,930 |
|
Operating lease liabilities, non-current |
|
|
2,030 |
|
|
|
2,366 |
|
Total long-term liabilities |
|
|
15,982 |
|
|
|
16,482 |
|
|
|
|
|
|
||||
Total liabilities |
|
|
97,900 |
|
|
|
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 |
|
|
2,720 |
|
|
|
3,138 |
|
Shareholders’ equity: |
|
|
|
|
||||
Preferred stock, no par value, 1,800,000 shares authorized |
|
|
— |
|
|
|
— |
|
Common stock, no par value, 640,000,000 shares authorized, 71,218,130 and 71,188,053 shares issued and outstanding at |
|
|
469,503 |
|
|
|
469,918 |
|
Accumulated deficit |
|
|
(321,659 |
) |
|
|
(313,085 |
) |
Total shareholders’ equity |
|
|
147,844 |
|
|
|
156,833 |
|
Total liabilities, convertible preferred stock and shareholders’ equity |
|
$ |
248,464 |
|
|
$ |
255,632 |
|
|
||||||||
Condensed Consolidated Statements of Operations |
||||||||
(Unaudited) |
||||||||
|
|
Three months ended |
||||||
|
|
|
||||||
($ in thousands, except per share data) |
|
2022 |
|
2021 |
||||
Revenues: |
|
|
|
|
||||
Subscription and transaction fees |
|
$ |
47,075 |
|
|
$ |
40,625 |
|
Equipment sales |
|
|
10,707 |
|
|
|
5,155 |
|
Total revenues |
|
|
57,782 |
|
|
|
45,780 |
|
|
|
|
|
|
||||
Costs of sales: |
|
|
|
|
||||
Cost of subscription and transaction fees |
|
|
30,370 |
|
|
|
26,024 |
|
Cost of equipment sales |
|
|
13,250 |
|
|
|
4,880 |
|
Total costs of sales |
|
|
43,620 |
|
|
|
30,904 |
|
|
|
|
|
|
||||
Gross profit |
|
|
14,162 |
|
|
|
14,876 |
|
|
|
|
|
|
||||
Operating expenses: |
|
|
|
|
||||
Sales and marketing |
|
|
2,525 |
|
|
|
2,339 |
|
Technology and product development |
|
|
6,865 |
|
|
|
5,389 |
|
General and administrative |
|
|
11,578 |
|
|
|
7,264 |
|
Investigation, proxy solicitation and restatement expenses |
|
|
397 |
|
|
|
— |
|
Depreciation and amortization |
|
|
1,315 |
|
|
|
1,022 |
|
Total operating expenses |
|
|
22,680 |
|
|
|
16,014 |
|
|
|
|
|
|
||||
Operating loss |
|
|
(8,518 |
) |
|
|
(1,138 |
) |
|
|
|
|
|
||||
Other income (expense): |
|
|
|
|
||||
Interest income |
|
|
567 |
|
|
|
473 |
|
Interest expense |
|
|
(477 |
) |
|
|
(478 |
) |
Other income (expense) |
|
|
(120 |
) |
|
|
(59 |
) |
Total other expense, net |
|
|
(30 |
) |
|
|
(64 |
) |
|
|
|
|
|
||||
Loss before income taxes |
|
|
(8,548 |
) |
|
|
(1,202 |
) |
Provision for income taxes |
|
|
(26 |
) |
|
|
(89 |
) |
|
|
|
|
|
||||
Net loss |
|
|
(8,574 |
) |
|
|
(1,291 |
) |
Preferred dividends |
|
|
(334 |
) |
|
|
(334 |
) |
Net loss applicable to common shares |
|
$ |
(8,908 |
) |
|
$ |
(1,625 |
) |
|
|
|
|
|
||||
Net loss per common share |
|
|
|
|
||||
Basic and diluted |
|
$ |
(0.13 |
) |
|
$ |
(0.02 |
) |
|
|
|
|
|
||||
Weighted average number of common shares outstanding used to compute net loss per share applicable to common shares |
|
|
|
|
||||
Basic and diluted |
|
|
71,207,750 |
|
|
|
71,175,927 |
|
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(Unaudited) |
||||||||
|
|
Three months ended |
||||||
|
|
|
||||||
($ in thousands) |
|
2022 |
|
2021 |
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(8,574 |
) |
|
$ |
(1,291 |
) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
|
|
|
|
||||
Stock based compensation |
|
|
1,318 |
|
|
|
1,762 |
|
Amortization of debt issuance costs and discounts |
|
|
29 |
|
|
|
39 |
|
Provision for expected losses |
|
|
1,436 |
|
|
|
412 |
|
Provision for inventory reserve |
|
|
200 |
|
|
|
(370 |
) |
Depreciation and amortization included in operating expenses |
|
|
1,315 |
|
|
|
1,022 |
|
Depreciation included in costs of sales for rental equipment |
|
|
242 |
|
|
|
264 |
|
Other |
|
|
657 |
|
|
|
(186 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
||||
Accounts receivable |
|
|
(4,693 |
) |
|
|
2,991 |
|
Finance receivables |
|
|
(346 |
) |
|
|
635 |
|
Inventory |
|
|
(3,948 |
) |
|
|
(3,875 |
) |
Prepaid expenses and other assets |
|
|
(70 |
) |
|
|
(148 |
) |
Accounts payable and accrued expenses |
|
|
3,596 |
|
|
|
(2,239 |
) |
Operating lease liabilities |
|
|
(369 |
) |
|
|
153 |
|
Deferred revenue |
|
|
175 |
|
|
|
(43 |
) |
Net cash used in operating activities |
|
|
(9,032 |
) |
|
|
(874 |
) |
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
|
||||
Cash paid for acquisition |
|
|
— |
|
|
|
(2,900 |
) |
Purchase of property and equipment |
|
|
(4,956 |
) |
|
|
(1,641 |
) |
Net cash used in investing activities |
|
|
(4,956 |
) |
|
|
(4,541 |
) |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
|
||||
Repayment of long-term debt |
|
|
(193 |
) |
|
|
(210 |
) |
Contingent consideration paid for acquisition |
|
|
(1,000 |
) |
|
|
— |
|
Repurchase of Series A Convertible Preferred Stock |
|
|
(2,151 |
) |
|
|
— |
|
Net cash used in financing activities |
|
|
(3,344 |
) |
|
|
(210 |
) |
|
|
|
|
|
||||
Net decrease in cash and cash equivalents |
|
|
(17,332 |
) |
|
|
(5,625 |
) |
Cash and cash equivalents at beginning of year |
|
|
68,125 |
|
|
|
88,136 |
|
Cash and cash equivalents at end of period |
|
$ |
50,793 |
|
|
$ |
82,511 |
|
|
|
|
|
|
||||
Supplemental disclosures of cash flow information: |
|
|
|
|
||||
Interest paid in cash |
|
$ |
248 |
|
|
$ |
187 |
|
|
||||||||
Reconciliation of |
||||||||
(Unaudited) |
||||||||
|
|
Three months ended |
||||||
($ in thousands) |
|
|
2022 |
|
|
|
2021 |
|
|
|
$ |
(8,574 |
) |
|
$ |
(1,291 |
) |
Less: interest income |
|
|
(567 |
) |
|
|
(473 |
) |
Plus: interest expense |
|
|
477 |
|
|
|
478 |
|
Plus: income tax provision |
|
|
26 |
|
|
|
89 |
|
Plus: depreciation expense included in costs of sales for rentals |
|
|
242 |
|
|
|
264 |
|
Plus: depreciation and amortization expense in operating expenses |
|
|
1,315 |
|
|
|
1,022 |
|
EBITDA |
|
|
(7,081 |
) |
|
|
89 |
|
Plus: stock-based compensation (a) |
|
|
1,318 |
|
|
|
1,762 |
|
Plus: investigation, proxy solicitation and restatement expenses (b) |
|
|
397 |
|
|
|
— |
|
Adjustments to EBITDA |
|
|
1,715 |
|
|
|
1,762 |
|
Adjusted EBITDA |
|
$ |
(5,366 |
) |
|
$ |
1,851 |
|
|
|
|
|
|
||||
(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 fees incurred in connection with the costs and expenses related to the 2019 Investigation, financial statement restatement activities, and proxy solicitation costs because we believe that they represent charges that are not related to our core operations. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221107006065/en/
Media and Investor Relations Contacts for
stoomey@rhstrategic.com
Investor Relations:
CantaloupeIR@icrinc.com
Source:
FAQ
What was Cantaloupe's revenue for the first quarter of 2023?
What is the outlook for Cantaloupe's financial performance in FY 2023?
What are the main drivers for Cantaloupe's revenue growth in Q1 2023?
How did Cantaloupe's net loss compare in Q1 2023 versus Q1 2022?