Okay. We'll wait for some others who are grabbing some coffee. Yep, you could pass me. Perfect. Okay. Good morning, everyone, and welcome to Nayax Capital Markets Day. For those of you who don't know me, I know there's some familiar faces, but those who've never met me, my name is Virginea Gibson, and I actually manage investor relations for Nayax. 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. We really appreciate you guys being here. Joining me today is obviously some of the executive leadership from Nayax. Before I share the agenda, I just wanted to kind of point out to everyone how we kind of developed 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. We've listened to them. They've talked about certain topics they wanted to hear and questions that they've been asking us. I think our goal today is to really give you guys a kind of a deeper understanding of the Nayax product and our revenue roadmap. Of course, we're gonna talk about the financials. 2022 was an incredibly excellent year for Nayax. Of course, we're gonna talk about the financial outlook that we gave on March 1st. Okay. Okay, today we've got a great set of presentations from four members of the management team. We'll obviously kick it off with Yair.
Those of you who do not know Yair, he's the Co-Founder and CEO. Yair's really gonna talk about the One Nayax end-to-end platform. That's kinda 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 gonna talk about the five-year roadmap. You guys have heard about us speak to one building revenue, so we'll show you how we're actually going to get there. That's gonna be followed then by Keren Sharir, who is the Chief Marketing Officer. You guys know Keren from the last Capital Markets Day. Keren's gonna talk about the product roadmap. Again, another big reveal, some of the releases that you'll hear from us throughout 2023.
Then Karen is gonna come back on stage and she's gonna talk about executing on the Nayax go-to-market strategy. Following her will be Carly Furman, who is the CEO of Nayax North America. Carly's gonna provide some highlights of both the North America market as well as our international markets. Then we're obviously going to provide a customer testimonial. We're very pleased to have David Hartig, who is the Chief Information Officer of Five Star Food Service. Five Star Food Service is actually one of Nayax's tier one customers. He's gonna talk about why he selected Nayax. Of course, we will end with Sagit Manor, CFO, talking about the path to profitability, really kind of giving a little bit more details as to how Nayax will get there. You can't have a Capital Markets Day without a safe harbor statement.
Let me quickly provide that information. 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 sessions 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. With that, let's get started. First, let's show a video of one of Nayax customers and what they're saying about Nayax. Here we go.
Powerdose is very new to the market. We launched in December of 2021. We've created an automatic supplement dispenser, which makes drinking supplements at the gym simple, easy, and readily available.
Every 2 - 3 months, we are releasing to the market new flavors and new supplements. At that time, we are using Monyx Wallet to promote those supplements at the market.
We also have the Nayax QR codes on the machines, and we also use them on our social medias like Instagram and TikTok to promote that.
We can see the consumption preferences, and we can see the demographics. Based on that factors, we are making daily decisions to improve our business.
My name is Fred McGrath-Weber, and I am the designer and builder of the Majura Valley Farm Gate Shop. People are able to come directly to our farm to see where their food comes from and have that real connection with the farmer and grower. When we set off to build the new Farm Gate Shop, we wanted to make it look as fantastic as possible, but also minimize our costs. Since then, we've seen an increase of about 20% in revenue. Our customers have been very happy to be able to add to their basket, purchase more things directly from our farm. The Nova Market and the Nayax Core enables you to see transactions live.
Using that data, we're able to know when our customers are coming and make sure that the shop is stocked at the right times with the right products that customers want. As growers and sellers, we're able to look at growing products that sell quickly and well. That's something that's been really beneficial.
Hi, I'm Jason Scherer. I'm President of The Pelican Group. The Pelican Group is a national management company that manages amusement, vending, ATM and BTM machines. We have over 60,000 locations across the United States, Canada and Puerto Rico. We choose Nayax for all of our credit card needs because the technology truly matters. Nayax makes a difference to our bottom line revenues. Our revenue of, from that has gone up so much that we're seeing operators increase sales by as much as 350% in locations. Seeing that massive shift in revenue and all new revenue that's coming in from that makes them not only a great strategic partner, but our obvious choice when it comes to driving sales. You know, The Pelican Group's all in with Nayax.
We really see what they're doing as the technology that's gonna lead the future. It's really, it's future proof, the way that they've designed it. We, we will watch our sales closely, but as we always do and with what we're seeing right now, every machine we have should have Nayax readers on them. I'm Jason Scherer with The Pelican Group, and I trust Nayax.
Excellent. With that, I'll hand it over to Yair.
Hi. Good morning. Can you hear me? Yeah. I want to start with the reading that I prepared for you. Let me start. Good morning and warm welcome to Nayax Investors Day. It's too much. It is something that the voice, there is a big echo. Can you hear me? Again, good morning and warm welcome to Nayax Investors Day. We are thrilled to have you all here with us today in the iconic Nasdaq Exchange meeting room. As a leading provider of cashless payment solution, Nayax 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 on the way to achieving this goal.
Today's events promise to be an engaging and informative one as we take you through our growth and future plans. We will be sharing our latest development, market insight, financial results and more. We will also have an opportunity to hear from our executive team, who share 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 investor here with us today. Your insight and feedback are invaluable to us, and we look forward to a productive day and of exchanging ideas and knowledge. We thank you for joining us and look forward to a day filled with a fruitful discussion and insight. Let's get started. The question is, who wrote this? If you have any idea. ChatGPT.
Absolutely. It is ChatGPT, it took me, one sec, you know, it's 1one question that I asked the chat to write me, opening for this, for this meeting, and this was wrote by ChatGPT. I'm stating this because it's relevant, I think, to everyone in their industry. We're taking seriously that it will affect all our business. It is demonstrating also that it has to scale the business in a way that the operational of cost will be very tight because the ability of what we can do with ChatGPT today is amazing. Whether it is on the marketing side, operations side, code writing, visualize, everything is being really testing in our system, with our team.
We're looking very strongly to use this kind of tool. This is like an example of how we're thinking the way that we can scale the business operational-wise based on technology. Let's start. I'm always starting with the mission and vision and associate this with the numbers. As you see the numbers we're very proud of. Let us start with the mission. The mission is something that we are focused on the customer base. How can we help the customers to increase his sales and reduce the cost? This is really very simple financial result that we're looking at it.
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 control of their business in terms of managing the data in a way that it will affect their life. It will make their life much more under control. It will ease up the ability of customers to manage their life, and the tense will go down. Actually, we call it the well-being. If the well-being of the customer that can be under control of the data can create a lot of effect in the community. We're looking that our mission statement supports our vision statement. You can see that we are executing quite well under the last five years.
From 2018 - 2022, you can see that the numbers are really growing very fast. 37% in the last five years from 2018 - 2022. You can see that actually from 2020 - 2022, we grew up, we doubled our size in terms of dollar revenue from $80 million- $79 million - $174 million. It's all based on the number of customers. There is something that we are doing which is working quite nicely and attract customers and build our position in the market, that we're being 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 achieve the global presence of more than 70 countries. Actually, it's more than 100, but we're not counting the small unit that have in some case, in some places. Basically 70 countries are really supporting being supported by Nayax. We accept 80 payment and 50 currencies. It's kind of I talked just before the start of the meeting.
I think that I didn't do any benchmark, but I think we're 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. We should be probably one of the largest one 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. This is a big that we believe can cover us into the future countries. If you look about how we success, we see the world that we can access all the because of the scale.
This is why we're looking at a TAM, which is much bigger than just a segment of a solution per country. We see the payment part, the acceptance part, the alternative payment part. All of this together is a bigger TAM that we believe that we can access. The growth, as you can see over here, 40% in the 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 private grow the business is by working capital, that was part of what customer were paying. The ability of using the working capital smartly enabled us to become a private company 100% by three owners.
David, which is not over here, the CTO, and my brother, which is not working, Amir. Actually the three of us took the company, of course, with all the employees and all the talent employees that we have in the company, to become a public company just by 2021. We achieved the growth with the business model, and that's a very, very strong statement. You can see that we're still doing the same thing. What can predict the future is customer growth. We are growing with customer 57%. That means that we're starting to create what we call a bigger and bigger flywheel. 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 the churn. I'm coming from a company before Nayax, from Eden Springs. It's a five gallon mineral business company. One of the key elements that I learned there is to keep out the churn, because if the churn will grow, all the things that we're doing in new customer will be leaking down the company. Actually you're doing something that we call it in Hebrew, This service is another bulky solution. Nayax is now putting everything together in one place, in one shop. You present your ID, it will go to age verification, 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're doing, enabling customers to really to succeed. 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 at the right-hand side. This vending machine is enabling the butcher shop not to open the shop on Saturday, because he's putting wine and meat and everything for the barbecue. The, and the machine itself is carrying of course, online connectivity. The, and the owner of the butcher can stay Saturday at home. This is part of the well-being.
He don't have to go to work on Saturday because the vending machine and the online solution that we are providing enable him, enables the machine to work, and he can control everything and being and stay safe at home. It's part of the community that we believe so strongly that is important. The last thing about this, that this team, the Oliver and Moritz, is becoming to be our partner distributors, because they are customer, but they're gonna take the initiative to take to go to retail tobacco. They want to take Nayax, the retail part of Nayax, into retail and to go and to sell because they are serving this locations.
The part of the business is not just the machine, it's also routes for retailers, for tobacco. They want to switch all the retailers of the tobacco to their solution or to Nayax solution with their support. It's combining all the story about Nayax, how customer 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 to become a better, what we call, satisfied from his life. On top of it, extending our footprint and the 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. You can see that digital payments, omni-channel, self-service, scarcity of employees are all supporting this kind of thing. When I've been asked multiple times regarding the macroeconomic, the only thing that we have to do, or I have to do, or all the team has to do is look about what happened to the, to the cashless. Whether the cashless is growing or stagnating or static, and we see it growing.
When you look about the omni-channel needs, the ability of us as a consumer is to choose things from our mobile and then collect it, curb collection or to do the opposite. All of this kind of thing is accelerating more and more. If you look up, you look about the self-service, today we went over here to the Starbucks, in the morning it was like, I think it was 7:10. We tried to buy a coffee and some pastry, actually we couldn't buy, it was all packed. We order. We lost, I think $30. We order, actually it was too. The queue was so big, so we left. We couldn't buy.
Sagit has the application which didn't help us. There is a issue of what you call queue busting or queue that need to be solved. It's all over because people are really on a time scarce, and they want to have a solution quite quickly. All of this self-service is taking more and more places. You can see McDonald's moved everything to self-service. There is nobody around the, what you call the, behind the desk. It's only food mover from the kitchen to the desk. All of this is coming to be a very strong movement. 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 down. We look about the future of how can we create and help the customers to grow the business. Loyalty is a strong part that. Everybody's talking about loyalty. Everybody's talking about how loyalty is important. When we move to digital society and digital began 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 we call club or some kind of ideas that he knows his consumer, at least the pattern of the consumer usage.
To register a consumer to a loyalty program, you get 5% success. 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 COPPA, anything like this, but to know exactly where he's going, where he's coming, and to associate this to a solution, this is a very strong proposition for a customer, and that's what we're doing. The personalized shopping experience is part of it. The promotion that behind this, and the social media is really dictating. You know, today, I used to work in also in Coca-Cola in really 30 years ago. We used to do a summer campaign, winter campaign, billboards, radio, TV. Off you go.
You got all your marketing activity done. The loyalty of a Coca-Cola consumer was up to the roof. Today, even loyal consumers, because of the ease of trying, if you're not trying things, it's really something weird. You're loyal to something, but actually it's so easy to try something, there is no loyalty actually. At the end of the day, the loyalty is based on what you offer me, how fast is it. All the benchmark is being dictated by others. Loyalty is a very tricky thing, and you have to control the social media. Addressing the unattended opportunity has substantial barriers to entry. We talked about it many times regarding the barriers of entries.
I'll sum it up in a short. Our business, our main business, 90% of our business, the unattended business, is carrying a 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. Bringing all of this together into one place and gaining customer, which are small customer usually, not like the customer that we'll be presenting over here, which is a big tier-one customer. But most of Nayax customers, 72%, 73% of Nayax customers are small.
To gain all of this in a way that it is scalable and can move fast based on what we're doing, is quite a barrier to entry, to our belief. That's what we see, because if I imagine 10 years ago how many competitor we saw 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 the competition. The competition is mostly local competition. It is mostly something that is happening in potentially in one country, and so. Of course, there is all the certification around this. Sum it up in a picture. I have a demo over 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. I have this paper. I didn't succeed to work it out. Basically, if you try to think about this is a tectonic change in a slow motion, because it's moving all the time, all the time, moving, moving from cash to cashless. In a way that this cashless was previously was a paper that you put on the drawer at the end of the day, and you submit to the bank as paper. We moved to digital, and we moved to the digital that the consumer can hold.
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 through a card. Maybe I can pay with my bank account. Maybe it's connected to my social network, social media network. I can pay potentially with this. All of this create that the payment is the center of gravity of one side, which is the backend operation, and the other side, which is the loyalty part. Everything is now under the payment gravity or the center payment of gravity. This is the situation to my belief, to our belief. 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.
Alongside with this, we have the services that's supporting the customer payments, which are the backend software, aggregation of data, BI, moving data to their ELT, whatever it is. Front end, the loyalty part. The loyalty part is a strong needs for the customer, because the lack of transparency. If a customer will not hold a transparency on the behavior of his consumer, the cost of acquisition, all the costs will rise up, and it will hurt his business. The winners will be the one that really understand payment, know what to do with the payment, know to manage all the journeys of the payment between the backend 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 three days ago, a show called, in Israel called Roni Kuban. It's an interview show that taking all kinds of people. The last one that I saw is Dan Shechtman. He's a Nobel Prize of materials. He won the prize, Nobel Prize in 2011. Roni Kuban asked him how he found how can 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 Nobel Prize.
He asked him about this, how he found this new material that all the academic was saying it's, it's unbelievable. Nobody believed that it exists. He stated that you need luck. Always you need luck, because he was not looking for this. It came because of because of the because of occasion. You need to be prepared for this. You need to be prepared for this. 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 center of gravity that will be under the need of managed consumers, personalized data, mobile transaction, 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. It's operational, loyalty, and data. The mission statement that support all of this is all kind of solutions and features that we're bringing together for the telemetry software side and for the loyalty side, the increased sales and the decreased cost. It's endless. You know, I'm reading a lot of research, part of it by your publishment, and I see a lot of vertical ideas regarding how can we take different kind of angles and support our customers by adding up some new features, whether it is pay-by account or other stuff that we're looking at.
hing under the platform of Nayax enable us really to offer this to the customer. The research that we did in 2021 point out to our belief is the market TAM. The market TAM is basically to 2025 from $41 billion to 123 billion EUR. We're seeing the vending is a major part. Ticketing, kiosking, amusement, laundry, parking, EV, and other. All of this, Nayax has the ability to serve the market. You see that we have a solution for parking. We have a solution for laundromat. We have a solution for kiddie rides. 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, what? 200 countries, we're trying to serve the world of unattended mostly, then on top of it, to accelerate with the growth of attended. We're looking at the unattended is the base of what Nayax is doing. On top of it, we have the Nayax Retail, as I showed you with UKO Microshops, the Austrian company that's going to take it to, want to take us to retail part. EV Meter. We have two strategies on EV Meter. One strategy is we have our own division strategy of EV Meter containing all the hardware, software, payment, we call it out-of-the-box solution.
We have the other part of solution that we are OEM-ing, OEM or retrofitting EV chargers. Over here in the U.S., you can see EV chargers of Electrify America. You can see EV chargers of EVgo, DC chargers that are operating with the Nayax solutions, the payment. You can see some partnering that we have in Israel, Finland, Europe, part with countries that are taking the whole solution and being marketing this to the market. Tigapo is the arcade gaming. As you know, arcade gaming is all by tickets, all by paper. They is 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 spoke, as we talked regarding, 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, a customer point of view, enabling us to grow the business. Nayax Account is a new product that we're bringing to life. If you look about the accounts receivable, we're looking at account payable. Account payable today that we're doing for customers, actually, we are paying through their bank account. We're trying to build something that around this Nayax Account, it will be transparent.
All the account payable, all the money will be transparent. 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. This is a combination of CoinBridge, which is a huge initiative that we started two years ago. 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 to be a financial institution. 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. 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, cashback, whatever it is, outside from the four 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. If I'm a grocery, as a grocery, I can use my cashback only on my premises, but I can also enable this to be working outside of the premises. How we're doing this, there's a patent that we wrote, 10 patents around this or around the CoinBridge. It's a application of the retailers, potentially either Walmart, Starbucks, whatever it is, updating the application with a SDK that's been embedded to the application. This ability create for us the way that we can issue a EMV token.
When you come to a Starbucks, to a 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 the 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. 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, I'm pushing the pay. I certify this with my thumb, I'm touching the terminal, and I have a transaction. The transaction actually reach out to us as a issuer. We are as the issuer under the policy of the customer, allowing that transaction to happen. The ability of putting an SDK as a wallet, nobody did it. As a wallet within the premises of a application of a third-party customer, nobody did it. This enable us to work with Apple Pay and Google Pay seamlessly. That's, that's the idea. Becoming an issuer is a big, big part of what we believe in into the future.
If you look about the TAM of issuers, take Visa, at 26 basis points, and they're doing around $20 billion revenue in terms of earning. Take just the 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 a take rate of 100 basis point, you can understand what we're looking at. We are protected by patents, Visa, Mastercard. We can issue any brand that we would like. I will stop here. On lunch, I will show you demo over here because I prepared something that terminal and how it's operate, and you can see this.
Taking this to another level, connecting this to the Nayax account for the customer, when we'll do the account payable, it will be also under a card that we issue for the retailer. The ability of him using this money immediately, that is his own money, using this immediately to buy a 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 virtually a card, this is part of the take rate that we can increase with the customer relationship that we have. We'll have in one hand the account receivable, part of the take rate, and we'll have in the other hand, in the small and mid-size customers, the account payable. Altogether, it will increase the margins of Nayax. The $1 billion story.
We started this a year and a half ago, we stated this is our ambitions. That's how we want to go. We decide today to open this and to show you how we're looking at things and how it should create the $1 billion in five years. We're over here, $174 million. The unattended market, we believe will bring us this level. It is about $600 million at the end of 35% growth year-over-year. All the verticals, high growth vertical 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 add up to this. The whole idea behind this is a bit to show how we're thinking and how we see the magnitude of each and every part of the business. In terms of the earnings, The adjusted EBITDA, we're looking about the -$7 that we're having now, moving to a hardware gross margin improvement. What is the magnitude of this? The operating leveraging, what we can do with 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.
This is in a nutshell what we can share regarding the ability of Nayax to create a $1 billion revenue, 50% growth margin, 30% adjusted EBITDA. Lastly, the strategy of growth is the same. You all know this. You saw this multiple times. We stick with the existing customers, creating a lot of 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'll see some of the innovations that we'll share with you today. Continue to expand international. More and more countries want to share to cover the world. Enter emerging high-growth vertical. We stick to the EV.
The EV is a very strong part that we want to continue with. Pursue target and strategic M&A. We're taking this now from opportunistic view to a much more strategic view, and we have targeted ourselves some of the customers that we want to potentially to buy. That's it for me.
Thanks, Yair. Now we'll have Keren speak to extending the product roadmap and our market. Thanks, Keren.
Hi, everybody. Thank you for coming. To continue on what Yair was saying, this is how we capture a EUR 123 billion market. 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. Together, we find more and more ways to address the pains of our business owners or our customers and increase their bottom line by providing what they need constantly with innovation and elevate the way that they're managing their business. Yair mentioned the One Nayax. We provide everything they need. Our goal is to have an easy way to do business with us. 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. Then we have the second layer, which is the cashless payment. We connect to any dominant payment method globally. Whatever a consumer wants to pay with in France, in Canada, we accept it, because again, we wanna 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, increase their revenue with data. Everything is around the data. Have it in any way they want. We have an app, we have our own core management system. The next layer is loyalty.
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 hierarchy or product, and it's all surrounding data in whatever kinda floor you're in. How does it work? Let's assume I'm taking one of my kids to an amusement kiddie ride. The operator can connect their machine easily, this is our view, to their pulse machine. I, as a consumer. Well, right now, not only do I don't have cash, I don't even have my credit card anymore, right? 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 it more than once. The transaction is encrypted, sent to our data center. We have four redundant sites globally to make sure that we are looking at the time, we change our architecture to make sure that we're scalable and we can actually have more cashless transactions fast and secure. From there, we can actually use our separate servers to send data to different management systems, to ERP systems, and so on. We have a complete API suite. You will hear a little bit more from Carly later on.
What Yair mentioned, account payable, the operator gets their money at the end of the payment term without our monthly service fee and processing fee. That is, you know, the core, as Yair mentioned, you know, the payment is in the heart of what we do, the center of gravity. That's how we scale. We're agnostic to whatever machine it is. What is that One Nayax we mentioned before? Let's assume we're walking into a hotel and there is a kind of a micro market when we can grab a snack. You need to pay somehow. Again, we don't wanna put additional employees.
You saw briefly in that farm in the middle of nowhere in Australia, where they actually don't have to be there, they know exactly what they need to put there, 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. 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. This is another 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 expand to what Yair covered before as well. Unveiling, if you will, our product roadmap.
This is a glimpse of what we put into place for 2023 to expand our solution. We're looking at it in three ways. We are addressing how to enhance our core business. We wanna make sure that we penetrate new verticals with solutions and invest in innovative platforms. This is a little bit of what is coming. What does that mean to enhance the core? We are looking at our management system. We are bringing more solutions into it and enhancing our mobile capabilities in general. Bulk updates, again, we wanna 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.
Again, bigger screen, more consumer engagement, better loyalty, their ability to actually push sales, have a conversation with the consumer is right now even bigger, better. This is part of our roadmap. We didn't put a lot into it. A lot of it is hidden, obviously. Let's just touch on like two of what you see right here. Incremental authorization. When I checked into my hotel, they grabbed a 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. Sometimes when you go and you buy your Coke at a vending 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. If I stay with my electric vehicle and I charge it to more than $5, we'll go back, authorize again, and settle the transaction. That is a big deal when we actually have a higher price transaction. That's the incremental authorization. Let's look at the payment integration. Again, this is a glimpse. We have pages of that. As Yair mentioned before, we wanna make sure that however the consumer wants to pay, we're there, we can take that transaction. CONECS in France is actually meal vouchers. The operator came to us and said, "Look, we are putting out there food, we wanna make sure that everyone can buy it." No problem.
We're now connecting, and we will be accepting food vouchers as part. Acts like an EMV payment, but it's actually a food voucher. 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. Pioneering new solution. Again, we're looking at our TAM. This is interesting. Now, by actually utilizing our OTI solution, we have the ability to accept payments with a low power machine. You know how you go into a bar and you have a pool table almost in every bar, we're now able to actually, instead of having coin, accepting credit card payment, mobile 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. It's another big, big market. In forecourt, again, it's actually showing how we are able to bring in the complete solution attended, unattended to the forecourt market. The next one is a short video showing how we again cover multiple areas of our solution to another new market.
Our company is based in China, and we are trying to build more railways and metros worldwide. This is the first international project here for us in Israel.
When we started the project, it was very important to integrate with a local player, Nayax, which is very much established in the Israeli market. By this, we can actually reduce the risks and implement the project within a very short timeframe. Nayax enable us to have an end-to-end solution.
For this project, we have actually three different services and products we got from Nayax. First one is the payment gateway, and second one is the VPOS, third one is Nova 55. We have purchased more than 250 devices from Nayax.
One of the biggest challenges in the project is the cybersecurity. In Israel, there are special requirements around this topic.
Nayax team worked with our team, tightly, and, we find the solution quickly and, implement it.
Together, we were able to bring a solution that on one hand meets all the very tough cybersecurity requirements, and on the other hand, it's a solution that is very easy for the customers to use.
I love Nayax is because you have expertise and you have professional solution-based services.
Nayax was proven definitely a technology partner, not just a vendor that is trying to sell their products.
Innovative platform. EV Meter. EV Meter is our solution for the electric vehicle market. Our goal is to help charge point operators, again, increase the revenue, decrease the operational cost. Again, you'll 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'll 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 our EV charging station, as you can see in Nayax colors. Again, this is a complete solution. It's our Nayax house that you saw before, but addressing the electric vehicle market. Yair also touched briefly before about Weezmo. Loyalty return consumers is the heart of every business right now. The world's changed. Everyone are online. The problems that retailers brick-and-mortar have is to actually connect their online spending, online consumers' visits to their offline purchases. Now, I'm as a marketing person, see everything. Again, we, you know, 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 the two. 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. At the end of the purchase, we ask for their phone number, and we send the receipt in an SMS. It's better for the consumer because I tend to actually lose my receipts, and I can't exchange stuff. It's better for the environment. It provides them the ability to have a next best offer and increase the next purchase. Social feedback, they can put whatever they want with the receipt. It's their tool. They can manage it. They actually build it themselves.
That's the enabler to close the loop between what they do online and the purchase in the store. 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. This is a glimpse of it. This is question 12: What is your company's main challenge regarding gathering marketing insight? 41% said, "The main challenge is connecting what we do and what we spend and what we see then in return." 60%-80% of happy customers actually don't return, and we can help with that because we can keep engaging them after they visit the 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 Weezmo, and we're now going global with them as well. 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 roadmap. We're strengthening our competitive positioning, increased customer loyalty, and of course, we're capturing more verticals, more markets. This was a glimpse of our kind of product and solution. I think we have a break, right?
Yes.
Do you? Okay. People want a break.
Why don't we pause here, take a 15-minute break. I think they're gonna 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? Mm-hmm. Yes.
10:05.
Oh, I'm sorry. 10:05. Sorry. Keren finished earlier than I expected. Thank you, Keren. We're giving them back 10 minutes. Thank you. Thank you.
We can resume, please. Hello? Is this on? We're going to get started again, please. Is this on? Testing. We're going to resume again, please. If everyone can take their seats again, please. Thank you. Excuse me. This isn't working. This is not working. Right. Testing. Is it working? Okay. If we can take our seats again. Thanks for the time. We're going to get started again with Keren.
That's okay.
Hello, can we resume? Thank you.
Where is that?
Okay, guys, we're going to resume, please.
Okay.
They're coming.
Oh, my God, you're giving them like a...
Okay, guys. We are going to resume the formal presentation. I just wanna 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, 'cause I know some have asked about some of the information on the slides. With that, we've got Keren here again to just go over the Nayax go-to-market strategy.
Thank you. Okay. We'll have a quick look at our go-to market and how we capture market customers. We're good, right? Yeah? Okay. This is like the a way to see the unattended market. There are a lot of nano operators. We call them nano operators. They're either, you know, people in the middle of nowhere, like you saw on that farm, that have basically a device from Nayax. One device to 25 point of sale. How do we capture that market? We capture that market by Yair mentioned that before. We have an inside sales group. We bring obviously as much leads as we can. Then they deal with the leads that are coming, that global team that are working on the nano operators.
We're also now deploying eshops, so e-commerce online shops to capture that audience. What it does is actually they can go in, purchase the device, and go 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. 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 onboard with us. Another great way for us to capture this market as well as the SMB market is OEMs and resellers. 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 or original equipment manufacturers as well, we have them globally. We have an office in China, that's one of our nine 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 wherever 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. 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 partner. As I said before, we have nine offices, but we also have over 40 distributors. 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 our what we just launched in Nayax Win, actually, which is our one 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, 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. We speak the same language.
Those distributors, those partners are providing the first level support, the sales, the marketing in their region. They are bringing the SMB operators, and they deal with the nano operators in their region. We have nine offices around the globe, which you'll hear from Carly soon, the head of the U.S. office. 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. In general, that is how we capture the market. How do we grow? 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.
You saw it, 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. We provide new offerings. 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. 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. With that, I'm gonna pass the baton to Carly. We're gonna have Carly Furman, who is the CEO of North American markets, and Carly is gonna give us some insights on the Nayax U.S. and international markets.
All right. Nice to see everyone. Great to see some familiar faces. 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 roadmap. 2022 was. Let me not stand completely in the way of the slide. 2022 was a great year for us globally. We, you know, really excelled on what our focus was to ensure we still have that great concentration of customers, of still being very heavy with our SMB customers for increased, you know, so we don't have too much sensitivity to any one customer, as well as securing enterprise customers across all regions and verticals.
You know, some of the logos that we're excited about, Cafe X, Regis, Innovative IBS Solutions, which is in massage chairs, Canteen, Prima Water, Five Star, who David Hartig is here today and is gonna 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. 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, I'm very proud to say that we actually more than doubled the number of customers in 2022 alone than, you know, than we've, we've had.
You know, 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. 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 to years of continuous growth. We expanded our reseller networks in multiple verticals. Right. In the U.S., we have extended our partnership with Ventech International, with CandyMachines.com, with reseller partners and distributor groups like The Pelican Group. 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. We have expanded our global reach with EV OEMs. We have EV OEM partners in Italy, in South Korea, of course, in the U.S., in Australia, as well as we're also having the charge point operators nationally and regionally requesting Nayax. To kinda 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 kinda 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.
Finally, we became the preferred payment technology partner for the premium high ticket operator called Prepango. I'm sure you all are well-traveled in airports across the U.S. If you've ever seen the illy coffee machines or the LEGO machines, the Kylie Cosmetics makeup machines, Sprinkles Cupcakes, that's all being handled by a company called Prepango out of San Diego, and they have chosen Nayax as their preferred payment technology partner. Internationally, we expanded our presence as well. 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 issuer 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 Systems globally. How are we gonna continue this growth? Right? We've had amazing growth in 2022 and prior, and we wanna ensure that we are able to keep that trajectory in a scalable way. We're gonna do that through ensuring that we have growth of new customers. You know, making sure that we have those new logos in multiple verticals and through different sales partners and channels. We're gonna ensure that we're reaching that path to profitability, which Sagit will be talking about further on how we're gonna achieve that. Most importantly, we wanna 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. How do we specifically do this? We do this through our land and expand strategy. What that really means is that to land a customer, we're really gonna target our sales strategy on solving pain points with a scalable solution-driven sales approach, right? We're coming in as the technology partner, not as just a payment processor or a payment device provider, right? We are a technology partner.
We, you know, David will be able to touch on a bit more how when we, you know, started discussing in 2019 what were 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. Once we have that initial land, we then work on the expansion of our customers. We do that through an increase in revenue organically, through additional penetration of the customer's footprint, as well as additional revenue-generating offerings and services. What we see at Nayax is that when we have a customer, in this case, in 2018, a customer who started with us, we actually see 5 x the revenue growth in a four-year period.
This is showing that that land and expand strategy really does work and is successful in our revenue modeling. Now I'm gonna talk about some case studies that give specific examples of our four pillars. The first one is our integrated POS, right? 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. We have a proprietary Marshall Protocol. That's how we connect our devices to machines like fast chargers and also smart machines and kiosks. We have our standard MDB, which is connecting with vending machines and allows multiple different settings and configurations to allow things like the incremental authorization that Keren mentioned. Of course, we also have our pulse machine.
That's our ability to allow our devices to really be kind of the operating brain for more traditionally dumber devices or machines. One example is Ride On in Australia. They are an amusement and kiddie ride operator. One of their pain points was they were looking for ways to really be able to increase their revenue and their bottom line. This is very common with pulse operators, whether it's laundry, whether it's amusements, whether it's air and vac, whether it is, you know, massage chairs, is how can they actually increase their ticket size, and also their revenue. What Ride On did is they utilized the Nayax devices to allow for several different... You can see here, the device compared to other competitor devices. We allow this customization in our back end, right?
You can choose to have different dollar amounts, different time amounts, however you want the screen to be quadranted out. Additionally, we allow for a count up mode. Traditionally in pulse machines, right, it might be a countdown, meaning that there's no way to actually allow a customer to put more value onto the machine. With Nayax, we allow our operators to actually do a count up mode, which of course puts more time and then more revenue into the pockets of our customers. 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 enabled them with Nayax devices, utilizing both the multi-pricing strategy as well as the count up mode.
Our second pillar of Nayax is our embedded payment strategy. We allow for multiple payment integration, actually as a payment services provider for an easy onboarding experience, as well as acceptance of EMV and multiple closed loop payments, as well as we have a proprietary Cortina integration, which allows for server-to-server payment integration. One of the case studies that utilizes this is WESTbahn, which is in Austria, and they are the second largest train company. What their challenge was is they didn't have a cashless solution for coffee machines on board, right? It was for multiple reasons, the train crossing borders, some stability in the communication, as well as how they could utilize an existing loyalty platform into that cashless acceptance.
What they did is they utilized the Nayax device along with our DOT QR Reader, which allows for QR codes to be snapped and our Cortina server-to-server cashless payment protocol. 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 a lack of transaction reliability. Our third pillar of our product solution is our management and telemetry. I think we all know, right, that data is king in any business, whether we're talking about a more traditional retail environment or especially in unattended. You know, having that visibility in a way that you can get the data you need and in a usable manner is so pivotal.
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. An example of this is the MOL Group in Hungary. Who they are is they're a major European oil and gas company. 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.
By using Nayax's data and telemetry services, they were able to implement our quick connect 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. Finally, the fourth pillar of Nayax is our loyalty and consumer engagement suite, right? This is allowing for discount campaigns, loyalty campaigns, as well as being able to integrate our loyalty suite into existing applications using our APIs. One of the examples of a successful implementation of Monyx 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.
What they did is they used our SDK to integrate Monyx into their existing app and also offered additional campaigns and offerings to see an increase in sales and also achieve new customers. The conclusion was great. They saw an 80% increase in sales on their machines and a 50% increase in their customer base. Now I will call up David Hartig from Five Star. We're gonna sit together and I'm gonna allow David to actually give you a real-time case study on the reasons how Nayax is helping Five Star. Okay.
Sit?
I guess. Take a little fireside chat here. All right. Well, thank you, David, for coming and, of course, for your partnership. It's meant a lot to Nayax.
Thank you. Thank you for inviting me.
It's a pleasure. Would you mind starting telling us a little bit about yourself and Five Star?
Sure. 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 two years, but I've been in the information technology field for, unfortunately, 35+ years, so I know a little bit about it. Five Star is a vending micromarket company, but really what our main objective is to provide a experience for our customer's 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. I think all of us in here know everyone's demanding that these days. They wanna have an ease of checkout.
They wanna have a way to go in and not necessarily have to stand in lines. We're constantly looking at technology on how we can improve that experience for our customers. You know, 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. I still think today that that's an issue. We found a lot of the companies were using the break room experience to try to get their employees to wanna come back into the office by offering coffee in the morning, by offering free food for lunch, things of that nature. We've partnered with those customers to do those offerings.
Can you tell us a little bit about where Five Star is located, kind of what a bit about your customer profile is?
Sure. 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. We go out to Louisiana or 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 number one largest Canteen franchise. We are a franchise of Canteen, who is the largest vending, micromarket player in the country.
If you can share, how many machines, markets? What's kind of the split of your operation?
Sure. So we have roughly 42,000 vending machines across our platform, and we're fast approaching 3,300 micro markets. Micro markets have been a big growth area for us. The margins on micro markets are 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. Micro markets is a growing piece of our business, and we see a number of conversions. I think we're gonna have close to 400 conversions this year to micro markets as well as new installs.
Tell us now a little bit about how you got to Nayax, what you were looking for.
Sure.
You know, that kind of process.
Well, Nayax got to Five Star before I actually started back in 2019. Five Star has always kind of been a bleeding-edge kind of company. They're always looking at technology. You know, our president and CEO's philosophy has always been to enhance that customer experience, and, you know, because of that, we're always looking for innovative ways to enhance that experience. You know, 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. You know, the vending machines are not sexy by any means, right? They're a box with stuff in it, and you push a couple buttons, and your food gets stuck, and you gotta shake it.
For the most part, you know, how can you increase that experience for them, and what can you do at that vending machine to make that whole process better. We wanted to do promotions, when Nayax came in, that was one of the big things that was on the table that they offered. We decided at that point, they decided to pilot a number of the Nayax devices in our Athens branch, and went over extremely well.
You tack on the fact that they came out, you know, all the service providers for 3G came out and said, "We're shutting down our 3G networks, and you've got till this time to get over onto 4G, as well as we're gonna be shutting down non-EMV touch technology on devices that aren't EMV compliant." It was time for us to really do a thorough analysis and take a look at, you know, how do we wanna 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.
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. We made the decision at that time that we were gonna move forward with Nayax. You know, we've replaced over 20,000 readers over the last two years, and I've got 8,000 more to get done this year. It's been a task. You know, one of the great things is that we've found is, you know, the Nayax readers seamlessly install onto our vending machines.
I mean, we take the old readers off, and these things go right on. 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 undertaking. You know, 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, where at the vending machine from the hours of two to four, somebody can go to the vending machine and get $0.25 off any product in the vending machine. We can push that promotion from the corporate office to 42,000... Well, not 42,000, 22,000 vending machines, that have our Nayax readers on there.
You know, that's gonna be a big game changer for us to be able to continue to do that.
Thank you. Kind of as you're looking at the roadmap for 2023 and beyond, what are some things that, you know, you're planning on utilizing next or additionally to lift revenue and/or decrease operational costs?
One of the big things since I've started is remote price change. In our micro markets, if we want to increase prices, and all of us have experienced the price increases over these last two years that have just been ridiculous, and we pass those costs on, some of those costs on to our customers as well. If we're gonna increase the price in a micro market on a Reese's Peanut Butter Cup, 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 wanna change the price on Reese's Peanut Butter Cups in the vending machine, we gotta go to 42,000 different vending machines and change the price at the vending machine level.
Remote price change has been a big deal for us. 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 roadmap going forward. We're probably a month or two away from being able to start to roll that out to all of our vending machines as well. 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 lift our revenue.
Right.
You know, you don't talk much about VendSys, but they've been a great partner.
Well, they're a vending management system.
They've been a great partner too.
They are.
You know, the fact that Nayax owns VendSys and they're 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 out front in a lot of the things we ask for and, you know, 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. We've been very happy with that decision.
Well, thank you so much. I think, you know, I can say that, you know, Five Star is definitely the leader in the industry. I think, most if not all of, vending operators look to see what Five Star is going to be doing because you really are putting, you know, your money where your mouth is.
Yeah
In terms of growth and profitability. Having your seal of approval means a lot in your partnership.
Well, thank you.
Thank you for coming.
I appreciate it. Thank you.
I guess we'll move our chairs.
Thanks, Carly. Thanks, David. Okay. To end the formal presentation session, we now have Sagit Manor, CFO, who's gonna give us some insight about the path to profitability.
Hey, guys. Are you guys awake? Good to see you all. What did we see so far? Do you hear me well, by the way? Okay. Yair spoke about the One Nayax. He spoke about the payment as a center of gravity. He also showed the five years bridge for revenue as well as the adjusted EBITDA that we are aspiring to achieve. Keren spoke about our products and solutions offering and the many opportunities that we have and the competitive advantages that we see in the market. Carly presented as well the U.S. and international success stories. Thank you again, David, for coming. I'd like to shift the conversation to our path for profitability.
Before we go there, for those who are new to the Nayax business model, I'll touch base on the three pillars. Hardware, as you know, it's a one-time fee that our customer pays. It's the lock-in, the enabler for connectivity to our software management suite and the telemetry. Then we have 60% of our revenue that comes from recurring revenue. The two pillars are 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. As you saw already when we issued our earnings on March first, we had an excellent 2022 and exceeded in some of our key metrics. Let me touch on a few of those.
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 managed and connected devices, 725,000 of those. 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. Given the business momentum and the growing customer demand we continue to see, we are very excited and confident as we head into 2023. We talked a lot about the 2022 was the year of investment in talent acquisition, customer go-to-market strategy, automation, infrastructure, and of course, talent acquisition.
You know, I have to focus on some of those investments. All of them were focusing on scale, and you will see that in a second. All of them are really building today the foundation for our growth tomorrow. 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 our global customer expansion and international expansion with scalability and agility in mind, and obviously expanding the platform beyond the unattended piece. On the marketing, 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.
A beautiful success that we are very proud of, both on the SMB and tier one 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 ServiceNow. We've upgraded the infrastructure to provide better visibility to some of our verticals and payments. That's a key component when we go and talk about the five pillars roadmap 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.
Let's run into some of the numbers, 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. 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. The right side bar is 2022. The great two 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. How is our diverse revenue sources are reflected in 2022? If you look at our customer mix, we have both SMBs as well as tier one and rest of customers. We enjoy from this healthy mix between the two. We're in all continents, global footprints, as mentioned by Yair and by Carly Furman. Selling in more than 70 countries. Yair is right, we have actually 100 countries, but if they have less than 10 devices, we consolidate to 70.
Healthy business model with three 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. As you know, we've initiated our outlook for 2023 with four elements to it that I will touch base. We've communicated that during our earnings call on March 1st. 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-$240 million revenue, at least 35%, with recurring revenue around 60%.
On the hardware gross margin side, we've spoken about gradually improve to mid-teens. That comes both from a slight raising 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've committed to a slight growth of 5% if you are comparing that to the Q4 2022 run rate, and reaching breakeven in 2023. We also communicated that in 2024, we would reach profitability and cash flow positive. Again, excited about 2023 and what it has in its hand there for us and what we are planning to do.
Again, focusing on executing our strategic growth, continue supplying our product with a very strong customer demand and we are assuming no significant changes in macroeconomic conditions. As Yair mentioned, we are consider our business as a low risk because of three reasons. One, the low ticketing. The second is the 44 verticals that we're in. Lastly is the global reach, is 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. If I talk about the path to the billion-dollar revenue company we aspire to be with the healthy profitability that Yair showed you and you have the bridge in mind. Again, three things that are important here, right?
35% growth, 35% year-over-year revenue growth on both core and growth engines. Recurring revenue will be higher, a bit higher than right now with 65%-70% of that. continue to executing our excellent strategic plans with the global scale and everything we're doing and will continue to do with automations and infrastructure, we're gonna see significant operating leverage as we are already seeing and gonna see in 2023. All of that are helping us to reach the 50% gross margin and more than 30% on the adjusted EBITDA. With that, I would like to thank you. If Virginia can moderate the questions, if you have any.
We now move to the Q&A session. Thank you.
Thank you.
One of the speakers please come up to the stage, executive management team, Nayax.
Yes, sure.
Mm-hmm.
One-minute break.
One-minute break. One second. That's it.
Absolutely. We'll give you that, Yair. Okay, let's not be shy. This event is being recorded, so we actually wanna hear your questions. There is a microphone here in terms of a standing microphone. As you come to this standing microphone. If not, Yon will help me, and he'll just pass the microphone to you. The first question... Oh, okay. First question is from Joe from Canaccord. If you push the up yeah.
Yeah. Yeah. Yeah. Yeah. Hey, everyone. Thanks for a nice presentation and update on Nayax. Thanks for taking some questions. I thought maybe we'd first start on, I think, your revenue walk over the next couple of years. I think, you know, we've got a pretty good feel now for a lot of the opportunities in vending and unattended. There are those two big buckets of growth over the next couple of years to get to that billion. I think, you know, one's obviously EV. We heard something about EV today. Maybe it'd be interesting to get a deeper strategic view there over the next couple of years. Probably the other big piece of that one bar was also in, I think in probably attended or retail point of sale.
Would like to hear more about the strategy there.
Sagit, you wanna start us off?
I'll remind there were three or four buckets there. The major one was the unattended growth by itself, right? I keep saying, and you probably heard me enough, that we can get to a billion-dollar 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. One bucket was the unattended growth. The second bucket was the engines, the growth engines, and there were two more. One was the M&A and the and the fourth one was I just lost it.
Expansion to,
Okay.
International.
International expansion.
Vertical.
On, on the unattended piece, there is no doubt. You've seen the growth, you've seen the land and expand, you know, the, the great secular tailwinds that we see in the market, the consumer behavior change, our ability to get to all of those verticals and be in all of those markets. From a growth engines perspective, it's everything that you've mentioned. It's our retail approach inside the store and not just outside. It's the EV, again, outside the store, not just inside. And the, and CoinBridge, of course, as well. All of those elements in our growth engines, CoinBridge, I believe, is the only one, I don't believe, I know, that doesn't create revenue yet.
All of the others one, are revenue generating businesses with successful case studies and market fit. It's really about, you know, growing them to where we believe that they should be. It was about the bucket.
Any other questions? Unless, Yair, did you have anything to add?
No.
Okay, next question, please. Trevor. Trevor at Jefferies.
Thanks, guys. Wanted to follow -up. It was on one of the more recent slides in Sagit's section, just with the 50% gross margin expectation, how are you thinking about the growth between payments and software within the recurring bucket? Your payments revenue's 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 a heavier software component. Thanks.
Thank you, Trevor. 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 five years from now, it's gonna be from a mix perspective, it's gonna be more or less than we see today. From not the growth necessarily, but just the buckets and how it's. 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. How, though, as we talked about, it will be between 30%-35% in a five-year roadmap. Actually, it's, it will be more or less what you see today.
There's a question from Chris.
Yes, Chris.
William Blair. Thanks, Chris.
Thanks for the, 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? Thank you.
Yes, I can answer this. Early discussion a few years ago regarding a micro market, how to address this in terms of make or buy. At the end, we decided to do a make and not to buy, because we look at the term of the market that we're looking at retail, which is broader than the micro market. 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. 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 UKO. We are not addressing ourself to become a Toast or a Lightspeed or Clover.
We're trying to see what are the customer base around us, how can we help them to grow their business. It started from self-service, unattended, self-checkout, it's growing also to locate to places that we didn't foresee. In order to serve them on what we call POS solution, retail solution, we had to hold our hands in the full scope of solution and not to do a buy for a specific segment of micro market, which is also retail. We look about this into very long terms of what we can achieve around this and what we can do with this.
We believe that this integration that we are holding all the R&D behind this and we have to invest in this is the best return for the company for the long run. 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 end, we have a POS in other aspects. The hint that we give you already that we're moving also to Android-based in terms of platform.
You'll see us in all over the place is Android-based, and all of the application that will be embedded with this could be our application or third-party application. We're looking again to starting to create a scale of all what we're doing. For this, we did what we intend to do is to do what you call a make and not to buy.
Thank you. Carly, you gave some examples, Ride On, WESTbahn, and then we had Five Star talk about various customizations. 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?
Sure. I think actually the really cool thing is actually none of what we showed is actually truly a customization for that specific customer. It's using our existing proprietary protocols. You know, when you're looking at our Lynx API, those are already out of the box. When you're looking at our Marshall Protocol, we provide an SDK for integration, it's actually on the operator's end to be able to integrate our device with a smart kiosk or machine. Everything has a very proprietary custom feel but actually out of the box. It's highly scalable and also very agile for the end customer.
It's really giving that customized feel, but in a way that allows us to grow, you know, two times our customer base in one year alone in the U.S., while also giving the features and functionality that are actually contributing to the uptick in revenue and decrease in OpEx for our operators. You know, I think it's, you know, when you're looking at that land and expand, right? That the... You know, David, you're a great example, right, of this. As I kind of said, you know, we saw the 3G EMV opportunity in the U.S. as kind of, you know, just a way to get our hands, you know, into people's businesses and let us try. You know, let them try us, right?
We feel very confident 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 change is on everybody's mind. Can you just give us a little bit more, but like why is that not more of an attention-
Sure.
-span and, what you're excited about there?
Yeah. I mean, VendSys is a fantastic solution. 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. When 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. If you look at My favorite slide, and this is where I, you know, start using my hands even more. The slide that Keren presented is like my favorite slide, right? When you see the kind of the flow of our transaction, right?
You have someone coming to the machine and presenting, you know, 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 VDI to VendSy s, which again, is fantastic for our really large enterprise customers. 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, you know, and out of the box. It does give us the opportunity to also scale more and add more value-added services internally. You're right, VendSy s is fantastic, but really it's needed for our 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, we decided to do a buy. The reason for this is because it's mostly for enterprise, it mostly for the U.S. market. Scale with this solutions like ERP solutions. To scale with this, I think Five Star Food Service can admit it takes for a branch to take a few weeks or a few days to onboard. We, Nayax would like to have what you call as fast as we can to move fast, and then to extend our footprint with the customer. We didn't want to buy just to make this kind of a solution.
We bought VendSys. With this, we're operating seamlessly from our perspective. 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 you call effort to make it seamlessly in some of it. At the end of the day, if you want to really manage ERP, which is kind of a VendSys solution, you need to have what you call service-oriented business, which is different DNA that you have to touch base with the branches, with the depots, with the people that are already running the business. The implementation is quite long.
From our perspective, this is not what we wanted to do at the beginning. This is why we bought VendSys.
I think too, you know, we're not limited, you know, maybe, you know, I didn't touch on this, you know, well enough, but, you know, I think, you know, really that kinda third pillar of the case study that I showed with, you know, kind of the DAB dissemination abilities using Amazon SQS. Customer can set up, you know, David, they're using Amazon SQS in addition to VendSys, right? We see this often with our partners, right? 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. With Nayax, it takes an hour, you're able...
we can dump all that real-time and, you know, data in, and the customer then has the opportunity to pull those transactions down into any system that they want. 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. Go ahead.
Thank you, Morgan. Thanks for taking the questions. I wanna go back to EV for a minute. It's come up in a, in a lot of conversations in the industry and a couple 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? Also because these are greenfield builds, in this type of an environment, would you expect to have higher market share, kinda given the overall performance of your solution? Then I had a couple follow-ups.
I'll start with the end. I think the strategy that we're executing is a two-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, now the regulation is starting to move in Germany, in California, to put also AC chargers as a with a terminal, with a card present. It will flow, I think, to all Europe and all the U.S. will be covered with the, I think, the norm will be a card present solution. Based of this, you have to do OEM solution when you go into a new product.
The reason for this, because there is certification behind this, and all the certification of energy and electricity is a sensitive certification. It carry the U.S. certification, for example, in the U.S. You have to put the certification all together, including the payment. Actually, you cannot take a payment out from a terminal and replace it once you put it OEM and certify this. This is one strategy that we are implementing, and we have all the access to all the OEM around the world, okay? Most of them are in the Far East, in South Korea, in China, and some of them are in Europe, some of them are in U.S.
When you working together as technology partner with them, you certify the unit, and then from now on, all the units that will be export with a terminal, and it's easy to work with Nayax because we already cover 100 countries. Wherever you export the EV charger, AC or DC, it's already in place with the card present solution. That's the nice thing and the unique proposition of Nayax. The other part of this strategy is that we ourselves develop what we call the management solution. It's a different management solution because you manage energy.
The end game that we're looking on the AC charger, that's what we're doing, is not just the parking lot location or the office locations or any kind of a open mall, street mall, location. We're also looking about a multi-tenant location. In a multi-tenant location, the energy that you can supply to all the tenants in one moment or one hour is limited. Then we know it will become to be what they call the subscription, and the subscription will be based on priority, where it is like Netflix, like I don't know, a tier one, tier two, tier three. It's based on your behavior. All of this will be managed by Nayax as a solution, while we will not be the one that sell the energy.
The energy will be sold by someone that is taking care of this. He will be the vending operator from our perspective. We don't want to sell B2C. We are a company that really focused on B2B. We don't want to touch base with B2C. We are touching anything that we're doing on B2B relating to help the customers to address the C level, we're giving them all the application and all the things that we're giving, we are giving. We're not really holding hands in our business in terms of B2C. We are B2B business. That's how we are 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 100,000 payment terminal locations that accept public payments. We're tracking this a lot with a lot of research regarding where it's going and how it's going. Actually today is the run to reach out to partnership with many pay providers that we can. Many go to market agreement. For the last year, the EV company, the EV Meter company of Nayax achieved 21 agreement with partnership in EV that we are selling to them on top of what the OEM is doing.
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. 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-based. It sounds like you're starting to see some improvement from a gross margin standpoint in the supply chain. I'm assuming the new product fits in with that gross margin cost profile and structure. Just wanna get my hands around that. There were two other items, just in terms of the monetization opportunities of Android now, right? In terms of what you could do with Weezmo and CoinBridge, kinda how that filters in and how we should expect that to hit the P&L?
The second item was, I thought I heard power mentioned 2 x 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 on the terminal? Is that a differentiator for you guys? Thanks.
I will start from the end, then you'll have to remind me the first question. I'll start with the end. The low power energy is revealing the ability of the other segments to serve. You're right, it could be parking, it could be pool table, it could be others. This is one of the gain that we achieved with OTI. The journey of consumer-wise is that you're approaching for a pool table. The terminal is really switch off, is on battery, it's really switch off. The whole trick around over here is to wake up the terminal in five seconds. You push a button, in five seconds, the terminal is ready to take a transaction.
You place your card, credit card, or debit card, whatever it is, in terms of contactless or usually it is contactless. You touch the terminal. It creates a transaction. It's off the grid. It's going down. This ability is, this technology has enabled the terminal to live one day, two days with a very small battery beneath the table. That's the whole idea behind this. If we try to do this with our VPOS Touch to wake up the system, it's very heavy task. It can take a few minutes to wake up the system. With the OTI, we succeeded to make it a five-second wake up. This is a barrier that not too many, if any, can do this kind of thing.
Again, a blue ocean from our perspective, all the low battery, okay? Could be parking, could be pool table, could be anything that is really, under the off the grid. I think I remember the Weezmo.
The Android. The Android view is that 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 one of the key element 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 technologies that we have into a unified. If you take, I know mall, for example, in the future, or any kind of what you call integrated solutions that carry attended, unattended kiosk self-service, and he can run all his application and control them with a flick of a finger, and it will be native, embedded into the kiosk or into our solution. This is a really a game changer from what we see and what we can offer into the future.
Again, these kind of things revealing a lot of pains from customer point of view and bringing customer closer to Nayax. It's not that we are shooting now marketing campaign only for this kind of segment or this 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 people, into the customers. Everybody's raising their hands. "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.
Does that help? I think we have a question from Dominique at Oppenheimer.
Great. Thanks so much. Great presentation. Thank you for the answering my question. I just wanted to touch base again on Nayax Account. I guess this seems like a really, you know, big opportunity among your customer base that can't go unnoticed and highlighted even more. If we just think about the sold pipeline of current customers for this product, can you provide any information on the sold pipeline there? Perhaps what percentage of, you know, the growth areas of revenue growth that Sagit you mentioned this could potentially make up? Then I just have a follow-up. Thanks.
We talked on the break. This is a new product that will come. It's not, it's not really active now. It will come through the year and will be production next year from what we just revealed. 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. If we can provide the availability of the speed of the allowances to use the money, instead of doing this push one week or one month, it is available on the hands of the customer immediately after the transaction, after the day, after two days, and he can withdraw this money to his bank account. It's his discretion. He can do this.
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 this, directly to buy from a vendor, and motivate him to do this in the way that we want, we are doing this with a corporate card that we're gonna issue for this kind of account, we can gain a market share under the interchange level that we can gain as an issuer. We're gonna go from account receivable to also account payable. With the interchange, which is built in, it's not really touching the revenue of the customer. It is taking what you call the banking account, the issuing part.
That's where when I started and saying CoinBridge as an issuer, that's the main point, the top line. We will be, and we are already a an issuer on territory-wise that will be global. We will issue cards under our BIN or sponsored BIN all over the world. This, this license can create another margin that we can take without affecting the customer margin. The opposite, increasing the satisfaction of the customer point of view, because the money flow will be much faster from his perspective. He will be using the money that we already received from the acquirers immediately afterwards.
From there, you know, actually we're doing, I'm calling this, nobody put this in the jargon, but it is like a business service issuing. We're letting all the customers to use this kind of a solution in order to use our issuing license.
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's why...
Absolutely. Absolutely. They want to get to the money much, much faster. It's a working capital issue. They all want to reach out quite quickly for this. My dream is that it will be immediately. Of course, it opened the doors for all kind of banking and financial embedded that we can put together into this. If we have a BIN, this BIN, we can route the transaction to his bank account, we can route the transaction to a third party. He can receive the money from multiple from us to multiple levels.
Great. Just my follow-up for you, Sagit. I think, you know, there's a theme of obviously a lot of innovation at Nayax throughout this presentation. You know, not, you know, innovation takes a lot of CapEx and spending, and we're obviously seeing you know, 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 one more time about the balance between CapEx spend, that need for spend on specifically new innovation products and maintaining this path towards profitability in 2024? Thanks so much.
Sure. You can see actually I start from the end. You can see how even in 2022, the slower the growth in R&D expenses was slower. 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 is, you know, the bread and butter, and there's all kinds of, as you've seen, features, functionality. The bottom line is that all of those investments that we have done, not just in 2022, we have done that in the last 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, you know, a separate segment from a reporting perspective, except from 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. I believe that the investment was already done, will continue to be done in 2023. The growth from a revenue perspective will be in the next five years as we've outlined.
I think we have a question from Joe again.
Just a quick couple follow-ups. If I looked at those numbers real quick on the outlook, it looks like it may accelerate this year a little bit. Is that a function of supply chain catch-up versus just, you know, normalized demand accelerating, you know, X any supply chain catch-up? It looks like you're looking obviously for EBITDA breakeven this year. I know you're not providing quarterly guidance, I assume then that means that, you know, we're maybe EBITDA positive in slightly in Q3 or something like that. Any color you can add there? Thanks.
Tricky question.
No, easy. Well, I can only share what we publicly shared that we will reach breakeven in 2023. This is an excellent year and excellent moment, you know, movement into everything that we just said. As you've seen, right, we've executed exactly as we've communicated the last six, seven quarters. Should be no surprise with this excellent results that we've shown. From a hardware perspective, definitely the component shortages and the crisis. Like, I, remember I've called it the component war. The crisis in the global supply chain impacted us. 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 cost that we buy from our suppliers. With, you know, it was the electric board that we had to change. It's to find new and available suppliers of components to be able to continue the manufacturing at any given time. That was the first, right, the first approach, especially with the backlog that we had and the growing demand for our products. 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.
It will grow to the midterms, as I said, gradually. We will continue to update about our hardware gross margin as soon as we have more information about that.
Okay, great. Are there any addition--. Oh, 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 five. Can you go a little bit more into the details of that? Is it new connections, adding additional products and services, just growth of payments?
Sure. You want me? Okay. It is a combination. You know, it's the land and expand, you know, the beautiful land and expand that we're showing and continue to show on an annual basis. The point is that our, most of our customers, as you know, 72%-73% are small businesses, and they have between one machine to 30 machines. They buy five, and a few months later, they buy another five. The cohort analysis doesn't take any hardware revenue into account. It's only the services and processing, only the recurring revenue. What you see is either with the additional product that they bought, they are paying more monthly subscription fee. You also see that with the consumer behavior change.
You know, I keep telling that six, seven years ago, 25% of the transactions were cashless in our machines. Now it's 65%. 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. It's a combination of more, you know, slowly adding more hardware, therefore paying more monthly fee as well as the payment processing. 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, you know, the best technology and the best services.
Any additional questions?
Thank you so much.
Okay. If there are no additional questions, we'll 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. 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.