USA Technologies Reports Second Quarter Fiscal Year 2020 Results
Revenue Growth of 27.7% Year-Over-Year
Total Connections Rose 16% Year-Over-Year
Fiscal 2020 Revenue Expectations Increased to $175 Million to $185 Million
MALVERN, Pa.--(BUSINESS WIRE)--Feb. 18, 2020-- USA Technologies, Inc. (OTC:USAT) (“USAT” or the “Company”), a cashless payments and software services company that provides end-to-end technology solutions for the self-service retail market, today reported results for the second quarter fiscal year 2020 ended December 31, 2019.
“We are pleased with our fiscal second quarter results, which were marked by an acceleration in revenue growth and improvement in gross margins,” said Don Layden, USA Technologies’ Interim Chief Executive Officer. “We are in the final stages of negotiating a new transaction processing agreement, which we expect to result in first year savings of approximately $3.5 million and total cost savings over the next five years of approximately $22 million. In addition, we have completed a series of cost actions that will reduce our operating expenses by approximately $8.0 million on an annualized basis and we continue to rationalize our expenses to further optimize our cost structure.”
Second Quarter Fiscal 2020 Financial Highlights:
- Revenue of $44.1 million, increased 27.7% year-over-year
- License and transaction fee revenue of $35.8 million, increased 20.3% year-over-year
- Equipment revenue of $8.3 million, increased 74.6% year-over-year
- Net new connections of 40,000 bring total connections to 1,255,000
- Gross margin of 29.0% increased from 27.4% in the prior year period
- License and transaction gross margin of 36.8% increased from 34.5% in the prior year period
- Equipment gross margin of (5.0)% increased from (17.6)% in the prior year period
- Operating loss of $(7.8) million compared to operating loss of $(10.0) million in the prior year period
- Net loss of $(8.4) million, or $(0.13) per basic share compared to net loss of $(10.4) million, or $(0.17) per basic share in the prior year period
- Non-GAAP net loss of $(4.0) million, or $(0.06) per share compared to non-GAAP net loss of $(1.6) million, or $(0.03) per share in the prior year period
- EBITDA of $(5.9) million compared to $(8.0) million in the prior year period
- Adjusted EBITDA of $(2.3) million compared to $0.0 million in the prior year period
- Ended the quarter with $37.5 million in cash and cash equivalents
“We are pleased to deliver another quarter of strong revenue growth, over 80% of which remains from recurring license and transaction fees,” said Glen Goold, USA Technologies’ Interim Chief Financial Officer. “We are raising our revenue guidance based on our strong financial performance this fiscal year. We are focused on execution and believe our scalable financial model, improved financial position, and enhanced compliance controls positions the Company well.”
Fiscal Year 2020 Outlook:
For full fiscal year 2020, the Company now expects revenue to between $175 million to $185 million, up from prior expectations of $165 million to $175 million, and continues to expect to add 170,000 to 190,000 net new connections to its service. We will not be able to meet our previous guidance of $10 million of annualized Adjusted EBITDA previously given. This guidance was set assuming we would take out all non-recurring expenses as part of our Adjusted EBITDA calculation. We will provide more details during the upcoming conference call of what our normalized performance would look like after eliminating all non-recurring expenses from the Company.
Webcast and Conference Call
USA Technologies will host a conference call and webcast the event beginning at 8:30 a.m. Eastern Time tomorrow, February 19, 2020.
To participate in the conference call, please dial (866) 393-1608 approximately 10 minutes prior to the call. International callers should dial (224) 357-2194. Please reference conference ID # 7577265.
A live webcast of the conference call will be available at http://usat.client.shareholder.com/events.cfm. Please access the website 15 minutes prior to the start of the call to download and install any necessary audio software. A telephone replay of the conference call will be available from 11:30 a.m. Eastern Time on February 19, 2020 until 11:30 a.m. Eastern Time on February 26, 2020 and may be accessed by calling (855) 859-2056 (domestic dial-in) or (404) 537-3406 (international dial-in) and reference conference ID # 7577265. An archived replay of the conference call will also be available in the investor relations section of the company's website.
About USA Technologies
USA Technologies, Inc. is a cashless payments and software services company that provides end-to-end technology solutions for the self-service retail market. With more than one million connections worldwide, USAT is transforming the unattended retail community by offering one solution for payments processing, logistics, and back-office management solutions. The company’s enterprise-wide platform is designed to increase consumer engagement and sales revenue through digital payments, digital advertising and customer loyalty programs, while providing retailers with control and visibility over their operations and their inventory. As a result, customers ranging from vending machine companies, to operators of micro-markets, car charging stations, laundromats, kiosks, amusements and more, can run their businesses more proactively, predictably, and competitively.
