Nayax Ltd. (NYAX) Earnings Call Transcript & Summary

Okay. So good morning, everyone, and welcome to Nayax Capital Markets Day. For those of you who don't know me, I know there are some familiar faces, but those never met me. My name is Virginea Gibson, and I actually manage Investor Relations for Nayax. And we're really pleased that you guys are here, and we appreciate the participation given all of the excitement going on in the capital markets these days. So we really appreciate you guys being here. Joining me today is obviously some of the executive leadership from Nayax. And so before I share the agenda, I just wanted to kind of point out to everyone how we kind of develop the presentation content for today. We've been talking to investors over the last several months. And they've been sharing a lot of feedback about the Nayax story, and how the business model is evolving. So we've listened to them. They've talked about certain topics they wanted to hear and questions that they've been asking us. So I think our goal today is to really give you guys a kind of a deeper understanding of the Nayax product and a revenue road map. And of course, we're going to talk about the financials. 2022 is an incredibly excellent year for Nayax. And of course, I'm going to talk about the financial outlook that we gave on March 1. Okay. So today, we've got a great set of presentations from 4 members of the management team. We'll obviously pick it off with a Yair. Those of you who do not know Yair, he's the Co-founder and CEO. And Yair is really going to talk about the One Nayax end-to-end platform. That's kind of the big reveal today talking about that whole One Nayax platform and all the different business lines and how that differentiates the company. He's also going to talk about the 5-year road map. You guys have heard about us speak to one building revenue. So we'll show you how we're actually going to get there. And that's going to be followed then by Keren Sharir, who is the Chief Marketing Officer. You guys now preparing from the last Capital Markets Day. And Keren is going to talk about the product road map, again, another big reveal, some of the releases that you'll hear from us throughout 2023. And then Keren is going to come back on stage and she's going to talk about executing on the Nayax go-to-market strategy. And following her will be Carly Furman, who is the CEO of North America. Carly is going to provide some highlights of both the North America market as well as our international markets. And then we're obviously going to provide a customer testimonial. We are very pleased to have David Hartig, who is the Chief Information Officer of Five Star. Five Star is actually one of Nayax' Tier 1 customers. He's going to talk about why he selected Nayax. And of course, we will end with Sagit Manor, CFO, talking about the path to profitability, really kind of giving you a little bit more details as to how Nayax will get there. Okay. So you can't have a Capital Markets Day without a safe harbor statement. So let me quickly provide that information. So today's presentation will have forward-looking statements, and we will also mention some GAAP and non-GAAP financial measures. You can find a reconciliation of these figures in the appendix section of the presentation, which will be on our IR website following the event tomorrow. We also encourage all of you in today's session and the viewers of the replay to please see the disclaimer information in today's presentation, which is also in the appendix and also our filings with the SEC about the risks and uncertainties that these statements can present. So with that, let's get started. But first, let's show a video of one of Nayax customers, and what they're saying about Nayax. Here we go. [Presentation]

Excellent. And with that, I'll hand it over to Yair.

Good morning, and warm welcome to Nayax' Analysts/Investors Day. We are thrilled too much. We are -- it is something that the voice -- there is a big echo. Can you hear me? Again, good morning, and a warm welcome to Nayax Analyst/Investor Day. We are thrilled to have you all here with us today in the iconic Nayax exchange meeting room. As a leading provider of cashless payment solution, continue to push boundaries in the industry, and we are excited to share our latest update and insight with you. Our mission is to revolutionize the way people pay and transact. And we believe that we are well positioned to achieving this goal. Today's events promised engaging and informative one as we take our growth and future plans. We will be sharing our development, market insight, financial results and more. We will also have an opportunity here from our executive team, which have their perspective on the future of cashless payment. At Nayax, we believe that collaboration is a key success, and we are honored to have such a distinguished group of analysts and investors here with us today. Your insight and feedback are invaluable to us, and we look forward to a productive day of exchanging ideas and knowledge. We thank you for joining us and look forward to a day filled with the fruitful discussion and insight. Let's get started. So the question is who wrote this, if you have any idea? Absolutely. It is ChatGPT, and it took me 1 question that I ask the Chat to write me opening for this meeting. And this was wrote by ChatGPT. I'm stating this because it's relevant, I think, to everyone in the industry. And we took -- we're taking seriously that it will affect all our business. It is demonstrating also the it has to scale the business in a way that the operational of cost will be very tight because of the ability of what we can do with Chat today is amazing, whether it is on the marketing side, operations side, code writing, visualized, everything has been really tested in our system with our team. And we're looking very strongly to use this kind of field, but this is like an example of how we're thinking the way that we can scale the business operationalize based on technology. So let's start. I'm always starting with the mission and vision and associate this with the numbers. And as you said, the number we were very proud of, but let's just start with the mission. The mission is something that we are focused on the customer base, how can we help the customers to increase these sales and reduce the cost. This is really very simple financial results that we're looking at -- but the outcome of all of this, I believe, and we believe, that the vision that come out from this is that we can help customers take in all of their business in terms of managing the data in a way that it will affect their life. It will make their lives much, much more under control, it will ease up the ability of good customers to manage their life and the tents will go down. And actually, we call it the well-being the way being of the customers that can be under control, the data can create a lot of effect in the community, and we're looking at our mission statement to support our vision statement. You can see that we are executing quite well under the last 5 years. From 2018 to 2022, you can see that the numbers are really growing very fast. 37% in the last 5 years from 2018 to 2022. You can see that actually from 2020 to 2022, we grew up with double our size in terms of dollar revenue from $80 million -- $79 million to $174 million. And it's all based on the number of customers. So there is something that we are doing, which is working quite nicely and attract customers and build our position in the market that we've been chosen by more and more customers to join the Nayax' solution. When we see this and we know what we want to do, it's all about scaling, how we're scaling the business, how we're taking this into the next level. We grew up as a private company until 2021. We did it with a business model, which is the same business model. And now we're taking it to the next level to become a bigger company. We already achieved the global presence of more than 70 countries. Actually, it's more than 100, but we're not counting the small units that have in some places. But basically, 70 countries are really supporting -- been supported by Nayax. And we accepted a payment in 50 currencies. It's kind of -- I talked just before the start of the meeting I think I didn't do any benchmark, but I think we are the largest one in the world that can accept card present as one company, because we are connected to more than 50 acquirers, to more than 50 alternative payments. So we should be probably one of the largest ones that can accept in one company the New Zealand currency, the Australian currency, the Japanese currency, all the European currency and North America dollar and Canadian dollar in one place. And this is a big that we believe can cover us in [Indiscernible]. So if you look about how we see the world, we see the world if we can access all the . And this is why we're looking at a [Indiscernible], which is much bigger than just a segment of a solution per country, [Indiscernible] acceptance part, the [Indiscernible] payment part, all of this together is a bigger, bigger time that we believe that we can access. The growth, as you can see over here, 40% in recurring revenue. Part of the model, if I can say about the model, if we become to be a public company just by 2021 and being priced, we're going to grow the business is by working capital that was part of what customers were paying, the ability of using the working capital smartly enabled us to become a private company, 100% by 3 owners. David, which is not over here, the CTO and my brother, which is not working, Amir. Particularly, the 3 of us took the company, of course, with all the employees and all the talented employees that we have in the company to become a public company just by 2021. So we achieved the growth with the business model, and that's a very, very strong statement. And you can see that we're still doing same the same thing. What can predict the future is customer growth. So we are growing with customers 57%. So that means that we're starting to create what we call a bigger and bigger flywheel. And we're doing this in the terms of creating more and more traction to customers, addressing more and more pain points for the customers. We're tracking quite closely the net retention -- dollar net retention and [Indiscernible]. I'm coming from a company before Nayax, from Eden Spring. It's a mineral business company. And one of the key elements that I learned there is to keep up the share, because if the share will grow, all the things that we're doing and new customer will be looking down the company. And actually, you're doing something that we call it [indiscernible], if you're doing something neutral. And we don't want to work by neutral. So we have to keep a very close eye on the satisfaction of the customers. And part of the initiatives that we're doing these days is really accelerating the ability of us concentrating with customers. Summing up in one picture. These 2 friends, I met them in Austria, Oliver and Moritz, they are owning a company have 5,000, 6,000 vending machines, tobacco machine mainly. And there are a few stories that summarize actually the life and how we see lives. First, they reach out to Nayax, because a customer or a competitor was not delivering their solution. They were working with one of our competitors in Europe. And actually, the competitor came to them and said to them, I need you to switch the terminal. And they came to them and switching the terminal because of end of certification with a terminal that when you put it on the door of the vending machine, the door will not close, because it was bulky terminal that you cannot close the door. They log into the internet. They're looking for someone, they reach out to the inside sales of Nayax. So inside sale of Nayax sold what they had, and they are moving to the German office. And the German office pick it up, and went through a meeting with them and revealing what we have under their needs. And on top of it, they have a specific need that Nayax is sorting out for them is age verification. And you'll see -- we'll talk about later. But the idea is that tobacco in Europe, in Austria, it could be age verification, as there is another service that you have to go before the machine will wake up. This service is another bulky solution. And Nayax is now putting everything together in one place in one shop. So you present your ID. You will go through your application and immediately afterwards, the machine will wake up, you can present your card. That's kind of a technology lift that we're doing or heavy lifting that we are doing, enabling customers to -- really to succeed. So this is one story around this. The second story about this is that this is a picture that there is a vending machine over here, and there is a butcher on the right-hand side. This vending machine is enabled the butcher shop, not to open the shop on Saturday because he's putting wine and meat and everything with the barbecue and the machine itself is carrying, of course, online connectivity, and the owner of the butcher can stay Saturday at home. This is part of the world being, so he don't have to go to work on Saturday, because the vending machine and the online solution that we are providing enabled machine to work, and he can control everything and being -- and stay safe. So it's part of the community that we believe still strongly that is important. The last thing about is that this team, the Oliver and Moritz is becoming to be our partner distributors to their customers, where they're going to take the initiative to go to retain tobacco. So they want to take Nayax in the retail part of Nayax into retail and to go and to serve, because they are serving these locations and part of the business is not just the machine, is also route for retailers -- for tobacco. And they want to switch all the retailers of the tobacco to their solution of -- to Nayax solution with their support. So it's combining all the story about Nayax, how customers reach out to us, how we're dealing with the customers and bringing the customer to a better position in terms of his life, how we are helping the customer's customers to become a better, what you call, satisfy from his life. and on top of it, extending our footprint and a partnership with the customers. The trends is never ending. We move to cashless. We as a consumer move to cashless. Cashless is now becoming to be a tailwind that becoming more and more power in the day to day of our lives. Cashless is becoming to be the center of all the activity in terms of the loyalty and the operation. And you can see that the digital payment, omnichannel, self service scarcity of employees are all supporting this kind of thing. So when I've been asked multiple times regarding the macroeconomics, the only thing that we have to do, I have to do or all the team has to do is look about what happened to the cashless, whether the cashless is growing, or stagnating or started, and we see it growing. When you look about the omnichannel needs, the ability of us as the consumer is to choose things from our mobile and then collect it care of collection or to do the opposite. All of this kind of thing is accelerating more and more. If you look about the self-service, there we went over here to the Starbucks. And in the morning, it was like, I think it was 7:10. We try to buy a coffee and some pastry. And actually, we couldn't like it was all packed. We order, we lost, I think $3 dollar, we order. And actually, it was -- the queue was so big, so we left, we couldn't buy. So -- and Sagit has the application, which didn't help us. So there is an issue of what we call queue busting or queue that need to be solved, and it's all over, because people are really on a time [Indiscernible], and they want to have this solution quite quickly. So all of these search service is taking more and more places. You can see McDonald's moved everything to self service. There is nobody around what it's called behind the desk. It's only food mover from the kitchen to the desk. So all of this has come to be a very strong movement. So macroeconomic, I don't see it right now. Surely, when you see the scarcity of employee, which is another indicator regarding the employment, you see that this is not going to be -- is down. We look about the future how can we create and help the customers to grow the business. So loyalty is a strong part that everybody is talking about lot. Everybody is talking about how loyalty is important. But when we move to digital society and digital became to be the center of collecting data, and you cannot really track anymore the consumers on the online because all the cookies are now off. You have to find a way that any customer need to hold some kind of what called club or some kind of ideas that he knows his consumer, at least the partner of the consumer usage to register a consumer to a loyalty program, you get 5% success. But if you have all the ability to touch with a digital solution with the customers and to know exactly afterwards, not by violating GDPR or any kind of [Indiscernible] or anything on this. But to know exactly where it's going, where it's coming and to associate this to a solution, this is a very strong proposition for our customer, and that's what we're doing. The personal shopping experience is part of the promotion that's behind this and the social media is really dictating. Today, I used to work also in Coca Cola in really 30 years ago. We used to do summer campaign, winter campaign, billboard, radio, TV, off you go, you've got to share all your marketing activity done. And the loyalty of Coca Cola consumer was up to the roof. Today, even loyal consumers, because of the ease of trying, if you are not trying things, it's really something . Because you are loyal to something, but actually, it's so easy to try something. So there is no loyalty actually. At the end of the day, the loyalty is based on what you offer me, how fast you did, all the benchmark has been dictated by others. So loyalty is a very tricky thing, and you have to control the social media. Addressing the unattended opportunity has a substantial barriers to entry. We talked about it many, many times regarding the barriers of entry, I'd sum it up in short. Our business, our main business, 90% of our business, the unattended business is carrying complexity, which is carried by size of customer, size of ticket, engagement, loyalty, certification and mostly at the end of the day, it's a retrofit business that you have to know the IoT part. All of this has to be very simple operation for the customer. And bringing all of this together into one place and gaining customers, which are small customers usually, not like the customers that will be presenting over you, which is big Tier 1 customer, but most of our -- Nayax customers, 72 -- 73% of Nayax customers are small. And to gain all of this in a way that this is scalable and can move fast based on what we're doing, is quite a barrier to entry to our believe. And that's what we see because if I imagine 10 years ago, how many competitors we still really jumping into this area, there were more. Today, there are less. Although the market is becoming to be much more digital, much more cashless to what we see today, we're seeing less competition or not really moving up to competition. The competition is mostly local competition. It is mostly something that is happening potentially in 1 country. And so -- and of course, there is all the certification around this. Sum it up in a picture. I have a demo here. I don't know if you remember this. This is cashless. We all know this is cashless, because it was accepting credit card. I tried to work it out, I didn't succeed. I have the paper over here also. And this paper, I didn't succeed to work it out. But basically, if you try to think about it, this is a tectonic change in a slow motion because it's moving all the time, all the time moving, moving, moving from cash to cashless in a way that this cashless was previously was a paper that you put on the role at the end of the day and you submit to the bank as paper. And we move to digital, and we move to the digital that the consumer can hold, and consumer is now holding a digital payment, which is open loop, closed loop, Starbucks loyalty payment, any payments, connecting to my account, to my bank account maybe, not to recall, maybe I can pay with bank account, maybe it's connected to my network -- social media network. I can pay potentially with this. So all of this created payment is the center of gravity of one side, which is the back-end operation and the other side, which is the loyalty part. Everything is now under the payments, gravity or the center payment of gravity. This is the situation to my belief, to our belief. And Nayax is a fintech, is a financial technology company. That's what we're doing. We're centralizing as a technology on the payment side. And along side this, we have the services that's supporting the customer pains, which are the back-end software, aggregation of data, BI moving data to their ERP, whatever it is front end, the loyalty part. The loyalty part is a strong need for the customer, because the lack of transparency -- as the customer will not hold a transparency on the behavior of this consumer, the cost of acquisition. All the costs will rise up, and it will hurt his business. So the winners will be the one that really understand payments, know what to do with the payment, know to manage all the journeys of the payment between the back-end data and the front-end loyalty. This is, to our belief, the game that we are trying to serve is the places where we are trying to bring value to the market. I watched 3 days ago the show called -- in Israel called [Indiscernible]. It's each of you show that taking all kinds of people. And the last one that I saw is Dan Shechtman. He has a Noble Prize of materials. He won the prize -- Noble Prize in 2011. And [Indiscernible] asked him how -- he found, I hope I say, quasicrystal material, which is a new material. Everybody was objecting to this. All the academic were objecting to this, but he was right, and that's why he won the Noble Prize. And he asked him about this, how we found this new material that all the academic were saying, it's unbelievable. Nobody believed that it exists, and he was a persistent about this. And he stated that you need luck. Always, you need luck. Because he was not looking for this, it came because of occasion, but you need to be prepared for this. And I think what Nayax is doing regarding all the changes of payments around the globe, we are prepared for this. We think that we see this kind of way of world as a payment is center of gravity that will be under the need of managed consumers, personalized data, mobile transactions, payment, all of this is something that we are jumping into it and looking very carefully how can we accommodate all of this and put this together into a solution that customers can enjoy from this. So it's operational loyalty and data. The mission statement that support all of this is all kind of solutions and teachers that we're bringing together for the telemetry software side and for the loyalty side and the increased sales and the decreased cost is endless. I'm reading a lot of research part of it by your publishment, and I see a lot of what I call ideas regarding how can we take different kind of angles and support our customers by adding up to some new features, whether it is pay by account or other stuff that we're looking at, these kind of things under the platform of Nayax and maybe [Indiscernible] to offer this to the customer. The research that we did in 2021 point out to our belief is the market TAM. And the market TAM is basically to 2025 from $41 billion (sic) [ EUR 41 billion ] to EUR 123 billion. And we're seeing that vending is a major part, ticketing, kiosking, amusement, laundry, parking, EV and other. All of this Nayax has the ability to serve the market. And you see that we have a solution for parking. We have a solution for laundry. We have a solution for kiddie ride. We have a solution for vending. We have a solution for coffee machine, all of this based on different kind of journeys of consumers. What is One Nayax? If I try to see the world as 200 countries, and we're trying to serve the world of unattended mostly and then on top of it to accelerate with the growth of attendance. We're looking at the unattended is the base of what Nayax is doing. But on top of it, we have the Nayax Retail. As I showed you with UKO, company that -- the Austrian company that wants to take it to their -- want to take us to retail part. EV Meter. We have few strategies on EV Meter. One strategy is we have our own division strategy of EV Meter containing all the hardware software payments, we call it out-of-the-box solution. And also we have the other part of solution that we are OEM or retrofitting EV charges. So over here in the U.S., you can see EV chargers of Electrify America. You can see EV chargers for EVgo, DC chargers that are operating with a Nayax solutions of payment. And also, you can see some partner that we have in Israel, Finland, Europe, other countries that are taking the whole solution and being marketing this to the market. Tigapo is our kid gaming. As you know, kid gaming is all by tickets, all by paper. This's the only company that are doing digitization of all the arcade gaming and creating an increased sales for the customer. Weezmo is the combination of the online offline as we talked regarding follow it, follow the consumer. It is the marketing capability of Nayax to enable customers to control the online and offline solution. Nayax Capital already launched in the U.S. and today in U.K. that enable us to reduce the CapEx from customer point of view, enable us to grow the business. Nayax Account is a new product bringing to life. If you look about the accounts receivable, we're looking at account payable. The account payable today that we're doing for customers, actually, we are paying to their bank accounts. We're trying to do something that around this Nayax account. It will be transparent. All the account payables. All the money will be transparent. But actually, it will be the chosen of the customer to take the money out to their bank account. We'll not push the money anymore. And this is a combination of CoinBridge, which is a huge initiative that we started 2 years ago. And there are a lot of ways to describe this, but I choose to describe it in this way. We became to be an issuer, an issuer on a global level, enabling customers should be a financial institution. So instead of being democratizing all of this activity by just the big companies can create issuing, we are now enabling every customer to become an issuer. And the reason for this is, again, for the loyalty. We started from the loyalty part. The idea of consumer using their call it points, air miles, cash back, whatever it is outside from the 4 walls of the premises, is much more appealing for the consumers to come back and to buy more often and to buy higher ticket size. So if I'm at grocery, as a grocery, I can use my cash back only in my premises, but I can also enable this to be working outside of the premises. And how we're doing this is a patent that we roll 10 patents around this or around CoinBridge. It's an application of the retailers potentially on Walmart, Starbucks, whatever it is, updating the application with an SDK that's been embedded to the application and disability create for us the way that we can issue an EMV token. When you come to a Starbucks, to Costa Coffee to any place in the world, 200 million location of EMV acceptance. You can use it based on the policy of the owner of the points, which is Walmart, Air Mile, United, whoever it is. By this policy, he can dispense their points in any kind of form of formula, let's say, 10 points is $10, and you can use it on MCC code of coffee or MCC code of food. So if I'm coming here to the U.S., and I'm using, let's say, EL AL points, which is the airline, I have 100 points, and they allow me to use 10 points on MCC code of food. I'm coming to the store. I'm buying my coffee. I'm opening the application EL AL, and I'm pushing the pay. I certify this with my thumb. I'm touching the terminal and I have a transaction. The transaction actually reached out to us as an issuer. We are, as issuer, under the policy of the customer, allowing the transaction to happen. The ability of putting an SDK is a wallet, nobody did it. As a wallet within the premises of application of a third-party customers, nobody did. This enabled us to work with FNP and Google Pay seamlessly. That's the idea. So becoming an issuer is a big, big part of what we believe into the future. And if you look about the TAM of issues, Take Visa, 26 basis points, and they're doing a $20 billion revenue in terms of earnings. Take just a loyalty points and accumulate all the loyalty points. We're talking about almost $600 billion in terms of what's going on around the world. If you take this into take rate of 100 basis points, you can understand what we're looking at. And we are protected by patent Visa, MasterCard, we can issue any brand that we would like. I will stop here. On lunch, I will show you then obviously, because I prepare something that terminal, and how it offers and you can see this. Taking this to another level, correcting this to the Nayax account for the customer. So when we do the account payable, it will be also under a card that we issue for the retailer. And the ability of him using this money immediately that is his own money using this immediately to buy pallet of Coca Cola to buy a pallet of snacks, whatever it is, through the money that he already own, but using Nayax card, which is here to recall, this is part of the take rate that we can increase with the customer relationship that we have. So we'll have, in one hand, the account receivable part of the ticket, and we will have, on the other hand, the small and midsized customers, they account payable. Altogether, it will increase the margins of Nayax. The $1 billion story. We started this 1.5 years ago. We expected this is our ambitious. That's how we want to go. And we decide this today to open this and to show you how we're looking at things, and how it should create the $1 billion in 5 years. So we overhead $174 million. The unattended market, we believe, will bring us this level. It is about $600 million at the end of the 35% growth year-over-year. All the verticals, high-growth verticals that we have been on top of it, the EV, the retail, the Weezmo, the CoinBridge, all of this together will bring us all the rest of it over here. The extending of international will bring this and the pursue of target and strategic M&A will lead up to this. The whole idea behind this is it to show how we're thinking, and how we see the magnitude of each and every part of the business. In terms of the earning, we are -- the adjusted EBITDA, we're looking about the minus 7% that we have in now, moving to hardware gross margin improvement. What is the magnitude of this, the operating leveraging, what we can do is scaling the business and holding the OpEx steady. And the growth engine that will support this, because the margin on the growth engines are higher than the unattended. So this is, in a nutshell, what we can share regarding the ability of Nayax to create a $1 billion revenue, 50% gross margin, 30% adjusted EBITDA. Lastly, the strategy of growth is the same. You all know this, you saw this multiple times. We stick existing customers, creating a [Indiscernible] traction with existing customers, new and large enterprise customers that are coming in and choosing Nayax because of technology platform, because we have end-to-end solution is to do business, continue to innovate and develop new solutions. You see some of the innovations that we will share with you today. Continue to expand international more and more countries to cover the world and to emerging high-growth vertical, we stick to the EV. The EV is a very strong product we want to continue with and pursue target and strategic M&A. We're taking this now from a opportunistic view to a much more strategic view, and we have targeted ourselves as some of the customers that we want to -- potentially to buy. That's it for me.

Thanks. And now we'll have Keren speak to extending the product road map and our market.

Hi, everybody. Thank you for coming. Okay. So to continue on what Yair was saying, this is how we capture EUR 123 billion market. So our goal, as Yair mentioned before, is to increase our customers' bottom line. And we do that by providing increased revenue while bringing solutions to reduce operational costs. And together, we find more and more ways to address the pains of our business on our customers and increase the bottom line by providing what they need constantly with innovation and elevate the way that they're doing -- they're managing their business. So Yair mentioned the One Nayax. This is our little Nayax house. We provide everything they need. Our goal is to have an easy way to do business with us. So one phone call solves all of your problems. We start by having an integrated point of sale, which is seamless to deploy, new machine, old machine easy plug and pay, if you will, plug and play, it's connected IoT, multiple protocols. And then we have the second layer, which is a cashless payment. So we connect to any dominant payment method globally. So we're whatever consumer wants to pay with in France, in Canada, we accept it because again, we want to increase the revenue. After that, we have our management and telemetry, and the idea is to provide our operators with a way to manage their business, not rely on employees, more than they have to, increased their revenue with data, everything is around the data and have it in any way they want. We have an app, we have our own core management system. And the next layer is loyalty. So Yair touched on that. We have more and more solutions to have the ability to get returning consumers, offer loyalty discounts based on time or higher key or product and it's all surrounding data in whatever kind of floor you're in. So how does it work? Let's assume I'm taking one of my kids to an amusement kiddie ride. So I -- the operator can connect their machine easily. This is our view to their pulse machine. As a consumer choose to -- well, right now, not only do I don't have cash, I don't even have my credit card anymore, right? So I'm using my phone and I tap our VPOS Touch, and that actually operates the machine. I can tell you that my kid now is smart and she sees that she can just stay on the ride and go again and again, because we have the option to operate at more than once. And the transactions encrypted sent to our data center. We have 4 redundant sites globally to make sure that we are looking at the TAM, we change our architecture to make sure that we're scalable and we can actually have more cashless transaction fast and secure. And from there, we can actually use our separate servers to send data to different management systems through ERP systems and so on. You have a complete API suite. You will hear a little bit more from Carly later on. And then what Yair mentioned, account payable, the operator gets their money at the end of the payment term without our monthly service fees and processing fees. So that is the core, as Yair mentioned, the payment is at the heart of what we do, the center of gravity. That's how we scale. And we're agnostic to whatever machine it is. So what is that One Nayax we mentioned before. Let's assume we're walking into a hotel, and there is a kind of a micromarket when we can grab a snack, you need to pay somehow. Again, we don't want to put additional employees. You saw recently in that farm in the middle of Norway and Australia, when they actually don't have to be there. They know exactly what they need to put their and that's how they can pay and we can pay as well in that hotel. We have parking EV chargers. We cover that as well. The wine at the end of the day, we have that covered as well. So now we have the ability to grow with our customers and be there and answer whatever they need in one phone call with our extended platform. So this is not a way kind of to show our go-to-market. This is a complete platform and how we grow with our business owner from the unattended and expend to what Yair covered before as well. So unveiling, if you will, our product road map. This is a glimpse of what we put into place for 2023 to expand our solution. So we're looking at it in 3 ways. We are addressing how to enhance our core business. We want to make sure that we penetrate new verticals with solutions and invest in innovative platforms. So this is a little bit of what is coming. So what does that mean to enhance the core. So we are looking at our management system, and we are bringing more solutions into it and enhancing our rollway capabilities in general, bulk updates. Again, we want to make sure that it's easy to manage. And on the other side, this is a picture of our new VPOS media. It is an android base. It enables pin on glass, and again, bigger screen, more consumer engagement, better loyalty, their ability to actually push sales, have a conversation with the consumers right now even bigger, better. This is part of our road map. We didn't put a lot into it. A lot of it is hidden, obviously. But let's just touch on like to of what you see right here. So incremental authorization. When I checked into my hotel, they grab the hold on my card. They put $100, they told me about it. I didn't see it. that's because of their MCC. If I now go and I charge my electric vehicle, I will get a hold, and I will see it, and sometimes, when you go and you buy your coke of any machine, you get a hold of $5, $10 and you don't understand why. By having an incremental authorization, we take that $10 and reduce it. We basically hold $5. And if I stay with my electric vehicle and I charge it to more than $5, then we'll go back, authorize again and settle the transaction. So that is a big deal when we actually have a higher priced transaction. So that's the incremental authorization. And then let's look at the payment integration. Again, this is a glimpse. We have pages of that. As Yair mentioned before, we want to make sure that whatever -- however the consumer wants to pay, we're there, we can take that transaction. So Conecs in France is actually meal vouchers. So the operator came to us and said, "Look, we are putting out there food. We want to make sure that everyone can buy it." No problem. So we're now connecting and we will be accepting food vouchers as part acts like an EMV payments, but it's actually a food voucher. So again, this is another way for us to increase the revenue of the operator and make sure that they see an increase in their bottom line. So Pioneer new solution. Again, we're looking at our TAM. So this is interesting. Now by actually utilizing our OTI solution, we have the ability to accept payments with a low power machines. So you know how you go into a bar and you have a full table, almost in every bar, we're now able to actually, instead of having coins accepting credit card payment model payments. The next part is parking. Nayax right now is actually the dominant parking vendor in Israel. It's fun. My kid just walks in and yells Nayax wherever we go. So it's another big, big market. And forecourt, again, it's actually showing how we are able to bring in the complete solution attended, unattended to the forecourt markets. The next one is a short video showing how we again cover multiple areas of our solution to another new market. [Presentation]

Okay. So innovative platform. EV Meter. EV Meter is our solution for the electric vehicle market. Our goal is to help charge point operators, again, increased the revenue, decreased operational costs. Again, you will see our complete solution here. We built our management core system to manage their special needs. So dynamic load management, managing their energy consumption. For example, if you go to a multi-residential building, and you have multiple residents actually charging their electric vehicle at the same time, dynamic load management is helping them make sure that everyone gets electricity in their car. We also take care of the billing for that space. You will see, obviously, the Nayax payment solution as we do in every other vertical. We accept everything for the open loop. This is a great picture for -- from one of Israel's largest CPOs right now. It is tailor-made solution. Everything is tailor-made for them. It's a white label or EV charging stations, as you can see, in Nayax colors. So again, this is a complete solution. It's our Nayax house that you saw before, but addressing the electric vehicle market. You also touched briefly before about Weezmo. So loyalty return consumers is the heart of every business right now. And the world changed. Everyone are online. The problems that retailers, brick-and-mortar have is to actually connect their online spending, online consumers visit to their offline purchases. Now I'm as a marketing person to see everything, again, we -- with ongoing more security, more problems with cookies, but I do see the funnel. I see people going in, getting a lead, and I see them as customers. When you have a brick-and-mortar and the purchase is actually made on the street, you cannot connect it to. And Weezmo's ability is actually to make their spending smarter and more effective, because they see actually what works. They see the transaction at the end in the store. How do we do that? The receipt that you see here is actually an enabler. So at the end of the purchase, we ask for their phone number and we send their seat in an SMS. It's better for the consumer, because I tend to actually lose my receipt, and I can't exchange stuff. It's better for the environment. It provides them the ability to have an excess offer and increase the next purchase. Social feedback, they could put whatever they want with their receipts, it's their tools, they can manage it, they actually build it themselves. But that they enable us to close the loop between what they do online and the purchase in the store. And we actually did a research with BDO, where we asked 150 retailers a few questions to know what can we do and how can we help them even further. So this is a glimpse of it. This is question 12. What is your company's main challenge regarding gathering, marketing insights? The 41% said the main challenge is connecting what we do and what we spend and what we see then return. 60% to 80% of happy customers actually don't return, and we can help with that, because we can keep engaging them after they visit a store. What we see with Weezmo is 80%, an increase in loyal customers and 43% higher spend in repeat customers. Again, we have multiple brand names that are using now with Weezmo, and we're now going global with them as well. So what have we seen so far? We enhanced our solution. We keep doing that with more and more innovations. You saw a glimpse of what we're doing in the road map. We're strengthening our competitive position in increased customer loyalty. And of course, we're capturing more verticals, more markets. So this was a glimpse of our kind of products and solutions. I think we have a break, right? Okay. So people want to break.

So why don't we pause here and take a 15-minute break? I think they're going to come and remove these panels, if not just please go out through these doors. And then we'll come back here at 10:15 and resume with Keren talking about our go-to-market strategy. I'm sorry. Yes. Oh, I'm sorry, 10:05. Keren finished earlier than I expected. Thank you, Keren. We're giving us -- giving them back 10 minutes. Thank you. Thank you. [Break]

Okay. We're going to get started again, please. If everyone can take their seats again, please. Thank you. Excuse me. Okay. Guys, we're going to resume please. Okay, guys. So we are going to resume the formal presentation. I just want to point out before Keren starts talking about the go-to-market strategy. There's a lot of information here today. So this event is being recorded. The presentation slides will be available tomorrow with the video recording, because I know some have asked about some of the information on the slides. And with that, we've got Keren here again to just go over the Nayax go-to-market strategy.

Okay. So we'll have a quick look at our go-to-market, and how we capture market customers. Can we -- we're we good, right? Yes. Okay. This is like a way to see the unattended market. So there are a lot of nano operators. We call them nano operators. They are either people in the middle of nowhere, like you saw on that farm and have basically a device from Nayax, so 1 device to 25 point of sale. And how do we capture that market? So we capture that market by -- Yair mentioned that before, we have an inside sales group, we bring, obviously, as much leads as we can, and then they deal with the leads that are coming that global team that are working on the nano operators. And we're also now deploying e-shops, so e-commerce, online shops to capture that audience. And what it does is actually they can go in purchase the device and grow through the entire flow of onboarding, KYC signage, contract and exactly putting all the information that they need to onboard fast and start working with Nayax. So that was a great way for us to capture that nano operators, they basically go online, choose their product, get the help they need from inside sale if they need it and on board with us. If they need it and on board with us. Another great way for us to capture this market as well as the SMB market is OEMs and resellers. So we have a lot of resellers usually per vertical that buy our devices in bulk and then sell it to Nano operators or SMBs. OEMs, original equipment manufacturers as well. We have them globally. Now we have an office in China. That's one of our 9 offices. The office in China, obviously, a lot of the manufacturers are located in China. They integrate with our device. Again, you saw there are a lot of ways to integrate. If they are using the regular protocols that are being used great, plug and play. If not, have the API, they connect to our machine and whatever that machine goes to around the globe, we have a Nayax foot on the ground, and then they actually are just starting to work once they get the machine with the device. So we have over 1,500 OEMs and 700 resellers, so that's another basically sales for us without actually having more salespeople. This is another way for us to capture that audience. Another layer is our distributor partners. So as I said before, we have 9 offices, but we also have over 40 distributors. And the distributors is our foot on the ground, it's our basically Nayax office. They are working with our materials. We are working together to understand the market, the competitors what the market needs. And they're using what -- we just launched the Nayax WIN actually, which is our 1 single source of truth to our sales and marketing, whatever they need is there and they can pull the data. We see exactly what works. We see how the capture -- how the -- sorry, how the customer interacts with the material and we see that the deals are closing, and then we know what works, what they need to hear and what we need to work on. And then we speak the same language. So those distributors, those partners are providing the first level support, the sales, the marketing in their region. And they are bringing the SMB operators and they deal with the Nano operators in their region. Then we have 9 offices around the globe, which you'll hear from Carly soon, the Head of the U.S. office, and they are capturing the SMBs and the enterprise accounts. We also have a team of salespeople in our office as well as inside sales to capture the small and the larger opportunity. So in general, that is how we capture the market. And how do we grow? So obviously, we're bringing new businesses. As we mentioned before, SMB accounts, Nano, or enterprise accounts. We have more and more new verticals because we provide solutions for more and more verticals as you've seen before. And then you saw it, so we have an upsell and cross-sell with the Nayax Capital as an example to help customers increase their capability to increase their cashless payment. And also, we provide new offerings. So if we have an amusement customer and they have an FEC, a family entertainment center, they can now get Tigapo and use the Tigapo capabilities to increase the spending of their customer in their Family Entertainment Center. So we have more solutions for them to grow with Nayax, as you've seen from that circle of the One Nayax and the One Platform. And with that, I'm going to pass this on to Carly.

So now we're going to have Carly Furman, who is the CEO of North American Markets. And Carly is going to give us some insights on the Nayax [indiscernible] and International Market.

All right. Nice to see everyone. Great to see some familiar faces. So thanks for taking the time out of your day to come in and hear about what we've been doing in 2022 and what we have on the road map. So 2022 was -- let me not stand completely in the way of the slide. 2022 was a great year for us globally. We really excelled on what our focus was, was to ensure we still have that great concentration of customers. So being very heavy with our SMB customers for increased -- have too much sensitivity to any one customer as well as securing enterprise customers across all regions and verticals. Some of the logos that we're excited about, Tapigo, Regus, Innovative IBS solutions, which is in [indiscernible]. Canteen, Prima Water, Five Star, who David Hartiq is here today and is going to give you a live case study and TIBA Parking Systems. Again, as Yair mentioned, we really have been concentrating and able to achieve our low churn rate and also our high net retention rates. So some of the key milestone customers and different verticals that we wanted to spotlight today are in North America and of course, rest of world. In North America, it's -- I'm very proud to say that we actually more than doubled the number of customers in 2022 alone, than we've had. So to have that kind of customer penetration and growth really shows that we are putting our money where our mouth is and giving a solution that is actually meeting our customers' needs. So we extended our footprint with Canteen Corporate and Canteen Franchises like Five Star, right? This is showing that land and expand where that initial customer impact is then leading 2 years of continuous growth. We expanded our reseller networks in multiple verticals right? So in the U.S., we have extended our partnership with Ventec International with vendingmachines.com, with reseller partners and distributor groups like Pelican Group. So we're really hitting every vertical and ensuring that we have multiple ways to sell to our customers and also support them. We also have had great success in the EV market in the U.S. So we have expanded our global reach with EV OEMs. So we have EV OEM partners in Italy, in South Korea, of course, in the U.S., in Australia as well as also having the charge point operators nationally and regionally requesting Nayax. So to kind of have that demand for fast charge payment acceptance to be coming from both the OEM level as well as the end charge point operator level is really kind of giving us that leading edge in the U.S. We also won new logos on both the SMB and of course, enterprise level for food and beverage market, one of which is Imperial, which is a large Canteen franchise as well as Coca Cola Hawaii. And then finally, we became the preferred payment technology partner for the premium high ticket operator called Prepengo. So I'm sure you all are well traveled, in airports across the U.S. And if you've ever seen the illy coffee machines or the Lego machines, the Kylie Jenner's makeup machines, sprinkle cup cake, that's all being handled by a company called Prepengo out of San Diego, and they have chosen Nayax as their preferred payment technology partner. Internationally, we expanded our presence as well. So we launched in the UAE and in New Zealand. In Australia, we were excited to announce the partnership with the 7-Eleven Group. In Austria, we partnered with UKO, who is the customer that Yair mentioned that we're also expanding our age verification services with. We were awarded a European issue license from MasterCard on behalf of CoinBridge that's allowing for that loyalty additional revenue opportunity for Nayax. And we signed an agreement to partner with TIBA Parking globally. So how are we going to continue this growth, right? We've had an amazing growth in 2022 and prior, and we want to ensure that we are able to keep that trajectory in a scalable way. We're going to do that through ensuring that we have growth of new customers. So making sure that we have those new logos in multiple verticals and through different sales partners and channels. we're going to ensure that we're reaching that path to profitability, which Sagit will be talking about further on how we're going to achieve that. And most importantly, we want to retain our customers. right? We all know that it takes a lot more money and effort to secure new customers and also that at Nayax, we see continuous growth and that ability to achieve profitability from our existing customer base. And how are you going to -- and how do we specifically do this? So we do this through our land and expand strategy. What that really means is that to land a customer, we're really going to -- we target our sales strategy and solving pain points with a scalable solution-driven sales approach, right? So we're coming in as a technology partner, not as just a payment processor or a payment -- or a payment device provider, right? We are a technology partner. We -- David will be able to touch on a bit more how we started discussing in 2019. What we're current pain points with his current cashless provider, how Nayax could actually show an increase in revenue and/or a decrease in operational expense to solve those pain points. So once we have that initial land, we then work on the expansion of our customers. And we do that through an increase in revenue organically through additional penetration of the customers' footprint as well as additional revenue-generating offerings and services. So what we see at Nayax is that when we have a customer. So in this case, in 2018, a customer who started with us, we actually see 5x the revenue growth in a 4-year period. So this is showing that, that land and expand strategy really does work and is successful in our revenue modeling. So now I'm going to talk about some case studies that give specific examples of our 4 pillars. So the first one is our integrated POS, right? And one of the things that really makes Nayax stand out is our ability to integrate with just about any machine that's out there regardless of the protocol. So we have a proprietary marshal protocol. That's how we connect our devices to machines like fast chargers and also smart machines and kiosks. We have our standard MVB, which is connecting with vending machines and allows multiple different settings and configurations to allow things like the incremental authorization that Keren mentioned, and then, of course, we also have our pulse machine. So that's our ability to allow our devices to really be kind of the operating brain for more traditionally dumber devices or machines. So one example is ride on in Australia. And so they are an amusement and Kiddie Ride Operator. And one of their pain points was they were looking for ways to really be able to increase their revenue and their bottom line. And this is very common with pulse operators, whether it's laundry, whether it's amusements, whether it's air and vac, whether it is massage chairs, is how can they actually increase their ticket size and also their revenue. And so what Ride On did is they utilize the Nayax devices to allow for several different you can see here. So the device compared to other competitive devices, we allow this customization on our back end, right? So you can choose to have different dollar amounts, different time amounts, however, you want the screen to be [indiscernible] printed out. Additionally, we allow for -- allow me get up -- Additionally, we allow 4 count up mode. So traditionally in pulse machines, right, it might be a count down, meaning that there's no way to actually allow a customer to put more value on to the machine. With Nayax, we allow our operators to actually do a count up mode, which, of course, puts more time and they're more revenue into the pockets of our customers. So the conclusion was, and this is where the numbers speak for themselves that Ride On actually saw a 30% lift in existing machines when they enable them with Nayax devices, utilizing both the multi-pricing strategy as well as the count up mode. So our second pillar of Nayax is our embedded payment strategy. So we allow for multiple payment integration, [indiscernible] is a payment services provider for easy onboarding experience as well as acceptance of EMV and multiple closed loop payments as well as we do -- we have a proprietary Cortina integration, which allows for server to serve payment integration. And so one of the case studies that utilizes this is Westbahn, which is in Austria. And they are the second largest trading company. And what they had -- what their challenge was is they didn't have a cashless solution for coffee machines on board. Right? It was for multiple reasons. The trade crossing borders, some stability in the communication as well as how they could utilize an existing loyalty platform into that cashless acceptance. And so what they did is they utilize the Nayax device, along with our DOT QR Reader, which allows for QR code to be snapped and our Cortina server-to-server cashless payment protocol. And what the conclusion was for them was it allowed them to quickly and securely embed their prepaid solution into their coffee machine system and also not have the issue of the lack of transaction reliability. So our third pillar of our product solution is our management in telemetry. I think we all know, right, that the data is king in any business, whether we're talking about a more traditional retail environment or especially in unattended. Having that visibility in a way that you can get the data you need and in a usable manner is so pivotal. And what Nayax is able to do is to implement our APIs for making updates to our server system as well as also utilizing our Amazon SQS services to pull down data into any third-party ERP or management system, allowing for that easy implementation of data into existing systems. And an example of this is the MOL group in Hungary. And who they are is their major European oil and gas company. And what they really needed to do was they wanted to deploy cashless payment devices across their fleet, but additionally, they wanted to be able to have that full visibility into their operations. And by using Nayax's data and telemetry services, they were able to implement our QuickConnect Amazon SQS service protocol to pull down data into their ERP systems as well as also use our LYNX API to be able to make updates to our system as well as their existing management systems. And then finally, the fourth pillar of Nayax is our loyalty and consumer engagement suite, right? So this is allowing for discount campaigns, loyalty campaigns as well as being able to integrate our loyalty suite into existing applications using our APIs. So one of the examples of a successful implementation of Monix is a leading bottler in Israel. And this leading bottler in Israel wanted to really be able to promote new products as well as increase same-store locations. And what they did is they used our SDK to integrate Monix into their existing app and also offered additional campaigns and offerings to see an increase in sales and also achieve new customers. And the conclusion was great. We saw an 80% increase in sales on their machines and a 50% increase in their customer base. And now I will call up David Hartig from Five Star we're going to fit together, and I'm going to allow David to actually give you a real-time case study on the reasons how Nayax is helping Five Star. I guess a little fireside chat here. All right. Well, thank you, David, for coming. And of course, for your partnership. It's been a lot to Nayax.

Thank you for inviting me.

It's a pleasure. So would you mind starting telling us a little bit about yourself and Five Star?

Sure. So I've already been asked what is Five Star, right? First of all, my name is Dave Hartig. I'm the Chief Information Officer for Five Star. I've been there about 2 years, but I've been in the information technology field for unfortunately 35-plus years. So I know a little bit about it. Five Star is a vending micro-market company. But really, what our main objective is to provide experience for our customers' break room. We want our customers to be able to have their employees be able to go into the break room and have a good experience. And I think all of us and you know, everyone is demanding that these days. They want to have an ease of checkout. They want to have a way to go in and not necessarily have to stand in lines. So we're constantly looking at technology on how we can improve that experience for our customers. And with COVID and as we came out of COVID, we were finding that a lot of our companies were having difficulty getting employees to come back into the office, and I still think today that that's an issue. And we found a lot of the companies were using the break room experience to try to get their employees to want to come back into the office by offering coffee in the morning, by offering free food for launch, things of that nature. So we've partnered with those customers to do those offerings.

And can you tell us a little bit about where Five Star is located, kind of what a bit about your customer profile is?

Sure. So we're located. Our corporate office is in Chattanooga, Tennessee. We're mainly in the Southeast. We go as far north as Wapakoneta, Ohio, and we go as far south as the Gulf Coast. So we go out to Louisiana, we're in Mississippi, Alabama, but we're primarily in the Southeast. We primarily have been growing through acquisition. We do a number of acquisitions. We are the #1, the largest Canteen franchise. So we are a franchise of Canteen, who is the largest vending micro-market player in the country.

And how many -- if you can share, how many machines markets, what's kind of the split of your markets.

Sure. So we have roughly 42,000 vending machines across our platform, and we're fast approaching 3,300 micro markets. So -- and micro markets have been a big growth area for us. There -- the margins on micro markets are much, much better. They're easier to maintain. They're easier to push price changes out to, which we'll get into when we talk about the Nayax device. But micro markets is a growing, growing piece of our business, and we see a number of conversions. I think we're going to have close to 400 conversions this year to micro markets as well as new installs.

So tell us now a little bit about how you got to Nayax, what you were looking for that kind of process.

So well, Nayax got to Five Star before I actually started back in 2019, but Five Star has always kind of been a bleeding edge kind of company. They're always looking at technology. Our President and CEO's philosophy has always been to enhance that customer experience. And because of that, we're always looking for innovative ways to enhance that experience. And one of the things that they've wanted to do for a long time was to be able to do promotions and targeted marketing at the vending machine level. And the vending machines are not sexy by any means, right? They're a box with stuff in it and you push a couple of buttons and your food gets stuck and you got to shake it. But for the most part, how can you increase that experience for them? And what can you do at that vending machine to make that whole process better. And we wanted to do promotions. And when Nayax came in, that was one of the big things that was on the table that they offered. So we decided at that point, they decided to pilot a number of the Nayax devices and our Athens branch and went over extremely well. Then you tack on the fact that they came out all the service providers for 3G came out and said we're shutting down our 3G networks and you've got until this time to get over on the 4G as well as we're going to be shutting down non-EMV touch technology on devices that aren't EMV compliant. So it was time for us to really do a thorough analysis and take a look at how do we want to move forward? Who is going to be able to service our technology needs going forward? We were a cantaloupe USAT company. We were probably 99% USAT cantaloupe at the time, but when we took a look at the Nayax device, when we took a look at the pilot that went on in Athens, when we took a look at the functionality, the partnership, the willingness to do customization and adapt things for us, Nayax clearly rose to the top as the company that we wanted to partner with. So we made the decision at that time that we were going to move forward with Nayax. And we've replaced over 20,000 readers over the last 2 years, and I've got 8,000 more to get done this year. So it's been a task, but one of the great things is that we've found is the Nayax readers seamlessly install onto our vending machines. I mean we take the old readers off and these things go right on. So we've had no issues from an installation standpoint. It's been good. It's just been man hours, right? It's been a big, big undertaking. But we're seeing benefits on the other side of it because we are doing promotions now. In fact, we've got one that we're looking to start here. It's kind of an afternoon happy hour. We're at the vending machine from the hours of 2:00 to 4:00 so we can go to the vending machine and get $0.25 off any product in the vending machine. And we can push that promotion from the corporate office 42,000 -- well, not 42,000, 22,000 vending machines that have our Nayax readers on there. And that's going to be a big game changer for us to be able to continue to do that.

And so kind of as you're looking at the road map for 2023 and beyond, what are some things that you're planning on utilizing next or additionally to lift revenue and/or decrease operational costs.

So one of the big things since I've started is remote price change. So in our micro markets, if we want to increase prices and all of us have experienced price increases over these last 2 years that have just been ridiculous. We passed those costs on -- some of those costs on to our customers as well. if we're going to increase the price in the micro market on a reese's peanut butter cups, we push one button and it goes out to 3,200 micro markets, and we're done. Unfortunately, on the vending side, it's always been if we want to change the price on reese's peanut butter cups and the vending machine, we got to go to 42,000 different vending machines and change the price at the vending machine level. So remote price change has been a big, big deal for us. And we've been working with Nayax who also owns VendSys, which is our vending management software that we're basically settled on and is part of our strategic road map going forward. And we're probably a month or 2 away from being able to start to roll that out to all of our lending machines as well. So that is, again, as our President and CEO, says that is a game changer for us, being able to push price increases out to vending will be amazing and really, really lift our revenue. And we don't talk much about VendSys, but the but they've done a great partner, too. And the fact that Nayax owns VendSys and they are one company really gives us leverage. It really allows us to get a lot of customization that we ask for. Again, we tend to be upfront in a lot of the things we ask for, and we look for partners that can grow with us. And we really truly felt that Nayax was that partner. And that's why we said they are our future strategic partner going forward. And we've been very happy with that decision.

Well, thank you so much. I think I can say that Five Star is definitely the leader in the industry, I think most, if not all, vending operators look to see what Five Star is going to be doing because you really are putting your money where your mouth is in terms of growth and profitability. So having your say of approval means a lot in your partnership. So thank you for coming.

I appreciate it. Thank you.

Thanks, Carly. Thanks David. Okay. So to end the formal presentation session. We now have Sagit Manor, CFO, who's going to give us some insight about the path to profitability.

Guys. Are you guys awake. Good to see you all. So what did we see so far? Do you hear me well, by the way. Okay. you spoke about the One Nayax, you spoke about the payment as a center of gravity. You also showed the 5 years bridge for revenue as well as the adjusted EBITDA that we are aspiring to achieve. Keren spoke about our product and solutions offering and the many opportunities that we have and the competitive advantages that we see in the market. And Carly presented as well as the U.S. and international success stories. And thank you again, David, for coming. So I'd like to shift the conversation to a path for profitability, but before we go there, for those who are new to the Nayax business model, I will touch base on these 3 pillars. So hardware, as you know, it's a onetime fee that our customer pays. It's the lock-in, the enabler for connectivity to our software management suite and the telemetry. And then we have 60% of our revenue that comes from recurring revenue, the 2 pillars of SaaS, which is the monthly subscription fee and payment processing. We have the rapidly growing recurring revenue, as you can see, with excellent economic on the payment processing. So as you saw already, when we issued our earnings on March 1, we had an excellent '22 and exceeded in some of our key metrics. Let me touch on a few of those. So as a CFO, I was especially pleased by our revenue, $174 million of revenue, 46% growth year-over-year. Recurring revenue grew 47% year-over-year. And of course, with a record number of managing connected devices, 725,000 of those. Also, if you look at the bottom, leading key indicators, whether it's the number of customers, the transaction value and transaction volume, we grew 60% in each of those key indicators. And given the business momentum and the growing customer demand, we continue to see, we are very excited and confident as we head into 2023. So we talked a lot about the '22 was the year of investment in talent acquisition, customer go-to-market strategy, automation, infrastructure and, of course, talent acquisition. So I have to focus on some of those investments. All of them were focusing on scale, and you will see that in a second. And all of them are really building today the foundation for our growth tomorrow. So if you think about the product innovation, we've completed as, by the way, as Keren and Carly presented our end-to-end platform and solutions to support a global customer expansion and international expansion with scalability and agility in mind and obviously exceeding the platform beyond the unattended piece. On the marketing and sales and marketing, we've strengthened our brand awareness and recognitions across all markets and verticals, we've won. As you saw, we've shown 4,000, 5,000 customers a quarter, new customers a quarter, and a beautiful success that we are very proud of, both on the SMB and Tier 1 customers and extend our global footprint all over. When we talk about automation and infrastructures, we've invested and implemented more systems and tools. One of them, for example, is Service Now. We've upgraded the infrastructure to provide better visibility to some of our verticals and payments and that's a key component when we go and talk about the 5-years road map into our very achievable, in our opinion, adjusted EBITDA target. On the talent acquisition, we've doubled the number of employees in the last couple of years, retained an excellent and strong team with a culture of innovation and accountability. So let's run into some of the numbers, and let's recognize the great consistent revenue growth that the company showed over the years. Obviously, we expect, as we've communicated, to continue this excellent growth into 2023 with around 60% of the revenue coming from recurring revenue. And if I move to recurring revenue, you can see on the right side, on the left bar is 2021 recurring revenue split by SaaS and processing fee with the breakdown of revenue and gross margin and the right side bar is 2022. And the great 2 elements here is the 47% recurring revenue growth. And as you can see, 63% revenue growth on the payment processing. We communicated to you the entire 2022 that one of the important growth indicator for us and into our underlying business is the recurring revenue and its growth and we continue to show that beautiful, healthy, excellent growth. So how is our 2022? I mean how is our diverse revenue sources reflected in 2022? So if you look at our customer mix, we have both SMBs as well as Tier 1 and rest of customers. We enjoy from this healthy mix between the two. We're in all continents, global footprint, as mentioned by Yair and by Carly, selling in more than 70 countries, Yair is right. We have actually 100 countries, but if they have less than 10 devices, we consolidated 70 and healthy business model with 3 sources of revenue, as you know, the Hardware, the SaaS and the Payment Processing. It's really showing our market fit in all of those markets in all customer sizes. So as you know, we've initiated our outlook for 2023 with 4 elements to it that I will touch base. We've communicated that during our earnings call on March 1. So let's start with that. I've kept telling you all that 2023 is the turning year, right? It's the year that we continue to grow 35% on the revenue coming from both core and some of our growth engines, reaching to $235 million to $240 million revenue, at least 35% with recurring revenue around 60%. On the [HW] gross margin side, we've spoken about gradually improve to mid-teens. That comes both from raising a slight raise in prices that we have done this year as well as the reduction of component costs that we've already started to see that at the end of 2022. On the OpEx side, we have committed to a slight growth of 5%, if you are comparing that to the Q4 '22 run rate and reaching breakeven in 2023. We also communicated that in 2024, we will reach profitability and cash flow positive. So again, excited about 2023 and what it has in it's hand there for us and what we are planning to do, again, focusing on executing our strategic growth and continue in supplying a product with a very strong customer demand. And we are assuming no significant changes in macroeconomic conditions, but as Yair mentioned, we consider our business as a low risk because of 3 reasons. One, the low ticketing. The second is the 44th verticals that we're in. And lastly is the global reach. It's the fact that we are in many markets. So even if one market will be less strong than before, we're all over the other markets. And if we talk about the path to the $1 billion revenue company, we aspire to be with the healthy profitability that Yair showed you and you have the -- now the bridge in mind, so again, 3 things that are important here, right, 35% growth, 35% year-over-year revenue growth on a more -- on both core and growth engines, recurring revenue will be higher -- a bit higher than right now with 65% to 70% of that and then with continue to executing our excellent strategic plans with the global scale and everything we're doing and will continue to do with automation and infrastructure, we're going to see significant operating leverage as we are already seeing and going to see in 2023. And all of that are helping us to reach to 50% gross margin and more than 30% of the adjusted EBITDA. And with that, I would like to thank you. And if Virginia can moderate the questions, if you have any.

Okay. Let's not be shy. So this event is being recorded. [Operator Instructions]. First question is from Joe from Canaccord.

Everyone, thanks for a nice presentation and update on Nayax. So I thought maybe we could first start on, I think, your revenue walk over the next couple of years. I think we've got a pretty good feel now for a lot of the opportunities in vending and unattended, but there are those 2 big buckets of growth over the next couple of years to get to that $1 billion and I think one, obviously, EV, we heard something about -- some about EV today, but maybe it'd be interesting to get a deeper strategic view there over the next couple of years. And then probably the other big piece of that one bar was also in, I think, in probably attended a retail point of sale. I would like to hear more about the strategy there.

And then -- so I'll remind there were 3 buckets there. The major 1 was the unattended growth by itself, right? I keep saying and you probably heard me enough that we can get to a $1 billion revenue company even with just the unattended. Where the growth engines are actually helping is with the gross margin and with the adjusted EBITDA because of its structural profitable structure and more services into it and therefore, can take us there. So one bucket was the unattended growth. The second bucket was the engines, the growth engines, and there were 2 more. One was the M&A and the fourth one was international expansion vertical. So on the unattended phase, there is no doubt you've seen the growth. You've seen the land and expand and the great secular tailwinds that we see in the market, the consumer behaviorial change, our ability to get to all of those verticals and be in all of those markets. From a growth engine perspective, it's everything that you've mentioned, it's a retail approach inside the store, not just outside. It's the EV, again, outside the store, not just inside and CoinBridge, of course, as well. So all of those elements in our growth engines. CoinBridge, I believe, is the only one, I don't believe I know, but that doesn't create revenue yet. All of the others one are revenue-generating businesses with successful case studies and market feet. And so it's really about growing them to where we believe that they should be.

Next question, please. Trevor, Trevor at Jefferies.

I wanted to follow up. It was on one of the more recent slides in Sagit's section. Just the -- with the 50% gross margin expectation, how are you thinking about the growth between payments and software within the recurring bucket. Your payments revenue has been growing faster recently. I'm wondering when the newer verticals start to layer on more to revenue if that changes kind of the gross profit, if there's a different mix there between your current business between software and payments and if we start to see more of a gross margin uplift if there's the heavier software component.

Thank you, Trevor. So yes, we've seen recently how payment processing is growing much faster than services, probably twice as much as services, right? Actually, when we look at the 5 years from now, it's going to be from a mix perspective, it's going to be more or less than we see today from not the growth necessarily, but just the buckets and how because payment processing will continue to grow. But with the services that we are initiating and we are introducing into the market, that piece will continue to grow as well. And how we talked about, it will be between 30% to 35% in 5 road map. So actually, it will be more or less what you see today.

There's a question from Chris.

Thanks for all the time today. There's a lot of discussion on micro markets. Can you talk about your strategy to have a role in micro markets and kind of where you are?

I can answer this -- we have a discussion a few years ago regarding micro market, how to address this in terms of make or buy. And at the end, we decided to make it not a buy because we look at the 10 of the market that we are looking at retail, which is broader than the micro market and we wanted to really hold a full solution of a POS solution with a payment solution, addressing all the customer base that we have around the world. And the way that we look at retail is how can we grow the business within the customer base. Like the example that I gave you with [indiscernible], we are not addressing ourselves to become close or light speed or clover. We're trying to see what are the customer base around. How can we help them to grow the business. It started from self service, unattended self-checkout. So it's growing also to locate to places that we didn't foresee. In order to serve them what we call POS solution, retail solution, we had to hold our hands in the full scope of solution and not to do not -- would call a bike for specific segment of micro market, which is also retail, but we look about this into a very long term of what we can achieve around this and what we can do with this, and we believe that this integration that we are holding all the R&D behind this, and we have to invest in this is best return for the company for the long run. So we are a little bit in terms of not pushing this very quickly now. Now that we have already out-of-the-box solution, we call it Nova Market, and you saw this in one of the example. We are looking at this as part of our solution because we have Nova market in one end, we have a kiosk in the other hand, we have a [indiscernible] in other aspects. And the hint that we give you already that we're moving also to 100 base in terms of platform. So you'll see us in all over the place's Android base, and all of the application that will be embedded with this could be our application or third-party application. We're looking again to some need to create a scale of all what we're doing. And for this, we did what we intend to do is to do what we call a make and not a buy.

Thank you. Carly, you gave some examples, Ride On, Westbahn, and then we had Five Star talk about various customization. So all of those look like somewhat customized solutions. Can you talk about the need to do customizations and then the ability to take those customizations further out into the market?

So I think actually the really cool thing is actually none of what we showed is actually truly a customization for that specific customer. So it's using our existing proprietary protocols, so when you're looking at our LYNX API, those are already out of the box. So when you're looking at our marshal protocol, we provide an SDK for integration. So it's actually on the operator's end to be able to integrate our device with a smart kiosk or machine. So everything has a very proprietary custom field but actually out of the box. So it's highly scalable and also very agile for the end customer. So it's really giving that customized feel, but in a way that allows us to grow 2x our customer base in one year alone in the U.S., also giving the features and functionality that are actually contributing to the uptick in revenue and decrease in operational expenses for our operators. And I think it's -- when you're looking at that land and expand, right, that David, you're a great example right. As I kind of said, we saw the 3G EMV opportunity in the U.S. as kind of just a way to get our hands into people's businesses and let us try -- let them try us, right? We feel very confident we when we have that opportunity, the numbers and the results speak for themselves with the ability to utilize all these kind of protocol and APIs and data integration features that we offer really right out of the box.

One other question, if I could. I agree with David, you don't discuss VendSys much, which surprises me because when we talk to operators remote price changes on everybody's mind, so can you just give us a little bit more like why is that not more of an attention to span and what you're excited about there?

Yes. I mean VendSys a fantastic solution. But Nayax, right, we have what we call Nayax Core, which is our own management system. For the majority of our SMB operators, they don't actually need the functionality that VendSys offers. It actually is too much of a vending management software. So we're talking about remote price changing using the APIs, using even Amazon SQS being able to do all the alerting and the cashless and cash reporting. All of that is actually available in the Nayax system. So if you look at the -- my favorite slide is this where, start using my hands even more. Besides the care presented is like my favorite slide, right, when you see the kind of the flow of our transaction, right? So you have someone coming to the machine and presenting their card at the Nayax device that encrypted information is then sent to our Nayax servers. From there, we are able to send it through BDI to VendSys, which again is fantastic for our really large enterprise customers. But the Nayax servers themselves has its own management system that for our Pulse customers for our operators that have up to 600 machines has everything they need included and out of the box. It does give us the opportunity to also scale more and add more value-added services internally, but, you're right, VendSys is fantastic, but really, it's needed for enterprise customers, all that other functionality is already part of the Nayax services.

Maybe just to add on this, it's related to what I just said regarding Make or buy, VendSys has decided to do a buy and the reason for business because it's mostly for enterprise, it's mostly for the U.S. market. and scale with these solutions like ERP solution, so to scale this, I think Five Star can admit it takes for [indiscernible] to take a few weeks or a few days to onboard. And we now would like to have what we call as fast as we can to move fast and then to extend our footprint with the customers. So we didn't want to buy -- to make this kind of a solution. We bought the VendSys. And with this, we are operating seamlessly from our perspective. So the way to scale with this business is not something globally that we can take and say, okay, from now on, it's embedded. Although from the other side, the more the technology is evolving, we can take the core of Nayax and put a lot of what I called effort to make it seamlessly in some of it. But at the end of the day, you want to really manage ERP, which is kind of a VendSys solution, you need to have what we call a service-oriented business, which is a different DNA that you have to touch base with the branches, with the depots, with the people that are already running the business and the implementation is quite long. And from our perspective, this is not what we wanted to do at the beginning. So this is why we bought VendSys.

And I think, too, we're not limited. We're not limited. I didn't touch on this well enough, but I think really the kind of third pillar of the case that they showed with kind of the DAG dissemination abilities using Amazon SQS. Customer can set up, David, they're using Amazon SQS in addition to VendSys, right? We see this often with our partners, right? So one of the benefits that Nayax can offer our customers in any vertical is the ability to not be constricted to one management system, right? Because that's not how operations work, especially with acquisitions, as we all know, right? It becomes this whole mismatch, so would Nayax take an hour, you're able -- we can dump all that real time and data in and the customer then has the opportunity to pull those transactions down into any that they want. So -- and again, these are things that feel very custom, but really is now applicable to all of our 47,000 customers.

Okay. We got a question from Scott at Roth Capital.

I want to go back to EV for a minute. It's come up in a lot of conversations in the industry in a couple of times this morning, but I was wondering if you could talk a little bit more about the size of the market opportunity. When you think about the revenue contribution per charging station or node, right? From a processing standpoint, from a SaaS standpoint, is it larger, and also because these are greenfield builds in this type of an environment, would you expect to have a higher market share kind of given the overall performance of your solution? And then I had a couple of follow-ups.

So I'll start with OEM. I think the strategy that we're executing is a 2-way strategy. One is the retrofit side, which is OEM with partnering, DC charger or AC charger that now need to put a payment. DC is a must. AC was not too much on it, but now the regulation is starting to move in Germany, in California, to put also AC chargers as with a terminal with a car present. And it will flow, I think, to all Europe and all the U.S. will be covered with I think the norm will be a car present solution. Based on this, you have to do OEM solution when you go into a new product. And the reason for this because there is certification behind this and all the certification of LG and electricity is a sensitive certification -- carry the U.S. certification, for example, in the U.S. So we have to put the certification altogether, including the payment. Actually, you cannot take a payment out from a terminal and replace it once you put at OEM and certify it, so this is one strategy that we are implementing, and we have all the access to all the OEMs around the world, okay? Most of them are in the far east, in South Korea and China. And some of them are in Europe, some of them are in U.S. But when you're working together as a technology partner with them, you certify the unit. And then from now on, all the units that will be export will be exported with a terminal, it's easy to work with Nayax because we already cover 100 countries. So with every export, the EV charger AC or DC, it's already in place with the car present solution, and that's a nice thing in the unique proposition of Nayax. The other part of the strategy is that we, ourselves, develop what we call the management solution. It's a different management solution because you manage energy. And the end game that we're looking on the AC chargers, that's what we're doing is not just the parking lot location or the office locations or any kind of open mall, street mall location, we're also looking about a multi-tenant location because in a multi-tenant location, the energy that you can supply to all the tenants in one moment or one hour is limited. And then we know it will become to be what we call the subscription and the subscription will be based on priority, where it is like Netflix, like I don't know, Tier 1, Tier 2, Tier 3. It's based on your behavior. And all of this will be managed by Nayax as a solution, while we will not be the one that sells the energy. The energy will be sold by someone that he's taking care of this. He will be the vending operator from our perspective. We don't want to serve B2C. We are a company that's really focused on B2B. We don't want to touch base with B2C. We are touching anything that we're doing a B2B relating to help the customers to address the C level, we're giving them all the application of all the things that we are giving, but we're not really holding hands in our business in terms of B2C, we are a B2B business. And that's how we're looking about how to grow the business on the EV. It is a huge business according to all the reports. I think today, in -- just in the U.S., there are more than 100 payment terminal, 100,000 locations that accept public payments. We are tracking this a lot with a lot of research regarding where it's going and how it's gone. And actually, today is what we call the round to reach out to a partnership with many providers that we can in many, many go-to-market agreement. So for the last year, the EV company, the EV meter company of Nayax achieved 21 agreements with partnership in the EV that we are selling to them on top of what the OEM is doing. So all of this is like seeding the market, putting seeds on the market that will be shown in the future because they will start moving ahead.

Very helpful. And if I could follow up on the hardware front, the point-of-sale terminals, you've got a next-generation product coming out that's Android base. It sounds like you're starting to see some improvement from a gross margin standpoint in the supply chain. I mean assuming the new product fits in with that gross margin cost profile and structure. So I just wanted to get my hands around that. But there were 2 other items. Just in terms of the monetization opportunities of Android now, right, in terms of what you could do with [indiscernible] and CoinBridge, kind of how that filters in and how we should expect that to hit the P&L? And the second item was I thought I heard power mentioned a couple of today because traditionally, I think a lot of the unattended markets that you're talking about have a power source that goes along with them. Now as you start to go into parking meters and parking garages, are you starting to go into areas where there are less power sources that you have to think about differently in terms of how you're driving the power in the terminal. And is that a differentiator for you guys?

I will start from the end, and then you'd like to remind me the first question, but I'll start with the end. The low-power energy is revealing the ability of other segments to serve -- and you're right, it could be parking, it could be pool table, it could be others. And this is one of the games that we achieved with OTI. The journey of consumer-wise is that you're approaching for a pool table. The terminals really switch off is on battery. So it's really switch off. The whole trick around over here is to wake up the terminal in 5 seconds. So you push a button and in 5 seconds, the terminal is ready to take a transaction. You place your card, credit card or debit card or whatever it is in terms of contact less or usually, it is contact less, you touch the terminal, it's created transaction. It's of the grid, is going down. This ability is -- this technology has enabled the terminal to leave 1 day, 2 days with a very small battery beneath the table. That's the whole idea behind this. If we will try to do this with our [indiscernible] to wake up the system, it's very heavy task, it can take a few minutes to work up the system. With OTI, we succeeded to make it a 5-second wake up. So this is a barrier that not too many, if any, can do this kind of thing. So again, a blue ocean from our perspective or the low battery okay? It could be parking, could be pool table. It could be anything that is really under the -- of the grid. I think I remember the Vismo -- the Android view is that -- well, there is a lot around this what we're doing in our back-end today is on technology platform that actually is moving between the back-end software to the front-end software crossing Apple and Google as one software. When we're talking about the operation that we can hold the operation down is because we are utilizing platform of solutions that actually the productivity per employee, developer, when he's doing one thing on the back-end, it's the same thing on the front end, on the mobile, on the IoS on the Android. That's 1 of the key elements that we know how to manage the -- what you call, capital spending and the return of this into a product and cash flow for the company. On top of it, the reason that we are running into Android because we see into the future that Android, in terms of the way that we can open a marketplace and open all of this colorful solution and segment solution technology that we have into a unified. If you take the mall, for example, in the future or any kind of what vertical integrated solutions that carry attended, unattended kiosk service and you can run all these applications and control them with a flick of a finger and it will be native, embedded into the kiosk into our solution. This is really a game changer from what we see and what we can offer into the future, and again, these kind of things revealing a lot of pains from a customer point of view and bringing customer closer to Nayax. It's not that we are shooting our marketing campaign only for this kind of segments or these kind of things. It's all come from a lot of pains coming from a lot of customers. Sampling this with a very good marketing team that really putting this into the vertical to the customers. And everybody is raising their hand. Yes, I want this. I want this, that's how we are growing very nicely in the way that we have a solution and we scale with the solution.

I think we have a question from Dominick at Oppenheimer.

Great. Thanks so much. Great presentation. So I just wanted to touch base again on Nayax account. I guess it seems like a really big opportunity among your customer base that can't go unnoticed and highlighted even more. And so if we just think about the sold pipeline of current customers for this product. Can you provide any information on the sold pipeline there? And perhaps what percentage of the growth areas of revenue growth that Sagit you mentioned, this could potentially make up? And then I just have a follow-up.

So we talk on the break. This is a new product that will come. It's not really active now. It will come through the year, and will be production next year from what we just reveled and the idea is quite simple. At the end of the day, we're losing value by putting the money directly to the bank account of the customers. So if we can provide the availability of the speed of the allowances to use the money. Instead of doing this a push once a week or once a month, it is available on the hands of the customer immediately after the transaction or after the day after 2 days and he can withdraw this money to his bank account. It's his discretion, he can do this, but if we -- on top of it, we can offer him ability to spend the money directly from this bank -- from this ledger account, let's call it like directly to buy from a vendor and motivate him to do this in the way that we are doing this with a corporate card that we're going to issue for this kind of account, we can gain a market share under the interchange level that we can gain as an issuer. So we're going to go from account receivable to also account payable and with the interchange, which is built in is not really touching to the revenue of the customer. It is taking what we call the banking account, the issuing part. And that's why when I started in saying CoinBridge as an issuer -- that's the main point to the top line. We will be and we are already an issuer on territory wise, that will be global. So we will issue cards under our bean or sponsored bean all over the world. And this license can create another margin that we can take without affecting the customer margin. But the opposite, increasing the satisfaction of the customer point of view because the money flow will be much faster from this perspective. He will be using the money that we only receive from the acquirers immediately afterwards. And from there, actually, we're doing -- I'm calling this -- nobody put this in the jargon, but it is like a business service issuing and we're letting all the customers to use this kind of a solution in order to use our issuing license.

And have you found that the customers -- did they come to you for this product that they would like to have their money faster and that is why.

Absolutely, they want to get to the money much faster. It's a working capital issue. I want to reach out quite quickly for this. My dream is that it will be immediately. And of course, it's opened the doors for all kind of banking and financial embedded that we can put together into this because if we have a bean, and this bean, we can route the transaction to his bank account, we can roll the transaction to a third party. He can receive the money from multiple from us to multiple levels.

And just my follow-up for you, Sagit. I think there's a theme of obviously a lot of innovation at Nayax throughout this presentation and innovation takes a lot of CapEx and spending. And we're obviously seeing you see some of the benefits of the scale of the business come through in the next year and beyond moving to profitability. Can you just walk through more time about the balance between CapEx spend and need for spend on specifically new innovation products and maintaining this path towards profitability in '24.

Sure. You can see actually the start from the end. You can see how even in 2022, we've slowed the growth in R&D expenses was lower. Sorry -- just a second. But we are investing in product innovation that obviously between Keren and Carly, you've seen our new product generation VPOS Touch, the bread and butter and those all kinds of, as you've seen, feature functionality. The bottom line is that all of those investments that we have done, not just in '22, we have done that several years are starting to come to reality this year and for sure next. As I've mentioned, all of those growth engines are revenue-generating businesses not more than 10% to be a separate segment from a reporting perspective, except on CoinBridge, which we believe that this year will be, again, the turning year for CoinBridge as well with all the licenses that the business received with the patents that were written and with the great market opportunity, that's just a matter of time, and we are in the process of getting there from an operational standpoint. So I believe that the investment was already done -- will continue to be down in 2023 and the growth from a revenue perspective will be in the next 5 years as we've outlined.

I think we have a question from Joe again.

Just a quick couple of follow-ups. Hardware looked like -- if I looked at those numbers real quick on outlook, it looks like it may accelerate this year a little bit as -- is that a function of supply chain catch-up versus kind of just kind of normalized demand accelerating ex any supply chain catch up? And then it looks like you're looking, obviously, for EBITDA breakeven this year, and I know you're not providing quarterly guidance, but I assume then that means that we're maybe EBITDA-positive slightly in Q3 or something like that. Keren, any color you can add there?

Well, I can only share what we publicly shared and then that we will reach breakeven in 2023. This is an excellent year and excellent moment -- movement into everything that we just did. As you've seen, right, we've executed exactly as we've communicated the last 6, 7 quarters, should be no surprise with this excellent results that we've shown. From a Hardware perspective, definitely the component shortages and the crisis, I remember, I've called it the component war, the crisis in the global supply chain impacted us. And we went to a zero gross margin -- as low as zero gross margin in hardware around 2%. It was in Q4 of 2021. We've been able to slowly and successfully improve the gross margin. At the beginning, it was by changes we did internally without even changes of the actual costs that we buy from our suppliers with -- it was the electric board that we had to change is to find new and available suppliers of components to be able to continue the manufacturing at any given time, that was the first approach, especially with the backlog that we had and the growing demand for our products. And later on, what we've seen is that and I think since September, I'm actually speaking about that, we've seen better availability of the components, which, by definition, will impact the cost, and that's what we do -- we see in 2023 already. And it will grow to the midterms, as I said, gradually, and we will continue to update about our -- the hardware gross margin as soon as we have more information about that.

There's a question from Chris.

Just going to the cohort analysis that you guys have given. Can you give us a little bit more color on -- you talked about, I think, the 2018 cohort and how revenues are up by a factor of 5. Can you go a little bit more into the details of that? Is it new connections, adding in additional products and services, just growth of payments?

Sure. Do you want me -- so it is a combination. It's the land and expand, the beautiful land and expand that we're showing and continue to show on an annual basis. But the point is that most of our customers, as you know, 72%, 73% of small businesses, and they have between one machine to 30 machines, they buy 5 and a few months later, they buy another 5. The cohort analysis doesn't take any hardware revenue into account. It's only the services and processing, only the recurring revenue, but what you see is either with the additional product that they bought, they are paying more monthly subscription fee. And you also see that with the consumer behavior change, I keep telling that 6, 7 years ago, 25% of the transactions were cashless in our machines, now it's 65%. So also, even if they didn't buy any additional hardware, the fact that more consumers are using cashless transactions means more processing, which means more processing fee for us. So it's a combination of more slowly adding more hardware, therefore, paying more monthly fee as well as the payment processing. And that's the stickiness, right? I mean, with the high net retention rate and with the low churn rate that we see, once customer joins us, it's a journey of 20 years, 20, 25 years, and that's our job to continue to make sure that those customers are happy and that they get the best technology and the best services.

Okay. If there are no additional questions, we will conclude the Q&A session. For those of you who have additional time today, we do have lunch we're serving. It's right out here in the lobby area, and you can spend some time with the speakers, executive management of Nayax if you have additional questions. Thank you again for participating, and thanks for your questions.

Thank you.