Exhibit |
Description
|
NAYAX LTD.
|
|||
By:
|
/s/ Gal Omer
|
||
Name: Gal Omer
|
|||
Title: Chief Legal Officer
|
|||
|
• |
Total revenue of $60.3 million, grew 27.8%.
|
|
• |
Recurring revenue from monthly SaaS and payment processing fees grew 47.8% and represented 67% of total revenue in Q3 2023.
|
Revenue Breakdown
|
Q3 2023 ($M)
|
Q3 2022 ($M)
|
Change (%)
|
SaaS Revenue
|
15.2
|
11.3
|
34.5%
|
Payment Processing Fees
|
25.0
|
15.9
|
57.2%
|
Total Recurring Revenue (*)
|
40.2
|
27.2
|
47.8%
|
POS Devices Revenue (**)
|
20.1
|
20.0
|
0.5%
|
Total Revenue
|
60.3
|
47.2
|
27.8%
|
|
• |
Overall gross margin continued to trend higher. Q3 2023 gross margin of 38% was higher compared to Q2 2023 of 37% and Q3 2022 of 34%. The increase was mainly attributed to our hardware gross margin improvement. In Q3, hardware gross
margin improved to 21% from 19% in Q2 2023 and 12% in Q1 2023. Year-to-date September 30, 2023, hardware gross margin was 17%, within the annual target range, previously communicated.
|
|
• |
Gross profit reached $23.0 million, an increase of 46%.
|
|
• |
Operating expenses, including research and development, share-based compensation expenses, and depreciation and amortization amounted to $23.9 million, a decrease of 1% from Q2 2023, reflecting lower SG&A costs. Q3 did not have any
material impact from foreign currency exchange rate fluctuations compared to Q2 2023.
|
|
• |
Operating expenses as a percent of total revenue improved to 40% of Q3 2023 total revenue, compared to 50% of Q3 2022 total revenue.
|
|
• |
Q3 2023 operating loss was $1.5 million, compared to an operating loss of $9.2 million in Q3 2022, representing a significant improvement, driven mostly by revenue growth outpacing expense growth.
|
|
• |
Net loss for Q3 2023 improved significantly from a net loss of $9.9 million or ($0.300) per diluted share to a net loss of $3.1 million, or ($0.093) per diluted share, an improvement of almost $7 million.
|
|
• |
We continued to make significant strides in improving our profitability. Adjusted EBITDA was a positive $3.5 million, a marked improvement of $7.2 million to Adjusted EBITDA compared to negative $3.7 million in Q3 2022. Q3 Adjusted
EBITDA more than doubled compared to Q2 2023 Adjusted EBITDA of $1.3 million.
|
|
• |
Cash and cash equivalents reached $39.8 million. The $8.8 million increase in the quarter is due to the additional credit facility to fund the proposed Retail Pro International acquisition announced on October 30, 2023.
|
|
• |
Customer expansion continued this quarter, with an additional 4,000 new customers across our global, diverse footprint. This brings our total customer base to 60,000, as of September 30, 2023, an increase of 43%.
|
|
• |
Dollar-based net retention rate increased to 145%, reflecting the high satisfaction and loyalty our customers place on our comprehensive solutions to increase their revenue and improve their operations.
|
|
• |
Added 50,000 managed and connected devices during the quarter, driven by robust customer demand, bringing the total number of managed and connected devices to 874,000 for Q3 2023. This represents an increase of 27.6%.
|
|
• |
Number of processed transactions grew by 39% to 473 million.
|
|
• |
Total transaction value increased by 61% to $989 million.
|
|
• |
Signed a strategic partnership with Turkey’s Duzey, the largest Koç Holding company in the fast-moving consumer goods sector. The partnership was initiated with the installation of Nayax devices on vending machines in public locations
and factory locations throughout Turkey and will eventually expand to other locations in Europe.
|
|
• |
Nayax Coinbridge entered into a strategic partnership with Giift, a global leader in loyalty technology solutions. The collaboration marks a significant milestone for the loyalty industry by introducing the world’s first open-loop
Loyalty to Payments™ solution, powered via CoinBridge by Nayax’s patented technology.
|
|
• |
Signed partnership agreement with a leading US car manufacturer for EV chargers in each dealership for public use.
|
Key Performance Indicators
|
Q3 2023
|
Q3 2022
|
Change (%)
|
Total Transaction Value ($m)
|
989
|
616
|
60.6%
|
Number of Processed Transactions (millions)
|
473
|
341
|
38.7%
|
Take Rate % (Payments) (*)
|
2.53%
|
2.59%
|
-2.3%
|
Managed and Connected Devices
|
874,000
|
685,000
|
27.6%
|
|
• |
On October 30, 2023, we announced a definitive agreement to acquire Retail Pro International. The proposed transaction is expected to close in Q4 2023, subject to the satisfaction of customary closing conditions.
|
|
• |
Reaffirming revenue on a constant currency basis to be in the range of $235 million to $240 million, representing year-over-year growth of at least 35%.
|
|
• |
Reaffirming operating expenses to stay flat from Q4 2022 annualized run rate.
|
|
• |
Revising Adjusted EBITDA to a range between $4 to $7 million in FY 2023 from $3 to $7 million.
|
|
• |
Continued execution of strategic growth plans and benefits of secular trends in digital payments.
|
|
• |
Customer demand continues to be strong.
|
|
• |
Assumes no material changes in macroeconomic conditions.
|
|
• |
We are reaffirming our mid-term revenue outlook of 35% annual growth, driven by organic growth initiatives, with customer growth, market penetration and continued expansion of our integrated payments platform as well as our emerging
growth engines and strategic M&A.
|
|
• |
We are reaffirming our long-term outlook of 35% annual growth, driven by organic growth initiatives and strategic M&A.
|
|
• |
Our long-term gross margin target of 50% is driven by leasing options for IoT POS, growing SaaS revenue and payment processing fees along with services offering through our emerging growth initiatives.
|
|
• |
Our long-term Adjusted EBITDA margin target is 30%.
|
September 30
|
December 31
|
|||||||
2023
|
2022
|
|||||||
U.S. dollars in thousands
|
||||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
39,803
|
33,880
|
||||||
Restricted cash transferable to customers for processing activity
|
50,957
|
34,119
|
||||||
Short-term bank deposits
|
1,250
|
83
|
||||||
Receivables in respect of processing activity
|
40,384
|
25,382
|
||||||
Trade receivable, net
|
29,986
|
27,412
|
||||||
Inventory
|
19,788
|
23,807
|
||||||
Other current assets
|
5,765
|
5,777
|
||||||
Total current assets
|
187,933
|
150,460
|
||||||
NON-CURRENT ASSETS:
|
||||||||
Long-term bank deposits
|
1,284
|
1,336
|
||||||
Other long-term assets
|
5,354
|
2,948
|
||||||
Investment in associates
|
5,335
|
6,579
|
||||||
Right-of-use assets, net
|
5,853
|
7,381
|
||||||
Property and equipment, net
|
5,609
|
6,668
|
||||||
Goodwill and intangible assets, net
|
61,235
|
55,116
|
||||||
Total non-current assets
|
84,670
|
80,028
|
||||||
TOTAL ASSETS
|
272,603
|
230,488
|
||||||
September 30
|
December 31
|
|||||||
2023
|
2022
|
|||||||
U.S. dollars in thousands
|
||||||||
LIABILITIES AND EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Short-term bank credit
|
26,810
|
7,684
|
||||||
Current maturities of long-term bank loans
|
1,022
|
1,052
|
||||||
Current maturities of loans from others and other long-term liabilities
|
5,137
|
4,126
|
||||||
Current maturities of leases liabilities
|
2,159
|
2,206
|
||||||
Payables in respect of processing activity
|
100,903
|
63,336
|
||||||
Trade payables
|
10,730
|
14,574
|
||||||
Other payables
|
17,773
|
17,229
|
||||||
Total current liabilities
|
164,534
|
110,207
|
||||||
NON-CURRENT LIABILITIES:
|
||||||||
Long-term bank loans
|
573
|
1,444
|
||||||
Long-term loans from others and other long-term liabilities
|
2,715
|
7,062
|
||||||
Post-employment benefit obligations, net
|
446
|
403
|
||||||
Lease liabilities
|
4,392
|
5,944
|
||||||
Deferred income taxes
|
640
|
793
|
||||||
Total non-current liabilities
|
8,766
|
15,646
|
||||||
TOTAL LIABILITIES
|
173,300
|
125,853
|
||||||
EQUITY:
|
||||||||
Share capital
|
8
|
8
|
||||||
Additional paid in capital
|
153,524
|
151,406
|
||||||
Capital reserves
|
9,954
|
9,771
|
||||||
Accumulated deficit
|
(64,183
|
)
|
(56,550
|
)
|
||||
TOTAL EQUITY
|
99,303
|
104,635
|
||||||
TOTAL LIABILITIES AND EQUITY
|
272,603
|
230,488
|
Nine months ended
September 30 |
Three months ended
September 30 |
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
U.S. dollars in thousands
|
||||||||||||||||
(Excluding loss per share data)
|
||||||||||||||||
Revenues
|
168,896
|
122,592
|
60,327
|
47,249
|
||||||||||||
Cost of revenues
|
(107,189
|
)
|
(79,584
|
)
|
(37,351
|
)
|
(31,440
|
)
|
||||||||
Gross Profit
|
61,707
|
43,008
|
22,976
|
15,809
|
||||||||||||
Research and development expenses
|
(15,420
|
)
|
(16,691
|
)
|
(5,314
|
)
|
(5,999
|
)
|
||||||||
Selling, general and administrative expenses
|
(50,804
|
)
|
(46,664
|
)
|
(16,837
|
)
|
(16,718
|
)
|
||||||||
Depreciation and amortization in respect of technology and capitalized development costs
|
(4,609
|
)
|
(3,128
|
)
|
(1,795
|
)
|
(1,017
|
)
|
||||||||
Other expenses, net
|
-
|
(1,690
|
)
|
-
|
(824
|
)
|
||||||||||
Share of loss of equity method investee
|
(1,244
|
)
|
(1,499
|
)
|
(503
|
)
|
(428
|
)
|
||||||||
Operating loss
|
(10,370
|
)
|
(26,664
|
)
|
(1,473
|
)
|
(9,177
|
)
|
||||||||
Finance expenses, net
|
(1,355
|
)
|
(2,888
|
)
|
(1,237
|
)
|
(531
|
)
|
||||||||
Loss before taxes on income
|
(11,725
|
)
|
(29,552
|
)
|
(2,710
|
)
|
(9,708
|
)
|
||||||||
Income tax expense
|
(869
|
)
|
(444
|
)
|
(384
|
)
|
(159
|
)
|
||||||||
Loss for the period
|
(12,594
|
)
|
(29,996
|
)
|
(3,094
|
)
|
(9,867
|
)
|
||||||||
Loss per share attributed to shareholders of the Company:
|
||||||||||||||||
Basic and diluted loss per share
|
(0.381
|
)
|
(0.914
|
)
|
(0.093
|
)
|
(0.300
|
)
|
Nine months ended
September 30 |
Three months ended
September 30 |
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
U.S. dollars in thousands
|
||||||||||||||||
Loss for the period
|
(12,594
|
)
|
(29,996
|
)
|
(3,094
|
)
|
(9,867
|
)
|
||||||||
Other comprehensive loss for the period:
|
||||||||||||||||
Items that may be reclassified to profit or loss:
|
||||||||||||||||
Exchange differences on translation of foreign operations
|
183
|
(455
|
)
|
74
|
34
|
|||||||||||
Total comprehensive loss for the period
|
(12,411
|
)
|
(30,451
|
)
|
(3,020
|
)
|
(9,833
|
)
|
Share
capital |
Additional paid in capital
|
Remeasurement of post-employment benefit obligations
|
Other capital reserves
|
Foreign currency translation reserve
|
Accumulated
deficit |
Total
equity |
||||||||||||||||||||||
U.S. dollars in thousands
|
||||||||||||||||||||||||||||
Balance at January 1, 2023:
|
8
|
151,406
|
248
|
9,503
|
20
|
(56,550
|
)
|
104,635
|
||||||||||||||||||||
Changes in the nine months ended September 30, 2023:
|
||||||||||||||||||||||||||||
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
(12,594
|
)
|
(12,594
|
)
|
|||||||||||||||||||
Other comprehensive income for the period
|
-
|
-
|
-
|
-
|
183
|
-
|
183
|
|||||||||||||||||||||
Employee options exercised
|
*
|
2,118
|
-
|
-
|
-
|
-
|
2,118
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
-
|
-
|
4,961
|
4,961
|
|||||||||||||||||||||
Balance on September 30, 2023:
|
8
|
153,524
|
248
|
9,503
|
203
|
(64,183
|
)
|
99,303
|
||||||||||||||||||||
Balance at January 1, 2022:
|
8
|
150,366
|
102
|
9,503
|
394
|
(28,697
|
)
|
131,676
|
||||||||||||||||||||
Changes in the nine months ended September 30, 2022:
|
||||||||||||||||||||||||||||
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
(29,996
|
)
|
(29,996
|
)
|
|||||||||||||||||||
Other comprehensive loss for the period
|
-
|
-
|
-
|
-
|
(455
|
)
|
-
|
(455
|
)
|
|||||||||||||||||||
Employee options exercised
|
*
|
700
|
-
|
-
|
-
|
-
|
700
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
-
|
-
|
7,665
|
7,665
|
|||||||||||||||||||||
Balance on September 30, 2022:
|
8
|
151,066
|
102
|
9,503
|
(61
|
)
|
(51,028
|
)
|
109,590
|
Share
capital |
Additional paid in capital
|
Remeasurement of post-employment benefit obligations
|
Other capital reserves
|
Foreign currency translation reserve
|
Accumulated
deficit |
Total
equity |
||||||||||||||||||||||
U.S. dollars in thousands
|
||||||||||||||||||||||||||||
Balance at July 1, 2023:
|
8
|
152,648
|
248
|
9,503
|
129
|
(62,580
|
)
|
99,956
|
||||||||||||||||||||
Changes in the three months ended September 30, 2023:
|
||||||||||||||||||||||||||||
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
(3,094
|
)
|
(3,094
|
)
|
|||||||||||||||||||
Other comprehensive income for the period
|
-
|
-
|
-
|
-
|
74
|
-
|
74
|
|||||||||||||||||||||
Employee options exercised
|
*
|
876
|
-
|
-
|
-
|
-
|
876
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
-
|
-
|
1,491
|
1,491
|
|||||||||||||||||||||
Balance on September 30, 2023:
|
8
|
153,524
|
248
|
9,503
|
203
|
(64,183
|
)
|
99,303
|
||||||||||||||||||||
Balance at July 1, 2022:
|
8
|
150,763
|
102
|
9,503
|
(95
|
)
|
(43,191
|
)
|
117,090
|
|||||||||||||||||||
Changes in the three months ended September 30, 2022:
|
-
|
|||||||||||||||||||||||||||
Loss for the period
|
-
|
-
|
-
|
-
|
-
|
(9,867
|
)
|
(9,867
|
)
|
|||||||||||||||||||
Other comprehensive loss for the period
|
-
|
-
|
-
|
-
|
34
|
-
|
34
|
|||||||||||||||||||||
Employee options exercised
|
*
|
303
|
-
|
-
|
-
|
-
|
303
|
|||||||||||||||||||||
Share-based compensation
|
-
|
-
|
-
|
-
|
-
|
2,030
|
2,030
|
|||||||||||||||||||||
Balance on September 30, 2022:
|
8
|
151,066
|
102
|
9,503
|
(61
|
)
|
(51,028
|
)
|
109,590
|
Nine months ended
September 30 |
Three months ended
September 30 |
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
U.S. dollars in thousands
|
||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||||||||||
Net loss for the period
|
(12,594
|
)
|
(29,996
|
)
|
(3,094
|
)
|
(9,867
|
)
|
||||||||
Adjustments to reconcile net loss to net cash provided by operations (see Appendix A)
|
16,810
|
5,623
|
8,088
|
3,681
|
||||||||||||
Net cash provided by (used in) operating activities
|
4,216
|
(24,373
|
)
|
4,994
|
(6,186
|
)
|
||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||||||||||
Capitalized development costs
|
(12,250
|
)
|
(9,663
|
)
|
(4,266
|
)
|
(3,532
|
)
|
||||||||
Acquisition of property and equipment
|
(341
|
)
|
(828
|
)
|
(67
|
)
|
(229
|
)
|
||||||||
Loans granted to an equity method investee
|
(620
|
)
|
-
|
-
|
-
|
|||||||||||
Decrease (Increase) in bank deposits
|
(1,200
|
)
|
(981
|
)
|
(18
|
)
|
6,067
|
|||||||||
Payments for acquisitions of subsidiaries, net of cash acquired
|
-
|
440
|
-
|
-
|
||||||||||||
Payment of deferred consideration with respect to business combinations
|
-
|
(4,500
|
)
|
-
|
(4,500
|
)
|
||||||||||
Interest received
|
1,021
|
43
|
573
|
8
|
||||||||||||
Investments in financial assets
|
(195
|
)
|
(6,686
|
)
|
(98
|
)
|
-
|
|||||||||
Proceeds from sub-lessee
|
110
|
-
|
41
|
-
|
||||||||||||
Net cash used in investing activities
|
(13,475
|
)
|
(22,175
|
)
|
(3,835
|
)
|
(2,186
|
)
|
||||||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||||||||||
Interest paid
|
(1,757
|
)
|
(384
|
)
|
(737
|
)
|
(123
|
)
|
||||||||
Changes in short-term bank credit
|
20,103
|
-
|
9,229
|
-
|
||||||||||||
Royalties paid in respect to government assistance plans
|
-
|
(40
|
)
|
-
|
(4
|
)
|
||||||||||
Transactions with non-controlling interests
|
-
|
(186
|
)
|
-
|
-
|
|||||||||||
Repayment of long-term bank loans
|
(749
|
)
|
(2,025
|
)
|
(247
|
)
|
(314
|
)
|
||||||||
Repayment of long-term loans from others
|
(3,074
|
)
|
(2,167
|
)
|
(813
|
)
|
(599
|
)
|
||||||||
Repayment of other long-term liabilities
|
(226
|
)
|
(218
|
)
|
(23
|
)
|
(70
|
)
|
||||||||
Employee options exercised
|
1,940
|
775
|
907
|
274
|
||||||||||||
Principal lease payments
|
(1,575
|
)
|
(1,168
|
)
|
(512
|
)
|
(512
|
)
|
||||||||
Net cash provided by (used in) financing activities
|
14,662
|
(5,413
|
)
|
7,804
|
(1,348
|
)
|
||||||||||
Increase (decrease) in cash and cash equivalents
|
5,403
|
(51,961
|
)
|
8,963
|
(9,720
|
)
|
||||||||||
Balance of cash and cash equivalents at beginning of period
|
33,880
|
87,332
|
31,050
|
41,762
|
||||||||||||
Gains (losses) from exchange differences on cash and cash equivalents
|
211
|
(4,581
|
)
|
(326
|
)
|
(684
|
)
|
|||||||||
Gains from translation differences on cash and cash equivalents of foreign activity operations
|
309
|
753
|
116
|
185
|
||||||||||||
Balance of cash and cash equivalents at end of period
|
39,803
|
31,543
|
39,803
|
31,543
|
Nine months ended
September 30 |
Three months ended
September 30 |
|||||||||||||||
2023
|
2022
|
2023
|
2022
|
|||||||||||||
U.S. dollars in thousands
|
||||||||||||||||
Appendix A – adjustments to reconcile net loss to net cash provided by operations:
|
||||||||||||||||
Adjustments in respect of:
|
||||||||||||||||
Depreciation and amortization
|
9,002
|
6,293
|
3,219
|
2,357
|
||||||||||||
Post-employment benefit obligations, net
|
44
|
(30
|
)
|
18
|
12
|
|||||||||||
Deferred taxes
|
(107
|
)
|
(145
|
)
|
(35
|
)
|
(38
|
)
|
||||||||
Finance expenses (income), net
|
(1,233
|
)
|
3,381
|
(215
|
)
|
393
|
||||||||||
Expenses in respect of long-term employee benefits
|
232
|
173
|
134
|
82
|
||||||||||||
Share of loss of equity method investees
|
1,244
|
1,499
|
503
|
428
|
||||||||||||
Long-term deferred income
|
(88
|
)
|
(78
|
)
|
(36
|
)
|
(26
|
)
|
||||||||
Expenses in respect of share-based compensation
|
4,264
|
7,000
|
1,279
|
1,835
|
||||||||||||
Total adjustments
|
13,358
|
18,093
|
4,867
|
5,043
|
||||||||||||
Changes in operating asset and liability items:
|
||||||||||||||||
Increase in restricted cash transferable to customers for processing activity
|
(16,838
|
)
|
(11,229
|
)
|
(382
|
)
|
(2,208
|
)
|
||||||||
Decrease (increase) in receivables from processing activity
|
(15,003
|
)
|
(6,375
|
)
|
(7,980
|
)
|
1,590
|
|||||||||
Decrease (increase) in trade receivables
|
(2,779
|
)
|
(4,438
|
)
|
2,170
|
1,413
|
||||||||||
Decrease (increase) in other current assets
|
1,106
|
(3,156
|
)
|
1,344
|
3,907
|
|||||||||||
Decrease (Increase) in inventory
|
3,958
|
(14,006
|
)
|
3,108
|
(3,798
|
)
|
||||||||||
Increase in payables in respect of processing activity
|
37,567
|
18,115
|
6,057
|
2,470
|
||||||||||||
Increase (Decrease) in trade payables
|
(2,825
|
)
|
7,233
|
(793
|
)
|
(4,873
|
)
|
|||||||||
Increase (Decrease) in other payables
|
(1,734
|
)
|
1,386
|
(303
|
)
|
137
|
||||||||||
Total changes in operating asset and liability items
|
3,452
|
(12,470
|
)
|
3,221
|
(1,362
|
)
|
||||||||||
Total adjustments to reconcile net loss to net cash provided by operations
|
16,810
|
5,623
|
8,088
|
3,681
|
||||||||||||
Appendix B – Information regarding investing and financing activities not involving cash flows:
|
||||||||||||||||
Purchase of property and equipment in credit
|
142
|
713
|
142
|
713
|
||||||||||||
Acquisition of right-of-use assets through lease liabilities
|
338
|
1,200
|
-
|
820
|
||||||||||||
Share based payments costs attributed to development activities, capitalized as intangible assets
|
697
|
665
|
212
|
195
|
||||||||||||
Recognition of receivable balance in respect of sub-lease against derecognition of right-of-use asset in respect of lease of buildings
|
455
|
-
|
-
|
-
|
|
Quarter ended as of
(U.S. dollars in thousands)
|
|
Sep 30, 2023
|
Sep 30, 2022
|
|
Loss for the period
|
(3,094)
|
(9,867)
|
Finance expense, net
|
1,237
|
531
|
Tax expense
|
384
|
159
|
Depreciation and amortization
|
3,219
|
2,357
|
EBITDA
|
1,746
|
(6,820)
|
Expenses in respect of share-based compensation
|
1,279
|
1,835
|
Non-Recurring issuance costs
|
-
|
824
|
Share of loss of equity method investee (1)
|
503
|
428
|
ADJUSTED EBITDA (2)
|
3,528
|
(3,733)
|