Nuvei Corporation (NVEI) CEO Philip Fayer on Q4 2021 Results – Earnings Call Transcript

Nuvei Corporation (NASDAQ:NVEI) Q4 2021 Earnings Conference Call March 8, 2022 10:30 AM ET

Company Participants

Philip Fayer – Chairman and Chief Executive Officer

Anthony Gerstein – Vice President and Head-Investor Relations

David Schwartz – Chief Financial Officer and Corporate Secretary

Conference Call Participants

George Mihalos – Cowen & Company

Will Nance – Goldman Sachs

Sanjay Sakhrani – KBW

Jason Kupferberg – Bank of America

Bob Napoli – William Blair

Timothy Chiodo – Credit Suisse

Paul Treiber – RBC Capital Markets

Mike Colonnese – Bank of America

Matt Shafer – Raymond James

Andrew Bauch – SMBC Nikko Securities

Operator

Good morning, ladies and gentlemen and thank you for standing by. Welcome to Nuvei Corporation Fourth Quarter 2021 Earnings Call. As a reminder, this conference call is being recorded. I will now turn the conference over to Anthony Gerstein, Vice President and Head of Investor Relations for Nuvei. Please go-ahead Sir.

Anthony Gerstein

Thank you, Operator. And good morning, everyone. And thank you for joining us. With me today are Philip Fayer, Chair and CEO and David Schwartz, CFO. As a reminder, this conference call is being recorded and webcast and is copyrighted property of Nuvei and rebroadcast of this information in whole or in part without written consent of Nuvei is prohibited. This morning Nuvei issued a press release announcing financial results for the three-month period and full year ended December 31st, 2021. The release as well as an accompanying presentation is available in the Investor Relations section of the company’s website, nuvei.com under Events and Presentations.

During this call, we may make certain forward-looking statements within the meaning of the applicable securities laws. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the business, or developments in Nuvei’s industry to differ materially from anticipated results, performance, achievements, and developments expressed or implied by such forward-looking statements. Information about these factors that could cause actual results to differ materially from anticipated results or performance can be found in Nuvei’s filings with the Canadian Securities Regulatory Authority and on the company’s website.

Our discussion today will include non-IFRS measures, including adjusted EBITDA, adjusted net income, adjusted net income per share, and free cash flow. Management believes non-IFRS results are useful in order to enhance our [Indiscernible] For FIRS, financial measures. Reconciliation of these measures to IFRS measures is available in our earnings release and MD&A. We’ll open up the call to your questions after our prepared remarks. With that, I’ll now turn the call over to Phil.

Philip Fayer

Thanks, Anthony, and thank you everyone for joining us today. We had an excellent fourth quarter delivering results ahead of our outlook and capping off an exceptional year in which we advanced our strategic initiatives while achieving an unprecedented number of milestones along the way. For the fourth quarter, total volume increased 127%, revenue increased 83%, and adjusted EBITDA increased 78% year-over-year. For the full year 2021, total volume increased 121%, revenue increased 93%, and adjusted EBITDA increased 95% year-over-year.

On an organic revenue basis, which excludes revenue from acquisitions completed in the trailing 12-month period increased 55% and 61% for the fourth quarter and full year respectively. Our net revenue retention rate was 146% for the 12-months ended December 31st, 2021. Our consistent revenue growth profile combined with our exceptional free cash flow generation and strong balance sheet is class leading in our opinion when comparing Nuvei to many other fintech companies. We’ve made tremendous progress transforming the company to a leading global payments platform. Most importantly, our tenant is large and growing and we saw so much opportunity ahead of us. To continue to accelerate our momentum, we’ve announced several promotions and leadership changes across our organization.

First, we’ve appointed Yuval Ziv the President of Nuvei, a newly created global [Indiscernible] worldwide product, sales, marketing, client engagement, and OE. We’ve also promoted Praful Morar, who joined the company in 2014 as Chief Strategy Officer to Nuvei’s Global Expansion Officer. Praful has moved to Singapore, and is responsible for driving Nuvei’s international growth in target markets across Asia-Pacific, the Middle East, and North America. Third, we’ve appointed a Netanel Kabala, a co-founder of Simplex, who joined through our acquisition of Simplex last September, to Chief Data and Analytics Officer, as we continue to grow our data led services. I also want to welcome all 75 of our new teammates who joined us in the fourth quarter from around the world. We’re excited to have you as part of the Nuvei family, which totaled 1368 at December 31, 2021.

We remain steadfast in our mission to make the world a local marketplace by growing our modern, scalable modular technology with our key growth pillars, namely expanding our geographic reach, growing with our existing customers, accelerate new client wins, and finally, exploring inorganic opportunities that drive further value to our customers. As you know, our focused verticals each have inherent growth, longevity, and a propensity to operate globally. Our technology and expanded geographic reach, is helping win customers in all our core verticals, which include regulated online gaming, social gaining, online retail, digital goods and services, financial services, travel, and now digital assets and cryptocurrencies. We’re excited about the progress we’re making across all verticals, and in our earnings supplement in press release today.

We are providing a one-time disclosure which includes showing revenue contribution, and growth by vertical for the full year 2021. While we have historically discussed concentration by vertical in terms of gross profit dollars, which continues to be no more than approximately 21% for any given vertical. Our additional disclosures provided today, focus on revenue to remain consistent across all of onetime disclosures. As you’ll be able to see Nuvei’s experiencing momentum across all verticals but we are especially pleased with the progress we’re making in our focus global verticals. At our core, we are a technology company where payment innovator driving real world solutions that make a material difference to our customers businesses, which crucial to understand is that our modern, scalable, modular technology stack addresses the needs of our customers with an unprecedented numbers solutions offer uniquely as modules.

[Indiscernible] that go far beyond acquiring our technology stack has been purposed built from the ground up by our nearly 500 software engineers and products experts supporting our exceptional growth. Having our own acquiring licenses in multiple jurisdictions, principal membership with the card schemes and our own processing platform allows us to dictate our own road map and is a primary reason we have been able to successfully accelerate our product innovations. In fact, we are one of the few truly global payment platforms today.

Available a la carte as modules, our platform offers our customers incredible flexibility as they look to simplify an efficient technology, consolidate global vendors, and streamline their back-office functions while achieving costs and operating synergies. While we intend to impact these modules and expect it to feature in detail at our upcoming Capital Markets Day, I thought it important to highlight a few key modules. The journey begins with a flexibility of our API solutions allowing our customers to connect to our platform for their global operations supporting in-app, online, and soon in-store customer engagements, or preferably, our customers can elect to use our local cashier simplifying global commerce and instantly offering our entire toolkit while the scoping [Indiscernible] PCI burden.

Once integrated, our clients can use our solutions as is appropriate for their business model, and this could include our advanced authentication tools to comply with enhanced customer authentication managed around the world available as plug-ins meaning that our authentication tools are available with — in conjunction with any third-party acquirer. Our global payment gateway, which [Indiscernible] directly with the card schemes, our local acquiring, now offered in 46 markets globally, we simplified onboarding and contracting. Our open banking and payments for faster SEPA and instance SEPA in Europe, faster payments in the U.K. and ACH, same-day ACH and RTP in the U.S. Our more than 530 alternative payment methods, including cryptocurrency acceptance.

Our instant payout solutions across multiple payment mediums. Our risk as-a-service enabling transaction scoring, mitigation and now full guarantee on both ACH and card acquiring, our debit and very soon prepaid card issuing, our advanced currency management solutions to help localized product offerings, our rich data reporting to enhance business intelligence, our extensive reconciliation tools to streamline back office functions across all regions, our on and off-branch solutions for cryptocurrencies, NFTs, and DeFi, supporting over a 109 different coins via 89 different fiat currencies, in addition to a long list of value-added capabilities that build deep modes with our customers. And while the list is long, I thought it worthwhile to highlight our native commerce platforms, which includes all key components that our customers require to operate globally.

Each individual module has its own independent addressable market, and that’s why you can’t simply compare acquiring only [Indiscernible] to Nuvei as our modules expand our TAM and differentiate Nuvei from additional lend legacy acquires. And remember, to enable all this functionality, customers will need multiple vendors per country, resulting in increased costs, complexity, inefficiencies, which would impact their flexibility and ultimately hinder their growth opportunities. Providing all these services is why we win. For example, combining risk as-a-service, acquiring and payouts, simplifies experience for both our customer and their customers, as we manage the complete risk-free process of pay-ins, regardless of payment medium.

Reconciliation, drive real-time payouts to our customer’s customer and net settle to our customer, eliminating back-office workloads, allowing our customers to focus on what’s important, growing their business. So, while each module can be consumed individually, combining them together creates an incredibly powerful offering to our customers, their customers, and Nuvei. We believe our approach to offering solutions as individual modules, provides greater flexibility and allows us to engage with customers based on their specific needs at the time of on-boarding and grow with them as their needs and requirements change. It’s a foundation to our learn and expand strategy, and what drives our net revenue retention rate, which I’ll highlight in a moment.

We’ve broken out processing revenue into acquiring and modular technology revenue, to help you appreciate the breadth of our technology in the relevant contribution to our growth trajectory. For the full-year 2021 acquiring represented approximately 62% of total revenue, an increase of 73% from the prior year, while modular technology revenue represented 38% of total revenue, increasing 138% from the prior year, nearly twice the rate of acquiring. Because of our modular technology and its significance to our success, you can see why comparing Nuvei to other acquirers is simply not accurate in our view. Most importantly, we’re not standing still as our pace of innovation is accelerating. At the same time, our technology is scalable.

In 2021, our transaction concludes 77% from 2020, breaking it down one level deeper. Credit card transactions increased 51%, debit card transactions increased 21%, and alternative payment methods increased 286%. Furthermore, we have ample capacity to continue processing significantly more going forward. And because our technology is fully proprietary, we customize our solutions to any customer vertical and geography. This flexibility is paramount as we continue scaling and growing our customer base around the world. The takeaway here is that Nuvei’s technology is really second to none in our opinion. Unlike other global payment providers, including IGN and Stripe, we believe customers prefer our flexibility in our performance and showing up in our new customer wins, which I’ll address momentarily.

I’ll now walk you through our growth pillars in greater detail to help you appreciate our focus, momentum. First, let’s talk about geographic expansion. Many of our customers may be expanding country to country, growing not only in one market, but in many markets around the world. As we enable more geographies, it allows our customers to seamlessly and immediately access those markets via their existing integration into Nuvei, and this is where we absolutely shine. We normalized customer experiences from market-to-market so they could focus on growing their business. And coupled with our single integration, as we enable more countries, our clients can activate them without any technical integration whatsoever. Today, we offer connectivity in over 200 markets, making sure our platform can support our clients everywhere they want to be.

Additionally, we now offer local acquiring in 46 markets with simplified on boarding, contracting, client services, and standardized reporting. As part of our geographic expansion strategy. We also continuously see payments, intuition, licenses, card association memberships, and acquiring licenses in order to better support our customers. We have obtained our visa license in both Hong Kong and Singapore. We continue to focus both in Asia and LATAM to expand ourselves, acquiring. As this occurs, it allows us to increase our capabilities to providing gateway or routing all maintenance to provide full stack end-to-end offering. This strategy and using with our technology is another key pillar to driving our impressive NRM.

Embedded in our geographic expansion is a change in regulatory framework around the world in certain key focus verticals, as you know, we believe we are in the very early days of online gaming and sports betting, not just in the United State, but also in Canada. And hopefully sooner Brazil. We are executing well in these markets and our momentum in the U.S. has been accelerating. In 2021, we launched our Global Payment business unit in North America and significantly enhanced our capabilities in LATAM with the acquisition of payment test. Today we have commercial teams across both regions and coupled with key product launches, we now support most of our modular offerings in both geographies, dramatically expanding our TAM for 2020. And naturally, we’re not stopping there.

Our mission is to make the world a local marketplace. And while we are focused on scaling in our current regions, we’re also excited about meaningfully expanding our presence in key Asian markets. For perspective, looking at our revenue by region, for the full year 2021, EMEA, North America, LATAM, and APAC, represented approximately 54%, 42%, 3%, and 1% of revenue respectively. And from a growth perspective, EMEA, North America, LATAM, and APAC all increased 123%, 64%, 112%, and 16% respectively. Our second growth pillar is growing with our customers and when you bring it all together, approximately 80% of our growth in 2021 came from capturing greater wallet share from our existing customers. And these are driven by change in consumer behavior, advancing regulatory frameworks, our customers own growth trajectory, our technology and our new geographies.

This is best reflected in our overall net revenue retention rate of a 146% for the 12 months ended December 31st 2021. What’s most interesting and compelling is that when you unpackage further, you’ll see that our global e-commerce direct channel had an NR of a 179%, which is a true testament to the success of our investments in this channel. Our global e-commerce direct channel is the largest in terms of revenue contribution and is growing the fastest. By contrast, our North American small business portfolio and our e-commerce reseller channels are slow for our growth. With our new geographic capabilities in North America and [Indiscernible], we feel the remainder of significant opportunity to cross-sell within our current customer base. And we’re starting to see this with some of our existing gaming customers who are entering the U.S. and Canadian markets, for example.

The next growth pillar is winning new customers. As you may recall, we have frequently spoken about being under distributed and we’ve since been accelerating our investments and expanding our direct commercial teams globally. We’ve done this because the complexity, the breadth of our technology, and the types of customers we are targeting, in addition to its global nature, simply requires a direct sales force. Our investments are yielding exceptional results with so much more to come. Our objective remains to be local to our customers around the world and remain focused on continually expanding our sales force in every region to make sure we have global coverage. We manage our commercial teams by having regionally, vertically focused sales teams are in-country, in time zone, and in-language supported by a team of local solutions engineers, integration specialists, and account managers.

This white glove service is crucial to building relationships with our customers, given the complexity and importance of the challenges we’re solving for them and the sophistication and capabilities of our leading technology. Looking back, we started when the commercial team was about 10 salespeople. We have now expanded to more than 100 at the end of 2021 with a target of multiplying again in the coming years, mostly as a result of our expanded TAM opportunities as I mentioned earlier. In 2020, new-in-year customers generated $42 million in revenue.

This cohort subsequently grew 2021 to more than $190 million. In 2021, Nuvei new customers represented an excess of $71 million, which represents 69% increase in new business compared to 2020. You can appreciate that the 2021 cohort is expected to significantly grow in 2022, and our momentum continues as we see exceptional depth in our pipeline. We are engaged with the who is who across all our key verticals and geographies. We are expecting a very strong performance in this area in 2022. Alongside our investment in direct sales is our increased investment in marketing. For perspective, we are increasing our marketing spend in 2022 by up to approximately $20 million compared to 2021. We expect this investment to yield greater brand awareness with the objective ensuring Nuvei is associated with other global providers.

The increased marketing spend is fully considered in our adjusted EBITDA outlook for the year. Remember, our land-and-expand strategy is also relevant to new sales and allows us to engage with customers around the flexibility of our modular technology offerings, which means Nuvei can build relationships with customers and grow with them accordingly. Turning to the acquisition strategy follows three strict criteria as we look at adding new geographies, new capabilities, and or scale to support our long-term growth. We completed four acquisitions in 2021 Base Commerce, Mazooma, Simplex, and Paymentez. And we’re pleased with how all these acquisitions are performing. What’s most exciting is that each one of these early-stage businesses strengthens our technology and sales proposition, bringing additional growth opportunities and capabilities to our platform for the long term.

For 2021, we reported revenues from these four acquisitions of approximately $73 million, representing approximately 10% of our revenue going forward, our exceptionally strong balance sheet and low leverage provides optionality and flexibility as we continue exploring future opportunities. With additional onetime disclosures today and the double-click into our growth pillars, you should have a much better understanding as to why we are unique when compared to others in this space and appreciate why we’re so excited about our future. We are also looking forward to sharing even more details with you at our upcoming Capital Markets Day later this month. This morning, we’re announcing that the Board has authorized a share repurchase program pursuant to which new vacant purchase, an open period in one or more transactions.

And at its discretion, up to approximately $6.6 million subordinate voting shares over the 12-month period, which represents approximately 10% of the public float. The NCIB does not obligate Nuvei to acquire specific dollar amount or number of shares and maybe extended, modified, or discontinued any time. Also, this morning, we are [Indiscernible] and long-term targets previously provided of total volume and revenue growth in excess of 30% annually in the medium term, and adjusted EBITDA margins greater than 50% over the longer term. Before turning it over to Dave, I want to briefly touch on the tragic events in the Ukraine. Our thoughts are with the innocent people of Ukraine as it relates to our business, we are, of course, compliant with all global sanctions and confirm that our exposure there is negligible. We’ve also announced that we will match any and all employee donations to any accredited charity supporting Ukraine, up to a total of $500,000 thousand.

Furthermore, I’ve extended our global HR team [Indiscernible] employees across neighboring countries ensure theirs and their family’s safety. Finally, I want to recognize all the [Indiscernible] and hard work of all of our employees who contribute to Nuvei’s success each and every day. Your commitment is invaluable and it’s a privilege to have you all as shareholders to our global L-tip program, which we introduced company-wide in November. We also recently implemented a policy that each time we beat our outlook, our employees receive an additional two half-days’ vacation. You guys are rockstars, I’m grateful for your dedication and contribution to our mutual success. In closing, I’ll reiterate how pleased I am with our results, and the progress we are making across the entire company. I love where we sit as a company today, I’ve never been more confident and optimistic about our future. With that, I’ll turn it over to Dave to discuss the financials and our financial outlook for 2022.

David Schwartz

Thanks, Phil and good morning, everyone. Let me start with what we believe to be the four key financial takeaways from our fourth quarter. As a result of the power of our platform, we grew revenue year-over-year by 83% and on an organic basis, this translates to revenue growth of 55%. A scalable operating model. For all the adjusted EBITDA margin of 43% and generated a free cash flow of $82 million. As you can see, we had another great quarter. Now, let me get into the details. In addition to the four key takeaways, the fourth-quarter represented some new milestones for Nuvei. Notably, it’s the first time that total volume exceeded $30 billion and revenue exceeded $200 million in a given quarter.

More specifically, total volume increased 127% to $31.5 billion and was above the top of our outlook range of between $25.5 billion to 26.5 billion. The variance versus our outlook is in part due to certain recent large wins in the government and charitable services sector, which also tend to have higher volume in Q4. Fourth quarter, revenue increased by 83% to $212 million compared to our previously provided outlook range of between $204-$210 million. Organic revenue, which excludes revenue attributable to acquired businesses for a period of 12 months following our acquisition and excluding revenue attributable to divested businesses, was a $179 million, representing 85% of our revenue and which grew by 55%. Previously, we presented different adjusted revenue, non-IFRS measures.

As we continue to execute on our acquisition strategy, and presents more useful information about comparable growth in the period. Take rate in the fourth quarter was lower due to high ticket transactions such as property tax payments and charitable donations relating to the new client wins, I just mentioned. In many cases, especially for property taxes, the fees charged are typically fixed transaction fees. Therefore, these transactions [Indiscernible] gross profit dollars through our land-and-expand approach. Gross margin in the fourth quarter was 76.8% compared to 79.7% in the fourth quarter of 2020. The change in gross margin is primarily as a result of the inclusion of certain acquisitions which have a higher associated cost of revenue. In terms of gross profit for the quarter, we generated a $163 million which represents more than a $70 million increase as compared to the prior year period.

Selling, general, and administrative expenses increased by $72 million as a result of both organic and inorganic growth. The largest contributor to the increase in SG&A was share-based payments, which increased by $30 million primarily due to awards to employees who joined Nuvei as part of the acquisitions completed during the third quarter, and other employee grants made in the third and fourth quarters, including the annual L-tip grant for our entire employee base, which occurred in the fourth quarter. Employee compensation other than share-based payments increased by $21 million.

This is as a result of the investments we’re making in the business, including distribution and technology as well as increased headcount of approximately 280 team members and associated costs relating to the four acquisitions completed in the year. Commission expense increased by $10 million primarily due to the acquisition of Base Commerce as well as the increase in commission-based volume and revenue from organic growth. Adjusted EBITDA increased by 78% in the fourth quarter to $91.5 million as compared to the outlook range we’ve previously provided of between $86 and $90 million. Adjusted EBITDA margin was 43% in the quarter, compared to 44% in the prior-year period, and towards the top end of the outlook range. Net finance costs was $4.5 million compared to just over $1million in last year’s fourth quarter.

And that’s mainly due to increased borrowing costs related to the acquisitions we made in 2021. Income tax expense in the quarter was $7.5 million, which represented an effective tax rate of approximately 38%. The reason for the higher effective tax rate is primarily due to an increase in non-deductible share-based compensation expense. As the share-based expense is expected to continue, the effective tax rate will also continue at this level and everything else being equal. Net income for the quarter was $12.3 million or $0.07 per diluted share compared to $22.6 million or $0.16 per share in the fourth quarter of 2020. As I mentioned earlier, this year’s fourth quarter included a $30 million increase in share-based expense, which represented approximately $0.20 per diluted share. Adjusted net income [Indiscernible] and share in the fourth quarter of 2020. I will now turn to our full-year results.

Total volume increased a 121% to $95.6 billion and $43.2 billion in 2020, with e-commerce volume representing 86%. Revenue for the year increased 93% to $725 million dollars and $376 million in 2020. Gross margin was 79.6% compared to 81.6% in 2020. Similar to the fourth quarter, the change is primarily as a result of the inclusion of certain acquisitions which have a higher associated cost of revenue. SG&A expenses increased by $196 million, as a result of both organic and inorganic growth. Of that, commission expense increased by $58 million. Employee compensation other than share-based payments increased by $52 million, and share-based payments increased by almost $43 million. Adjusted EBITDA for the year increased 95% of $317 million, up from $163 million dollars in the prior year.

Adjusted EBITDA margin was 43.8%, which compares to 43.3% to 2020. Net income for the year was a $107 million or $0.71 per diluted share compared to a net loss of a $104 million or a $1.8 per share in 2020. Adjusted net income was $249 million or a $1.69 per diluted share compared to $89 million or $0.85 per diluted share in 2020. Looking at our balance sheet and liquidity for the year, our cash position and cash generation remained strong. Cash flow from operating activities for the full year was $267 million compared to $95 million for the comparable prior period. Free cash flow, which we define as adjusted EBITDA, less capital expenditures, increased to 290 million for fiscal year 2021 and representing free cash-flow conversion of over 90%. As at December 31, 2021, we had cash of nearly $750 million, which includes the net proceeds of $411 million raised from our NASDAQ listing in the fourth quarter.

In addition, we had turned debt of $500 million, resulting in a net cash position of almost $250 million, with access to an additional 385 million available under our revolving credit facility. In addition, our leverage remains low. I will now discuss our financial outlook for the first quarter in full year 2022 and refer you to our forward-looking information disclosure in our press release and MD&A. For the first quarter, we expect total volume of between $28 and $29 billion dollars. Revenue of between $208 and $214 million and adjusted EBITDA of between $82 and $85 million. For the full year 2022, we expect total volume of between $127and $132 billion dollars revenue of between $940 and $980 million dollars and adjusted EBITDA of between $407 and $425 million.

The outlook, specifically the adjusted EBITDA, reflects our strategy to continue to invest in our business such as in distribution, marketing, innovation, and technology. Historically, our marketing spend has been nominal. Still mentioned for 2022, in addition to the investments we are making in the marketing team, we’ve also planned to significantly increase our advertising spend to increase brand awareness and drive growth. We’re very pleased with our Q4 and full-year 2021 results and are excited about 2022. We’re now happy to answer your questions. Operator, please open the lines for Q&A.

Question-and-Answer Session

Operator

Thank you. I will indicate your line is in the question queue. [Operator Instructions] And the interest of time we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of George Mihalos with Cowen and Company. Please proceed with your question.

George Mihalos

Hey, guys, good morning, congrats on the results, the outlook and I’m not sure there’s anything left to complain about in the disclosures. I think you’ve covered more than everything anyone could have imagined. I guess, first question for me, guys, if we look at the guide for ’22 a couple of macro things to sort of think about. I’m assuming FX is working against — now I know you usually don’t call that up, but I’m just curious, how much of a negative impact is embedded in the guide for the strengthening USD. And then just a point of clarification Phil. I understand you don’t have direct exposure to some of these Ukraine and Russia and the like, but I’m just curious, could there be any sort of fall through for some of the partner platforms that you service in any sort of slowdown there that they might give you some pause? Thank you.

Philip Fayer

Thanks George. I’ll take the second question. I’ll let — well go-ahead Dave.

David Schwartz

Hey George. I’ll take the first one, I guess Phil will take the second as he was just saying. So, from an FX perspective, as you probably know, the largest single currency we deal with is the U.S. dollar, the Euro would probably be the second largest that we deal with. We’re obviously operating an environment that has some volatility and so it’s difficult to forecast. So, for the most part, we’ve kept it relatively fly. And what I’d say is, in recent history, the FX impact has been pretty minor on our results. So, like I said, probably we are in U.S. dollars anyway, so that impacts you being muted because of that. I’ll let Phil answer the next question, the second part.

Philip Fayer

Thanks Dave and George for clarification. So, we don’t have any merchants that operate in Russia and Ukraine. Naturally, there are our customers that were accepting transaction from Russia and Ukraine. We have implemented the sanctions as they were developing and certainly this week, Visa MasterCard has seized accepting transactions across the board. It was a very small and negligible amount of volume from our end. In terms of platforms when we end up looking around it. And we included this in fact, ultimately in the outlook for 2022. We found that also to be fairly negligible.

George Mihalos

Okay. That’s helpful. Just a quick follow-up. Phil, if you look at the growth you’ve seen in the modular technology and the success you are having there, I’m just curious if you could talk a little bit about the pipeline, how customer starts with you on the modular side and then you are able to cross-sell the acquiring into them. What does that pipeline look like? And typically, if there is — if you can say typically, how long does it take to get that cross-sell into new customers? Thanks, guys.

Philip Fayer

Thanks, George. Great question. We always start with the ethos as we want to help our customers connect with their customers. And whichever modular is right for their business, it’s a win for us. So, for us its ultimate flexibility of how customers engage and utilize our platform. Sometimes it’s restricted on one particular item, but that item allows you to grow. For example, one of our large social gaming customers they started with one single alternative payment methods and now expanded multiple. So, the expansion is not just necessarily to moving from technology to acquiring, it’s really what’s right for their business and how do we incorporate the customers’ needs from a geographic perspective and from an overall market perspective into our product roadmap. So, our team is tasked actually with building relationships, understanding what their needs are, we do a great job of staying close to the customer and embed them really within our roadmap. And that is what’s driving the growth from the business, because roughly 80% of our growth last year came from existing customers.

George Mihalos

Thank you, congrats again.

David Schwartz

Thanks, George.

Operator

You. Our next question comes from the line of Will Nance with Goldman Sachs. Please proceed with your question.

Will Nance

Hey guys. Good morning and thank you for all the additional disclosures, they were really great and I know a lot of work went into those. I wanted to ask question on some of the near-term puts and takes. I know and I guess we could see from the new disclosures that there is a diesel exposure on the crypto currency side. Just wondering what you’re seeing from an activity level perspective and whether that’s impacting any of the near-term numbers?

Philip Fayer

Thanks, Will. On the crypto side, we’ve taken them to consideration. So naturally, Simplex is directly tied because they do on — an off ramp, so they are directly tied to the price of crypto so certainly, we have taken that into consideration. From an overall perspective, what we found in the crypto market is because they utilize multiple solutions stacks across-the-board from us. We feel that this year will be a continuous trend of last year as you look at our portfolio, we have predominantly services now in Europe, we’re looking at expanding that into North Africa and LATAM. So those will offset any of the headwinds that we would see in Europe.

Will Nance

Got it. That’s helpful, appreciate it. And then just on the Simplex business, any color on just the thought process are plans on rolling that out to other verticals outside of crypto and what the road-maps on the product looks like?

Philip Fayer

Yeah, we have really exciting road-map around Simplex. So, it’s not just rolling it out to other verticals, it’s actually looking at infrastructure, custodial, looking at pivoting more with a greater focus on NFV platforms, so there is an incredible amount of opportunity with Simplex within its own current vertical focus. But certainly, from a Nuvei standpoint, we are using that capability from a transaction guaranteed perspective, and that is planned for this year.

Will Nance

Thank you for taking my questions, nice job today.

Philip Fayer

Thanks, Will.

Operator

Thank you, our next question comes from the line of Sanjay Sakhrani with KBW. Please proceed with your question.

Sanjay Sakhrani

Thanks. Good morning, and I appreciate all the disclosure as well. I’ve got a bunch of questions, but let me focus on one related to earnings and one on the disclosures, hence maybe summarizing some of the ones that were asked before. Just in terms of the outlook for 2022, can you remind us, David, maybe how much of the acquisitions contribute to the growth rate. And then Bill, you indicated you were applying some of the market pressures out there from a macro standpoint in crypto as well. Can you just maybe just go through sort of the macro assumption embedded in your guidance. Thanks.

David Schwartz

Hey, Sanjay, it’s David. So, from an acquisition perspective, I guess what I’d point you to as you’ll see in our financials, and I will give you a bit of history in then I’ll talk a bit about kind of the outlook which is more your question. But on a historical basis, the acquisitions represent until about 10% of our revenue for the full-year of ’21 and about 13% for Q4. So, on a go-forward basis, for the most part, Mazooma and payments as are still kind of early stage in terms of the size of revenue they contribute. And you’ll see that basis larger, but a more steady kind of business. Phil just alluded to fit on the Simplex side, that’s the real question before. That’s where it’s a little bit more. Let’s say, volatile and difficult to forecast as we look forward just because of the sector that Simplex primarily services today. So, we’ve taken that into consideration in our outlook, but it’s certainly part of the growth that we see coming forward.

Sanjay Sakhrani

Anything more on the macro? You guys are assuming crypto is going to be weak. Anything else from a macro perspective inside that? And the share buyback, are you guys assuming you are going to use it?

Philip Fayer

Lots of questions there, Sanjay, but let me —

Sanjay Sakhrani

Sorry. I told you I have a lot of them.

Philip Fayer

Yeah. So, what we assumed is, and Dave highlighted, we assumed a slower year for Simplex in 2022. Certainly, Simplex moves fast, right? As markets change and Simplex moves very quickly as well. On the crypto portfolio for us, we’ve assumed they’re relatively flat crypto this year, predominantly as slowdowns are offset by more market expansions, which we’re executing on now so we feel really good about where we sit. The other element to highlight is we’re pivoting to and there’s fairly good momentum around not just quick though, but enhancing our position in NFTs. And we have been announcing some of the early-stage wins that we’ve been on boarding and we’re actually really excited about what that’s going to drive for. From our perspective, we pulled the share. We really like what we see in terms of consumption. It’s not just acquiring keep in mind, it could be payouts. Mazooma is a really good product for any digital asset purchase for bank-to-bank payments in North America, which we’re rolling out now as well. We feel really good about the solution Sonic, and ultimately while that will drive forward for us in 2022.

Sanjay Sakhrani

Okay. Great. I’ll leave it to the rest to ask others. Thanks.

Philip Fayer

Thanks, Sanjay.

Operator

Our next question comes from the line of Jason Kupferberg with Bank of America, please proceed with your question.

Jason Kupferberg

Hey, thanks, guys. Maybe just to build on Sanjay’s question, can you just clarify how much of the 30% to 35% revenue growth in 2022 is organic and then can you just talk about margin cadence for the year? I think the Q1 guide puts you right at around 40% at the midpoint full-year is 43. So just talk about the drivers of the ramp I don’t know if it’s just some of the expense timing and then maybe if you can quantify some of the year-over-year increase in the other spend categories. I know you gave the 20 million on the marketing side. Thank you.

Philip Fayer

The 30% to 35% is organic. If you take into consideration the slowdown of Simplex, so is purely organic. On the margin cadence, ultimately, the largest increase in expenditure is marketing its front-loaded as you guys could probably see in the first couple of quarters and old expanded from that, we have lots of interesting opportunities to build re-generations and build brand awareness from our organization, our marketing spend was very light compared to our peers. So, we are enhancing that and our objectives to make sure that as hopes look at their global options from payment enablement that just consider audience and strive fail to consider Nuvei. So, it is a journey, it’s starting now, it is probably a little bit late from our end, but we’re really excited about — from a positioning perspective to the capabilities that we’ve on-boarded would talent and others helping us build out our marketing strategy for ’22 and beyond.

Jason Kupferberg

Okay, that’s helpful. And then I just wanted ask a follow-up on yield. I know you called out some of the mix factors, the property taxes, the charity piece. I mean, you came in I think around 67 [Indiscernible] in Q4. The guide for ’22, I think implies around mid-70’s, call it at the midpoint so, what would drive that expansion? I guess there must be some other mix factors or anything on pricing, apples-to-apples pricing in any parts of your customer base worth calling out?

Philip Fayer

No, I think ultimately, we’re not looking at the yield factor tax, property tax, and charitable giving are typically Q1 and Q4 events, so it is very seasonal. And they’re large tickets and they carry a fixed transaction fees. So, they’ll impact to take rate. And that is why we’ve always stayed away from take rate. [Indiscernible] said we’re at scale platform, every incremental gross profit dollar falls to the bottom line. And most certainly we wouldn’t reject customers if opportunities presented themselves. So, from our standpoint, naturally as then volume shifts down because of the seasonality, our take rate will go back up. In terms of areas of opportunity for us, we think LATAM is a higher take rate market. We certainly are excited about our expansion in the U.S. We’re excited about the momentum that we’re seeing across the U.S. We feel very comfortable with the outlook on the take rate.

Jason Kupferberg

Alright great, and thanks for those new disclosures, appreciate it.

Philip Fayer

Thanks, Jason.

Operator

Thank you. Our next question comes from the line of Bob Napoli with William Blair. Please proceed with your questions.

Bob Napoli

Thank you. Good morning, David and Phil. And again, thank you for those disclosures. They’re super, super helpful.

Philip Fayer

Pleasure.

Bob Napoli

What I guess part is in the product pipeline so what are the most important areas of technology development that you’ve had over the past 12 months organically and is in the pipeline or you are focused on in ’22 and ’23?

Philip Fayer

Sure. I’d urge you guys to go back and look at the press releases because they’ve been accelerating from our capabilities and what we rolling out, I would call out naturally are CIF up payments faster SEPA, U.K. instant payments. And our bank payments with Mazooma ACH with ACH guarantee. But in combination that we’ve also dramatically expanded the APM reached that we have some very excited about what’s happened there. I think the other elements for us, payouts in North America and we’re seeing some wonderful traction across the board there we have now launched payouts and Canada as well. So, we’re normalizing our capabilities around the world and certainly going forward for us, a company that it’s not limited. But ultimately, we’d like the ramp, our card issuing business.

We are highly focused on our global platform capability to expand our marketplace reach, and our third lever for us is at the end of this year staying source all processing around the world but specific North America, which we saw [Indiscernible]. So, those would be some of the big rocks but at capital markets day, we’re going to unpack some of our focuses and the rationale behind them. So, stay tuned for a few weeks.

Bob Napoli

Thank you. And then a follow-up I guess on the bank-to-bank or account to account payments, opportunities that you see there? Investments you’re making in account to account or in open banking if you would?

Philip Fayer

Yeah. We’re seeing wonderful momentum not just in Europe but also in North America. So, we actually think when you end up coming back to a payment page, be it from card or bank-to-bank payments with recognition of your bank with a one quick checkout is incredibly powerful in acquire. It is a value-added solution for certain verticals as well, where they have a higher propensity decline rate, or where credit card transactions are considered quasi cash, for example, like in crypto or digital asset. And for us, the embedded solution is gaining momentum. So very, very excited about what we’re seeing in North America as well as in Europe as bank-to-bank payments. And open banking are becoming some of the norm with the expectation of capturing between 5% and 10% of the wallet share.

What’s fascinating is that we haven’t seen the impact on card volume. But we suspect that other alternate forms of payments are being replaced by bank-to-bank payments. So, it is a must-have from a wallet share perspective. And we think making it easy from an acceptance from our merchants for them to be fully neutral, meaning they accept the credit card and debit card, any form of alternative payment or open banking payment for them is reconciled and settled in the same manner it’s critical. So, we’re at the early innings of it, but our momentum that we’re seeing around the world is very exciting.

Bob Napoli

Great. Thank you. Appreciate it.

Philip Fayer

Thanks, Bob.

Operator

Our next question comes from the line of Timothy Chiodo with Credit Suisse, please proceed with your question.

Timothy Chiodo

Great. Thanks. Good morning and thanks for taking the question. Global e-comm Direct, clearly that is the largest and the fastest-growing portion of the business. Really impressive growth. Wanted to talk about the direct sales force growth. I know you disclosed total employee growth, so the headcount growth year-over-year, which was very strong, is it safe to say that the sales force growth was faster than that? And in the past, you’ve talked about how you benchmark your sales headcount versus peers. Where would you say you are relative to peers at this point? Are you getting closer? Is there still a lot of hiring at?

Philip Fayer

Started last part, we still we still think there’s a lot of hiring ahead. So, we if you remember Tim, since IPO, we always talked about being under distributed. I want to congratulate UV and multi, and the overall team of how we’ve built out our reach across Europe. My last six months, we’ve brought in our full team in North Africa and all working verticals and now with the qualms held through Paymentez as we’re building out our team in LATAM. So, we want to always be close to our customers in verticals, in regions and in time zones. Today, we have roughly a 100 folks on the direct sales organist — part of the business. We think it can continue growing by multiple when you end up looking at LATAM in particular, obviously what we’re doing APAC is early crappy moving out to Singapore to help accelerate with licenses and local capabilities across region is going to be net new for us and then we’ll pivot to Mina and Africa.

So, a lot left to do and ultimately that’s why we always say run the ground floor but the effectiveness of the direct sales force because of the complexity of our technology, has just been really the driver for our momentum, right? So, we’re scaling our technology, we’re able to show our whereas to more merchants in our verticals of operation. And that is driving a significant amount of our growth, and we think we’re right at the early ending of that as well.

Timothy Chiodo

Excellent. Thank you so much for that, Phil.

Philip Fayer

Thanks, Tim.

Operator

Thank you. Our next question comes from the line of Paul Treiber with RBC Capital Markets. Please proceed with your question.

Paul Treiber

Thanks so much and good morning. You commented on crypto just the trends you’ve seen there more recently, generally speaking, can you speak to the linearity of growth across all your verticals that you’ve seen through Q4 and even Q1 to date?

Philip Fayer

I don’t have it by quarter, but ultimately, I — what I would urge you guys is to look at the top line because there’s — the disclosure that we have in the supplement, we think all of our verticals and there is some seasonality that you end up coming back to them but all of them are seeing momentum. And ultimately, if you want to run down our performance and social gains or if you look at the performance in regulated gaming, our performance in financial services, all of them are seeing really, really strong momentum and all of them have been seen momentum within our new net wins as well. So, if you want to talk about crypto, we are now engaged with many of the top 10 exchanges. We’re now engaged with many of the top NFC platforms.

Our solution stack goes from transaction guarantee in AML KYC to open banking to real-time payments and payouts to acquiring and all forms of alternative payment methods which we think actually if you look at open banking and the alternative payment methods is probably more conducive for the industry because they don’t have the higher credit card fee. So overall, I wouldn’t pinpoint one particular month, but we’re really excited with the momentum that we’ve seen. In terms of overall what we saw in January was certainly an impact in Canada from Omicron and that was taken into consideration. In fact, that was available in December as well unfortunately in some parts. February was a good recovery. And so far for March, we like what we see so very good momentum in the first quarter.

Paul Treiber

Thanks. And related to that, like in terms of the you know bigger picture, in terms of customer demand for digital e-commerce versus card-present. When you look at your sales pipeline, coming out of COVID, are you seeing continued demand across or the digital channel, but then also building for card-present mean, how do you sort of add these are engaged at the momentum in both those categories?

Philip Fayer

Yes, we’re very happy with the performance of our card-present business, but there is not necessarily a huge overlap. As we start rolling out our omni solutions, especially in North America where that single integration will be available across all channels. There’ll be a convergence between the sales efforts for retail and online but our digital verticals are predominantly digital. So that makes sense Paul, right? These are digital, digital first and global operations. When you end up looking at the performance of them, their growth in different geographies their requirements to solidify solution stack, we’re right at the beginning of it and our demand is very high. So really like what we see. In fact, I mentioned in my prepared remarks, our pipeline has never been deeper, and the engagements that we’re seeing on the digital side are by far a multiple of where they were in the previous years, so we’re starting off the year very strong.

Paul Treiber

Okay. Thank you, I’ll pass the line.

Operator

Thank you, our next question comes from the line of John Davis with Raymond James, please proceed with your question.

Matt Shafer

Hey guys, this is Matt on for JD. Thanks for taking my question and thank you for all the disclosure. Just wanted to ask about NRM for a moment. 2020 was definitely impacted COVID and 2021 was likely a little bit higher, and above the normal. So just what are you expecting for NRM in 2022? Is there any reason year-over-year growth from the previous year cohorts can’t be the same in 2022, I think it was about 360% in 2021?

Philip Fayer

Yeah. We — we’re not giving an outlook on the NRR. What we did want to kind of show for everyone is where the business was growing. Certainly, when you are looking for a total organization, 146% this year and in our NRR but when you end up zooming into the e-commerce which was really the point that our e-commerce business had an NRR almost 180%. And that NRR when you end up looking at e-commerce as we expand our geographies and to LATAM, what we’re doing right now in North Africa and our objectives across Asia we actually think we can continue maintaining that in our global e-commerce business. From a small business perspective, probably more market-driven, certainly an impact, both in 2020 negatively and then 2021 from a COVID recovery perspective.

I would look at those two that way but from a global e-comm direct, there is not just geography and actually to add to it, there’s also capability. As we launched more solutions, as we monetize more of our technology stacks, certainly that helps growing the acquiring and other value-added services that we do with the merchants. We feel very good with what we’re doing on the digital side. Certainly, there could be an impact on the small business side post COVID, but we’re pretty bullish on what we see in the small business for 2022.

David Schwartz

Hey, Matt —

Matt Shafer

Okay.

David Schwartz

It’s David. I would just add something to that as well. You may recall in our — when we did our U.S. IPO, NRR that was a 127% for the first 6 months of the year. And so, you can see it, and accelerating at the full-year at 246%. So there’s been an acceleration even within 2021. And think about the first six months of 2020, that base year period obviously, was the most COVID impact, and so still an acceleration in the latter half of 2021.

Matt Shafer

Okay. Thank you. And then just as a follow-up, social gaming was very, very impressive. Can you just talk about growth drivers there and maybe if it’s a geographic mix, larger enterprise customers. And just how much, if any, part of that growth do you think was pandemic or lockdown related?

Philip Fayer

I think social gaming hasn’t necessarily benefited as much in our portfolio from a lockdown perspective, because the markets that we’re operating in have remained relatively open. From a technology perspective, it’s really across the board. It’s more of a focus and something that you guys appreciate. We’re investing the same dollars in all our core verticals around the world. And we’re all — we think that there’s many opportunities across all key verticals, not just gaming and other that we talked about today, we’re seeing momentum across all key verticals. Certainly, social gaming has been pretty exciting growth for last year with lots of momentum. But the same is true in digital goods. And online retailers well for us. So, we’re happy with the investment that we’re making.

They will all come in at different times. So certain wins will come at different times. For example, the Hub Group has been something that we’re really pleased with a win. Large U.K. retail online retailer that has gone live now on the retail side, these things take conversations of sometimes three months, but sometimes years. So same investments across our board, same horsepower they’re providing across the board. Some will come earlier, somewhat come later, but these will be investments that we’re making all co-verticals.

Matt Shafer

Great. Thanks again.

Philip Fayer

Thank you.

Operator

Thank you. Our next question comes from the line of Andrew Bauch with SMBC Nikko Securities. Please proceed with your question.

Andrew Bauch

Hey, guys. Congratulations on pretty solid set of results here and thanks for all the disclosure. Just wanted to touch on the regulated online gaming piece. Obviously, you continue to announce a bunch of new licenses and new partnerships in this area. So could you help us get a sense how much of the performance in 2021 was from U.S. efforts? And when you do secure these new licenses, is it as simple as flipping a switch to translate to revenue or is there more integration timeline that needs to play supply out?

Philip Fayer

Gaming revenue in the United State was negligible in 2021. We’re starting to see momentum in Q4, pretty excited about what that’s going to shape up for this year. But again, it all looks too small. We’ve always said it was more of a 2023 opportunity. As licenses are pay-to-play mean that you have to have the infrastructure and licenses to be able to operate in those particular markets. And thereafter each state that emerging goes live has an onboarding process that we need to follow. So not just because your licensed you can flick the switch, it’s a new implementation on a per state basis.

Andrew Bauch

Got it. And then I wanted to touch up on the Nuvei’s approach around e-commerce platforms, specifically the Wix partnership. And this is a really nice headline to a big tech partner. Could you help us understand how this all came together in the differentiation that you have that helped you win that business?

Philip Fayer

Yeah. I highlighted a lot of our modules, right? So, can help you appreciate our differentiation. We’re adamant that there is no e-commerce platform like Nuvei in the market today. And our flexibility in what we offered to platforms we think is unparalleled. Naturally, the new endeavor, am super proud of the team for on-boarding wakes. We think there’s a lot more to do with our capabilities in development with Wix. But Wix is one of many that we are engaged with across our digital life service verticals. So very, very excited about Wix, it’s our first win. Why we want it, I think there was a region that we had specific requirement that we’re able to adhere to. Very thankful for Wix for that partnership and we certainly think we can grow better around the world.

Andrew Bauch

Great and congratulations again.

Philip Fayer

Thank you.

Operator

Ladies and gentlemen, that concludes our question-and-answer session. I will turn the floor back to management for any final comments.

Philip Fayer

Yeah. Thank you everybody for joining today. I really appreciate everyone’s feedback over the past few months, that drove us to the onetime disclosure that you guys see now. We really are thankful for our partnership. Thanks everyone for dialing in and looking forward to seeing everyone very soon.

Operator

Thank you. This concludes today’s conference call. You may disconnect your lines at this time. Thank you for your participation.

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