CANTALOUPE, INC.

Cantaloupe, Inc. is a global technology leader powering self-service commerce, offering a comprehensive suite of solutions including micro-payment processing, self-checkout kiosks, mobile ordering, connected point-of-sale systems, and enterprise cloud software. The company serves 34,896 ¹ customers in the United States, United Kingdom, European Union countries, Australia, and Mexico. The self-service industry is highly competitive with service providers ranging from well-established enterprises to early-stage companies within the financial technology and software services industries, characterized by evolving industry standards, aggressive pricing, continuous innovation, and changing consumer trends. Key industry trends driving growth include increased adoption of cashier-less models via vending machines, self-service kiosks, automated stores, and mobile ordering; rising consumer demand for transaction convenience, safety, and security; and ongoing labor challenges and inflation driving increased utility of actionable operational business intelligence from new technologies like machine learning and artificial intelligence.

The company believes it has competitive strengths that position it for continued success, though many competitors are challenging its industry position as an industry leader, particularly when it comes to pricing, emulating products, services, and marketing, as well as addressing consumer trends. Competitors are entering the market with modernized back-end systems focused on the user interface along with real-life product planogram possibilities. The company had 34,896 ² Active Customers and 1.28 million ³ Active Devices connected to its service as of June 30, 2025, compared to 31,466 ⁴ Active Customers and 1.22 million ⁵ Active Devices as of June 30, 2024. One customer represented 10% ⁶, 9% ⁷, and 12% ⁸ of total revenue for the years ended June 30, 2025, 2024, and 2023, respectively.

The company generates revenue through subscription fees, transaction processing fees, and equipment sales. For the fiscal year ended June 30, 2025, approximately 59% ⁹ of revenue came from transaction fees, 28% ¹⁰ from subscription fees, and approximately 13% ¹¹ from equipment sales. The majority of customers pay a monthly service fee plus a blended percentage rate on transaction volumes, with transaction fees on volumes processed through payment devices and POS systems being the most significant driver of revenues. The company offers customers several different ways to connect and manage their distributed assets, ranging from cashless hardware, both attended and self-checkout kiosks, the Seed platform, the Cantaloupe Go platform, the Cheq platform, SB Software, and API services via Seed API.

The company's hardware includes Cantaloupe card readers, integrated payment devices, Cantaloupe Go POS kiosks, a wide range of POS terminals, as well as the Cheq POS attended and self-service kiosks for the stadium, entertainment venue and festival verticals. Hardware products include the G11 Cashless Kit and G11 Pulse Kit which are 4G LTE digital payment devices, the G11 Chip Kit, the Engage Series of digital touchscreen devices, and the P Series card readers for U.K./E.M.E.A. and MX/LAC markets. The Cantaloupe Go product line provides a variety of self-checkout kiosks ranging from tablet-based POS terminals to feature-rich 46-inch kiosk screens, including the Go Mini, Go MiniX, Go Plus100, Go Plus200, Go Plus300, Go Max, Cooler Cafe, Smart Store Go Micro kiosk, and the Cantaloupe Smart Aisle frictionless retail experience. The Cheq product line supports both attended and unattended self-service kiosk mode for concessionaires and event-goers, along with handheld devices and mobile ordering activation areas. The SB Software platform includes Vendmanager and Coffeemanager software solutions for the U.K. and E.M.E.A. vending operator.

Integrated software services include the Seed platform, a cloud-based asset management and optimization solution providing advanced analytics, dynamic route scheduling, automated pre-kitting, proactive equipment management, intelligent merchandising, inventory management, warehouse purchasing, and accounting management. Add-on software services within the Seed platform include Remote Price Change and integration with e-commerce partners. The Cantaloupe Go Portal is a cloud-based platform for managing kiosk performance, uptime, inventory, and integrating into Seed. The Cheq platform provides real-time updates for deploying changes across multiple POS menus during events, with intuitive reporting functionality. Seed API (formerly Quick Connect) is an API web service allowing client applications to interface with the company's payment processing and asset managing services. Additional services include Cantaloupe Go consumer mobile app loyalty programs, campus card integrations, digital ad-management, and data warehouse services.

On June 15, 2025, the company entered into an Agreement and Plan of Merger with 365 Retail Markets, LLC, whereby 365 Retail Markets agreed to acquire the company in an all-cash transaction for $11.20 ¹² per share of common stock. On September 4, 2025, shareholders approved the Merger Agreement, and the merger is expected to be completed in the second half of calendar year 2025. In September 2024, the company acquired SB Software Limited for a purchase price of approximately $11.4 million ¹³, including cash paid of $10.0 million ¹⁴ and estimated fair value of contingent consideration of $1.4 million ¹⁵. In February 2024, the company acquired Cheq for $4.5 million ¹⁶. In January 2025, the company amended its credit facilities and entered into the 2025 Credit Facility providing for a $40 million ¹⁷ secured term loan facility, a $30 million ¹⁸ secured revolving credit facility, and a $30 million ¹⁹ secured delayed draw term loan facility. In August 2024, the company launched Suites, a premium suite management system. In September 2024, it released a significant update to its Seed VMS platform. In October 2024, it launched the AdVantage program for digital advertising on POS touchscreen devices. In December 2024, it launched Smart Store self-service retail solutions and was selected by the San Jose Earthquakes for POS technology. In January 2025, it launched Engage Pulse card readers for the arcade and amusement industry. In February 2025, it collaborated with Fundbox to launch Cantaloupe Capital. In April 2025, it launched Go Micro, the industry's most affordable self-service micro market kiosk. In May 2025, it entered into a partnership with Carnival Cruise Line to provide POS technology at Celebration Key.

Total revenues increased by $34.0 million ²⁰, or 13% ²¹, from $268.6 million ²² for the year ended June 30, 2024, to $302.5 million ²³ for the year ended June 30, 2025. Net income was $64.5 million ²⁴ for fiscal 2025 compared to $12.0 million ²⁵ for fiscal 2024 and $0.6 million ²⁶ for fiscal 2023. Total gross profit was $112.1 million ²⁷ for fiscal 2025 compared to $95.9 million ²⁸ for fiscal 2024, an increase of 17.0% ²⁹. Total gross margin was 37.1% ³⁰ for fiscal 2025 compared to 35.7% ³¹ for fiscal 2024. Adjusted EBITDA was $46.7 million ³² for fiscal 2025 compared to $34.0 million ³³ for fiscal 2024. Net cash provided by operating activities was $20.3 million ³⁴ for fiscal 2025 compared to $27.7 million ³⁵ for fiscal 2024. As of June 30, 2025, the company had cash and cash equivalents of $51.1 million ³⁶ and a net working capital surplus of $70.5 million ³⁷.

The filing states that the merger with 365 Retail Markets is expected to close in the second half of calendar year 2025, subject to customary closing conditions including the receipt of required regulatory approvals.

The company's primary growth objective is to continue enhancing its position as a leading provider of technology powering self-service commerce. Key growth vectors include maximizing growth in existing customers and partners through the addition of new products and services such as RPC, Seed Markets, Seed Analytics, Seed Pick Easy, and Cantaloupe Go POS solutions. The company aims to capitalize on the emerging cashless, contactless, EMV, NFC, and growing mobile payments trends globally, believing this trend will continue to drive significant opportunity to further penetrate cashless transactions in both existing and new markets in the United States and abroad. The company is expanding into micro markets and smart stores with its Cantaloupe Go platform, differentiating itself by providing a single platform to manage consumer and operational aspects while integrating multiple service providers.

The company is focused on capitalizing on opportunities in international markets, believing it is well positioned to expand across Mexico and Europe following the acquisitions of Three Square Market in December 2022 and SB Software in September 2024, as well as setting up operations in Mexico. The company plans to continue growing its self-checkout micro market kiosks in these regions while leveraging the Seed platform to optimize customer vending and micro market businesses, and establish a presence in cashless payment devices. With the acquisition of Cheq in February 2024, the company believes it is well positioned to disrupt the POS market supporting entertainment venues, stadiums, festivals, and state fairs, with a mobile-first built POS platform focused on in-seat mobile ordering, handhelds, and attended or self-checkout stations. The company also plans to further penetrate attractive adjacent markets including amusement and arcades, residential buildings, hotels and hospitality, college campuses and universities, and retailers seeking grab-and-go experiences, leveraging solutions like the Cantaloupe Go line of products.

The company's total Adjusted Gross Margin (non-GAAP) was 40.9% ³⁸ for the year ended June 30, 2025, up from 38.2% ³⁹ for the year ended June 30, 2024. The increase in Adjusted Gross Margin was primarily driven by an increase in subscription fees revenue which is inherently a higher margin revenue stream, and equipment sales gross margins improved from the prior fiscal year primarily driven by the diversification of equipment sales and higher margins on certain micro market equipment. The company's cost of transaction fees increased $11.3 million ⁴⁰ primarily due to corresponding increases in transaction processing fee revenue and transaction processing volumes. Cost of equipment sales increased $1.1 million ⁴¹ primarily due to increased equipment sales, in particular the new Smart Stores product.

The company's go-to-market strategy includes both direct sales and indirect channels, depending on the particular dynamics of each market. Direct sale efforts are supported by both inside and external sales team members aligned to serve enterprise, mid-market, and small business customers and prospects, along with channel partners and resellers both domestically and internationally. The company maintains agreements with resellers, affiliate networks, and distributors in select market segments. Marketing drives growth through a variety of online and offline initiatives designed to build brand awareness, position thought leadership within the self-service commerce market, highlight competitive strengths, and illustrate the value of products and services to opportunity markets. As of June 30, 2025, the company had 358 ⁴² full-time employees compared to 359 ⁴³ full-time employees as of June 30, 2024, representing a headcount decrease of less than 1% ⁴⁴ over the prior fiscal year.

The company invested $17.0 million ⁴⁵ in capital expenditures during fiscal 2025 as it focuses on investing in innovative technologies and products, and increasing rental devices enrolled in the Cantaloupe One program, compared to $14.9 million ⁴⁶ for the year ended June 30, 2024. The company paid $11.1 million ⁴⁷ in cash for business acquisitions during the year ended June 30, 2025, compared to $3.7 million ⁴⁸ for the year ended June 30, 2024. The company's primary sources of capital available are cash and cash equivalents on hand of $51.1 million ⁴⁹ as of June 30, 2025 and cash expected to be provided by operating activities. The company believes its current financial resources will be sufficient to fund its current twelve-month operating budget from the date of issuance of the consolidated financial statements.

The company faces headwinds from general economic, market or business conditions unrelated to its operating performance, including global supply chain disruptions, inflationary pressures, tariffs, elevated interest rates, and geopolitical conflicts. A sustained deterioration in general economic conditions in the markets in which the company operates may adversely affect financial performance by reducing the number of active devices, active customers, and total number of transactions using its payment solutions. The company's own costs, including labor, hardware, services, technology providers, and other variable expenses could be impacted by severe, widespread or continuing inflation and the levying of tariffs. The customer base includes many small businesses, some of which operate on tight margins, and customers may not successfully navigate a rising cost environment, causing collection issues or bankruptcies. The company's efforts to expand into international markets may not be successful, and its products may need to be localized, with failure or delay in localization efforts potentially adversely affecting the business.

The pendency of the merger with 365 Retail Markets may result in disruptions to the business, as the Merger Agreement generally requires the company to operate its business in the ordinary course pending consummation and prohibits it, without 365 Retail Markets' consent, from taking certain specified actions until the merger has been consummated. These prohibitions may affect the company's ability to execute business strategies and attain financial and other goals. The merger may place a significant burden on management and internal resources and may divert management's time and attention from the day-to-day operation of the business and execution of other strategic initiatives. The company has incurred and will continue to incur significant costs, expenses and fees for professional services and other transaction costs in connection with the merger, many of which are payable regardless of whether the transaction is consummated. There can be no assurance that the merger will be consummated within the intended timeframe, or at all, and the failure to consummate the merger will adversely affect the market price of common stock and could adversely affect the business, results of operations and financial condition.

The company faces material risks related to the pending merger with 365 Retail Markets, including potential disruptions to business operations from operating covenants that limit strategic actions, the diversion of management attention, and significant transaction costs that must be paid regardless of whether the merger is consummated. The company's business is highly dependent on a single customer, which represented 10% ⁵⁰ of total revenue for fiscal 2025, and substantially all customer service contracts are terminable upon thirty days' notice, creating revenue concentration and retention risk. The company's debt facilities contain financial covenants requiring a total leverage ratio of not more than 3.50 to 1.00 ⁵¹ and a fixed charge coverage ratio of not less than 1.15 to 1.00 ⁵², and failure to comply could trigger acceleration of the $39.0 million ⁵³ in outstanding borrowings. The company relies on agreements with the three largest credit card associations for substantially all cashless payment transactions, and failure to comply with their security standards could result in suspension or termination of registration, materially impairing the ability to provide cashless payment services. The company has identified material weaknesses in internal controls in the past and may identify additional weaknesses in the future, which could result in financial statement misstatements and loss of investor confidence.

Management's message emphasizes the company's position as a global technology leader powering self-service commerce, handling more than a billion transactions annually, and serving 34,896 ⁵⁴ customers across multiple countries. The key themes include driving growth through innovation in digital payments and business optimization, with highlights for fiscal 2025 including revenues of $303 million ⁵⁵, an increase of 13% ⁵⁶ year over year, $3.4 billion ⁵⁷ in dollar volume of transactions compared to $3.0 billion ⁵⁸ in the prior year, and 1.28 million ⁵⁹ Active Devices. Management emphasizes the strategic priorities of maximizing growth in existing customers, capitalizing on cashless and contactless payment trends, expanding into micro markets and smart stores, capitalizing on international market opportunities, delivering exceptional guest experiences at stadiums and venues, further penetrating adjacent markets, extending IoT services into new verticals, and providing comprehensive service and support. The forward-looking statements include the expectation that the merger with 365 Retail Markets will be completed in the second half of calendar year 2025, subject to customary closing conditions including the receipt of required regulatory approvals.