TransAct Technologies NASDAQ: TACT lowered the top end of its 2026 revenue and adjusted EBITDA forecasts, citing softer expected demand in its casino and gaming business, even as food service technology sales grew in the third quarter.
The company also said its board is considering a broader range of strategic alternatives, including a potential sale of its food service technology business. The review was initially focused on casino and gaming.
CEO John Dillon said third-quarter net sales were $14.1 million, while CFO Troy Ingianni cited $14.4 million. Both executives described sales as up about 10% year over year. Ingianni said the company recorded a net loss of $440,000, or $0.04 per diluted share, compared with net income of $15,000 a year earlier.
Food Service Growth Offsets Gaming Decline
Food service technology revenue rose 33% year over year to $6.4 million and increased 24% from the second quarter. Dillon said hardware, software and labels all grew from a year earlier.
Software revenue increased approximately 61% year over year, helped by pricing changes, sales to existing customers and new accounts, Dillon said. The company sold 2,346 BOHA! units during the quarter and ended the period with approximately 22,600 online terminals, up 26% from a year earlier.
TransAct is working to charge customers for software and hosting services that in some cases had previously been provided for free. Dillon said software is almost always included when selling to a new customer, but terms vary for existing accounts. Some customers have pushed back because they had not budgeted for the expense, he said.
“In each case, it’s a conversation,” Dillon said. He added that the company sees opportunities to sell additional software and products to existing customers.
The executives gave slightly different figures for food service recurring revenue, which includes software, services and labels. Dillon cited $4.1 million for the quarter, while Ingianni said it was $4.0 million. Both said it rose 24% year over year.
TransAct added four new food service accounts in the quarter. Dillon said the company will report new accounts rather than new logos to better reflect its market footprint.
Guidance Cut and Strategic Review
Casino and gaming revenue fell 11% year over year to $6.4 million. Dillon attributed the business’s variability to factors including equipment manufacturers’ order timing, customer inventory levels, casino openings and expansions, and regulatory approvals.
TransAct expects softer casino and gaming demand to continue into the fourth quarter. It narrowed its full-year revenue outlook to $55 million to $56 million from $55 million to $57 million. It also reduced the top of its adjusted EBITDA forecast, projecting $1.5 million to $1.75 million rather than $1.5 million to $2 million.
Regarding the strategic review, Dillon said management engaged BofA Securities as financial adviser during the third quarter. The board is considering alternatives involving the food service business, including a potential sale separately or as part of a broader transaction.
The company has not set a public timetable, and Dillon said there is no assurance the review will lead to a transaction or other strategic outcome.
Margins and Expenses
Third-quarter gross margin declined to 46.4% from 49.8% a year earlier. Ingianni attributed the decline largely to product mix, including higher sales of lower-margin food service hardware and lower sales of higher-margin casino and gaming hardware. TransAct continues to expect a full-year gross margin in the mid-to-high 40% range.
Operating expenses rose 9% to $7.1 million. The company reported an operating loss of $415,000, compared with operating income of $14,000 in the prior-year quarter. Adjusted EBITDA fell to $289,000 from $669,000, while adjusted EBITDA for the first nine months of 2026 totaled approximately $2.2 million.
TransAct ended the quarter with $20.2 million in cash and cash equivalents and $3.0 million outstanding on its revolving loan.
About TransAct Technologies (NASDAQ:TACT)
TransAct Technologies Incorporated NASDAQ: TACT develops and manufactures transaction-based technology products for the gaming, lottery, food service and point-of-sale markets. The company's offerings include thermal printers, kiosks, terminals and related hardware used to produce tickets, receipts, vouchers and other transaction documents. In the gaming and lottery industries, TransAct supplies printers and other equipment for slot machines, video lottery terminals, ticket-in/ticket-out systems and lottery applications.
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