Transact Technologies (NASDAQ:TACT) released first-quarter financial results and hosted an earnings call on Tuesday. Read the complete transcript below.
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View the webcast at https://viavid.webcasts.com/starthere.jsp?ei=1762628&tp_key=7a0ba64b5e
Summary
Transact Technologies reported a 10% year-over-year increase in total net sales to $14.4 million for Q1 2026, with an adjusted EBITDA of $1.4 million.
The company’s strategic focus is on growing its Food Service Technology (FST) vertical, primarily through software revenue, which increased by 23% year-over-year.
Transact Technologies is progressing on transitioning its software to a new platform, expecting to go live by late Q2 or early Q3 2026, ahead of schedule.
Casino and gaming sales were strong, increasing by 24% year-over-year, contributing positively to cash flow.
The company reaffirmed its 2026 net sales outlook of $55 million to $57 million and raised its adjusted EBITDA guidance to $1 million to $1.75 million.
Operational highlights include selling 1,370 Boha terminals in Q1 and growing the online terminal base to nearly 20,000.
Transact Technologies is exploring AI applications to enhance its software platform and expand its solutions offering.
A new Chief Marketing Officer, Dana Loof, has been appointed, expected to revitalize the company’s brand and market presence.
The CFO, Steve DeMartino, announced his retirement after 30 years, contributing significantly to the company’s growth since its IPO.
Full Transcript
OPERATOR
Greetings welcome to the Transact Technologies first quarter 2026 conference call. this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press Star 0 on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Ryan Gardella, Investor Relations. Thank you. You may begin. Thanks, Jesse. Good afternoon. Welcome to the Transact Technologies first quarter 2026 earnings call. Today we’ll be discussing the results announced in a press release issued after market close. Joining us from the company is CEO John Dillon and President and CFO Steve DeMart. Today’s call will include discussion of the Company’s key operating strategies, the progress on these initiatives and details in our first quarter financial results. We’ll then open the line to participants for questions. As a reminder, this conference call contains statements about future events and expectations which are forward looking in nature. Statements on this call may be deemed forward looking and actual results may differ materially. For a full list of risks inherent to the business of the company, please refer to the company’s SEC filings, including its reports on Forms 10-K and 10-Q. Transact Technologies undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances that occur after the call. Today’s call and webcast will include non Generally Accepted Accounting Principles (GAAP) financial measures within the meaning of SEC Regulation G when required. A reconciliation of all non Generally Accepted Accounting Principles (GAAP) financial measures to the most directly comparable financial measures calculated and presented in accordance with Generally Accepted Accounting Principles (GAAP) can be found in today’s press release as well as on the company website. And with that I will turn the call over to Joe.
John Dillon (Chief Executive Officer)
Thanks Ryan and good afternoon everyone. Thanks for joining us. It’s a nice afternoon here and I’m pleased to report today that Transact delivered a solid first quarter 2026 total net sales 14.4 million, up 10% year over year, generating an adjusted EBITDA of 1.4 million, which is a strong start for the year. As we discussed, our focus remains on driving revenue growth in our Food Service Technology or FST vertical with software as our primary growth engine going forward, supported by targeted and disciplined investments across the business. To accelerate sales in the first quarter we sold 1,370 Baja terminals, driven mostly by upgrade orders from our 40,000 plus unit install base from prior sales of older products. We also continue to see strong interest from existing customer base to move from either the accudate, which is an older System, or the T1, which is also an older system to our newer Terminal 2 T2. We see a long Runway of growth there, so that’s a good sign. We ended the first quarter with 19,959 online terminals online terminals, which is an increase a little over 1,000, actually, specifically 1,062 new online terminals over the fourth quarter of 2025. Most importantly, our recurring FST revenue continues to grow. Our software revenue were up 23% year over year, which gives us confidence in our strategic direction. And we’re very focused on generating this revenue, which is high margin, certainly higher margin than hardware. It’s more sustainable and predictable and it’s a focus we didn’t really have in the past because we didn’t own the software and we own it now. So we can start selling the software in a way we couldn’t do before. So with nearly 20,000 online terminals now in the field, this is the time to begin monetizing these deployments more effectively. In the past we didn’t really do this and in fact software was often bundled for free to make a hardware sale. Now our focus is to ensure that our customers are paying for and receiving the fair market value of our leading software offering. And given the importance of this growing revenue stream, we will begin sharing more and more of our AR details, recurring revenue details each quarter to help you track that progress. ARR includes for your reference software, but it also includes contracted support service, which is a high margin service for us because our products are highly reliable and the labels. So from an information standpoint for first quarter ARR revenue was 3.3 million. And we firmly believe that the future for Tranzact will come from recurring software revenue rather than one time hardware sales. Longer term, we’re aiming to get our install base up to $100 to $200 per machine per month in recurring software revenue, which could really unlock a lot of significant value given the size of our install base and the fact that it’s growing. Next, let me say a few words about the update on our port of our software to the new platform. As you know, we acquired the software about a year ago last April and we’re making good progress here. We’ve pulled the pulled forward our go live date from what was originally Suggested to be first quarter of 2027 and now it looks to be late Q2 this quarter, late in this quarter or early Q3 of 26. So that’s really good news and good progress. And I’d like to say that our cloud partner, our public cloud partner in this has done A really terrific job helping us with this transition. And as I stated before, ownership of the source code and launching our own hosting platform is really crucial for our recurring revenue model going forward. It provides us with an increased level of operational freedom and enables us to accelerate software innovations like exploring, for example, an application store model for our own terminals where we could add additional applications which either are grown in house or maybe sourced from outside through partners. So this model is appealing and as we get into full production here, I think that’s an interesting growth engine that we probably can explore successfully. I also want to speak briefly about AI, also known as artificial intelligence, and I know it’s a hot topic in any software investment thesis right now, so I’d like to say a few words about it. Most of you probably know that AI was developed in the 50s, we’re talking a long time ago, almost 75 years ago, and now it’s really coming into its own because we have more data, we have cloud compute capacity which …
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