Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Management is aggressively shifting from a hardware-centric model to a high-margin, recurring software-as-a-service (SaaS) framework within the Food Service Technology (FST) segment.
Software revenue growth of 47% year-over-year was primarily driven by a strategic initiative to capture fair market value through price increases and the cessation of free software bundling. The migration of the BOHA! platform to Microsoft Azure is expected to accelerate the software roadmap, enabling faster innovation, AI-related workflows, and seamless enterprise integrations. FST demand is currently sustained by a multi-year conversion cycle as customers upgrade legacy AccuDate and Terminal 1 systems to newer BOHA! hardware.
The Casino and Gaming segment remains a profitable 'cash cow' with solid OEM contributions, though management views its role as relatively small within a large industry compared to the FST market opportunity. A formal strategic review of the Casino and Gaming business has been initiated to maximize stockholder value and potentially reallocate capital toward higher-growth FST initiatives. Management reaffirmed full-year 2026 net sales guidance of $55 million to $57 million, while raising adjusted EBITDA guidance to a range of $1.5 million to $2.0 million.
The company aims to drive FST monetization toward a target of $100 to $200 in recurring software-related revenue per machine per month. Gross margins are projected to remain in the mid-to-high 40% range for the full year 2026, supported by higher-margin software and label sales. The strategic review of the gaming business has no set timetable and may result in a sale, though management believes the FST business can reach cash flow break-even independently.
Future reporting will shift toward metrics that better reflect contractual software growth and unique food service venues to more accurately track market share. Supreme Court ruling on import tariffs resulted in a $1 million reduction to net sales and a $400,000 impact on adjusted EBITDA due to estimated customer refunds. The company has reclaimed approximately 80% of expected government refunds related to these tariffs as of the earnings call date.
Engineering and R&D expenses decreased 29% year-over-year due to the capitalization of costs associated with in-housing the BOHA! software source code. Selling and marketing expenses rose 30% following a deliberate overhaul of the sales team and increased investment in lead generation and trade shows. Nvidia-level potential. 30M+ investors trust Moby to find it first.
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