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    TACT
    Earnings call· Jun 2026(Q2 FY26)

    TRANSACT TECHNOLOGIES Q2 FY26 earnings call TACT

    Aug 11, 2026 Source

    Executive summary

    TransAct Technologies Q2 FY26 — Solid Results Driven by FST Software Growth and Strategic Review of Casino & Gaming Business

    TransAct Technologies delivered solid second-quarter results, driven by strong growth in its Food Service Technology segment, particularly recurring software revenue and an expanding BOHA unit installed base. The company is strategically shifting towards a higher-margin, software-led business model, supported by a strong balance sheet. Concurrently, the Board has initiated a formal strategic review of the Casino and Gaming business to maximize shareholder value.

    Highlights

    6

    • Net sales up 8% YoY to $14.9 million (excluding tariff impact).

    • Adjusted EBITDA outlook raised to a range of $1.5 million to $2.0 million for FY26.

    • Food Service Technology (FST) revenue up 9% YoY to $5.2 million.

    • Recurring FST sales grew 13% YoY to $3.4 million.

    • Software revenue within FST up 47% YoY, driven by price increases.

    • Online BOHA units increased 33% YoY to nearly 22,000.

    Concerns

    4

    • Net sales impacted by a $1 million reduction due to estimated customer refunds related to import tariffs.

    • Adjusted EBITDA impacted by $400,000 from tariff adjustments.

    • Casino and Gaming reported revenue down 4% YoY to $7.3 million.

    • ARPU for FST down 15% YoY to $673, though management notes it's becoming less indicative of true software growth.

    Guidance & targets

    4
    CategoryTargetConfidence
    Adjusted EBITDA
    $1.5 million to $2.0 million
    high materiality
    High
    Net Sales
    $57 million to $55 million
    high materiality
    High
    Gross Margin
    mid to high 40% range
    medium materiality
    High
    POS Automation Sales
    about 600,000 per quarter
    low materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Food Service Technology (FST)
    Revenue growth driven by upgrade orders from existing Accudate and Terminal One systems. Focus on building high-margin, predictable recurring revenue from software. Software revenue growth primarily due to price increases. ARPU is becoming less indicative of true software growth.
    Online BOHA units sold: 1,900 (Q2 FY26)Online BOHA units sold YTD: 3,270 (H1 FY26)Total online units: 22,000Total online units growth YoY: 33%Recurring FST sales: $3.4 millionRecurring FST sales growth YoY: 13%Software revenue growth YoY: 47%Software revenue growth QoQ: 25%ARPU: $673
    		$5.2 million9%10%—
    Casino and Gaming
    Reported revenue was impacted by a $1 million tariff-related reduction. Solid contributions from key OEM customers. Epic TR-80 roll-fed printer gaining international traction.
    Revenue (excluding tariff impact): $8.3 millionRevenue growth YoY (excluding tariff impact): 9%
    		$7.3 million-4%-13%—
    POS Automation
    Sales of Ithaca 9000 printer remain in a normalized range, expected to be similar going forward.
    		$619,0005%——
    TransAct Services Group (TSG)
    Increase driven by higher service revenue from legacy lottery printers, partially offset by lower spares and accessory revenue as legacy install base winds down.
    		$838,0003%——

    Operational metrics

    23
    Net Sales
    $13.9 millionup slightly compared to $13.8 million in Q2 FY25
    Q2 FY26

    Reported net sales, including the impact of tariff-related customer refunds.

    Net Sales (excluding tariff impact)
    $14.9 millionup 8% year over year
    Q2 FY26

    Net sales adjusted for the approximate $1 million reduction related to estimated customer refunds from import tariffs.

    Adjusted EBITDA
    $514,000compared to $478,000 in Q2 FY25 and $1.4 million in Q1 FY26
    Q2 FY26

    Adjusted EBITDA for the quarter, including tariff adjustments.

    Adjusted EBITDA
    $1.9 million
    H1 FY26

    Adjusted EBITDA for the first half of 2026.

    Gross Margin
    50.2%compared to 48.2% in Q2 FY25; roughly flat sequentially from 50.3% in Q1 FY26
    Q2 FY26

    Reported gross margin.

    Total Operating Expenses
    $7.1 millionup 2% compared to $6.9 million in Q2 FY25
    Q2 FY26

    Total operating expenses for the quarter.

    Engineering and R&D Expenses
    $1.2 milliondown compared to $1.7 million in Q2 FY25
    Q2 FY26

    R&D expenses reflecting capitalization of BOHA software development costs.

    Selling and Marketing Expenses
    $2.7 millionup 30% compared to $2.1 million in Q2 FY25
    Q2 FY26

    Increased S&M expenses due to strategic investments.

    G&A Expenses
    $3.1 millionessentially flat compared to Q2 FY25
    Q2 FY26

    G&A expenses remained flat due to offsetting factors.

    Net Loss
    $50,000compared to a net loss of $143,000 in Q2 FY25
    Q2 FY26

    Reported net loss for the quarter.

    Diluted EPS
    break-evencompared to a one-cent loss per diluted share in Q2 FY25
    Q2 FY26

    Diluted earnings per share for the quarter.

    Income Tax Expense
    $30,000
    Q2 FY26

    Income tax expense recorded.

    Cash and cash equivalents
    $19.4 million
    Q2 FY26

    Balance sheet cash position.

    Government Refunds Received (Tariff-related)
    $500,00080% of total expected
    Subsequent to Q2 FY26

    Amount of expected government refunds received related to invalid import tariffs.

    Online BOHA Units Sold
    1,900
    Q2 FY26

    Units sold in the Food Service Technology segment.

    Online BOHA Units Sold
    3,270
    H1 FY26

    Units sold in the Food Service Technology segment for the first six months of 2026.

    Total Online Units
    22,000up 33% year over year
    Q2 FY26

    Total installed base of online BOHA units.

    Recurring FST Sales
    $3.4 millionup 13% year over year
    Q2 FY26

    Includes software and service subscriptions, as well as consumable labels.

    Software Revenue Growth
    47%year over year
    Q2 FY26

    Growth in software revenue within the FST segment.

    Software Revenue Growth
    25%sequentially
    Q2 FY26

    Sequential growth in software revenue within the FST segment.

    ARPU
    $673down 15% to $792 in Q2 FY25, and down 5% sequentially from $709 in Q1 FY26
    Q2 FY26

    Average Revenue Per Unit for FST. Management notes this metric is becoming less indicative of true software growth.

    Total Addressable Market (TAM)
    $4 billion to $12 billion
    Current

    Estimated current total addressable market for the FST segment.

    Total Addressable Market (TAM)
    $18 billionexpected to go to
    2032-2033

    Projected total addressable market for the FST segment.

    Industry KPIs

    6
    MetricValueDetails
    Capital return FCF—
    Unit shipments ASP1,900units
    Gross margin drivers50.2%%
    Services peripheral attach$3.4 millionUSD
    Installed base refresh runway22,000units
    Revenue mix by end market segmentFST: $5.2 million; Casino & Gaming: $7.3 million; POS Automation: $619,000; TSG: $838,000USD

    Product announcements

    1
    ProductTypeDetails
    BOHA SaaS Platformupdate

    Deals & partnerships

    1
    BofA SecuritiesFormal strategic review related to the casino and gaming business to explore potential options and maximize stockholder value.

    The Board of Directors engaged BofA Securities as its financial advisor. The review is focused on the casino and gaming business but may evaluate broader strategic alternatives. No public timetable set, no assurance of a transaction.

    Risks & headwinds

    3
    Impact from US Supreme Court ruling on import tariffsQ2 FY26

    $1 million reduction to sales; $400,000 impact on adjusted EBITDA

    Mitigation: Reclaiming duty amounts from government (received $500,000 so far), refunding a portion of tariff surcharges to customers while retaining a modest management fee.

    Decline in Average Revenue Per Unit (ARPU) for FSTQ2 FY26

    Down 15% YoY to $673 in Q2 FY26 (from $792 in Q2 FY25); down 5% QoQ from $709 in Q1 FY26

    Mitigation: Management states ARPU is becoming less indicative of true software growth and plans to share new, more relevant metrics in the future. Focus is on growing software and installed base.

    Natural wind-down of legacy install base for TransAct Services GroupOngoing

    Partially offset higher service revenue from legacy lottery printers, leading to lower spares and accessory revenue.

    Mitigation: Focus on new growth areas like FST software and strategic review of Casino & Gaming.

    What to watch in Q3 FY26

    5

    Casino & Gaming Strategic Review

    next quarter
    CurrentFormal review initiated, BofA Securities engaged.
    TargetUpdate on potential transaction or course of action.

    Why it matters

    This review could significantly alter the company's business structure and capital allocation, impacting the investment thesis.

    We do not intend to disclose developments until our Board of Directors has approved a specific transaction or course of action. or until which time we otherwise determine that disclosure is appropriate or required.

    Q&A highlights

    3

    Why now for the strategic review, given a past discontinued process? What is the EBITDA of the casino business? If the gaming business is sold, will FST have enough capital to grow and reach cash flow breakeven?

    The prior review was during a turbulent period, but the gaming business has now stabilized. The FST market (TAM) is significantly larger ($4B-$12B, growing to $18B by 2032/33). The gaming business has been a 'profitable cash cow.' The review aims to determine the best strategy for the gaming unit, while FST's strategy is 'well baked.' Management believes FST will have enough capital to grow and reach cash flow breakeven even without the gaming business. Management aims to eventually share specific EBITDA for the two segments.

    “I think the answer to that question is yes.”

    asked by Greg Burns · answered by John Dillon

    2 min read6 chapters

    Detailed Narrative

    01

    Tariff Refund Impact

    The company's Q2 FY26 results were significantly impacted by a US Supreme Court ruling on import tariffs, leading to a $1 million reduction in sales and a $400,000 impact on adjusted EBITDA due to estimated customer refunds. TransAct is reclaiming duties from the government and refunding a portion of previously recognized tariff surcharges to customers, retaining a modest management fee. As of the call date, $500,000 of expected government refunds have been received, representing 80% of the total.

    02

    FST Software Monetization Strategy

    TransAct is actively monetizing its Food Service Technology (FST) software, shifting away from bundling software for free with hardware sales to build a higher-margin, predictable recurring revenue stream. The company is negotiating fees with existing clients for enhanced Azure-hosted services and bundling software packages with new system sales. The long-term aim is to drive the FST installed base toward $100-$200 per machine per month in recurring software-related revenue.

    03

    BOHA Platform Migration to Azure

    The company completed the migration of its BOHA SaaS platform from legacy hosted infrastructure to Microsoft Azure. This strategic move significantly enhances platform scalability, security, resiliency, and performance, enabling faster innovation, seamless integrations, and enterprise-grade uptime. The new platform also provides greater operational freedom and positions TransAct to accelerate its software roadmap, including implementing AI-related workflows and applications, with AI also aiding internal development teams.

    04

    Casino and Gaming Strategic Review

    The Board of Directors initiated a formal strategic review of the Casino and Gaming business, engaging BofA Securities as a financial advisor. This review aims to explore potential options and maximize stockholder value, given the current strength of the market. While focused on this segment, the board may evaluate broader strategic alternatives. No public timetable has been set, and there is no assurance that the review will result in any transaction or specific outcome.

    05

    ARPU Metric Evolution and Future Reporting

    Management noted that ARPU (Average Revenue Per Unit) for FST, which includes software, labels, and other recurring revenue, is becoming less indicative of true software growth as the software and installed base expand. The company plans to share new metrics in the future that better reflect the contractual software side of the business, acknowledging the need for more precise indicators of software performance.

    06

    Sales & Marketing Team Overhaul

    TransAct has overhauled its sales and marketing team and revised its go-to-market motions for FST. This includes new hires and increased spending on trade shows, advertising, and commissions, which are just beginning to yield dividends in increased FST sales. The company focuses on large customers and plans to report on new food service venues captured, rather than just new customer logos, to better reflect market share.

    AI-generated summary of the company’s earnings call. Not investment advice.