TransAct Technologies Incorporated Q2 FY2025 earnings call

• Acquired a perpetual license to BOHA! software source code for $2.55M plus $1M in professional services, expecting to capitalize $3.55M and amortize from early 2027.
• FST revenue up 14% YOY with recurring revenue at $3M and ARPU at $792. Rollouts progressing, focusing on land and expand strategy.
• Casino and gaming revenue up 42% YOY, with new OEM win for non-casino charitable gaming and Epic TR80 printer gaining traction. Partnership with CasinoTrac thrives.
• Adjusted EBITDA expected 0 to $1.5M for full year 2025, revenue guidance raised to $49M-$53M.

FST: Total revenue rose to $4.8 million in Q2, up 14% YOY, with recurring FST revenue at $3 million and ARPU at $792. Casino and gaming: Revenue was $7.6 million, up 14% sequentially and 42% YOY, driven by major OEMs and new non-casino charitable gaming applications. POS automation: Q2 revenue was $590,000, down 49% YOY, expected to remain $500,000-$600,000 per quarter. TSG: Revenue was $818,000, down 10% YOY, expected to stay at current run rate.

• Full year 2025 revenue guidance raised to $49 million to $53 million.
• Adjusted EBITDA expected to range from 0 (breakeven) to positive $1.5 million, assuming no major disruptions.
• Capitalizing $3.55M for BOHA! source code acquisition, with amortization starting in early 2027 and P&L impact expected to be net positive within 4-5 years.

• Tariff situation: Expecting another pricing action due to incremental tariff costs on imports.
• Broader economic factors in casino and gaming industry, though no long-term midterm concerns seen currently.

Q: Jeff Martin asks about FST excluding QSR and progress into newer client base.

A: John Dillon mentions progress due to discipline, process, and execution, focusing on land and expand strategy, targeting clients with good ROI, and sales training on value proposition.

Q: Jeff Martin asks about adding software components to large QSR terminal sales.

A: John Dillon states there is dialogue about adding software components.

Q: Jeff Martin asks about casino and gaming market share.

A: John Dillon talks about increased focus, adjusting compensation plans, incursions into competitors' installed base, and progress with CasinoTrac partnership and Epicentral sales