Breaking Down Cantaloupe, Inc. (CTLP) Financial Health: Key Insights for Investors

You might look at Cantaloupe, Inc.'s (CTLP) 2025 fiscal year results-specifically the reported $302.55 million in revenue and the dramatic net income jump of over 460%-and think the path is clear, but honestly, that headline number is a bit misleading. Here's the quick math: a big chunk of that net income, which hit $63.96 million, came from a one-time release of a deferred tax asset valuation allowance, a necessary accounting move that doesn't reflect core operating profit growth. Still, the underlying business is solid, driven by subscription and transaction fees, and the real near-term action is the pending $848 million acquisition by 365 Retail Markets at $11.20 per share, a deal now facing a tough Federal Trade Commission (FTC) review over competition concerns. That regulatory uncertainty is the defintely the biggest swing factor for the stock right now, so you need to understand the financial bedrock before betting on the merger premium.

Revenue Analysis

If you're looking at Cantaloupe, Inc. (CTLP), the first thing to grasp is that this isn't a hardware company anymore; its financial health is now firmly rooted in recurring software and payment services. The shift is clear: for the full fiscal year (FY) ending June 30, 2025, Cantaloupe reported total annual revenue of $302.55 million. That's a solid 12.64% increase year-over-year, which shows the business model is working.

Primary Revenue Sources: Software and Transactions

Cantaloupe's revenue comes from three primary streams, but two of them-Subscription and Transaction fees-are the real drivers of growth and stability. The company's focus is on providing end-to-end technology solutions for unattended retail, which means cashless payments and management software for vending, micro markets, and laundromats. This is where the predictable, high-margin revenue lives.

• Transaction Fees: Revenue from payment processing, which is the largest single component.
• Subscription Fees: Recurring revenue from the use of their software platform, like the ePort Connect® system.
• Equipment Sales: Revenue from selling hardware, such as card readers and telemetry devices.

Here's the quick math on the segment contribution for the latest reported quarter, Q4 FY2025, which ended June 30, 2025. Total Q4 revenue was $82.56 million. You can see the revenue mix is heavily skewed toward services, which is what you want to see from a modern tech company.

Year-over-Year Growth and Segment Shifts

The year-over-year revenue growth of 12.64% for FY2025 is defintely a healthy trend, but the story is in the segments. What this estimate hides is the difference in growth rates between the segments. For example, in Q2 FY2025, Transaction fees grew by 17.2% and Subscription fees by 14.1%, while Equipment sales actually decreased by 7.4% year-over-year. That's a significant change.

But then, in Q3 FY2025, Equipment sales bounced back with a strong 17.9% increase, even as Transaction and Subscription fees grew a bit slower at 10.0% and 10.3%, respectively. This volatility in equipment sales is normal, as it's often tied to customer hardware refresh cycles or large new deployments, but the consistent double-digit growth in the combined Subscription and Transaction revenue is the core strength here. It's the recurring cash flow that matters most for valuation.

For more detail on how these revenue streams translate into profitability, you should check out the full post on Breaking Down Cantaloupe, Inc. (CTLP) Financial Health: Key Insights for Investors.

Profitability Metrics

You need to know if Cantaloupe, Inc. (CTLP) is not just growing revenue, but actually converting that growth into real profit. The short answer is yes, profitability is improving, but the composition of that profit tells a more nuanced story about their business model-specifically, the high-margin software component is driving the change.

For the latest available twelve months (LTM) ending around the end of their fiscal year 2025, Cantaloupe, Inc. reported total revenue of $312.57 million. This revenue translated into a Gross Profit of $128.49 million, an Operating Income of $27.87 million, and a Net Income of $59.46 million. Here's the quick math on those margins, which are the figures that matter most:

• Gross Profit Margin: 41.1%
• Operating Profit Margin: 8.9%
• Net Profit Margin: 19.0%

To be fair, the Net Income figure of $59.46 million is significantly higher than the company's own full fiscal year 2025 GAAP Net Income guidance, which was between $22 million and $32 million. This suggests the LTM figure likely includes a significant one-time gain, so the more conservative Net Profit Margin of 7.1% to 9.9% (based on the guidance midpoint) is a safer bet for ongoing operations.

Operational Efficiency and Margin Trends

The real story here is the trend in operational efficiency, which is excellent. Cantaloupe, Inc.'s business is split between high-margin subscription/transaction fees and lower-margin equipment sales, but the margin on the core business is expanding. The company's overall Adjusted Gross Margin hit a strong 46% in the fourth quarter of fiscal year 2025, up from 41.7% in Q2 2025. That's a defintely positive trend. This improvement is driven by scale and better cost management, particularly in the transaction segment where margins have expanded due to renegotiated vendor agreements and smarter transaction routing strategies.

The gross margin breakdown shows where the value is created:

• Subscription Adjusted Gross Margin (Q3 2025): 90.7%
• Transaction Gross Margin (Q3 2025): 24.8%
• Equipment Sales Gross Margin (Q3 2025): 12.3%

The operating margin of 8.9% (LTM) shows that, while the gross profit is strong, the company is still spending a decent amount on operating expenses, including recent acquisitions. Still, the trend is moving in the right direction, proving they are achieving operating leverage (meaning revenue is growing faster than operating costs).

Benchmarking Against the Fintech Industry

When you compare Cantaloupe, Inc.'s profitability ratios to the broader fintech and unattended retail technology space, you get a clear picture of its positioning. The company's LTM Gross Margin of 41.1% is below the 65% blended gross margin target for scaled, software-led fintech portfolios, but that's expected because CTLP still sells physical hardware (payment terminals). Their peer in the unattended retail space, Nayax, reported a similar LTM Gross Margin of 47.33%.

The operating and net profitability, however, is competitive:

The LTM Net Profit Margin of 19.0% is right in line with the broader financial services industry average of 18% and within the target range for scaled fintechs. This shows that despite the drag from lower-margin hardware sales, Cantaloupe, Inc. is successfully translating its transaction volume and subscription fees into bottom-line performance. If you want to dig deeper into who is buying into this profitability story, check out Exploring Cantaloupe, Inc. (CTLP) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You need to know how Cantaloupe, Inc. (CTLP) funds its growth because that mix of debt and equity tells you everything about its financial risk and flexibility. The quick takeaway is that Cantaloupe, Inc. maintains a highly conservative capital structure, leaning heavily on equity and operating cash flow, especially when compared to peers in the payments technology space.

For the fiscal year ending June 30, 2025, the company's debt-to-equity (D/E) ratio stood at approximately 0.15. This is a very low number, signaling that for every dollar of shareholder equity, the company only holds 15 cents of debt. To put that in perspective, a direct peer in the unattended retail technology sector, Nayax Ltd, has a D/E ratio closer to 0.80, meaning Cantaloupe, Inc. is far less leveraged. This low ratio suggests a strong balance sheet and a low risk of financial distress, which is defintely a good thing for investors.

Here's the quick math on Cantaloupe, Inc.'s debt breakdown for the 2025 fiscal year:

The company's financing strategy balances debt and equity by prioritizing operational cash flow and maintaining significant borrowing capacity. In January 2025, Cantaloupe, Inc. amended its debt facilities, repaying $37.3 million on previous loans and increasing its total borrowing capacity to $100 million. This move is less about immediate debt issuance and more about optimizing terms and securing a larger credit line for future strategic moves, like acquisitions or large capital expenditures.

The most significant recent corporate action impacting the capital structure was the announcement in June 2025 of a definitive agreement to be acquired by 365 Retail Markets for $848 million. This event shifts the focus from the internal debt/equity balance to the value being realized for shareholders, effectively a massive equity-based financing event that will restructure the company's ownership and future capital needs. This is why understanding the Mission Statement, Vision, & Core Values of Cantaloupe, Inc. (CTLP) is also key-the financial structure supports the strategic vision.

• Maintain a low D/E ratio: 0.15 shows minimal leverage.
• Secure large capacity: $100 million in new borrowing capacity is available.
• Focus on equity value: The $848 million acquisition is the ultimate equity payoff.

What this estimate hides is the potential debt structure of the acquiring company, 365 Retail Markets, which will ultimately determine the long-term leverage of the combined entity. Still, for current Cantaloupe, Inc. investors, the low D/E ratio is a sign of financial strength right up to the acquisition close.

Liquidity and Solvency

You need to know if Cantaloupe, Inc. (CTLP) can cover its near-term bills, and the answer is a solid yes. The company's liquidity position, measured by its ability to convert assets into cash quickly, is defintely healthy, underpinned by strong operational cash generation and a conservative debt profile.

Current and Quick Ratios: A Strong Buffer

The traditional measure of short-term financial strength is the Current Ratio (current assets divided by current liabilities). For Cantaloupe, Inc., this ratio stands at a robust $\mathbf{1.81}$ as of the most recent trailing twelve months (TTM) data for 2025. This means the company has $\mathbf{\$1.81}$ in current assets for every $\mathbf{\$1.00}$ in current liabilities, giving it a comfortable buffer to meet obligations.

More importantly, the Quick Ratio (or Acid-Test Ratio), which strips out inventory-the least liquid current asset-is $\mathbf{1.13}$. A Quick Ratio above $\mathbf{1.0}$ is the gold standard, showing that Cantaloupe, Inc. can cover all its short-term debts using only its most liquid assets, like cash and accounts receivable. That's a great sign of immediate financial flexibility.

Analysis of Working Capital Trends

Cantaloupe, Inc.'s working capital-the difference between current assets and current liabilities-is positive and substantial at $\mathbf{\$73.33 \text{ million}}$ (TTM 2025). Positive working capital is crucial; it means the company isn't reliant on a sudden sale of long-term assets or emergency borrowing to keep the lights on. Here's the quick math on the components, which shows good management:

• Current Assets: $\mathbf{\$163.5 \text{ million}}$
• Current Liabilities: $\mathbf{\$90.1 \text{ million}}$
• Working Capital: $\mathbf{\$73.4 \text{ million}}$ (approximate)

The trend shows a consistent capacity to manage the operating cycle-getting paid by customers and paying suppliers-efficiently, which is key for a technology and transaction-based business like this one.

Cash Flow Statements Overview

Cash flow tells the real story of a business's health, and Cantaloupe, Inc.'s cash flow statement for 2025 is quite telling. They are generating significant cash from their core business, which is the most sustainable source of funding.

Operating Cash Flow (OCF) of $\mathbf{\$39.33 \text{ million}}$ is the engine here. It's more than enough to cover the capital expenditures (CapEx) in Investing Cash Flow (ICF) of $\mathbf{-\$18.02 \text{ million}}$, which is largely for property, plant, and equipment to support expansion. The difference is Free Cash Flow, which is substantial.

In Financing Cash Flow (CFF), the company has been active in debt management, notably repaying $\mathbf{\$37.3 \text{ million}}$ of previous debt facilities in January 2025 by amending its debt agreement. This move signals a proactive approach to optimizing the balance sheet, not a distress signal. For more on the strategic direction driving these figures, you should review the Mission Statement, Vision, & Core Values of Cantaloupe, Inc. (CTLP).

Potential Liquidity Concerns or Strengths

The primary strength is the quality of the liquidity ratios and the sheer volume of operating cash flow. With $\mathbf{\$54.99 \text{ million}}$ in cash and cash equivalents on the balance sheet, Cantaloupe, Inc. has a solid cash cushion. The cash flow from operations alone is sufficient to fund the company's investment in growth assets.

A minor concern, as with any growth company, is managing the trade-off between growth investment and cash preservation. The consistent outflow in ICF shows they are spending to expand, which is good, but any slowdown in OCF would quickly expose that spending. Still, for now, the liquidity metrics are excellent, showing no immediate risk.

Valuation Analysis

You're looking at Cantaloupe, Inc. (CTLP) and trying to figure out if the current market price of around $10.71 is a fair deal or a trap. The quick takeaway is that the stock appears to be trading at a slight premium to its intrinsic value, but its valuation metrics are reasonable for a growth-focused technology company in the unattended retail space. The market is pricing in the company's strong recent earnings growth.

The stock's performance over the last 12 months shows significant momentum, with the price increasing by over 20.64% as of late 2025, moving within a 52-week range of $7.01 to $11.36. This rally, plus the pending acquisition by 365 Retail Markets, LLC, is what's driving the valuation multiples higher. Here's the quick math on the key ratios you need to know:

• Price-to-Earnings (P/E): The trailing twelve-month (TTM) P/E ratio is approximately 13.12x. This is low for a high-growth tech stock, suggesting it might be undervalued based on earnings, or that investors are cautious about future growth without the merger.
• Price-to-Book (P/B): The P/B ratio stands at about 2.64x. This means the market values the company at more than 2.5 times its net asset value, which is typical for a software and payments company where intellectual property and recurring revenue are the real assets, not just physical plant and equipment.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio is currently around 16.44x. This is the most telling metric for a company focused on growth and adjusted earnings. It's a bit high, signaling that the stock is defintely not a deep value play, but rather a growth-at-a-reasonable-price (GARP) candidate.

What this estimate hides is the impact of the pending merger. The valuation is heavily influenced by the announced acquisition, which some analysts believe undervalues the company at an estimated $11.20 per share compared to a prior price target of $13.00.

Analyst Consensus and Dividend Profile

Wall Street's view on Cantaloupe, Inc. (CTLP) is cautious, reflecting the uncertainty and limited upside potential created by the merger news. The consensus among the 8 analysts covering the stock is generally a Reduce or Hold rating. The average 12-month price target is approximately $12.73, which suggests a modest upside from the current price, but you must factor in the regulatory risk of the merger.

For income-focused investors, there is no dividend to consider. Cantaloupe, Inc. (CTLP) does not currently pay a dividend, meaning its dividend yield and payout ratio are both 0.00%. The company is prioritizing reinvesting its earnings-which hit $63.96 million in 2025-back into the business for growth, which is the right move for a company operating in an expanding technology sector.

See the full strategic breakdown of the company's financial health, including the risks of the merger, in our full report: Breaking Down Cantaloupe, Inc. (CTLP) Financial Health: Key Insights for Investors

Risk Factors

You're looking at Cantaloupe, Inc. (CTLP) because its shift to a high-margin, recurring revenue model is compelling, but every growth story has its tripwires. My two decades in finance, including time at BlackRock, tells me the near-term focus must be on three clear risks: a major strategic integration, persistent macroeconomic headwinds, and the classic operational challenge of scaling fast.

The biggest strategic risk right now centers on the planned merger with 365 Retail Markets, LLC. While this deal is expected to close in the first half of calendar year 2026 and should create revenue synergies from an expanded product offering, it's not a done deal yet. The U.S. Federal Trade Commission (FTC) issued a Second Request for additional information in September 2025 under the Hart-Scott-Rodino (HSR) Antitrust Improvements Act. This regulatory scrutiny introduces a delay and a defintely material risk to the transaction's completion, which could derail the anticipated boost to the company's market presence.

On the financial and external front, the macroeconomic environment remains a real headwind. Cantaloupe, Inc. serves a large base of Small and Medium Businesses (SMBs) in the unattended retail market.

• Sustained macroeconomic uncertainty can directly impact the capital expenditure and spending patterns of these SMB customers.
• The company also faces foreign exchange headwinds due to its growing international operations, which can pressure reported earnings.
• Competition is fierce, especially from rivals like Nayax, which operates across a broader range of verticals.

Operationally, one key internal risk is managing the hardware refresh cycle and activation process. The company has been working to address a backlog of sold equipment and delays in device activation timelines, which can slow down the conversion of equipment sales into high-margin subscription revenue. To mitigate this, Cantaloupe, Inc. has strategically shifted to the Cantaloupe ONE program, which bundles hardware rentals with its Software as a Service (SaaS) platform, like the cloud-based ePort Connect® platform. This move is smart because it drives recurring, high-margin subscription revenue, which boasts a gross margin of around 88% to 90%, compared to the much lower margins on equipment sales. Here's the quick math: prioritizing subscription revenue, which was a strong $65.18M in Q4 2025, is a clear path to profitability.

What this estimate hides is the one-time tax benefit that significantly inflated the reported US GAAP Net Income. For the full fiscal year 2025, the company revised its outlook for US GAAP net income to be between $64 million and $70 million, but this includes a massive, non-recurring release of a valuation allowance on deferred tax assets. A more normalized view is the Adjusted EBITDA, which is projected to be between $46 million and $50 million for FY 2025. That's the number I focus on for true operating performance. You need to look past the one-time noise.

If you want a deeper dive into the financial mechanics that underpin these risks and opportunities, you can check out the full analysis here: Breaking Down Cantaloupe, Inc. (CTLP) Financial Health: Key Insights for Investors.

The table below summarizes the core financial risks and the company's strategic responses as of the 2025 fiscal year filings:

Next step: Portfolio Manager: Model a scenario where the 365 Retail Markets merger is terminated, and assess the impact on the FY26 revenue forecast by the end of next week.

Growth Opportunities

You're looking for where Cantaloupe, Inc. (CTLP) goes from here, and the short answer is: they are doubling down on high-margin recurring revenue, which is the right play. The long-term growth story is solid, but you must factor in the near-term reality of the announced acquisition by 365 Retail Markets for $11.20 per share, expected to close in the second half of 2025.

The company's own guidance for the full fiscal year 2025 (FY2025) projects total revenue between $302 million and $308 million, which represents a respectable growth rate. But the real quality of that growth is in the Subscription and Transaction segments, which management expects to grow between 15% and 20%. That's where the fat margins live.

The Triple-Threat Growth Drivers

Cantaloupe, Inc.'s strategy is not about chasing every new trend; it's about deepening their platform's value in the unattended retail space. Their key growth drivers are a mix of product innovation, market expansion, and smart financial engineering for their customers.

• Product Innovation: They are expanding beyond traditional vending. The launch of the Smart Store and new devices like the Engage Pulse and Go Micro kiosk are driving growth in micro markets-those small, self-checkout convenience stores in offices and residential buildings. They also rolled out the AdVantage program, which turns their point-of-sale (POS) touchscreens into digital advertising revenue streams.
• Market Expansion: The acquisition of SB Software was a key move to expand their operational capabilities and reach into the European market. They are also strategically targeting new verticals like sports and entertainment with their Suites premium management system, as seen with the San Jose Earthquakes deal. Plus, they are actively looking at expansion in Latin America.
• Customer Enablement: A smart, low-risk initiative is the Cantaloupe Capital funding platform. This helps their customers secure loans to buy more equipment and expand their own businesses, alleviating capital constraints without Cantaloupe, Inc. taking on the loan risk. This accelerates their customers' device deployment, which means more transaction revenue for Cantaloupe, Inc.

Financial Projections and Competitive Edge

The financial picture for FY2025 shows a focus on profitability alongside growth. Adjusted EBITDA is projected to be between $46 million and $50 million. This is a strong sign of operating leverage (operating leverage is when revenue growth outpaces the growth of operating expenses, leading to faster profit growth). Here's the quick math on why their model is so powerful:

The core competitive advantage is their vertically integrated, end-to-end platform. They don't just process payments; they provide the hardware, the cloud-based enterprise resource planning (ERP) software (Seed), and the telematics (IoT technology) that connect it all. The strategic shift to bundling hardware rentals with their high-margin SaaS under the Cantaloupe ONE program is defintely a game-changer for profitability. This comprehensive solution is why their value proposition can offer customers a 20-35% revenue lift and a 30-40% reduction in operating expenses (OpEx) when fully onboarded. That's a compelling argument for any business owner.

You can read more about their long-term vision in their Mission Statement, Vision, & Core Values of Cantaloupe, Inc. (CTLP).

The Acquisition Context: A Clear Next Step

While the organic growth drivers are strong, the most immediate factor for any investor is the announced acquisition by 365 Retail Markets. The offer price is $11.20 per share. This creates a ceiling on the stock's price, limiting upside potential unless a higher bid emerges or the deal is terminated. The risk, of course, is that the deal could be delayed due to regulatory scrutiny (antitrust concerns, since 365 Retail Markets is a competitor) or fail altogether. If the deal falls through, Cantaloupe, Inc. would receive a termination fee of $31.5 million.

Action: Review the current stock price against the $11.20 acquisition price. If you own the stock, calculate your risk/reward based on the small potential arbitrage gain versus the risk of the deal collapsing. If you don't own it, you're essentially betting on the deal closing or a higher bid appearing. Finance: Model the impact of the $31.5 million termination fee on FY2026 earnings per share (EPS) by the end of the month, just in case.