USA Technologies Announces Second Quarter FY2016 Results Revenue up 44 Connections Jump 28

PRESS RELEASE

Second Quarter Financial Highlights:

» Total quarterly revenue of $18.5 million, a year-over-year increase of 44%

» 20,000 net connections for the quarter compared to 12,000 in the same quarter last year, a year-over-year increase of 67%

» 369,000 connections to ePort service, a year-over-year increase of 28%

» Record 10,625 customers compared to 8,450 in the same quarter last year, a year-over-year increase of 26%

» Quarterly record license and transaction fee revenue of $13.7 million, a year-over-year increase of 30%

» Quarterly license and transaction fees gross margins increased to 33.7% from 31.7% in the prior year

» Quarterly adjusted EBITDA of $2.3 million, a year-over-year increase of 34%

» Quarterly GAAP net loss of $0.9 million, including the impact of $1.2 million non-cash expense for the fair value warrant liability adjustment

» Quarterly Non-GAAP net income of $0.7 million, or $0.02 per share

» Achieved positive free cash flow* for fourth straight quarter fueled by success in the company's QuickStart third-party leasing program

"The growing success at USA Technologies validates that the self-service retail market is moving toward the acceptance and adoption of cashless payments," said Stephen P. Herbert, USA Technologies' chairman and chief executive officer. "This is an exciting time for us as we see major customers move toward migrating all of their machines to the ePort Connect service, as we simultaneously increase our customer base. With the acquisition of VendScreen we are driving additional value to each connection with the most advanced cloud based interactive content delivery system for the self-service market. We are enthusiastic about the traction we have made this quarter and our organic growth, coupled with the increasing operating leverage, underpin our confidence that USAT will continue to deliver strong results."

Fiscal 2016 Outlook

For full fiscal year 2016, management expects to add more than 75,000 net new connections, bringing total connections on the service to over 400,000 and expects total revenue to be between $69 million and $71 million. Additionally, we anticipate that QuickStart will remain a popular program for customers, and management expects it to drive positive free cash flows in fiscal year 2016. We also expect to have year-over-year increases of adjusted EBITDA and non-GAAP net income.

Click here for first quarter financial highlights and transaction data.