Digital Transactions Authoritative, insightful and timely information for payments professionals
By Kevin Woodward
@DTPaymentNews
Six Pepsi-licensed bottlers will use USA Technologies Inc.’s cashless payments devices in 2,120 vending machines, the Malvern, Pa.-based vending-payments specialist announced Wednesday. USAT also released its fiscal second-quarter earnings showing revenue at $21.8 million, but a year-to-date loss of $2.2 million.
The Pepsi bottler announcement—for a cooperative known as Carolina Canners Inc. operating in North and South Carolina—heralds the latest in a string of vending operators choosing USAT’s cashless-vending technology. In this deal, 1,750 of the devices will be USAT’s touchscreen-enabled ePort Interactive devices and 370 will be its near-field communication (NFC)-enabled ePort devices. In December, USAT announced vending operator Ten M Corp. would add ePort cashless payment devices to 1,000 of its machines.
For the quarter ending Dec. 31, USAT added 21,000 new connections, pushing its total connections to 469,000. That’s a 27% increase from 369,000 connections at the end of the second quarter of 2015.
Transaction volume for the quarter was $192 million, a 39% increase from $138 million a year ago. The total number of transactions was 100 million, up 32% from 76 million.
Of the new connections, approximately 80% are from existing customers, “which is a strong indication of the increasing move by our customers toward 100% adoption of our cashless technology,” said Lee Maxwell, interim chief financial officer, according to a SeekingAlpha.com transcript of an earnings call with analysts.
USAT advocacy of cashless-vending payments is bolstered in part by consumer affinity for contactless payments. In a test promoting Apple Pay on its interactive ePort devices, USAT found that vending operators had a 36.5% increase in overall sales and a 55.5% increase in revenue from contactless purchases. The average contactless ticket of $1.47 was 26.7% more than the average cash ticket of $1.16.
“As revenue and connections continue to grow, we’ve returned to our profitability path we were on in the early part of last year and we’re obviously on track to reach our long-term goals of 500,000 connections and a $100 million annual revenue run rate,” said chairman and chief executive Stephen P. Herbert during the call.
For the first two quarters, USAT had revenue of $43.3 million, a 23% increase from $35.1 million in the year-earlier period. The company, however, has a $2.2 million loss year-to-date, up from its $514,000 loss a year ago. In the second quarter alone, USAT had a net income of $233,000, a reversal from the $874,000 loss a year ago.
By the end of fiscal 2017, USAT expects to have added between 115,000 and 125,000 new connections, for a total ranging from 544,000 to 554,000. Annual revenue expectations range from $95 million to $100 million, USAT says.
As of the second quarter, USAT had 11,900 customers, a 12% increase from 10,625 a year ago.
