TransAct Technologies (TACT -1.04%), a technology supplier focused on printing and software equipment for the food service and gaming industries, released second-quarter 2025 earnings on August 6, 2025. The company delivered stronger-than-expected results, with GAAP revenue of $13.8 million outpacing the analyst estimate of $12.55 million and GAAP earnings per share of $(0.01), beating expectations for a $(0.05) loss. Compared to Q2 2024, GAAP revenue rose by 19%, and losses narrowed, demonstrating progress in core Food Service Technology and Casino and Gaming segments. Despite improved financial performance and some operational progress, the quarter saw margin pressure, as gross margin declined to 48.2% and ongoing declines in POS automation GAAP net sales were observed in 2024 compared to 2023. Overall, the period marked an important step in the company's turnaround efforts amid mixed signals across its major business lines.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.01) | $(0.05) | $(0.03) | Improved |
| Revenue | $13.80 million | $12.55 million | $11.60 million | 19 % |
| Gross Profit | N/A | $6.11 million | N/A | |
| Gross Margin | 48.2 % | 52.7 % | (4.5 pp) | |
| Adjusted EBITDA | $0.48 million | $0.09 million | 433 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Key Drivers
TransAct Technologies develops solutions for the food service, casino, and gaming sectors. Its offerings include specialty printers, terminals, and related software that streamline processes for clients ranging from quick service restaurants to casinos. The Food Service Technology (FST) division, a centerpiece of its business, provides BOHA! terminals used for food safety, labeling, and kitchen automation. In gaming, the company manufactures and supplies ticket and receipt printers for gaming machines and lottery kiosks.
In the past year, the company focused on expanding its recurring revenue base, particularly with the BOHA! suite, and invested in operational efficiency programs. Key areas of importance are product innovation and securing repeat business via software subscriptions, labels, and service contracts. TransAct's progress hinges on its ability to grow these stable income streams, manage costs, and maintain liquidity to support ongoing technology development.
Quarter Highlights: Growth, Margins, and Segment Trends
The most prominent feature of the second quarter was strong year-over-year revenue growth, led by improvements in both Food Service Technology and Casino and Gaming. FST segment sales increased to $4.8 million (GAAP), with recurring revenue up 7% year-over-year and FST recurring revenue was up 11% sequentially. Over 1,900 FST terminals sold during the quarter expanded the installed base, helping reverse stagnation seen last year. Casino and Gaming revenue rebounded to $7.6 million, a 42% year-over-year jump in casino and gaming sales and a 13.5% sequential rise from Q1 2025, driven by both core casino wins and increasing use in charitable and non-casino gaming applications.
POS Automation, however, remained a weak spot. Sales dropped to $0.6 million, nearly 49% lower than the prior-year period. This segment continues to face structural competition and declines as customers reduce investment in legacy systems and competitors regain market share. Services revenue also edged down, reflecting a normalization in demand following a period of high legacy spare parts orders.
Product innovation remained a focus. The acquisition of a perpetual, royalty-free copy of the BOHA! software source code allows the company to take full control of this core FST platform. Management noted that this will enable direct modification and enhancement of the entire BOHA! suite. This move aims to strengthen the company's position in recurring software and service revenues.
On the cost side, gross profit (GAAP) climbed to $6.7 million, but gross margins (GAAP) compressed to 48.2%, down from 52.7% in Q2 2024. Margin pressure in Q1 2025 was primarily due to a greater share of lower-margin hardware in the sales mix, a trend that management said was anticipated. Operating expenses (GAAP) held steady at $6.9 million, but the company posted a lighter operating loss and positive adjusted EBITDA, showing some benefit from ongoing cost reduction programs. Cash and cash equivalents rose to $17.7 million, due in part to lower inventory levels, and overall debt was unchanged at $3 million, preserving liquidity and flexibility for future periods. There were no material one-time events or changes to the company's dividend policy; TACT does not currently pay a dividend.
Looking Ahead: Outlook and Investor Considerations
Management updated its outlook for FY2025, now expecting net sales between $49 million and $53 million, up from earlier guidance of $47 million to $52 million. The company's new range for adjusted EBITDA stands at $0 (breakeven) to $1.5 million for the full year 2025, improved from prior guidance of as low as negative $1.5 million. However, profitability remains modest and sensitive to swings in sales mix and operating expenses. Execution risk remains high given the thin margins and evolving market demand patterns across its major segments.
For the rest of the year, investors should focus on the pace of growth in recurring revenue and the continued rebound in casino and gaming sales, as evidenced by FST recurring revenue of $3.0 million (up 7% year-over-year) and casino and gaming sales of $7.629 million in Q2 2025. Margin trends will merit close attention, and management maintained that large orders in segments like FST and gaming will continue to produce "ups and downs" in reported results, specifically referencing quarter-over-quarter and year-over-year variability. TACT does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
