Nexi S.p.A. Earnings Call: Growth Amid Challenges

Nexi S.p.A. ((IT:NEXI)) has held its Q1 earnings call. Read on for the main highlights of the call.

Nexi S.p.A. recently held its earnings call, showcasing a robust financial performance marked by revenue and EBITDA growth, strategic alliances, and efficient cost management. Despite these positive developments, the company acknowledged challenges stemming from macroeconomic uncertainties and historical banking impacts. However, Nexi’s investment-grade status and plans for shareholder returns are promising indicators for the future.

Profitable Growth and Revenue Increase

Nexi reported a commendable revenue increase of 3.7% in the first quarter of 2025, with Merchant Solutions experiencing a 4.5% rise despite facing adverse conditions such as leap year effects and Easter phasing. The company’s EBITDA saw a growth of 7.1%, accompanied by a margin expansion of nearly 150 basis points, highlighting its ability to sustain profitable growth.

Strategic Partnerships and Expansion

The company has been proactive in forming strategic partnerships, notably with Planet in the hospitality sector, targeting large merchants across the Nordics, Italy, and the DACH region. This move is part of Nexi’s broader strategy to expand its footprint, with direct complementary sales channels in Italy now contributing to about 30% of total new sales.

Strong Cost Efficiency and Shareholder Returns

Nexi’s effective cost control measures resulted in a minimal cost increase of just 0.8%, demonstrating strong operational leverage. The company plans to enhance shareholder value by returning €600 million in 2025, a 20% increase from the previous year, through a €300 million dividend and a €300 million share buyback program.

Investment Grade and Financial Structuring

In a significant development, Nexi was upgraded to investment grade by Standard & Poor’s and Fitch. The completion of a €2.9 billion financing plan and the establishment of an EMTN program are set to optimize the company’s financial structure, positioning it well for future growth.

Impact of Historical Bank Situations

Nexi anticipates that past banking situations in Italy will gradually affect its Merchant Services segment, with external pricing pressures also impacting Issuing Solutions in other regions. This highlights the ongoing challenges in navigating historical financial landscapes.

Macroeconomic and Calendar Challenges

The company faced macroeconomic uncertainties and calendar challenges, such as leap year and Easter phasing, which have impacted short-term visibility and volume trends. These factors underscore the complexities of operating in a fluctuating economic environment.

Cost Pressures and HR Cost Phasing

While Nexi has maintained strong cost efficiency, it foresees cost pressures due to the unwinding of last year’s HR rightsizing and inflation affecting non-HR costs. This indicates potential challenges in maintaining cost control in the future.

Forward-Looking Guidance

Looking ahead, Nexi confirmed its guidance for 2025, projecting low to mid-single-digit revenue growth and an EBITDA margin improvement of at least 50 basis points. The company remains committed to returning €600 million to shareholders, supported by its recent upgrade to investment grade and a robust financing plan.

In conclusion, Nexi’s earnings call painted a picture of a company on a solid growth trajectory, bolstered by strategic partnerships and financial restructuring. While challenges remain, particularly from macroeconomic factors and historical banking impacts, Nexi’s investment-grade status and shareholder return plans provide a positive outlook for stakeholders.