Transact Technologies Inc (TACT) Q4 2024 Earnings Call Highlights: Navigating Challenges with ...

GuruFocus.com
14 Mar
  • Total Revenue (Q4 2024): $10.2 million, down 23% from $13.3 million in Q4 2023.
  • Full-Year Revenue (2024): $43.4 million, down 40% from $72.6 million in 2023.
  • FST Revenue (Q4 2024): $4.3 million, flat sequentially, down 9% year over year.
  • FST Full-Year Revenue (2024): $16.1 million, down 1% from 2023.
  • Recurring FST Revenue (Q4 2024): $2.7 million, down 15% year over year.
  • Casino & Gaming Revenue (Q4 2024): $4.8 million, up 14% year over year.
  • Full-Year Casino & Gaming Revenue (2024): $20.3 million, down 51% from 2023.
  • Gross Margin (Q4 2024): 44.2%, down from 48% in Q4 2023.
  • Operating Loss (Q4 2024): $1.1 million, compared to a loss of $522,000 in Q4 2023.
  • Net Loss (Q4 2024): $8 million or $0.79 per diluted share, compared to a net loss of $62,000 or $0.01 per share in Q4 2023.
  • Adjusted EBITDA (Q4 2024): Negative $705,000, compared to positive $587,000 in Q4 2023.
  • Cash on Hand (End of 2024): $14.4 million, up from $2.1 million at the end of 2023.
  • Warning! GuruFocus has detected 2 Warning Sign with TACT.

Release Date: March 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Transact Technologies Inc (NASDAQ:TACT) reported a strong year-end with a 42% compound annual growth rate in BOHA! terminal placements over the last eight quarters.
  • The company successfully sold 1,639 BOHA! terminals in Q4 2024, marking the highest quarterly number since 2020.
  • Casino & Gaming revenue increased by 13.5% to 14% year over year in Q4 2024, indicating a recovery in this segment.
  • TACT completed the rollout of the Epic TR80 thermal roll printer, expected to fuel additional sales in 2025.
  • The company has a strong balance sheet with $14.4 million in cash, up from $2.1 million at the end of 2023, providing liquidity for at least the next 12 months.

Negative Points

  • Total net sales for Q4 2024 were down 23% compared to Q4 2023, and full-year 2024 net sales were down 40% compared to 2023.
  • Recurring FST revenue decreased by 15% sequentially and 5% year over year in Q4 2024.
  • The company recorded a net loss of $8 million for Q4 2024, compared to a net loss of $62,000 in the same period the previous year.
  • TACT incurred a $7.3 million non-cash charge to record a full valuation allowance on its deferred tax assets.
  • POS Automation sales decreased by 74% in Q4 2024 compared to the prior year, due to increased competition and difficult comparisons.

Q & A Highlights

Q: Can you provide details on the FST terminal installations for the quarter and year, particularly regarding the large QSR customer and new logos? A: John Dillon, CEO, mentioned that while he couldn't provide a detailed breakdown, the large QSR was a significant portion of the installations, though not more than half. Steve DeMartino, CFO, added that the business with the large QSR is expected to expand in 2025, with new clients and geographic expansions contributing to growth.

Q: What is the outlook for the Casino & Gaming segment in 2025, and can you update on the international market? A: Steve DeMartino, CFO, stated that all domestic OEMs are back to buying, and while some international OEMs are still working through inventory, most are purchasing again. The expectation is for a stronger year in 2025, both domestically and internationally.

Q: How much revenue was lost due to the C-store customer exit in 2024? A: Steve DeMartino, CFO, explained that the C-store customer contributed about $3 million to $4 million annually, with approximately half of that amount falling off in 2024.

Q: Can you elaborate on the complexity of the strategic review process? A: John Dillon, CEO, explained that the complexity arises from managing two distinct business segments, each with different market dynamics and strategic interests. The internal operations are intertwined, making it challenging to separate financials and resources for potential strategic opportunities.

Q: What is the market opportunity for the Epic TR80 printer? A: Steve DeMartino, CFO, highlighted that the Epic TR80 targets the growing sports betting market, especially in Europe. The company is re-establishing relationships and has seen good interest since re-entering the market, indicating significant potential.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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