DEF: Cantaloupe Reports Strong FY25 Growth, Merger Pending

Cantaloupe, Inc. reported a 13% year-over-year revenue increase to $303 million for fiscal year 2025, alongside an 11% customer base expansion, as it prepares for a merger with 365 Retail Markets expected to close in H1 2026.

Summary

• Achieved total revenue of $303 million for fiscal year 2025, representing a 13% increase year-over-year.
• Transaction fees increased by 15% and subscription fees by 11% in fiscal year 2025.
• Expanded the customer base by 11% to 34,896 active customers and grew active devices by 5% to 1.28 million.
• Entered into a merger agreement with 365 Retail Markets, LLC in June 2025, which was approved by shareholders in September 2025.
• The merger is subject to regulatory clearances, including under the HSR Act, and is currently expected to close in the first half of calendar year 2026.
• Acquired SB Software to enhance presence in the U.K. and Europe.
• Launched new products including Smart Store and the Go Micro kiosk, and expanded presence at entertainment venues with partners like the San Jose Earthquakes and Carnival Cruise Line.
• Introduced the AdVantage digital media program in October 2024 and Engage Pulse card readers for the arcade and amusement industry.
• Collaborated with Fundbox to launch Cantaloupe Capital, providing small businesses with access to capital.
• Enhanced financial flexibility by amending and expanding credit facilities to increase total borrowing capacity.
• Fiscal year 2025 annual bonuses for named executive officers were based on 71.8% achievement of corporate goals, which included Adjusted EBITDA (40%), Revenue (25%), and Monthly Recurring Revenue Growth (20%), plus Board Discretion (15%).
• The CEO's total compensation for FY25 was $957,707, with compensation actually paid at $1,725,357, and the median employee compensation was $80,000, resulting in a CEO pay ratio of 12:1.

Sentiment

Score: 8

Explanation: The company demonstrates strong financial growth and strategic execution, including a significant merger approved by shareholders. While regulatory clearance for the merger introduces some uncertainty, the overall performance and strategic direction are highly positive, indicating robust health and future potential.

Positives

• Strong financial performance in fiscal year 2025 with total revenue of $303 million, a 13% year-over-year increase.
• Significant growth in transaction fees (15%) and subscription fees (11%).
• Expanded customer base by 11% to 34,896 active customers and active devices by 5% to 1.28 million.
• Shareholders approved the merger agreement with 365 Retail Markets, LLC in September 2025.
• Strategic acquisition of SB Software to expand international presence in the U.K. and Europe.
• Successful launch of innovative products like Smart Store and Go Micro kiosk, and expansion into new market segments such as sports and entertainment.
• Enhanced financial flexibility through amended and expanded credit facilities, increasing borrowing capacity.
• High shareholder support (over 98%) for the fiscal 2024 named executive officer compensation programs.

Negatives

• The merger with 365 Retail Markets, LLC is still subject to regulatory clearances, specifically under the HSR Act, introducing a degree of uncertainty regarding its final closing.
• Gaurav Singal, the former Chief Technology Officer, resigned effective October 7, 2025, and was ineligible to receive severance payments.
• The annual bonus payout for fiscal year 2025 was 71.8% of the target, indicating that some corporate performance goals were not fully met, with the revenue metric achieving 0% for bonus calculation purposes.

Risks

• Disruption to business caused by the acquisition by 365 Retail Markets.
• Ability to consummate the transaction with 365 Retail Markets within the contemplated timeframe, or at all, including risks related to securing necessary regulatory approvals (HSR Act) and satisfaction of other closing conditions.
• Impact on stock price, business, financial condition, and results of operations if the proposed transaction with 365 Retail Markets is not consummated.
• Costs, charges, and expenses relating to the proposed transaction with 365 Retail Markets.
• Proceedings, including litigation, that seek to prevent the proposed transaction with 365 Retail Markets from being consummated.
• General economic, market, or business conditions unrelated to operating performance, including inflation, elevated interest rates, supply chain disruptions, financial institution disruptions, geopolitical conflicts, public health emergencies, and declines in consumer confidence and discretionary spending.
• Failure to comply with financial covenants in debt facilities.
• Ability to maintain compliance with rules and regulations applicable to business operations and industry.
• Disruptions in other card payment processors, software, and manufacturing partners upon whom the company relies.
• Customer agreements are generally cancellable by the customer with thirty days notice.
• Ability to acquire and develop relevant technology offerings for current, new, and potential customers and partners.
• Risks and uncertainties associated with expansion into and operations in Europe, Mexico, and other foreign markets, including economic conditions, trade policy changes, political instability, inflation rates, recessions, sanctions, foreign currency exchange rates and controls, foreign investment and repatriation restrictions, legal and regulatory constraints, civil unrest, armed conflict, and war.
• Ability to satisfy trade obligations included in accounts payable and accrued expenses.
• Ability to attract, develop, and retain key personnel, or loss of the services of key executives.
• Incurrence of any unanticipated or unusual non-operating expenses, which may require diversion of cash resources from achieving the business plan.
• Ability to predict or estimate future quarterly or annual revenue and expenses given the developing and unpredictable market for products.
• Ability to successfully integrate acquired companies into current products and services structure.
• Ability to add new customers and retain key existing customers from whom a significant portion of revenue is derived.
• The ability of a key customer to reduce or delay purchasing products.
• Ability to obtain widespread commercial acceptance of products and service offerings.
• Whether any patents issued will provide competitive advantages or adequate protection for products, or would be challenged, invalidated, or circumvented by others.
• The ability of products and services to avoid disruptions to systems or unauthorized hacking or credit card fraud.
• Risks associated with cyber-attacks and data breaches.
• Ability to maintain effective internal controls and to timely file periodic and current reports with the Securities and Exchange Commission (SEC).

Future Outlook

The company expects the merger with 365 Retail Markets to close in the first half of calendar year 2026, pending regulatory clearances. Management remains focused on maintaining operational excellence and innovation, ensuring a smooth transition for all stakeholders, and continuing to deliver high-quality service and performance until the transaction closes.

Management Comments

• Fiscal year 2025 was marked by strong financial performance, driven by disciplined execution.
• We achieved total revenue of $303 million, a 13% increase year-over-year, led by a 15% increase in transaction fees and an 11% increase in subscription fees.
• We expanded our customer base by 11% to 34,896 active customers and grew our active devices by 5% to 1.28 million, reflecting ongoing demand for our platform.
• As we work toward completing the Merger, we remain focused on maintaining our commitment to operational excellence and innovation.
• We are dedicated to ensuring a smooth transition for all stakeholders and continuing to deliver high-quality service and performance until the transaction closes.

Industry Context

The company operates in the rapidly evolving self-service commerce and payments industry, demonstrating growth through digital advertising, advanced self-service retail solutions, and expansion into new sectors like sports and entertainment. The pending merger with 365 Retail Markets signifies a trend towards industry consolidation and the creation of more integrated platforms. The launch of Cantaloupe Capital, in collaboration with Fundbox, reflects a broader industry movement towards embedded finance, offering tailored capital solutions within the company's ecosystem to support small businesses.

Comparison to Industry Standards

• The company's Total Shareholder Return (TSR) is compared against the US Small-Cap Russell 2000 Index for performance evaluation.
• The peer group used for executive compensation benchmarking includes 16 companies: Atlanticus Holding Corporation, AvidXchange Holdings, Inc., Bakkt Holdings, Inc., Cardlytics, Inc., Cass Information Systems, Inc., CoreCard Corporation, CPI Card Group, Inc., Flywire Corporation, i3 Verticals, Inc., International Money Express, Inc., PAR Technology Corporation, PaySign, Inc., Priority Technology Holdings, Inc., Repay Holdings Corporation, Sezzle, Inc., Usio, Inc.

Management Changes

Corporate Governance

Related Party Transactions

• Mr. Michael K. Passilla, a director, serves as a strategic advisor to Optimized Payments, Inc., a consulting firm that the Company utilizes for payments analytics and advisory services. The Company paid $0.2 million to Optimized Payments, Inc. for services in both fiscal years ended June 30, 2025, and 2024. The Board determined Mr. Passilla did not have a direct or indirect material interest in the transaction, as his aggregate ownership interest in Optimized is less than 10%.

Stakeholder Impact

• **Shareholders**: Benefit from strong financial performance, strategic growth initiatives, and the pending merger. Have the opportunity to vote on directors and executive compensation, and exercise proxy access rights.
• **Employees**: Benefit from competitive compensation programs, professional development, and employee engagement initiatives. Subject to stock ownership guidelines and anti-hedging policies.
• **Customers**: Gain access to new products (Smart Store, Go Micro kiosk, Engage Pulse), digital advertising opportunities (AdVantage), and streamlined capital access through Cantaloupe Capital.
• **Suppliers/Partners**: Engaged through collaborations like Fundbox for Cantaloupe Capital and expanded presence with entertainment venues.
• **Regulatory Bodies**: The merger is subject to HSR Act clearance, and the company maintains compliance with SEC rules and Nasdaq listing standards, including new clawback and insider trading policies.

Next Steps

• Shareholders are invited to attend the 2026 Annual Meeting of Shareholders online on Wednesday, November 19, 2025, at 11:00 a.m., ET.
• Shareholders will vote on the election of nine directors nominated by the Board.
• Shareholders will cast an advisory vote to approve the compensation of the named executive officers.
• Shareholders will ratify the appointment of Deloitte & Touche LLP as the independent registered public accountants for the fiscal year ending June 2026.
• The company will work towards completing the merger with 365 Retail Markets, LLC, which is expected to close in the first half of calendar year 2026, subject to regulatory clearances.
• Management will remain focused on maintaining operational excellence and innovation.
• The company is dedicated to ensuring a smooth transition for all stakeholders and continuing to deliver high-quality service and performance until the merger transaction closes.

Key Dates

Recommendation

The company demonstrated robust financial performance in fiscal year 2025, marked by significant revenue and profit growth, alongside strategic expansions and product innovations. The shareholder-approved merger with 365 Retail Markets, while awaiting regulatory clearance, positions the company for enhanced market leadership in self-service commerce. The strong operational execution, commitment to innovation, and sound corporate governance framework, including a relatively low CEO pay ratio, support a positive investment outlook. The identified risks are manageable and typical for a growing technology company undergoing a merger, and the company appears to be addressing them proactively. These factors collectively suggest strong potential for continued value creation.

Keywords

Self-service commerce, Payments technology, Fintech, Vending, Micro-markets, IoT, Retail solutions, Merger, Acquisition, Corporate governance, SEC filing, Proxy statement, Cantaloupe, 365 Retail Markets