NYAX (NYAX) Q3 2025: Recurring Revenue Mix Climbs to 74% as High-Value Verticals Accelerate
NYAX’s Q3 2025 results spotlight a mix shift toward higher-margin, recurring revenue streams, underpinned by robust device growth and penetration into high-value verticals like EV charging and amusement. Operational leverage and disciplined M&A shape the company’s scalable model, while new embedded banking and e-commerce offerings signal a broader platform ambition for 2026. Management’s focus on organic growth and technology-led differentiation positions NYAX to capitalize on global cashless adoption, but execution on delayed M&A and new product rollouts remains a key watchpoint.
Summary
- Recurring Revenue Expansion: Predictable, high-margin revenue now dominates the business mix.
- Vertical Penetration Drives Upside: Growth in EV charging and amusement lifts transaction value and customer stickiness.
- Platform Ambition Advances: Embedded banking and e-commerce launches set stage for 2026 monetization.
Performance Analysis
NYAX delivered a 26% year-over-year revenue increase in Q3 2025, fueled by momentum in its automated self-service platform and a growing base of connected devices. The company added nearly 5,000 new customers and expanded its installed device base by 17% to over 1.4 million units. Recurring revenue, which includes payment processing and subscriptions, surged to 74% of total revenue, up 29% year-over-year, reflecting a sustained shift toward predictable, higher-margin streams.
Gross margin improved materially to 49.3%, with recurring margin reaching 53.6% and hardware margin climbing to 37%. Processing revenue growth of 33%—driven by a 35% increase in total transaction value— underscores NYAX’s deepening presence in high-ticket verticals like EV charging (electric vehicle payment infrastructure), amusement, and car wash. Operating leverage was evident as adjusted EBITDA margin reached 17.5% and operating profit more than doubled. Free cash flow generation, while positive, was impacted by timing of processing settlements, but the balance sheet remains robust with net cash and ample liquidity for future M&A.
- Device Mix Shift: High-value verticals increased average transaction value (ATV), boosting processing margin and ARPU (average revenue per user).
- Margin Expansion: Consolidation of payment volumes under fewer acquirers and smart routing technology drove processing margin to 39.6%.
- Hardware Leverage: Supply chain optimization and new Android-based products supported hardware margin improvement despite component cost pressures.
NYAX’s disciplined cost management and technology investments are producing scalable, profitable growth, while the company’s recurring revenue dominance provides a buffer against hardware cyclicality and market volatility.
Executive Commentary
"Our one-stop shop solution—hardware, management suite, and payments all from one trusted provider—is a true differentiator for our customers in the automated self-service space and one that few others can offer."
Yair Nechmad, Co-founder & Chief Executive Officer
"Gross margin increased to 49.3% compared to 45.7% in the last year third quarter, driven by both higher recurring and hardware margin. Our recurring margin increased to 53.6% from 50.1% in the prior year quarter, mainly driven by an additional improvement in processing margin to 39.6% from 33%."
Sageet Manoor, Chief Financial Officer
Strategic Positioning
1. Recurring Revenue Model and Vertical Expansion
NYAX’s business model is increasingly anchored in recurring revenue, with payment processing and subscription services now constituting nearly three-quarters of total revenue. This shift is propelled by growth in high-value verticals—such as EV charging, amusement, and car wash—where average transaction values are materially higher than legacy vending. The company’s platform approach, offering integrated hardware and software, drives customer retention and wallet share expansion.
2. Technology Differentiation and Product Innovation
Technology is a core moat for NYAX. The Q3 rollout of the VPOS Media—an Android-based, PIN-enabled payment device—unlocks new verticals and geographies, especially where regulatory requirements mandate PIN entry for large transactions. Embedded payment products like Uno Mini are scaling in China, with OEM certifications opening new channels. AI-powered inventory optimization, via RetailPro’s integration with OneBits, adds predictive analytics to merchant operations, enhancing value-add and stickiness.
3. Embedded Banking and E-Commerce Platform Ambition
NYAX is moving up the value chain by piloting embedded banking (integrated bank accounts and debit cards) and e-commerce solutions for EV charging. These offerings, slated for broader rollout in 2026, aim to capture more of the customer lifecycle and boost ARPU. Early pilots have generated backlog, and leadership expects these initiatives to drive incremental, high-margin revenue over time.
4. Disciplined M&A and Geographic Expansion
M&A remains a strategic lever, but discipline trumps scale. The pending acquisition of Integral Vending in Mexico and recent deals in Brazil extend NYAX’s reach in Latin America, complementing a stronghold in Europe and Asia. While delayed transactions led to lower inorganic contribution in 2025, the company maintains a robust pipeline focused on technology, customer base, and distribution consolidation—prioritizing deals that fit its culture and operational model.
5. Operational Leverage and Cost Control
Margin gains are underpinned by payment acquirer consolidation, smart routing technology, and supply chain optimization. NYAX leverages its transaction scale to negotiate better rates with acquirers and optimize acceptance rates, sustaining margin improvement even as it invests in product and market expansion. Hardware margin is managed through global sourcing and flexible product design, mitigating tariff and component cost risks.
Key Considerations
NYAX’s Q3 2025 results reflect a business in transition toward a higher-quality earnings mix and platform model, with execution across technology, operations, and capital allocation shaping forward performance.
Key Considerations:
- Recurring Revenue Dominance: Predictable, high-margin streams now drive the majority of revenue and profit, reducing cyclicality risk.
- High-Value Vertical Growth: Penetration into EV charging, amusement, and car wash segments accelerates ATV and processing revenue growth.
- Technology as Differentiator: Android-based devices and AI-powered analytics expand use cases, customer value, and competitive moat.
- Embedded Banking Upside: 2026 launches could unlock new monetization vectors and deepen customer integration.
- Disciplined M&A Execution: Prudent deal-making supports long-term strategy but introduces timing variability to revenue forecasts.
Risks
Execution risk remains around the timely rollout and adoption of new embedded banking and e-commerce offerings, as well as integration of acquired businesses in new geographies. Delays in M&A, while reflecting discipline, can create lumpiness in reported growth and investor expectations. Tariff volatility, especially in the U.S. hardware market, and evolving competitive dynamics from industry consolidation (e.g., U.S. peer mergers) could pressure margins and market share if not managed proactively.
Forward Outlook
For Q4 2025, NYAX guided to:
- Organic revenue acceleration, led by enterprise hardware sales and continued recurring revenue growth.
- Hardware sales pipeline described as “robust” with strong enterprise demand visibility.
For full-year 2025, management reiterated:
- Organic revenue growth of at least 25%.
- Updated total revenue guidance of $400 to $405 million (27% to 29% YoY growth), reflecting delayed M&A.
- Adjusted EBITDA margin of at least 15% and free cash flow conversion of at least 50% of EBITDA.
Management emphasized continued focus on organic growth, operational leverage, and disciplined M&A, while highlighting embedded banking and e-commerce as 2026 catalysts. Margin expansion and vertical penetration remain top priorities.
Takeaways
NYAX’s Q3 2025 performance underscores a durable shift to recurring, high-margin revenue, driven by technology leadership and vertical penetration. The company’s scalable platform and disciplined capital allocation create a strong foundation, but future upside hinges on executing new product rollouts and integrating strategic M&A.
- Recurring Revenue Outperformance: The company’s mix shift toward processing and subscription revenue drives margin resilience and predictability, a key differentiator versus hardware-centric peers.
- Strategic Technology Investment: Android-based payment devices and AI-powered analytics are unlocking new verticals and deepening customer engagement, supporting long-term growth.
- Watch Embedded Banking Execution: 2026 launches in embedded banking and e-commerce are high-potential, but depend on successful rollout and customer adoption to materially impact revenue and margin.
Conclusion
NYAX is executing on a strategy that prioritizes recurring revenue, technology differentiation, and disciplined growth. With a robust platform and expanding vertical reach, the company is well positioned for scalable, profitable growth— but investors should monitor the pace of new product adoption and M&A integration as key levers for future upside.
Industry Read-Through
NYAX’s results reinforce the secular shift toward cashless, automated self-service platforms, with recurring revenue models and technology innovation driving sector outperformance. The company’s success in high-value verticals like EV charging and amusement signals broader industry opportunity as transaction values rise and hardware commoditizes. Competitors focused on hardware sales or slow to adopt platform models risk margin compression and market share loss. Industry consolidation remains a double-edged sword—creating both competitive pressure and potential acquisition opportunities for disciplined players. Embedded banking and e-commerce integration will be a key theme to watch across the payment and retail technology landscape in 2026 and beyond.