管理層發言
Greetings. Welcome to the TransAct Technologies Second Quarter 2026 Earnings Conference Call. Please note this conference is being recorded. I will now turn the conference over to Ryan Gardella, Investor Relations. Thank you, Ryan. You may begin.
Thanks, Sam. Good afternoon. Welcome to the TransAct Technologies Second Quarter 2026 Earnings Call. Today we'll be discussing the results announced in our press release issued after market close. Joining us from the company is CEO John Dillon and CFO Troy Ingianni. Today's call will include a discussion of the company's key operating strategies, the progress in those initiatives, and details on our second quarter financial results. We'll then open the call to participants for questions. As a reminder, this conference call contains statements about future events and expectations, which are forward-looking in nature. Statements on this call may be deemed as forward-looking and actual results may differ materially. For a full list of risks inherent to the business and the company, please refer to the company's SEC filings, including its reports, Forms 10-K and 10-Q. TransAct undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances that occur after the call. Today's call and webcast will include non-GAAP financial measures within the meaning of the SEC Regulation G. When required, reconciliation of all non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP can be found in today's press release as well as on the company website. And with that, I'd like to turn the call over to John.
Thanks, Ryan, and good afternoon, everyone, and thank you for joining us today. Before I begin, let me introduce you to Troy Ingianni. I'm delighted to have him here. He's joining us as our new CFO and is on the call for the first time. Let me just say, he's been great to work with. He's really exceptional at his job. I couldn't be happier to have him on our team. I think as shareholders you'll be pleased as well with him. He's a great addition, and I'm really delighted to have him here. So thank you for joining us, Troy. And now let me begin my...
Thank you, John. I appreciate that.
You're welcome, Troy. Yes. So I'm pleased to report that TransAct delivered solid second quarter results that continue to demonstrate progress against the long-term strategy that we've discussed. Total net sales were $13.9 million. As Troy will detail in a moment, this figure includes the impact of an approximate $1 million reduction to sales related to estimated customer refunds. These were driven by a U.S. Supreme Court ruling on certain import tariffs. Excluding this tariff impact, net sales would have been approximately $14.9 million, up 8% year over year. Adjusted EBITDA was $514,000 during the second quarter, also impacted by $400,000 of the tariff adjustments. For the first half of 2026, we generated $1.9 million of adjusted EBITDA, resulting in us raising our full year guidance to a range of $1.5 million to $2.0 million. Let me begin with a more detailed breakdown of the results and I'll start with Food Service Technology, which we refer to as FST. Total revenue was $5.2 million, up 9% year over year, and up 10% sequentially. Our focus remains squarely on driving revenue growth in our Food Service Technology space, with software as a primary growth engine. Our second quarter results are consistent with the strategic direction we have shared with investors to date: building a high-margin, more predictable recurring revenue stream that leverages a growing base of online BOHA! units. In the second quarter, we sold 1,900 BOHA! units, which means we have sold 3,270 units through the first six months of 2026. Demand continued to be driven by upgrade orders from our large installed base of older AccuDate and Terminal 1 systems. Customers are seeing the value of moving to the new terminal, and we continue to view this conversion cycle as a multi-year runway of opportunity. We continue to execute on our land-and-expand strategy and believe the revised go-to-market motions and revitalized sales and marketing teams are beginning to pay dividends in the form of increased FST sales. We ended the second quarter with nearly 22,000 online units, up about 33% year-over-year, continuing the steady growth of our installed base. That growing online base is the foundation of the software opportunity we're now actively monetizing. Most importantly, our recurring FST revenue continues to grow. During the last quarter, recurring FST sales reached $3.4 million in the second quarter, up 13% year over year. Software revenue was up 25% sequentially and 47% year over year, driven primarily by price increases that we began implementing earlier this year as part of an intensified focus on capturing fair market value for our software offerings. In the past, the company frequently bundled the software for free simply to close a hardware sale or to get the label business. This practice now is behind us. We control the source code for the software and the platform. We're deliberately seeking to shift the business model toward a higher-margin, sustainable, and predictable recurring software revenue model. Our long-term aim remains to drive the FST install base toward $100 to $200 per machine per month in recurring software-related revenue. That level of monetization applied to the growing base of terminals has the potential to unlock significant value for TransAct. Labels also saw a strong quarter, contributing positively to our gross margin and enhancing retention within our customer base. We'll continue to lean into the label sales business as a key piece of our long-term FST strategy, as growth within the terminal base helps grow both the label and the software businesses. The label business creates a stickier, long-standing relationship with the client and greater intimacy, so it's very important. On the technology side, we recently launched our next-generation enterprise-grade BOHA! SaaS platform with the completion of our migration from our legacy hosted infrastructure to Microsoft Azure. This was a strategic move. It significantly enhances the platform's scalability, security, resiliency, and performance, allowing us to bring innovation and requested enhancements to market faster, deliver seamless integrations with other systems such as point-of-sale systems, and provide enterprise-grade uptime and disaster recovery across large multi-location deployments. Combined with control of the software, the new platform also gives us greater operational freedom and positions us to accelerate our software roadmap, including implementing AI-related workflows and additional applications over time. Internally, AI is also helping our development teams move faster. It's more a function of having experts review code that AI assists in producing rather than relying on repetitive manual coding. We remain focused on the practical application for AI and are confident it will leverage our integrated hardware and software solutions approach in the future. Turning to Casino and Gaming, revenue in the second quarter was $7.3 million, down approximately 4% from the prior year. After adjusting for the tariff-related impact of the refunds, casino and gaming revenue would have been approximately $8.3 million, up approximately 9% year over year. We saw solid contributions from key OEM customers, both domestically and internationally. Our relatively new Epic TR80 roll-fed printer continued to gain traction internationally in gaming applications for betting kiosks and similar systems. Finally, moving on to our financial outlook, we reaffirm our full year 2026 net sales outlook of $55 million to $57 million. As noted earlier, we are increasing our adjusted EBITDA outlook to a range of $1.5 million to $2.0 million. So we delivered solid second quarter results, continued progress against our strategic priorities, sold 1,900 online BOHA! units, increased our recurring revenue opportunity, posted software revenue growth of 47%, and successfully launched the next-generation BOHA! platform on Azure. Recurring revenue continues to build, our installed base is expanding, and we remain on track to deliver against our financial and strategic goals for the year. At the center of the strategy is building out a high-margin software-led recurring revenue business on a growing install base. We are executing that transition with disciplined capital allocation and the strength provided by a solid balance sheet. Those are most of my remarks. Before I turn it over to Troy, I want to provide additional news related to casino and gaming. The Board of Directors recently initiated a formal strategic review related to the casino and gaming business. Management has engaged BofA Securities as its financial advisor given their expertise within the casino and gaming market and their long-standing relationship with TransAct. We believe exploring potential options within casino and gaming, given the current strength of that market, is in the best interest of stockholders as they look to maximize value. While the review is focused on the casino and gaming business, the Board intends to evaluate a broader range of strategic alternatives to the extent the Board determines doing so may further enhance stockholder value. The company has not set a public timetable for the review and there can be no assurance the review will result in any transaction or other strategic outcome. We do not intend to disclose developments until our Board has approved a specific transaction or course of action, or until we otherwise determine disclosure is appropriate or required. We have the right platform, the right focus, and the right team to continue driving the software transition forward while also focusing on strategic potential options for casino and gaming. So those are my remarks, and with that, I'll turn the call over to Troy for a more detailed review of the financial results. Troy?
All right, thank you, John. I appreciate the kind words, and thank you, everyone, for joining us today. As today is my first earnings call at TransAct, I wanted to take a minute to introduce myself. I bring more than 25 years of financial leadership experience. Most recently, I served as the Vice President Global Controller and Chief Accounting Officer at Barnes Group. I joined TransAct on July 1 because I believe in the BOHA! platform. I met with John and could see it represents a compelling growth opportunity. I'm excited to partner with John and the executive team. So as you can tell, I'm very happy to be here. With that, let's turn to the second quarter results in a bit more detail. Total net sales for the second quarter were about $13.9 million, which were up slightly compared to $13.8 million in the prior year period. John mentioned there was an impact on the financials related to tariff refunds that I'd like to discuss. Our second quarter results reflect the impact of a February 20, 2026 U.S. Supreme Court ruling that declared certain import tariffs to be invalid. During the periods in which the tariffs were in effect, we collected both the actual duties and related service and management fees from our customers. These amounts were broken out as tariff surcharges on the invoices. We are in the process of reclaiming the duty amounts from the government via a portal that was set up, and we plan to return these amounts in full to the customers who requested and paid them, as these were pass-through collections from a tariff standpoint. On the service and management fees, we have decided to refund a portion of the previously recognized tariff surcharge and return those amounts to the customers while retaining a modest management fee to cover the direct costs we incurred while administering this process. As a result, in the second quarter, we recorded an approximate $600,000 reduction to cost of goods sold related to the tariff refunds from the government, along with a corresponding $1 million in estimated customer refunds, thereby reducing sales. Subsequent to quarter end and through the date of this call, we have received about $500,000 of the expected government refunds. This represents about 80% of the total. We are starting the process of returning the funds to our customers. Excluding this tariff impact, total net sales would have been $14.9 million, up approximately $1.2 million, or 8%, compared to the prior year period. Sales from our FST business for the second quarter were $5.2 million, up 9% versus $4.8 million in the prior year period, and up 10% sequentially from $4.7 million in the first quarter of 2026. We sold 1,900 BOHA! units in the second quarter. Our recurring FST sales, which include software and service subscriptions as well as consumable labels, were $3.4 million in the second quarter, up 13% from $3.0 million in the prior year period. Software revenue was up 47% year over year, driven primarily by price increases. ARPU for the second quarter of 2026 was $673, down 15% from $792 in the second quarter of 2025, and down 5% sequentially from $709 in the first quarter of 2026. Recall ARPU includes software, labels, and other sources of recurring revenue, so as our software and installed base grow, this metric becomes less indicative of true software growth. Going forward, we plan to share metrics that better reflect our contractual software revenue. John, I, and the leadership team are working through key metrics now and plan to share those in the future. Our casino and gaming sales were $7.3 million, down 4% compared to $7.6 million in the second quarter of 2025 and down 13% sequentially from $8.3 million in the first quarter of 2026. As with company-wide results, casino and gaming sales this quarter were impacted by the tariff-related revenue reduction of $1 million. Excluding this impact, casino and gaming sales would have approximated $8.3 million, up $700,000 compared to the prior year period. The Epic TR80 continues to build momentum internationally in roll-fed gaming applications. Regarding POS automation, sales of our Ithaca 9000 printer for the second quarter were $619,000, up 5% compared to $590,000 in the prior year period. These sales remain in our normalized range of about $600,000 per quarter, and we expect similar results going forward. For TransAct Services Group, or TSG, sales in the second quarter were $838,000, up 3% from $818,000 in the prior year period. The increase was driven by higher service revenue related to legacy-based lottery printers, partially offset by lower spares and accessory revenue as the legacy install base winds down. Moving down the income statement, our second quarter gross margin was 50.2% compared to 48.2% in the prior year period, roughly flat sequentially from 50.3% in the first quarter of 2026. We continue to expect gross margin in the mid- to high-40% range for full year 2026. Total operating expenses for the second quarter were $7.1 million, up 2% compared to $6.9 million in the prior year period. Breaking that down, engineering and R&D expenses for the second quarter were $1.2 million, down 29% compared to $1.7 million in the prior year period. This reflects the capitalization of software consulting and R&D costs related to bringing the BOHA! software in-house. We have now begun amortizing these costs that were capitalized in the third quarter of 2026. Selling and marketing expenses for the second quarter were $2.7 million, up 30% compared to $2.1 million in the prior year period. The increase reflects new hires initiated in 2026, along with higher trade show, advertising, and commission expense. G&A expenses for the quarter were $3.1 million, essentially flat compared to the prior year period. We had higher legal expenses related to the executive transition and other strategic items, largely offset by lower bonus expense. On the bottom line, we recorded a net loss of $50,000, effectively break-even on a diluted-share basis for the second quarter of 2026, compared to a net loss of $143,000, or a $0.01 loss per diluted share, in the prior year period. We recorded income tax expense of $30,000 as we continue to maintain a full valuation allowance against our U.S. pre-tax earnings. Adjusted EBITDA for the quarter was $514,000 compared to $478,000 in the second quarter of 2025 and $1.4 million in the first quarter of 2026. For the first half of 2026, adjusted EBITDA was about $1.9 million, which allowed us to raise our full-year adjusted EBITDA outlook to a range of $1.5 million to $2.0 million. Our balance sheet remains strong with $19.4 million in cash and cash equivalents. As in past periods, we held only the minimum balance on our revolver with Siena, giving us maximum financial flexibility going forward. We'll continue to manage the balance to provide optionality while ensuring value is delivered to shareholders. We did not repurchase any shares during the quarter. Thank you all. I appreciate you being on the call and your continued interest in TransAct. I'm excited to work with the team. With that, I'd like to turn the call over back to the operator.
分析師問答
Our first question is from Greg Burns with Sidoti & Company. Please proceed with your question.
Maybe you could just help us understand your thoughts behind the strategic review. I know you had started a process in the past and discontinued it. What's changed? Why now? And is it possible that you might be able to share with us the EBITDA of the casino business so we might better assess what the value of that business might be?
Well, on the last part of your question, my goal is eventually to share the specific EBITDA between the two go-to-market strategies that we have. When we ran the process before, it was a turbulent time for the company. We'd come out of the pandemic and had supply chain issues. The gaming industry overbought in that period and we had to work that down, so the gaming business hadn't stabilized and recovered, and it has now. If I contrast the two businesses, our role in the gaming industry is relatively small in a fairly large industry. The opportunity in the FST space has a total addressable market that various estimates put at least around $4 billion and perhaps larger, expected to grow toward roughly $18 billion by 2032 or 2033. As we look at cash allocation, the gaming business has been profitable and a cash cow in the traditional sense, and we need to figure out what's the best strategy with that unit while our FST strategy is more clearly defined. We know what we need to do in FST and must execute, but with the gaming and casino business there are strategic choices to make, such as whether to expand or pursue other paths. Now is a good time to consider options. As we commented on the call, we selected Bank of America Securities. I've known the team there for years. They know the industry well, and we thought they would be an outstanding partner to help us evaluate the best scenarios for monetizing that asset.
Okay. When you think about monetizing that asset, the FST business is obviously an emerging growth company and it has the cash backing of the gaming business. But if you sell off the gaming, where does that leave the FST business? Does it have enough capital to grow? Do you think you could get that business to break even from a cash flow perspective with the cash you have on hand?
I think the answer to that question is yes.
Okay. When we look at growing the software component of the FST business, are you now bundling a software package with the new BOHA! sales?
That's correct. We have about 22,000 online systems, many of which were sold when we didn't fully appreciate the value of recurring software. We've changed that approach. We're going back to existing clients and explaining that the platform on Azure provides better hosting, support, and reliability, and that there is a fee for the service. When we sell new systems, either to existing customers or new customers, we expect to bundle software packages. Our offering has multiple components; some clients need only certain modules and some want everything. We work with clients to determine what they need. It's typical in our space for these units to generate recurring revenue in the range of $100 to $300 per unit per month, depending on the customer and configuration. Historically we missed that opportunity because we were focused on hardware. We are transitioning now, and the results so far are promising. We target large customers—organizations that may have hundreds or thousands of locations—and have experience designing systems for sophisticated clients like McDonald's, so our products are best suited for large deployments undergoing digital transformation. We work with clients to find the right package based on their challenges and goals.
Okay, so maybe you could help us understand the economics a little better. What would be the average bundle on a new BOHA! system? You sold 1,900 new systems this quarter — did those all have a bundled software package, or is that more something for prospective quarters where you start to attach software packages?
In some cases, customers already had software. If they're retiring an old machine and those machines were online, the licenses would transfer. In some cases we bundled a license with the new unit. Some clients have one or two module licenses and we might add additional applications such as the temperature application or checklist modules. A very basic package might be $75 to $90 per month for basic nutrition, food labeling, and date coding. Some clients purchase all applications and pay much more; others only need basic functionality and pay less. Our sales team customizes deals case by case, and it's working well so far. We target the largest customers in the industry where most of the revenue opportunity exists. Because we helped design systems for large chains in the past, we understand what a sophisticated client needs. Some units may generate $50 per month, others $300 to $400 month, depending on the solution and integrations required. We are still developing the metrics and will provide more detail as we standardize reporting. Overall, the uptake we've seen to date is a promising sign for future growth.
I might have missed it, but in past quarters you've disclosed new customer logos. Did you disclose any new logos this quarter, or is that not something you'll be sharing on a go-forward basis?
We do share logos, but there have been challenges with that metric. When we win a contract with a food service management company, they may place units across dozens or hundreds of venues, which complicates how to report 'new customers.' We're considering reporting unique food service venues—new venues where we weren't previously present—because that better reflects market penetration. In the last quarter, we focused heavily on developing the software business and overhauled our sales and marketing team, so lead generation is ramping. We debated reporting net new customers or new venues and decided not to provide that specific number on this call. I do expect to discuss net new customers and, importantly, new FST venues that we captured as we refine reporting.
We have reached the end of the question and answer session. I would like to turn the floor back over to John Dillon for closing comments.
I'd like to thank everyone again for joining us. I appreciate your time and attention. These calls don't cover everything, and I look forward to talking to many of you during the coming months and on the next quarterly call at the end of the third quarter. Thank you very much.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.