Nayax Ltd.

Hello, everyone, and welcome to the NIAC's fourth quarter and full year 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. As a reminder, this conference call is being recorded. After the presentation, there'll be an opportunity to ask questions. 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. I would now like to turn the call over to Mr. Aaron Greenberg, Chief Strategy Officer. Please go ahead.

Thank you, operator, and everyone for joining us today on this conference call. With me on the call today are Yair Nahmad, NIAC's co-founder and Chief Executive Officer, and Fageet 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'll 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 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 filings. In addition, today's call will include a discussion of non-IFRS measures. Management believes known 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. A reconciliation between NIACS's non-IFRS to IFRS measures 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 a macroeconomic environment to guide and support our decision-making. These key performance indicators may be calculated in a matter 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. Dayir will start the call with key financial and operational highlights. Following that, Sigeet will go through the details of financial results and discuss the outlook. And with that, I would like to turn the call over to NIACS' CEO, Dayir Nekhmad.

Thank you, Aaron, and thank you, everyone, for joining us today to discuss our four-quarter and full-year 2023 earnings. 2023 was an outstanding year for us and was a key inflection point in terms of profitability and the advancement of our strategy into the next stage. After years of heavy investment in R&D and operational growth, NARCS ended the year on a strong trajectory that will continue to accelerate for the years to come, both in terms of revenue growth and profitability. Revenues for the fiscal year 2023 ended at $235.5 million, up 36% over last year. Positive adjusted EBITDA reached $8.2 million versus a negative adjusted EBITDA of $12.7 million last year. a remarkable improvement of $20.9 million in our profitability. When we presented at our Capital Market Day in early 2023, we shared our long-term target of hitting $1 billion in revenue by 2028, which represents a compound annual growth of 35% a year. In 2023, our results demonstrated that we are very much on track, reporting a 36% year-over-year growth, Furthermore, we are proud that our adjusted EBITDA for the fiscal year 2023 was ahead of our guidance range, eclipsing more than $8 million versus our estimated range of $4 to $7 million. For those who are new to our story, NYX is a SaaS-based company at its core, providing automated tools that allow retailers to offer their customers payment and loyalty program in a manner that is a plug-and-play, When NIAC started its business as a payment processing company focused on solution for a vending machine, NIAC now proudly covers over 45 self-service end segments and counting. Our vertically integrated platform seamlessly adapts our products and services to any new payment market opportunities via customization and without needing to do substantial R&D work. Our ability to provide payment and automation tools at the global level to so many end segments built on the same platform is a differentiator and competitive mode for NIACS that competing payment companies have a difficult time to achieve. We will continue to innovate with our goal being to provide a one-stop end-to-end solution for retailers for anything related to payment and loyalty regardless of their end market. Over the course of this call, I would like to focus your attention on the following topics. our investment in automation and improved operational efficiency, the positive trend in recurring revenue and margins, the retail pool acquisition and further strategic M&A goals, our growth in device and take rates, and our progress on our new growth engine, including our loyalty product, CoinBridge. First, I would like to talk about how investment in automation and improved operational efficiency is paying off faster than expected. Excluding employees joining us for the acquisition of Ripple Pro, our headcount remains similar to that at the end of 2022 at around 800 employees. We believe that we have the foundational team in place to continue to scale in line with our long-term plan without the need to significantly increase headcount. This is due to the substantial automation we added to our operation, including onboarding and our sales cycle. Additionally, in 2023, we will work diligently to improve our efficiency and lower the time needed to successfully handle customer service requests. We saw large success in reducing customer service time, largely due to creating a dedicated service center in Romania, which has improved our efficiency. Over the coming years, we will continue to build automation features, including leveraging some of the latest AI technology that will eventually make it only necessary to call for our customer support in a small fraction of more complex situations. Now, I would like to talk about positive direction of our recurring revenue and margins. It's important to highlight that our net retention rate continues to remain high, which is a strong tailwind for our continuing profitable growth. Our dollar-based net retention rate was 144% in Q4 2023, which is holding similar to the previous quarter. With a large percentage of our growth coming from expanding businesses with existing customers, we see flywheel effect from our investment over the past several years, while also bringing substantial new customer growth. The current revenue from SaaS and processing fees grew 44% year-over-year, and continue to grow as a percentage of our total revenue to 64%. As for margins, both margins are improving in both hardware and software. This is due to automation processes improvement in our supply chain and other operational efficiencies. Tagit will go into greater detail regarding that later on. Now, I would like to provide an M&A update and focus initially on the acquisition of RetailPro International, a retail point-of-sale software company that closed at the end of last year. This acquisition solidified our strategy of growing our end-to-end payment and loyalty solutions in the retail space, working on adding automated products such as self-checkout line. Only a small fraction of RetailPro customers utilize payment or loyalty through its platform. And therefore, we see significant synergies as we vertically tie the two platforms together. The 7,500 active customers added through the acquisition will not only be targets of our payment and loyalty platform, but will also focus on cross-selling other solutions of our platform, such as EV charging and parking. While Retail Pro International did not bring a material impact in 2023 due to the closing near-year end, we expect the company to contribute meaningfully to our financial results in the coming years. Looking ahead, we expect to continue to make targeted strategic acquisition where it makes sense for the company. Our M&A strategy is focused on three pillars, regional expansion into new markets, consolidation of channels when it strategically makes sense, and acquiring technologies that will bring significant synergies. I would now like to move to our growth in device count and take rates. At the end of 2023, we managed to break the 1 million managed and connected devices milestone, which is a big achievement for our team. This is a growth of 171,000 devices or 44% year-over-year, which includes both organic and inorganic growth. Additionally, our total transaction value rose by 43% between Q4 2023 and Q4 2022 to $975 million, and we continue to see an increase to our take rate throughout the year. We increased it to 2.66% in Q4 2023 versus 2.47% in Q4 2022. NIACS is a fast-growing global financial institution with high pricing power and our increased scale is providing an ability to negotiate better processing fees. As we continue to scale, we expect to improve our processing costs while providing us with additional sales channels through acquiring partners. Lastly, I'd like to provide our progress on our new product initiative. We have spent significant amount of time over the past couple of years highlighting new product where we see rapid growth potential. And I'm pleased to say that they are where we expect them to be. One of the fastest growing unattended segments for NIAF is the EV charging space. Famous solution for the EV charging space is a strategic end market in our self-service business where we see a significant total addressable market growing over the next several years. EV charging is a complex market where NYX thrives, being one of the only global suppliers that can easily integrate a card-present payment solution in this segment. NYX's investment in the development of payment infrastructure and EV charging-related protocol over the past several years paid off in 2023, with year-over-year growth in payment devices in this segment growing rapidly. NIAX is chomping on the opportunity to play in the clean energy transition and expect to capitalize on it. To date, several dozens of OEM manufacturers in the EV charging segment are integrated with NIAX payment devices. And that number will continue to grow due to our strong reputation in this space. I would now like to provide an update on CoinBridge, our patent platform developed to seamlessly convert loyalty assets such as points, miles, stars, vouchers, and gift cards, and other non-fiat currency into a real transaction at any shop worldwide. CoinBridge has been developing on the R&D side at a rapid pace. As promised, CoinBridge generated some initial revenue in Q4 2023, and we expect to see this solution as a significant asset for our company and an important revenue generator in the future. As a reminder, CoinBridge is a technology platform that now is built from ground up, allowing loyalty clubs and retailers to offer their customers a greater freedom of choice by redeeming their loyalty assets anywhere outside of the print, as a seamless payment method anywhere. CoinBridge technology is seamlessly implemented into existing loyalty apps, turning those into a loyalty e-wallet, providing retailers with a new tool to better engage customers, increase loyalty, basket size, and their revenue. Coupled with new transactional data outside their brand, they now can enjoy new insight and optimize on customers' behavior and needs. We've already managed to announce a strategic partnership with GIF, the global leader in loyalty technology solution, as a major distribution channel and expect to have exciting development over the coming quarters. In summary, we highlighted many important drivers of profitable growth for NIAX. A significant investment in automation and improving operational efficiency is staying off faster than expected. Marching in both our hardware and software side of the business continue to improve with strong operational leverage in our business. And we are at that key inflection point for strong and profitable growth into the years ahead. Our technology platform allows us to not only expand within the region we already are operating, but also expand to new regions with limited additional investments. In 2024, we expect to make a concerted effort to expand into new regions such as Latin America, where we see tremendous opportunity for cashless solutions. Our strong operational leverage allows us to continue to expand profitably with our ability to utilize our technology on a global platform being a differentiator that will carry our company into the years ahead. I would like to now turn it over to our CFO, Sagit Manor, who will go into greater detail on the business's 2023 financial and 2024 outlook. Sagit?