Transact 2025 Q1 Earnings Strong Performance as Net Income Swings 101.8% Positive

Transact (TACT) reported its fiscal 2025 Q1 earnings on May 14th, 2025. The company's revenue increased significantly by 22.1%, reaching $13.05 million, surpassing previous expectations. Transact's positive net income of $19,000 marks a substantial improvement from a net loss of $1.04 million in the prior year, indicating a strong turnaround. The company has raised its guidance, projecting full-year sales between $47 million and $52 million, aligning with market expectations.

Revenue

Transact reported total revenue of $13.05 million in 2025 Q1, reflecting a 22.1% increase from $10.69 million in 2024 Q1.

Earnings/Net Income

Transact maintained stable EPS at $0.00 in 2025 Q1 compared to 2024 Q1. The company reported a net income of $19,000 in 2025 Q1, a notable improvement from the net loss of $1.04 million in 2024 Q1. Despite stable EPS, the net income improvement is a positive indicator.

Price Action

The stock price of Transact has edged down 2.62% during the latest trading day, has tumbled 9.24% during the most recent full trading week, and has dropped 6.44% month-to-date.

Post Earnings Price Action Review

The strategy of purchasing TACT when revenues miss expectations and holding for 30 days is a high-risk, high-reward tactic that requires thorough backtesting for potential profitability evaluation. This contrarian approach involves buying the TACT ETF despite negative earnings news. Backtesting over various market conditions, including bullish, bearish, and volatile periods, reveals that the strategy has underperformed the market, with losses surpassing gains. This suggests the strategy's lack of profitability under current conditions. Insights from the backtest emphasize understanding market reactions to earnings misses and highlight the need for refining the strategy, possibly by integrating more market indicators or technical analysis to enhance timing and positioning. Ultimately, without profitability in backtested scenarios, revisiting strategy parameters such as holding period and market conditions is essential for potential improvement.

CEO Commentary

"TransAct started the year with a solid first quarter, achieving an all-time, quarterly high of 2,350 BOHA! terminal unit sales, driving a 49% year-over-year FST revenue growth. Our BOHA! platform is gaining traction in large, emerging markets for FST, with significant wins, including a 1,400 BOHA! unit upgrade for a major convenience store chain. We are pleased with the positive net income and adjusted EBITDA, reflecting our operational discipline and the continued success of our revised go-to-market strategies. This positions us well to build upon our team’s ability to continue improving our year-over-year results for the balance of 2025." — John Dillon, Chief Executive Officer of TransAct.

Guidance

The Company expects full year 2025 net sales of between $47 million and $52 million. Adjusted EBITDA is projected to be between breakeven and $(1.5) million. The outlook emphasizes that non-GAAP adjusted EBITDA is presented only on a non-GAAP basis due to uncertainties related to future adjustments that may arise, which could be material to GAAP reported results.

Additional News

TransAct Technologies recently secured a significant BOHA! Terminal 2 upgrade contract with a leading national convenience store chain, upgrading 1,400 units. This marks a notable expansion in the company's customer base, highlighting the growing traction of its BOHA! platform. Additionally, TransAct announced a strategic business review, actively assessing alternatives with the assistance of Roth Capital Partners, LLC. This review aims to explore potential opportunities for enhancing shareholder value. Furthermore, TransAct has engaged in a contract food service win with a national healthcare services provider, underscoring its continued expansion in diverse markets and solidifying its position as a leader in software-driven technology and printing solutions.