Nayax Ltd. ((IL:NYAX)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Nayax Ltd. opened its latest earnings call on an upbeat note, stressing strong operational momentum despite some near-term pressures. Management highlighted double-digit revenue and transaction growth, improving unit economics and expanding margins, while acknowledging cash flow softness, hardware margin pressure and higher financing costs as the company invests for scale.
Revenue Growth Fueled by Recurring Streams
Nayax reported revenue of $107 million for the quarter, up 32% year over year with organic growth of 26%. Recurring revenue rose 27% and now accounts for roughly 74% of total revenue, underscoring the company’s shift toward a more predictable, subscription-like model.
Scaling Installed Base and Customer Footprint
The installed base surpassed 1.5 million managed and connected devices, while the customer count climbed to about 120,000. This expanding footprint feeds a recurring-revenue flywheel, as each new device and client adds ongoing processing and software income.
Transaction Volume Surges and Mix Improves
Total dollar transaction value increased 33% to around $1.8 billion, reflecting both more activity and broader adoption of Nayax’s platform. Average transaction value jumped about 14.6% to $2.36, helped by deeper penetration into higher-value verticals such as EV charging, amusement and car wash.
ARPU and Unit Economics Strengthen
Average revenue per unit climbed 14% year over year to $247, signaling healthier monetization per device. Management linked this improvement to merchants converting cash payments to cashless and to growing exposure to verticals with heavier transaction intensity.
Hardware Demand Accelerates Across Markets
Hardware revenue advanced 46% to roughly $28 million, driven by broad-based demand and new product rollouts. A key contributor was the launch of PIN-on-glass VPOS Media devices in Europe, which supported larger deployments and reinforced Nayax’s hardware-led go-to-market strategy.
Profitability and Margins Edge Higher
Adjusted EBITDA rose 43% to $14 million, lifting the adjusted EBITDA margin to 13% from 12% a year ago. Operating profit reached $4 million versus $1.8 million in the prior-year period on a comparable basis, indicating that scale benefits are beginning to flow through to the bottom line.
Processing and SaaS Margins Advance
Processing margin approached 40% compared with 36% a year earlier, aided by renegotiated acquirer contracts and smarter routing. SaaS margins improved to 76.5%, pushing overall recurring margins to 54%, which helps offset pressure in other parts of the business.
Balance Sheet Supports Investment Ambitions
Nayax closed the quarter with $306 million in cash and short-term deposits, providing ample liquidity for strategic projects and potential deals. This sits against short- and long-term debt totaling $325 million, a level management presents as manageable given its growth plans.
Strategic Product and Geographic Initiatives Advance
The company reported steady progress on several strategic fronts, including a Yellow embedded banking pilot in partnership with Adyen. It is also rolling out an AI intelligence layer within its MoMa platform and advancing integration and rebranding efforts in Brazil under the Nayax Brazil banner, alongside a sharpened push in EV charging.
M&A Pipeline Positioned for Inorganic Growth
Management described an increasingly attractive, buyer-friendly M&A landscape and an active pipeline of potential targets. They reiterated that acquisitions are expected to contribute meaningfully toward Nayax’s long-term ambition of reaching $1 billion in revenue by 2028.
Hardware Margin Pressure from Promotions
Hardware gross margin slipped to 33.1% from 39.5% in the prior-year quarter, largely due to promotional campaigns tied to VPOS Media launches in Europe. Executives indicated hardware margins should hover near current levels with room for modest improvement as promotional intensity normalizes.
Investment-Driven Negative Free Cash Flow
Free cash flow was negative $6 million for the quarter, with operating cash flow of $3.6 million reflecting higher infrastructure spending and timing of processing settlements. Despite this dip, management maintained its target of converting about 40% of adjusted EBITDA into free cash flow for the full year.
Higher Financing Costs Hit the Bottom Line
Net financial expenses increased by $2.9 million, mainly from interest linked to bonds issued in 2025. This higher cost of capital weighed on quarterly net income, even as operational metrics trended positively.
Take-Rate and FX Headwinds
The company’s take rate eased to 2.66% from roughly 2.75% in the prior quarter because of a greater revenue mix from Europe, where take rates are structurally lower. Foreign exchange volatility also created about $1.2 million of unfavorable impact on adjusted operating expenses, although management noted that hedging and guidance assumptions already factor in FX risks.
Modest Net Income and Managed Leverage
Net income came in at $1.3 million versus $1.1 million in the comparable period, reflecting modest profitability at this stage of scaling. Gross debt slightly exceeds cash balances, underscoring a measured but present leverage profile that the company is monitoring while funding M&A and rental growth.
Guidance Reaffirmed Amid Growth Investments
Management reaffirmed 2026 guidance for revenue between $510 million and $520 million, implying organic growth of 22% to 25%. They continue to forecast an adjusted EBITDA margin near 17% and free cash flow conversion of about 40% of adjusted EBITDA, framing this outlook within their current scale and ongoing investment and FX considerations.
Nayax’s latest earnings call portrayed a company balancing strong growth and expanding margins against the short-term costs of scaling. Investors heard a story of rising transactions, better unit economics and a clear strategic roadmap, offset by hardware promotions, higher interest expense and FX noise, with management’s reaffirmed guidance signaling confidence in the path ahead.