NYAX — Nayax Ltd.

Summary of Nayax Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Revenue: Grew 32% year-over-year to $107 million, with organic growth of 26%.
• Adjusted EBITDA: Increased 43% to $14 million, representing 13% of revenue.
• Recurring Revenue: Grew 27%, accounting for approximately 74% of total revenue.
• Total Transaction Value: Rose 33% to approximately $1.8 billion.
• Average Revenue Per Unit (ARPU): Increased 14% year-over-year to $247.
• Hardware Revenue: Increased 46% to approximately $28 million.
• Gross Margin: Held steady at 49%, with recurring margins at 54%.
• Net Income: Reported at $1.3 million, up from $1.1 million in the prior year, excluding a one-time gain from the previous year.

2. Strategic Updates and Business Highlights

• Installed Base: Surpassed 1.5 million connected devices, with a customer base of 120,000.
• Vertical Expansion: Continued growth in higher-value sectors such as EV charging, amusement, and car wash.
• Geographic Expansion: Significant progress in Brazil, including rebranding and onboarding new customers.
• Embedded Banking Initiative: The Yellow account pilot is progressing well, aiming to enhance customer engagement and revenue.
• AI Integration: Plans to launch an AI intelligence layer in the MoMa app to improve operational efficiency and customer insights.
• M&A Activity: Active pipeline with potential acquisitions expected to contribute to growth.

3. Forward Guidance and Outlook

• Revenue Guidance for 2026: Reaffirmed at $510 million to $520 million, with organic growth of 22% to 25%.
• Adjusted EBITDA Margin: Expected to be around 17%, translating to $85 million to $90 million.
• Free Cash Flow Conversion: Anticipated at approximately 40% from adjusted EBITDA for the year.

4. Bad News, Challenges, or Points of Concern

• Hardware Margins: Lower hardware margins in Q1 due to promotional activities for new products, with expectations of only slight improvements.
• Financial Expenses: Increased by $2.9 million due to interest expenses from bond offerings.
• Free Cash Flow: Reported negative free cash flow of $6 million, primarily due to infrastructure investments and timing of cash settlements.
• Currency Volatility: FX fluctuations had a negative impact on operating expenses, though management is confident in their hedging strategies.

5. Notable Q&A Insights

• EV Strategy: Management sees rising fuel prices as a potential driver for EV adoption, with plans to connect to more public DC fast chargers.
• Hardware Costs: No significant impact from geopolitical conflicts on hardware margins; inventory levels remain stable.
• Rental Model Potential: Management is optimistic about introducing a rental or lease-based model, especially in markets like Brazil, which could enhance margins.
• M&A Landscape: The current market conditions are favorable for acquisitions, with a focus on founder-led businesses.

Overall, Nayax reported strong growth and operational performance in Q1 2026, with strategic initiatives aimed at enhancing customer engagement and expanding market presence. However, challenges such as hardware margin pressures and negative free cash flow were noted, alongside a cautious outlook on currency volatility.