Nayax Ltd.

Hello, everyone, and welcome to the NAICS first quarter earnings conference call. At this time, participants are in a listen-only mode. A question and answer session will follow the speaker's prepared remarks. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. As a reminder, this conference call is being recorded. I would now like to turn the call over to Ms. Virginia Stewart-Gibson. Please go ahead.

Thank you, operator, and everyone for joining us today on this call. With me on the call today are Yair Nikhmad, NIAC's co-founder and chief executive officer, and Sangeet Manoor, 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.niacs.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 actual 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 earnings press release issued earlier today and our regulatory filing. In addition, today's call will include a discussion of non-IFRS measures. These measures should be considered as a supplement to and not as a substitute for IFRS financial measures. Reconciliations to the nearest IFRS measure 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 the macroeconomic environment to guide and support our decision-making. These key performance indicators may be calculated in a manner different from the 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 strategic and operational highlights. Then Segeet will go through the financial results for the quarter. With that, I would like to turn the call over to NIAC's CEO, Yair Nekmat. Yair?

Thank you, Virginia, and thank you to everyone for joining us on the conference call. I'm especially pleased to be on this call with all of you today. This month of May marks NIAC's first full year as a public company. Our results for the first quarter reflect the continuous strong performance that we have been delivering over these past 12 months. Demand for our platform and solution remained strong as we added an additional 36,000 devices, bringing the total number of devices to 553,000, and we processed 269 million transactions an increase of 87% over the three-year quarter. We reported a higher level of recurring revenue at $23 million. This excellent recurring revenue growth trend increased by 67% in first quarter over the same period last year, accounting for 66% of total revenue compared to 59% of total revenue in Q1 2021. Our customer loyalty, as measured by net retention rate, also hit a new high at 140% for the quarter. This is a result of our compelling solution and our commitment to constantly making them even better for our customers. This industry-leading metric also reflects the high confidence and satisfaction with our platform, solution, and the trusted partnership that we have developed over the past 17 years with our customers. As we previously communicated on our early calls, the destruction from the ongoing global component shortage remained a challenge and we saw an impact during the first quarter compared to Q4 2022. But a sequential decline in our post-device revenue. We continue to carefully manage the situation in order to supply the growing backlog of orders for our products and focusing on what we can control and mitigate as the situation evolves. Our strong results demonstrate the durability of our business model and the mission-critical nature of our technology in solving our customers' problems and their reliance on NIAX to grow their business. As we announced in April, our continuous strong results and the high visibility we have from the growing backlog of orders for the rest of the year give us the confidence in reaffirming our mid-term revenue growth target of 35%. It will provide more color on our financial performance and outlook later on the call. I would now like to talk about some of the recent partnership announcements and how they are advancing our strategy for sustained long-term growth and providing masks with efficient ways to scale our business even faster than our own. Let me start with our ongoing strategic focus on expanding our global footprint while establishing a presence in markets that are still poised for growth as they transition to cashless and accept more digital payments. Expanding into new markets and extending our reach globally has always been part of Knives' growth plan that we outlined and we have been delivering on that promise. Knives already has a global presence in key regions, as can be seen by our revenue mix. For Q1 2022, more than 40% of our revenue was derived from Europe, over 30% from North America, 12% from the rest of the world, and 11% from Australia. We are easing the results from this expansion strategy and seeing many more under-penetrated market opportunities. Let me give you an example of one of these attractive growth markets. We further strengthened our international presence with the announcement earlier this month about our market extension into the United Arab Emirates, or UAE region, through a partnership with Network International. Network is the leading enabler of digital commerce across Middle East and Africa. The collaboration will enable us unattended self-service solutions to be introduced to network's UAE merchants and enable seamless payment transactions with unattended self-service businesses segments, including vending machines, kiddie rides, car chargers, car wash, a laundromat, micro-market, and any type of smart machine or kiosk. The UAE NIAC solution will allow consumers to simply select their desired product or service and pay using their preferred payment method, whether it is debit or credit card. Working with Network International will enable us to reach various retailers in the UAE and other countries in the Middle East and Africa region, enabling growth for our customers with increased revenue and market opportunity, as well as access to tier one customer enterprise, a perfect win-win situation. We also announced an integration partnership with American Express. This is an extended partnership that we initially kicked off in Australia about a year ago, and we are now rolling out across the European region and UK market. NAICS UK will be the first office to implement these changes across all NAICS people's touch and ONIX cashless payment devices installed across unattended industries, including vending, self-service, laundromat, kiddie ride, office coffee services, automated car wash, and more. NICE has been accepting American Express cards in both the U.S. and Israel for many years through swipe only. This integration now offers payment acceptance through EMV. We expect to roll out to additional countries in the next upcoming month. This will enable NICE retailers to accept American Express cards for all purchases and services, giving them the opportunity for increased growth and revenue. The American Express card members now have greater choice of where they can use their card. With thousands of locations around the world accepting the American Express card, this partnership is a strong statement of confidence in having NICE as a key partner. A successful execution of our geographic expansion will help us acquire new customers and leverage our increasing scale. At the core of who we are, as a company is our unrelenting focus on technology disruption and innovation. This allows us to continuously add value to our customers' business and maintain a trusted partnership. During our participation at NAMA, one of the largest national trade associations of the convenience service industry, including vending, micro-market, and food service management, we introduced EasyFit, a bid validator kit allowing the acceptance of cash and cashless payments. EasyFit will work with Nike's proven award-winning cashless payment solution, Vipos Touch, used by almost 34,000 customers worldwide. With this solution, Nike simplified the acceptance of cash and cashless transactions from a single location on an operator's machine. Lastly, I want to remind everyone that the acquisition of OTI, a provider of smart payment solutions for unattended machines, remains on track to close in June. These acquisitions support our long-term growth plans to gain market share in strategic growth markets and accelerate our growth drivers in attractive regions such as Japan. We recently provided OTI a loan disbursement of approximately $6.5 million to repay its outstanding debt and support their current operations. the loan has maturity to NICE within two years. Once acquisition is approved and meets all statutory procedures and processes, NICE will invest $4.5 million and will assume full ownership of OTI shares. To wrap up, I continue to be pleased with our strong execution and the consistent progress we have made in delivering on our strategy and growth initiatives. With that, I will now turn the call to Sagit.