Cantaloupe Cracks 40% Adjusted Gross Margin Barrier in Q2, Continues to Expand Market Reach
Cantaloupe has announced a strong second quarter fiscal year 2025 performance, driven by continued growth across its key business segments. The company's total revenue increased by 13% year-over-year to $73.7 million, with transaction revenue growing by 17% and subscription revenue rising by 14%. Adjusted gross margin reached a notable milestone of 41.7%, representing a significant improvement over the same period last year.
CEO Ravi Venkatesan highlighted the company's success in expanding operating leverage, as evidenced by a 26% increase in adjusted EBITDA to $10.7 million. This achievement underscores Cantaloupe's ability to effectively scale its business while maintaining profitability.
One of the key highlights of Q2 was the continued momentum in micro markets and Seed software adoption. The company secured significant wins, including Premier Food Service's decision to replace all competitive micro markets with Cantaloupe solutions. This deal demonstrates the growing recognition of the benefits of integrated micro market management and seed-based software solutions.
In addition to its core business, Cantaloupe has made notable inroads into emerging markets such as kiosks, smart stores, and automated retail. The company's premier payment acceptance and telematics devices continue to lead the market in North America, with recent wins including Berkshire Foods' replacement of competitive devices with Engage and Engage Combo units.
Other notable verticals where Cantaloupe is seeing traction include amusement, outdoor vending, and sports and entertainment. Entertainment Solutions Group secured a large number of Pulse devices for their amusement machines, while Outdoor Vending Solutions acquired significant numbers of G11 serial devices to be placed at Lowe's distribution centers on new Rhino propane self-service machines.
The company's indirect channel also performed well in Q2, with AVS securing a major win for Cantaloupe's latest Engage Pulse units. This deal has the potential to disrupt the amusement sector by allowing customers to purchase multiple play credits in a single transaction through an interactive app running on the Engage device.
In sports and entertainment, Cantaloupe added the San Jose Earthquakes at PayPal Park as its point-of-sale provider for all games and events at the stadium. This partnership further solidifies the company's presence in the sports and entertainment sector.
The Q2 results demonstrate Cantaloupe's continued momentum across various markets and segments, driven by its innovative solutions and strong customer relationships. As the company looks to the second half of fiscal year 2025, it is well-positioned to build on this success and further expand its market reach.
