Nayax Ltd.

Hello everyone and welcome to the NIAC's first quarter 2023 earnings conference call. At this time, all participants are in a listen only mode. A question and answer session will follow the speaker's prepared remarks. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. 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 conference call. With me on the call today are Yair Necmad, NIAC's co-founder and chief executive officer, and Sageet 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 risk and uncertainty 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 supplementary investor presentation released earlier today, as well as our regulatory final, which you can find on our IR website. 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 and our ongoing performance. However, 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 and or investor presentation 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 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 key financial highlights and then provide a business outlook. Sageet will go through the details of financial results and discuss the financial outlook. With that, I would like to turn the call over to NIAC CEO Yair Nekhmad. Yair?

Thank you, Virginia, and thank you to everyone for joining us on the first quarter of 2023 Earnings Conference Call. On today's call, I'm going to focus my comment on two areas. I'll briefly highlight key results in our excellent first quarter and provide an update outlook on the business. I'm pleased to say that we exceeded our first quarter expectation on both the top line and bottom line and continue to capture efficiencies across our global operation. This is a result of the investment in automation and infrastructure we made in 2022 to scale the NIAICS business and from our discipline focus on capital and expenses management as we communicated last quarter. For the quarter, Topline growth remained strong as we delivered revenue of $52.4 million and growth of 54% year-over-year that again exceeded our 35% annual growth target, driven primarily by our organic growth initiatives. Recurring revenue grew 44% to represent 62% of our total revenue. First quarter adjusted EBITDA continued to show strong improvement. A focused effort to manage the business with greater cost discipline resulted in a $2.7 million improvement with adjusted EBITDA coming in at negative $600,000 compared to a negative $3.3 million in Q1 2022. An improvement of $1.9 million compared to Q4 2022. This ongoing improvement has been driven largely by our consistent revenue outperformance and higher efficiency capture across the business as we further automate and scale and with the diligence focus on moderating expenses. In reviewing our Excellence Q1 results, it demonstrates how our scalable platform and our capital management decisions are putting us well on track towards our long-term target of 30% adjusted EBITDA. Looking at Q1 2023 over Q1 2022, we've seen $18 million revenue increase and $2.7 million adjusted EBITDA improvement. This represents 14% of the growth cascading to the bottom line. With a significant improvement in adjusted EBITDA over the past two quarters, this outcome now gives us a clearer line of sight and confidence to reach profitability at an accelerated timeline. Last quarter, we provided initial guidance that adjusted EBITDA would reach break-even in 2023. I'm excited to report that we now expect to reach adjusted EBITDA profitability in 2023. SEGIT will provide more detail about our profitability outlook later on the call, but at a higher level, we remain committed to and have been executing our profitability plan. We expect that with an annual revenue growth target of at least 35% in addition to an improvement in hardware gross margin to mid-teens, combined with relatively flat year-over-year operating expenses, these results will flow through to the bottom line, putting us on the path to profitability. Two metrics that I'm particularly proud of. and pay close attention to our net retention rate, which measure our customer loyalty, and our churn rate, which measure our customer satisfaction. We ended the quarter with an increase in our net retention rate of 141%, reflecting the high satisfaction and confidence our diverse customers place on the Nyex end-to-end platform and solution. Our churn rate remained low at 3.8%. Turning to our global footprint performance, in Q1, 39% of our revenue was driven from Europe, 38% from North America, 10% from Australia, and 13% from the rest of the world. We continue to see strong growth and demand for the NICE solution across all these regions. Finally, we reported a gross margin of 34% for the quarter. This is a slight improvement from last quarter, which was 33%. I'm encouraged to see the modest improvement in hardware gross margin of 300 basis points this quarter compared to Q4 2022, as we previously communicated. Last quarter, we announced that we had raised hardware price in the mid single digit, and we started seeing the benefit already in Q1 2023, with full impact to be seen as we continue in 2023. We are also continuing to find ways to reduce component costs through dual sourcing, and we are already seeing the benefit as we head into Q2 2023. We will see additional hardware growth margin improvement throughout the year. SAGIT will provide more detail about our hardware margin outlook later on the call. Before I wrap up, I wanted to share our thoughts on the remainder of the year. Let me start by saying that our business fundamentals remain strong and our diversified business model and our momentum with our customers and solution position us well for the large market opportunity ahead. We will continue to watch the macro environment closely, and as we have demonstrated, capital management is a key priority. We have the flexibility to act nimbly in a rapidly evolving macro environment to adapt our cost structure and prioritize strategic investment while executing on our key strategic initiatives. To wrap up, NYX is off a great start in 2023 with another set of strong financial results highlighted by delivering improved adjusted EBITDA ahead of the expectation and accelerating the path to profitability. As we look ahead to the rest of 2023, these results give us the confidence that we are tracking in line with the revenue guidance we gave for the full year and the visibility to raise our adjusted EBITDA guidance for reaching profitability in 2023. This reflects steady progress against our long-term growth aspiration. With that, I will now turn the call over to Sagit to talk about our financial performance and provide an update on our 2023 guidance. Sagit?