Transact Technologies (TACT) Q2 2026 Earnings Report

The call communicated several meaningful operational and strategic positives: strong execution on the BOHA! rollout (1,900 units sold), substantial software revenue growth (+47% YoY), an expanding online install base (~22,000 units, +33% YoY), a completed migration to Azure, improved gross margin (50.2%), improved adjusted EBITDA for H1 and an upgraded EBITDA outlook. Offsetting these positives were near-term headwinds from the tariff ruling (≈$1.0M customer refunds and a ~$400K EBITDA impact), declining ARPU, some sequential weakness in reported gaming revenue, and higher near-term selling & marketing spend as the company invests in GTM. Management addressed metric transparency and has initiated a strategic review of the casino & gaming business which could unlock value but adds near-term uncertainty. Overall, the operational momentum in software and recurring revenue alongside a strong balance sheet and raised EBITDA guidance outweigh the quarter-specific challenges.

The company reaffirmed its full‑year 2026 net sales outlook at roughly $55–57 million and raised adjusted EBITDA guidance to $1.5–$2.0 million after generating $1.9 million of adjusted EBITDA in the first half; Q2 results included $13.9 million of net sales (about $14.9 million excluding an estimated $1.0 million of customer tariff refunds), $514,000 of adjusted EBITDA (said to be impacted by roughly $400,000 of tariff adjustments), and a 50.2% gross margin (management still expects full‑year gross margin in the mid‑to‑high 40% range); tariff actions also produced an approximate $600,000 reduction to COGS with about $500,000 of government refunds received to date (~80% of expected), cash of $19.4 million on the balance sheet, and operating metrics showing continued software momentum (Q2 FST sales $5.2M, recurring FST sales $3.4M, software revenue +47% YOY, ARPU $673, sold 1,900 BOHA! units in Q2 and ~3,270 YTD with ~22,000 online units, +33% YOY).