Nayax Q3 2026 Earnings Call Transcript

Nayax (NASDAQ:NYAX) reported third-quarter financial results on Wednesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Nayax reported a strong Q3 2026 with a 23% revenue increase to $128 million and a 32.9% rise in adjusted EBITDA to $24.2 million, driven by higher recurring revenue and margins.

The company is expanding its addressable market through new distribution channels, OEM partnerships, and international expansions, with notable growth in China, Southeast Asia, and Latin America.

Nayax completed the acquisition of IPS Group, enhancing its entry into the parking vertical and aiming to integrate IPS into its payment platform by 2027.

Strategic priorities for 2027 include integrating IPS, converting partnerships into recurring revenue, and expanding financial services offerings.

Future guidance reaffirms full-year revenue expectations of $530 to $540 million, including contributions from IPS, with adjusted EBITDA expected between $90 to $95 million.

Full Transcript

OPERATOR

Hello everyone and welcome to Nayax’s third quarter 2026 earnings conference call. All participants are at present 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.

Aaron Greenberg (Chief Strategy Officer)

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 will 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 and our regulatory filings.

In addition, 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 our industry standards. And finally, please note that all figures in today’s call will be reported in US 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. And with that, I would like to turn the call over to Nayax’s CEO, Yair Nechmad. Yair.

Yair Nechmad (Chief Executive Officer)

Thank you, Aaron. And thank you everyone for joining us today. I’m happy to share that Q3 was a strong quarter for Nayax, with profitability in focus. Our revenue, margins, and cash flow were highly impressive for the quarter, reflecting our progress in scaling the business while working towards our 2028 target. I’d like to focus today on the following. First, how our recurring revenue and margin discipline are driving profitability. Second, how we are expanding our addressable market through new distribution channels.

Third, the addition of IPS. And fourth, why 2027 is about to deliver return on what we have built. Let’s dive in. Recurring revenue continues to be the primary engine of Nayax and a growing part of our total revenue. For perspective, in Q1 2023 recurring revenue was around 62% of our business, while now, with discipline and a successful flywheel effect, our higher-margin recurring revenue is 73% of the business and growing. The land-and-expand model is working, and we believe that the business will continue accelerating growth on ARPU. We intend to provide our customers with additional services over the coming years as Nayax remains at the center of their day-to-day business operation.

Turning to hardware, greater sales of the VPOS Media product family post full launch and lower product cost allowed us to improve our margin significantly, compared sequentially to Q2, to approximately 35%. As a leading industry solution provider, we continue to deliver competitive pricing while maintaining strong margins. The second area I want to discuss is our expansion effort. We are steadily expanding our addressable market and our channel distribution within those verticals we already serve. Our investment in sales, OEM integration, and continued international expansion are working and reflected in the results. For example, our China business is expanding rapidly. Focused on integrating with OEM manufacturers at the factory level, we have been creating partnerships with many OEMs in vending, EV charging, and other verticals, whereby they are adding the VPOS family devices or the embedded Uno Mini as a default option before it is delivered to the customers.

This means that when a machine leaves the factory with our reader inside, the operator starts with Nayax from day one at almost no customer acquisition cost for us. Throughout the rest of Southeast Asia, our expansion in multiple countries over the past year is starting to show success. As an example, a leading amusement operator in the region placed an order in the third quarter for more than 10,000 units, which we expect to deliver in Q4. Orders like this show how our investments are successfully turning into sales.

In Latin America, we recently announced a partnership with Getnet, a leading global merchant payment platform and solution provider in Latin America and Iberia. This partnership gives Nayax a clear path into new Latin American markets, starting with Chile, then Brazil, Mexico, and Argentina, and strengthens our presence in countries where we already operate, such as Portugal and Spain. We do this by pairing our unattended payment technology with Getnet’s local acquiring network, one of the largest in Latin America.

Moving to our fuel vertical, we signed a distribution partnership with Allied Electronics, which reached around 53,000 US fuel stations, and will offer our VPOS Media 5 at the pump. We expect to launch fueling payment in the US together with Allied over the coming months. For context, a gas station forecourt today can typically have a pump, EV charger, a car wash, and a retail store, and the operator wants one payment provider to support all of it.

This is exactly what our platform solution intends to deliver. Finally, on expansion we had several successes this quarter in our EV vertical. First, our LinkWIL software has opened up a significant TAM expansion opportunity for bundled payment and software services. For example, we just moved a sizable network of 2,000 chargers over to our platform, which wouldn’t have been possible without having the full-stack solution together with LinkWIL. Additionally, we launched our EV solution in Brazil, which is a substantial market opportunity with a low penetration in EV charging.

To be clear, LinkWIL’s strategy is not to own and operate its chargers, but rather to supply charge point operators with hardware, software, service, and most importantly, payment. Every charger we touch becomes recurring revenue regardless of who owns it, unlike other EV charging companies who carry the capex and utilization risk. Turning now to my third topic, the IPS acquisition. On October 1st we completed the acquisition of IPS Group to accelerate our entry into the parking vertical. Why parking? First of all, it’s a great market opportunity, as parking is steadily moving away from coins towards cards and mobile payments—same shift we have seen throughout the automated self-service verticals we already serve today. Second, contracts with municipalities are typically long term with strong recurring revenue, consistent with Nayax’s business model.

Third, cities are consolidating their vendors, and Nayax payment capabilities and our EV charging stations, together with the IPS platform, offer a comprehensive and competitive solution. We will provide more updates in the coming quarters on the progress we are making in parking. Now let me turn to my fourth area of focus and share our three strategic priorities for next year. Some have asked how we balance investment in new opportunities with return on what we have already built. Our answer is simple. In 2027 our focus is on delivering. First, integrating IPS. IPS extends Nayax’s payment leadership into mobility with one of the leading smart parking platforms serving more than 250,000 parking spaces. Over the next 12 months we expect to begin converting IPS payment volume to our processing platform and introduce IPS to the European market.

Successfully integrating IPS and realizing the expected synergies will be a key operational and capital allocation priority in 2027. Second, focusing on turning this year’s partnerships into future recurring revenue. This year we expanded our reach through new distribution partners, deepened our integration with OEMs, and entered new geographies in our growth verticals. 2027 will be about converting these opportunities into revenue. The third focus is financial services.

Our customers already run their payment monitoring and reporting on the Nayax platform. Through Nayax Capital we offer our customers device financing. In 2027 we expect to expand more financial offerings to our customers. As we add services, Nayax becomes even more embedded in our customers’ day-to-day operation, which deepens the relationship and increases our revenue per customer. To summarize, the foundation is in place. A large part of the automated self-service market is not connected yet, and many of our customers do not yet use everything we offer. We are still early in a long-term global shift, and Nayax is built to lead it. With that, I would like to pass the call to our CFO, Sagit Manor, to discuss our financial progress this quarter, the remaining investment requirements that will support cash generation going forward, and our guidance.

Sagit Manor (Chief Financial Officer)

Thank you, IR, and good morning. Good evening, everyone. We appreciate having our shareholders, analysts, and the entire Nayax team together with us today. I’m pleased with our third quarter results. Our focus, dedication, and execution delivered solid growth over the prior year’s quarter with margin and adjusted EBITDA expansion both sequentially and year over year and, importantly, an improvement of cash generation. Let me walk you through the results and the key drivers of our performance.

Revenue increased 23% to $128 million from $104 million in last year’s third quarter, with organic revenue growth of 21%. Year to date, recurring revenue grew 21% and represented approximately 73% of total revenue. We ended the quarter with an installed base of nearly 1.6 million managed connected devices while serving approximately 131,000 customers globally. Total dollar transaction value grew 26% to $2.2 billion. Consistent with recent quarters, we continue to see a favorable mix shift towards higher-value verticals.

Average transaction value, or ATV, increased to $2.64 from $2.40, while take rate remains strong at 2.66%, representing a mix of both regional and vertical shifts. Combined, these indicators show that our growth is increasingly driven by adding more devices and by increasing activity and monetization. We also saw a continued increase in the revenue generated from each connected device. Average revenue per unit, or ARPU, increased 11% year over year to $255.

This increase continues to be driven by two main factors: first, the ongoing conversion of existing machines from cash to cashless transactions, and second, our strategic expansion into higher-value verticals such as EV charging, amusement, and car wash. These are the same trends we’ve been speaking about for several quarters. Turning now to hardware revenue, hardware revenue increased 27% to $34.5 million from $27.2 million in last year’s third quarter, driven primarily by the extension of our EV platform as we strengthen our position in this important long-term growth market and continue to capture market share.

Moving now to profitability and margins for the quarter, overall gross margin for the quarter was a record high of the company at 49.6%. The continued expansion of our recurring business remains the key driver of our long-term profitability, with both processing and SaaS margins improving this quarter. Recurring gross margin increased to 54.8%, up from 53.6% in the prior-year quarter, reflecting continued scale, higher transaction volumes, and broader adoption of our software solutions.

Across our installed base, processing margin improved to 41.6%, up from 39.6% a year ago, reflecting the continued benefits of our renegotiated acquiring agreements together with our enhanced smart routing capabilities. SaaS margin also expanded to 77.3% from 76.3%, reflecting continued scale. Hardware gross margin was 35.2%, which was a significant improvement sequentially from this year’s second quarter of 28.1%, driven mainly by both a higher average selling price and a lower product cost of our VPOS Media product family.

Adjusted OPEX for the quarter was $40 million, which was an improvement of more than $4 million sequentially compared to the second quarter, and represented 31.2% of revenue. Most of the improvements were related to several cost-reduction initiatives such as employee-related, marketing, and IT expenses. Adjusted EBITDA increased 32.9% to $24.2 million from $18.2 million, representing 19% of revenue. As we continue to drive margin expansion, improved productivity, and operational efficiency across the organization, it’s worth mentioning that adjusted EBITDA in the third quarter increased by more than 70% sequentially compared to the second quarter, emphasizing the operating leverage of the business, reflecting both an improvement in overall gross margin as well as disciplined cost management. Stock-based compensation was approximately $6.2 million in the third quarter compared to $2.6 million in the prior-year quarter.

This increase is due to our new company Senior Leadership stock-based incentive plan that was initiated and disclosed last quarter. Net financial expenses increased to $4.2 million compared to $3.3 million in the prior-year period, primarily reflecting higher expenses due to FX and interest expenses associated with the bond issuance completed in 2025. We reported a net loss of $1.1 million for the quarter compared to net income of $3.5 million in the prior-year period due to higher financial expenses and stock-based compensation.

Adjusted net income for the quarter was $14.1 million compared to adjusted net income of $10.2 million in the prior-year period. The main adjustments of $15 million from our net loss to adjusted net income are related to stock-based compensation, an amendment to VM Technology consideration, and amortization of acquired intangibles. Turning now to our balance sheet, as of September 30, 2026, cash and cash equivalents and short-term deposits totaled $453 million, while total short- and long-term debt stood at $491 million. Both include $150 million of bank loan to finance the IPS acquisition, which was completed on October 1st for a total consideration of $350 million. Looking at cash flow, we generated $18.1 million from operating activity in the third quarter. Free cash flow was $10 million, representing 41% conversion of adjusted EBITDA.

Turning now to our guidance and outlook and referring to the forward-looking information included in today’s press release, we are reaffirming our guidance for the full year excluding IPS of $510 to $520 million, including organic revenue growth of 22% to 25%. IPS is expected to contribute an addition of approximately $20 million of revenue in the fourth quarter. Therefore, with IPS, the company’s revenue guidance is expected to be between $530 to $540 million for the full year. 2026 Q4 is seasonally the strongest quarter in our core business with strong recurring and higher hardware revenue. This seasonality, together with identified opportunities supported by orders in hand, a well-tracked pipeline, and meaningful contribution from our EV charging, fuel, and retail verticals, gives us confidence in delivering our FY 2026 guidance. Similarly, adjusted EBITDA for the year is now expected to be approximately $90 to $95 million, which again, we are reaffirming our original guidance of $85 to $90 million plus the expected contribution of approximately $5 million from IPS in the fourth quarter.

We continue to expect free cash flow conversion from adjusted EBITDA of approximately 5% to 10% for this year, excluding the expected contribution of IPS. As stated last quarter, this primarily reflects accelerated investments the company is making to support its long-term growth initiatives. The areas of investment are in financial services, including lending, installment, and issuing capabilities, as well as capturing market share in the EV charging space and securing sourcing of key components and cost.

In financial services, we continue to invest in our capabilities and infrastructure this quarter. We expect a lower level of investment in 2027 as our focus shifts toward expanding adoption and generating revenue from these services. In EV charging, we fund certain linked customer deployments ahead of customer payments, including payments that follow the receipt of government grants. Since the beginning of the year, we have provided approximately $12 million in short-term operating investments for linked charging deployments, of which approximately $5 million was funded in the third quarter.

Overall, our third quarter results demonstrated continued growth alongside improved margins, operating leverage, and a return to positive free cash flow. As we integrate IPS and expand adoption across our platform, our focus remains on disciplined investment and translating recurring revenue growth into stronger profitability and cash generation. We remain confident in our full year outlook and look forward to updating you on our progress. I want to thank all of our Nayax colleagues for their hard work and dedication, and with that, I’ll now turn the call over to the operator for our Q&A session.

OPERATOR

Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. And our first question will come from Raina Kumar with Oppenheimer.

Raina Kumar (Analyst)

Good morning. Thanks for taking my question. Could you go a little bit more in detail on just what gives you confidence in the organic growth acceleration that’s implied by your full year guidance, particularly given that it’s a tougher fourth quarter comparison? If you can just discuss the drivers. Thank you.

Yair Nechmad (Chief Executive Officer)

Hi, this is Yair. Thank you for the question. As you know, we are more than 73–75% recurring revenue, and we can see how it’s growing, and it will grow to Q4. So the remaining is regarding the funnel that we’re holding, and we have a strong funnel that we believe we can deliver upon this quarter. You have to remember that Q3 against Q3—Q3 ’25 was a very strong quarter. So this is why it looks like that we’re not growing enough in terms of organic growth.

But basically, the end of the year, as we projected, we’re feeling good with the funnel that we’re having and, of course, with the recurring revenue that supports all the projections that we have given.

Raina Kumar (Analyst)

Thank you, very helpful.

Aaron Greenberg (Chief Strategy Officer)

Raina. Hi, good morning. Maybe to add that, you know, Q4 is seasonally the strongest quarter we have in our core business—right—like I have mentioned: strong recurring revenue, strong hardware revenue as well. The opportunities that we see in hand is in the EV charging, fuel, and the retail vertical, with orders in hand, well-tracked pipeline. So we feel very comfortable with delivering our FY 2026 guidance.

Raina Kumar (Analyst)

Thank you, that’s very helpful. And just as a follow-up, how much further margin expansion do you see in SaaS and payment processing, and then for hardware, how sustainable is the sequential margin improvement that we saw, and are you seeing any emerging cost pressures? Thank you.

Yair Nechmad (Chief Executive Officer)

So I think this is, again, Yair. I think the way that we look business-wise on managing the margin is according to what we project for 2028, and we believe that we are on track. Coming to some granularity of how we control this, we have also the track record, again, for past quarters that whenever we need it, we can actually use the acquisition cost through the hardware. And whenever there is an issue, we use the hardware in some cases to not lift the price because we thought this is the right thing to do.

So it’s under full control of us to manage the total gross margin of the company. Saying that, you have to remember that the context that we’re looking at, how we believe in the business, is basically what is the total take rate, total cost of ownership from the side of the customer. We are really managing this in a very careful way that we’re not crossing the 4%, 5% of the total cost of ownership for the customer. And that’s the main driver that protects us from any kind of, what you call, a hiccup in the market in terms of competition.

And the outcome is that you see that we are growing organically very nicely. You see that the gross margin has really been kept very nicely. And the most important part is the share is not going up. And that means that we are on the right track regarding the tailwind that we’re building with the market and holding more and more market share, and not losing grip of the market because we’re taking a little bit more gross margin, whatever it is. And ending up this, the whole business into the future years, is how we are converting this to cash. And we showed in the past, and now we’re moving back to this, that we’ll show in the future: are we moving the adjusted EBITDA conversion to cash. And we know that we can control this as well. So basically, this is like a full cycle of how we’re managing ourselves in terms of trajectory to the future with a very strong tailwind, keeping the market in favor.

Sagit Manor (Chief Financial Officer)

And maybe just to add that, again, very proud of the margins that we’ve been able to achieve this quarter. Improvement in all revenue sources, whether it’s the recurring revenue, but in particular the margins on the processing as well as the SaaS, and of course the hardware margins. I’m expecting that Q4 will be around that area, maybe a little bit lower because of the higher hardware margins that we’re expecting. However, all of that is strong attention that we put on where we are controlling, which is everything that we talked about: the acquiring agreements and renegotiation, the component cost reduction, improvement in supply chain initiatives, etc., etc.

OPERATOR

And our next question will come from Matthew Mouse with B. Riley Securities.

Josh Nichols (Analyst)

Hey, it’s Josh Nichols. Great to see the record margin. I know you’ve only had IPS around like six weeks at this point, but, you know, combining the parking, the payments and EV charging for sites, I’m just kind of curious when you look at the mobility platform, what are you most excited about and any specifics that you could give about the timeline to expand and evolve that into Continental Europe and the opportunity there?

Aaron Greenberg (Chief Strategy Officer)

Hi, Josh, this is Aaron. It’s a great question. As you know, we finished the acquisition just about a little under a month and a half ago, but we’re already seeing a lot of really positive momentum with our teams. Between the parking team and the EV team, they’ve been going back and forth to each other’s offices and, you know, we see a lot of initial momentum even with some of the existing cities that we have, both IPS and their customers as well as Linkwell and their customers.

And the most important thing when we’re thinking about mobility is how do we tie the payments together between parking, EV, and then eventually we’d like to do transit as well, and combining the three of them together and really creating an ecosystem essentially for the city. And what we’ve seen in the research that we’ve done, and we’re talking to the customers, both our current customers and prospective customers, the biggest pain point still is the fragmentation of payments within the mobility segments.

And we believe that this is a really big opportunity that we can accelerate into over the coming years. And IPS really helps with that. Now, with regards to expansion of IPS, a big part of our strategy with regards to IPS is to take it more internationally. They do already have a presence in the UK and have done the integration in Ireland and have some customers in Ireland as well, which is in the EU, which allows us to have the integration already to go into Europe as we go into 2027. So 2027 plans are to start to expand more into Continental Europe with regards to them and to integrate the payments as fast as possible, which we’ve been actively working on both for the US and for Europe, and also looking at that as well.

We’ve been working on expanding the Linkwell platform as well into Continental Europe, which we’ve launched in a few countries over the last handful of months, and we’re continuing to expand that offering as well.

Yair Nechmad (Chief Executive Officer)

Hi Josh, thanks. I want to spend a second on talking why parking, right? Because, you know, we’re talking about more IPS, but why parking? So I think that, one, it is a great market opportunity for Nayax because it’s in the beginning of the cash-to-cashless conversion. So this is one, right. The second thing is that it’s a strong recurring revenue business model, consistent with us, consistent with Nayax. And lastly is the ability of taking the Nayax payment capabilities and putting that on the IPS platform.

So, you know, the three is kind of a win-win of why parking was—and we talked about, like, a year and a half, right, in the last year and a half—about why we are excited about the parking vertical, and IPS meets all of those criteria.

Josh Nichols (Analyst)

Yeah, appreciate the context for that. And then I wanted to touch on—you spent a little bit of time on the call talking about some of these new distribution partners, Getnet, Allied. I mean, you’re putting more readers now on machines at the OEM level and at more markets. You mentioned things you’re doing in Asia. How do you expect that to be a little bit more of a flywheel when we start moving into 2027, expanding across things like fuel, but also in new markets across Latin America and Asia?

Yair Nechmad (Chief Executive Officer)

Hi, this is Yair. Thank you for the question. It’s really two sides of what we’re working very hard on, and the cycle is a little bit long, but then it will be fruitful for the next year, we believe. On one hand, we started even more than a year, two years, to accelerate our investment in the OEM part, and we are counting very strongly on the OEM. Actually, today we’re doing a big splash of promotion into the OEM in China—like WeChat online, like combination of video—and this is now working.

Now, this is like the end of the year; that’s part of our growth. And we have a very, very, very good acceptance in the market for the OEM. So actually we build the channel not just in relationship but also in a digital relationship. So we can create the funnel to the leverage of our product to be ordered almost digital. And that’s a very strong confidence from the OEM on Nayax. On the other side, we’re building the go-to-market with more and more partners that see Nayax as their go-to-market. Like Getnet is a strong partner, or Allied is a strong partner. One is a bank and one is for the fuel. All of this is a long, long relationship and long terms of establishment. But once it’s running—and we know how it was in the past for us, when we were a little bit doing this, but not in that strong effort—we know that this is then taking us for the next decade and moving forward.

Very strong relationships that build the growth and secure our growth. So summing up the question, it is two ends. One is that we strongly believe in the OEM not just in China, but all over the world, because we’re doing this with Italian manufacturers, with UK manufacturers, all over the world. And we’ve been recognized as the one that can deliver in more than 120 countries the landing of the units and the machines on the ground, and having all the capabilities of onboarding customers, and then cooperating with meaningful channels that were not available for us a few years ago.

But now they really see us as their go-to-market, and the partnership is going very nicely.

Josh Nichols (Analyst)

Appreciate that.

OPERATOR

We’ll hop back in the queue. We’ll go next to Chris Kennedy with William Blair.

Chris Kennedy (Analyst)

Great, thanks for taking the question. Clearly you’re tracking towards your 2028 framework from a revenue, but can you just talk about the 30% EBITDA margin goal as you balance investments with growth?

Sagit Manor (Chief Financial Officer)

Hi, good morning. So as presented this quarter, right, with the focus on discipline—from cost discipline to improved margin—we were able to show $10 million, or 70%, improvement on the adjusted EBITDA just from Q2 to Q3. Okay. Yair likes to say that, you know, the cost, whether it’s the cost of our product to the cost of our services to, you know, our opex and how much we spend, is in our hands. So, you know, cost discipline is the number one. Obviously, in order to get to our 30% adjusted EBITDA margins in 2028, 2027 will be somewhere in between 26% to 28%, without providing, obviously, guidance for 2027. And that will be coming from both revenue growth, the additional contribution of IPS, and, as well, as we talked about, improvement in margins and in our operating expenses.

Yair Nechmad (Chief Executive Officer)

Maybe to add to this, Chris, regarding products that are not being revealed and did not contribute yet to the gross margin and to the EBITDA of the financial stack that we’re having. As you know, we are in progress of the financial—I’m calling it the payout level. And with that, just calculating any customer that is passing through us in terms of the acquiring side, $10,000, and then the payout will be, again, the same—10 times the dollar. And just the margin of this can generate an extra margin for the processing from our side.

So this is a very high contribution to the bottom line, to what we believe that will go to conversion cash that is more than 50%, 60% from this product. And then we have all the other part of the financial product that we are planning for. So this is also supporting our idea of what we’re looking at as payment, not just as the side of the acquiring side, but also the side of the payout. And we didn’t put any kind of extra product that we are having—the issuing license that we didn’t really exercise yet in terms of the revenue.

All of this will come together the next two years. And with that we believe that we can create 30% adjusted EBITDA. Not saying that we’re seeing also the ability of us to be more efficient operational-wise. It is not secret that using potentially internally AI tools that making not just for the developer, but for the whole group of the operation, and accelerating the efficiency in the operation is part of—it’s taking some investment in terms of the token. But we know that we can generate more revenue from this investment and create efficiency, that the growth of the company will keep running without totally more and more employees, but even staying the same will be the trajectory that we see in terms of operational leverage.

And maybe thank you. Just to thank you for making that point. If I look at the revenue, I look at it in two ways, kind of to summarize. One is our way to continue to increase our existing managed and connected devices from 1.6 today. You know how the market looks like 45 million devices out there going to 60 million by 2029, to increase our number of customers, etc. That kind of, you know, growing our legacy and continue to grow that. But at the same time, how do we enjoy those 1.6 million devices, those 130,000 customers, and provide them more services and be able to give them the full solution that they need, which also improves our revenue and our growth within the existing customers. We have

Chris Kennedy (Analyst)

Understood. Thank you for that. And then just as a quick follow-up, Sagit, you mentioned improving the payment capabilities at IPS. Can you just provide a little bit more details on that? Like what are the economics today and where can they go as you integrate the capabilities? Thank you.

Aaron Greenberg (Chief Strategy Officer)

Hey Chris, this is Aaron. I’ll take this one. With regards to the payment capabilities, there’s approximately 500 million of cashless volume that’s already going through IPS, which is predominantly card-present volume, which is, you know, as you know, historically what we have excelled at. We’re working very hard on the integration right now to be able to advance a payment facilitation solution, which IPS has not historically been the payment facilitator, and we believe that this obviously can bring not only more throughput from the revenue side because their processing revenues are negligible at this point, but also down to the margin side.

We think that margins on this can be very good, and we think that there’s a lot of inefficiency within the parking industry, and we also think, and we’ve seen the rates that people have been charging both in North America and Europe, and we believe that we can be very competitive with our existing go-to-market strategy on payment pricing. We’ll give some more updates on that over the coming quarters as we continue the integration on this. But we are hoping to finish an integration as we go into 2027 over the coming months. You know, but this is a complex company from a size perspective and a number of regions, etc. So we are putting a lot of emphasis on the integration and several people that are on this and making it happen. But it will take some months to see some of the throughput from the payment side.

Chris Kennedy (Analyst)

Thank you guys, appreciate it.

OPERATOR

And as a reminder, that is star one if you would like to ask a question. We’ll go next to Octavian Popetscu with Jefferies.

Octavian Popetscu (Analyst)

Hi, thanks for taking my questions. So first one, how should we think about your M&A firepower after pro forma leverage is now at approximately four times, the leverage including the IPS acquisition?

Aaron Greenberg (Chief Strategy Officer)

Thanks for the question. This is Aaron again. We’re not intending to do another large acquisition soon. We’re focused a lot right now on the integration of IPS. Obviously we want to make sure that we’re bringing down the leverage as we go into 2027, and our free cash flow, as you saw this quarter and going into the future, is accelerating in the right direction. So we do expect that the leverage is going to continue to go down. That being said, we are still looking at opportunities, albeit smaller opportunities, more similar to the size transactions that we’ve done historically. And we’re looking for the right opportunities, obviously accretive opportunities to the business, long-term ones that are helping with verticalizing our platform, offering more services to our customers, obviously increasing ARPU as a result, and selectively looking at specific regions that we’re not necessarily heavily penetrated into yet.

But you make a good point, and this is not a leverage position that we’re planning to expand on. But as you know, with the EBITDA expecting to go to 30% over the next couple of years, the leverage is going to continue to go down between the growth of the profitability and the decrease of the net debt position.

Octavian Popetscu (Analyst)

Thank you. And second question if I may, can you talk about the performance for this quarter, especially what drove the regional growth, especially in Europe and Israel which seems to have been weak? And also if you can discuss about the dynamics. Thank you.

Yair Nechmad (Chief Executive Officer)

As you know, we never take one quarter and look at it as trend. All of our regions performed beautifully. If you look at the nine months, beautiful, whether it’s total growth to organic growth. And as we said, we’re expecting Q4 to be a strong quarter, and together with IPS, you know, will be a nice end to 2026.

OPERATOR

And moving next to Michael Allen with Barclays.

Michael Allen (Analyst)

Hello, this is Michael Allen on for Nick Craymo. Thanks for taking the question. You highlighted several wins in EV this quarter, including the 2,000 charger migration onto the Linkwell platform, and EV continues to be a meaningful driver of hardware growth. Can you help us size how much of the total revenue EV represents today? And given the pipeline momentum you’re seeing, is it reasonable to think EV could exceed 10% of total company revenue in 2027?

Aaron Greenberg (Chief Strategy Officer)

Thanks for the question. This is Aaron. EV has been a very strong driver of our business over the last several, and obviously we’re continuing to mention it, and we see EV as a big accelerating potential for the business and a tailwind for the overall business as we look into the future, especially with some of the synergies as well with IPS. The EV revenues are still under the 10% that we would normally have to go and report as a separate segment, although it is accelerating very fast.

And we’ll continue to give updates on it as we go into the coming quarters.

Michael Allen (Analyst)

Appreciate it. Thanks so much.

OPERATOR

And this concludes our question and answer session, and we’ll conclude today’s teleconference. We thank you for your participation. You may disconnect at this time and have a wonderful day.

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