Research Article

Nayax Looks Like A Buy Right Now

Nov 24, 2024

Updates

Business Overview / Sources of Revenue

Nayax Ltd (ticker: NYAX) is a global fintech company providing commerce enablement, payments, and loyalty platform solutions designed for merchants across various retail environments[2][3]. The company specializes in cashless payment solutions and management systems, primarily serving unattended retail markets[4].

Nayax's business model focuses on helping merchants increase revenue while decreasing operational costs through a comprehensive operating system that includes:
- Cashless payment acceptance across multiple channels
- Management suite for business operations
- Consumer engagement and loyalty tools
- Mobile wallet applications
- API suite for integration

The company went public on Nasdaq (NYAX) and has expanded through strategic acquisitions, including VMtecnologia, Roseman, Retail Pro International, Inepro Pay, and UPPay[2]. Nayax's global presence includes offices in Japan and Germany, among other locations[2].

Note: The search results do not provide specific revenue breakdown percentages for Nayax's business segments.

Revenue Growth Potential and Recurrence

Nayax Ltd demonstrates a substantial recurring revenue component, representing 77% of total revenue as of Q1 2025[4]. The company reported recurring revenue growth of 35% year-over-year in Q1 2025[3] and 47% year-over-year for full-year 2024[1][5].

For near-term growth, Nayax provided 2025 revenue guidance of $410-425 million, indicating expected growth of 30-35% compared to 2024's $314 million revenue[1][5]. Management expects at least 25% of this growth to be organic[1][5].

Long-term growth potential appears strong as Nayax continues expanding its global customer base (now exceeding 100,000)[3] while focusing on scaling recurring revenue streams, particularly payment processing capabilities that benefit from the ongoing cash-to-cashless transaction conversion trend[1][5]. The company's demonstrated ability to achieve margin expansion and cash flow generation further supports its sustainable growth trajectory.

Economic Moat Factors

Nayax Ltd. possesses some economic moat characteristics but faces competitive pressures. Its moat stems from switching costs—retailers integrating Nayax’s payment devices benefit from real-time reporting, inventory management, and loyalty programs, making switching inconvenient[3][1]. The company’s global scale and established customer relationships provide moderate economies of scale[4][5]. Network effects are present but limited; more users can enhance data insights, but the business is not as sticky as major consumer networks. Nayax’s brand is reputable in unattended retail and fintech, yet it is not dominant enough to deter strong competitors. Its technology is advanced but not fully unique or irreplaceable. In summary, Nayax has a modest economic moat based on switching costs and operational scale, but lacks deep network effects or irreplaceable assets[3][4][5].

Leadership

Nayax Ltd (NYAX) is led by CEO Yair Nechmad (63), who co-founded the company in 2005 and has served for 20.3 years[1][2]. He also chairs the board of directors and holds a significant 23.21% ownership stake valued at approximately $308.2 million[2]. The leadership team includes other co-founders who have substantial ownership positions, with the average executive tenure being 2.9 years[2]. Recent appointments include Keren Sharir, who was promoted to President and CMO in September 2024[5], and a Chief Operating Officer position created in 2023[3]. Management is considered experienced with an average age of 51[2].

Financial Health

Nayax Ltd. (NYAX) reported strong financial performance for Q1 2025, with $81.1 million in revenue, a 35% year-over-year increase in recurring revenue, a gross margin rising to 49%, net income of $7.2 million, and adjusted EBITDA of $9.7 million[1][3]. The company is profitable and reaffirmed its full-year 2025 guidance[1][3]. While detailed cash-to-debt figures and free cash flow margin are not specified, Nayax has demonstrated net profitability and EBITDA generation, suggesting positive operating cash flow[1][3]. There is no information indicating recent share dilution or net repurchases in the provided results.

Last updated May 29, 2025