Cantaloupe Inc (CTLP) 2024 Q2 法說會逐字稿

Thank you for standing by, and welcome to Cantaloupe's second quarter fiscal year 2024 earnings conference call. (Operator Instructions)

感謝您的耐心等待，歡迎參加 Cantaloupe 2024 財年第二季財報電話會議。（操作員說明）

I would now like to hand the call over to Dara Dierks, Investor Relations. Please go ahead.

我現在想將電話轉交給投資者關係部門的 Dara Dierks。請繼續。

Thank you. Good afternoon, everyone, and welcome to the Cantaloupe's second-quarter earnings conference call. With me on the call today is Ravi Venkatesan, Chief Executive Officer; and Scott Stewart, Chief Financial Officer.

謝謝。大家下午好，歡迎參加哈密瓜第二季財報電話會議。今天與我一起參加電話會議的是執行長 Ravi Venkatesan；和首席財務官斯科特·斯圖爾特。

Before we begin today's call, we would like to remind you that all statements included in this call other than statements of historical facts are forward looking in nature. Actual results could differ materially from those contemplated by the forward-looking statements because of certain factors including but not limited to business financial markets and economic conditions. A detailed discussion of the risks and uncertainties that could cause the actual results to differ materially from such forward-looking statements is included in our filings with the SEC and in the press release issued earlier today.

在我們開始今天的電話會議之前，我們想提醒您，本次電話會議中除歷史事實陳述外的所有陳述本質上都是前瞻性的。由於某些因素，包括但不限於商業金融市場和經濟狀況，實際結果可能與前瞻性陳述預期的結果有重大差異。我們向美國證券交易委員會提交的文件以及今天早些時候發布的新聞稿中詳細討論了可能導致實際結果與此類前瞻性陳述存在重大差異的風險和不確定性。

Listeners are cautioned to not place undue reliance on any such forward-looking statements, which reflect management's views only as of the date they are made. Cantaloupe undertakes no obligation to update any forward-looking statements, whether because of new information, future results or otherwise.

請聽眾注意不要過度依賴任何此類前瞻性陳述，這些陳述僅反映管理層截至其做出之日的觀點。Cantaloupe 不承擔更新任何前瞻性陳述的義務，無論是由於新資訊、未來結果或其他原因。

This call will also include a discussion of certain non-GAAP financial measures that we believe are useful for, among other things, evaluating Cantaloupe's operating results. These non-GAAP financial measures are supplemental to and not substitute for GAAP financial measures. Details of these non-GAAP financial measures, a presentation of the most directly comparable GAAP financial measures, and a reconciliation between those non-GAAP financial measures can be found in our press release issued this afternoon, which has been posted on the Investor Relations section of our website at www.cantaloupe.com.

這次電話會議也將討論某些非公認會計準則財務指標，我們認為這些指標對於評估 Cantaloupe 的營運績效等有用。這些非公認會計原則財務措施是對公認會計原則財務措施的補充，而不是替代品。這些非公認會計原則財務指標的詳細資訊、最直接可比較的公認會計原則財務指標的介紹以及這些非公認會計原則財務指標之間的調節表可以在我們今天下午發布的新聞稿中找到，該新聞稿已發佈在投資者關係部分我們的網站 www.cantaloupe.com。

And with that, I would like turn the call over to Ravi.

說到這裡，我想把電話轉給拉維。

Thanks, Dara. Good afternoon, everyone, and thank you for joining us today for our second quarter of fiscal year 2024 call.

謝謝，達拉。大家下午好，感謝您今天參加我們的 2024 財年第二季電話會議。

During the second quarter of fiscal year '24, our total revenue increased 7% year over year to $65.4 million, driven by 17% year-over-year transaction revenue growth and 10% year-over-year subscription revenue growth. We now expect subscription and transaction revenue to be at the lower end of the 17% to 21% range for the fiscal year due to a slower-than-anticipated ramp in international revenue and delayed activations domestically. We now expect subscription revenue to be in the 12% to 15% range for fiscal year '24.

在 2024 財年第二季度，我們的總營收年增 7%，達到 6,540 萬美元，這主要得益於 17% 的交易收入同比增長和 10% 的訂閱收入同比增長。由於國際營收成長慢於預期以及國內啟動延遲，我們目前預計本財年的訂閱和交易收入將處於 17% 至 21% 區間的下限。我們現在預計 24 財年的訂閱收入將在 12% 至 15% 範圍內。

Our backlog of shipped devices in micro markets remains robust. We anticipate growth in subscription revenue in the second half to increase as we work through this backlog and continue to invest in decreasing activation timelines.

我們在微型市場中已出貨設備的積壓仍然強勁。我們預計，隨著我們解決積壓問題並繼續投資縮短啟動時間，下半年訂閱收入的成長將會增加。

We've spoken before about our initiatives to drive subscription revenue growth, a key driver of continued expansion in operating leverage, and we continue to be laser-focused on this. In addition to a robust backlog, our international pipeline continues to build, and we are as excited as ever about the successes we are having in Europe and Latin America.

我們之前已經談到我們推動訂閱收入成長的舉措，這是營運槓桿持續擴張的關鍵驅動力，我們將繼續高度關注這一點。除了強勁的積壓之外，我們的國際管道還在繼續建設，我們對我們在歐洲和拉丁美洲的成功一如既往地感到興奮。

I want to highlight the progress we've made in recent quarters on another key driver of operating leverage, which is expansion of our gross margins. Total gross margin for the quarter was 37.2% compared to 30% in the same quarter last year. This increase in gross margin was driven by higher margins across all lines of revenue. Transaction margin or transaction revenue, the largest of our three revenue streams, realized gross margins about 20% this quarter, up from the high single-digit percentages just a couple of years ago.

我想強調我們最近幾季在營運槓桿的另一個關鍵驅動因素方面取得的進展，即毛利率的擴大。該季度的總毛利率為 37.2%，而去年同期為 30%。毛利率的成長是由所有收入線的利潤率提高所推動的。交易利潤率或交易收入是我們三個收入來源中最大的一個，本季實現的毛利率約為 20%，高於幾年前的高個位數百分比。

Recall that we had previously outlined a plan to drive transaction margins to 20% plus by fiscal year '25. I'm delighted to report that we've reached that goal a year ahead of schedule as there is no additional SG&A expense associated with the incremental dollars we receive through transaction processing revenue. This gross margin expansion has a positive impact to our EBITDA and free cash flow, helping drive profitability.

回想一下，我們之前就制定了到 25 財年將交易利潤率提高到 20% 以上的計畫。我很高興地向大家報告，我們已經提前一年實現了這一目標，因為我們透過交易處理收入獲得的增量資金沒有帶來額外的銷售、管理和行政費用。毛利率的擴張對我們的 EBITDA 和自由現金流產生了積極影響，有助於提高獲利能力。

We now expect to be at the high end of our adjusted EBITDA guidance for fiscal year '24 all and we are pleased with our performance for the first half of the year. In addition, we kicked off the second half of the year with some exciting news. Last week, we announced the acquisition of CHEQ. This strategic investment positions Cantaloupe for expansion into the large and rapidly growing sports, entertainment, and restaurant sectors with a comprehensive suite of self-service solutions.

我們現在預計 24 財年的調整後 EBITDA 指引值將達到上限，我們對今年上半年的表現感到滿意。此外，我們也以一些令人興奮的消息拉開了今年下半年的序幕。上週，我們宣布收購 CHEQ。這項策略性投資使 Cantaloupe 能夠透過一整套自助服務解決方案擴展到大型且快速成長的體育、娛樂和餐飲業。

There is tremendous synergy between our combined product lines, which will enable growth across our combined customer base. The addition of CHEQ will fit nicely into our long-term strategy and create a new growth vector for the business. We are excited to welcome the CHEQ team to the Cantaloupe family.

我們的合併產品線之間存在著巨大的協同效應，這將促進我們合併的客戶群的成長。CHEQ 的加入將很好地契合我們的長期策略，並為業務創造新的成長載體。我們很高興歡迎 CHEQ 團隊加入 Cantaloupe 大家庭。

I now want to highlight select customer wins from this quarter. There is a growing trend among customers seeking all-in-one solution providers that can manage cashless payments, vending management software and micro market solutions and team of Northern California, a vending operator serving Sonoma, Napa and Marin counties migrated from competitor kiosks to our platform and integrated Seed software throughout their operations.

我現在想重點介紹本季的部分客戶勝利。客戶尋求能夠管理無現金支付、自動販賣機管理軟體和微觀市場解決方案的一體化解決方案提供商的趨勢不斷增長，北加州團隊（一家為索諾瑪縣、納帕縣和馬林縣提供服務的自動售貨業者）從競爭對手的售貨亭遷移到了我們的服務亭平台並在整個運營過程中整合種子軟體。

Paramount Vending was another great example of a competitive cross-sell win in the micro market space. Nick DePasquale of Paramount Vending stated, we had previously used Three Square Market, but had a combination of other micro market kiosks, and we had been seeking a more streamlined way to manage our entire business. We were already all in on seed as our VMS, and we're excited to take advantage of the trade-up program to upgrade to Cantaloupe Go, moving our entire micro-market business to catalog as we continue to grow.

派拉蒙自動販賣機是微觀市場領域競爭性交叉銷售獲勝的另一個很好的例子。Paramount Vending 的 Nick DePasquale 表示，我們之前使用過 Three Square Market，但結合了其他微型市場亭，我們一直在尋求一種更簡化的方式來管理我們的整個業務。我們已經將種子作為我們的 VMS，我們很高興能夠利用以舊換新計劃升級到 Cantaloupe Go，隨著我們的不斷發展，將我們的整個微型市場業務轉移到目錄中。

Our sales team continues to grow penetration in the small business micro market space with several wins including TechSun Vending, MiFID Vending, who all deployed micro markets and Cooler Cafes. We also continue to see increased penetration of Seed. We are seeing steady adoption of Seed markets, which is becoming the industry standard for combining management of vending, micro markets, and office coffee businesses.

我們的銷售團隊繼續擴大在小型企業微型市場領域的滲透率，取得了許多勝利，包括 TechSun Vending、MiFID Vending，它們都部署了微型市場和 Cooler Cafe。我們也繼續看到 Seed 的滲透率不斷提高。我們看到種子市場的穩定採用，它正在成為自動販賣機、微型市場和辦公室咖啡業務相結合管理的行業標準。

During the second quarter, we posted a number of competitive wins with customers converting their operations to Seed, including Culinary Ventures Vending, a large vending operator in the tri-state area, and Vend West Services in Coos Bay, Oregon, who completed a full conversion to Seed and ePort.

在第二季度，我們在客戶將業務轉換為Seed 方面取得了一系列競爭勝利，其中包括三州地區的大型自動售貨運營商Culinary Ventures Vending 和俄勒岡州庫斯灣的Vend West Services，後者完成了完整的轉換為種子和 ePort。

On the product side, we recently released two new subscription products, Seed Analytics and Seed Intelligence. These tools are designed to transform the way of vending operators leverage data for revenue growth, improving real-time decision-making and enhancing productivity. Seed Pick Easy, our warehouse picking solution is now fully integrated with the Three Square Go kiosk, opening up opportunities with micro market operators that need a nimble warehouse picking solution.

在產品方面，我們最近發布了兩款新的訂閱產品：Seed Analytics 和 Seed Intelligence。這些工具旨在改變自動販賣機利用數據實現收入成長、改善即時決策和提高生產力的方式。Seed Pick Easy，我們的倉庫揀選解決方案現已與 Three Square Go 自助服務終端完全集成，為需要靈活倉庫揀選解決方案的微型市場運營商提供了機會。

The Seed platform, including Seed Entrepreneur and Seed Enterprise is now available in Mexico with full Spanish language support. Seed was showcased at our Cantaloupe LIVE Mexico event held in December. We hosted over 100 industry leaders there. Prospects were able to hear strong endorsements from Riviera Vending and Feel Good Market, who described the utilization of Cantaloupe's vending and micro market solutions.

Seed 平台（包括 Seed Entrepreneur 和 Seed Enterprise）現已在墨西哥推出，並提供完整的西班牙語支援。Seed 在 12 月舉辦的 Cantaloupe LIVE Mexico 活動中進行了展示。我們在那裡接待了 100 多位行業領袖。潛在客戶能夠聽到 Riviera Vending 和 Feel Good Market 的強烈認可，他們描述了 Cantaloupe 的自動販賣機和微型市場解決方案的使用情況。

We also continue to see expansion into the mid-market segment, a newer segment for us, as well as with channel partners and in adjacent verticals. For example, our partnership with AVS Companies, one of our master resellers, continues to build as they purchase additional devices in Q2 and also expanded into the micro market space by purchasing Cantaloupe Go kiosks.

我們也繼續看到中端市場領域的擴張，這對我們來說是一個較新的領域，以及與通路合作夥伴和相鄰垂直領域的合作。例如，我們與 AVS 公司（我們的主要經銷商之一）的合作夥伴關係繼續建立，因為他們在第二季度購買了更多設備，並透過購買 Cantaloupe Go 自助服務終端擴展到微型市場空間。

Growth in adjacent verticals was driven by an expansion into the amusement sector with Mendota Valley Amusement, a supplier of music and gaming machines from the United States. CEO Bill Lethert stated, thanks to Cantaloupe, we are seamlessly transitioning from zero to implementing hundreds of cash card readers with plans for further expansion. This strategic move is projected to boost our revenues by at least 25%. Choosing Cantaloupe was a clear decision for us as their innovative solutions perfectly cater to business growth objectives across the gaming and restaurant spaces.

鄰近垂直產業的成長是由美國音樂和遊戲機供應商 Mendota Valley Amusement 向娛樂產業的擴張所推動的。執行長 Bill Lethert 表示，感謝 Cantaloupe，我們正在從零無縫過渡到部署數百個現金卡讀卡器，並計劃進一步擴展。這項策略性舉措預計將使我們的收入增加至少 25%。選擇 Cantaloupe 對我們來說是一個明確的決定，因為他們的創新解決方案完美地滿足了遊戲和餐廳空間的業務成長目標。

On the international front, our event in Mexico City in December was a success. Since that event, we've started pilots with multiple customers in Latin America, which we expect to scale in Q3 and beyond. In Europe, we secured a number of deals with telemetry and cashless payment acceptance. These deployments are going through the stages of pilots followed by larger scale deployments.

在國際方面，我們 12 月在墨西哥城舉辦的活動取得了成功。自那次活動以來，我們已開始與拉丁美洲的多個客戶進行試點，我們預計將在第三季及以後擴大規模。在歐洲，我們透過遙測和無現金支付受理達成了多項交易。這些部署正在經歷試點階段，然後是更大規模的部署。

We also continue to experience growth in our micro market solutions for the European markets, bringing on new customers such as Canny Local Vending, The Vending People, and RG's Coffee. So as you can see, the shifts we made to our go-to-market strategy over the last 12 months are showing results.

我們針對歐洲市場的微觀市場解決方案也持續成長，帶來了 Canny Local Vending、The Vending People 和 RG's Coffee 等新客戶。正如您所看到的，我們在過去 12 個月中對上市策略所做的轉變正在顯現成效。

We also remain focused on the continued optimization of cost of goods sold. As mentioned earlier, we've made significant progress in expanding gross margins through the optimization of costs, especially in transaction processing.

我們也持續關注銷售成本的持續優化。如前所述，我們透過優化成本，特別是在交易處理方面，在擴大毛利率方面取得了重大進展。

Lastly, being disciplined on operational expenses is also a priority, and we expect to finish the year with a decrease in OpEx as a percentage of revenue. In Q2, OpEx increased slightly year over year, which was driven by our investments in international expansion and also the inclusion of Three Square Market related expenses this quarter.

最後，嚴格控制營運支出也是優先事項，我們預計今年底營運支出佔收入的比例將會下降。第二季度，營運支出較去年同期略有成長，這是由於我們對國際擴張的投資以及本季三方形市場相關費用的推動。

We remain excited about the long-term opportunity for Cantaloupe driven by secular tailwinds, including decreased use of cash, increased use of credit cards, and the increased use of cashless payment options, which continue to drive industry growth.

我們仍然對哈密瓜在長期有利因素的推動下所面臨的長期機會感到興奮，這些因素包括現金使用量的減少、信用卡使用量的增加以及無現金支付方式的使用增加，這些因素將繼續推動行業增長。

While we are excited about the growth prospects in adjacent verticals, Berg Insight forecasts that the number of connected vending machines worldwide will grow at a CAGR of 16.4% to reach 12.3 million units by 2027, a forecast that augurs well for the growth of our core vending and micro market business.

雖然我們對相鄰垂直產業的成長前景感到興奮，但Berg Insight 預測，全球連網自動販賣機數量將以16.4% 的複合年增長率成長，到2027 年將達到1,230 萬台，這項預測對我們核心業務的成長來說是個好兆頭自動販賣和微型市場業務。

In addition, Consumer Research confirms increased willingness to buy more items and buy more expensive items from vending machines. As for the operators, labor shortages and a higher reliability derived from cloud processing continues to drive increased adoption of Seed as an industry platform. Seed technology continues to be a proven solution to help customers drive revenue and deliver cost reductions.

此外，消費者研究證實，人們購買更多商品和從自動販賣機購買更昂貴商品的意願有所增強。對於營運商而言，勞動力短缺和雲端處理帶來的更高可靠性繼續推動 Seed 作為行業平台的採用。種子技術仍然是一種行之有效的解決方案，可以幫助客戶增加收入並降低成本。

In summary, I could not be more proud of our team's abilities to execute on strategic priorities, especially the expansion of gross margins and discipline with operational expenses that have led to strong growth in adjusted EBITDA. We are proud of our product innovation that enables our customers to increase revenue through new modes of payment, additional consumer engagement features as well as new business tools for running a more efficient operation.

總而言之，我對我們團隊執行策略優先事項的能力感到非常自豪，特別是毛利率的擴大和營運支出的紀律，導致調整後 EBITDA 的強勁成長。我們為我們的產品創新感到自豪，這些創新使我們的客戶能夠透過新的支付方式、額外的消費者參與功能以及用於更有效率運作的新業務工具來增加收入。

With that, Scott will now review our Q2 results in more detail, as well as review our updated outlook for fiscal year '24. Scott?

至此，史考特現在將更詳細地審查我們第二季的業績，並審查我們對 24 財年的最新展望。史考特？

Thanks Ravi. As Ravi mentioned, we delivered another strong quarter. Our 2Q '24 revenue was $65.4 million, up 7% year over year. Our combined transaction/subscription revenue grew 15% to $56 million during the quarter. This includes $18.1 million of subscription revenue, a year-over-year increase of 10%, and $37.9 million of transaction revenue, an increase of 17% year over year. The overall increase in revenue was again driven by increased processing volumes, higher average transaction ticket sizes and subscription revenue growth for micro markets.

謝謝拉維。正如拉維所提到的，我們又實現了強勁的季度業績。我們 2024 年第二季的營收為 6,540 萬美元，年增 7%。本季我們的交易/訂閱合併收入成長了 15%，達到 5,600 萬美元。其中包括1,810萬美元的訂閱收入，年增10%，以及3,790萬美元的交易收入，較去年同期成長17%。收入的整體成長再次受到處理量增加、平均交易票據規模增加以及微型市場訂閱收入成長的推動。

As you may have noticed in our earnings release, we are now providing a new operating metric, average revenue per unit or ARPU. This is defined as our total subscription and transaction fees for the trailing 12 months, divided by average total active devices for the same period. Management uses this metric to measure the impact of new products and features, as well as higher ticket items being sold through our points of sale.

您可能已經在我們的財報中註意到，我們現在提供了一個新的營運指標，即每單位平均收入或 ARPU。這定義為過去 12 個月的總訂閱費和交易費除以同期平均活躍設備總數。管理層使用此指標來衡量新產品和功能以及透過我們的銷售點銷售的高價商品的影響。

The ARPU for 2Q '24 was $182, up 14% from the prior year period. Our equipment revenue was $9.3 million, a decrease of 25% compared to Q2 FY23. This was primarily due to prior year benefiting from the 3G upgrade cycle that is now behind us. But overall equipment revenue was down, we did see an increase in active device growth of 7% year over year.

2024 年第二季的 ARPU 為 182 美元，比去年同期成長 14%。我們的設備收入為 930 萬美元，與 2023 財年第二季相比下降了 25%。這主要是由於去年受益於現在已經過去的 3G 升級週期。但整體設備收入下降，我們確實看到活躍設備年增 7%。

Total gross margin for the quarter was 37.2% compared to 30.1% in the same quarter last year, driven by higher margins across all three revenue lines. Subscription and transaction revenue margin was 43.1% versus 38.3% in prior year. This increase was driven by an improved processing take rate, reduced processing costs, and subscription revenue representing a larger share of our overall revenue.

本季的總毛利率為 37.2%，而去年同期為 30.1%，主要得益於所有三個營收線利潤率的提高。訂閱和交易收入利潤率為 43.1%，而上一年為 38.3%。這一增長是由於處理率的提高、處理成本的降低以及訂閱收入在我們總收入中所佔的份額更大而推動的。

Equipment revenue margin for Q2 FY24 improved to a positive 1.8% from a negative 2.3% in prior year. This is down from the immediate prior quarter of 12%. The sequential decrease was driven by several opportunistic deals we were able to replace competitor devices.

2024 財年第二季的設備營收利潤率從前一年的負值 2.3% 升至正值 1.8%。這比上一季的 12% 有所下降。連續下降是由我們能夠更換競爭對手設備的幾項機會主義交易所推動的。

Total operating expenses for Q2 FY24 were $20.7 million compared to $19.4 million in Q2 FY23. Net income applicable to common shares for the second quarter was $3.1 million or $0.04 per share compared to a net loss of $0.6 million or $0.01 per share in the prior period. Adjusted EBITDA was $8.5 million in the second quarter compared to $3.9 million in the prior year period, an increase of 119%.

2024 財年第二季的總營運支出為 2,070 萬美元，而 2023 財年第二季的總營運支出為 1,940 萬美元。第二季適用於普通股的淨利潤為 310 萬美元，即每股 0.04 美元，而上一季的淨虧損為 60 萬美元，即每股 0.01 美元。第二季調整後 EBITDA 為 850 萬美元，較去年同期的 390 萬美元成長 119%。

We ended the second quarter with cash and cash equivalents of $43.5 million. Our capital allocation priorities continue to target profitable growth and are specifically focused on driving operational improvements to control OpEx, expand our micro market offerings, and investing in our domestic and international go-to-market strategy and product development.

第二季結束時，我們的現金和現金等價物為 4,350 萬美元。我們的資本配置優先事項繼續以獲利成長為目標，特別注重推動營運改善以控制營運支出、擴大我們的微觀市場產品，以及投資於我們的國內和國際上市策略和產品開發。

Now turning to our FY24 guidance. We continue to expect total revenue between $275 million and $285 million. We continue to expect transaction subscription revenue to be between $234 million and $242 million. As Ravi mentioned earlier, we anticipate being on the lower end of this range due to a slower-than-anticipated ramp in international revenue and delayed activations domestically. In addition, we expect higher-than-anticipated equipment revenue in FY24, which will ramp throughout the second half of the year as our international presence ramps.

現在轉向我們的 2024 財年指引。我們仍然預計總收入在 2.75 億美元至 2.85 億美元之間。我們仍然預計交易訂閱收入將在 2.34 億美元至 2.42 億美元之間。正如拉維之前提到的，由於國際收入增長慢於預期以及國內激活延遲，我們預計將處於該範圍的下限。此外，我們預計 2024 財年的設備收入將高於預期，隨著我們國際業務的擴大，該收入將在下半年持續成長。

We continue to expect total U.S. GAAP net income to be between $9 million and $15 million. We expect to be at the higher end of our previously provided adjusted EBITDA guidance of between $28 million and $34 million, and total operating cash flow to be between $28 million and $38 million.

我們仍然預計美國 GAAP 淨利潤總額將在 900 萬美元至 1500 萬美元之間。我們預計調整後的 EBITDA 指引將達到 2,800 萬美元至 3,400 萬美元之間的上限，總營運現金流將在 2,800 萬美元至 3,800 萬美元之間。

With that, we'd now like to turn the call back over to the operator for the Q&A session. Operator?

這樣，我們現在希望將通話轉回給接線員進行問答會話。操作員？

(Operator Instructions) Cris Kennedy, William Blair.

（操作員說明）克里斯·甘迺迪、威廉·布萊爾。

Good afternoon. Thanks for taking the question. So it's been over a year since your Investor Day and at Investor Day, you talked about 20% plus subscription growth for the business and I think over the next three years. Can you just give you your updated thoughts and achieving that goal

午安.感謝您提出問題。自從您的投資者日以來已經過去一年多了，在投資者日上，您談到了該業務的訂閱增長超過 20%，我認為在未來三年內。您能否告訴您最新的想法並實現該目標

Yes, Chris, thanks for asking the question. We are on the right trajectory for the long-term goals we outlined. The challenge that we faced and continue to face is delayed activation timelines. The good news is it's not a demand problem. We have a significant backlog of sold and shipped devices in micro markets. The challenge is more of an installation and activation timeline issue, and we are continuing to invest in various ways to tackle that challenge.

是的，克里斯，謝謝你提出這個問題。我們正處於實現我們概述的長期目標的正確軌道上。我們面臨並繼續面臨的挑戰是啟動時間延遲。好消息是這不是需求問題。我們在微型市場上已售出和發貨的設備有大量積壓。挑戰更多的是安裝和啟動時間表問題，我們正在繼續投資各種方式來應對這項挑戰。

So as that normalizes, we expect the subscription revenue growth to ramp and we still believe that a long-term sustainable target growth rate for our subscription revenue is the 20% acknowledging the fact that right now we are at a much lower number than that number.

因此，隨著這種情況正常化，我們預計訂閱收入增長將會加速，並且我們仍然相信訂閱收入的長期可持續目標增長率是 20%，承認目前我們的數字遠低於這個數字。 。

Got it. Okay. And then real quickly on international, it's been a strategy for a long time and you guys seem very confident about it moving the needle I think in the back half of this year, but it seems like it's taking a little bit longer than expected. Can you just talk about the puts and takes with the international business? Thank you.

知道了。好的。然後在國際上很快，這已經是很長一段時間的策略了，你們似乎對它在今年下半年取得進展非常有信心，但似乎需要比預期更長的時間。能簡單談談國際事業的情況嗎？謝謝。

Thank you. So on the international business, as I mentioned, we've now gone through several stages of doing launch events, doing pilot, proving our various aspects of the solution, including cashless payment acceptance, telemetry, Seed software, as well as the micro market kiosk. And now we are starting to scale all those.

謝謝。因此，在國際業務方面，正如我所提到的，我們現在已經經歷了幾個階段：舉辦發布活動、進行試點、證明我們解決方案的各個方面，包括無現金支付受理、遙測、種子軟體以及微觀市場亭。現在我們開始擴展所有這些。

So while it's taken longer than perhaps I would have liked maybe answering this question two years ago, right now we are shooting from a position of strength. And I'm seeing great reception to our products and solutions in both Europe and Latin America. So that's what gives us the confidence in the ramp, in the back half of this fiscal year.

因此，雖然花費的時間可能比兩年前我想要回答這個問題的時間要長，但現在我們正在從一個有利的位置進行拍攝。我看到我們的產品和解決方案在歐洲和拉丁美洲受到了熱烈歡迎。因此，這讓我們對本財年後半段的成長充滿信心。

Right. Thanks for taking the questions.

正確的。感謝您提出問題。

George Sutton, Craig Hallum.

喬治·薩頓，克雷格·哈勒姆。

Thank you. Ravi, just to follow up on the European piece about you mentioned you're in the pilot phase for many of these deals. Can you just walk through a timeframe that a pilot would typically take? And then when would we start to see those deals roll out?

謝謝。拉維，只是為了跟進有關您的歐洲文章，提到您正處於其中許多交易的試點階段。您能簡單介紹一下飛行員通常需要的時間範圍嗎？那我們什麼時候開始看到這些交易推出呢？

Yes, thanks for the question, George. And typically, these pilots run three to four months. And majority of them were actually started at various points in the last quarter. Some of them even earlier than that. We almost chose not to disclose too much information about all the specific customers and all the specific pilots for competitive reasons. But it's a juicy ramp, is the best way I can describe it. And I'm very excited about where we are with Europe and Latin America.

是的，謝謝你的提問，喬治。通常，這些試點計畫會持續三到四個月。其中大多數實際上是在上個季度的不同時間點開始的。其中一些甚至比這更早。出於競爭原因，我們幾乎選擇不透露太多有關所有特定客戶和所有特定飛行員的資訊。但這是一個多汁的斜坡，這是我描述它的最好方式。我對我們與歐洲和拉丁美洲的關係感到非常興奮。

I'm not sure how much you want to disclose, but you talked specifically about a trade-up program. And just curious how that trade-up program works.

我不確定你想透露多少，但你具體談到了以舊換新計劃。我只是好奇這個以舊換新計劃是如何運作的。

It's as it sounds, it's an incentive for operators who may be stuck with equipment and micro markets, in particular, that are older. Like anything else, if you set something up four or five years ago, it starts looking dated from a consumer experience perspective and our trade-up program offers customer an opportunity to kind of trade up to the latest and greatest with us, and we provide some incentives for that.

顧名思義，這對那些可能受困於設備和微型市場（尤其是較舊的設備和微型市場）的營運商來說是一種激勵。與其他任何事情一樣，如果您在四五年前設置了一些東西，從消費者體驗的角度來看，它開始看起來過時了，我們的以舊換新計劃為客戶提供了一個機會，可以與我們以舊換新，獲得最新最好的產品，我們提供一些激勵措施。

And just to add to that a little bit, too, it also helps the customers if they want to be all in with Seed. So if they've been using Seed Markets and they have Seed on their vending machines but don't have Three Square Market kiosks, it's a way for them to trade out and get a Three Square Market kiosk.

再補充一點，如果客戶想要全心投入 Seed，它也會對他們有幫助。因此，如果他們一直在使用種子市場，並且自動販賣機上有種子，但沒有三廣場市場資訊亭，那麼這是他們進行交易並獲得三廣場市場資訊亭的一種方式。

I understand. us. Lastly, Ravi, you mentioned with CHEQ, you see that as a new vector of growth. Can you just talk about how this works with the rest of your distribution capability?

我明白。我們。最後，Ravi，您在 CHEQ 中提到，您將其視為新的成長載體。您能談談這如何與您的其他分銷能力配合使用嗎？

Absolutely. Look, our mission simply put is we want to move as much commerce as possible to self-service commerce, and we want to be the leading provider of technology that powers that self-service commerce. When we looked at CHEQ in the stadiums and live events space, CHEQ has built an incredible set of technology capabilities that allow consumers to order from a mobile app on their phone.

絕對地。看，我們的使命簡單地說就是我們希望將盡可能多的商業轉移到自助服務商務，並且我們希望成為支援自助服務商務的技術的領先提供者。當我們觀察體育場和現場活動空間中的 CHEQ 時，發現 CHEQ 建立了一套令人難以置信的技術功能，讓消費者可以透過手機上的行動應用程式進行訂購。

They have an app that's embedded into the various league apps and the various teams apps. And it also works by scanning QR codes at various locations at a stadium. There are kiosks that are distributed at various locations, handheld devices as well as even cashier-assisted point-of-sale solution.

他們有一個應用程式嵌入到各個聯盟應用程式和各個團隊應用程式中。它還可以透過掃描體育場各個地點的二維碼來工作。有分佈在不同地點的自助服務終端、手持設備，甚至還有收銀輔助的銷售點解決方案。

So in other words, it's a pretty comprehensive suite of self-service capabilities that cut out the long lines and some of the challenges that these live events face, and enable more frictionless commerce. So it fits very nicely. The best part about the acquisition, as we dug into it, was the same companies that we serve in the vending and micro market space are the companies that provide convenience services to these live events and stadiums.

換句話說，這是一套相當全面的自助服務功能，可以消除這些現場活動所面臨的排長隊和一些挑戰，並實現更順暢的商務。所以它非常適合。正如我們深入研究的那樣，此次收購最棒的部分是，我們在自動販賣機和微型市場領域提供服務的公司也是為這些現場活動和體育場提供便利服務的公司。

However, they don't currently benefit from the value proposition that Seed is providing around optimizing their warehouse workflow, optimizing and dynamically scheduling field services to go out and deliver food products and beverage products, as well as doing smart merchandising because they have now real-time inventory data, real-time sales data, et cetera.

然而，他們目前並沒有受益於 Seed 提供的圍繞優化倉庫工作流程、優化和動態調度現場服務以出去交付食品和飲料產品以及進行智能推銷的價值主張，因為他們現在擁有真正的- 實時庫存數據、實時銷售數據等。

So with what CHEQ has in terms of tech capabilities and what she brings to the table in terms of these things, it's a very powerful solution. And we can pitch it to the exact same companies that we've already been selling into and have large and deep relationships with.

因此，憑藉 CHEQ 的技術能力以及她在這些方面所帶來的成果，這是一個非常強大的解決方案。我們可以將其推銷給與我們已經銷售產品並與之建立廣泛而深入關係的完全相同的公司。

Perfect. Thank you very much.

完美的。非常感謝。

Griffin Boss, B. Riley.

格里芬·博斯，B·萊利。

Hi, thank you for taking my questions. I just want to jump back to check real quick while we're on that point, is there -- I know it's a relatively nascent business only founded a few years ago, but is there any more color you can give on the revenue profile or margins considering that the purchase price was relatively nominal.

你好，謝謝你回答我的問題。我只是想跳回來快速檢查一下，在這一點上，是否存在 - 我知道這是一個相對較新的業務，幾年前才成立，但是您是否可以在收入概況或方面提供更多信息考慮到購買價格相對名目上，利潤率較低。

Sure. I'll let Scott jump in with the margin profile and the breakup of revenue.

當然。我會讓斯科特來談談利潤概況和收入分解。

Yes, sure. So overall, the revenue profile is they're predominantly transaction revenue, so 95% of the revenue is transaction-based. They do have some subscription revenue. Overall, the margin profile, it's a little hard to say right now, but we do know that there's going to be lots of synergies that we're going to receive from bringing them into our transaction processing realm and be able to get the type of volume discounts that we get will help really improve their margin profile. So with them only being a business for two years, it's not really worth talking about, I think, the margin profile.

是的，當然。總體而言，收入狀況主要是交易收入，因此 95% 的收入是基於交易的。他們確實有一些訂閱收入。總體而言，現在很難說利潤狀況，但我們確實知道，透過將它們帶入我們的交易處理領域，我們將獲得很多協同效應，並且能夠獲得以下類型：我們獲得的批量折扣將有助於真正改善他們的利潤狀況。因此，由於他們的業務只成立了兩年，我認為實際上不值得談論利潤狀況。

Sure. Yes. No, fair enough. Thanks for that color. Appreciate it. And then on. Yes, next for me, just on the cash flow operating cash flow guide. And I'm just curious if you give more color on the cadence in the back half of the year. Are you sort of expecting to see something similar as you saw last year in terms of front-loaded it in 3Q or is it going to be more evenly weighted this operating cash flow coming in the back half?

當然。是的。不，很公平。謝謝那個顏色。欣賞它。然後繼續。是的，接下來我要講的是現金流量經營現金流量指南。我只是好奇你是否對下半年的節奏給予更多的色彩。您是否期望在第三季的前載方面看到與去年類似的情況，或者下半年營運現金流的權重是否會更加均勻？

Yes. It will be probably evenly weighted over third quarter and fourth quarter. We had a decrease in our operating cash during the second quarter, but a lot of that was just the mechanics of our credit card processing during the, because of the holidays at the end of the year. There's always a little bit of decrease in the volume.

是的。第三季和第四季的權重可能是均勻的。第二季我們的營運現金有所減少，但這很大程度上是因為我們的信用卡處理機制，因為年底的假期。音量總是有一點點減少。

And then this year also happened to end on a Sunday. We had three days of transaction processing revenue that increased our accounts receivable, but it got paid up the first week in January. So that decrease is very temporary. And then you'll start to see that cash, operating cash build up in the third quarter.

然後今年也恰好在周日結束。我們三天的交易處理收入增加了我們的應收帳款，但在一月份的第一周就付清了。因此，這種下降是非常暫時的。然後你會開始看到第三季現金、營運現金的累積。

Great, perfect. Thanks for additional color and appreciate taking my questions.

太棒了，完美。感謝您提供額外的顏色並感謝回答我的問題。

Michael Latimore, Northland Capital.

麥可‧拉蒂摩爾 (Michael Latimore)，北國資本。

Hi. This is Aditya on behalf of Mike Latimore. Could you give some color on the hardware revenue? Do you expect it to grow higher sequentially for the rest of the year?

你好。我是阿迪亞（Aditya），代表麥克拉蒂摩爾（Mike Latimore）。能否介紹一下硬體收入？您預計今年剩餘時間它會繼續成長嗎？

Yes, we do. So we expect it to grow sequentially and third quarter and be even more heavily weighted in the fourth quarter. And a lot of that has to do with our international ramp.

是的，我們願意。因此，我們預計將連續第三季成長，並在第四季佔據更大的權重。這很大程度上與我們的國際坡道有關。

All right. And in terms of the international pipeline, do you think Europe is a bigger contributor, or is it Latin America who's a bigger contributor?

好的。就國際管道而言，您認為歐洲的貢獻較大，還是拉丁美洲的貢獻較大？

In the near term. Europe will be the bigger contributor. But as I've mentioned in the past, Latin America is an interesting market. It's a barbell market where you've got many number of very small players and then a very small number of very large players. So as we get any one of those large players to come onboard, and that is in progress, then it will move in a very lumpy manner to large numbers of connected devices. So near term, Europe will definitely be bigger. I think medium term, we'll see growth in both kind of evenly-based.

短期內。歐洲將成為更大的貢獻者。但正如我過去提到的，拉丁美洲是一個有趣的市場。這是一個槓鈴市場，其中有許多非常小的參與者，然後是極少數非常大的參與者。因此，當我們讓這些大型參與者中的任何一個加入時，而且這一切正在進行中，那麼它將以一種非常不穩定的方式轉移到大量連接的設備上。所以短期內，歐洲一定會更大。我認為從中期來看，我們將看到兩種均勻成長。

Right. All right. Thank you.

正確的。好的。謝謝。

Thank you. I would now like to turn the conference back to Ravi Venkatesan for closing remarks. Sir?

謝謝。現在我想請拉維‧文卡特桑 (Ravi Venkatesan) 致閉幕詞。先生？

Thank you, operator. Again, thanks for joining us this afternoon. In summary, I'm very excited about getting ahead of schedule and plan on our transaction revenue journey and arriving upon margin profiles that we expected or anticipated to reach in fiscal year '25, and we are there almost a year ahead of schedule. And we'll continue to consolidate and build on those trends.

謝謝你，接線生。再次感謝您今天下午加入我們。總而言之，我很高興能提前規劃我們的交易收入之旅，並達到我們預期或預期在 25 財年達到的利潤率，而且我們比計劃提前了幾乎一年。我們將繼續鞏固和發展這些趨勢。

We remain committed to delivering operating leverage expansion in this business and the goals that we outlined at our Investor Day in December 2022, and look forward to executing on that trajectory.

我們仍然致力於實現該業務的營運槓桿擴張以及我們在 2022 年 12 月投資者日概述的目標，並期待按照這一軌跡執行。

Thank you.

謝謝。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。