Nayax Ltd (NASDAQ:NYAX), a global commerce payments and loyalty platform designed to help merchants scale their business, stock fell 5.15% (As on May 16, 11:23:18 AM UTC-4, Source: Google Finance) after the company posted lower than expected results for the first quarter of FY 24. Recurring revenue rose to 72% of total revenue, growing 43% year over year. Hardware revenues decreased this quarter by 11% because of a shift in customer mix towards SMBs, as well as a change in product mix which favored devices with lower average selling prices, both of which are characterized with higher gross margins. Additionally, the company showed a record organic growth of 62,000 in the number of managed and connected devices, bringing the total number of managed and connected devices to 1,108,000, representing an increase of 44% year-over-year. Adjusted EBITDA in the quarter was $3.6 million, versus last year’s adjusted EBITDA loss of ($0.6) million. The dollar-based net retention rate remained high at 134%.  Gross margin improved strongly to 43.8% from 34.1%. This was primarily due to significantly improved hardware margins rising to 27% from 12%, as a result of steps taken to increase efficiencies within Nayax’s business and supply chain, as well as the product and customer mix sold. Operating loss was reduced to $2.8 million, compared to an operating loss of $5.2 million. Net loss for the period was $5.0 million compared to a net loss of $5.5 million.

Moreover, Total transaction value grew 34% to $1.07 billion. Number of processed transactions increased 32% to 540 million. Growth in the customer base continued at a healthy pace, adding 4,000 new customers in the quarter, bringing the total customer base to over 76,000, an increase of 46% year-over-year.

NYAX in the first quarter of FY 24 has reported the adjusted earnings per share of -15 cents, missing the analysts’ estimates for the adjusted earnings per share of -2 cents. The company had reported the adjusted revenue of $64 million in the first quarter of FY 24, missing the analysts’ estimates for revenue of $70.93 million. As of March 31, 2024, the company had $93 million in cash and cash equivalents and short-term deposits. The increase was primarily due to the successful completion of a public offering during the quarter. As of March 31, 2024, short-term and long-term debt balances stood at $48.2 million.

Nayax sees Q2 2024 revenue to be in the range of $325.00M-$335.00M versus the analyst consensus of $328.00M.