Cantaloupe Inc delivered a solid QQ3 2024 quarter with revenue of $67.90 million, up 12.5% year over year and 3.9% quarter over quarter, underpinned by ongoing demand for digital payments solutions in unattended retail. Gross margin expanded to 39.63% and operating margin reached 7.66%, contributing to a net income of $4.66 million and earnings per share of $0.059 (diluted $0.059). The company generated healthy operating cash flow of $14.71 million and free cash flow of $11.45 million, further supporting a liquid balance sheet with cash and cash equivalents of $50.20 million and a net cash position of approximately $2.33 million. Balance sheet strength is complemented by modest leverage (total debt $47.9 million; debt-to-capitalization 0.209; interest coverage ~32x) and ample liquidity (current ratio 1.56, quick ratio 1.16).
While the quarter showcases improving profitability and robust cash generation, Cantaloupe faces a relatively extended working capital cycle (CCC ~142 days; DSO ~65 days; DIO ~77 days), which warrants continued attention to collections, inventory management, and payable terms. Valuation remains elevated relative to many IT services peers (price-to-sales around 34x; price-to-earnings around 124x), signaling strong growth expectations priced into the stock but also implying sensitivity to any deviation in growth trajectories or margin trajectory. Overall, the QQ3 print reinforces a constructive near-term trajectory with optionality from partnerships and product expansion in unattended retail, balanced against the risk of valuation compression if growth or profitability decelerates.