TransAct Technologies Q2 Earnings Call Highlights

Key Points

• Second-quarter sales were $13.9 million, while tariff-related customer refund adjustments reduced reported revenue by about $1 million; excluding that impact, sales would have risen approximately 8% year over year. TransAct raised its full-year adjusted EBITDA outlook to $1.5 million–$2 million.
• Food service technology revenue increased 9% to $5.2 million, with recurring revenue up 13% and software revenue up 47%. The company is expanding its BOHA! installed base and shifting toward higher-margin paid software subscriptions after completing its migration to Microsoft Azure.
• TransAct launched a formal strategic review of its casino and gaming business with BofA Securities as adviser, potentially including broader strategic alternatives. Reported casino and gaming revenue fell 4% year over year, but would have increased about 9% excluding tariff-related adjustments.

TransAct Technologies NASDAQ: TACT reported second-quarter net sales of $13.9 million, up slightly from $13.8 million a year earlier, as growth in its food service technology business was partially offset by tariff-related customer refund adjustments and lower reported casino and gaming revenue.

The company recorded an estimated $1 million reduction in sales tied to customer refunds following a February U.S. Supreme Court ruling that invalidated certain import tariffs, according to CFO Troy Ingianni. TransAct also recorded an approximately $600,000 reduction in cost of goods sold related to expected tariff refunds from the government. Excluding the tariff-related effect, the company said second-quarter sales would have been approximately $14.9 million, an 8% increase from the prior-year period.

Adjusted EBITDA totaled $514,000 in the quarter, compared with $478,000 a year earlier and $1.4 million in the first quarter. The result included a $400,000 impact from tariff adjustments. For the first half, adjusted EBITDA was approximately $1.9 million, prompting TransAct to raise its full-year adjusted EBITDA outlook to a range of $1.5 million to $2 million.

Food Service Revenue and Software Growth

Food service technology, or FST, revenue rose 9% year over year and 10% sequentially to $5.2 million. CEO John Dillon said the company’s strategy remains focused on building a higher-margin and more predictable recurring-revenue business around its BOHA! food service platform.

TransAct sold 1,900 BOHA! units during the second quarter, bringing first-half unit sales to 3,270. The company ended the quarter with nearly 22,000 online units, an increase of about 33% from a year earlier. Dillon said demand continued to come from customers upgrading older AccuDate and Terminal One systems, which the company views as a multiyear conversion opportunity.

Recurring FST revenue, including software and service subscriptions as well as consumable labels, increased 13% to $3.4 million. Software revenue rose 47% from the prior year and 25% sequentially, driven mainly by price increases implemented earlier in 2026.

Dillon said TransAct is moving away from prior practices of bundling software without charge to support hardware or label sales. The company now intends to charge for the value of its software offerings and, over the long term, aims to generate $100 to $200 per machine per month in recurring software and related revenue from its installed base.

During the question-and-answer session, Dillon said basic software packages may generate roughly $75 to $90 per month, while more extensive deployments can produce $300 to $400 per unit monthly. He said software packages vary by customer requirements and may include applications such as food labeling, nutrition, temperature monitoring and checklists.

The company also completed its migration from legacy hosted infrastructure to Microsoft Azure for its next-generation enterprise-grade BOHA! software-as-a-service platform. Dillon said the move is intended to improve scalability, security, resiliency, system performance and integration capabilities, while enabling TransAct to bring new features to customers faster. He also said the platform could support AI-related workloads and additional applications over time.

Casino and Gaming Strategic Review

Casino and gaming revenue was $7.3 million, down 4% from $7.6 million in the second quarter of 2025 and down 13% from the first quarter. Excluding the $1 million tariff-related sales reduction, casino and gaming revenue would have been about $8.3 million, up approximately 9% year over year.

Dillon said the company received contributions from domestic and international original equipment manufacturer customers, while its Epic TR80 roll-fed printer continued to gain traction in international gaming applications such as betting kiosks.

TransAct’s board has initiated a formal strategic review of the casino and gaming business and retained BofA Securities as financial adviser. The review could also encompass broader strategic alternatives if the board determines they could enhance shareholder value. The company did not provide a timetable and said there is no assurance the process will result in a transaction or other outcome.

Dillon said the prior strategic process occurred during a more volatile period following the pandemic, when supply-chain issues and customer inventory adjustments affected the gaming business. He said the business has since stabilized and recovered. Management plans eventually to provide separate EBITDA information for its casino and gaming and FST go-to-market strategies, he added.

Margins, Expenses and Balance Sheet

Second-quarter gross margin was 50.2%, compared with 48.2% in the prior-year period and 50.3% in the first quarter. Ingianni said TransAct continues to expect full-year gross margin in the mid-to-high 40% range.

• Engineering and research and development expense fell 29% to $1.2 million, reflecting capitalization of software consulting and R&D costs related to bringing BOHA! software operations in-house.
• Selling and marketing expense rose 30% to $2.7 million, driven by new hires, trade shows, advertising and commissions.
• General and administrative expense was essentially flat at $3.1 million, as higher legal costs related to executive transitions and strategic matters were offset by lower bonus expense.

TransAct reported a net loss of $50,000, or break-even on a diluted per-share basis, compared with a net loss of $143,000, or 1 cent per diluted share, a year earlier. The company ended the quarter with $19.4 million in cash and cash equivalents and said it maintained only a minimum balance on its Siena revolver. It did not repurchase shares during the quarter.

The company reaffirmed its full-year 2026 net sales outlook of $57 million to $55 million, as stated on the call, while raising its adjusted EBITDA outlook.

About TransAct Technologies (NASDAQ:TACT)

TransAct Technologies Inc designs, manufactures and distributes secure card issuance systems and embedded transactional printing solutions for a variety of industries. The company's portfolio includes high-speed card printers, card personalization and issuance software, as well as embedded printers used in kiosks, point-of-sale terminals, lottery machines and gaming applications. TransAct's products are built to deliver reliable, on-demand printing and secure card encoding for markets that require rapid, accurate issuance of payment cards, identification badges and tickets.

Within its secure card solutions segment, TransAct offers turnkey systems that integrate card printing, magnetic stripe encoding, smart card personalization and instant card issuance software.

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