Nayax Ltd. — FY2023 Form 20-F
Reporting period: Fiscal year ended December 31, 2023; audited consolidated statements are prepared under IFRS. This is an annual report, not a quarterly filing, and the supplied filing text does not provide a clear standalone Q4 2023 financial result. Amounts below are U.S. dollars unless stated otherwise.
Business context and performance
Nayax provides payment processing, software, customer-engagement tools and integrated point-of-sale devices, primarily for automated self-service retail, and is expanding into attended retail. It reported 72,252 customers and 1.044 million managed and connected devices at year-end, serving customers in more than 120 countries. Retail Pro was acquired on November 30, 2023.
| Metric | FY2023 | FY2022 | Change / context |
|---|---|---|---|
| Revenue | $235.5 million | $173.5 million | Up 36% |
| Recurring revenue: SaaS and processing fees | $151.1 million | $104.8 million | Up 44%; 64.1% of revenue versus 60.4% |
| Integrated POS device revenue | $84.4 million | $68.7 million | Up 23% |
| Gross profit / margin | $88.3 million / 37.5% | $60.0 million / 34.6% | Margin improved 2.9 percentage points |
| Operating loss | $12.4 million | $34.0 million | Loss narrowed |
| Net loss | $15.9 million | $37.5 million | Loss narrowed; basic and diluted loss per share was $0.479 versus $1.143 |
| Adjusted EBITDA (non-IFRS) | $8.1 million | $(12.7) million | Improved; see management’s definition and reconciliation |
| Operating cash flow | $8.8 million provided | $27.5 million used | Improved by $36.3 million |
| Investing / financing cash flow | $(36.8) million / $31.6 million | $(26.5) million / $6.2 million | Acquisition spending and increased borrowing contributed |
| Cash and cash equivalents at year-end | $38.4 million | $33.9 million | Excludes restricted customer-processing cash |
Financial position and material changes
- Recurring revenue increased primarily from higher device counts, transaction volume and transaction value. SaaS revenue was $58.9 million, up 30%; payment processing fees were $92.2 million, up 55%.
- Device gross margin increased to approximately 18.9% from 8.5%, reflecting lower manufacturing costs and higher sales. Recurring-revenue gross margin declined; management attributed this mainly to mix shifting toward payment-processing fees.
- Current assets and current liabilities were $203.4 million and $203.8 million, respectively. Current assets included $49.9 million of restricted cash held for customers and $43.3 million of processing receivables; current liabilities included $104.5 million of processing payables. These processing balances relate to customer funds and should be distinguished from freely available liquidity.
- Total liabilities were $226.3 million and equity was $97.6 million at year-end. Short-term bank credit was $47.5 million; long-term bank loans were $1.4 million; loans from others were $3.9 million. Lease liabilities totaled $6.3 million. Retail Pro also generated $12.1 million of contingent consideration, recorded as a liability.
- Investing cash outflow included $18.3 million, net of acquired cash, for Retail Pro and $15.9 million of capitalized development costs. Financing cash inflow was driven mainly by increased short-term bank credit and acquisition financing.
- Retail Pro’s purchase accounting recorded $30.9 million of total consideration, including $12.1 million of contingent consideration, and $2.8 million of goodwill. Its post-acquisition contribution to reported 2023 revenue was $0.5 million. The filing also presents different implied enterprise-value figures in different sections; see items to verify below.
Outlook, risks and unusual items
- No specific numerical revenue or earnings guidance is provided in the supplied filing text. Management expects recurring revenue to grow as a share of revenue and says operating expenses may increase moderately as it invests in personnel, customer growth, infrastructure and product development. Profitability remains an objective, not an assured outcome.
- The company has reported annual net losses since inception. FY2023 Adjusted EBITDA was positive, but this non-IFRS measure does not replace the IFRS net loss.
- Israel’s war and regional instability pose risks to staffing, supply chains, shipping costs, financing conditions and customer demand. The filing says the conflicts had not materially affected results or R&D activity to date; duration and future effects remain uncertain. Nearly 10% of Israeli employees and managers had been called to reserve duty.
- The Israeli Competition Authority requested information, mainly concerning the OTI acquisition. Nayax provided information and discussions continued. The authority could pursue enforcement, including a potentially material fine; the outcome and timing are uncertain.
- Key risks include reliance on a limited number of component suppliers and two contract manufacturers, dependence on external payment processors and networks, competition, customer retention and execution of acquisitions. Cybersecurity, privacy, payment regulation and licensing across multiple jurisdictions also create compliance and operational exposure.
- Borrowings include variable-rate facilities. In February 2024, a roughly $17 million long-term loan to refinance Retail Pro acquisition financing was executed; management reported approximately $54 million of outstanding Israeli bank credit facilities as of February 19, 2024. Credit agreements contain restrictive covenants, and the company reported compliance with its financial covenants at year-end.
- The founders beneficially owned approximately 74% of shares as of the dates disclosed, giving them substantial influence. The company does not anticipate cash dividends in the foreseeable future.
- The auditor issued an unqualified opinion on the IFRS financial statements. Management concluded disclosure controls and internal control over financial reporting were effective at December 31, 2023; the filing contains no auditor attestation on internal controls because of the company’s emerging-growth-company transition relief.
Most important facts for investors to verify
- Confirm Retail Pro’s transaction terms: the filing cites an implied enterprise value of $36.5 million in one section and $34.5 million in the acquisition note, while reporting $30.9 million of purchase consideration and $12.1 million of contingent consideration.
- Review the maturity, interest-rate terms, covenants and refinancing status of short-term credit, including the post-year-end Retail Pro loan and the approximately $54 million of bank facilities reported as utilized in February 2024.
- Assess freely available liquidity separately from restricted cash and processing-related receivables and payables; the filing does not provide a simple unrestricted net-liquidity figure.
- Track the ICA process concerning OTI and any resulting fine, enforcement action or acquisition-related consequences.
- Monitor recurring-revenue growth and margins, device economics, operating cash conversion, and whether acquisition synergies and integration benefits are realized.
- Assess exposure to Israel-related disruption, supplier and processor concentration, foreign-exchange movements, cybersecurity events and evolving payment and privacy regulation.