Nayax Ltd. Q3 FY2025 earnings call

• Technology: Made progress on key initiatives. In Australia, began rolling out the Bipos Media and started initial launch of the Vipose media in the UK and Europe. In China, six OEM partners completed UNO Mini SDK certification. Retail Pro integrated with One Bit AI-powered inventory optimization engine.
• Customer and partnership: Success with ChartSmart in EV charging, collaboration with Adient in e-commerce embedded banking, and completed purchase of remaining shares of Tigapo.
• M&A: Signed letter of intent to acquire Integral Vending, completed purchase of remaining shares of Tigapo, and launched rental business in Australia under Nayax Ltd. Capital.

In the third quarter, Nayax Ltd. reported revenue of $104.3 million, an increase of 26% compared to Q3 2024. Recurring revenue, which includes payment processing fees and SaaS subscription revenues, increased by 29% compared to Q3 2024, reaching $77 million and representing 74% of total revenue in Q3. Processing revenue grew by 33% to $48 million in Q3, driven by a 17% increase in the installed base of managed and connected devices and a 35% increase in dollar transaction value. Hardware revenue in the quarter grew 18% to $27 million compared to $23 million in the same quarter of the previous year. Gross margin increased to 49.3% compared to 45.7% in Q3 2024, driven by higher recurring and hardware margins. Recurring margin increased to 53.6% from 50.1% in the prior year quarter, and hardware margin increased to 37% compared to 34.4% in Q3 2024.

Reiterated organic revenue growth guidance of at least 25% driven by enterprise hardware sales in the fourth quarter. Adjusted the full-year revenue outlook to a range of $400 million to $405 million on a constant currency basis, representing revenue growth of 27% to 29%. Expect adjusted EBITDA margin of at least 15% and other margins in the range of 30% to 35% for the full year.

Planned M&A transactions have been delayed, which may impact the expected financial contribution. Market competition and potential challenges in integrating acquisitions successfully.

Q: Josh Nichols asked about EV partnerships shipment timing and smart cooler market offerings.

A: Aaron Greenberg responded that EV charging is accelerating, with hardware revenues related to EV charging customers seen in Q3 and expected acceleration in Q4. Also mentioned partnerships in smart cooler market with signings in US and Europe.

Q: Cristopher David Kennedy inquired about embedded banking, e-commerce, and average ticket values.

A: Yair Nechmad and Aaron Greenberg discussed that embedded banking will launch in Q1 2026 in US, e-commerce for EV starts in 2026, and average ticket values are growing in verticals like EV charging, car washes, etc., with factors like cashless conversion and vertical growth driving this.

Q: Hannes Leitner asked about acquirer optimization, M&A appetite, and US market competition.

A: Yair Nechmad talked about transaction routing optimization, Aaron Greenberg mentioned continuing prudent M&A with appetite for larger acquisitions if strategic, and no change in US market competition outlook.

Q: Sanjay Sakhrani inquired about hardware visibility, M&A delay impact, and 2028 guidance breakdown.

A: Yair Nechmad spoke about hardware visibility in Q4, Sagit Manor and Aaron Greenberg discussed M&A delay impact on financials and the breakdown of 2028 guidance with organic and inorganic contributions.