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 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 in a 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…

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 into 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 the 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…

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 bit of 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. Yeah. So 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. And we're getting a lot of momentum, especially in the North American market, and I expect also over the coming quarters with the launch of the VPost Media, which we talked about a little bit in the script as well. You know, over the coming quarters in Europe and UK with a pin on glass given that with DC charging, with 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 all you know, so we see that, with the launch of that, that we'll be able to do more, in that market for the EV charging as opposed to in, you know, 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, into next year, the partnership with Autel and with the other OEMs are progressing as expected. And we're seeing, you know, the first, Uno Minis were, you know, our embedded readers, were delivered at the '2 actually, 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 other things you mentioned, like car washes, amusement, Looking at some of the recent, like, 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. We signed some partnerships in the US market with regards to the smart coolers for distribution with our Vipostouch. And 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. And 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, you know, 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 finish 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. Maybe just to add to the appreciate One thing to add to it, yeah, there is a great opportunity that Nayax Ltd. is exercising with all the OEM. In the cooler by itself, we are partnering with the cooler manufacturers and we are embedding ourselves with the Deepos Media already right now with the provider OEM. And by that, we can expose ourselves to a greater market share in the cooler industry. Appreciate the update. I'll hop back in the queue.

Thanks.

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 is alive and kicking in terms of internally almost done from Nayax Ltd.'s perspective in the ready to launch. It will be launched during Q1, mostly in the US market. Everything in terms of setting up the agreement the way that we're operating. Will take live in Q1. And then following this, in Q2, this Q3, rolling out production, we have set targets for this. The impact of this in terms of how we're operating, I strongly pushing that, we'll look very much to bring value out to our customer. Mostly with the weight, MCA, with the working potential solution that we have. And then we'll help our customers to work it 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 we 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-com. The e-com is mostly for the EV for the first start. The EV market. And then it will roll out to more and more segments in the All of this is gonna happen in 2026.

Right.

Thank you. And then I'll if I could just add there, we did start pilot test testing in the US market for the e-commerce solution. The beginning of this month. And as Yair said, production, full production, with external customers will start beginning of the year.

Okay. Thanks for that. And then 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 you know, the range between traditional vending versus EV or amusement or car washes? Thanks for taking the questions. Of course. I'll start and maybe Aaron can help as well. Thank you for the question.

So we do see that, on a quarterly basis, the number of the value of the transaction is growing faster than the number of transactions. So and it comes from the higher, the verticals that provide higher ticketing. Like power, like laundromat, like, the easy, of course, and other areas where other verticals that we are growing. And we expect that to continue. And with that, I'll let Aaron to add some more information.

Yeah. So know, there's high you know, some of the higher growth verticals like like EV charging. You know, for example, on a, you know, on a DC charger, you can see you know, average transaction value. Right now, we're seeing it somewhere around $18 on a transaction. You know, even with AC chargers, we see about 4 to $5 per transaction. On average. At the moment, and those have been, steadily rising as well. With EV adoption over the last couple of years. And, also, some of the other verticals as well are, starting to see some significant growth, car wash and others that are, you know, rising that, ATV. And then you know, it's important to mention also that on the retail, division, as you continue to grow the retail side of the business as well, the ATV will continue to go up as well. So I think we you know, it's important to, you know, stress that the ATV will likely continue to go up over time. You know, it's continue to expand these new verticals. The gross take rate is not what the focus has been on as opposed to really the net take rate and making sure that as we continue to increase the ATV, that the net take rate that we've been taking continues to maintain steady or growing. And as we've shown over the last several we've been able to get the processing gross margin up from the high twenties up to the high thirties. Which is a huge testament to the, you know, to the financial negotiating power that we now have, you know, doing, you know, several billion transactions a year now, and growing that processing growth as much as we are, gives us a lot of leverage to be able…

Great. Thanks for all Maybe one last thing to add to add to this.

Chris, one last thing to add to this. We also boost the platform remotely to change pricing. It's helped existing customers to fit their pricing according to inflation. And it's also increasing 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 profits been driven here on the recurring side. That would be interesting. To understand. Then the second one is on M&A opportunity. Appreciate the prudence of rather quality over quantity. Which led to the guidance cuts. Maybe you just can give us an update on your appetite. Has there anything been changed in terms of 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? And then maybe just the last one, in terms of giving us 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 delay in that process? Has there been any opportunities? Thank you.

Maybe I'll start. Regarding how we are routing transactions, we are doing this more and more and better and better. And it's helped us to go currently now semi-automatic regarding how we are we're doing this with the acquirers, but we'll move further and further to almost automatic regarding each and every beam call will be routed according to the best price and the best data that we have. Since we have more than 3 billion transactions, we know exactly which acquirers is doing in terms of acceptance rate, is the most important part. And then they're the rate that we're getting. And we'll have the ability to increase the acceptance in one hand and to reduce the cost from the other end. This will go more and more into holding our margin in a very, very tight way that we can control the margins. And we know that we can negotiate against the vendors regarding the acquirers, we have big volume, and we can also have leverage against our customers. Most of the customers, 36% of them, are small customers that cannot really have leverage in terms of negotiating. So all of this is keeping us, I think, on the good track that the margin will be according to what we expect to achieve, and we are in control. Maybe before passing this to Aaron to talk about the M&A, we're looking at the 2028 and we see the market according to what we expected to reach our targets. That's a part of what we believe is the ability of the Nayax Ltd. team to bring to life this growth. And with the M&A, sometimes it will be potentially a delay, and maybe we should be more clear regarding the organic and just that's what be the main topic that will guide the market and not really relating to an organic.

Thanks, Yair. This is Aaron. Thanks, Hannes, for the questions. On the M&A front, on the two points that you asked about, With regards to M&A appetite, we are continuing to be prudent with regards to the acquisitions that we're doing. Most of the acquisitions that we've looked at have tended to be on the smaller side, as you've seen, in quarters past. However, we do have the appetite to do a larger acquisition, not transformational, but a larger acquisition, if it makes sense strategically for us. As if we look into the 2028, mark, we expect to see somewhere around probably $200 million of inorganic out of the billion with regards to, as we've looked from 2022 to 2028, when we first came out with the 2028 targets. And, we still expect that to be relatively the same. So that would mean, obviously, if we're continuing to do a few a year, there's going to be a couple of larger acquisitions between now and 2028. And I would expect that probably as we go into 2026, one of the, you know, few acquisitions will likely be larger, you know, call it more than $100 million of enterprise value but still not a transformational acquisition. It's very important to us that we keep the culture and the infrastructure of Nayax Ltd. at the core. And that and having the core management team and, you know, and not having an acquisition, you know, us in the wrong direction. So anything that we end up doing, you know, really needs to fit within our culture, but also, needs to be something that we can, you know, easily digest as a company. And that's been very important to all of us as we look at this. You know, with you know? And I'll…

Great. Thank you so much.

Our next question is from Sanjay Sakhrani with KBW. Please proceed.

Thank you. Good morning. 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 invest around I think, the last two years a lot regarding putting the hardware in the half of ourselves in terms of how we produce and how we are reaching out to the best source of the component and design of the product. And now we're launching the also the Repos Media, which is a fully Android, which should support. Should have been what you call increasing our hardware cost, but actually, it is not. We succeed to get what we call a very, very good way to operate our hardware manufacturing and the way that we are sourcing it. And I believe that we can keep on running on the rails of the 30%, 35% as we said on the hardware side. We have the flexibility to meet all the requirements of the market. On top of the risk of the target, which is coming on and off into the US market, but the US market is only 39% of our business. So basically, in terms of all the blending of the global, we can see that we can control the margin of the hardware.

Got it. And just the visibility for that fourth-quarter ramp.

So we're seeing high demand. Q4 is always a big enterprise. And we have a very, very good visibility to end this quarter with the expectations that we set to the market. And visibility is in our Salesforce. So it's a good visibility.

Okay. And just one follow-up. In terms of the delay in the M&A, like, how much of that contributed to the third quarter versus it contributing to the fourth quarter? And then just a follow-up on Yair, you mentioned sort of it might be better just to give the organic growth expectations because inorganic is sort of hard to sort of estimate timing. There's always lumpiness there. As we think about that 2028 guidance, like, how much of it is organic versus inorganic to get to that 35? Thank you.

So maybe I'll start and Yair and Aaron will continue. So the job in Q3, you know, we are not giving a quarterly guidance. However, versus the consensus, absolutely, the gap between our organic financial results. And the consensus comes from the lack of significant M&A that we were expecting to see, and that impacted the Q3 and, obviously, Q4. That's the reason why we are updating our guidance with respect mainly to the inorganic growth of the business. And as for 2028, I'll let Aaron speak about that and what's the M&A portion of it.

Yeah. Thank you, Sagit and Sanjay. So with regards to this year, you know, I'll just say that, you know, there were multiple M&A's, that were delayed later in processes. You know, as I mentioned to Hannes and to others, you know, we're very prudent with regards to M&A. We want to make sure that we're doing the right acquisitions. You know, we have a very, you know, detailed due diligence process with regards to these acquisitions. You know, we're not just buying them on the fly. We have a dedicated team to work on this. And we want to make sure that the ones that we're buying are not just contributing, you know, in the short term to revenue, but you know, contribute to the long-term strategy of the business. Specifically with regards to this year, we expected that the Integral Vending acquisition would have happened earlier in this year. It's one that we've been talking about for a while with our with Integral there in Mexico, and it's one strategically that we really wanted to do for a while. And we finally were able to, know, to get to terms on the LOI, back. In the last, you know, month and a half or so, which is, which is a big plus for us, and, we're very excited about that. And, we believe that we'll be able to get that done by the end of the year. We're actively in the negotiations and due diligence process right now to get it closed. And there was another acquisition at the time of the Q2 earnings that we were deep in the process of we decided to drop out of in the due diligence process. You know, again, because of the prudent, you know, measures that we take during the…

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 payment in many geographies and verticals. As we look ahead, we will stay focused on our plan profitable, and profitability growth growing 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.