TransAct Technologies Incorporated Q4 FY2025 earnings call

• Strategic priorities for 2026 include focusing on revenue growth in FST, with software as the primary growth engine. Funding expansion through casino and gaming cash flows. Leveraging acquisition of BOA source code to enhance offerings, introduce new apps, capture higher margin recurring revenue. • In FST, fourth quarter net sales $4.8 million, up 12% y-o-y, fueled by hardware placements, expanding software adoption, record labels sales. Labels hit all-time high of $2.6 million in Q4. • Casino and gaming saw Q4 net sales $5.4 million, up 13% y-o-y, full year sales $26.9 million, up 32% y-o-y. International sales strong despite domestic demand softening. New domestic OEM win provided momentum in 2025. • New Chief Marketing Officer Dana Loof joined, focusing on competitive positioning, messaging, lead generation, and refreshing website. • Working on migrating existing customers to public cloud platform to enhance scalability and cross-selling opportunities.

For the fourth quarter, total net sales were $11.5 million, up 12% from prior year's $10.2 million. Full year 2025 total net sales were $51.5 million, up 19% from 2024's $43.4 million. FST: Fourth quarter net sales $4.8 million, up 12% y-o-y; full year FST sales $19.3 million, up 20% y-o-y. Recurring FST sales in Q4 were $3.4 million, up 24% y-o-y; full year recurring FST sales $12.2 million, up 14% y-o-y. ARPU in Q4 2025 was $756. Casino and gaming: Q4 net sales $5.4 million, up 13% y-o-y; full year casino and gaming sales $26.9 million, up 32% y-o-y. POS automation: Q4 sales increased 47% y-o-y to $606,000; full year POS automation sales $2.2 million, down 34% y-o-y. TSG: Q4 sales $658,000, down 13% y-o-y; expected to decline sequentially going forward.

• Company expects 2026 net sales to be between $55 million and $57 million. • Adjusted EBITDA expected to be between $800,000 and $1.5 million positive. • Emphasizes enhanced sales team and go-to-market strategy to drive software upsell, partnerships, and subvertical expansion with measured incremental investments to stay above adjusted EBITDA break-even line and protect balance sheet.

• Casino and gaming business is highly cyclical. • Potential impact of competition despite using AI tools; while AI helps internally and in product enhancements, competition still exists and needs to be navigated. • Market fluctuations and macro headwinds in certain segments like domestic casino demand.

Q: How do you see AI programming tools helping the business and potential competition?

A: We use AI internally to make code more efficient, looking for problems, dead ends, etc. In products, will add AI tooling for food service and gaming to help clients make better decisions. Relative to competition, AI can handle pedestrian coding, but need senior expertise for user experience; see it as an opportunity not a threat as we deliver enterprise-grade solutions involving hardware, software, etc., which is not commodity stuff.