Good morning. My name is Rayna Kumar, and I lead Fintech Equity Research at Oppenheimer. Today, I'm fortunate to have the Nayax management team, including Sagit Manor, she is the Chief Financial Officer, Aaron Greenberg, Chief Strategy Officer, and Ehud Helft, he's Head of Investor Relations. Thanks, all of you, for joining me today. Of course. Thank you for having us.. Sagit and Aaron are gonna start with the presentation, then I'm going to go into Q&A, and if anyone has any questions in the audience, feel free to type it into the dashboard, and I will read it towards the end of our session. Sagit, over to you. Thank you. G lad to be here. Thank you for having us, and we'll take you through who and what is Nayax. My name is Sagit Manor, as mentioned. I'm the company CFO, been in the payment industry most of my professional life, and with me, Aaron Greenberg. Would you like to introduce yourself quickly? Hi, everyone. Yes, yeah, my name's Aaron Greenberg. Nice to meet everyone, thanks for joining. Chief Strategy Officer of the company. Let's start. Nayax is the only global company in the unattended space, and what do we mean by that? We're talking about if you, if you think about that, and you go into the store, and you have a cashier in front of you, we are outside the store. We are in the automated self-service, in the vending machine, massage chair, kiddie ride, laundromat, parking, electric vehicle charger, and whatnot. We are in 44 different verticals, and we have. O ur, our aim is to do two things: one, enablement of payment, and two, to simplify the life of our customers and make sure that they run their business better. What does it mean? Increase their revenue and decrease their cost. Sorry about that. A little bit of us, so we have—we are, as I said, global company, 11 offices around the world. We're selling our product in more than 120 countries, using distributors in 80 of them. We are accepting more than 80 payment methods in more than 50 different currencies. We have 1.2 million devices around the world. Just as a perspective, we doubled the number of managed and connected devices in the last couple of years. We have 85,000 customers. We tripled the number of customers in the last three years. 1.2 billion transactions are going through our devices. For example, in Q2, that we just announced, our financials, it's the same value of transaction that went through our devices in the entire of 2020. We were able to do that just in Q2, so growing fast, growing faster than the competition. We finished the quarter with $78 million of revenue and $8.1 million Adjusted EBITDA, as you can see, and I'll talk a little bit about that later, a significant improvement. We reached operating profit this quarter, and I'll talk a little bit about the guidance, say, later on. Very proud of our margins that continue to expand, and if you need to take a couple of items from this slide, is two, one, a very high net retention rate of 130%, and a very low churn rate of 2.8%, less than 3%. And when you learn later on about the fact that 75% of our customers are small businesses, you will appreciate this even more. Here you go. This is—I like to call it how we bring the global solution into the local markets. We love our small businesses. That's how we started the company. 75% of our customers are small, and when I speak about small, I speak it's between 1- 15 devices that they have, so very small. We spoke about how global we are. Around 40% of our revenue come from North America, around 40% from Europe, around 11%, is from Australia, and then we have the rest of the world. As you can see, the high net retention rate and the low churn rate are throughout the years, and as much as we love our small businesses, we love our Tier 1 customers all around the world. You can see here from Caféco in Europe to Continental in the United States and Primo Water and many more. So what is the problem we're trying to solve? On one hand, we have the consumer that wants everything, right? They want to be able to be recognized from online to offline, unattended to in-store and mobile, of course. To be able to pay in every payment method that exists, Apple Pay, Google Pay, credit card, of course, to pay in any currency they want, and obviously, to be appreciated as a loyal customer. That these, the retailers, our customers, our Nayax customers, that on the one hand need to provide their consumers everything that they want, but also to be able to manage their business better, to manage employees, to manage inventory, to be able to access data, and whatnot. In terms of what the business is trying to accomplish, so our business and in order to solve this problem, as Sagit mentioned, we are providing an all-in-one solution to the customer, which is the merchant. We're a B2B company. T he idea is that we sell a one-stop shop solution of payment, of software, and of various services, along with the embedded end-to-end payment solution. W e have our own hardware, the VPOS Touch, for example, which is our flagship product. We put that on vending machines, but also on 43 other unattended verticals, and then also in the self-service industry, self-checkouts or in kiosks. Regardless of whatever vertical it is, it's the same piece of hardware, which allows for consistency. From the payment side, we accept up to 80 forms of payment. We accept up to 80 forms of payment, as well as 50 currencies. And on the management platform, regardless of whether it is, whether it's EV charging, or if it's parking, or if it's vending or car washes, then we are able to cover that under one management platform. We also have loyalty marketing solutions, including a mobile application, our Onyx application, and then we have financing solutions to make it easier for our customers to be able to for our customers to be able to finance, rather than paying CapEx, but paying OpEx instead. Sagit, if you could go to the next slide, please. With regards to the total addressable market of the company, so we are focused on the unattended side, which is automated self-service. Vending is the core segment that we've been in, but like I said, we're in 43 other unattended segments as well. The total addressable market is huge. Just to give some perspective, we believe that there's 45 million machines roughly globally right now, going to 60 million by 2029. We believe that it's only around 20%-25% penetrated at the moment, which gives a lot of white space for us to be able to grow. Obviously, there's other companies that are trying to grow in this space as well, but we do believe that we have one of the leading positions, and we have an ability to continue to grow at the high growth rate that we've been able to grow over the last several years. So far, we've been growing over 35% a year for the last several years, and we've continued to provide midterm guidance and long-term guidance of having 35%+ growth as a company. Next slide, please. With regards to organic growth strategy, I think it is important to understand that there's a lot of pillars to our organic growth and why we're able to grow as much as we are. First and foremost, we are adding, generally speaking, 4-5 thousand new customers every quarter. This quarter, though, we were able to get 9,000 customers, of which 6,000 were organics. It was 1 of the best quarters we've ever had. We're continuing to innovate and develop new solutions. These solutions are allowing us to continue to maintain stickiness in customers, which is part of the reason why we're able to maintain such a low churn rate and such a high dollar-based net retention rate, as Sagit mentioned. We're continuing to expand into new regions, adding new countries. We're in 120 countries right now, 80 of which we can accept payments in. We are entering into high growth verticals, such as parking and EV and mass transit, which are growing extremely fast right now and have very high total addressable markets. As I mentioned, we have 130% dollar-based net retention rates, and the customers are growing with us, which is really important. Please, next slide. In terms of inorganic growth, we also have an inorganic growth strategy. You know, the payments industry is consolidating. We're targeting very specific companies, but focused on a few different verticals that are helping our growth. Geographic expansion, such as accelerating into new markets. An example was the acquisition we did going and entering into Brazil, in the unattended space back at the beginning of this year. Leveraging channels, we have 120 distributors right now that work with us. Strategically, we have purchased some of these distributors in order to open up an office, a direct sales office. A good example is the U.S. market, where we bought a distributor back in 2014, back when it was less than $5 million in revenues, and now it's north of $100 million to date. One of the most successful acquisitions that we've done. Technological upgrades, such as VendSys, which is a vending management system platform in the U.S., which we use with some of our largest enterprise customers, and Roseman, which we just purchased recently to help us enter into the fueling space. Go to the next slide. A little bit about the business model that we have, a couple of slides about that. Very successful and solid recurring revenue model, where on one hand, we sell the hardware, and the hardware is being sold on a one-time basis. Every quarter, we start from scratch, both to new and existing customers. And then we have a very strong recurring revenue model, where around 70% of our revenue comes from it, and it's comprised from two pillars. One is the SaaS basically monthly subscription fee that our customers pay for connectivity to our management suite and telemetry. T hen each our customers pay a processing fee for every transaction that is going through our devices. As you can see, we have a 2.7% take rate, which is very high, as a, you know, as an average worldwide one, and we also talked about the very high, net retention rate. Couple of items here. Another strong quarter, Q2, was, we grew our revenue by 39% quarter-over-quarter. We grew our, recurring revenue by 47%. Maybe to highlight that we are improving our margins, significantly. You can see that 44% is the highest that we had for years now, and this is improvement in all aspects, in our margins on the, hardware revenue, as well as in the recurring side of the business, and you can see here that recurring revenue, margins, improved as well. If you need to take one thing here is to see how we've moved into profitability on the Adjusted EBITDA level last year, and we're continuing to show that this year. We actually touched the operating profit. This quarter, we're back to profitability. I should say we've been there in the past, but we took 2021, 2022 to invest in talent acquisition, product innovation, infrastructure, and automation to get us to the billion-dollar revenue company we are aspired to build. And our outlook talks about that we're gonna grow our revenue at least 38% year-over-year, with beautiful margins and with Adjusted EBITDA positive. While if 2023 was all about the pivoting year into profitability on the Adjusted EBITDA level, 2024 is another step into being a free cash flow positive. When we talk about the 5-year roadmap, which is as important for us, we put ourselves a goal to get into 2027, 2028, to reach the billion-dollar revenue, which translates to 35% growth year-over-year. Which, if you are familiar with the payment industry, with fintech, with even software companies, this is an excellent, excellent, performance and execution that we have done so far, and we are continuing, or expect to continue to do that, with a target of 50% margins and a 30% adjusted EBITDA. The 50% margins will get us through improvement in margins, in supply chain, cost reduction initiatives that we've put in place, as well as the move into Hardware as a Service or rental business model, leasing opportunities, loyalty program that Aaron mentioned, and whatnot. Lastly, and maybe that's the summary of all of that, with our really with our unique business model, right? With the market opportunity that we see ahead of us, with our complete end-to-end solution, and with the fact that we are in every country that exists out there, we're really seeing how we are growing, growing with our existing customers, growing into new regions, really taking our product and our solution and putting it out there, and excited to continue to execute as we've committed, and would love to hear if you have any questions. Great. That was a great introduction and presentation. Thank you for that. I'll just dive straight into my questions. You're guiding the market for revenue growth rates of 35% annually for the coming years. What allows you to continue to grow faster than most public payment companies? A couple of things, here. One is the ability to be able to grow as such is, one, start with the, the business model that is relying on, recurring revenue, where, you know, we are able to provide our customers, whether it's small, medium, or large, the complete solution, and of course, the payment. As I said, our job is to combine the enablement of payment, as well as to simplify, their business, and they're growing, and we're growing with them. It's not just the unattended, though, and that's where I was speaking, the automated self-service. We have some other growth engines, whether it's in the electric vehicle side, the retail side, loyalty, and even embedded finance, where we're seeing, significant, growth opportunities for us. Combine that with M&A opportunities to whether it's to increase our geographic presence, like we did in Brazil acquisition, or if it's to increase our product portfolio, as we did with the Roseman and the Forecourt opportunity, or even with Retail Pro in the retail side of the business. A s Yair, our CEO, likes to say, you know, we are there. We are in the-- we are a retail company. I f you think about that, you know, we are there to provide whatever they need on an end-to-end solution, and our specialty, if you will, our the secret sauce, is to have a solution for small businesses and then take that to wherever they need. Aaron, I don't know if you want to add anything to that? No, I think that you highlighted pretty much everything. I'll just say also that, you know, we're continuing to expand organically into new emerging market, like EV charging, for example, that have had very high, you know, not only a very high TAM, but a very high macro growth rate. And we're seeing a lot of tailwinds in some of these industries that historically did not require card-present payments, and now all of a sudden, government is requiring card-present payment, or customers are requiring card-present payment in these industries, which puts us in a very good position to continue to grow very strongly. Understood. Okay. That's extremely helpful. W ith all of this growth you are seeing, you're also expecting significant improvement in your profitability. Where will that come from? It's a combination of really everything that we do. One is obviously the scalability, right? We are showing that, you know, for the last few years, that we are focusing on profitable growth. It's not just the growth, and it comes from the hardware, where just this quarter, we were able to show 29% margins on the hardware versus 19% last year. A gain, last year was the outside, you know, going out from the pandemic and the component shortages that everyone experienced. In this case, we are able to not just go back to the pre-pandemic profitability on the hardware, but to exceed that. A s you probably know, Rayna, nothing costs the same as it was prior to the pandemic. We're really being able not only to reduce the costs, but also to create some cost reduction initiatives, you know, and improvement there, in order to be able to exceed even the profitability that we used to have. In addition to that, from a service as well as processing perspective, we are continuing to, whether it's on the processing side, to continue to negotiate with the acquirers. L ike I've said, we are with just Q2, $1.2 billion of transactions went through our devices. Think about the purchasing power that we have now in front of all of the acquirers, and from their perspective, this was all cash in the past. We actually now brought them $1.2 billion of business that they didn't have before, and they don't wanna the, you know, to deal with a customer that is processing $400 a month in its vending machine, right? F rom their perspective, we are bringing new business into them. They're willing to pay for it, and we are able to to gain some traction there. In addition to that, we are doing all kinds of of operational efficiencies from an OpEx perspective, right? To continue to to improve our profitability as we continue to grow from a revenue perspective. Got it. That's extremely helpful, Tsachit. Tell us a bit more about the energy sector and your strategy there. How significant is this market today, and where could it go over the next several years? I can start with this. The, you know, the energy side is, as I said before, it's one of the highest growth segment that we see right now in terms of not only total addressable market, but also growth potential. We started in this industry back 7-8 years ago. We were one of the first, if not the first, that started with card-present payments for EV charging. We have been able to make big inroads through our investment in that space over the last 7-8 years, particularly on payments for EV charging. And we're starting to see a lot of tailwinds now, both in Europe and in the United States, and also in some other jurisdictions, largely related to two reasons. One is government regulation. Government regulation is starting to require card-present payment readers at a lot of these locations, especially public charging sites, fast chargers. And with us being one of the few solutions that are available on global scale, it's one of the leading choices for OEM manufacturers and for the charge point operators. The other key factor is adaptability. W hen there were early adopters that were doing EV charging, you know, the early people that were buying Teslas and other EVs, they were okay with downloading mobile application. They were more tech-savvy willing to have multiple apps on their phone in order to adopt this technology. Now, we're starting to get into more mainstream people who are buying EV chargers... or sorry, EV, electric vehicles and going and using the EV charging stations. W ith that, people are becoming more and more frustrated with the mainstream. Electric vehicle owners are becoming more frustrated as they move over to EVs, seeing that they need to go download 10, 15 applications on their phone, in order to go and figure out how to pay for their EV charging, and they're just like: "I wanna pay like I'm paying at a gas pump," which we're able to provide with a Card-Present reader, but if you didn't have the Card-Present reader, you'd have to go and figure it out through the mobile application. And so that's also a big tailwind right now of customers essentially pushing the Charge Point Operators to go and adopt Card-Present readers. We see a lot of growth in the segment as we start to move forward. We're with some of the largest charge point operators in the United States. W e're continuing to press in other parts of the world. Understood. Very helpful. If anyone has any questions from the audience, this is a good time to type them into the dashboard. Otherwise, I'll keep going with my questions. How large is the unattended market, and where do you have opportunities to grow in this space? Maybe I'll start. O ne of the things that we have done, just before we went to the IPO in Tel Aviv three years ago, and then just recently when we went to, we did the follow-on on NASDAQ just 3-4 months ago, is we've updated the market research analysis, and that, where it shows that there's 45 million unattended devices today, right? All around the world, growing into 60 million devices by 2029. E ven if we just focus on the 45 million, as Aaron mentioned in the presentation, we believe that maybe 20%-25% of them are actually accepting cashless transaction. W hen you understand that, you understand that the real competition is not the other companies that have an unattended cashless solution, but it's really cash. How do you get to all those parks, to all those, you know, areas, where it's still only cash and coins that accepting and convert them to cashless? So if you, you know, if you, if you live in New York, you probably saw in JFK, you will see the vending machine, the massage chair, and all of the big cities, right, have that, those. But how do you get to the other, you know, 30 million devices that are there that can be converted? T hat's one. Also, from a payment processing perspective, from the, from, from a the transaction value, you know, it's gonna triple itself to $257 billion. T he nice part of it, sorry billion dollars. The nice part about that is you can see the trend, the consumer behavior change. In there 6-7 years ago, in a vending machine that was accepting both cash and cashless, you would see that 25% of the transactions were cashless. In today's machines, same machines, 65%-70% of the transactions are cashless. So you see the consumer behavior change, and therefore, I know more and more, I don't know about you, Rayna, but I have my $20 emergency bill in my phone or in my phone that I'm never using, right? You go, and you pay with your credit card, with your Apple Pay everywhere, and that's the transition that is existing. You know, definitely the corona helped, you know, and pushed, but it started before, and it's continuing to be there. The market opportunity is amazing, and our product, if you will, or the company in that space, is quite resilient to any macroeconomic changes that exist. We saw that in the corona. We're seeing that even today, the company is continuing to grow significantly, 35% year-over-year. T hat's exciting. Got it. Very helpful. We have a question from an investor. I'll read it out loud. Can you talk about your distribution strategy? Who are your main distributors, and how does the economic model work with them? Sure, maybe I can start, and Sagi, if you wanna say anything after. W e have, you know, a little bit of a hybrid business model when it comes to distribution of our product. We sell in multiple different ways. F irst off, we sell direct. We do it in countries, for example, like the United States, where we bought the distributor back 10 years ago. That's a very good percentage of our sales. We then have 120 distributors, of which are global, covering the globe, mostly centered around the European market. E ssentially, each of these distributors generally will cover a country. It's generally not an exclusive type of relationship, but they're generally covering individual countries for us. I'll get back to the business model there in a second. The third is resellers. We have over 1,000 resellers that we have globally. Those are mostly OEM manufacturers that are purchasing our credit card reader and then reselling it with whether it's their vending machine or the massage chair or whatever it is, or the EV charger. T hey're essentially selling it once we sell it to them. A good example of that is our China office. Our China office, we don't actually do payments in China, but we do have an office in China, where we're working directly with the OEM manufacturers who are exporting to other countries around the world. T hat's a big business of ours. T hen the fourth is our e-shop. We have an e-shop for our, for the smallest merchants, the ones who want to buy 1-5 devices. T hey can buy in a completely automated fashion, be able to do all their onboarding, everything online, making it very easy for them to go and pick up a reader, put it on their vending machine, and start being able to accept cashless payments. Now, to come back to the distributor model, the way that we generally do it, and I say generally, 'cause it's not always a catch-all, but generally, the way that we do it is, we sell the hardware to the distributor. They mark it up as they see fit. We have our, you know, suggested MSRP pricing around the world. T hey, generally speaking, will follow guidelines along that. We generally have one – it's one channel, though, generally. W e sell to the distributor, distributor will sell to the end customer, generally. And then, they will also mark up value-added services. The way that we charge is we charge for the hardware, we charge for the software, we charge for our payments. We're not doing it as a gross net revenue spread normally. w hen you see our financial reporting, that's net revenues, not gross revenues. T hat's already net of anything that the distributor might end up taking on top of it. Hope that answers the question. No, it definitely does. How sensitive are you to an economic downturn? Yeah, so generally speaking, we've been very resistant, and we mentioned this in the Q2 report as well. Unattended industry, in general, is mostly micro transactions. W hile a lot of it is discretionary spending, we saw it during COVID as well, that people still want to buy a, you know, a $1 Snickers bar out of a vending machine, whether it's a great market or they're going into a recession. W e haven't seen headwinds so far this year in terms of, in terms of spending. Our transaction volume is at all-time highs. Our growth rate, as we showed in Q2, on transaction volume is still, in line with what we've been seeing in the past. W e don't expect to see headwinds on the unattended side. Where we have seen a little bit of headwinds is where everyone else has seen it, which is on the attended retail side and the retail stores. I t's still a very small percentage of our revenues, and generally speaking, we've been able to offset that with the fact that we're really more in a high-growth stage right now on the, on the attended retail side, going and entering into new markets, geographic expansion, et cetera. W e haven't really been seeing much headwind there as well from a growth rate perspective. Got it. Okay. Talk to me a little bit about your M&A strategy. Are you actively pursuing acquisitions? We're active in the market. The payments industry is rapidly consolidating. We're actively looking out for opportunities that make sense for the company, that's accretive to the company, that's going to continue to help us get to our targets in 2028 of $1 billion of revenue and 30% EBITDA margins. We are focused on the three areas that I mentioned. W hat I'll highlight is that, you know, we're much more focused on, you know, not tiny transactions, but on the smaller side as opposed to transformational. W e see right now, we feel that our penetration rate, you know, in terms of our market share as a company, it's probably somewhere between 10%-15%. Is probably the number, you know, in the top 2 or so in terms of number of connected devices, globally. I n terms of global company, we're the only global unattended company out there. I t's a very fragmented industry still. It's not run by the, you know, by the big payments players that you would think of. It's not, you know, Global Payments, Visa, Worldline, et cetera. It's a lot of small operators that are, you know, they own, you know, between 10,000 and 50,000-60,000 devices. W e see an opportunity to be able to to help consolidate some of the industry and hopefully in the long term, be one of the dominant market players with the target, trying to get to close to 30% market share, which would be what people would see as a leading technology player in a specific industry. Sagit, do you have anything you want to add there or? No, you answered very well. Got it. Since we only have a few minutes left, I just have one final question for both of you. What are you most excited about over the next 6-12 months, and what potentially worries you the most? I can start and, Sagit, if you wanna take your side as well. I think what we're most excited about right now is a couple of things. One is pursuit in some of these emerging industries that we've been seeing a lot of momentum in, and continuing to grow our unattended segment, which has been the cash cow of the business. We're still seeing a lot of growth in the core unattended, vending, laundry, you know, car washes, things like that, expanding into new countries. T hen the other is, as we mentioned in Q2, we're starting to see a lot of success, especially after the Brazil acquisition with Hardware as a Service, with being able to increase the gross margins. Even on the hardware side, this quarter, we were at a high in the last few years at 29% gross margins on the hardware side. But we're especially excited about the, you know, rental-based model, which we're seeing a lot of momentum in some countries. Brazil is a great example of that, where we feel that by moving more towards an OpEx-based business model instead of CapEx for the customer, that we'll be able to continue to expand the gross margins as we start to move forward, as we try to reach our targets in 2028 of 50% gross margins. Sagit, anything you want to add? Yes. So if I'm excited about something is, you know, is on, on top of just being in, in, in an amazing, innovative, company that continued to grow 35% year-over-year, that by itself, it's a unique specifically for me, is Brazil, and with their, hardware as a service or rental business model that, I hope, we can, and we started, to, implement that everywhere. I t's really taking hardware revenue today for basically SaaS, if you will, whether it's software as a service or hardware as a service, or services in general, in the future, with as, as we mentioned, higher margins, et cetera. And, just to continue to, execute, per the plan and continue to gain market share in, in, other geographic areas where, we see a, a high potential. I think from a concern perspective, it's not necessarily a concern, but you know, just continue with a strong discipline to execute per the plan. F rom a market and public market perspective, we are in both in Israel and U.S. That has its challenges to be in two exchanges. W e are very excited about, the unique proposition that we have, and it's our job to continue to tell the story, continue to put our name out there, and thank you for having us. Oppenheimer is a great partner for since the IPO in Tel Aviv, and we appreciate that. Thank you. This was a very insightful session and, looking forward, to have a continued conversation with your team.