Nayax Ltd. (Israel) Q4 FY2024 earnings call

Key Financial Highlights - 2024 revenue increased 34% to $315.2 million on constant currency, with recurring revenue at 71% of total. - Adjusted EBITDA reached $35.5 million, exceeding guidance. - Positive free cash flow of $18 million generated. - Total transaction value increased 36% to nearly $5 billion, customer base expanded 32% to over 95,000, and installed base of connected devices grew 21%. ### Customer Success Stories - In the US, extended partnerships with CandyMachines and Pelican Group, and strengthened with Minnesota Vending. - In El Salvador, launched automated self service payment solution. - In the UK, deployed OTI PetroSmart Fuel Management System in Tesco's fleet. - In Europe, secured agreements with large buying groups. ### Strategic Focus - 2025 focus on automated self service market, retail, and energy verticals. - Emphasis on OEM partnerships, with over 2,400 OEMs globally. - Expansion in Latin America via acquisitions like VMtecnologia and UPPay. - Pay at the pump solution via Roseman Engineering acquisition to address gas station technology gap.

In 2024, Nayax's revenue reached $315.2 million, a 34% increase on a constant currency basis. Recurring revenue grew 47% for the full year, representing 71% of total revenue. Processing revenue grew 45% to $133.8 million, driven by a 21% increase in the installed base of managed and connected devices, a 36% increase in dollar transaction value, and a higher take rate of 2.73%. Hardware revenue grew 9%. The installed base of managed and connected devices grew 21% to 1,260,000 devices at the end of 2024.

2025 Guidance - Revenue growth expected 30%-35% (constant currency), range $410 million to $425 million, with organic growth at least 25%. - Adjusted EBITDA guidance $65 million to $70 million, driven by revenue growth, market expansion, M&A integration, and operational optimization. - Expect at least 50% free cash flow conversion from adjusted EBITDA in 2025. - Target 35% annual revenue growth and 50% gross margin by 2028, with adjusted EBITDA margin of 30%.

Risks - Forward-looking statements subject to risks and uncertainties causing results to differ materially. - Foreign currency volatility impact on financials. - Execution risks in M&A integration and go-to-market strategies. - Macroeconomic uncertainties affecting cashless payment adoption and market expansion.

Q: About 2025 guidance and organic growth, how to parse moving parts and phasing?

A: Sagit Manor mentioned 2025 growth includes market share expansion, recurring revenue, and customer base growth, with seasonality similar to 2024.

Q: On OpEx and bridging into next year?

A: Sagit noted adjusted OpEx efficiency, with M&A integrations expected to lower OpEx over time.

Q: On cash generation next year?

A: Sagit stated confidence in 50% free cash flow conversion similar to 2024.

Q: On M&A contribution, split of completed vs pipeline?

A: Aaron Greenberg said existing completed deals like Roseman, VMtecnologia, UPPay contribute, with pipeline to bridge inorganic growth.

Q: On POS certifications and POS mix?

A: Yair Nechmad said EV certifications passed, and POS mix expected to continue shifting.

Q: On ARPU expansion drivers?

A: Aaron Greenberg said ARPU growth from cash-to-cashless conversion in existing devices, verticals like micro markets and EV driving it up.

Q: On ARPU by categories?

A: Aaron Greenberg said ARPU mix mostly from traditional unattended, with micro markets and EV starting to drive it up.

Q: On 2028 business mix?

A: Yair Nechmad said unattended with EV as a major part, aiming for billion-dollar revenue by 2028.

Q: On Q4 processing margin and 2025 outlook?

A: Sagit Manor said Q4 processing margin was 36.3%, expecting margins to continue around 34% in 2025.

Q: On ARPU by verticals?

A: Aaron Greenberg said ARPU disclosure first, with traditional unattended being majority, micro markets and EV driving up.

Q: On 2025 FX headwinds and take rate sustainability?

A: Sagit Manor said 2025 to have similar tailwinds, take rate sustainable with cash-to-cashless conversion and market trends.