Nayax Ltd "Management Meeting Takeaways" (Neutral) Zhang

Research evidence excerpt

Nayax Ltd "Management Meeting Takeaways" (Neutral) Zhang

A, with the buyout being gross margin and EBITDA margin accretive.

Competitive landscape and differentiation: Nayax estimates a TAM of ~48mm

unattended machines in 2025 growing to ~60mm in 2029, with connected machines

growing 2.5x faster, from ~16mm to ~27mm during the same period and cashless

payment volume in unattended retail anticipated to grow at a ~19% CAGR to $257b in

2029. Nayax believes it is the largest provider with a total of ~1.5mm managed &

connected devices. In addition, the company generally operates among the top 3 of

unattended payment providers across most regions. In the US market, Nayax now

primarily competes with 365 Retail Markets (following 365's acquisition of Cantaloupe

last year), with the combined entity having ~1.2mm connected devices in the US

(compared to Nayax having ~1.5mm globally and ~40% US revenue mix [device mix not

disclosed]). Management noted that while Canteloupe offers a strong product and has a

good enterprise customer base, it is more focused on the food services vertical in the US,

compared to Nayax's more horizontal product suite outside of food services and its

global footprint with EMI (or similar e-money/payment services) licenses in the UK, EU,

Israel, Canada, etc.

Drivers of margin improvement / OpEx leverage: Nayax is already approaching its

long-term gross margin target of 50% by 2028, with 2025 gross margins of 48.2%,

while adjusted EBITDA margins of 15.3% in 2025 are expected to scale toward the 2028

target of 30%. Key drivers of EBITDA margin expansion are expected to be continued

cost leverage (growing OpEx by <20% per year, well below revenue growth) driven by

headcount discipline, personnel cost mix, and AI-enabled efficiencies. On FCF, while