Cantaloupe, Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Canada Loves Third Quarter Fiscal Year 2023 Earnings Conference Call. At this time, all participants are on a listen-only mode. After this speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automatic message advising your hand is raised. Please note that today's conference may be recorded. I will now hand the conference over to your speaker host, Thank you.

Good afternoon, everyone. Welcome to the Cantaloupe Third Quarter Earnings Conference Call. With me on the call today is Ravi Venkatesan, Chief Executive Officer, and Scott Stewart, Chief Financial Officer. Before we begin today's call, we would like to remind you that all statements included in this call, other than statements of historical facts, are forward-looking in nature. Actual results could differ materially from those contemplated by the forward-looking statements because of certain factors, including but not limited to business, financial markets, and economic conditions. A detailed discussion of the risks and uncertainties that could cause actual results to differ materially from such forward-looking statements is included in our filings with the SEC and in the press release issued earlier today. Listeners are cautioned to not place undue reliance on any such forward-looking statements. which reflect management's views only as of the date they are made. Cantaloupe undertakes no obligation to update any forward-looking statements, whether because of new information, future events, or otherwise. This call will also include a discussion of certain non-GAAP financial measures that we believe are useful for, among other things, evaluating Cantaloupe's operating results. These non-GAAP financial measures are supplemental to and not substitute for GAAP financial measures, such as net income or loss. details of these non-GAAP financial measures, a presentation of the most directly comparable GAAP financial measures, and a reconciliation between those non-GAAP financial measures, as well as the most comparable GAAP financial measures, can be found in our press release issued this afternoon, which has been posted on the investor relations section of our website at www.cantelope.com. And with that, I would like to turn the call over to Robbie.

Thanks, Daryl. Good afternoon, everyone, and thanks for joining us today. I wanted to start the call highlighting our financial results. We are proud to deliver the highest quarterly earnings in the history of the company. Our total revenue for the quarter was $60.4 million, up 20% year on year. This was driven by a record quarter for both transaction and subscription revenue. Transaction revenue grew 21% year on year, and subscription revenue grew 22% year on year for the third quarter. We continue to expect subscription revenue to ramp throughout the year, resulting in growth in the high teens for the full year. Equipment revenue grew 12% year on year for the third quarter. Adjusted EBITDA for the quarter was $10.1 million, an increase of 176% year on year compared to the third quarter of 2022. This is an all time record for the company. This is evidence of our unlocking operating leverage from the business as outlined at our analyst day in December, 2022. Operating cash for the quarter was also strong at $22 million, which includes $14 million of AR collection and demonstrates the cashflow generation ability of our business. We expect the positive operating leverage and cash flow generation to continue into future quarters as outlined at our analyst day. A few additional third quarter business highlights include, at the end of the quarter, we had a total of 27,598 active customers, an increase of 21% year-over-year and 5% sequentially. Active devices grew by 2% year over year. We also rolled out two new products during the quarter, the Seed Driver mobile app and our next generation 46 inch micro market kiosk with enhanced accessibility features. With one full quarter of three square market or three to M in our results, we are pleased with the progress on integrating this business. The former 3-2M and Cantaloupe sales teams have been integrated and are leveraging subject matter expertise, as well as their respective strengths with specific channels to drive revenue synergies and a very healthy pipeline for future growth. In addition, the customer reception to the combination has so far exceeded our initial expectations, and I'm very pleased with the sales momentum and opportunities for revenue synergies in the micro-market space. We already have a number of examples of selling three-square market kiosks to cantaloupe customers and seed markets software to 3-2-M customers. Some recent examples of this cross-selling include Canteen of Northern California, a full-line vending micro-market and office coffee service operator who initially purchased and implemented our seed software back in the first quarter. They have now ordered three 2M kiosks in the third quarter. This is also a great example of a customer with whom we had no relationship a year ago, but with our new mid-market segment strategy, we've been able to bring them onto the full Cantaloupe platform. Another cross-sell example is Take a Break Vending, a full-line vending, micro-market, and office coffee service operator located in California. who was fully deployed with Cantaloupe's ePort hardware for telemetry and payment processing. They signed an agreement in the third quarter to move their entire operation onto the seed platform, as well as place their first order for 32M kiosks. Both of these, along with many other existing Cantaloupe customers, are examples of operators who've gone all in with Cantaloupe and are converting from competitor kiosks onto our platform. A great example of cross-selling in the other direction, seed markets to existing 3-2M customers, is a win with HGM Direct Service, a major micro-market operator in Sweden. They are currently implementing seed markets across their large and growing micro-market business. This also represents our first at-scale implementation of seed markets in Europe, and demonstrates our success to localize and roll out this platform internationally, which I'm particularly excited about. You can get more details about this rollout and market win in a press release that was issued earlier today. Subscription growth during the quarter was 22%, driven by 3-2-M and our SMB strategy, which is spearheaded by Cantaloupe One, our platform as a service offering that continues to see great market acceptance. At our analyst day, we laid out a strategy to target the mid-market segment in addition to the enterprise and small business segments. As part of this strategy, we've optimized the seed suite of software products to make it easier to implement for this segment. One recent example of this is a vending and micro-market company called Essentially Organic. Essentially Organic originally made the switch to cashless payment acceptance with Cantaloupe's ePort card readers. Now they are transitioning their entire operation onto the Cantaloupe SEED platform. We continue to deepen our thought leadership in the self-service industry. We recently released our 2023 Micropayments Trends Report, which studied micropayment trends for transactions less than $10 at food and beverage vending, as well as amusement machines throughout the United States and Canada. The results, which covered a sample of more than 700,000 active cantaloupe cell service locations, showed that consumers are increasingly using cashless payment methods, even for smaller ticket transactions. One of the more impressive data points was around the average cashless ticket size at amusement gaming machines for play purchases, which was $5.32 compared to only $0.93 for cash purchases. This report supports the trends we are seeing in terms of continued growth in cashless payments and specifically contactless payments by consumers. We are excited about the upcoming NAMA show, the largest convenience services industry event of the year in Atlanta in a few days. This gives us the opportunity to meet face-to-face with leaders in the self-service industry. We would encourage you to stop by our booth as we'll be unveiling some of our latest payment acceptance technology as well as showcasing our latest innovations. In conclusion, I'm excited about the progress we've made this quarter in doing what we said we would do at our analyst day last December. With that, I'll turn the call over to Scott for the financial review. Scott?