Nayax Ltd.

Hello everyone and welcome to the NIACC second quarter 2023 earnings conference call. At this time, all participants are in 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 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and 0. I would now like to turn the conference 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 Sagit 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 and our regulatory filing. 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 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 key financial highlights and then provide operational and strategic updates. Sageet will go through the details of financial results and discuss the outlook. With that, I would like to turn the call over to Nayak's CEO,

Thank you, Virginia, and thank you to everyone for joining us on our second quarter 2023 Earnings Conference Call. On today's call, I'm going to focus my comments on two areas. I'll briefly highlight key results of our excellent second quarter and provide an outlook on the business. Overall, we once again deliver another standard quarter for both operational and financial performance, highlighted by strong revenue growth, improved gross margin, and accelerated profitability. Agit and I are excited to report an operational accomplishment this quarter, which was demonstrated by the significant improvement in our hardware gross margin and ongoing operational efficiency. Hardware gross margin improved to 19% from 12% in Q1 2023 and 9% in Q4 2022. Building on Q1 2023 improvement, we continue to execute our playbook on component cost management and operational efficiencies across the business to further drive our profitability. The hard work is paying off and we would expect to see improvement throughout the rest of the year. The GIT will have more to say about our profitability outlook later on the call. For the second quarter, revenue growth was strong. We delivered revenue of $56.2 million, growing 36% year-over-year, driven primarily by our running growth initiative in another quarter of exceptionally strong recurring revenue. The growing revenue grew 43% year-over-year, increasing to 65% of our total revenue. Our first half results for 2023 in terms of revenue were also strong. We reported first half 2023 revenue of $109 million, growing 44% compared to first half 2022. driven mainly by our grinding growth initiative and recurring revenue year-over-year growth of 43%. Turning to gross margin, we are able to deliver an outstanding margin expansion in Q2. We reported gross margin of 37% for the quarter. This is a strong improvement from last quarter, which was 34%, and from Q4 2022, which was 33%. This improvement was driven mainly by the significant hardware gross margin improvement I highlighted at the beginning of my remark. This positive outcome is due to our focused execution on component cost management in addition to favorable hardware selling price we experienced in the quarter. Adjusted EBITDA accelerated in the quarter to a positive $1.3 million, reaching profitability for the first time in two years. since Q1 2021. This is a marked improvement of $4.5 million to adjusted EBITDA compared to a negative $3.2 million in Q2 2022. This ongoing profitability improvement has been driven largely by our consistent revenue outperformance and higher efficiency capture across the business as we further automate and scale. Adding to the profitability outperformance in Q2, was the significant improvement in our hardware gross margin. Our Q2 and first half result clearly reflect the positive momentum we continue to see in the business and again demonstrate how our scalable business model and our capital management decision are putting us well on track towards our long-term targets of 30% adjusted EBITDA. We communicate all along our efforts to continue to deliver our exceptional growth while focusing on operational excellence and improved profitability. Q2 is another great quarter moving us towards our targeted profitability. Let's take a look at the significant operating leverage we continue to see in our business model and the confidence we have on our path to profitability. Looking at H1 2023 over H1 2022, we've delivered an increase of $33 million in revenue and an improvement of $7 million to adjusted EBITDA, representing revenue growth outpacing expense growth, resulting in an exceptional impact in our operating leverage acceleration flowing directly to the bottom line. As I mentioned, each quarter, Two metrics that I'm particularly proud of and pay close attention to are our net retention rate, which measure our customer loyalty, and our churn rate, which measure our customer satisfaction. Our net retention rate remains elevated at 139%, reflecting the high value and confidence our diverse customers place on iX end-to-end platform and solution. Our churn rate remain low I want to now provide a brief update on our emerging growth engine, which provides us with a large addressable market opportunities beyond our core attended market over the next several years and is a critical component to further drive our SaaS revenue. As a reminder, our emerging growth engine is outlined at our Capital Market Day in March this year. include Naix Capital, our embedded financing solution for micro-operators and SMBs, CoinBridge, our loyalty asset solution, EVMeter, our electric vehicle platform, and Naix Retail, our self-checkout platform. All these new services and solutions generate revenue, except for CoinBridge, which will start generating revenue in the second half of 2023. I'm pleased with the progress each business unit is making towards their strategic goals. Overall, the team are excited about executing their mission and operating plans, and they are pretty much where they are expected to be regarding internal milestone, customer adoption, go-to-market strategy, and product launches. I look forward to providing updates as these opportunities evolve. I would also like to share our thoughts on the business for the second half of the year. Heading to the second half, Knife's business fundamental remains strong. Our differentiated growth strategies and value proposition as global solution provider with a complete end-to-end solution continue to resonate with our diverse global customer base. We continue to benefit from the secular growth trends and consumer behavior shifts driven the global and under-penetrated unattended markets. Our global footprint in major regions such as North America, Europe, and Australia provide revenue diversification in scale as well as exposure to some of the most attractive growth markets contributed to our overall growth. For example, in Q2, we added Synergy Energy as a new Tier 1 customer in Australia. Synergy Energy is Western Australia's largest energy retailer and generator. Synergy has chosen to roll out their EV DC chargers with NIAPS devices embedded. This deployment of EV fast chargers with cashless payment is the first in Australia, and NIAPS is at the forefront of this growth dynamic. So in summary, our Q2 and first half results were strong. demonstrating that our business fundamentals remain intact. We have delivered revenue within the guidance range that we have previously communicated, and we have accelerated the pace of our profitability. Again, we continue to execute on our long-term growth pillar, continue over the past year, and we are scaling the business based on our strong customer momentum and the rapidly increasing number of processed transactions across our growing base of managed and connected devices. These positive underlying trends give us confidence that we are tracking in line with the revenue guidance we gave for the full year and reflect steady progress against our long-term growth aspiration. With that, I will now turn the call over to Sagit to provide additional color about our financial performance and discuss our financial outlook. Sagit?