USA Technologies Nearly Doubles Its Connection Counts While Leveraging Its Cantaloupe Deal

Unattended payments continue to bear fruit for USA Technologies Inc. as the company said its connections increased 92.3% in its fiscal third quarter from a year ago. Malvern, Pa.-based USAT said its connections totaled 969,000 in the quarter ended March 31, up from 504,000.

Its total number of customers, at 15,600 this year, increased 25.8% from the 2017 quarterly total of 12,400.

“Our commercial success in cross-selling our combined offering is allowing us to reach new customers, displace competitive solutions, as well as expand our footprint within our existing customer base,” said Stephen P. Herbert, chairman and chief executive, in a press release.

USAT, which specializes in providing payments to vending machines, car washes, kiosks, and amusement operators, said the profit margin on its license and transaction fees increased to 40.7% from 32% a year ago.

“Our third quarter L&T margin was the highest we have seen in the past five years, reflecting our commitment to driving L&T margin expansion,” said Priyanka Singh, USAT chief financial officer. “Additionally, certain actions made in connection with our integration of Cantaloupe have resulted in approximately $3 million in annualized cost savings.”

USAT purchased Cantaloupe, a vending-industry software provider, in November for $85 million. Herbert touted the cross-selling opportunities because of the deal as a “win” for USAT.

Revenues increased 35.1% to $35.8 million from $26.5 million. USAT posted an operating loss of $500,000, compared with a profit of $419,000 a year ago. In full-year guidance, USAT expects its revenue to be between $138 million and $142 million. Total connections by its fiscal year end are projected to be in the 1.03 million to 1.07 million range.