Revenue during the quarter surged 30.05 percent to $21.59 million from $16.60 million in the previous year period. Gross margin for the quarter contracted 184 basis points over the previous year period to 28.57 percent. Operating margin for the quarter stood at negative 4.40 percent as compared to a positive 0.67 percent for the previous year period.

Operating loss for the quarter was $0.95 million, compared with an operating income of $0.11 million in the previous year period.

However, the adjusted EBITDA for the quarter stood at $0.66 million compared with $1.75 million in the prior year period. At the same time, adjusted EBITDA margin contracted 748 basis points in the quarter to 3.07 percent from 10.55 percent in the last year period.

"USA Technologies continued its strong connection and revenue growth and is executing in the market to drive cashless and mobile payments to self-service retail locations," said Stephen P. Herbert, USA Technologies' chairman and chief executive officer. "As we move further into our fiscal year, we expect to see both continued top line growth and expanding profitability as we drive wider adoption of our ePort Connect service to vending, kiosks, and other unattended retail locations. Our customers continue to see compelling economics which underpins their decisions to upgrade 100% of their locations to our technology. Further, as the market advances we expect our ePort Interactive Service, which enables a more robust consumer experience and yields improved performance at the location, to expand market share." 

Fiscal 2017 Outlook For full fiscal year 2017, management expects to add between 115,000 and 125,000 net new connections for the year, bringing total connections to our service to a range of 544,000 to 554,000 and expects total revenue to be between $95 million and $100 million. We also expect to have year-over-year increases of adjusted EBITDA and non-GAAP net income.

The company has spent $0.81 million cash to meet investing activities during the quarter as against cash outgo of $0.04 million in the last year period.

Cash flow from financing activities was $6 million for the quarter as against cash outgo of $0.10 million in the last year period.

Cash and cash equivalents stood at $18.20 million as on Sep. 30, 2016, up 56.99 percent or $6.61 million from $11.59 million on Sep. 30, 2015.

Working capital increases sharply
USA Technologies, Inc. has recorded an increase in the working capital over the last year. It stood at $13.97 million as at Sep. 30, 2016, up 86.90 percent or $6.50 million from $7.48 million on Sep. 30, 2015. Current ratio was at 1.65 as on Sep. 30, 2016, up from 1.44 on Sep. 30, 2015.

Days sales outstanding went down to 32 days for the quarter compared with 36 days for the same period last year.

Days inventory outstanding has decreased to 13 days for the quarter compared with 32 days for the previous year period.