管理層發言
Hello, everyone, and welcome to Nayax's Fourth Quarter and Full Year 2025 Earnings Conference Call. Operator instructions: 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 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 will be making forward-looking statements. All forward-looking statements on our call today are based on assumptions and 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's non-IFRS and 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 performance indicators may be calculated in a manner different from 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, I will continue with details about our acquisition strategy and two new initiatives we are working on. Finally, Sagit will go through the details of our 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 all for joining us today. We delivered strong 2025 results and a very solid fourth quarter. For the first time in our company's history, we delivered strong net income, $35.5 million compared to a loss just one year ago, a milestone that reflects the true earning power of our business model. In 2025, we continued to scale profitability to record margin, advanced our strategic priorities and executed well across the organization. I want to recognize the entire Nayax team for their dedication and hard work, as these results reflect their commitment to our success. We're at an important stage in Nayax's evolution. The foundation we've built over the past 20 years is now translating into consistent profitable growth. Recurring revenue continued to grow and represented approximately 72% of total revenue for the year, compounding month after month across around 115,000 customers globally. Margins continue to improve, driven by smart-routing payment optimization, lower acquiring costs, supply chain efficiency and ongoing technology enhancement. As we continue to scale, our recurring revenue model drives profitable growth and progress toward our target of becoming a $1 billion revenue company. On M&A, we completed a strategic acquisition of Lynkwell, Tigapo, UpPay, Nayax Capital and Inepro. Each acquisition expanded our platform, strengthened our vertical capabilities and enhanced our geographic reach. More importantly, these acquisitions accelerated the growth engines we've built over many years. Regarding our TAM, the market opportunity remains significant. Cashless penetration in automated self-service environments is still relatively low worldwide. Every touch point is a connected commerce opportunity for us, whether it is vending, EV charging, fuel, laundromat, amusement and other verticals. The global shift towards digital payments, IoT connectivity and retail automation continues to accelerate. But the question for Nayax is not just about the size of the market. It's about our structural position to capture it. And that position, I believe, has never been stronger. This is a complex industry with meaningful barriers to entry, and we figured it out with the right product fit and solution for the market. At its core, the integration across thousands of machine types operating in fully unattended environments, regulatory certification and reliability at scale requires deep proprietary expertise. This is what we have built over the past two decades and is validated by our loyal customer network. What this creates is a structural position that compounds over time. Each of our connected devices is a long-lasting market touch point, running on our software, processing transactions on our platform and generating recurring revenue for years. These are assets embedded in the market. And this footprint at this scale across so many verticals and geographies is not built overnight. It takes years of execution, and it is not easily replicated. In addition, the ongoing conversion of machines from cash to cashless continues to increase revenue per device, providing a durable growth driver within our existing customer base. A software layer above that hardware is where the economics get particularly strong. Our platform gives operators real-time monitoring, remote management, consumer engagement and business analytics capabilities our customers depend on every single day. This translates directly into high retention and low churn. The result is a software and payment business with strong margin and customer relationships that deepen over time. At the center of our strategy is vertical payments. We provide the hardware, software and global payment infrastructure, with payment connecting the entire platform. Our payment engine is fully proprietary, licensed, actively processing and growing volume at a rate that continues to outpace device growth, meaning monetization per device is increasing. We are building a platform that gets stronger and more valuable with scale, creating compounding network effects. Every merchant we add increases the value of our platform. Every transaction we process improves our routing algorithm. Every device we connect strengthens our proprietary data moat. This is not a linear business. It is a compounding one, and this integrated approach increases customer retention and strengthens long-term relationships. Let me update you on the progress we are making on our four core strategic areas of focus and how we are positioned for achieving long-term success. Automated self-service remains the foundation of Nayax. Today, we are serving more than 40 automated self-service verticals globally. Geographically, we now operate in more than 120 countries and continue to expand into additional markets. From a product standpoint, we launched our new flagship device, the VPOS Media, in Europe, Israel and Australia. This device introduced a screen-based consumer experience at the point of sale, enabling advertising, loyalty programs and customer engagement directly on the machine. We also completed several UNO Mini OEM integrations, expanding our distribution channel of our installed reader directly at the factory level. This approach reduces retrofit requirements and lowers customer acquisition costs while positioning Nayax as the preferred integrated solution. Turning to EV, another core area of focus where we built a dedicated division and successfully expanded into the U.K. and Australia while continuing to work with leading operators around the world. The recent acquisition of Lynkwell was an important milestone. It enabled us to offer a combined payment and AI-enabled software offering purpose-built for EV charging. We also introduced a new leading solution on our EV kiosk, allowing drivers to initiate payment and access session detail via QR code without requiring an app, simplifying their payment experience. Our approach in EV mirrors what we successfully built in vending, providing operators with flexibility to choose payment software on a fully integrated solution. Payment remains central to the model, reinforcing customer stickiness and long-term value creation. We believe this positions us well as the EV ecosystem continues to develop. Aaron will elaborate more about the recent consolidation we have done internally to facilitate synergies as a result of our successful integration of our EV department. With regards to geographic expansion, we see substantial opportunities, particularly in Latin America, one of our fastest-growing regions. Cashless penetration remains relatively low, and demand is increasing. Our device base in Brazil doubled year-over-year. With VMtecnologia and UpPay in Brazil and Integral Vending in Mexico, which will be joining Nayax soon, we have established strong local infrastructure to support our continued regional expansion. In Asia, we see one of the largest untapped markets for automated self-service commerce globally. In 2025, we invested in regional leadership across Singapore, China and Japan, giving us the foundation to scale across the region in 2026 and beyond. Finally, operational efficiency remains a key focus. We now operate in more than 120 countries across 13 offices with approximately 1,200 employees. Over the next several years, we are focused on increasing revenue per employee to $1 million. We intend to achieve this through continued resource optimization efforts, a greater use of AI and process automation across the organization. As the founder and CEO, I couldn't be more excited about what still lies ahead for the company. Our focus is on continued growth, disciplined execution, increasing profitability, and most importantly, supporting our customers globally. We are very proud of our net revenue retention rate, which remains strong at around 120%, reflecting the value of our technology to our customers and the strength of our payment platform. With that, I will turn the call back to Aaron to discuss our acquisition strategy and two new strategic initiatives. Aaron, please go ahead.
Thank you, Yair, and hello, everyone. I'm excited to update you on our acquisition strategy, as well as provide more color on two new strategic platforms that we believe can meaningfully impact our growth trajectory in the years ahead. With respect to our M&A strategy, 2025 was a productive year. In total, we deployed about $52 million of capital, completing five acquisitions: Lynkwell, UpPay, Inepro and the remaining stake in Nayax Capital and Tigapo. Each of these fit our M&A strategy, expanding our geographic reach, adding to our technological capabilities, consolidating our target verticals and strengthening the long-term infrastructure of our payment solution ecosystem. Collectively, these acquisitions contributed to the expansion and monetization of our customer base, combining payments, software and financial services. I'll now provide an update on each acquisition and successful integration to date. Starting with Brazil, UpPay has now been fully integrated into VMtecnologia. The two entities are now legally and operationally merged with unified systems and one consolidated team structure. We are already seeing the benefits of operating as one platform with improved coordination, streamlined development and stronger go-to-market execution. Brazil remains a high-growth market for automated self-service, and we are excited about our potential there in 2026 and beyond. Turning to Europe, Inepro has been fully integrated and now operates as Nayax BV, our direct sales office in the Benelux region. Transitioning from a distributor model to a direct office has already generated synergies and strengthened our local presence. This transaction reinforces one of our core M&A approaches, which is selectively acquiring distributors in strategic markets to open direct channels, increase margin and improve customer relationships. It has been a very successful model, and we will continue evaluating similar opportunities where they present a unique value proposition. In November, we completed the purchase of the remaining shares of Tigapo, bringing our ownership to 100%. Tigapo gives us a strong and differentiated software solution in the family entertainment center vertical, a sector where payments and software must work seamlessly together to ensure optimal customer experience in a fast-paced energetic environment. We've integrated the team and transitioned leadership under Yinon Raviv, who brings significant global operating experience and has been with Nayax for several years. This positions us well to expand further in this attractive and growing vertical, which grew significantly in 2025. At the end of the year, we acquired Lynkwell, which accelerates our verticalization strategy in the EV charging space. We believe strongly that pairing payments with purpose-built vertical software creates a much stronger value proposition for our customers. Immediately following the closing, we consolidated Lynkwell with Nayax Energy, merging the teams and appointing Jason Zarillo, Lynkwell's Co-Founder, as the new head of Nayax Energy. We intend to migrate all Nayax Energy software customers to the Lynkwell platform over the coming months. We see meaningful synergies over time as we offer a more comprehensive vertically integrated EV solution that combines payments, management software and e-commerce capabilities. Finally, we purchased the remaining stake in Nayax Capital from our joint venture partners, Bank Hapoalim and individual investors. Bringing this technology fully in-house allows us to control and accelerate our global financial services roadmap. Let me now describe how we see the evolution of our customer model going forward. Historically, our model has been straightforward. We sell hardware and drive increased recurring ARPU through embedded software and payment processing. Growth per customer has been driven by increased processing volume per device and our land-and-expand strategy across additional devices and locations. As we look ahead, we believe ARPU per customer can increase more meaningfully through the adoption of two strategic initiatives. The first is Nayax Capital. Originally focused on installment payments and rental solutions for Nayax hardware, we are now expanding this into a broader financial services platform. Our first step will be soon launching a deposit account offering, the Yellow Accounts, through Adyen as our banking sponsor. Over time, we intend to layer additional financial services onto this platform such as lending and issuing. We see a significant opportunity here, particularly in the United States, where we serve a large installed base of customers whose broader financial services are currently handled by other financial service providers. By offering integrated financial services alongside payments, we can provide additional value to customers while leveraging our existing relationships. This is an opportunity to expand our ARPU efficiently, as it builds on our current customer base. The second initiative is e-commerce, specifically our SDK-based e-commerce solution, which we are initially deploying in the EV charging industry. We will provide this both directly through our own EV mobile application for SMB customers and through an SDK for larger operators. Both e-commerce solutions are in partnership with Adyen. We believe e-commerce can unlock incremental processing volume that would not have otherwise flowed through our platform, particularly in unattended verticals such as EV charging and amusements. Over time, we expect this to become an additional driver of processing growth and customer stickiness. Looking ahead, our M&A strategy is clear. We are prioritizing segments such as parking, mass transit and laundry as three key verticals where we see clear opportunities to strengthen and further verticalize our payments offering. As we've demonstrated with EV charging and family entertainment centers, combining vertical software and payments strengthens our competitive positioning and increases long-term value creation. Our focus is on accretive growth, which accelerates payment processing volume through our financial infrastructure. We have the capacity to act when the right opportunity arises. With a strong balance sheet, which includes more than $300 million of cash, we have the ability to move quickly when we identify assets that align with our long-term strategy. We also continue to favor founder-led or founder-owned companies where cultural alignments and long-term partnerships tend to be stronger. I would now like to pass the call over to our CFO, Sagit Manor, to go over our financial results and provide our outlook for 2026. Sagit?
Thank you, Aaron, and good morning, good evening, everyone. We appreciate having our shareholders, analysts and the entire Nayax team with us today as we review our results. 2025 was the year where the scale of our platform translated into meaningful profitability and marks a historic inflection point. Over the past several years, we have focused on extending our installed base, growing transaction activity and deepening our recurring revenue mix. And this year, that strategy showed up clearly in our margins. Both gross margin and adjusted EBITDA margin expanded, driven by improved processing economics and operating leverage as the platform scales. Importantly, this was structural margin expansion, not a result of one-time cost actions, reflecting the inherent economics of our transaction-based recurring revenue model. Additionally, 2025 marked another historic inflection point, our first ever net income coming in at $35.5 million compared to a loss just one year ago, a milestone that reflects the true earnings power of our business model. Recurring revenue now represents approximately 72% of total revenue, providing improved visibility going forward. The strength of this model is reflected in our platform activity. Our installed base reached 1.46 million managed and connected devices, serving approximately 115,000 customers globally. Total dollar transaction value grew 32% to approximately $6.4 billion, a direct result of our expanding device and customer base, which is a direct driver of recurring revenue growth. We also saw a favorable mix shift towards higher-value verticals. Average transaction value, or ATV, increased to $2.25 from $2.05, reflecting continued expansion into EV charging, amusement and car washes, while our take rate remained strong at 2.7%. Combined, these indicators show that growth is coming from deeper engagement and higher value usage across the platform. In 2025, total revenue reached $400 million, representing 28% year-over-year growth, including approximately 24% organic growth. Recurring revenue continued to grow, increasing 29% to approximately $287 million and representing 72% of total revenue. Processing revenue increased by 30% to approximately $174 million, primarily driven by higher number of transactions across our connected device base. Beyond expanding our customer and device base, we are also increasing the revenue generated from each connected device. Average revenue per unit, or ARPU, increased to approximately $239, up 11% year-over-year, reflecting deeper engagement of customers with our platform. This increase is driven by two factors: continued conversion of existing machines from cash to cashless transactions and our expansion into higher-value verticals such as EV charging, amusement and car washes. As customers are processing more transactions through our platform, they are increasingly using additional software and payment capabilities which result in higher recurring revenue per device. Over time, we expect further ARPU expansion as we introduce additional platform services, including embedded financial services to our existing customer base. This brings us to hardware. Within our model, hardware functions as the deployment layer of the platform. Each new installed device expands our connected base and enables future transaction activity, which then converts into recurring processing fees and software revenue over the life cycle of the device. In 2025, hardware revenue was approximately $113 million. More importantly, we added over 200,000 devices during the year, bringing our installed base to approximately 1.46 million devices. This expansion of the installed base supports future transaction volume growth and translates into recurring revenue growth for the years to come. Let me move to profitability and margin. In 2025, we saw meaningful margin expansion, driven by both the proven scale of our business model and improved unit economics. Gross margin increased significantly to 48.2% from 45.1%, driven by improved efficiency in payment processing and optimizing our hardware cost structure. Processing margin improved to approximately 38% from around 34%, primarily due to lower acquiring costs and better routing efficiencies, while SaaS margins remained strong at approximately 76%. Hardware margins also improved following supply chain optimization and component cost reductions. These are deep structural drivers that continue to work in our favor going forward. Beyond gross margin, we are also seeing clear operating leverage in our business. As revenue grows, a larger portion of our incremental revenue translates into earnings. Adjusted EBITDA increased to $61.1 million, representing 15.3% of revenue, while net income was $35.5 million compared to a loss in the prior year. As mentioned, this is a milestone that marks a fundamental turning point for the business. Net income includes a $10.3 million one-time gain related to the share purchases of Tigapo and Nayax Capital. Adjusted EBITDA and margin improved significantly, clearly demonstrating the scalability of our model as volumes increase, operational efficiency improves and the contribution to profitability strengthened. Turning to our balance sheet, we are well positioned with $321 million in cash and short-term deposits and $328 million in debt. This is a comfortable cash position that allows us to pursue strategic M&A and continue accelerating our growth. Free cash flow for 2025 came in at approximately $12 million or 20% of adjusted EBITDA, below our guidance. While adjusted EBITDA grew meaningfully year-over-year, operating cash generation was impacted by deliberate working capital investments. Two dynamics drove the gap. First, the ramp-up of our VPOS Media devices required full advanced payment to our new contract manufacturer, creating a timing difference that was compounded by inventory build ahead of planned 2026 hardware sales. Second, accounts receivable increased, driven by strong hardware sales in the month of December and the expansion of our next capital installment portfolio. We view this as growth-driven working capital investments, and we expect a meaningful portion to reverse as collections normalize in 2026. As a result, we expect free cash flow conversion to improve materially in 2026. Looking at Q4, revenue grew approximately 34% and was $119.5 million, higher than 2021, the entire year's revenue, with around 30% organic growth, reflecting continued expansion across our new and existing customer base and growth of our installed devices. Recurring revenue increased 23% year-over-year, and we saw continued margin improvement and operating leverage as transaction activity scaled. Other revenue was particularly strong in the quarter, driven in part by the launch of VPOS Media in Australia and Europe and the ongoing 2G-to-4G upgrade cycle. Importantly, these hardware sales further expand our connected device base and support future recurring transaction growth. Looking ahead to 2026, our guidance reflects the continuation of the strong operating drivers we have discussed today. We expect growth to be supported by continued expansion of our installed base through both direct sales and OEM integration. In parallel, we are seeing increased recurring revenue as a result of growing transaction activity per device as cash-to-cashless conversion continues and as we expand into higher-value verticals. In addition, we expect further monetization from our existing customer base through adoption of new software and the gradual rollout of additional platform services, including embedded financial services. Finally, we continue to onboard customers through thoughtful M&A activity, which increases transaction volume once integrated into our payments infrastructure and improves margin over time. Together, these drivers provide visibility into our expected growth. Looking ahead, our revenue guidance for 2026 is $510 million to $520 million, inclusive of organic growth of 22% to 25% and the expected contribution from the Lynkwell acquisition. We also expect further improvement in profitability with adjusted EBITDA margin of around 17%, which represents a range of $85 million to $90 million. We have confidence in these numbers as operating leverage continues to accelerate across the business. Turning to free cash flow, we expect free cash flow conversion of approximately 40% of adjusted EBITDA in 2026, a significant improvement over 2025. This reflects the partial reversal of working capital timing items we discussed, the continued growth of Nayax Capital's installment portfolio and our typically higher concentration of hardware revenue in the fourth quarter. We see this as a clear step towards normalized conversion as the working capital portfolio matures. With respect to our midterm 2028 framework, which we introduced shortly after our IPO in 2021, we continue to make measurable progress. The framework includes $1 billion in revenue, driven by a combination of organic growth and strategic M&A, 50% gross margin and 30% adjusted EBITDA margin. The increasing share of our recurring revenue, the continued growth in ARPU and the discipline around operating expenses all support the trajectory towards our long-term profile. As we have said before, these targets reflect the long-term flywheel power of our business model, added scale and the operating leverage trajectory, which remains consistent with the framework we outlined. In closing, 2025 was a year of disciplined execution. We grew our connected device and customer base, deepened our vertical software capabilities and expanded geographically, all while improving margins and unit economics. As the platform scales, recurring revenue grows alongside it, making our financial profile increasingly predictable and resilient. A growing portion of future performance is supported by our land-and-expand strategy with our existing customers. Looking ahead, we are laying the foundation for the next phase of ARPU expansion through embedded financial services and e-commerce, with payment at the core. The results today reflect the underlying strength of our platform and reinforce our confidence in the sustainability of this growth trajectory. I'll now turn the call over to the operator for a Q&A session. Operator?
分析師問答
Operator instructions: The first question is from the line of Josh Nichols with B. Riley Securities.
Great to see the real strong acceleration in the enterprise hardware deployments for Q4. If we could get a little bit more detail on that, could you kind of quantify that this is—given these hardware deployments are future recurring revenue growth—like is a lot of that coming from EV charging, as you talked about before, or other specific end markets? And how do you think that's going to play out to support the growth for 2026, given the outlook?
I can start, and Yair will continue. Thank you, Josh. Good to have you here. Yes, the strong hardware sales in Q4 were as expected. We've been talking about it for the entire year about how the second half of 2025 would be stronger than the first half and how it's going to be driven by strong organic growth, which we've shown in Q4, around 30% organic growth, driven mainly by hardware. So it all came together to meet the expected organic growth for the year. And yes, all of those hardware revenue and hardware sales are also the enabler for the recurring revenue that comes with it, whether it's in the EV segment or other verticals that we're in. It's always the beginning of the sale, and then we add to that services as well as the processing afterwards.
Maybe just to add one view from my point of view: we're looking at the pain of customers and we're looking at the cost of acquisition, and we're looking at the go-to-market. Between quarters, it could be deferred between unattended EV or unattended vending machines or retrofit or fuel. But the main point that I think needs to be recognized is that Nayax is a machine that's building customer base based on disciplined acquisition cost and discipline on the gross margin. I think this is what drives the business globally in more than 120 countries. We become almost agnostic to the vertical, and that's the beauty about the one-stop solution that we built.
And then pretty impressive gross margin expansion—like north of 48% gross margin for the year. I know your long-term outlook is to get to 50%. Clearly, you're getting close to that level already. Thoughts on what the gross margin could look like for the upcoming year, 2026, given the guidance and the opportunity longer term to kind of expand above that 50% rate given the current trajectory that you guys appear to be on?
You see it right. We're expecting in 2026 and in the years to come to stay at these high level margins that we've been able to achieve. That obviously comes from all aspects, whether it's the processing that grew to 38% from 34% last year, the hardware margins that grew significantly to 35.5% this year, and of course keeping the margins of the services stable at around 76%. So yes, overall, we are expecting margins to stay at this high level and accelerate as we continue to grow our device sales and device base. And of course, the recurring revenue will continue to increase.
Last question for me. Good to see the company laying out some pretty healthy organic growth guidance for 2026. But given you have plenty of firepower on the balance sheet based on what you're seeing in the end markets today, are you still expecting targeting two to three acquisitions per year, and should we assume that while this isn't in the guidance for '26 that you're likely to close on a few deals this year as well?
Yes. This is Aaron. So I'll start, and maybe Sagit will come after that. With regards to the acquisitions, yes, we still have the same targets in mind: doing a few acquisitions a year, two to three acquisitions a year. And we still see a very good pipeline of potential acquisition targets. Nothing's really changed from what we gave in Q3 with regard to that, including trying to do a little bit larger transaction this year. And obviously, we have the balance sheet, as you mentioned, with a little more than $300 million of cash on the balance sheet to be able to use for deployment for M&A, as we mentioned. With regards to the guidance for this year, we guided based on the organic growth as well as the Lynkwell acquisition that was closed in December. We did not include any additional M&A in the guidance. So that was a change from last year. And as we go forward, we will only guide on acquisitions that have actually been completed.
The next question is from the line of Cris Kennedy with William Blair.
Thanks for all the information, and hope the team is safe in Israel. You guys operate in over 40 different verticals. Is there any way to think about the revenue mix or the growth drivers between kind of traditional vending verticals and the higher-value verticals, such as EV, car wash, amusement? What is the split, and how are you thinking of the growth trajectory across these verticals?
Cris, yes, this is Aaron again. So with regards to the mix, obviously, as we've said before, we don't split each of the verticals directly. What I will say though is that some of the higher-growth verticals—EV charging, parking, amusement, car washes and some of these other higher-growth verticals—are growing a lot more than the traditional vending space, which inherently means that the mix is spreading and diversifying across each of these verticals. Historically, over the last 20 years, it started with vending within Nayax and has been expanding into the other verticals. We'll continue to see vending become a lower part of the mix as some of these other growth segments continue to bring more volume.
The main opportunity that we see now for the short term is mostly in Japan. Of course, Australia and New Zealand are part of what we call ongoing. But I think the changes that we're doing and preparing ourselves to be more ready for the Japanese market are enormous. We invested a lot in building the platform and the foundation to be ready for the Japanese market in the unattended business. I think we have a very good team on the ground, and we have a new product, the VPOS Media, that has been certified now in Japan. I believe that Japan will show signs of acceleration in the next year.
The next question is from the line of Sanjay Sakhrani with KBW.
It's very clear you guys are looking to get more ARPU expansion from the installed base. I'm curious if you could dimensionalize how much can come from existing products and services within the current installed base? And then obviously embedded finance is another area. Maybe you could talk about what the TAM is and how you see that playing out over the next couple of years?
Sanjay, this is Aaron. With regards to ARPU, we've seen in the last couple of years the growth rate of ARPU being in the low double digits, predominantly from processing growth. We haven't seen any changes to that regarding processing growth and seeing ARPU expand because of that. We haven't used software as a lever extensively to try to increase ARPU. As we continue to look into the outer years, ARPU growth besides processing, which will continue to grow ARPU, should come from some of these additional value-added services that we're trying to bring to the table: embedded financial services, things like lending and issuing, which we hope to bring in over the next year or two. We are also expanding a lot on rental and installment payments with the Nayax Capital acquisition that we completed last year, bringing that fully in-house in the middle of last year. Nayax Capital business is the foundation for being able to bring in these additional value-added services. It will start this year with launching the Yellow Accounts, which are deposit accounts in partnership with Adyen. Then, as customers come onto the platform, we'll be able to add additional value-added services and promote these additional services to them.
Got it. And I guess I have a question about the outlook. When we think about the breakdown between recurring revenue growth and point-of-sale revenue growth, what's sort of baked into the guidance?
Thank you, Sanjay. So we have been in this business for 20 years. If you look at the last five years, we tripled the number of managed and connected devices, grew fourfold the number of customers and increased transaction value roughly five times. The same expected growth trajectory that we've seen in the past is expected in the coming years. Recurring revenue will continue to be around 70% of total revenue, which is an ongoing component of our strong business model. We've deployed around 200,000 devices in 2025 and we're expecting to grow to between 200,000 and 250,000 devices in 2026. So the flywheel is there; the machine is working. Most of our revenue growth comes from existing customers as well as new ones, but most of it is coming from existing customers. The TAM is still the same, so I don't think 2026 will be different than the previous many years in terms of how the flywheel works.
Could I just ask one follow-up on take rates? Those have been coming down consistently over the last five to six quarters. I know there's mix impacts. Do you expect those to inflect as we move through this year?
I remind you that take rate is impacted by two main drivers. One is geography: the more transactions we have in the U.S., the higher the take rate would be and vice versa for Europe and other regions. If you look at the take rate, there is some volatility to it. Q4 was relatively lower than we've seen in the last probably 18 months. However, margin still continued to grow and remained very strong at around 38% for processing margin, and growth was around 30%. The point is that fluctuations in take rate can be driven by geography and by the verticals through which the transactions flow. What you can see are the strong margins, growing ATV—which is now $2.25 versus $2.05 last year—and solid KPI trends. Take rate becomes more of a variable metric and not necessarily a primary growth projection.
The next question is from the line of Chris Zhang with UBS.
I have a follow-up question on recurring revenue and retention. What's your assumption for net revenue retention for 2026 in your guide? Also, on total revenue, how are you thinking about revenue from existing customers versus new customers?
Chris, thank you. Regarding NRR, we expect it to continue to stay in the same range as 2025, which was around 120%, something we are very proud of, and we expect to maintain our low churn rate. With respect to existing customers versus new customers, around 75% to 80% of our growth is coming from existing customers. You can see that consistently over the last few years, and I expect that to continue. That's really how the business model works: customers start with a few devices and then buy more over time, and cash-to-cashless conversion means more transactions going through those devices, helping increase existing customer revenue growth.
At this time, I'll turn the floor back to Yair Nechmad for closing comments.
Thank you for joining us today and for your interest in Nayax. 2025 was a strong year. We grew our business, went deeper into new verticals and added important capabilities through both our acquisitions and our own product innovation. I want to thank our employees for their dedication and to thank our customers, partners and shareholders for your continued trust. Thank you very much.
Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may now disconnect your lines at this time, and have a wonderful day.