6-K
Nayax Ltd. (NYAX)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16
OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2023
Commission file number: 001-41491
NAYAX LTD.
(Translation of registrant’s name into English)
Arik Einstein Street, Bldg. B, 1st Floor
Herzliya 4659071, Israel
(Address of principal executive offices)
_____________________
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
EXPLANATORY NOTE
On August 9, 2023, Nayax Ltd. posted on its website a corporate presentation titled "Nayax Q2 Earnings Presentation". A copy of the corporate presentation is furnished as Exhibit 99.1 hereto.
EXHIBIT INDEX
The following exhibit is furnished as part of this Form 6-K:
| Exhibit | Description |
|---|---|
| 99.1 | Corporate Presentation titled "Nayax Q2 Earnings Presentation", dated August 9, 2023. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| NAYAX LTD. | |
|---|---|
| By: | /s/ Gal Omer |
| Name: Gal Omer | |
| Title: Chief Legal Officer |
Date: August 9, 2023
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Exhibit 99.1
Nayax Q2 Earnings Presentation Aug 9, 2023
Important Disclosure This presentation is intended to provide general information only and is not, and should not be considered, as an offer to purchase or sell the Company’s securities, or a proposal to receive such offers. In addition, this presentation is not an offer to the public of the Company’s securities. By attending or viewing this presentation, each attendee (“Attendee”) agrees that he or she (i) has read this disclaimer, (ii) is bound by the restrictions set out herein, (iii) is permitted, in accordance with all applicable laws, to receive such information, (iv) is solely responsible for his or her own assessment of the business and financial position of the Company and (v) will conduct his or her own analysis and be solely responsible for forming the Attendee's view of the potential future performance of the Company’s business. The information in this presentation is provided for convenience only. It does not contain comprehensive information, but merely summary information in a condensed form. This presentation does not and is not intended to replace a careful inspection of the Company's Financial Statements and other public filings, as reported or will be reported to the Israeli Securities Authority and the Securities and Exchange Commission (the "Company's Reports"). In case of any inconsistencies between the information provided in this presentation and the Company's Reports, the latter will prevail. The information in this presentation is not a basis and should not be used as a basis for making any decisions in relation to the Company, including any decision to purchase securities of the Company. Any such decision should be based on the Company's Reports and following the receipt of appropriate professional advice. The information provided in this presentation is not, and should not be considered to be, a recommendation or an opinion of any kind in relation to an investment in the Company, whether legal, financial, tax, economic or otherwise. This presentation does not replace the need for a potential investor to collect and analyze further independent information for their due consideration. Every potential investor must obtain their own independent advice and guidance, in connection with a potential investment in the Company, including tax advice which takes into account the investor’s own tax position. This presentation includes projections, guidance, forecasts, estimates, assessments and other information pertaining to future events and/or matters, whose materialization is uncertain and is beyond the Company’s control, and which constitute forward looking statements (within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Israeli Securities Law, 5728-1968). Many of the forward-looking statements contained in this presentation can be identified by the use of forward-looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate” and “potential,” among others. Forward-looking statements include, but are not limited to, expectations and evaluations relating to the Company’s business targets and strategy, the success of trials and the integration of the Company’s technology in various systems and industries, the advantages of the Company’s existing and future products, timetables regarding completion of the Company’s developments and the expected commencement of production, sales and distribution of the Company’s products and technology, the Company’s intentions in relation to various industries, the Company’s intentions in relation to the creation of collaborations and engagements in licensing agreements, production and distribution in various countries, and other statements regarding our intent, belief or current expectations. Forward-looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and actual results may differ materially from those expressed or implied in the forward-looking statements due to of various factors, including, but not limited to: our expectations regarding general market conditions, including as a result of the COVID-19 pandemic and other global economic trends; changes in consumer tastes and preferences; fluctuations in inflation, interest rate and exchange rates in the global economic environment over the world; the availability of qualified personnel and the ability to retain such personnel; changes in commodity costs, labor, distribution and other operating costs; our ability to implement our growth strategy; changes in government regulation and tax matters; other factors that may affect our financial condition, liquidity and results of operations; general economic, political, demographic and business conditions in Israel; the success of operating initiatives, including advertising and promotional efforts and new product and concept development by us and our competitors; and other risk factors discussed under “Risk Factors” in our annual report on Form 20-F filed with the SEC on March 1, 2023 (our “Annual Report"). The preceding list is not intended to be an exhaustive list of all of our forward-looking statements. These statements are only estimates based upon our current expectations and projections about future events. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements. In particular, you should consider the risks provided under “Risk Factors” in our Annual Report. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Each forward-looking statement speaks only as of the date of the particular statement. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, to conform these statements to actual results or to changes in our expectations. In addition, the presentation includes data published by various bodies, and data provided to the Company in the framework of cooperation engagements, concerning the industry, competitive position and the markets in which the Company operates, whose content was not independently verified by the Company, such that the Company is not responsible for the accuracy or completeness of such date or whether the data is up-to-date, and Company takes no responsibility for any reliance on the data. Management estimates contained in this presentation are derived from publicly available information released by independent industry analysts and other third-party sources, as well as data from the Company's internal research, and are based on assumptions made by the Company upon reviewing such data, and the Company's experience in, and knowledge of, such industry and markets, which the Company believes to be reasonable. In addition, projections, assumptions and estimates of the future performance of the industry in which the Company operates and the Company's future performance are necessarily subject to uncertainty and risk due to a variety of factors, including those described above. These and other factors could cause results to differ materially from those expressed in the estimates made by independent parties and by the Company. Industry publications, research, surveys and studies generally state that the information they contain has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Forecasts and other forward-looking information obtained from these sources are subject to the same qualifications and uncertainties as the other forward-looking statements in this presentation. In addition to various operational metrics and financial measures in accordance with accounting principles generally accepted under International Financial Reporting Standards, or IFRS, this presentation contains Adjusted EBITDA, a non-IFRS financial measure, as a measure to evaluate our past results and future prospects. Please refer to the Appendix for a definition of Adjusted EBITDA and for a reconciliation of Adjusted EBITDA to net income (loss). The Company does not confirm or undertake that the information appearing in this presentation is complete or accurate. The Company, its employees, officers and its shareholders will not be responsible for damages and/or losses which may arise as a result of the use of the information contained in this presentation. The Company is not responsible for any changes to the economic, financial or legal situation relating to the Company and its business. The Company does not undertake to update and/or change forecasts and/or evaluations included in the presentation in order that they will reflect events and/or circumstances which apply after the date of the presentation’s preparations. No persons have been authorized to make any representations regarding the information contained in this presentation, and if given or made, such representations should not be considered as authorized. The content of this presentation does not bind the Company or its managers and they have the right to change any item described in the presentation relating to the Company, at their sole discretion. The Company and its licensors have proprietary rights to trademarks used in this Presentation. Solely for convenience, trademarks and trade names referred to in this Presentation may appear without the “®” or “™” symbols, but the lack of such references is not intended to indicate, in any way, that the Company will not assert, to the fullest extent possible under applicable law, its rights or the rights of the applicable licensor to these trademarks and trade names. This Presentation also contains trademarks, trade names and service marks of other companies, which are the property of their respective owners and are used for reference purposes only. Such use of other parties’ trademarks, trade names or service marks should not be construed to imply, a relationship with, or an endorsement or sponsorship of the Company by any other party.
Yair Nechmad CEO and Co-Founder Today’s Speakers Sagit Manor CFO
Company Overview
Our Vision and Mission OUR VISION Redefining commerce to benefit communities around the world OUR MISSION To simplify commerceand payments for retailers while driving growth, optimizing operations,and enhancing consumer engagement
Recurring revenue includes SaaS revenue and payment processing fees Based on SaaS revenue and payment processing fees. Nayax (Nasdaq & TASE: NYAX) Q2 23 at a Glance Global offices 9 Customer YOY growth 47% Revenue churn 4.1% Markets with distributors 46 Countries with devices 80+ Payment methods 80+ Currencies 50+ Managed and connected devices 824k Jun. 2022 595k End customers 56k Jun. 2022 38k Transactions processed 446m Recurring revenue(1)YoY growth 43% Dollar-basednet retention rate(2) 139% Global Scale Growth
Bringing a Global Solution to the Local Market 1 Based on SaaS revenue and payment processing fees. See definition in the Appendix. YoY Revenue Churn Rate Retaining & Growing Customers YoY Revenue Churn Rate YoY Dollar-Based Net Retention Rate1 Low CustomerConcentration Global Reach Q2 2023 Q2 2023 Strong Track Record of Winning Clients
Nayax’s platform increases sales and decreases costs for retailers Telemetry and Software Consumers Omni-Channel Acceptance, Consumer Engagement & Loyalty Increase Sales Pricing Remote Monitoring Reporting Reconciliation Dynamic Routing/ Inventory Management Telemetry / IoT Data Collection Decrease Costs Instant Refunds In-Store Discount Loyalty and Marketing Programs Cashless Acceptance Integrated POS Retailers Suppliers
Recent Key Business Highlights Oils Unkut is expanding in Nova Market in gas station stores. Recently launched the Food & Beverage (F&B) module in Israel Building presence in Hotel vertical, with three locations up and running. Added Synergy Energy as a new Tier 1 customer. Synergy Energy is Western Australia’s largest energy retailer and generator. Synergy has chosen to rollout their EV DC chargers with Nayax devices embedded. This deployment of EV fast chargers with cashless payments is the first in Australia. Signed a new Tier 1 customer. This customer is the leading full-service provider in the field of Smart Vending. The company has developed complete digitized vending machines, targeting high frequency locations such as shopping centers. We have developed solutions for Multifamily Residential vertical and started implementation. This vertical takes Nayax's payment solutions from the retail space to the consumer residential space. Extended the relationship with Primo Water in the US with additional Nayax devices and plan to expand globally The leading US unattended retail provider extended its program with Nayax by purchasing devices for a water refilling project at a large car manufacturer
Proven Growth Existing Customer Expansion ($m) (1) (1) See Appendix for definition of existing customer expansion. For example, revenue from new customers in 2018 grew more than 5 times over the next 4 years. Land and Expand Solving pain points with a scalable, solution-driven sales approach Increase revenue organically through additional penetration and offerings Land Close Expand
Strategy for Sustained Long-term Growth Retain and grow with existing customers Continue to innovate and develop new solutions Win new large enterprise and SME customers globally Pursue targeted and strategic M&A Continue to expand internationally Enter emerging, high-growth verticals Nayax continues to execute its strategic growth plan while remaining focused on balancing top line growth with a path to profitability
"One Nayax" Strategy: End-to-End PlatformExpanding TAM and Driving SaaS "One Nayax” Embedded payment solution Embedded payment solution Embedded financing solution Embedded payment solution Converting loyalty assets to currency Embedded payment solution Omni channel marketing platform New Innovative platform for Family Entertainment Centers and amusement Electric vehicle platform Self-checkout platform
Financial Overview
Powerful business model built on solid recurring revenue Source: company data Multi Layers of Value Creation ~60% Recurring Revenue Processing fee as % of transaction volume Monthly Subscription Fee (SaaS) per connected POS Purchase fee per sold connected POS “Lock in” Consistently growing recurring revenue base Superior payment processing economics 2.4%+ Take Rate Embedded Payment Hardware SaaS Payments Rapidly Growing Recurring Revenue Base
Highlights Gross Profit grew 32% YoY. Q2 gross margin reflects an increased shift to higher processing payment fees than SaaS revenue. Highlights Q2 Gross margin improvement was mainly attributed to our hardware component cost management execution and favorable hardware selling prices. Highlights High recurring revenue Grew by 43% YoY. Primarily driven by exceptionally strong payment processing fees YoY growth of 51%. SaaS revenue Grew by 32% YoY. Our Business Model is Working Recurring Revenue: SaaS Revenue and Payment processing fees. Highlights Strong revenue in Q2. Grew 36% YoY as we continued to benefit from faster growing recurring revenue. Hardware revenue also contributed growing 26% YoY. Gross Margin Gross Margin Strong Revenue Growth ($m) High Recurring Revenue ($m) (1) Gross Profit ($m) Recurring Gross Profit ($m) 47% 40% 34% 37% 35% 61% 57% 51% 47% 52% CAGR 55% 36% CAGR 48% 43% 48% CAGR 27% 32% CAGR 41%
Highlights Adjusted EBITDA was a positive $1.3 million for the first time in two years, since Q1 2021, a marked improvement of $4.5 million to Adjusted EBITDA compared to negative $3.2 million in Q2 2022. Depreciation and Amortization ($m) Highlights Increase in Q2 2023 YoY primarily due to investment in automation. Highlights 21% Increase in Q2 2023 YoY Reflects investment in talent acquisition, customer base expansion, and higher go-to-market expenses. Highlights 2% Reduction in Q2 2023 YoY Reduction primarily due to higher capitalization of development expenditure Improved Profitability from Moderating Expenses and Operating Efficiencies (1) Excluding share-based compensation and Amortization (2) For historical years comparison (2018-2020), when excluding (i) product costs increase due to global components shortage (ii) bonus plan for non-sales employees that was introduced in Q3 2021, Adjusted EBITDA for Q2 2022 and Q2 2023 improved to $1.3M and $2.8M respectively. R&D Expense ($m) (1) SG&A Expense ($m) (1) Adjusted EBITDA ($m) (2%) 21%
Consistent Track Record Of Expanding Footprint Highlights Q2 2023 reflects momentum in customer base, with YoY growth of 47%, across all geographies Significantly increasing and retaining customer base with high net retention rate at 139% and low churn rate at 4.1% Number of Customers (thousands) Number of Managed and Connected Devices (thousands) Highlights Reaching another record number of 824,000 managed and connected devices across all geographies Grew by 38% YoY 38% CAGR 40% 47% CAGR 57%
Global Cashless Payment Trends Driving Transactions Transaction value ($m) Highlights 51% Growth in Q2 2023 YoY Growth across all geographies driven by consumer behavior trends, and increased transactions processed from our expanding, global customer base Number of Transactions (millions) Highlights 41% Growth in Q2 2023 YoY Growth across all geographies with our strong customer expansion as well as shift in customer behavior toward cashless payments 41% CAGR 67% 51% CAGR 75%
2023 Outlook (1) We cannot reconcile expected 2023 Adjusted EBITDA to expected net income without unreasonable effort because certain items that impact net income and other reconciling metrics are out of our control and/or cannot be reasonably predicted at this time, which unavailable information could have a significant impact on our IFRS financial results. Guidance as of August 9, 2023. Any usage of slide on a subsequent date does not constitute guidance re-confirmation as of such subsequent date. Refer to Cautionary Statement for a discussion of factors that could cause actual results to differ materially from outlook. See Appendix for details related to constant currency. Metric FY 2023 Revenue (constant currency) $235 - $240M Revenue Growth YoY At least 35% Operating expenses Remain flat from Q4 2022 annualized run rate Adjusted EBITDA $3 - $7M Guidance Assumptions Continued execution of strategic growth plans; benefits of secular trends in digital payments. Customer demand continues to be strong Assumes no material changes in macroeconomic conditions
Summary Founder-led mentality with a mission and performance culture. Growth exposure to large and underpenetrated global markets for cashless payment adoption and secular tailwinds driving growth in our core unattended market. Ability to expand total addressable market and drive additional SaaS revenue from our emerging growth engines. Diverse business model across revenue, customer and geography with high recurring revenue. Seasoned management team with deep Payment industry experience. Accelerated path to profitability driven by revenue outperformance and focused cost management.
Looking ahead, we remain excited about our strong long-term growth drivers and the large market opportunities ahead of us. Our durable business model is demonstrated by our diverse customers, verticals and geographies. With strong secular tailwinds and with our high net revenue retention rate, we believe we have a clear opportunity to drive revenue growth in the future. Mid-Term and Long-Term Outlook Mid-Term Outlook Revenue Growth Reaffirming mid-term outlook of 35% annual growth, driven by organic growth initiatives and strategic M&A. Growth Drivers Customer growth, market penetration, continued expansion of our integrated payments platform as well as our growth engines. Guidance as of August 9, 2023. Any usage of slide on a subsequent date does not constitute guidance re-confirmation as of such subsequent date. Refer to Cautionary Statement for a discussion of factors that could cause actual results to differ materially from outlook. Mid-term defined as over the next 3-5 years. Long-Term Outlook Revenue Growth Reaffirming long-term outlook of 35% annual growth, driven by organic growth initiatives and strategic M&A. Gross Margins Target of 50% Main drivers: providing leasing options for IoT POS, growing SaaS revenue and payment processing fees and services offering through our growth engine initiatives. Adjusted EBITDA Target of 30%.
Appendix
Highlights 31% Growth YOY in Q2 2023 Increase primarily due to additional capitalized development expenditure CAPEX growth due to additional capitalization Capex ($m) 31%
IFRS to Non-IFRS (1) Equity method investee is related to our 2021 investment in Tigapo. (2) For historical years comparison (2018-2020), when excluding (i) product costs increase due to global components shortage (ii) bonus plan for non-sales employees that was introduced in Q3 2021, Adjusted EBITDA for Q2 2022 and Q2 2023 improved to $1.3M and $2.8M respectively. The following is a reconciliation of loss for the period, the most directly comparable IFRS financial measure, to Adjusted EBITDA for each of the periods indicated. Quarter ended as of (U.S. dollars in thousands) Q2 2023 Q2 2022 Loss for the period (3,973) (10,349) Finance expense, net 40 1,499 Tax expense 226 235 Depreciation and amortization 3,156 1,932 EBITDA (551) (6,683) Expenses in respect of share-based compensation 1,425 2,063 Non-Recurring issuance costs - 866 Share of loss of equity method investee (1) 383 570 ADJUSTED EBITDA (2) 1,257 (3,184)
Historical 2018-2022 IFRS to Non-IFRS Consists primarily of (i) fees and expenses, other than underwriter discount and commissions, incurred in connection with our May 2021 initial public offering on the TASE and (ii) expenses incurred in connection with our listing on Nasdaq in September 2022 Equity method investee grew due to our 2021 investment in Tigapo. The following is a reconciliation of loss for the period, the most directly comparable IFRS financial measure, to Adjusted EBITDA for each of the periods indicated. Quarter ended as of (U.S. dollars in thousands) 2020 2021 2022 Loss for the period (6,083) (24,769) (37,509) Finance expense, net 3,874 1,655 3,021 Tax expense (15) 632 451 Depreciation and amortization 5,908 7,198 9,028 EBITDA 3,684 (15,284) (25,009) Expenses in respect of share-based compensation 2,965 8,850 8,747 Non-Recurring Issuance costs(1) - 1,879 1,790 Share of loss of equity method investee(2) - 538 1,794 ADJUSTED EBITDA 6,649 (4,017) (12,678)
Key Definitions Managed and ConnectedDevices that are operated by our customers. End CustomersCustomers that contributed to Nayax revenue in the last 12 months. Recurring RevenueSAAS revenue and payment processing fees. Dollar-based net retention rateMeasured as a percentage of revenue from returning customers in a given year as compared to the revenue from such customers in the prior year, which reflects the increase in revenue and the rate of losses from customer churn. Revenue ChurnThe percentage of revenue lost as a result of customers leaving our platform in the last 12 months. Existing Customer ExpansionRevenue generated within a given cohort over the years presented. Each cohort represents customers from whom we received revenue for the first time, in a given year. Constant CurrencyNayax presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. Future expected results for transactions in currencies other than United States dollars are converted into United States dollars using the exchange rates in effect in the last month of the reporting period. Nayax provides this financial information to aid investors in better understanding our performance. These constant currency financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with IFRS. Adjusted EBITDAAdjusted EBITDA is a non-IFRS financial measure that we define as loss for the period plus finance expenses, tax expense (benefit), depreciation and amortization, share-based compensation costs, non-recurring issuance costs and our share in losses of associates accounted for by the equity method.
Thank you! IR Contact: Virginea Stuart Gibson VP, Investor Relations virgineas@nayax.com Virgineas@nayax.com Virgineas@nayax.com Website: ir@nayax.com