Cantaloupe, Inc. (CTLP): A Bull Case Theory

Yahoo

07-05-2025

We came across a bullish thesis on Cantaloupe, Inc. (CTLP) on Substack by P14 Capital. In this article, we will summarize the bulls' thesis on CTLP. Cantaloupe, Inc. (CTLP)'s share was trading at $8.12 as of May 2nd. CTLP's trailing and forward P/E were 42.74 and 17.27 respectively according to Yahoo Finance.
A customer interacting with a point-of-sale terminal, demonstrating the impact of targeted loyalty marketing.
Cantaloupe Inc. (CTLP) stands out as a deeply compelling investment opportunity, particularly in the context of its recent share price decline from a 52-week high of $11.36. The drop, largely attributable to macroeconomic uncertainty and small-cap selling pressure, obscures the company's strong fundamentals and unique positioning as a leader in the fast-growing self-service commerce space. Despite the near-term volatility, CTLP is poised to benefit from powerful secular trends, including increased adoption of micro-markets, smart unattended retail solutions, and cashless payments. Its most recent quarterly results reaffirm the strength of its business model, with robust growth across subscription and transaction revenues. In 2Q25, subscription revenue rose 14.1% year-over-year (Y/Y), while transaction revenue jumped 17.15% Y/Y, supported by a 10.43% Y/Y increase in average ticket sizes and stable take rates. These drivers also pushed average revenue per user (ARPU) up 11.15% Y/Y. The company's SEED software platform continues to gain traction, with rising attach rates helping boost recurring revenue and customer stickiness. Management reaffirmed full-year guidance, targeting 17.5% Y/Y revenue growth, with strength in equipment sales in the second half—particularly from Smart Store units that carry high margins and are priced between $12K and $15K.
Beyond domestic tailwinds, Cantaloupe's international expansion—especially in Latin America—offers underappreciated long-term optionality. Though rollout has been methodical, management is focused on disciplined execution and sustainable growth. Meanwhile, the company is exhibiting strong operating leverage. Adjusted EBITDA for the quarter rose 26% Y/Y to $10.7 million, with margins expanding to 14.5%, up from 13% a year ago. Transaction margins increased 4.5% Y/Y to 25.6% due to better routing efficiency and larger transaction sizes. Equipment margins also improved significantly to 9.1%, on track to reach 13.5% by FY28. Subscription margins remained healthy at 78.8%, leaving ample room for incremental gains. Active customers rose 9.6% Y/Y and active devices were up 3.5% Y/Y, reflecting accelerating adoption and growing penetration across both traditional vending and new verticals like sports stadiums, auto dealerships, and senior living centers. With its full-year revenue and margin outlook de-risked, CTLP is well-positioned for continued outperformance and offers an attractive entry point for investors looking for resilient, cash-generating growth stories.