MALVERN, PA — Cantaloupe, Inc. (Nasdaq: CTLP), a leader in payment and self-service technology, has announced its financial results for the third quarter of fiscal year 2025, ended March 31, 2025. The report highlights significant year-over-year revenue growth, enhanced margins, and strategic business developments, setting a strong trajectory for the remainder of the fiscal year.
The company’s third-quarter revenue totaled $75.4 million, marking an increase of 11.1% compared to the same period last year. Subscription and transaction revenues, the company’s core business drivers, rose by 10.1% year-over-year. Equipment sales also surged by 17.9%, reaching $10.2 million.
Net income applicable to common shares was $48.9 million, or $0.65 diluted earnings per share, a dramatic increase from $4.4 million or $0.06 diluted earnings per share in the same quarter of the prior fiscal year. This gain was largely attributed to a $42.2 million one-time release of a valuation allowance on the company’s deferred tax assets tied to federal and state net operating losses. Excluding this adjustment, net income saw a year-over-year increase of $2.3 million.
Cantaloupe also reported strong transaction volumes, with $852.4 million in total dollar volume for the quarter, an 11.1% increase from the previous year. The total number of transactions processed grew by 4.5%, reaching 296.1 million compared to 283.3 million in the prior year.
The company’s adjusted gross margin improved significantly, climbing to 41.6% from 39.6% in the same quarter last year. Notably, subscription fees gross margins reached 90.7%, while transaction fees gross margins rose to 24.8%. Equipment sales gross margins also increased, from 7.2% to 12.3%. Adjusted EBITDA stood at $13.9 million, a 36.6% improvement from $10.2 million in the third quarter of fiscal year 2024.
“In the third quarter, we saw exciting adoption of our smart stores as well as strong earnings growth and cash flow generation,” said Ravi Venkatesan, Cantaloupe’s Chief Executive Officer. “I am pleased with our continued success increasing operating leverage through margin expansion.”
Key Business Highlights
Throughout the third quarter, Cantaloupe launched several initiatives aimed at expanding its market presence and enhancing its offerings.
- Launch of Engage Pulse: Cantaloupe introduced Engage Pulse card readers tailored for the arcade and amusement industry. These devices leverage ladder pricing to maximize revenue and create a seamless customer experience, promoting higher customer engagement.
- Introduction of Cantaloupe Capital: Through a collaboration with Fundbox, the company rolled out a capital access program for small businesses, enabling operators to secure funds for equipment upgrades and manage cash flow with greater flexibility.
- Credit Facility Expansion: Cantaloupe amended its credit facilities in January, boosting its borrowing capacity to $100 million. This includes a $40 million term loan facility, a $30 million revolving credit line, and a $30 million delayed draw term loan facility.
- Customer Growth: The company reported 34,115 active customers at the end of the quarter, reflecting an 11.2% increase from the previous year. Active devices also grew 3.6% year-over-year, reaching 1.26 million.
Fiscal Year 2025 Outlook
For the full fiscal year, Cantaloupe has revised its total revenue expectations to range between $302 million and $308 million. Subscription and transaction revenue growth is now projected to be at the low end of the previously anticipated range of 15% to 20%.
US GAAP net income applicable to common shares is forecasted to fall between $64 million and $70 million, while adjusted EBITDA is projected to range from $46 million to $50 million. Operating cash flow is expected to remain between $24 million and $32 million.
A Promising Future
Cantaloupe’s third-quarter results reflect a strong operational performance and continued momentum in advancing its strategic objectives. The company’s focus on technology-driven solutions, such as Engage Pulse and Cantaloupe Capital, underscores its commitment to innovation and customer success. With its enhanced financial position and expanded capabilities, Cantaloupe is well-positioned to drive sustained growth and deliver value to stakeholders in the years ahead.
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