NYAX

Hello, everyone, and welcome to Nayax's first quarter 2026 earnings conference call. All participants are present or in listen-only mode. Following management's formal presentation, instructions will be given for the question-and-answer session. As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Aaron Greenberg. Please go ahead, Aaron.

Thank you, operator and everyone for joining us today on this conference call. With me on the call today are Yair Nechmad, Nayax Co-Founder and Chief Executive Officer, and Sagit Manor, Chief Financial Officer. Following management's prepared remarks, we will open the call for the question-and-answer session. Our press release and supplementary investor presentation are available on our Investor Relations website at ir.nayax.com. As a reminder, during this call, we'll be making forward-looking statements. All forward-looking statements on our call today are based on assumptions and therefore subject to risks and uncertainties that may cause results to differ materially from those projected. We have no obligation to update these statements except as required by law. You can read about these risks and uncertainties in our supplementary investor presentation released earlier today in our regulatory filings. Today's call will include a discussion of non-IFRS measures.

Management believes non-IFRS results are useful in order to enhance our understanding of our ongoing performance. However, these measures should be considered as a supplement to and not as a substitute for IFRS financial measures. A reconciliation between Nayax's non-IFRS to IFRS measures can be found in our earnings press release issued earlier today. All key performance indicators are intended to evaluate our business and properly measure factors in a macroeconomic environment to guide and support our decision-making. These key performance indicators may be calculated in a manner different from the industry standards. Finally, please note that all figures in today's call will be reported in U.S. dollars unless stated otherwise. Yair will start the call with key financial and operational highlights. Following that, Sagit will go through the details of financial results and discuss the outlook.

With that, I would like to turn over the call to Nayax's CEO, Yair Nechmad. Yair?

Thank you, Aaron, and thank you everyone for joining us today to discuss our results for the first quarter and the progress we are making across the business. We had an excellent start to 2026 with strong operational and financial results across the business. Revenue grew 32% to $107 million with organic revenue growth of 26%. Adjusted EBITDA margin expanded to 13%. The quarter results reflect the continuing confidence and execution of our strategy, and we are reaffirming our financial guidance for the year. This quarter, our installed base surpassed 1.5 million devices, an important milestone that drives our recurring revenue model. Our customer base reached 120,000, which is truly exciting and reflecting continuing opportunities in the market.

The more customers we onboard, the more devices they buy, the more transactions flow through our platform, and the more our recurring revenue compounds. It is clear that our growth algorithm is working. To this end, let me highlight a couple of KPIs. First, total transaction value grew 33%, with average transaction value continuing to expand as we shift further into higher value verticals such as EV charging, amusement, and car wash. Second, our ARPU is growing, reflecting both the trend in cash-to-cash conversion with our existing customers base and our deeper presence in these high-value segments. Hardware sales were strong this quarter, with growth of 46% driven by strong demand for our product across all markets.

In the unattended space, the rollout of our PIN-on-glass VPOS Media devices drove significant hardware demand in Europe and is unlocking higher ATV verticals where local regulation requires PIN verification for transactions. In the EV charging vertical, we made our first joint appearance as the combined Nayax and Lynkwell brand at the EVCS conference, which is the largest conference in the EV space, and received strong customer reception. Our pipeline of mid-sized network moving onto Lynkwell's white label platform continued to grow. With respect to geographic expansion, in Brazil, we continue to invest and are making significant strides in the region. Following the successful integration of VMtecnologia and UPPay, we are fully rebranding its operation to the Nayax brand, which is now operating as Nayax Brazil.

In addition, we have started onboarding new customer as payment facilitator in the country, and we will soon be bringing the VPOS Media to the Brazilian market, which will allow us to address the market with a unified PIN-on-glass product. We are also making great progress with our platform expansion initiatives. As stated last quarter, our Yellow account, our embedded banking offering for the U.S. market in partnership with Adyen, is in pilot phase and advancing well. We believe embedded banking can become an important additional monetization layer across our platform, leveraging our existing customer relationship and transactions data. This is a long-term strategic initiative that can strengthen customer engagement and increase revenue per customer over time. We expect to have more to share in Q2 about our embedded banking initiatives.

Not surprisingly, AI is becoming an increasingly more meaningful driver across our business as we are embedding AI across our platform as well as throughout the entire organization. For example, R&D is advancing faster with AI system development. On the product side, we are launching in Q2 a new AI intelligence layer in MoMa, our mobile management app. This will give operators a conversational assistance for business insight, AI-driven shared strategy suggestion, and rapid merchandising plan setup using visual recognition. These initiatives and many more reinforce both our OpEx discipline and our long-term margin expansion strategy. On M&A, our pipeline is active and growing, and we are engaging with several opportunities in what is becoming a buyer market. We are disciplined about finding the right opportunity for Nayax, those that fit our strategy, our culture, and our long-term growth profile.

Our strong balance sheet position us to act decisively when we find them. In summary, our growing installed base of connected devices, the strength of our recurring revenue model, and the disciplined execution of our team continue to position us well for sustained profitable growth. With 1.5 million devices on the platform and with the flywheel accelerating, we are well-positioned to capture the opportunities ahead. I want to thank our employees for their continued dedication and our customers, partners, and shareholders for your trust. With that, I'll turn it over to our CFO, Sagit Manor, who will review our financial results in greater detail and walk through the outlook. Sagit?

Thank you, Yair, and good morning, good evening, everyone. We appreciate having our shareholders, analysts, and the entire Nayax team with us today as we review our financial performance. We are very pleased with our results for the first quarter as we continue to scale our platform, expand our installed base, and drive transaction activity, all of which reinforces the more predictable and profitable recurring revenue contribution to our business. As Yair stated, revenue grew 32% to approximately $107 million, including 26% organic revenue growth over the prior year's quarter. Recurring revenue grew 27% and represented approximately 74% of total revenue. We ended the quarter with an install base of more than 1.5 million managed and connected devices while serving 120,000 customers globally.

As a result, total dollar transaction value grew an impressive 33% to approximately $1.8 billion. Consistent with more recent quarters, we continue to see a favorable mix shift towards higher value verticals. Average transaction value or ATV increased to $2.36 from $2.06, while take rate remained strong at 2.66%. Combined, these indicators show that growth is coming from deeper engagement and higher-value usage across the platform, which is a leading contributor to our success. We also saw a continued increase in the revenue generated from each connected device. Average revenue per unit or ARPU increased to $247, up 14% year-over-year, which again demonstrates improved unit economics and deeper engagement of customers with our platform. This increase continues to be driven by two main factors.

First, the ongoing conversion of existing machines from cash to cashless transactions. Second, our strategic extension into higher-value verticals such as EV charging, amusement, and car wash. Turning now to hardware revenue. We saw a significant increase of 46% over the prior year's quarter to approximately $28 million, driven by strong demand for our products across all markets. Importantly, we continued taking market share, adding over 5,500 new customers and 41,000 managed and connected devices, proving that our growth algorithm is working. Moving now to profitability and margin for the quarter. Gross margin was impressive and in line with the prior year's quarter at 49%, driven by higher processing and SaaS margin, slightly offset by lower hardware margin in the quarter, primarily because of product mix.

More specifically, our recurring margin increased to 54% from 52% in the prior year's quarter, driven by additional improvement in processing margin that reached nearly 40% from 36% in the prior year quarter, reflecting the ongoing benefits of renegotiated contracts with several bank acquirers and the company's improved smart routing capabilities. SaaS margin improved as well to 76.5% from 75.9%. Both processing and SaaS margins reflect the company's growing scale and increasing transaction volume. Hardware margin was 33.1% compared to 39.5% in Q1 2025 due to marketing promotions for our newly released PIN-on-glass display media devices in Europe. Adjusted OpEx of $39 million, or 36% of revenue, an improvement over the prior year period and included a full quarter of Lynkwell expenses.

Adjusted OpEx had an unfavorable impact of $1.2 million in the quarter compared sequentially to Q4 2025 due to foreign currency volatility. Adjusted EBITDA increased 43% to $14 million, representing 13% of revenue, compared to 12% in Q1 2025, and again demonstrating the operating leverage of the business. Operating profit was $4 million compared to $1.8 million in prior year period, excluding a one-time gain of approximately $6.1 million related to Nayax share repurchase of Tigapo in Q1 2025. Financial expenses net for the quarter increased by $2.9 million as a result of interest expenses related to the two bonds offering completed in 2025 at the Tel-Aviv Stock Exchange, which raised a total of nearly ILS 1 billion.

Net income for the quarter was $1.3 million, compared to net income of $1.1 million in the prior year's period, excluding the one-time gain associated with Tigapo. Turning now to our balance sheet. On March 31st, 2026, cash and cash equivalents and short-term deposits totaled $306 million, while short and long-term debt was $325 million, maintaining a solid balance sheet. Looking at cash flow, we generated $3.6 million from operating activities. Free cash flow for the quarter was negative at $6 million, mainly due to increased infrastructure investment and the timing of cash settlement from processing activities. Turning now to our outlook and referring to our forward-looking information disclosure in our press release. As Yair mentioned, we are reaffirming our financial outlook for 2026.

Our revenue guidance for the year remains $510 million-$520 million, inclusive of organic revenue growth of 22%-25%. We expect an adjusted EBITDA margin of approximately 17%, which represents a range of $85 million-$90 million. Turning to free cash flow, we continue to expect free cash flow conversion from adjusted EBITDA of approximately 40% for the year. In closing, we are well-positioned for future growth in 2026 and beyond as we continue to grow our install base globally and capture market share. We'll also continue to focus on scaling our recurring revenue streams, in particular our payment processing capabilities, which benefit from the conversion trend of cash to cashless transactions.

I want to thank all of our Nayax colleagues for their hard work, and with that, I will now turn the call over to the operator for our Q&A session. Operator?

Thank you. Well, now we're conducting our question-and-answer question. If you want to ask a question today, please press star one from your telephone keypad. And a confirmation tone indicate your line is in the question queue. Please press star two if you would like to remove your question from the queue. If you're using a speaker equipment, it would be necessary to pick up the handset before pressing the star keys. Thank you and our first question is from the line of Rayna Kumar at Oppenheimer. Please proceed with your questions.

Good morning. Can you discuss your EV strategy and, like the EV contribution in the quarter, just given the rise in fuel prices? Thank you.

[Ricky] and Yair, your lines are open for questions. Please stand by for one moment. Your line is open for questions. Please stand by. We're experiencing technical difficulties. Please remain on the line. We'll resume momentarily.

Can you speak right now?

Yeah. It seems that Aaron has a technicality, so I'll take it.

Is it working?

It sound like we can hear you now. Please try again and see if I can hear you now.

Can you hear me?

Yes, I can hear you, Aaron. Yes.

Okay. Sorry for the technical difficulties. I can take the question. Rayna, thank you for the question. This is Aaron. With regards to the EV strategy, obviously we bought Lynkwell at the end of last year, you know, after eight years of investing in the EV industry. You know, that was us doubling down on our strategy of really trying to penetrate this industry and both on the software and the payment side.

As we see, over the last few months, the gas prices rising, we see this as a potential secular tailwind for the EV penetration, particularly in the U.S. Because, as it's not going to necessarily impact the number of EV drivers today, it should impact, as long as this continues, the number of EV drivers in the future, people switching from ICE vehicles over to EV, which should increase the utilization of EV chargers in the U.S. As we look at this, our EV strategy right now is to be connected to as many public DC fast chargers as possible, which is where these new EV drivers are gonna be charging their car.

With the purchase of Lynkwell, we have a better opportunity to go after a lot of these mid-size networks with a full end-to-end solution, expanding our payment business. We believe the strategy's already working. We signed the partnership with ChargeSmart before the Lynkwell acquisition. We've signed the partnership with E-Plug after the Lynkwell acquisition. We expect to sign more networks over the coming quarters.

Extremely helpful, Aaron. Then, just wanted to follow up. Can you talk a little bit about what you're seeing in terms of hardware costs and how we should think of hardware gross margin potential for the remainder of the year? Thank you.

Hi, Rayna. Hardware is supposed to stay as we've guided, which again, I remind that we've just reaffirmed the guidance of $500 million-$520 million of revenue and adjusted EBITDA of $85 million-$90 million. Q1 specifically had lower hardware margins as a result of promotions that we have done in Europe, with the bringing into the market the VPOS Media, our new PIN-on-glass products that are very relevant to our Europe, as well as Latin America and Australia regions. However, I'm expecting that to stay around that level the remaining of the year, a little bit higher, with beautiful margins, gross margin overall of around 49%, as we've shown in Q1.

Appreciate all the color. Thank you.

Thank you. Our next question is from the line of Josh Nichols with B. Riley Securities. Please proceed with your question.

Yeah, thanks for taking my question. I mean, great to see the processing margins. They're nearly 40%, record for the company. Can you just give us a little bit more detail, walk us through, like, what's driving that expansion, and how should we think about, you know, what the ceiling is for processing margins? They've continued to go higher over the last few years by a pretty significant amount.

Hi, Josh. Thank you. Yes, we're very proud of the processing margins that continue to improve to nearly 40% compared to 36% last quarter or even around 38.5% in Q4. There's two main reasons for processing margins to improve, as we've continued to explain that, you know, the last year, is couple of things that we have done. One is the renegotiation with every major acquirer that we work with in order to improve our the fees and therefore our margins, as well as the smart routing capabilities that we've implemented.

We know how to send any transaction that comes in to the acquirers that make sense from us as but still the customer gets its Coke or the service on the massage chair in a nanosecond. Specifically this quarter, it's a matter of a geographical mix. You can also see that the take rate went down, whether from 2.75% last quarter or previous quarters to 2.66%. It's a geographical mix. What do I mean by that? The higher the transactions are in Europe, the take rate is a little bit lower than the U.S., but the margins are higher.

We're continuing to push everything we can in order to improve margins in all aspects, both in processing as well as in the improved margins that we saw this quarter on the SaaS area and Q1 margins, I just spoke about that as well.

Thanks. Then just one follow-up for me. Nice to see the ARPU growth accelerated from 11% year-over-year last quarter to 14%. We've talked about mix before. You know, how much of that is being driven by like EV, amusement, and is there still room to continue to scale that up pretty significantly as those verticals become bigger over time?

Yeah. Thank you for asking about that, because this is the first quarter that we're actually showing ARPU on a quarterly basis. Again, it's a 12-month trend, but, you know, we saw that after showing it for 2024 and 2025 and have enough kind of historical quarters to show, to continue to show that now on a quarterly basis. There's two main reasons for the ARPU to go down or up. One is about our existing machines and how much you can see there the shift from cash to cashless. The second thing is obviously the entrance into higher transactional verticals like EV, exactly as you said, like car wash and amusement.

As long as we continue, and that's the plan, to invest in higher transactional verticals, ARPU should continue to improve.

Josh, I just wanna add, this is Aaron, that on the ARPU, as you've seen over the last several quarters, the processing growth, as Sagit mentioned, has been the main driver of the ARPU growth. You know, we expect this to continue to grow, you know, as it has. I wanna flag though that this has been, as I said, predominantly from the processing side. The SaaS side, we've kept relatively the same, across the business. As we look forward over the coming years, this is where I think that the embedded banking and some of these other services that we're bringing to the table, really have the opportunity as a catalyst to grow the ARPU, even further, which, you know, we'll talk about here over the coming quarters.

Adding additional services like lending, issuing, and e-commerce to our existing customers, should continue to accelerate the ARPU growth. Appreciate it. Thank you.

The next question is from the line of Cris Kennedy with William Blair. Please proceed with your question.

Great. Thanks for taking the questions. Just wanted to follow up on the pilot of Yellow. I know it's very early, and we'll get additional information, but any initial learnings or kind of use cases that are resonating with your customers?

Yeah. Hi, Cris. This is Aaron again. Yeah, we've started the pilots on the Yellow account. We launched the marketing of it at the NAMA conference back last month. So far, things are going well. You know, we're learning a lot along the way with it. I would say that the general perception that we, you know, that we see is that customers want to have this product.

I think there's a few reasons and many reasons, but I think the most important thing is ease of getting the payout at the end of the day. One of the things that we're marketing is getting a faster payout into their accounts. They get to see it right away, as opposed to having to wait that extra, you know, potentially couple days in order to go and get it transferred from our account into an external account. This is, this is huge for businesses that, you know, live day-to-day on cash flow, which a lot of these nano merchants do. The other part, though, that is really important for us is this is the foundation for being able to add the other services over time. The first step is to get people onto the Yellow accounts.

The second step here is once they have the application and they're, you know, using it on a daily basis, the fund flows are happening, so they get the pay-ins and, you know, and payouts from this account and all the processing's coming through us, then we can start layering in the other services and provide curated offers to them. You know, which really, you know, personalizes, you know, what the customer needs are, which we don't believe it can be served by external parties as easily because, you know, an external bank that is going and working with these customers, they don't get the daily payment flows, that are happening with these customers.

We're seeing by the minute how their flows are happening, which allows us to either accelerate or decelerate the offers to these individual customers, which is a win-win for both of us.

Great. Very clear. Thank you for that. Just a quick update on Brazil. It sounds like you had a lot of momentum there. Can you just remind us of what the opportunity is in that market? Thanks for taking the questions.

This is Aaron again. Brazil has been amazing for us so far over the last couple of years since we bought VMtecnologia and then last year buying UPPay. You know, this is a couple hundred million person country, larger than most of the rest of Latin America combined. You know, we see a huge opportunity there, especially for the unattended industry.

We're expanding into many different verticals there right now. As we speak, we've aligned the branding now with Nayax, and we've moved and are continuing to move the infrastructure over to unified Nayax infrastructure. We'll be bringing the VPOS Media there over the coming months, as well, the PIN-on-glass device. We see a huge opportunity from a penetration side of, you know, some of these industries that historically didn't really have a cash flow if unattended, and unattended is relatively newer there in the last 10 years, 15 years. There weren't really incumbents prior to, you know, VMtecnologia entering and now obviously us, you know, inheriting VMtecnologia. I think that, you know, there's still a lot of opportunity to penetrate there.

We're seeing a lot of, it's mostly a rental business there with regards to the devices, which is amazing for us, because this is a gross margin that is more comparable to our SaaS gross margin today. Generally, you're seeing five, 7+ years of life on the devices. A lot to come there in Brazil, we intend to continue to invest there and in the rest of Latin America. We talked about the Integral Vending acquisition and really making our penetration on both sides of Latin America and then moving to the rest of the countries.

Also to add Cris, is that this is a great example of an acquisition that we have done in the past that now translates into strong organic growth that we also showed in Q1, you know, 32% growth on the revenue, 26% organic revenue growth. That's again, another example of translation into our day to day, and creates the growth machine.

Understood. Thank you.

The next questions are from the line of Hannes Leitner with Jefferies. Please proceed with your questions.

Yes, thanks for letting me on. I do have a couple of questions. The first one would be, if you could talk about the FX impact for Q1. I think there was quite some movement in the U.S. dollar and the Israeli shekel. Then maybe just like, you know, based on your definition, organic growth track trends ahead of your annual guidance. Maybe you can just talk a little bit about how you see the rest of the year shaping up. In just in the backdrop of the hardware contribution, which was quite healthy, Q4 has a quite tough comp in hardware sales. Maybe you can just give me a little bit of context. Thank you.

Thanks, Hannes. Regards to FX, actually was, you know, I'll give ourself a compliment that we're doing a great job of monitoring all of the currencies that we work with, not just the Israeli shekels, but the euro and the pound. As you know, we're selling our products in more than 120 countries, so FX is part of our day-to-day. We're doing a great job on hedging, whether it's a natural hedging or actually working with the banks to do that. Specifically this quarter we had a $1.2 million negative effect on the OpEx. As we said, we are reaffirming our guidance, which takes into account, you know, a lot of things, including some of the unknown of the FX.

I don't foresee. There is an effect, but I don't foresee a significant effect when it comes to currency volatility, again, with the current information that we have right now. On the organic growth, you're absolutely right. A beautiful organic growth in the quarter. We did guide last year on 22%-25% overall. That will come from a lot of other things that are happening in the next quarter. We're not changing the guidance, but we are different from last year that we have a very hockey stick towards the second half of 2025, especially in Q4.

This year I'm expecting a better split between the quarters that will impact both the growth as we talked about as well as the organic. On hardware contribution to your question, yes, very proud of 46% hardware revenue growth. As I said, this is exactly what I just said about more, you know, kind of split, better split between the quarters rather than a hockey stick in the next in the Q4 numbers. Having said that, H1 is always around 45% of our revenue. H2 is around 55%. Our quarterly, you know, we have a very common cycle because of the predictability of the business, the high revenue, recurring revenue that we have, that this quarter was 74%.

With that, you know, we kind of know what's the rhythm of the quarters and the ability to predict gets easier as we go along.

Our next question is from the line of Sanjay Sakhrani with KBW. Please proceed with your question.

Hi, this is Yvonne Jeng on for Sanjay. Thanks for taking my question. With regards to the question earlier on hardware gross margins, are you seeing any impact to hardware costs from the conflicts in the Middle East? How are you managing inventory levels as a result? Thank you.

Hi, Yvonne. Thank you for the question. We actually don't see a margin impact as a result of the conflict. You know, we have a very strong operational team that's working on from a component cost standpoint to improvement in the supply chain infrastructure and processes. I don't see any impact necessarily on that. Inventory levels are really good and as we've intended to have. Basically flat from last quarter to this quarter, despite the 46% increase on the revenue for the hardware. As we continue the year, we're expecting that to see around those level of gross margin a little bit, maybe a little bit higher on the hardware.

Okay. Thank you. That's really helpful. Just a follow-up on M&A. Can you provide any color on how the pipeline is shaping up and whether we should expect any activity in the near term? Thank you.

Yes, this is Aaron. The pipeline has been great, and we're seeing, you know, this is really in the last, especially the last six to 12 months, I've been mentioning this the last few quarters, but there's really a pickup of this becoming a buyer's market. You know, with AI disruption happening, it's freaked out the markets in a lot of different ways. You know, private companies especially, have been having trouble getting liquidity for multiple years now, basically since 2022. A lot of these companies, you know, need growth capital to continue even if they're very profitable businesses. You know, they're in a, you know, in a conundrum of what do they wanna do going forward.

You know, we're having many bilateral conversations now with companies and companies that have started, you know, sell processes. You know, with that in mind of, you know, they need to sell the company or want to sell the company. We can get much more favorable terms than what a competitive process might have been, you know, three or four years ago. You know, as I've said, you know, previously, you know, we're generally targeting founder-led or founder-owned businesses. There are many opportunities that are on the table. We're actively in processes with several companies, and I still expect that we will complete, you know, the roughly few acquisitions that we, you know, have been projecting, you know, on our long-term cycle on a year-to-year basis.

More to come there over the coming months. There definitely will be contribution from inorganic growth this year. You know, as we go towards the 2028 target of getting $1 billion of revenue, I remind that, you know, we still expect to see couple hundred million of inorganic contribution to that, and this year will be a part of that.

Okay. Thank you for the color. Thank you.

The next question is from the line of Chris Zhang with UBS. Please issue your three questions.

Hi. Thanks for taking our question. I wanted to ask about the potential for a rental or installment-based model, and then, you were asked about Brazil, so I guess it was a pretty good intro to that topic. Just wanted to get your thoughts or updates on the potential introduction of a rental or lease-based model elsewhere outside of the Brazil market. What do you think the opportunities and some of the unlocks are there? That's my first question, and I have a quick follow-up. Thank you.

Hey, Chris. Thanks for the question. Maybe I'll start with a little bit, you know, on the margin side, and then Aaron can take kind of the strategic view of rental in general. Yes, margins are amazingly better when it comes to the rental business. One, because you kind of bundle the hardware, the processing and the services to one, you know, $20 a month, $25 a month. And if you analyze it over time, usually, you know, those customers stays as a, you know, as a regular customer, stay for the five, for the 10, for the 15 years and continue to pay that, which brings the margins overall to around 80% from everything, right?

While now we have hardware margin 40% and recurring revenue of 54%. Overall, it's an amazing margin. Having said that, one, it takes time to transition, right? From hardware sales to, you know, kind of a rental model standpoint. It's sometimes relevant to some geographies versus others. It's also more relevant, in my opinion, to the small businesses need to small and not necessarily to the large customers that like to buy the hardware and manage it in a way themselves. There's a few specific rent to the rental market, but we are very excited about it. I also say, you know, it's not just the transition, it's also the infrastructure investment, right? It's basically a fixed asset that you need to make.

You know, the cost is on us today. The revenue will come over time. We all understand that now, obviously with the balance sheet, with the strong balance sheet we have, we can afford that to make the transitions, as I said, over time.

Great. I'll add on the strategy side. You know, as we look at the rental business, I see it as two different sets of end customers, actually. The best way to think about it is, you know, the customers that we're purchasing are probably still going to purchase the hardware up front. I think that it opens up a new segment, a new serviceable market for people that want unattended devices, and people that might want to swap out from existing devices, but don't necessarily have the CapEx to go and make the flip out so easily. It accelerates their transition over to our products. If anything, you know, we're seeing that this increases the TAM over time.

For some markets, like in Brazil, you know, we see it being the, you know, the dominant market opportunity to do rental over selling. Yeah, more to come there. You know, we're definitely seeing a pickup in rental, and we expect that over the coming years that rental will continue to be a larger portion of the overall sales.

All right, thank you so much for hearing that, Aaron. My follow-up is just looking at the free cash flow conversion and trying to think where that should be, where or where you see that to be in 2027 and beyond, from the 40% level this year.

Thank you. First and maybe to talk about that our operating cash flow improved year-over-year. It's kind of the normal first quarter cycle that we have, that the free cash flow was -$6 million. We made a lot of infrastructure investments, it's always the processing settlement timing that, you know, impact the Q1 free cash flow. As I said, we're still expecting that, you know, with the unit economics improved, and with our ability to increase significantly the adjusted EBITDA this year, right? To around 17%, that's our guidance, that it will translate into cash and into cash flow and obviously to a free cash flow.

We haven't provided guidance for 2027 and beyond about cash flow and free cash flow, but I would love to think about it if it's something that we would like to provide for the market in the future.

All right, thanks a lot, and appreciate it, and look forward to catching up on the call back in the next quarter. Thank you.

Thank you.

Thank you. At this time, I'd like to turn the floor back over to Yair for closing comments.

Thank you for joining us today and for your interest in Nayax. Q1 was a strong start to 2026. We grew our customer base at an accelerating pace and continue to compound profitability across the business. I want to thank our employees for their hard work and dedication and our customers, partners, and shareholders for your continuing trust. Thank you very much.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation. Have a wonderful day.