管理層發言
Hello, everybody. And welcome to Nayax Ltd.'s Third Quarter 2025 Earnings Conference Call. All participants are in a listen-only mode. Presentation instructions will be given for the question and answer session. 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 Ltd.'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 relations website at ir.nayax.com. As a reminder, during this call, we will be making forward-looking statements. All forward-looking statements on our call today are based on assumptions and are therefore 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 Ltd.'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 our macroeconomic environment to guide and support our decision-making. These key performance indicators may be circulated in a manner different from our industry standards. And finally, please note that all figures in today's call will be reported in US 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 Ltd.'s CEO, Yair Nechmad. Yair?
Thank you, Aaron, and thank you, everyone, for joining us this morning to discuss our results for the third quarter and the progress we are making across the business. It was another strong quarter for Nayax Ltd., reflecting the continued execution of our strategy and our focus on profitable growth. We delivered strong operational and financial results highlighted by expanding margin, disciplined growth across our segments, and consistent progress towards our long-term objectives. We continue to gain market share across our core automated self-service business with strong demand for our solution. We are adding new customers at scale while deepening relationships with existing ones. Our one-stop-shop solution, hardware management suite, and payment all from one trusted provider is a true differentiator for our customers in the automated self-service space and one that few others can offer.
Our platform continues to demonstrate its value and stickiness with very low customer churn. Customers are expanding their engagement with Nayax Ltd. by adding more devices, processing more transactions, and adopting more of our services over time. As a result, we are seeing a steady increase in our ARPU driven by processing revenue growth per connected device. This reflects our growing share in high transaction value such as EV charging, amusement, and car wash, which are segments that drive significantly more revenue per customer. Recurring revenue as a percentage of total revenue continued to grow quarter over quarter. This sustained mix shift reflects our focus on building a more productive, higher margin revenue model that scales efficiently as our customer base grows. Our growth in managing connected devices is a key driver of growth. As we continue to expand our product portfolio with our diverse payment hardware including lower-cost embedded products.
I will now provide an update on three main focus areas: technology, customer and partnership, and M&A. On the technology front, we made great progress during the third quarter on several key technology initiatives. In Australia, we began rolling out the Bipos Media, marking the first commercial deployment of our next-generation Android payment platform. This is a meaningful step for us. The new device is our first truly Android-based PIN-enabled device family. And it opens the door to a wider set of vertical and higher value use cases in regions requiring PIN. The product combines our payment infrastructure with new engagement capabilities, including a touch screen interface and support for loyalty, advertising, and promotional tools. We started our initial launch of the Vipose media in the UK and selective countries in Europe over the past months and plan more announcements about the product soon.
In addition to announcements, two large partnerships with Autel and LinQual, we continue to build momentum with the UNO Mini, our embedded payment product. In China, six OEM partners completed their Ono Mini SDK certification which now allows them to support contactless payment across EV charging stations and power bank machines. We have a strong pipeline of OEMs that are going through the certification process and expect sales in embedded products to scale over the coming quarters. Finally, with respect to technology initiatives, Retail Pro has successfully integrated with One Bit AI-powered inventory optimization engine. This integration lends retailers operational tools with predictive AI analytics from One Bit, helping merchants utilize retail post software to cut overstock and stay ahead of evolving customer demand patterns. Turning to customers and partnerships. A key customer highlight this quarter is our success with ChartSmart, a US chart point operator managing thousands of ports and growing rapidly in the DC fast charging space.
Which has committed to using Nayax Ltd. as its preferred payment solution. ChartSmart is one of the fastest-growing EV charging networks in the United States, underscoring how our payment technology continues to power growth in the electric vehicle charging vertical. Our platform enables large operators like ChartSmart to simplify daily operations from payout and reconciliation payment acceptance, allowing them to focus on growing their network. Our collaboration with Adient continues to evolve as we jointly develop solutions in e-commerce embedded banking. For example, we began a pilot of our new e-commerce offering for EV charging in October and already have a backlog ahead of the broader rollout. In parallel, we are preparing to launch our embedded banking product in the US in early 2026, including bank accounts and debit cards for our customers. This initiative brings us closer to our vision of being an end-to-end provider for our customers' business needs.
We expect this initiative to drive higher recurring revenue per customer over time. On the M&A front, we remain active with a disciplined approach. We continue to pursue acquisitions that align with our key objectives of geographic expansion, technology enhancement, and strategic consolidation of distribution channels. Recently, we signed a letter of intent with exclusivity to acquire Integral Vending, our exclusive distribution partner in Mexico since 2015. Degel Vending has built a high-performing network across Mexico, developing a proprietary vending management system tailored for the Latin American market. This acquisition will deepen our presence in the region, expand our software capabilities, and strengthen our ability to deliver a full suite of payment and management solutions across Latin America. It follows our recent two acquisitions in Brazil and represents the next step of our multiyear strategy to establish Nayax Ltd. as the leading platform across the region.
While we do not expect a material financial contribution in 2025, we believe this deal will create long-term strategic value in 2026 and beyond as we expand our operation and distribution in Spanish and Portuguese-speaking markets. In November, we also completed the purchase of the remaining shares of Tigapo, bringing us to full ownership of our arcade gaming business. Tigapo continued to deliver impressive growth and represents a highly scalable opportunity globally. Within the broader Nayax Ltd. ecosystem, Tigapo will benefit from our customers' network and international footprint. As an update to the Nayax Ltd. capital purchase in Q2, we have successfully integrated it fully within our broader embedded payment initiative under the consolidation team. In July, we launched our rental business in Australia and are rapidly growing our installed base of both rental units and financed hardware.
Nayax Ltd. Capital allows us to provide a fully automated process of ordering hardware, financing it, onboarding to NARTSCO, and invoicing, including the ability to automatically secure the financing against the gross processing receipt. This strategy produces a higher gross margin in the long term than selling the hardware outright. The low-touch sales cycle will create substantial operational leverage in the coming years. Turning now to guidance for the full year, which Sagit will also discuss in greater detail. At the beginning of the year, we set a target of revenue growth of 30% to 35% for 2025, including inorganic growth from acquisition. While multiple planned transactions have been delayed, we have maintained strategic discipline and refrained from pursuing deals at any cost. Our M&A pipeline remains active, focused on opportunities that enhance our technology, customer base, and long-term profitability.
We are reiterating our organic revenue growth guidance of at least 25%, which will be driven by enterprise hardware sales in the fourth quarter and maintain our strong recurring revenue growth. Enterprise sales accelerated in the third quarter, and we expect further momentum in the fourth quarter. Our hardware sales pipeline remains robust, and we are well-positioned to capture larger enterprise opportunities that align with our solutions and scale. Looking ahead, we remain confident in our strategy and the fundamentals of our business. Our growing base of connected devices, recurring revenue, strong customer retention, and disciplined focus on profitability position us well for sustained growth. Our addressable market continues to expand as the world moves further towards digital payment and connected commerce. While M&A continues to play an important role, organic growth remains the primary driver and the foundation of our business.
We have entered the fourth quarter with strong momentum and even greater conviction in the long-term opportunities ahead. With our expanding pipeline, diversified revenue base, and strong financial discipline, we are well-positioned to continue outperforming the broader payment industry and deliver lasting value to our customers, partners, and shareholders. With that, I'll turn it over to our CFO, Sagit Manor, who will review our financial results in greater detail and walk through our outlook.
Thank you, Yair, and good morning, good evening, everyone. I'll start by reviewing our KPIs and financial performance for the third quarter and then I'll discuss our updated outlook for the full year 2025. Looking at the three key performance indicators for the quarter that we consider primary measures of growth, first, total transaction value increased by 35% over Q3 2024, reaching $1.8 billion and driving strong corresponding processing revenue growth of 33% for the quarter. At the same time, average transaction value increased from $2.15 to $2.40 while maintaining a similar take rate, displaying our strong positioning in emerging verticals such as EV charging, amusement, and car wash. Second, our customer base expanded by 21% compared to Q3 2024, with nearly 110,000 customers at the end of Q3. And third, our installed base of managed and connected devices grew 17%, compared to Q3 2024 to more than 1.4 million devices at the end of the quarter.
These KPIs reflect the momentum in our business and the underlying strength of our platform as we continue to capture market share in automated self-service, driven by our technology platform and our growth in new verticals and geographies. Looking at our financial performance, revenue for the third quarter was $104.3 million which is an increase of 26% over Q3 2024. We continue to take market share, adding nearly 5,000 new customers this quarter and more than 56,000 managed and connected devices. Organic revenue growth for the third quarter was 25%, showing sequential acceleration compared to both the first and second quarters. We expect organic revenue growth to continue to accelerate in the fourth quarter, which I will discuss in our outlook. In the third quarter, recurring revenue, which includes payment processing fees and SaaS subscription revenues, increased by 29% compared to last year's third quarter reaching $77 million and represented 74% of our total revenue in Q3.
More specifically, processing revenue grew by 33% to $48 million in Q3, driven by a 17% increase in our installed base of managed and connected devices and a 35% increase in dollar transaction value. Our take rate for the quarter was 2.71%. Hardware revenue in the quarter grew 18% to $27 million compared to $23 million in last year's same quarter, with continued strong demand for our products, solutions, and technology. In the quarter, our installed base grew by 17% compared to last year's third quarter, reaching more than 1.4 million devices as we added more than 56,000 devices to our installed base this quarter. Moving now to profitability and margins for the quarter. We continue to drive significant margin expansion through initiatives to improve efficiency in payment processing and optimize our hardware cost structure. Gross margin increased to 49.3% compared to 45.7% in last year's third quarter driven by both higher recurring and hardware margins.
Our recurring margin increased to 53.6% from 50.1% in the prior year quarter, mainly driven by an additional improvement in processing margin to 39.6% from 33% as a result of consolidating a majority of the payment volumes under five main payment acquirers, driving improved operational efficiency. We also continue to benefit from recent favorable renegotiations of key contracts with several bank acquirers and improved smart routing capabilities. On the other side, our margin increased to 37% compared to 34.4% in Q3 2024, driven by customer sales mix and the continuing optimization of our supply chain infrastructure and better component sourcing. For the full year, we expect other margins to be at the higher end of the range between 30% to 35%. In terms of gross profit, we generated more than $51 million, an increase of 35% over last year's third quarter. Adjusted OpEx of $34 million was 32.2% of revenue and continues to improve as a percentage of revenue—a testament to our disciplined cost management.
Adjusted EBITDA increased to $18.2 million representing 17.5% of revenue, an improvement of more than $7.2 million compared to last year's third quarter and demonstrating the continued scaling of operating leverage in the business. Operating profit was $7.8 million, an improvement of $6.4 million from last year's third quarter. This significant operating profit increase is mainly driven by improved gross margin. Net income for the quarter was $3.5 million compared to $700,000 in the prior year period. Turning to our balance sheet. On September 30, 2025, cash and cash equivalents and short-term deposits totaled $173 million while short and long-term debt was $156 million. Both driven by notes and warrants completed in March 2025, maintaining a solid balance sheet and net cash position. Looking at cash flow, we generated $10.5 million from operating activities. Free cash flow for the quarter was $3.9 million mainly due to the timing of cash settlement 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, Nayax Ltd. is reiterating an organic revenue growth guidance of at least 25%, driven by enterprise hardware sales in the fourth quarter and maintaining our strong recurring revenue growth. With some delays in strategic M&A transactions, we are updating our financial outlook to a revenue range of $400 million to $405 million on a constant currency basis. This represents revenue growth of 27% to 29%. We still anticipate an adjusted EBITDA margin of at least 15%, and the updated guidance for the full year reflects the lower expected inorganic contribution due to delayed M&A activity and is now between $60 million to $65 million with at least 50% free cash flow conversion from adjusted EBITDA. As for our 2028 target, we continue to project an 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 revenues and operational efficiency.
In closing, we are well-positioned for our future growth as we continue to grow our installed base globally and capture market share. We also continue to focus on scaling our recurring revenue streams, in particular, 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.
分析師問答
Thank you. A confirmation tone will indicate your line is in the question queue. You may press 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Josh Nichols with B. Riley Securities. Please proceed.
Yes. Thanks for taking my question, and great to see the company posted some record EBITDA margin here in the third quarter. I just want to touch on a little bit. You mentioned during the call there's a large number of these fast-growing EV partnerships and if you could give us a little update on the timing some of those shipments. I know Autel alone was looking to ramp to maybe like 100,000 devices by the end of next year. Is that still on target? And what's the expectation for the EV ramp?
Hi, Josh. This is Aaron. Yes, the EV charging has been accelerating as you mentioned. We've been announcing several partnerships. We also have been accelerating the OEM integrations on the embedded readers, which is a big growth driver for us in the future with regards to EV charging. We're getting a lot of momentum, especially in the North American market, and I expect over the coming quarters with the launch of the VPost Media, which we talked about in the script as well. You know, over the coming quarters in Europe and the UK with a pen on glass given that with DC charging and the high average transaction value, you need to have a pen on glass device in order to be able to do those higher value transactions. And we see with the launch of that, that we'll be able to do more in that market for the EV charging as opposed to in past years where we've been more focused on the North American market for EV charging. As we look forward, we already started to see some hardware revenues related to EV charging customers in Q3. We expect to see a significant acceleration of that in Q4. And as we start looking into next year, the partnership with Autel and with the other OEMs are progressing as expected, and we're seeing the first Uno Minis, our embedded readers, were delivered, and we're starting to see some acceleration of those volumes as well.
That's good to hear for the EV ramp. I know there's been a couple of other things you mentioned, like car washes, amusement. Looking at some of the recent industry conference, I know smart coolers has been a big focus for the space. Any update you could provide us on what you guys have in terms of offerings on the smart cooler market and what you're seeing in terms of demand and potential growth activity that could be driving some acceleration there for next year?
Yes. This is Aaron again. We signed some partnerships in the US market regarding the smart coolers for distribution with our Vipostouch. We've been actively working in other markets as well. We signed a partnership with a large enterprise customer in Europe over the past several months to start delivering smart coolers in the European markets, which we hope to talk about over the coming months. We see this as a big growth driver in the future. Smart coolers, as opposed to micro markets, which is also a fast-growing space. It's been best suited for us, with all the integration technology that we've developed over the last twenty years. You know, being able to utilize our Vipostouch and now the Vipost Media and other markets as well, for the smart cooler market. We see some acceleration. I think that car washes, as you mentioned, is a big growth area for us. We're also seeing a lot of growth in things like arcade gaming, after we finished the purchase of Tigapo over the last year.
We saw significant growth in Tigapo's arcade gaming solution over the last twelve months, and we expect that to continue to be, even though it's a smaller number at the moment, to continue to be a large growth driver as well. There is a great opportunity that Nayax Ltd. is leveraging with all the OEMs in the cooler industry, partnering with cooler manufacturers and embedding ourselves with the Deepos Media, exposing ourselves to a greater market share.
Appreciate the update. I'll hop back in the queue.
Our next question is from Cristopher David Kennedy with William Blair. Please proceed.
Yes. Thanks for taking the question, and thanks for all the information. Just wanted to talk a little bit more about the embedded banking and the e-commerce opportunity that you mentioned in your opening comments? And just think about kind of the position for the business as we think out into 2026.
Yes. It's a great question. Thank you, Cristopher David Kennedy, for the question. The embedded banking is alive and kicking in terms of internally, we are almost done from Nayax Ltd.'s perspective and ready to launch. It will be launched during Q1, mostly in the US market. Everything in terms of setting up the agreement and the way that we're operating will take live in Q1. Following this, in Q2, we will roll out production; we have set targets for this. The impact in terms of how we're operating, I strongly believe will look very much to bring value to our customers, mostly with the MCA, with the working potential solutions that we have. And then we'll help our customers to work seamlessly with their working capital issues or challenges. With us helping them with our other part of the division, which is Nayax Ltd. Capital, that will help close the loop for this.
Great. Thank you for that. And then any update on the e-commerce opportunity as well? Thank you.
The same thing will happen also in the next year with the e-commerce opportunity. The e-commerce is mostly for the EV market for the first start. It will roll out to more and more segments; all of this is going to happen in 2026.
Right.
Thank you. And then I'll just add there, we did start pilot testing in the US market for the e-commerce solution at the beginning of this month. As Yair said, full production with external customers will start at the beginning of the year. Okay. Thanks for that. Just as a follow-up, Sagit, you mentioned the higher average ticket. Can you just talk a little bit about average tickets across different verticals and kind of the range between traditional vending versus EV or amusement or car washes? Thanks for taking the questions.
So we do see that on a quarterly basis, the value of the transactions is growing faster than the number of transactions. This comes from the higher verticals that provide higher transaction values like EV charging, laundromats, and other areas where we are growing. We expect that to continue. I'll let Aaron add some more information.
So, some of the higher growth verticals like EV charging, you know, for example, on a DC charger, you can see the average transaction value is currently around $18 per transaction. Even with AC chargers, we see about $4 to $5 per transaction. These have been steadily rising as well with EV adoption over the last couple of years. Some of the other verticals are also starting to see significant growth, such as car wash and others. It's important to mention that on the retail division, as we continue to grow that side of the business, the average transaction value will continue to go up as well. It's important to stress that the average transaction value will likely continue to rise over time as we continue to expand these new verticals. Our focus has been on the net take rate and ensuring that as we increase the average transaction value, the net take rate we retain continues to maintain or grow. We've been able to grow our processing gross margin significantly over the years, which is a huge testament to our financial negotiating power as we conduct several billion transactions a year and grow our processing margins.
Great. Thanks for all the information. Just one last thing to add.
Chris, one last thing to add to this. We also boost the platform remotely to change pricing. This has helped existing customers to adjust their pricing according to inflation and increase their capabilities to control price.
Right. Thanks, everyone. Appreciate it.
Our next question is from Hannes Leitner with Jefferies. Please proceed.
Yes. Thanks for letting me on. I got also a couple of questions. The first one is maybe on your comments around acquirer optimization, given the processing had been growing nicely and gross profit has been driven here on the recurring side. That would be interesting to understand. Then the second one is on the M&A opportunity. Appreciate the prudence of valuing quality over quantity, which has led to the guidance cuts. Maybe you can give us an update on your appetite. Has there been any change regarding size? Are you looking for bigger things which didn't come through this year? Or should we expect that next year will be a catch-up in M&A? Finally, a broader update on the market dynamics in the US. We know that two of your competitors are essentially merging. Has there been any change with the delays in that process? Have any opportunities arisen?
Maybe I'll start. Regarding how we are routing transactions, we are doing this more and more efficiently and it's helped us to move towards a semi-automatic process concerning how we are routing transactions with the acquirers, and we will move further towards almost automatic transactions. We'll ensure that each and every transaction call will be routed according to the best price and the best data we have. Since we have more than 3 billion transactions, we know exactly which acquirers are performing in terms of acceptance rates, which is critical for us. This will allow us to increase acceptance while reducing costs. This will help us maintain margins tightly, and we can negotiate effectively with the vendors regarding the acquirers to maintain this position. On the M&A front, we're still looking for potential opportunities while staying focused on our organic growth.
Thanks, Yair. This is Aaron. Regarding your questions on M&A appetite, we continue to be prudent with our acquisitions. Most of the acquisitions we've looked at have tended to be on the smaller side, as you've seen in previous quarters. However, we do have the appetite for larger acquisitions, not transformational, but larger acquisitions, if it makes strategic sense for us. Looking into 2028, we expect to see about $200 million in inorganic growth from acquisitions as we've projected previously. If we're continuing to make a few acquisitions a year, there will be a couple of larger acquisitions between now and 2028, and I expect that as we go into 2026, we will likely have a larger acquisition of more than $100 million in enterprise value, while still not being transformational. We believe in keeping our culture and management core intact during these acquisitions. We have cash on hand from bond offerings reserved for acquisitions, and we are exploring relative opportunities globally, including in the US market.
Great. Thank you so much.
Our next question is from Sanjay Sakhrani with KBW. Please proceed.
Thank you. Good morning. I want to talk a little bit about hardware. Obviously, it's a big contributor to the fourth quarter. You mentioned sort of accelerating enterprise. Could you just talk a little bit about the visibility there as well as the margins? It seems like the margins have been a bright spot there, continued improvement. What's the ceiling on those margins?
The ceiling is margin 100%, if you can. But in terms of what we want to achieve is to be better than the market. We have been investing over the last two years regarding our hardware production and sourcing the best components. Now we're launching the Repos Media, which is fully Android-based, which should have increased our hardware costs, but actually, it has not. We have succeeded in optimizing our hardware manufacturing and sourcing. I believe we can maintain margins around the 30% to 35% range on the hardware side. Additionally, the visibility for Q4 is high demand. We have a very strong visibility through our Salesforce and expect to align with our expectations that we've set for the market.
Got it. And just the visibility for that fourth-quarter ramp.
So we're seeing high demand. Q4 is always a big enterprise. We have a very, very good visibility to end this quarter with the expectations we've set for the market. The visibility is strong across our Salesforce, so it's promising.
Thank you.
With no further questions, I would like to turn the conference back over to Yair for closing remarks.
Thank you for joining us today and for your interest in Nayax Ltd. This quarter again showed the strengths of our business and our strategy, as we help merchants move to cashless payments in many geographies and verticals. As we look ahead, we will stay focused on our plan for profitable growth in key markets and working closely with our partners. I want to thank our employees for their hard work, and our customers, partners, and shareholders for their trust. Thank you.
Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.