Nexi S.p.A. Earnings Call: Balanced Growth Amid Challenges

Nexi S.p.A. ((IT:NEXI)) has held its Q3 earnings call. Read on for the main highlights of the call.

Nexi S.p.A.’s recent earnings call presented a balanced sentiment, highlighting both achievements and challenges. The company reported profitable growth and shareholder value creation, particularly noting strong performance in Germany and issuing solutions. However, it acknowledged challenges from extraordinary events impacting revenue growth, margin pressure, and potential future pressure on issuing solutions.

Overall Revenue and Growth

Nexi reported a 2.8% increase in revenues over the past nine months and a 1.8% rise in the last quarter. The underlying growth stands at approximately 6% year-on-year for both periods, indicating a steady upward trajectory in the company’s financial performance.

Merchant Solutions Growth in Germany

The company’s merchant solutions in Germany have shown impressive double-digit growth over the nine months, with an acceleration in the third quarter. This growth is attributed to an expanding customer base and increased market share, underscoring Nexi’s strong foothold in the German market.

Shareholder Value Creation

Nexi has prioritized returning capital to shareholders, with EUR 1.1 billion planned across 2024 and 2025. This year alone, shareholder remuneration has increased by 20%, reflecting the company’s commitment to enhancing shareholder value.

Net Financial Debt Reduction

Despite returning EUR 600 million to shareholders this year, Nexi has successfully reduced its net financial debt to 2.6 times EBITDA. This demonstrates the company’s effective financial management and strategic focus on maintaining a healthy balance sheet.

Issuing Solutions Performance

Issuing solutions have recorded a robust quarter with growth between 6.5% and 6.6%, driven by volume increases, international debit products in Italy, and upselling strategies. This segment remains a key contributor to Nexi’s overall growth.

Bank Losses and Contract Renegotiations Impact

The company faced challenges from extraordinary events such as bank losses and contract renegotiations, which have impacted revenue growth. These effects are expected to peak in the fourth quarter, adding a layer of complexity to the financial outlook.

EBITDA Margin Pressure

Nexi’s EBITDA margin experienced pressure in the quarter due to a slightly altered revenue mix and cost phasing effects. This has impacted margin accretion, highlighting areas for potential improvement.

Soft Performance in Poland

In Poland, Nexi encountered a slightly unfavorable volume mix, coupled with pricing and mix effects in e-commerce. This has led to a softer performance in this region, requiring strategic adjustments.

Issuing Solutions Future Pressure

Looking ahead, Nexi anticipates pressure on issuing solutions in the fourth quarter due to project work phasing effects and in-sourcing from a large Nordic client. This presents a potential challenge for maintaining growth momentum.

Forward-Looking Guidance

Nexi’s guidance for the remainder of 2025 indicates expectations of low to mid-single-digit revenue growth year-on-year. The company is confident in generating excess cash exceeding EUR 800 million. EBITDA is projected to grow by about 3.5% for the first nine months, with a 35-basis point margin expansion. However, margin outcomes for Q4 will depend on volume and business mix. Extraordinary events, such as bank losses and contract renegotiations, are expected to slow down in 2026, with underlying growth around 6% year-on-year.

In summary, Nexi S.p.A.’s earnings call reflects a balanced outlook, with notable achievements in revenue growth and shareholder value creation, alongside challenges from extraordinary events and margin pressures. The company’s strategic focus on partnerships and market expansion, particularly in Germany, positions it well for future growth, despite anticipated pressures in certain segments.