Prepared remarks
Hello, everyone, and welcome to Nayax's First Quarter 2025 Earnings Conference Call. As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Aaron Greenberg. Please go ahead, Aaron.
Thank you, operator, and everyone, for joining us today on this conference call. With me on the call today are Yair Nechmad, Nayax's Co-Founder and Chief Executive Officer; and Sagit Manor, Chief Financial Officer. Following management's prepared remarks, we will open the call for the question-and-answer session. Our press release and supplementary investor presentation are available on our Investor Relations website at ir.nayax.com. As a reminder, during this call, we'll be making forward-looking statements. All forward-looking statements on our call today are based on assumptions and therefore are subject to risks and uncertainties that may cause results to differ materially from those projected. We have no obligation to update these statements, except as required by law. You can read about these risks and uncertainties in our supplementary investor presentation released earlier today and our regulatory filings.
In addition, today's call will include a discussion of non-IFRS measures. Management believes non-IFRS results are useful in order to enhance our understanding of our ongoing performance. However, these measures should be considered as a supplement to and not as a substitute for IFRS financial measures. A reconciliation between Nayax's non-IFRS to IFRS measures can be found in our earnings press release issued earlier today. All key performance indicators are intended to evaluate our business and properly measure factors in a macroeconomic environment to guide and support our decision-making. These key performance indicators may be calculated in a manner different from the industry standards. And finally, please note that all figures in today's call will be reported in U.S. dollars unless stated otherwise. Yair will start the call with key financial and operational highlights. Following that, Sagit will go through the details of financial results and discuss the outlook. And with that, I would like to turn the call over to Nayax's CEO, Yair Nechmad. Yair?
Thank you, Aaron, and thank you, everyone, for joining the call this morning as we share our results for the first quarter and highlight the progress we are making across the business. Nayax is off to an excellent start in 2025 as we continue to execute on driving profitable top line growth, improving our recurring revenue mix, increasing our market share and expanding our geographic footprint. As a key milestone, we ended the quarter with more than 100,000 customers globally, which is a testament to Nayax being a trusted partner and leading payment company. I couldn't be more pleased with where we are today as an organization as we continue to scale the business for the long term. Revenue for the quarter saw a strong increase of 27% over Q1 2024, reaching $81 million and grew by 28% over Q1 2024 on a constant currency basis to $82 million, driven by continuing momentum from both new and existing customers.
Most notably, recurring revenue grew by an impressive 35% over Q1 2024, representing 77% of total revenue in Q1 compared to 72% in the same quarter last year. This growing share of high-margin recurring revenue continued to demonstrate the strength and resilience of our business model, a critical driver to our long-term growth and profitability targets. Turning to profitability. Adjusted EBITDA came in at $9.7 million for the quarter, representing approximately 12% of total revenue. This underscores our disciplined focus on delivering profitable growth while expanding our top line. I would now like to highlight three key performance indicators for the quarter that we consider primary measures of growth. First, total transaction value increased by more than 18% over Q1 2024, reaching more than $1.3 billion, which combined with a higher take rate of 2.75% drove strong processing revenue growth for the quarter.
Second, our customer base expanded by more than 30% since Q1 2024, reaching more than 100,000 customers at the end of Q1, up from 95,000 at the end of 2024. And third, our installed base of managed and connected devices grew by 20% since Q1 2024 to more than 1.3 million devices at the end of the quarter. These KPIs reflect not only the momentum in our business and the underlying strength of our platform, but also demonstrate the flywheel effect and the success of our go-to-market strategy. I'd like now to share some customer success stories and key developments from the quarter that highlight our continuing expansion in the automated self-service space. In Q1, we launched our cloud-based food service kiosk solution in the Brazilian market, a key step in our retail strategy. This rollout brings our modern cloud-based POS software to a market that is still dominated by legacy providers with limited automation and a population of over 200 million people.
We are already seeing our solution deliver strong customer value, and we believe Brazil represents significant potential in this vertical. Looking ahead, Latin America remains a strategic growth region and one of our fastest-growing markets. We also announced a strategic partnership with N-and Group to launch next-generation smart screens for OEMs featuring Nayax's embedded payment capabilities. This collaboration is a strong testament to our commitment to delivering seamless embedded payment to our OEM partners who typically bring high-volume deployment and enhance customer stickiness. In addition, we are seeing strong momentum in two high-potential self-service verticals, micro markets and smart coolers. Our end-to-end control of hardware, software, and payment processing sets us apart from competitors that rely on third-party systems or lack infrastructure to operate as payment facilitators.
This integrated approach delivers higher reliability, greater uptime, and fewer operational issues for merchants. By managing the full payment flow, we eliminate the need for third-party onboarding and enable faster, more transparent transactions. We view these verticals as important drivers of our future growth. Finally, as part of our continued investment in the EV charging space, we deepen our presence in these key verticals by expanding our customer base and securing more strategic partnerships with leading OEMs, charge point operators, and charging software platforms. For example, we expanded our partnership with BTC Power, one of the largest OEM providers of EV chargers in the U.S., who selected Nayax as their preferred cashless payment provider. Our partnership will provide BTC Power with leading payment technology in the EV industry, giving their customers a best-in-class combined platform.
We also introduced a new feature for our Easy kiosk product that enhances user experience by clearly separating card-present payments from mobile access to charging station details, simplifying the customer experience and reinforcing our role as a leading provider of integrated payment solutions for the EV ecosystem. With each of these customer success stories and key developments, we continue to establish Nayax as a leading provider of cashless payment and management solutions, driving innovation and growth across multiple industries and markets. Let me now turn to recent acquisitions. In February, we acquired UPPay, a leading digital payment and telemetry provider for automated self-service coffee machines in Brazil. This acquisition, combined with our 2024 purchase of Vmtecnologia, expands our reach to more than 50,000 managed and connected devices across Brazil, strengthening our position in the Latin America market.
During the quarter, we also completed the purchase of the majority of shares of Tigapo LTD, an associate company focused on family entertainment centers. We acquired an additional 30% of Tigapo's shares, increasing our ownership from 54% to 84%. In April, we acquired Inpro Pay, our longstanding distributor in the Benelux region. This move continues our strategy of consolidating distribution channels, improving operational efficiency, and bringing us closer to our European customers through the establishment of a full-service Nayax office in the Netherlands. Europe remained a core market accounting for approximately 36% of our global revenue in 2024, and this acquisition reinforced our commitment to growing in the region. Looking forward, we are excited about our near-term growth opportunities, and our business fundamentals remain solid with a relatively low penetration of cashless solutions in both unattended and attended markets.
Our TAM is large and growing, driven by the shift from cash to digital payments. While we continue to pursue strategic M&A, organic growth remains our primary building block and will continue to be the main driver of our growth. With our expanding pipeline, we are well positioned to continue outpacing the broader payment industry and delivering exceptional value to our customers. With that, we are reaffirming our full-year 2025 guidance. Furthermore, we are confident that we can consistently expand our revenue and margin over the coming years to achieve our 2028 annual target. With that, I'll turn it over to our CFO, Sagit Manor, who will review our financial results in greater detail.
Thank you, Yair, and good morning, good evening, everyone. I'll start by reviewing our solid financial performance for the first quarter and then discuss our outlook for the full year 2025, which, as Yair mentioned, we are reaffirming. Revenue for the first quarter was $81 million on a reported basis, an increase of 27% over Q1 2024, as we continue to gain market share, adding nearly 5,000 customers this quarter. On a constant currency basis, revenue was $82 million, representing a 28% increase over Q1 2024 with an impact of approximately $700,000 due to foreign currency volatility in the quarter. Organic revenue growth for the quarter was 18%, which is consistent with our prior year's first quarter performance and the seasonality of the business. We expect organic revenue growth to accelerate throughout the remainder of the year and are confident with our guidance of at least 25% organic growth for the full year.
Recurring revenue, which includes payment processing fees and SaaS subscription revenues increased by 35% compared to last year's first quarter to approximately $62 million and represented 77% of our total revenue in Q1. The favorably improving recurring revenue mix was driven by strong expansion in the U.S., European, and Brazilian markets. More specifically, processing revenue grew by 30% to $37 million in Q1, driven by three main factors. First, an impressive 20% increase in our installed base of managed and connected devices. Second, a strong nearly 18% increase in dollar transaction value; and third, a higher take rate of 2.75%. This processing revenue growth continues to demonstrate our success as a scalable and valued payment partner to our diverse customer base as the market continues its cash-to-cashless conversion. On a sequential basis, Q1 processing revenue was in line with Q4 2024.
Historically, processing revenue growth is seasonally slower in the months of January and February with greater acceleration in March and the remainder of the year. As we look to Q2, processing revenue growth to date is in line with prior year growth rates and is within our internal expectations. Hardware revenue in the quarter was $19 million with strong demand for our products, solutions, and technology supporting both the unattended and attended markets. This represents a 6% increase over Q1 2024. In the quarter, we added more than 69,000 managed and connected devices to our installed base, which includes 44,000 devices organically and 25,000 devices associated with our acquisition of UPPay. Managed and connected devices increased 20% over Q1 2024, reaching more than 1.3 million devices at the end of the first quarter. Moving now to profitability and margins for the quarter. Gross margin was 49% compared to 44% in the last year's first quarter.
More specifically, our recurring margin increased to 52% from 50% in the prior year quarter as we renegotiated key contracts with several bank acquirers and improved our smart routing capabilities. On the hardware side, our margin increased significantly to 39.5% compared to 27.3% in Q1 2024 and 30% for the full year 2024. While Q1 was an extraordinary quarter for our hardware margin, it was driven by customer sales mix, the continuing optimization of our supply chain infrastructure, and better component sourcing and cost. For the full year, we currently expect hardware margins to be higher than last year and within the range of 30% to 35%. With respect to tariffs, as previously disclosed, we are holding our current hardware pricing for U.S. customers steady despite new tariffs being imposed on imports to the United States. This decision underscores Nayax's commitment to our customer growth and their operational excellence while showcasing the strength of our global operations.
As for the rest of the world, we will continue to actively monitor its impact on our business to ensure we adapt and thrive positively. While total revenue grew by 27% over Q1 of last year, total gross profit grew significantly more by 43% to nearly $40 million. Adjusted OpEx of $30.5 million or 38% of revenue, better than last year's first quarter, is a testament to our disciplined cost management. Adjusted EBITDA increased to $9.7 million, representing 12% of revenue compared to 6% of revenue, a solid improvement of more than $6 million compared to last year's first quarter and demonstrating the continuing scaling and operating leverage of the business. Other income was $6.1 million, which includes a one-time gain from obtaining control of Tigapo. Operating profit was $7.9 million for the first quarter. Excluding the one-time gain associated with Tigapo, operating profit would have been $1.8 million, a significant improvement from an operating loss of $2.8 million in last year's first quarter.
Net income for the quarter was $7.2 million or an EPS of $0.195. Excluding the one-time gain related to the share purchase of Tigapo, net income would have been $1.1 million, a significant improvement of $6.1 million compared to a net loss of $5 million in the prior year period. Turning to our balance sheet. In March, we completed a note and warrant offering, raising net proceeds of approximately $133 million. We used some of those proceeds to repay higher-cost short-term and long-term debt, optimizing our leverage ratio. At March 31, 2025, cash and cash equivalents and short-term deposits totaled $176.8 million, while short- and long-term debt was $142.2 million, maintaining a solid balance sheet and net cash position. Looking at cash flow, we generated $1.3 million from operating activities. Free cash flow for the quarter was negative $5.7 million, mainly due to the timing of cash settlements from processing activities.
Turning now to our outlook and referring to our forward-looking information disclosure in our press release. For the full year 2025, we are reaffirming our financial outlook of revenue growth of between 30% to 35%, representing a revenue range of $410 million to $425 million on a constant currency basis. This includes an organic revenue growth of at least 25%. Consistent with prior years and reflecting the seasonal nature of our business, we expect stronger performance in the second half of the year, driven by continued revenue growth across both Tier 1 and SMB customers. Our guidance for adjusted EBITDA remains unchanged at between $65 million to $70 million, driven by continued revenue growth, market expansion, the full integration of recent acquisitions, and continued operational optimization. We also expect at least 50% free cash flow conversion from adjusted EBITDA for the full year 2025.
As Yair reiterated for our 2028 targets, we continue to project annual revenue growth of approximately 35%, driven by a combination of organic growth and strategic M&A. We also continue to target a gross margin of 50% and an adjusted EBITDA margin of 30% as we continue to drive high-margin SaaS revenues and operational efficiency. In closing, we are extremely well positioned for future growth in 2025 and beyond as we continue to grow our installed base globally and capture market share. We'll also continue to focus on scaling our recurring revenue streams, particularly our payment processing capabilities, which benefit from the conversion trend of cash-to-cashless transactions. I'll now turn the call over to the operator for our Q&A session.
Questions and answers
And our first question comes from Hannes Leitner with Jefferies. Please proceed with your question.
Yes. Thanks for letting me in. I got a couple of questions. Maybe, I mean, you mentioned a couple of comments around the growth acceleration. Maybe you can just break that down into maybe the end markets where you see that. Also your comment around EV that you shipped there some cheaper things, how will that add to the whole thing? Then the second question is like on the cost optimization. You talked about 30% to 35% hardware margins for this year. That's still a very good improvement. Maybe you can talk then what is the next step to get to improve that? And on the hardware side, it looks like you had lower priced items if you look at the average cost per hardware device. And then maybe just like one thing on your transaction volume. It looks like the third quarter in a row that transaction volume had been flattish. Maybe you can talk there a little bit about the underlying trends and what kind of hampers the growth in payment processing. Thank you.
Hannes, it's Yair. Thank you for the questions. I'll start and Sagit will continue. Regarding the growth of Nayax, I think I can mention first from the ground, okay? I just came back from the NAMA show. I've been at a few shows, and the teams are all over the world in terms of shows, even right now in China shows in the OEM shows. We are very, very confident regarding the OEM part coming from what we see now very clearly regarding machines that need to be equipped with the Nayax devices connecting as we call it as a pulse device. And we see this as a very strong part of the future growth of Nayax, which we actually didn't touch on as we are doing today. So we get a very good confirmation for this. The second thing is personally, I've been in the NAMA show. It's the vending industry show in the U.S., the largest show in the North American market. We do have in our hands a Tier 1 customer that is showing a high intention to put their orders this year.
It's a major number of orders that they're going to put this year. The relationships that we have with them gave us a lot of confidence regarding the need and it's a must-have from their perspective. And third, from the shows coming from Europe, from the EV that just finished last week, we're seeing our fit into the market as the best solution for the market. As you know, we developed a kiosk solution. We have a full integrated solution in terms of telemetry and management and the ability for us to have a retrofit solution for payment. So if I summarize this, OEM is a very strong part that will come to life. EV is a very strong part that we're seeing the product fit to the market, and securing a Tier 1 customer's orders gives us a very high confidence that this year will be an excellent year.
Thank you, Hannes, for your question. Regarding the gross margin, it was an excellent quarter with continued margin expansion, consistent with our performance in previous quarters. Specifically for the hardware margins, we are improving our supply chain infrastructure and optimizing costs, along with integrating our recent acquisition, which also benefits our hardware margins. You asked about costs as well. We have seen a continued reduction in product costs and an increase in the average selling price this quarter, which is typically higher in Q1. This is reflected in our customer distribution, where 76% of our revenue came from small businesses, which usually show a higher average selling price. In response to your question about transaction value, historically, Q4 is similar to Q3, and Q1 tends to start off slowly. January and February were particularly slow, but as we mentioned before, March and April looked promising. Quarter-to-date, we are seeing expected growth in transaction value.
Thank you.
Our next question is from the line of Josh Nichols with B. Riley. Please proceed with your question.
Yes, thanks for taking my question. Just to dig a little bit deeper, some gross margin expansion when you look particularly at like the recurring piece. Overall, I know you've made some good progress on some of the transactions or new agreements that you have with the banks. Given that you expect the recurring piece of the revenue to ramp up and be particularly stronger in the second half of this year. Do you expect that gross margins are going to see some expansion as we move throughout the year? Or what do you think of the cadence for gross margins for the rest of the year from where they are today?
Thank you, Josh. So first, thank you for highlighting that, indeed, the margins are not only improved because of the hardware margins, but also from the recurring revenue standpoint, recurring margins improved from 50% to 52%. It’s exactly, as you said, our ability to renegotiate with the acquirers because of our growing purchasing power. Again, $650 million of transactions went through our devices in Q1. So definitely, that helps to improve the margins as well as the smart routing from our side, the ability to control where the transaction is going, which again gives us the ability to control and to improve the cost of the transaction and the margins as well. When I look at the remainder of the year, I see margins of the recurring revenue stay around where they are. So if I open the recurring revenue from a service perspective and SaaS, it’s going to be in the regular range that we know between 76% to 78%. If we look at the margins on the processing revenue, and we know that, that improved significantly from five quarters ago when it was around 27% to 28% to the 35-ish percent that we see right now, I'm expecting that to stay around the 35% to 36%. And add to that, the hardware margins that we expect to be between 30% to 35%, as I just mentioned, I see solid margin execution. And as we said, continued margin expansion as we continue in 2025.
Providing a little bit more color. Just curious, how should we think about the split between hardware for these device sales and the recurring piece? You did mention that there are some interesting opportunities in like smart stores and micro markets. Presumably, those are much higher value, right, than just selling like a reader. So when you look at the expectations for growth this year, 25% organic with total revenue of $410 million plus, how should we be thinking about the growth in the device sales versus the recurring piece overall?
Yair, maybe you would like to start with the success we've had recently in various trade shows, including NAMA.
Yes. Most of the growth in hardware is coming from the VP Scratch units, which are the main driver for FL's growth. Although they are priced lower compared to the fridge or micro market options, the volume generated from these units is significant. During the show I attended two days ago, we showcased two fridges, and they were both sold immediately. There is strong demand for our fridge product, thanks to our solid partnerships with fridge manufacturers and the technology we have in place. While this reflects a trend, we're looking at numbers in the hundreds or maybe thousands when we anticipate tens of thousands in terms of growth. This indicates that the retrofit business of unattended hardware is where the growth is happening. As for service growth, we believe that payment solutions will lead this segment, as evidenced in our reports from the last few quarters.
And maybe to add to that is that, as we've mentioned right now is that the second half of the year will be stronger. There are several distribution channels that haven't impacted our financials yet. Through our interactions with our customers, we received confirmation for tens of thousands of devices that are coming in the next few weeks to few months that gives us the confidence, and that's the reason why we've reiterated the guidance of $410 million to $425 million of revenue. With respect to your question about the growth in general, we believe that despite the fact that Q1 was around 20% of the revenue on the lower range, the acceleration will start in Q2 and of course, Q3 and Q4 and represent the guidance that we've provided.
Appreciate it. Thank you.
Our next question is from the line of Cris Kennedy with William Blair. Please proceed with your question.
Thanks for taking the question. Just wanted to go back to micro markets and smart coolers. Can you talk a little bit about the dynamics associated with that business relative to your core business today?
Thank you for the question. We view the market broadly as a retail space, with the micro market already established primarily in North America, which has reached some limitations. We are approaching the micro market differently by expanding our existing customer base who are interested in transitioning to a micro market solution that is easy to implement. Our product is simple to scale, which makes it advantageous. We also see significant potential and added security with smart coolers; this has taken time to develop. We support technologies based on weight sensors and cameras and have partnerships to bolster this effort. The product is now ready for the market, and we received positive feedback from a recent trade show, indicating strong momentum that we plan to capitalize on. Our aim is for this product to have a global reach, extending to Europe, South America, and other regions, particularly since the micro market isn't advancing as quickly in these other areas. With our presence in over 100 markets, we want our offerings to resonate on a global scale. We believe smart coolers align well with our international customer base.
Great. Thanks for that. And then just as a follow-up, can you provide an update on kind of what you're seeing on the M&A front? How is the pipeline looking? How are valuations looking?
Chris, this is Aaron. As I mentioned in the Q4 earnings, everything is still on track for what we're expecting this year. We've completed the acquisition of UPPay and InPro, and we've also consolidated the majority of Tigapo earlier this year. I still anticipate that the inorganic growth will align with our Q4 earnings expectations. We remain on schedule and are likely to finalize one to two additional deals this year to bridge the revenue gap.
Great. Thanks for taking the questions.
The next question is from the line of John Coffey with Barclays. Please proceed with your question.
Thank you very much. I have a follow-up question regarding M&A. I'm curious about your enthusiasm for Latin America. When considering further expansion in that region, is the challenge due to a shortage of companies you'd like to invest in? Or are there suitable companies, but the valuation is currently problematic? Alternatively, are you concentrating on Latin America while also handling numerous acquisitions or integrations in other regions? I'm just trying to understand why we haven't seen more activity there. Additionally, I’d like to ask about the take rate. You've experienced a good year-over-year increase in the take rate. Is it fairly stable at 2.75%, or should we anticipate some fluctuations as the year continues?
Thank you, John. I will start, and then Aaron will continue. The way that we see markets, it's not just Latin America; it's any market that we're going to. We're seeing what is the relevance of how to progress in the market. We found ourselves in Brazil where we want to acquire a company because it's much more easier to scale with a company that we can put our hands on. In the rest of Latin America, we do have a subsidiary company or franchise partners in Mexico that we can work with them and extend their relationship. Most importantly is the relationship with the banks. Latin America is not the same as Europe and the U.S. where you can potentially have two, three, or four acquirers and you can close the market. In Latin America, you have to close deals and agreements with each and every country and acquire locally. We're doing this in the last year. This will be the acceleration of Latin America. When we say that we are concentrating in Latin America, it's not just to do an acquisition; it's also that we are creating partnerships with acquirers. It's important to focus on the way that we're growing. In this case, the acquirers are really a major part of the growth of Latin America.
I will continue discussing M&A. We are very careful about what we acquire and the valuations we accept in the current market, which I believe is still favorable for buyers. M&A activity has been quite low in the private sector, particularly in the lower middle market, allowing us to secure attractive valuations in our recent deals. I anticipate this trend will persist. The majority of the opportunities I have observed are outside the United States, particularly in Latin America, with Brazil being a key market. I expect no slowdown in potential opportunities there or elsewhere. However, we must prioritize, as there is a limit to how many M&As we can realistically undertake each year, generally around three. We need to ensure we can properly integrate these acquisitions, achieve synergies, and maintain our core business effectively.
Great. Any comments on the take rate stability going throughout the rest of the year?
Yes. Thank you. So the take rate is continuing to expand and to grow as in previous quarters. It is now 2.75%. As you know, that's a combination of both the geography where the transaction is going and the various verticals that we are now going into more and more that have higher transaction value, like parking or EV charging and whatnot. As I said before, we see a constant improvement in the take rate. It's not going to jump significantly one quarter or another, but it's a steady increase over time.
Thank you.
Our next question is from the line of Sanjay Sakhrani with KBW. Please proceed with your question.
Thank you. I wanted to revisit the volume growth. Sagit, you mentioned seasonality, and I'm curious about the deceleration. It seemed a bit extreme. Is there anything else contributing to that? Did you notice any macroeconomic impacts or tariff-related issues? As we look ahead to the rest of the year, what kind of reacceleration can we expect?
Maybe I will start, Sanjay. Thank you for the question. What we're seeing in terms of the volume is something that potentially is repeating itself every time that we come into Q4 and Q1; the differences are not so big. It's starting with January and February, a little bit flat. Sometimes February is better; sometimes it's less. But what we can say that while we're sitting over here now, it's mid-May, and we know what's happening in April, and we know how we're standing today. We're seeing in terms of the trends in the right projections that we had in the beginning of the year when we put the budget. So we're not really seeing any kind of change because of consumer behavior or any kind of tariff issues or any kind of macroeconomic issues affecting our business. We are quite confident that the volume will catch up. As we see it right now, it's actually reached the level that we expected.
In addition to that, the processing revenue increased by 30% quarter-over-quarter. The growth in processing revenue can be attributed to three main factors. First, we added a significant number of active units, with an increase of 69,000 devices this quarter, which is a 20% rise compared to the previous quarter, and 44,000 of these were organic additions. Additionally, the take rate is influenced by the size of vertical transactions; larger transactions lead to higher take rates. Although January and February were slower months, we have noticed that volumes in March, April, and even in May so far are returning to normal levels and are even accelerating.
Okay. That's encouraging. Regarding the tariffs, I believe you mentioned that you won't pass on the higher costs. Considering the combined effect of the tariff increases on prices, I understand you are currently operating at a very strong margin, even stronger than what you have indicated for the year in the first quarter. I'm curious if this is taken into account when you consider a potential reduction in the margin as you might absorb some of those higher costs. How should we interpret this? Thank you.
Let's start by discussing tariffs in general. We quickly communicated after the new administration addressed tariffs that we would maintain our current hardware pricing for U.S. customers. We manufacture our products in both Israel and the Philippines, and currently, the tariff is 10%, which is one of the lowest rates announced by the administration. Considering that the U.S. accounts for around 40% of our revenue and factoring in other supply chain improvements and process enhancements we've implemented this year, we have been able to keep our pricing steady. This reflects Nayax's commitment to our customers, their growth, operational excellence, and the strength of our global operations. Regarding hardware margins, the impact is not significant. This is why we are discussing a hardware margin of 30% to 35% for the entire year, as the sales mix may influence one quarter compared to another. Overall, we have seen remarkable improvement in hardware margins over the last four years.
Great. Thank you.
Thank you.
Our final question is from the line of Rayna Kumar with Oppenheimer. Please proceed with your question.
Good morning. Thanks for taking my question. So it sounds like you're not really seeing any changes in consumer behavior. So I'm just trying to understand, does your 2025 guidance include some buffer if consumer spending does change later this year? And then just a quick modeling question. How should we think about the impact of FX on revenue for this year?
No, we don't see any changes in consumer behavior from a macroeconomic perspective. However, we do observe a significant shift in consumer habits, particularly with the ongoing transition from cash to cashless payments. This trend appears to be permanent, considering the total addressable market of devices, which is growing from 45 million to 60 million, while we currently have 1.3 million of them. This presents a substantial opportunity for growth. Additionally, the shift to cashless payments will likely continue. Regarding foreign exchange, it's difficult to predict how it will evolve. We are the only global company in the unattended space, which allows us to benefit from diverse revenue sources, with approximately 40% from the U.S. and around 35% from Europe. However, this also means we are affected by foreign exchange fluctuations, particularly noticeable this quarter due to changes in the Australian market. In the previous quarter, the impact could have been related to the euro or Europe in general. That's why I always emphasize constant currency when discussing our revenue guidance. This quarter, we achieved $82 million in revenue, representing a 28% increase quarter-over-quarter.
Thanks for the color.
Thank you.
At this time, we've reached the end of our question-and-answer session, and I'll turn the floor back to Yair for closing remarks.
Thank you for being with us today. Entering 2025, we are proud to have surpassed 100,000 customers, a clear reflection of our team's dedication and the trust we've built across our customers and partners. Moving forward, our priority remains sustainable growth and long-term value creation. I'm grateful to our employees and partners for making this possible. The road ahead is full of opportunities, and we are ready to continue capitalizing on this momentum. Thank you very much.
This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.