Q: Why is now the right time to file for the bank charter, and why do it under self-control rather than through a smart partnership? A: Aaron Greenberg (Investor Relations): This is a multi-year process that began in early 2025, building on years of investment in issuing (Coinbridge) and lending (Nayax Capital). The timing is right because AI enables significantly better data monetization, and the company has reached an inflection point with enough scale. Doing it in-house is crucial because data is the most important asset; using sponsor banks would mean giving up control over underwriting and customer ownership. Nayax wants full control over risk tolerance and customer management for core services like payments, lending, and issuing.

Q: Can you frame the opportunity for financial services relative to payments or software? A: Yair Nahmad (CEO) and Aaron Greenberg (Investor Relations): While not providing specific numbers, the opportunity is significant given the 125,000+ customers on the platform. Financial services are a value-added service layered on top of the core payments business, not a separate vertical. Because Nayax underwrites based on real-time settlement data, it can make faster, lower-risk decisions and offer lower interest rates than traditional banks. It will be a good accelerant but will not become the majority of revenue.

Q: The hardware margin declined in Q2. Was this anticipated, and how should we think about hardware and SaaS margins for the remainder of the year? A: Sagit Manor (CFO): The decline was due to the strategic opportunity to capture market share through LinkWell, which has lower hardware margins and represented a larger portion of revenue growth. However, as the company steps into Q3 and Q4, margins are expected to return to Q1 levels, helping maintain overall gross margins in the high 40s.

Q: You reaffirmed revenue and EBITDA guidance but lowered free cash flow guidance. Are all these investments going through CapEx, and why aren't they flowing through EBITDA? A: Sagit Manor (CFO): Some investments do flow through EBITDA, but not everything can be capitalized, such as parts of the financial services investments. The company expects margin expansion in hardware and recurring margins to meet its EBITDA guidance. The free cash flow revision is due to specific cash investments: LinkWell's project-heavy business requiring upfront cash before government rewards, financial services infrastructure, securing key component sourcing, and timing of cash settlements from processing activities.

Q: You affirmed full-year organic growth guidance. Can you talk about the modest slowdown in Q2 and the implications for organic growth in the second half? A: Sagit Manor (CFO): The company looks at trends over six months rather than a single quarter. The first half showed 24% organic growth and 30% total growth, indicating the flywheel is working. Q2 was strong but reflected a return to normal after a great Q4 and Q1 for VPOS Media retrofits. The company expects to maintain the 22% to 25% organic growth guidance, with Q3 and Q4 typically being stronger (55% of revenue in the second half).

Q: Can you provide more detail on the drivers of ARPU growth and how you see it progressing into next year? A: Sagit Manor (CFO): While not providing specific guidance, the two main drivers are existing machines converting from cash to cashless and the shift to higher transaction value verticals like EV charging, car wash, and family entertainment. This trend is expected to continue, especially as 70% of the 48 million unattended machines globally still accept cash only. The company is also securing OEM partnerships to embed devices in machines at the source.

Q: How does the Connecticut State Banking License compare to an ILC or a bank holding company, and what does it allow you to do? A: Aaron Greenberg (Investor Relations): The Connecticut Innovation Bank Charter is relatively new and not heavily restricted compared to other fintech charters. Its biggest restriction is that it cannot be used for consumer business, which is fine since Nayax only works with businesses. The company chose to be a credit institution rather than a depository institution at this time, opting to partner with Adyen for deposit accounts to avoid SDIC oversight and infrastructure requirements, which provides a faster path to market.

Q: What are you seeing in the M&A market in terms of opportunities and valuations, and are there any incremental areas you're considering? A: Aaron Greenberg (Investor Relations): The M&A pipeline remains robust with priorities unchanged, targeting two to three acquisitions a year. The company is actively working on opportunities and expects to announce more this year. Key verticals of interest for verticalization include parking, mass transit (buses and trains), and laundry solutions. Geographically, the focus is on North America, Europe, and the UK, but the company is open to opportunities in other regions that can be taken global.

Q: Regarding the free cash flow conversion, what is the split between working capital, capitalized R&D, and CapEx for the incremental investments? A: Sagit Manor (CFO): The quarter had an FX impact on all areas, including CapEx. CapEx increased due to planned R&D capitalization and infrastructure projects. The company expects the R&D capitalization and CapEx levels seen in Q2 to continue in Q3 and Q4. The free cash flow revision reflects the timing of these investments, and the company expects improved free cash flow in 2027.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .