Ladies and gentlemen, thank you for standing by and welcome to the USA Technologies fourth quarter and fiscal year 2020 earnings conference call. At this time, all participants are in listen only mode. After the speaker's presentation, there will be a question and answer session. I would now like to hand your conference over to your first speaker for today, Alicia Nieva-Woodgate, Vice President of Corporate Communications and Investor Relations for USA Technologies. Please go ahead.
Thank you, and good afternoon, everyone. Welcome to the USA Technologies fourth quarter fiscal 2020 earnings conference call. With me on the call this afternoon are Sean Feeney, Chief Executive Officer, Wayne Jackson, Chief Financial Officer, and Anant Agrawal, Chief Revenue Officer. Before we begin today's call, I would like to remind you that all statements included in this call, other than statements of historical facts, are forward-looking in nature. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including, but not limited to business, financial, market, and economic conditions. A detailed discussion of the risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included with our filings with the SEC and in the press release issued earlier today.
Listeners are cautioned not to place undue reliance on any such forward-looking statements, which reflect management's view only as of the date they are made. USA Technologies undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. This call will also include a discussion of certain non-GAAP financial measures that we believe are useful for, among other things, evaluating USA Technologies' operating results. These non-GAAP financial measures are supplemental to and not a substitute for GAAP financial measures such as net income or loss. Details of these non-GAAP financial measures are presentation of the most directly comparable GAAP financial measures and the reconciliation between those non-GAAP financial measures, as well as the most comparable GAAP financial measures, could be found in our press release issued this afternoon, which has been posted on the investor relations section of our website at www.usatech.com.
With that, I'd like to now turn the call over to Sean Feeney. Sean?
Thank you, Lish. Thank you everyone for joining us today. It's hard to believe that I'm already in my fourth month with the company. The new team has done a lot of work in a short time, and I'm very excited to update you on our progress. I will start by reviewing our fourth quarter results, giving you some perspective behind the numbers. Anant and I will review our strategic initiatives for the year, and then Wayne will follow to fully detail our fourth quarter results. Lastly, I will discuss our financial guidance for this fiscal year. As you saw in our earnings release, and as we touched on during the last earnings call, the COVID-19 pandemic had a material impact on the company in the fourth quarter. Revenue of $32.6 million decreased 15.2% year-over-year.
Gross margin was 34%, compared with 25.3% in the prior year period due to mix of revenue during the quarter, which Wayne will discuss in more detail in a few minutes. Adjusted EBITDA of negative $0.1 million compared to negative $4.6 million in the prior year period. While these results were clearly impacted by the pandemic from a top-line perspective, we were pleased with our ability to control costs during the quarter. On our last call, I mentioned some key cost-cutting moves, such as consolidating and eliminating certain positions in the company. That trend continues as we work through our new management initiatives, as does the focus on reducing the number of consultants the company utilizes. We also implemented a 20% salary reduction for the senior leadership team for the rest of the year. Lastly, we noted that the board had deferred any cash-based director fees until calendar year 2021.
Some additional key points you should know about, which happened during the quarter, include that we launched the new company website. It was an important first step to redefining who we are and showcasing our Platform as a Service for unattended retail. We debuted the first Unattended Retail, or UR, Summit, a virtual customer and industry event, which was a resounding success with over 1,000 registrations. We announced the long-awaited feature, Remote Price Change, RPC, in late June. We are currently testing with customers to be able to take advantage of fully rolling this initiative out later this year. We have also formed a team to focus on improving our working capital, where we see ample opportunity to make improvements.
We have also launched a series of other marketing initiatives, including a program to showcase the ability of Seed to better prepare our customers for demanding times like we have seen in calendar year 2020. This has been well-received by our customers, and we expect to continue these efforts over the next few months. Most importantly, as we move towards a more customer-centric organization, we have added staff in sales as well as customer support to make sure our customers are taken care of properly. This should lead to higher retention, a better value proposition for our customers, and a better place for our team to work.
As for more recent events worth highlighting, when I got here, I found a team that had been understandably demoralized over the past 18 months. Since my arrival, we have started a regular cadence of all-hands meetings and will continue to focus on improving communications and team building. In August, we closed the new debt financing with JP Morgan Chase, which replaces the company's previous debt facility. We are excited to welcome a financing partner focused on the long-term success of the company. The terms of the new facility reduce our interest rate from nine point seven five percent to LIBOR plus four point seven five, which represents a significant cost savings going forward. Our processor migration to Fiserv is proceeding as planned and is on schedule to be completed by the end of the calendar year.
We have our team assembled and have put many hurdles behind us, we are reallocating capital from wasteful corporate overhead to product development and customer service. We spent $37 million over the past two years on investigations, proxy solicitation, and restatement expenses. These events and costs are now behind us, so we now look to accelerate our growth by investing in the platform, products, internal systems, and international expansion. In addition to having better communication throughout the organization, we will be providing the team the financial and human resources to help them do their job better and make them proud to work for this organization again. The strategic initiatives that the management board laid out for this fiscal year are to drive sustainable organic growth, right-size the company's cost structure, and invest in people and culture in order to achieve excellence.
To talk about organic growth, I wanted to turn the call over to Anant, our Chief Revenue Officer, to review our opportunities to grow the top line. Anant?
Thanks, Sean. As we exit FY 2020 and we refocus on our growth potential, I find it helpful to start with understanding where we stand today. We are the largest and most respected player in a large and under-penetrated industry. Also, we have clear leadership position in technology with innovative solutions and a robust roadmap backed by valuable intellectual property. In addition, despite the near-term challenges of COVID-19, we believe we have strong tailwinds in our industry helping our business, which will only accelerate further in a post-COVID world. For example, we released stats yesterday that were based off a study that included hundreds of unattended retail operators spread across the U.S. The study found that, one, over 60% of their sales in July of 2020 were actually made with cashless payments. This is up from 53% in just January of this year.
That's a huge shift in consumer preference of cashless over cash in a very short amount of time. Two, these trends are important to the industry because, on average, consumers spend more when they pay with cashless versus cash. In fact, our data says it's approximately 43% more. As such, as locations open back up safely in a post-COVID-19 world, we believe these trends will encourage operators to accept cashless on more of their machines, and our existing cashless devices will have higher volumes of processing than we have seen in the past. As a leader in the space, we believe we are best positioned to capture the upside driven by these exciting trends. Independent of these secular tailwinds supporting further adoption of cashless, we are well underway with our efforts to drive growth through various key initiatives.
First, we want all our customers, existing and future, to be fully deployed with Seed and cashless across their entire business. Penetration of the Seed product within our existing customer base is well below levels that we think we can achieve and that we believe to be optimal for our customer base. We believe now is the perfect time to drive this initiative home, and let me explain why. Over the past few months, Seed customers have benefited even more from our software product, which enabled them to manage their operating costs in real time. Basically, they know exactly where to go, when to go, and what to take, no matter what the volatility on sales at their machines look like. This allows them to maximize their profitability and help ride out the pandemic better than competitors who are flying blind, so to speak.
By reinforcing the benefits of Seed, coupled with the secular cashless tailwinds that I touched on earlier, we are well positioned to convert the vast majority of our customers onto the full platform. The success of this strategy requires best-in-class customer experience across our full platform. We continue to make strides in this area, but we still have a lot of work to do. Customer satisfaction is a top priority of the senior leadership team, and it's critical in allowing us to expand our offerings to current customers as well as introduce to new ones. On the topic of new customers, our second initiative this year is to selectively enter or expand within new verticals or unattended markets. You've heard this before.
The problem historically was that the company employed a cashless first and only sales approach for cracking new verticals, which limited our ability to engage with certain customer segments. For example, we were not set up to effectively engage with a potential customer for whom cashless was not a current and top priority, even if IoT and software solutions may have been. The new platform sales approach will allow us to sell any of our solutions as entry points to our platform rather than solely leading with cashless. This takes us from being a traditional widget sale model of cashless to a full enterprise solution that is enabled with IoT, cashless, and best-in-class Software as a Service. We believe this is the optimal way to capitalize on white space opportunities in each of our newer verticals and geographies.
Speaking of geographies, that leads me to our third initiative for growth in this year. We have a great opportunity in front of us with international expansion. As a reminder, our international strategy is to leverage our SaaS platform, partnering with incumbent payment providers to avoid the cost and delay of getting payment certification. Internationally, we are currently focused on two regions. In Asia, we are assessing partnership opportunities where we believe the company and its Seed offerings could be high value add to local providers and their underlying customers. As you may have seen in this morning's announcement, we recently hired Fernando Lopez-Lacroix to lead our Latin America and Caribbean expansion. We are very excited to welcome him to the team. Fernando was formerly Vice President and General Manager of Verifone, Latin America and Caribbean, where he reported directly to our Chairman, Doug Bergeron, for 12 years.
While at Verifone, he grew revenue from $30 million to $250 million, roughly eight times over his tenure. The great thing here is that we aren't starting from scratch. In Mexico, we already have two customers using Seed and our IoT solutions. We are now assessing the full market opportunity by building off these early learnings. I will now turn it over back to Sean.
Thanks, Anant. To move on to our two other strategic initiatives for the year, starting with the rationalization of our cost structure. While COVID-19 is an exogenous factor to which we must adapt, rationalizing the cost base is something completely within our control and is a major focus this fiscal year. As I mentioned on our last call, my focus is on profitable growth, not just growth for the sake of growth. While we will continue to invest in our growth, it has become clear to me during my short tenure that there is plenty of opportunities to significantly cut costs that have nothing to do with driving our top line or better servicing our customers. Correcting the over-reliance on third-party consultants and elevated corporate overhead is a big focus of mine. Our final initiative, investing in our people and culture in order to achieve excellence.
We've made a lot of changes in the leadership team over the last 100 days. My goal and the goal of these new leaders is to come together as a team to bring back a laser focus on our customer, our people, and our stakeholders. Lastly, and very important for me, a very sincere thank you to our employees for their continued dedication and resourcefulness over the past several months. The safety and wellbeing of our employees is always a top priority, and it has been inspiring to see such a successful transition as they work from home while continuing to support our customers. With that, let me hand it over to Wayne to walk you through the Q4 financial results.
Thanks, Sean. Good afternoon, everyone. I'm excited to be with the company as its CFO during this transformational period, and I look forward to getting to know many of our stakeholders over the coming months. I will begin by discussing the company's FY 2020 fourth quarter results. Revenue for Q4 FY 2020 totaled $32.6 million, a decrease of 15.2% from the prior year fourth quarter. License and transaction revenue totaled $27.8 million for the quarter, a decrease of $15.6 million from Q4 FY 2019, primarily as a result of lower transaction volume in Q4 FY 2020 over the prior year. Equipment sales of $4.8 million decreased by 13% from the prior year quarter, primarily as a result of the impact of COVID-19 on sales and shipments. Total gross profit margin for the quarter was 34%, compared with total margin of 25.3% for Q4 FY 2019.
License and transaction margin improved to 42.3% in Q4 from 33.8%, while equipment margin was a negative 14.1% for the quarter, compared with a negative 25.6% in the prior year. The primary driver of the improvement in overall margin was due to the revenue mix for the quarter. As the transaction volume and equipment revenue decreased due to COVID-19, the higher margins associated with our license revenue stream positively impacted the overall margin. While the discussions on this call are primarily related to our fourth quarter results, there is one item to highlight related to the full year. As more fully disclosed in the earnings release, we have reclassified certain items from SG&A into investigation, proxy solicitation, and restatement expenses.
We reclassified these amounts in order to more succinctly highlight the approximately $37 million we incurred related to these activities over the past two years, as well as allow us to prospectively highlight the changes in SG&A. Operating expenses in the fourth quarter totaled $21.5 million, an 11.7% increase over the prior year. SG&A expenses in Q4 FY 2020 were $12.5 million, which decreased 18.3% from $15.3 million in Q4 FY 2019. The decrease was primarily a result of reduced professional services cost of $3.2 million, as well as a reduction in marketing-related expenses of $900,000.
Partially offset by increases in payroll and facility-related expenses of $1.4 million. The other large movement in OpEx related to the increase in Q4 investigation, proxy solicitation, and restatement costs. As noted earlier, while these costs are behind us, we did have $5.2 million more of expense in Q4 FY 2020 than the prior year quarter.
Our operating loss for Q4 FY 2020 is $10.4 million, which compares to a loss of $9.5 million in the prior year period. Net loss for the fourth quarter was $11.4 million, or $0.18 per basic share, compared to net loss of $9.9 million, or $0.16 per basic share in the prior year period. Adjusted EBITDA for the fourth quarter was a negative $100,000, compared to a negative $4.6 million in the prior year period. Regarding liquidity, the company had $31.7 million of cash and cash equivalents as of June 30, 2020. In addition, as Sean indicated, on August 14, the company entered into a new credit agreement with JP Morgan Chase and repaid all amounts outstanding under the loan agreement with Antara.
The new credit agreement provides for a $5 million secured revolving credit facility and a $15 million secured term facility, which includes an uncommitted expansion feature that allows the company to increase the total revolving commitment and/or add new tranches of the term loans in an aggregate amount not to exceed $5 million. I will now turn the call back over to Sean.
Thank you, Wayne. As you may have seen in our earnings release, while many of our peers are not giving financial guidance due to the uncertainty presented by COVID, we did introduce guidance for fiscal year 2021. For top line, we are expecting a range of $170 million to $180 million in revenue. As many of you know, COVID still raises a lot of uncertainty. This range assumes no further unforeseen COVID-related impacts, which could create substantial economic duress later this year and into calendar year 2021. This range also expects that the first half of the fiscal year will be impacted both by the COVID-19 pandemic and our continued turnaround in the business. It also assumes that the second half of our fiscal year will be a more amenable environment than the first half in terms of office, school, and hotel traffic.
We expect that most of the heavy lifting of the turnaround will be completed during this calendar year and anticipate that we will begin to see the benefits of our investment and refocused sales efforts in the second half of our fiscal year. While the impact of COVID-19 to our top line is largely beyond our direct control, there are many other levers within our control as it relates to adjusted EBITDA. For the fiscal year, we're expecting a range of $2 million and $5 million. Just like the top line, we expect EBITDA growth to accelerate in the second half of the fiscal year. In the fourth quarter, we achieved improvements in important areas which we believe are reflective of disciplined execution of this new management team. While we're encouraged by the short-term results, our turnaround and full transformation of the business is not a short-term exercise.
With the new senior management team now in place, a reorganized business structure, a redesigned sales force, and a stronger capital structure, I am excited about our jumping-off point for FY 2021. While we are not yet out of the woods in terms of the headwinds presented by COVID-19, and our G&A is not consistent with a business of our size, I strongly believe that the work and investment we are putting in during the first half will start to bear fruit in the second half of the year. Lastly, I know everyone is interested in getting an update on our NASDAQ relisting efforts. I'm personally involved in making sure we do everything we can do to achieve this goal as expeditiously as possible. We will provide updates as we know more.
Just to wrap up, while we may experience a few bumps this year due to legacy and external factors, we have an incredible foundation from which to grow this business and will emerge stronger. With that, we will hand it back over to the operator for questions. Operator?
Certainly. Ladies and gentlemen, as we begin the Q&A, we will now open the call for questions. Please limit your call to two questions. If you have any additional questions, please add yourself back into the queue. Thank you. Our first question comes from the line of Michael Latimore from Northland Capital Markets. Your question, please.
Great. Yeah, thanks. I guess on the gross margin, license and transaction gross margin, very strong. As you think about transaction volumes coming back and the new processor, where does that normalize around?
Mike, I think that the product mix in Q4 was strong as transactions were down and also showed the strength of our licensed line. We would expect that will come back a little bit more in line as the transactions grow. As you know, those are not as profitable as our licensed part of the business. I would expect that'll come down a bit from what we saw in Q4.
Yeah. Then I think last quarter you talked a little bit about transaction volumes, kind of getting to a certain percent of pre-COVID levels and then improving from there. Do you have that kind of data sort of more recently?
Yes. Through the summer, I think the COVID kind of increase in transactions flattened a bit. What we're seeing is that compared to quarter-over-quarter, transactions are down somewhere 10% to 15% kind of on a weekly basis. Now that is a little bit not apples to apples, in that we do have more devices that are in the field. We think that when it does begin to come back and people are back in offices, we will see some acceleration. If you look at where we were in February, kind of at the high water mark for this year, we're off somewhere in the 20% to 25% range on transaction volume. Significantly off where we were earlier in the year.
Got it. Okay. Great. Just on OpEx, you talked about $12.5 million of SG&A, and then I think it was $1.1 in D&A. Is that kind of a good sort of baseline for the September quarter?
I'll let Wayne answer that one.
Hello, Mike. Thanks for the questions. Relative to the first quarter, the revenue and EBITDA guidance that Sean gave sort of bakes in all of the quarters and how we see them now. Maybe a more direct answer is, it's early innings, and as Sean talked about, the first half is going to be continued investment, which will impact our EBITDA and our SG&A cost. Then in the second half of the year, we see that scaling.
Got it. Okay, great. Thanks a lot. Good luck.
Thank you.
Thank you.
Thank you. Our next question comes from the line of Robert Napoli from William Blair. Your question, please.
Thank you, and good afternoon. I guess first question would be on the Cantaloupe, the cross-sell, and I think that you had said that you felt you could get the penetration rate up to close to 100% of the customer base. I was wondering what the percentage penetration is today, and what gives you the confidence that you could increase the cross-sell that dramatically?
This is Sean. What I would say is we would love to have it at 100% of our USAT customers. We believe that we're around 50% penetrated now. We've reorganized the sales organization and kind of focused them more on the Seed platform as an important part of their compensation plans. It's early in that we've kind of changed that direction, and what we think we will see is growing pipelines in the first half with growth starting to be delivered in the second half of the year.
Okay. Maybe let me ask one on capital, on the capital levels of the business and getting the financing from JPMorgan. Are you where, Sean, where you want to be on the capitalization of the business, or is there more work to do, and do you need to do that, not only for the health of the business, but also to get re-listed?
I don't think that has an impact on re-listing, Bob. I think that we feel that we can fund the business with the capital we currently have. We are looking at kind of are there other actions that we should take, but no decisions at this point.
Okay. Maybe just sneak in one last one. What are your views on the white space for your business, the TAM in the white space and your current share of the market? Kind of a broad question.
Yeah. I think as we've talked about, we think that there is ample room for penetration of the Seed platform into the USAT customer base. I think that we do also believe that there's still room for expansion with cashless and our platform as a whole. I think we've seen some of the adjacent kind of industries to vending be very negatively impacted by COVID-19, which has kind of brought those really to a halt or a stop or a significant slowdown. We think there's ample TAM to get to the growth that we want by continuing to expand our cashless part of the business. Really, we're focused on the solution sale of our platform as a whole.
As Anant talked about, we're beginning to work on some international expansions as well that, while probably may not bear fruit in this fiscal year, we'll definitely be counting on in fiscal year 2022.
Thank you. Appreciate it.
Thank you. Our next question comes from the line of George Sutton from Craig-Hallum. Your question, please.
Thank you. First welcome to Wayne. I wondered if you could break down how you're thinking about equipment versus license and transaction business going forward, in particular, how you're thinking about equipment sales. Are you looking to bring more partners in, particularly from a financing perspective, that might alter the way your revenues flow, but obviously have a favorable effect on margins?
George, we've focused on looking at the supply chain part of our business. We hired a gentleman in the fourth quarter that came to us from Ingenico and was involved with their supply chain. We're looking at all aspects of that and ways that we can best manage that part of the business from a cost point of view. I think that we have partners for leasing and financing of hardware for people, and I think that we will look to expand that and have as many options as we can for customers. We're looking at all of that, but not a lot that, decision-wise, that I can talk about yet.
Could you give us a bit of detail on the sales force realignment? How are you now structured differently than you were before?
Sure. I'll ask Anant to talk through what he's done with his organization to focus them on the customer and the sales of the various segments. Anant?
Sure. In the previous organization, sales, marketing, and customer service were different functions reporting to different leaders in the business. What we found is that it was fairly siloed off. In terms of the overall customer experience of working with our company and our solutions, lots of hands-off, hands-on transition issues when questions would come up or sales opportunities would come up, and it just wasn't very efficient. What we've done is we've, under my organization, brought all those functions under one umbrella. From marketing to sales to customer service to implementation teams and operations, all that now comes under one umbrella. Now when sales opportunities are coming up, all the leaders of each of those functions are aligned. They're communicating a lot more.
That's what we're evolving to in terms of driving a more SaaS enterprise-level consumer experience working with our business. Specific to the actual sales force itself, we are realigning what we call different tiers of how we attack the market in terms of the small, medium, large operator base, and putting the right skill sets that were a little bit misaligned before and hiring more people against the enterprise and larger-sized operators.
Got you. Finally, since NFL season started tonight, we're going to start betting again. I'm going to make a bet that Fernando does better than eight X that he did at Verifone in your Latin America market over the next three years, I'll take any bets, any comers. That's it for me.
I would love to be on that side of the bet with you, George. We've got high expectations for Fernando, and he'll hit the ground running in about a week and a half. We're excited to have him and he did some great things for Doug Bergeron at Verifone, and Doug strongly endorsed that we bring him on and have him begin working in that part of the market.
That's great. Thanks.
Thank you. As a reminder, ladies and gentlemen, if you have a question, please press star then one. Our next question comes from the line of Gary Prestopino from Barrington Research. Your question, please.
Hi. Good afternoon, everyone. I wanted to just ask on, Anant, some of the things that you were talking about in terms of new verticals and new markets. I didn't quite get the markets, first of all. Did you say Mexico was one, and then could you give us another one?
Yeah. We're focused on our international expansion for markets around Asia and in Latin America.
Okay. Asia and Latin America. Okay. Your platform can work in all of those different regions. You can go international with the platform that you have, right?
Correct. Like I mentioned in the earlier talk, our focus is really to leverage our IoT and software services as our tip of the spear into those markets. Cashless is something we're going to lean on partners as we get into these markets, primarily because I think a lot of people know it takes a lot of time and is very expensive to certify cashless solutions in new markets. That's our strategy as we look at these two regions.
Okay. That led me to the second question. You talked about they always used to lead with cashless under the prior regime. You're going to be moving more towards trying to sell that enterprise solution that you got with the Cantaloupe acquisition? If cashless comes, that's secondary?
Yeah. The way we view this. Oh, sorry, Sean.
No, go ahead, Anant.
The way we view our platform, when we talk about platform, it's all the services we provide, right? Ultimately, it's a platform that provides IoT, data, logistics, cashless payments. All of these are services around essentially the full platform that we provide, and our customers that are all in with us leverage all of those technologies and get the best benefit from the full platform. When you go into new markets, when you talk to operators, you talk to customers, some may have cashless as a priority, some may have logistics optimization as a priority, some may just want connectivity. Historically, if it wasn't cashless first, we didn't really know how to engage with those customers.
With the Cantaloupe platform integrated with the ePort platform, we now have a breadth of all those services. Now we're making it easier for our sales organization and our customer service organization to engage with customers to get onto our platform and any of those services as a first piece, but with the eye towards bringing it all on over time.
Okay. Then I just wanted to ask about the remote pricing. Are you the only one in the market now that has that? Nat, you want to comment on that?
Yeah, sure. The promise of remote pricing has probably been talked about in this industry for 15, 20 years.
Functionally, at a high level, sending a new price to a machine is not the hard part. The hard part really is how do you build it into an operative workflow processes, where if they're doing remerchandising their machines, they have to get a software platform that tells them, "These are the prices you want to take." Well, you need to also change the prices if the prices are different. There's a whole bunch of different use cases that use the underlying technology of Remote Price Change.
Today, I believe, we are the only ones that have actually delivered on some of these workflow processes that take into account not just the actual RPC piece, but how does an operator use it at scale.
Okay. Thank you.
Thank you. Our next question is a follow-up from the line of Robert Napoli from William Blair. Your question, please.
Just a question on the health of the customer base. Obviously, your market segment, portions of it have been hit really hard by COVID. Have you seen customers go out of business, or have you seen many customers go out of business? Just maybe some commentary around the strength of the customer base.
Yes. I think we've definitely seen some small customers either sell out or in some cases, not many go out of business. We've really seen kind of a mix of impact. If you can imagine, if your business is predominantly a coffee in an office in a major city, your business is really struggling. I was with a customer the other day that said that they had seen good kind of beach season, but now this is normally when the beach ends and school and college comes back, and their school business K through 12 was down 90-plus% year-over-year, and their college was off 45%. We really need kind of to get back, as I said earlier, into I think it was George that talked about the NFL.
We need people back in offices, kids back in school, kids in college fully engaged, people back in hotels. I've been traveling a little bit. Hotels are, while a little bit more than they were a month ago, they're still predominantly empty. Sporting events. There's a lot of vending at sporting events.
COVID, while the stock market is up, continues to kind of really hit our customer base pretty significantly.
That's what I would expect, I guess. On the technology side, what upgrades, where do you need to invest? Where are you investing and what kind of new releases or upgrades are you working on?
The biggest thing that Jeff Boat and I and the team have been working on is the prior management made a lot of commitments to partners, a lot of commitments to customers that they did not follow through on and have a really good, disciplined process. We've been rationalizing well over 100 deliverables, down into the ones that make the most sense. In some cases, we were doing a lot of work for very little revenue while we let things that could drive good revenue stand in line behind them. That's the main thing that we're working on through the first half of the year. We're working on with our customers with Remote Price Change and getting all of the various ePort devices available to work with that, and that really begins to unlock the power there.
We're looking at a number of other things that we think can drive revenue. To the earlier question of around international, of course, there would be translation work and some integration work. Ultimately, what we want is our platform to be very easily integratable to other pieces of software. As you get into larger customers, that becomes more and more important, and that's an area of focus for us of looking at how we can do that faster, quicker, and it could potentially also be a revenue line for us.
Thank you. Just a follow-up on Latin America, what's the game plan from a team hiring or marketing? What's the expense that's going to go along with that? An exact timeframe?
to get material results, maybe a year from now or something like that, it sounds like. What's the opportunity?
Great question. I think that what we believe is that Fernando, who we've hired, knows that market very well as he has worked there for a great number of years. I think he's had a lot of success with partnering. We believe that the success internationally is looking for partnerships that we can work with and drive. In the near term, he's basically assessing the various markets and looking for opportunities that we can ultimately grow. As I said earlier, I would love to see something in this year, but it's probably a 2022 before we begin to see impact on that. Fernando's done it before, and I'm counting on him to find us some great opportunities that we can take advantage of. As we sit here today, we know the software works.
There may be some localization that we need to do and maybe some integration that we need to do there as well.
Is there something to acquire that makes sense? Are there platforms, are there small businesses or anything that you're looking at or would be interested in there?
I think that's all part of our strategy. I think in the near term, I'm trying to get the company on very solid financial footing. Those sort of opportunities, when they arrive, we have the capability to take advantage of them.
Many times moving into new markets, M&A is a way to do it. Partnering is another way. I don't think you'll see us just go by ourselves in new markets. That's very difficult.
Thank you. Appreciate it.
Great.
Thank you. Our next question is a follow-up from the line of Gary Prestopino from Barrington Research. Your question please.
Yeah. Is it possible to just get some statistics for Q4? I didn't see them in the release, but can you give what the gross connections were, number of transactions, and the dollar volume, transaction volume?
Wayne, I don't know if you have that. I don't.
Okay. Yeah. All right. Sean, just wanted to ask you, as you've gone around and talked to your client base, what were some of the pinch points there that the client base maybe cited of things that were not done correctly or were not done to their liking that you can really strive to improve going forward?
I think there's a couple. One is, we need to be better in our customer service area. What I heard from customers was, "You're not servicing us well." In the near term, we are adding some people there, and looking at how we could best do that. We've got some people that are not happy with the way that we have serviced them over the last couple of years. Secondly, I think as I talked earlier, the sales organization made a lot of commitments that weren't necessarily well-coordinated through the organization. We're working our way through that and working our way out of it. I think that there are things that we've let sit through various reasons, that we are correcting and in some cases, having tough conversations with people that, "Hey, we're not going to do this.
There's just not enough revenue. In other cases, we're trying to accelerate deliverables because they ultimately could drive revenue.
Okay. All right. Thank you.
Gary-
Gary, excuse me, this is Wayne. The connections are 35,000 for the quarter, brings our total connections to 1.3 million.
No, we have that. I was asking what the gross connections were and what the transactions and the volume. That's data that you usually give. You put it in the Q, but obviously the K is not going to be ready for a while. If you don't have that handy, that's fine.
Yeah. I don't. Yeah.
Okay. Thank you.
Thank you. Our next question is a follow-up from the line of Michael Latimore from Northland Capital. Your question please.
Great. Yeah, just had a question about further Seed penetration. If you're at kind of 50% penetration of base and you have another 50% to go, how much of that incremental amount is kind of greenfield versus replacing a legacy system that may be in place?
Anant, you want to comment on that?
Yeah, sure. I don't have the rough percentages for you on this call, but directionally, most of the larger operators out there, thousands of machines, if they're not on Seed already, they're usually on some sort of competitive software solution in the marketplace. They tend to be fairly old legacy platforms. That's been a big target for our sales organization. On the small operator side, they basically have nothing. We feel like that's a really large white space that we're going to go after with some investments on the Seed side.
Great. Regarding the study you did about where you had some data on contactless transactions. Did you have visibility into what percent of your current transactions are via some sort of contactless, credit card or Apple Pay?
As we said, we've seen really a lot of growth in contactless. Within our transactions, it's grown from about nine percent in the beginning of the year, to the high teens.
through the first two calendar quarters. There's a lot of focus around contactless in the market, and while growing off a small base, that's pretty significant growth.
Yeah, definitely. All right, thanks.
Thank you. This does conclude the question and answer session. I'd like to now turn the program back to management for any further remarks.
Well, thanks everyone for listening and your interest in USA Technologies. We will talk to you soon. Thank you, operator.
Thank you. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.