Nayax Q2 2025 Earnings Call Transcript

Quartr
Provided by Quartr
August 13, 2025

Key Takeaways

  • Positive Sentiment: Delivered Q2 revenue of $96 M, up 22% year-over-year, with recurring revenue up 32% to 74% of total and Adjusted EBITDA of $13 M, and reaffirmed full-year 2025 guidance of 30–35% growth to $410–425 M and $65–70 M EBITDA.
  • Positive Sentiment: Secured major EV charging wins, including a deal with Ortel Energy for 100,000 UNO Mini embeds through 2026 and a Linkwell partnership for Buy America EV chargers, positioning for high-margin SaaS growth.
  • Positive Sentiment: Maintained best-in-class customer retention (<3% annual churn), added ~5,000 customers (up 24% to ~105,000) and grew the installed device base 16% to ~1.38 M, driving transaction value 34% higher to $1.6 B.
  • Positive Sentiment: Expanded profitability as gross margin rose to 48.3% (from 44.3%) with recurring margin improving to 52.8% and hardware margin to 35.4%, benefiting from supply-chain optimization and processing efficiency.
  • Positive Sentiment: Enhanced embedded finance capabilities by acquiring Innopropay and fully consolidating Nice Capital into a new Embedded Banking division, adding bank accounts, card issuing and financing to boost future recurring revenue.
AI Generated. May Contain Errors.
Earnings Conference Call
Nayax Q2 2025
00:00 / 00:00

Transcript Sections

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Operator

Hello, everyone, and welcome to the Nyax's Second Quarter twenty twenty five Earnings Conference Call. All participants are present in listen only mode. Following management's formal presentation, instructions will be given for the question and answer session. As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Aaron Greenberg. Please go ahead,

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

Thank you, operator, and everyone for joining us today on this conference call. With me on the call today are Yair Nixmad, NAC's Co Founder and Chief Executive and Saghit Menor, 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 niax.com. As a reminder, during this call, we'll be making forward looking statements.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

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 non IFRS results are useful in order to enhance our understanding of our ongoing performance.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

However, these measures should be considered as a supplement to and not as a substitute for IFRS financial measures. A reconciliation between NIAX'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 US dollars unless stated otherwise.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

Yair will start the call with key financial and operational highlights. Following that, Sagit will go through the details of financial results and discuss the outlook. And with that, I would like to turn the call over to Nax's CEO, Yair Naxman. Yair?

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

Thank you, Aaron, and thank you everyone for joining the call this morning to discuss our results for the second quarter and the progress we are making across the business. Our second quarter results reflect the successful execution of our strategic initiatives and the positive momentum of the business. We delivered yet another quarter of strong operational and financial performance, driven by profitable revenue growth, robust global demand for our solution and services, and an ever expanding geographic footprint for our installed base. Our TAM is large and growing, driven by the ongoing shift from cash to digital payments and our expansion into new verticals. We're continuing to gain market share across our core verticals.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

With strong global demand and a clear product market fit, we're not only acquiring new customers at scale, but doing so at a pace that exceeds broader market growth. As the global leader in the automated self-service payment space, we have a trusted brand and reputation that enable us to both deepen relationship with existing customers and consistently onboard thousands of new customers each quarter. Importantly, our growth continued to be achieved with a very low customer churn rate of under 3% annually, reflecting the stickiness of our platform and the mission critical role we play for our customers. Customers are not only sticking with us, but deepening their engagement with our platform as they add more devices, process more transaction, and expand into new vertical over time. Our role goes far beyond enabling transactions.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

We are a true partner to our customers, helping them grow their business with a platform shaped by two decades of listening, learning and building for their specialized needs. Whether it is launching a new location, expanding into new vertical or introducing value added services, our technology and team are there every step of the way. We deliver a complete solution that combines modular payment, hardware and management software built to reflect the diversity of our customers' ambitions and designed to scale without compromise. That's what makes NICE not just a solution provider, but a longer term growth partner. Turning to our results, revenue for the quarter increased 22% over Q2 twenty twenty four, reaching $96,000,000 Recurring revenue grew at even faster pace, rising 32% over Q2 twenty twenty four, lifting its share of total revenue to 74% from 68% in the same quarter last year.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

Our consistently growing share of high margin recurring revenue reflecting the long term success of our strategy to build a more profitable and predictable business. In terms of profitability, adjusted EBITDA was nearly $13,000,000 for the quarter, representing approximately 13% of total revenue. This underscore our disciplined focus on delivering profitable growth while expanding our top line. We see revenue acceleration in the second half of the year. We expect increased shipment and adoption of our recently launched product, including our embedded reader called the UNO Mini, as we ramp production to meet growing demand across multiple regions.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

Furthermore, we see strong growth in emerging segments such as EV charger, smart cooler and family entertainment centers. Stronger enterprise sales, particularly from customers with longer procurement cycles, expected to contribute meaningful to this acceleration in the second half of the year. With that, we are reaffirming our full year 2025 guidance. I'd like to now share some customer success story and key developments from the quarter that highlight our continued expansion the automated self-service space. Earlier this week, we announced a major milestone both for our embedded payment solution and for our presence in the fast growing EV charging vertical, when we signed a strategic partnership with Ortel Energy.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

As one of the largest electrical vehicle charging equipment manufacturer in the world, OTEL Energy is expected to purchase 100,000 UNO Minis to be embedded inside their manufacturer AC slow chargers through the 2026. We are seeing strong momentum for the UNO Mini product, which are devices integrated inside OEM products. In Q2, we announced a strategic partnership with LinkWILL, a leader in EV charging solution in The United States, to deliver a comprehensive suite of integrated payment and management capabilities to North American EV charging market. With the current tariff environment in The U. S, we believe that Linqvil's Buy America EV charger embedded with our UNO MINI payment reader will see strong demand over the coming quarters.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

We expect to announce more partnership with manufacturers as our UNO minis continue to gain traction for high volume deployment. We also advanced our M and A strategy in the quarter. We acquired Innopropay, our long standing distributors in the Benelux region, further strengthening our position in Europe and bringing us closer to our customers through the establishment of full service NICE office in The Netherlands. In addition, we acquired a remaining 51% of NICE Capital, a joint venture we initially launched in 2023. NICE Capital is now fully consolidated under our recently created Embedded Banking division.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

Embedded finance solutions such as bank account, card issuing and financing will bring more value to our customers and increase recurring revenue to customers over time. We are also focused on integrating our recent acquisition to streamline operations, combined complementary capabilities and realized synergies in key markets. In Brazil, we brought together Appe and VM Technology under the NICE Brazil brand, defining a common market strategy and unifying our sales, service and support operation nationwide. We integrated the AppPay coffee solution originally built for Brazil into the broader MAX sales platform and are seeing strong initial demand from customers in multiple international markets. In the fueling vertical, we combined Rosman and OTI Petrosmart into one global forecourt team to deliver a single end to end platform for fuel station operator.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

With each of these partnership, acquisition and integration, we continue to bolster NIAX as a leading provider of cashless payment and management solutions, driving innovation and growth across multiple industries and markets. Looking forward, we are excited about our near term growth opportunities and our business fundamentally remains solid. Our TAM is large and growing, driven by the ongoing shift from cash to digital payment and our expansion into new verticals. While we continue to pursue strategic M and A, organic growth remain our primary building block and will continue to be the main driver of our growth. With our expanding pipeline, we are well positioned to continue to outpace the growth of the broader payment industry and deliver exceptional value to our customers.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

With that, I'll turn it over to our CFO, Saghit Manor, who will review our KPIs, our financial results in greater detail and walk through our guidance. Saghid?

Sagit Manor
Sagit Manor
CFO at Nayax

Thank you, Yair, and good morning, good evening, everyone. I'll start by reviewing our KPIs and financial performance for the second quarter, and then I'll discuss our outlook for the full year 2025, which as Yair mentioned, we are reaffirming. I would like to start by highlighting three key performance indicators for the quarter that we consider primary measures of growth. First, total transaction value increased by more than 34% over Q2 twenty twenty four, reaching nearly $1,600,000,000 driving strong processing revenue growth of 35% for the quarter. Second, our customer base expanded by approximately 24% compared to Q2 twenty twenty four, approaching 105,000 customers at the end of Q2.

Sagit Manor
Sagit Manor
CFO at Nayax

And third, our installed base of managed and connected devices grew 16% compared to Q2 twenty twenty four to almost 1,380,000 devices at the end of the quarter. These KPIs reflect not only the momentum in our business and the underlying strength of our platform, but also demonstrate the flywheel effect and the success of our go to market strategy. Looking at our financial performance. Revenue for the second quarter was $96,000,000 which is an increase of 22% over Q2 twenty twenty four. We continued taking market share, adding nearly 5,000 new customers this quarter and 48,000 managed and connected devices.

Sagit Manor
Sagit Manor
CFO at Nayax

Revenue included $1,100,000 of favorable foreign exchange rates. Organic revenue growth for the second quarter was 20%. We expect organic revenue growth to accelerate throughout the remainder of the year, which I will discuss in our outlook. For the quarter, recurring revenue, which includes payment processing fees and SaaS subscription revenues, increased by 32 compared to last year's second quarter to $71,000,000 and represented 74% of our total revenue in Q2. More specifically, processing revenue grew by 35% to $43,000,000 in Q2, driven by a 16% increase in our installed base of managed and connected devices and a 34% increase in dollar transaction value.

Sagit Manor
Sagit Manor
CFO at Nayax

This processing revenue growth continues to demonstrate our success as a scalable and valued payment partner to our diverse customer base as the market continues its cash to cashless conversion. Our take rate for the quarter was 2.7%, same as the prior year's quarter. Hardware revenue in the quarter was $25,000,000 slightly higher than the prior year's quarter, with continued strong demand for our products, solutions and technology. In the quarter, our installed base grew by 16% compared to last year's second quarter, reaching nearly 1,380,000 devices devices as we added 48,000 devices to our installed base. Moving now to profitability and margin for the quarter.

Sagit Manor
Sagit Manor
CFO at Nayax

Gross margin significantly improved to 48.3% compared to 44.3 in the last year's second quarter, driven by both higher recurring and hardware margins. More specifically, our recurring margin increased to 52.8% from 51.5% in the prior year quarter, mainly driven by an additional improvement in processing margin from the acceleration to meaningful processing volumes with our new banking partner Adyen, driving improved operational efficiency. We also benefited from the favorable renegotiation of key contracts with several bank acquirers and improved smart routing capabilities. On the hardware side, our margin increased to 35.4% compared to twenty eight point seven percent in Q2 twenty twenty four, driven by the continuing optimization of our supply chain infrastructure and better component sourcing and costs, consistent with our expectations. For the full year, we continue to expect hardware margin to be within the range of 30% to 35%.

Sagit Manor
Sagit Manor
CFO at Nayax

While total revenue grew by 22% over Q2 of last year, total gross profit grew significantly more by 33% to more than $46,000,000 Adjusted OpEx of $34,000,000 was 35.6% of revenue, a testament to our disciplined cost management. Adjusted EBITDA increased nearly $13,000,000 representing 13% of revenue, an improvement of approximately $4,500,000 compared to last year's second quarter and demonstrating the continued scaling of our operating leverage in the business. Operating profit was $9,500,000 and includes a one time gain of $5,600,000 mainly from the share purchase of NAC Capital. Excluding this one time gain, operating profit would have been $3,900,000 an improvement of $3,000,000 from last year's second quarter. The significant operating profit increase is mainly driven by improved gross margin. Net income for the quarter was nearly $12,000,000 compared to net loss of $3,000,000 in the prior year period.

Sagit Manor
Sagit Manor
CFO at Nayax

Excluding the one time gain mainly associated with the share purchase of Nyx Capital, net income would have been $6,100,000 a significant improvement of $9,100,000 from the prior year period. Turning to our balance sheet. On 06/30/2025, cash and cash equivalents and short term deposits totaled $172,000,000 short and long term debt was $156,000,000 both driven by a notes and warrant offering completed in March 2025 of approximately $486,000,000 net, maintaining a solid balance sheet and net cash position. Looking at our cash flow, we generated $12,900,000 from operating activities. Free cash flow for the quarter was $5,600,000 Turning now to our outlook and referring to our forward looking information disclosure in our press release.

Sagit Manor
Sagit Manor
CFO at Nayax

As Yehua mentioned, for the full year 2025, we are reaffirming our financial outlook of revenue growth of between 30% to 35%, representing a revenue range of $410,000,000 to $425,000,000 on a constant currency basis. This includes an organic revenue growth of at least 25%. Consistent with prior years and reflecting the seasonal nature of our business, we expect stronger performance in the second half of the full year, mainly driven by enterprise sales, particularly from customers with longer procurement cycles. Our guidance for adjusted EBITDA remains unchanged at between 65,000,000 to $70,000,000 driven by continued revenue growth, market expansion, the full integration of recent acquisitions and continued operational optimization. We also expect at least 50% free cash flow conversion from adjusted EBITDA for the full year 2025.

Sagit Manor
Sagit Manor
CFO at Nayax

As for our 2028 target, we continue to project an annual revenue growth of approximately 35% driven by a combination of organic growth and strategic M and A. We also continue to target a gross margin of 50% and an adjusted EBITDA margin of 30% as we continue to drive high margin revenues and operational efficiency. In closing, we are well positioned for future growth in 2025 and beyond, as we continue to grow our installed base globally and capture market share. We'll also continue to focus on scaling our recurring revenue streams, in particular our payment processing capabilities, which benefit from the conversion trend of cash to cashless transactions. I'll now turn the call over to the operator for our Q and A session. Operator?

Operator

Thank you. We will now be conducting a question and answer Riley. Please go ahead.

Josh Nichols
Senior Research Analyst at B.Riley Securities

Yes. Thanks for taking my question and great to see the gross margin and the operating leverage is starting to come into play here. Wanted to touch on you had some key wins this quarter, particularly in the EV market. How should we think about the larger opportunity in terms of EV as a percentage of revenue as that starts to scale? A relatively small percentage today, but the win you just announced recently represents like 7% of the entire installed base and presumably with a relatively higher average transaction price than your other businesses.

Josh Nichols
Senior Research Analyst at B.Riley Securities

So how do you expect that piece of business to scale over the next couple of years?

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

Josh, hi, it's Eiyo, thank you for the question. First, I want to give the context of how we see payment into the decades ahead, and what is the important about the payment platform that we're building, it's based on trust and ease of use and scale. We are now in the era of scaling the business, and scaling the business in all the aspects of payment means that we have to pave the way for distribution partners and to have more and more partners that we can work with and scale our business in terms of acquiring customers. You have to remember that we're talking about almost direct to the market gaining and winning customers and most of them are small to medium sized businesses. When we are saying that we have a partnership like hotel that we put two days ago or yesterday, it's not the hotel itself that is the customer, we're looking through them that we're gaining more and more customer through the payment of their bringing the customer to us.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

It's keep the cost of acquisition quite low, and it's opened the door for all the customers that they're already selling to. The difference in terms of this kind of thing and why we see a big big difference in terms of the term of Marks into the future on this aspect, that we moved from just OEM basically that taking what you call a Vipostouch unit and retrofitting some of the orders into a solution which is ODM solution, meaning that all the market that the hotel will sell or anyone that's working with NIAX is embedded with the NIAX payment solution. Whether it will happen in terms of activation within one month, two months, five months, one year, two years, I really don't care. The only thing is that this customer is a full partner and he has what he call Max Insight. And this is opening the door for a big, big market from my perspective, and that's the agreement that we're doing today on the EV markets.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

We want to capture the market at the starting point and gaining potentially very, very big market share. So we are very optimistic regarding what we can gain out of it, although in terms of potentially of the hardware, it's been seen that because it's a UNO Mini, so it's very, very low hardware revenue, but in terms of customers, which is the main thing that we're getting a SaaS out of this customer, which is higher than the vending industry is much more important. And of course the gross margin is much higher.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

Just to add to that, this is Aaron. Josh, with regards to the hotel relationship specifically, but in terms of our broader strategy, as we talked about the last couple of quarters now, going up the chain, not just you said, the last couple of decades we started really from the ground up with going down to the small operator. And we're seeing now that we can also come from the top down with regards to the OEMs and really make a push into the OEM business, which really allows us to be able to get in front of the customer at a much lower CAC, as you mentioned, at a much higher volume at the OEM level. That's why we were able to set up the relationship with someone like Autel for 100,000 devices which they're going to now spread out over all of their jurisdictions. Now, part of that was our investment over the last couple of years after the OTI acquisition into the embedded payments business, which allows us to go and actually integrate these UNO Mini devices inside the EV charger, which creates a lot of stickiness because you can't actually remove it afterwards and flip it into another payment device.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

So, they receive it at the OEM level, they actually go through the certification, the UL certification process for The US market and various other certifications for other markets. They actually go through that certification with the UNO Mini in the machine and then they go and sell it. So it brings a different level of stickiness. And we've now announced two partnerships, Linkwell and now Wattel, and we hope to be able to announce a lot more in the future.

Josh Nichols
Senior Research Analyst at B.Riley Securities

I appreciate the context there and great to see the company moving up market. I guess just to dive in a little bit last question for me. You mentioned you're expecting a pretty healthy step up particularly in the second half for enterprise customers. Is a good chunk of that related to these new announcements in EV? Or are they more around like other areas specifically?

Josh Nichols
Senior Research Analyst at B.Riley Securities

And is the EV ramp expected to be more of a 2026 story?

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

We do have EV opportunities. We do have other aspects of the business. We have the unattended business that has big opportunities, and we do have also retail that's in front of us, and we do see something that will happen within the six months of all of these potential markets.

Sagit Manor
Sagit Manor
CFO at Nayax

Maybe to add to that, Josh, hi. The second half of the year, will we see a stronger, how the revenue sales both on from an enterprise perspective, both in the smart coolers area, as you mentioned in the EV space, but also some retrofit that we see that will happen towards the end of the year. However, we also see a very strong transaction value that is growing and recurring revenue in general. For example, July and August are already showing us the significant increase and give us the confidence of the strong second half.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

Appreciate the context. Thanks.

Operator

The next question we have is from Chris Kennedy of William Blair. Please go ahead.

Cristopher Kennedy
Research Analyst - Financial Services & Technology at William Blair

Great. Thanks for taking the question. Can you just talk about NRR and kind of how you think of that trending over the next couple of years as your business mix starts to maybe change a little bit? Thank you.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

Will take it first. Just to mention regarding NRL and then Sagitt will continue. We think basically the NR is basically on two engines, one is the service and the other one is the processing, both of them are really creating the net retention of NRX. It's maybe through verbal, it will be a little bit difficult to understand, but if you remember twenty twenty one, two and three, we always stated about the the TAM TAM, of the market and it was first and foremost the vending and then moving out to ticketing and moving out to car wash and then to electrical vehicle. We're seeing now more and more that the retrofit business totally that the customer is coming and is empty, is coming totally from cash to cashless is slowing down and we're seeing more the other verticals are emerging and that's created the engine of the processing, which is growing quite nicely, is holding very strongly on the NRR.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

So in terms of the future, we're seeing that we're coming from a ticket in the past, it was around, let's say, less than $2 and now it's much higher than $2 and we're growing with verticals that are really more higher in terms of the ticket. So retail vending is, let's say, dollars 0.6, dollars 1.8, the parking is potentially full, the EV is around 7, and these verticals are creating more vertical than that we see into the future.

Sagit Manor
Sagit Manor
CFO at Nayax

And maybe to add to that, you know, the NRL 123% remains very strong, really indicating as you mentioned, healthy growth both in the ARPU and in the ATV. And you can see that, as long as we continue to bring the 4,000, 5,000 customers a quarter, As long as we continue to grow significantly as we did this quarter with the number of managed and connected devices, the growth is there. Reminding you that approximately 80% of our customers are existing customers and organic revenue, and we grew recurring revenue by 32%, organic recurring revenue grew by 29%. So really, it really reflects the normal quarterly variation in customer usage and deployment cycles. So, you know, we feel that we continue to enjoy the high customer stickiness.

Sagit Manor
Sagit Manor
CFO at Nayax

You can see that with the very low churn rate And the scalability of the business is still there. It basically supports the continuing and sustainable growth.

Cristopher Kennedy
Research Analyst - Financial Services & Technology at William Blair

Great. You for that detail. And then just as a follow-up, can you just give us an update on kind of your hospitality and retail initiatives, kind of where are you in that journey? Thank you.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

On the retail, we built a big infrastructure in terms of the backend and we're moving forward with the retail, we're now testing the water with the retail initiative directly to customers, we built a team, they're doing outbound calls that already running on our existing customers and new customers. We're seeing a very strong demand and I think we'll have some news in the next six months regarding a big jump into the retail with some big news that will come following in the next six months.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

I'll also add to that on the hospitality space, We're trying to make a push into it in the last year since the VM technology acquisition. We spent a lot of time going and trying to integrate our technology into the Brazilian markets. And we released our food services business for kiosks into the Brazilian market a few months ago and are seeing already a lot of demand in that market for the solution. Interestingly, there was not very much in terms of the amount of cloud based solutions, fully integrated with the post, being able to give a full end to end solution that was in the modern generation. And we feel that there's huge market opportunity in the Brazilian market for the hospitality business specifically.

Cristopher Kennedy
Research Analyst - Financial Services & Technology at William Blair

Great. Thanks for taking the question, Gus. Thank you.

Operator

The next question we have is from Sanjay Sakhrani of KBW. Please go ahead.

Vasundhara Govil
Managing Director at Keefe, Bruyette & Woods (KBW)

Hi. This is Vasu Gobel for Sanjay. Thank you for taking my question. I guess maybe the first question, just around M and A, if we could get what the revenue contribution from M and A has been year to date, it looks like we're still expecting about $25,000,000 contribution for the year. Do we feel like we have all the deals that you need to done to hit that target for this year?

Vasundhara Govil
Managing Director at Keefe, Bruyette & Woods (KBW)

And then specifically on NIAC's capital JV, is that part of the M and A contribution? Sort of any color on how big that is? Thank you.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

Yes, this is Aaron. With regards to the M and A, as we've said at the beginning of the year after the first couple of acquisitions, We have a run rate still after that roughly the same as what we said back a few months ago, which is around 10,000,000 through the rest of the year in inorganic growth. With regards to the Nyx capital, don't see to be meaningful amounts of inorganic growth from that activity through the end of the year. Really what it does is it helps with our long term strategy, which is to start getting more into the financing solutions, which we've pushed out and already heavily in markets like the Brazilian market, which was separated from the Nyack's capital solution completely. And we're now bringing that all into one infrastructure and we're rolling out this rental based financing model into other jurisdictions. We saw opportunity there to bring it in house and to really start to scale it more quickly.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

And we're also combining that in our embedded banking solution, which we are now working on rolling out over the next few months and it was mentioned in the first notes here some minutes ago, but we've essentially put together a new division with bringing in Nyax Capital and we brought in the former CTO of Bank Hopwellin, the largest bank in Israel, to go and build out essentially a banking division for Nyax. We've partnered strategically with Adient to go and enter the market for embedded banking solutions. Issuing cards and bank accounts, which we plan on rolling out in The US market first in a few months. Hopefully we'll go into some other markets again soon. With regards to rest of the year M and A pipeline, we still intend to complete probably one to two more acquisitions this year based on our current pipeline.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

I don't expect that the inorganic revenue is going to get to $25,000,000 I do believe that we're going to be able to hit the inorganic growth that is needed in order to meet the 30% to 35%, which we have reiterated on.

Sagit Manor
Sagit Manor
CFO at Nayax

Great. And maybe to add to that, is that still, as in previous years, most of the growth will come from organic growth as we expect that the second half of the year will be, as we talked about, right, stronger in both hardware revenue as well as continue the beautiful growth that we already see in the recurring revenue.

Vasundhara Govil
Managing Director at Keefe, Bruyette & Woods (KBW)

Thank you. That's helpful color. And I guess for my follow-up, I wanted to ask about the VM technology acquisition. I know there was a plan to move from a hardware sales to more of a rental or subscription model. Curious where you guys are with that and if that's something you know, what the reception to that has been and if that's something you were planning to roll out more aggressively across the organization.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

Yeah, so as I was alluding to a little bit earlier, this is a big reason why we decided to bring the full Max Capital in house. It was previously a joint venture. We're seeing a lot of success in the Brazilian market with the rental based model. It's still growing very well as a business in Brazil and now with the UpPay acquisition as well. We've doubled our managed and connected devices there in Brazil.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

It's still growing very strongly. We're essentially taking that embedded banking division and centralizing everything so that we can roll out a standard model essentially across each of these jurisdictions. We announced locally in the Australian market a few weeks back that we're starting to roll out the rental based model pretty aggressively there in the Australian market and we're seeing a lot of demand for that so far. And we're starting to slowly go and roll it out in some other jurisdictions as well. But the intention here is over the coming months that we will start to more aggressively push the infrastructure for it And we'll start to see some results here over the coming quarters of that model.

Vasundhara Govil
Managing Director at Keefe, Bruyette & Woods (KBW)

Great. Thank you very much.

Operator

The next question we have is from Nick Cremo of UBS. Please go ahead.

Nik Cremo
Nik Cremo
Executive Director & Lead Equity Research Analyst - Payments & FinTech at UBS Group

Hey, guys. Congrats on the strong results, thanks for taking my questions. First, I just wanted to go back to the new EV charging partnerships you announced with the Tel and Linkwell. Can you just elaborate on how competitive winning those deals were and why NIOSH was ultimately selected?

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

Yeah, absolutely, Nick. This is Aaron. If we're looking at the EV charging industry, this is an industry that we entered into at the very beginning back seven, eight years ago. And that experience in the EV charging industry has allowed us to really have an advantage here today because we really have the know how of learning from experience of from mistakes at the beginning of how complicated this industry is. It's a very technical integration with these EV chargers.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

You have to now with the embedded devices, have to go through UL certification with manufacturer. You have to know what you're doing. You have to be working very closely hand in hand. You have to update them with SDKs periodically. There's very few players in the markets from the payments point of view that are able to compete in this space just because of the complexity of it.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

When we're looking at these OEMs now, I think that we have a very differentiated product with this UNO Mini that we released. And I don't think personally that there is another product at the same level out there right now. I think we have a first mover advantage with regard to this type of a product for the EV industry. And I think that now as we're working through this cycle now of integrating with all of these OEMs, I think we have the chance here to go and to run very fast with several more partners. And the thing is with the OEMs, they don't go and replace their hardware and go through UL certification every six months or year.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

They go through cycles on this. So the intention here is that once we've gone through this process with them, they'll be using us for many years before they go through another potential RFP process.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

Just to add to this, you have to remember that in twenty years we built a foot on the ground of more than 100 countries. So as an exporter coming from China or whoever it is, and he wants to serve his customers, it's plug and play, and then he can run the business smoothly with the embedded payment inside covering all over the world, and that's a big, big advantage that nobody else can have.

Aaron Greenberg
Aaron Greenberg
Chief Strategy Officer at Nayax

Yeah, it's one SKU, as Yair was alluding to it. That UNO Mini for Autel, if they're selling 100,000 of these devices, they can keep one SKU of the UNO Mini, they don't have to change it depending on the region, they don't have to go work with multiple suppliers.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

Yeah, I mean, it's landing on ground in France or in UK or in US and it's operating because on the onboarding of the customers is done by us as a payment facilitator.

Nik Cremo
Nik Cremo
Executive Director & Lead Equity Research Analyst - Payments & FinTech at UBS Group

Awesome. Well, thanks for all the color, guys. Very exciting.

Operator

At this time, there are no further questions, and I would like to turn the call back over to Yair Meghmat for any closing remarks.

Yair Nechmad
Yair Nechmad
CEO, Co-founder & Chairman of the Board at Nayax

Thank you for joining the call today. The quarter's performance demonstrate strong strengths of our strategy and the commitment of our team by continuing the investment in innovation, expanding our global reach and strengthening our customers' relationship. We are positioned NACS for sustainable growth and long term value creation. I'm grateful to our employees for their dedication which makes our success possible. The opportunities ahead are significant and we are prepared to build this momentum into the upcoming quarters. Thank you.

Operator

Ladies and gentlemen, that concludes today's conference. Thank you for joining us. You may now disconnect your lines.

Executives
    • Aaron Greenberg
      Aaron Greenberg
      Chief Strategy Officer
    • Yair Nechmad
      Yair Nechmad
      CEO, Co-founder & Chairman of the Board
    • Sagit Manor
      Sagit Manor
      CFO
Analysts
    • Josh Nichols
      Senior Research Analyst at B.Riley Securities
    • Cristopher Kennedy
      Research Analyst - Financial Services & Technology at William Blair
    • Vasundhara Govil
      Managing Director at Keefe, Bruyette & Woods (KBW)
    • Nik Cremo
      Executive Director & Lead Equity Research Analyst - Payments & FinTech at UBS Group
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