Nuvei Corp

TSX:NVEI

Earnings Call Analysis

Company Reports Strong Growth, Targets Expansion

The company closed its fourth quarter with impressive results, boasting a 53% increase in total volume, 46% rise in revenue, and a 40% boost in adjusted EBITDA. Notably, revenue growth reached 11% on a pro forma basis, and adjusted EBITDA margins widened by 100 basis points to 37.3%. Debt reduction remains a priority, with leverage down to 2.5x. Investors can also expect a $0.10 per share dividend. Looking ahead, robust revenue growth of 26-29% is anticipated, particularly driven by a full quarter of Paya in 2024. This aligns with the company's medium-term goal of 15-20% growth by Q4. The company is on the verge of significant scaling, paving the way for potential mergers and acquisitions and further debt leverage improvements.

Nuvei Caps Strong Financial Year with Solid Q4 Growth

Nuvei Corporation concluded the year with robust financial results. In Q4, the company witnessed considerable gains across key metrics: total volume soared by 53%, revenue grew by 46%, and adjusted EBITDA increased by 40%, marking substantial progress near the high-end of Nuvei's expected financial range. The 11% pro forma revenue uptick aligns with the company's projections. Importantly, the organic total volume, adjusted for constant currency differences, rose by 19% owing to Nuvei's commanding growth initiatives and market positions.

Operational Efficiency and Strategic Prioritization

Nuvei's adjusted EBITDA margin experienced sequential growth, enhancing by 100 basis points to achieve 37.3%, signifying the firm's continual pursuit of operational efficiency. An astute focus on capital allocation led Nuvei to emphasize debt repayment, successfully reducing leverage to 2.5 times as of year-end 2023.

Shareholder Returns through Dividends and Repurchases

Reflecting a commitment to shareholder returns, Nuvei's board authorized a cash dividend payment of $0.10 per share. This dividend is part of a broader framework of capital return, where Nuvei restored $251 million to its shareholders through a mix of buybacks and dividends since 2022, highlighting their shareholder-friendly approach.

Future-Focused: Customer Growth, Innovation, and Expansion

Looking ahead, Nuvei is poised for continued advancement. The forthcoming year is anticipated to channel Nuvei's dedication to customer growth, product innovation, and geographical market expansion. By capitalizing on strategic priorities, Nuvei stands ready to further evolve its product offerings and solidify its market presence globally.

Navigating Past and Future Milestones

Nuvei approaches the fiscal year conscious of previous milestones and focused on upcoming opportunities. Strategic decisions are influenced by the World Cup event's contribution to Global Commerce in the last year and the phasing out of a customer. As Nuvei prepares for new customer onboarding and seeks wallet share expansion, careful attention is given to the timing of these initiatives.

Momentum and Transformative Outlook

Early signs of another transformative year for Nuvei are emerging. Positive indications are evident from the burgeoning dynamics in January and February, with heightened engagement from both new and existing customers setting the stage for the consecutive year. Nuvei envisions organic growth to incrementally build throughout the year, and anticipates exiting the final quarter on track to meet their stated midterm growth goals.

Earnings Call Transcript 2023-Q4

[Operator]

Good morning, ladies and gentlemen, and thank you for standing by.

Welcome to Nuvei Corporation's Fourth Quarter 2023 Earnings Call. As a reminder, this conference call is being recorded. I'll now turn the conference call over to Chris Mammone, Head of IR.

Please go ahead, Mr. Mammone.

[Christopher Mammone, executive]

Thank you, operator, and thanks to everyone for joining us this morning. With us 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. Rebroadcast of this information in whole or in part without written consent of Nuvei is prohibited.

Prior to this call, we published a Shareholder Letter for the fourth quarter and full year. We encourage everyone to read it if you haven't done so already. The Shareholder Letter contains commentary that otherwise would have been included during our prepared remarks to this conference call, and allows us to spend more time on today's call answering questions.

We would also encourage investors that the Shareholder Letter be read in conjunction with our press release, MD&A and consolidated financial statements, all of which are available in the Events and Financial Information sections on our Investor Relations website, investors.nuvei.com.

During this call, we may make certain forward-looking statements within the meaning of the applicable securities laws. Such forward-looking statements involve 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 discussions today will include non-IFRS measures, including, but not limited to, adjusted EBITDA, adjusted net income and adjusted net income per share. Management believes non-IFRS results are useful in order to enhance our understanding in our ongoing performance, but they are not a supplement to and should not be considered in isolation from or a substitute for IFRS financial matters. Reconciliation of these measures to IFRS measures is available in our earnings release and MD&A.

We will just have some brief prepared remarks here before opening up the call to your questions. In order to get to as many people in queue within the allotted Q&A time, we ask that you limit yourself to one question and one follow-up.

With that, I would like to now turn the call over to Phil.

[Philip Fayer, executive]

Thank you, Chris, and thank you all for joining us this morning. As you've now seen, we've reported strong fourth quarter and full year results near the high end of our range for revenue and above the range we provided for total volume, revenue at constant currency and adjusted EBITDA.

Highlights for the quarter include, strong growth across the board with total volume increasing 53%, revenue increasing 46% and adjusted EBITDA increasing 40%.

On a pro forma basis, fourth quarter revenue growth was 11% and in line with our expectations. Our leadership and challenger positions across our end markets drove 19% growth in organic total volume at constant currency.

Adjusted EBITDA margins expanded sequentially by 100 basis points to 37.3% as we are driving efficiencies throughout our business. And on capital allocation, we continue to prioritize debt repayment, deleveraging to 2.5x as at December 31, 2023.

Our Board has authorized and declared a cash dividend of $0.10 per share. Since 2022, we have returned $251 million to shareholders in the form repurchases and dividends.

This year is off to an exciting start as we are executing on our strategic priorities. We're looking forward to another year of growing with our customers, driving product innovation and expanding our geographic footprint, all the while staying disciplined on cost management.

This concludes my prepared remarks, and we're now ready to take your questions.

[Operator]

[Operator Instructions] The first question we have is from Will Nance of Goldman Sachs.

[William Nance, analyst]

Phil, maybe just a -- kind of, question on some of the moving pieces in the segments. I think the SMB business had a nice improvement. I think in the Shareholder Letter you mentioned finding ways to kind of improve the performance. So just any color on some of the opportunities that you guys have uncovered more recently there?

And then, I thought it was interesting to see kind of like the heritage Paya business growing at high teens. It's a nice acceleration from what it had done historically. So just any color on what's been driving that?

And then maybe any color on the Till Payments? I think you mentioned that was kind of geared towards international expansion on the ISV business. Maybe just thoughts on the strategy there?

[Philip Fayer, executive]

Thanks, Will. Great questions. As we stated, we're investing in all of our channels. We're really excited about what they provide to us. If we double click, Global Commerce grew volume by 30 plus percent, which we continuously believe that is category leading.

We've made investments and executed our thesis around our B2B, government and ISV channels. If we look back that went from 13%, 16%, 19%. And we do believe our SMB is going to remain relatively flat and certainly driven the performance of our business with the continuous momentum that we see in our Global Commerce and B2B, ISV channels.

With respect to Till, very excited to welcome the Till team to Nuvei. A real small, but killer business with very exciting capabilities with respect to engaging with ISVs and ISV partners around the world. Fantastic onboarding tools for seamless and instant merchant onboarding, great partner tools and APIs for us to accelerate our ISV strategy. It is growth accretive in our B2B, gov and ISV channel and certainly drives a footprint for us to accelerate ISV engagements around the world.

What's interesting about Till, while small on acquisition, big on the capability, and certainly will be very interesting for us as a platform for continued growth. They have relevance in Australia and New Zealand, but also in the U.S., just about 50-50 with respect to where they're focused today. Wonderful team.

Certainly, margin dilutive initially for the first couple quarters. We believe will bring it to breakeven by the end of the year and will be accretive in the years to come.

[Operator]

The next question we have is from Darrin Peller of Wolfe Research.

[Darrin Peller, analyst]

Phil, in the prepared remarks or in the -- really in the Shareholder Letter, if you talk through the rigor you applied to guidance, maybe just expand on that a little more in terms of what you actually included in terms of conservatism and the outlook.

And then I think as a follow-up, just understanding the acceleration a little better. Just the moving parts, the driving forces of that acceleration as the year progresses to exit the year in that 15% to 20%, would be a great place to start.

[Philip Fayer, executive]

Yes, absolutely. The biggest thing for us is, we want to set ourselves up for success, Darrin. And that is really what is reflected in the guidance. We took a prudent approach. We want to remain conservative.

We're quite excited to how this year has started, but we've used our typical building blocks with respect to what we see in the business. What we see from a new customer, a very active pipeline, but being conservative on activation timelines from customers to essentially provide what we think is a better engagement with our shareholders with deeper visibility.

With respect to the exit of Q4, very good momentum in all of our channels, keeping in mind that we lapped in Global Commerce the World Cup, which is a significant event the previous year. And in the first half of the year, we're taking consideration of lapping the offboarded customer. We have taken some thoughtful views on timing for new customers and most certainly thoughtful views on wallet share expansion opportunities, which we're excited for.

With respect to starting the year, we're seeing great momentum in January and February. We're seeing really strong engagement with customers, both existing and new. And we feel like this year will be another transformative year for Nuvei.

From a building blocks perspective, we're building it slowly. So organic growth building throughout the year while we exit Q4 in the range of our midterm growth targets.

[Operator]

The next question we have is from Sanjay Sakhrani of KBW.

[Sanjay Sakhrani, analyst]

Maybe I could just drill down on Darrin's question just a little bit, Phil. When we think about that $100 million of revenue in the pipeline as of the end of the second quarter, how much of that should translate into revenues as we move through the year? And maybe you could just talk about how much of the new wins are sort of baked into the 2024 guidance?

[Philip Fayer, executive]

Yes. Without double clicking on a customer specific, I think the most important thing to remember is, when you sign a new customer, Sanjay, that's the implementation time frame, right? It typically takes 6 months to a year to see the full volume, just depending on how many countries and how long they have from an implementation standpoint.

So historically, what you do in the previous year or actually in the year is gardening for full implementation the following year provided that the customers went live throughout that period, if that makes sense.

So we've taken those historical trends into consideration for the year. We have a really deep pipeline, as you mentioned. Many of you have seen the press releases that have come out with companies and partnerships with Adobe or our win with Microsoft or us establishing a real foothold in the travel space, expanding greater in the retail space with some of the global retail pioneers.

So from an overall perspective, very excited about what we're seeing. Implementation is something that we have focused on last year. We have changed the way we manage client onboarding. Created Tiger teams to drive attention through all the relevant departments for client activations and that is starting to yield results.

So, I think, all-in-all putting it all together, the building blocks for us remain the same. Certainly, what's happening in the end markets, so GDP related and markets that we're operating with, both B2B, gov, ISVs and Global Commerce, we have the wallet share opportunities within our existing customers, which are fairly significant as our customers execute their own journeys and utilize our capabilities to grow their business.

There is the annualization of the previous year's new business, the ones that have activated and then net new business, which all combined, we've taken a fairly conservative approach with respect to the outlook that we provided for 2024.

[Sanjay Sakhrani, analyst]

Got it. And then just on a related note, I know you had, like, these cost synergies from Paya, as well as other initiatives like insourcing the back end processing. I think, could you just talk about sort of this timing of that? And does any of that sort of factor into the guide for 2024?

[Philip Fayer, executive]

It does not. So if you remember, Paya, we talked a lot about synergies by the end of 2024. We're really comfortable with the synergies that we've executed so far, both on a cost perspective, but more interestingly on a revenue perspective.

We have left back end as an upside to margin expansion for this year. And the reason being, Sanjay, is that back ends are never all in one and done. So, certainly, we plan on the migration of Canada within the second and third quarter. Thereafter, we'll look at the migration of the U.S.

That has enormous benefits into the organization, not just the cost perspective from third parties, but also internal process efficiencies, meaning that we have one process for onboarding, one process for data, one set of data that comes back. And then we have the element with respect to wallet share opportunities.

So on our own clearing and settlement, we do interchange prediction, which is materially different from how many of the North American operators and processors do it today, meaning that we can price transactions in real time. And that opens up a world of opportunities with our ISVs and reselling partners, because we can pay them daily, we can pay them weekly, we can provide merchants greater depth on cost analysis and reporting for them on a per transaction basis in near real time.

So it's very, very important, but we have left that as an upside opportunity. It's predominantly going to be for '25. However, we will see minor implementations and testing as we are doing right now. We are live in Canada with a handful of merchants and pretty excited about what we see.

So, overall, from what we've baked in from an initiatives perspective, we've kept a very conservative view. We have upsides on our back end. We have upsides on debit routing capabilities, which is going to be specific around Paya.

And then we have just general scale opportunities within the business. We have taken an approach last -- late last year and this is from my entire executive team to explore AI opportunities before we create the requisition for new hires. And this is yielding wonderful opportunities for us to continue driving greater efficiencies across the org.

Don't mince that for headcount reduction. It's more opportunities as we continue to scale to continue driving and enabling our work force to do more and be more efficient, and help margins expand to our long term targets over time.

[Operator]

The next question we have is from Dan Perlin of RBC Capital Markets.

[Daniel Perlin, analyst]

I wanted to just ask a question. It feels to me like the sales motion, almost like the go-to-market motion has been accelerated. And I think we also saw that kind of an indication in the current quarter. So I'm just wondering are there some nuance changes that you've been pushing in place? I know you're talking about implementation teams and tires, but this is kind of more the forward sales motion.

And then the second part of the question is a little bit different. But just expectations around gross margins, as we think about into next year given some of the mix dynamics that are at play of the business?

[Philip Fayer, executive]

Yes, thanks. I'll take the first question. I'll pass it over on the margin side to Dave. From a sales motion perspective, if we just double click on what we did last year, last year we created our sales enablement group, wonderful team that has created real structure around our global commercial operations.

What we mean by that is, if you can have 200 sales folks sell one way versus 200 folks sell 200 ways, it creates a lot better visibility to the org and the performance that we are seeing from the headcount that we have.

And from an ROI standpoint, the commercial team has become really attractive with respect to cost of acquisition, certainly understanding the time of implementations we shortened.

We've also added an SDR team, which is now our breeding ground for talent as we continue expanding to it. And we think that there is an opportunity, certainly keeping in mind the margin of the business to continue expanding our sales capabilities.

We're very excited about what we see in our Global Commerce. If you think about it, volume growth of over 30 plus percent. Certainly, we're lapping the off boarded customer and World Cup. But it's a fascinating business, guys, with so much opportunity in so many different countries. Even at our current scale this year of touching $250 billion of volume, we still have so much more to go.

So we really like where we're sitting both in Global Commerce and in our B2B, ISV and gov. Wonderful job from the team from the sales motion aspect to energize our B2B group. We feel that this can be another significant lever for growth for us in the business. We have accelerated our government business as well, and we are putting focuses here on ISV. Thankful to have Till as part of this, both from a capability perspective and a leadership perspective.

And all combined just gives us the tools to continue transforming the business into the player that we are today and the one that we're going to.

[David Schwartz, executive]

It's David. So as it relates to gross margin, it's a good question. I mean, it's really dependent on mix, of course, and what we -- how we roll out and the relative mix within markets. But what I'd say, if you look back at the last 8 quarters, the range has been really, really tight from a gross margin perspective. It's ranged from about 77% to about 83%. So the range has been really tight.

The last 2 quarters, sequentially, we were at that 81.7%, so pretty much flat and the quarter before that Q2 was 82%. So I'd say the variability, you shouldn't expect much variability, but of course, dependent on mix.

And look, as we drive expansion from a wallet share perspective with existing customers that always helps. But then there's some offset when you think about as we go upmarket to larger customers. So there's many puts and takes, but ultimately, we haven't seen much variability and I wouldn't expect to see any significant variability on a go forward basis either.

[Operator]

The next question we have is from John Coffey of Barclays.

[John Coffey, analyst]

My first question is on the revenue cadence. So given that you guide for Q1 and for the full year and also saying that you might leave 2024 at that 15% to 20% level, I was wondering if there's any insight you could give us into what the cadence would be revenue growth wise over the year? Because you know a lot of the ins and outs as far as that large customer leaving. So any kind of insight you could give us there?

And then my second question is, as I understand it, I don't think Brazil is open for gaming yet, but it seems like from what I've read, that might be happening soon. Is there any kind of, I don't know, view, if not sizing that you could give us on what you think the Brazilian gaming revenue opportunity could be for you?

[David Schwartz, executive]

I'll take the first part, then I'll pass it back to Phil for Brazil. On the revenue cadence, so I guess, what you'll see is there's a few factors to think about, especially in the first quarter and the first half.

So in the first quarter, certainly, we will expect strong revenue growth, 26% to 29%, but that's really driven by, of course, full quarter of Paya in 2024 and only partial in 2023. And then as we get into Q2 and the rest of the year, Paya will be comparable on a year-to-year basis.

The other factor to think about for sure for the first half and slightly into Q3 is really around the customer grow over. So that's a headwind that we're facing. And then high level what I'd say, if you kind of think about it in -- from an organic perspective, you kind of think about mid to high digit growth first couple of quarters and then kind of low double digit into Q3 and then like we said, exiting Q4, in line with our medium term target of 15% to 20%.

So there'll be a ramp throughout the year as we go, partly because of some of those headwinds I mentioned and just the dynamics of our Paya in the first quarter, but that's really how we see that. And we think that we've set up our 2024 for success and we want to make sure that we execute.

[Philip Fayer, executive]

Thank you. I'll take the second question. Gaming is a global vertical and it is part of our ethos to make sure that we support every new market that comes online. So we are focused on multiple geographies that have pending legislation to enable gaming. LatAm, as a whole, is a big gaming opportunity. Certainly, Brazil is topical for our customers and one that we are gearing up to supporting.

From a size and market perspective, we try to stay away from individual markets for gaming. We look at it more holistically from a customer perspective of where their journeys take them and what opportunities that drives for our end customers. We do think it's topical for our customers and certainly something that they are investing into, but not just the only market if that makes sense.

So I wouldn't just double click on saying one market. It is a new market that's coming online and it is certainly a top of mind for our customers. But over the last 3 or 4 years, there have been several key new markets that have enabled, including we think it's happening in the United States and last year in Canada. So there are a lot of tentacles for additional growth in that end vertical, Brazil being one of them, yes.

[Operator]

The next question we have is from Rufus Hone of BMO Capital Markets.

[Rufus Hone, analyst]

Maybe coming back to the EBITDA margin trajectory, you've got this target out there of 50% plus over the next 5 to 7 years and sort of implies a couple of 100 basis points of margin expansion each year.

And just given where you've guided to for 2024, slightly down margins year-over-year, how should we think about the margin ramp going into 2025? Is there going to be some kind of margin catch up? Just how are you thinking about that?

[David Schwartz, executive]

Yes. So I think we talked a little bit about it, but we can drill down a bit more. So when you think about margin and what the impact is, we'll talk about, I guess, 2024 first, then we can kind of go into 2025.

So exiting a full year of 2023 at 36.8%, our outlook, as you saw for the full year, 36% to 37% range. There is really a few core, I guess, building blocks that you think about from a bridge perspective. One is around Till.

Like Phil said earlier in the call, it's a business that we're really excited about. It brings us capabilities on the ISV side. But it is early stage, high revenue growth, but there is a drag from an EBITDA margin perspective. So that does have an impact in 2024. Again, we plan to exit 2024 with Till at breakeven or better. So that's one component.

The other component on the downside is the customer grow over that we experienced late last year. So that's going to be an impact, certainly, for the 1st part of the year. And then the offset to that is really around scale. So as our business scales -- and we are at scale, but as we continues to scale and as those 2 items lap, it really sets us up well from a, you know, from a margin perspective. And that brings us kind of to the 36% to 37% range.

Then there's the upside that was mentioned earlier on the call around the various initiatives. And as Phil touched upon some of them, there is back end in sourcing, there's the overall cost savings initiatives, there's Paya synergies. What I'd say is, on the cost saving initiatives, in addition to what we've tasked ourselves to do on the AI front is also just looking across the board at all of our costs, looking at vendors, trying to understand where the opportunities are from a vendor consolidation perspective, from a pricing perspective with vendors.

And so, we've taken a prudent approach of how we think about execution on those. We're really driving them hard. I think we mentioned on the last call, that we do have a Tiger team that we -- now weekly are looking at cost and I think we're driving the organization and making sure that, that culture is instilled across every level within the organization.

We've taken a prudent approach in terms of what we have baked into our outlook. I'd say, there's much more upside than what's baked in and we're executing.

Will we achieve it all that we've laid out? No. But our team has been really, really thoughtful and great around looking under every rock to just say, hey, what about this? What about that? So we're really, really driving the execution on those savings. So, I think, that's another part of the upside that can help drive us towards that EBITDA margin expansion into 2025 and beyond.

And I think you've seen over the past 3 quarters, we have had good margin expansion. And I think that's something to consider too about how we can leverage the revenue, leverage the scale to drive towards that 50 plus percent target.

[Operator]

The next question we have is from Richard Tse of National Bank.

[Richard Tse, analyst]

Just wondering if you could maybe elaborate a little bit more on your acquisition strategy. So should we think about this as you're looking for solutions to expand geographies?

And I guess, sort of related, was Till just opportunistic given sort of the valuation of that asset?

[Philip Fayer, executive]

Our base case, as we've talked about for the past few quarters from a capital allocation perspective, is debt repayment. So our leverage profile has changed. Our cash flow generation is extremely strong. And that is our base case and that's what we should think about.

We really like Till, as it ran through the process. We liked their capabilities. But just as a background for the process, we weren't there on price and/or on price expectations. We did give our best and final. And as you guys could see, it was not a significant acquisition just in the size of our overall business, but the capabilities were very compelling.

So we have a lot of rigor. I wouldn't expect acquisitions, as we stand today, to be our priority. It will be much more focused on debt repayment. But we will remain opportunistic until it was exactly that. The more we dug, the more we found relevance to our business. We love the team. We think this is additive to our B2B, ISV and government strategies. And we do think there's tentacles of opportunities around our SMB as well, specifically around the simplicity and the cleanliness that they have around merchant onboarding that's relevant for our businesses.

So from a capital allocation perspective, base cases, debt repayment, we're very fortunate with our free cash flow profile. Our business has hit another inflection point as we continue scaling. And this is just going to open up opportunities both with respect to potential opportunities for future M&A, but more importantly, just improving our leverage profile over the next few quarters.

[Richard Tse, analyst]

And my follow-up question, you talked about wallet share increases. I don't know if you can sort of elaborate on this, but perhaps you can maybe talk about who you're getting the most share from?

[Philip Fayer, executive]

It just depends on the area. There's not one particular folk that I could highlight. It just depends on what merchants are looking for and what solutions we offer. We compete against great companies, right? If you think about some of our large global peers, we've established the position. We're a substantial player today and that allows us to earn our fair share, driven by our technology stack and the flexibility that we've embedded into it.

So it depends on the region. It depends on what merchants are looking for. Certainly, from a Global Commerce perspective, there are 5 major competitors, and we compete really well on feature, functionality and capability. And ultimately, that's what's driving that 30 plus percent growth in Global Commerce and 19% for the overall organization.

[Operator]

The next question we have is from Reggie Smith of JPMorgan.

[Charles Pearce, analyst]

This is Charlie on for Reggie. You've announced a number of marquee wins over the last couple of months. I was hoping you could step back and kind of compare 2023 to 2022 in terms of how these deals are stacking up against one another.

Are there any appreciable changes in the size and scope of new deals, any demand, or changes in demand of specific services or offerings?

[Philip Fayer, executive]

Great questions. So if you think about it, 2022 is the onset building blocks of our global commercial team that we started building in '21. I think the machine is becoming really well oiled. So it's just the journey between building a commercial organization.

I would, just as side note, preface that. Technology is great, but you need a commercial organization to enable it and scale it, and that's really where we have been investing into. Yes, continue the momentum in our feature and capabilities. As we've highlighted 40 plus capability enhancements in the Q4 alone.

But it's all about bringing it to market, screaming on top of the rooftops of your solutions and making sure that customers hear you and consider you. And that is really what the transformation of the business and driven the transformation of the business between '21, '22 and '23.

Pipelines are also -- in Global Commerce, specifically, never over, if that makes sense. Right? Sometimes you can speak to a customer for years depending on where they go. Sometimes it could be for a quarter, sometimes they're running an RFP and all scenarios in between.

But our pipeline today, what's wonderful about it is not just the size and depth of it, but also the end markets and customer profiles from winning Microsoft to partnership with Adobe to the partnerships that we've seen across the board, and you guys have seen just the level of PRs and activity that's coming through.

We are going from very much, if you think about 5 years ago, a single vertical focus to, our capabilities now in 7 or 8 core verticals and new use cases with respect to B2B, ISV, government and new end markets in our Global Commerce team.

So we're still at the very early innings of it. It's an important building block. It's one that transforms the business and drives organic growth. So we're quite excited about what that means for us.

And it's one that ultimately, we feel there's more room, obviously, considering and focus on EBITDA margins, but there's one that there is more room for us to continue making thoughtful expansions of the commercial team into new regions to accelerate areas such as LatAm and what we've done in Australia.

But from the quality of the pipeline, the depth of the pipeline, the sheer opportunities that these merchants bring to us, we're in a very unique place and we think that sets us up for success in 2024.

[Operator]

The next question we have is from Timothy Chiodo of UBS.

[Timothy Chiodo, analyst]

I wanted to dig into a stat that was in the Shareholder Letter around the 19% growth with customers that are doing $1 billion or more in volume. If you could just elaborate a little bit more on that? It sounds like a lot of it was wallet share gains, which is great. And also, if you could talk a little bit about the vertical mix of those large billion-plus customers.

[Philip Fayer, executive]

Thanks, Tim. Good to hear your voice. I think what's fascinating for us is the fact that we have historically focused very much on mid-market. Our mid-market customers have grown. They've grown with us. And, certainly, just the breadth of new wins that we've onboarded, it's a fascinating place to be. And ultimately, it's a humbling place.

I started this business 20 plus years ago to help customers accept payments and break down barriers with respect to how they operate their own businesses. And to close your eyes and to think about where we are today, the customers that we support and the end markets that we're enabling, it's just a wonderful journey and I'm incredibly proud of the team.

But from the end market perspective, nicely diversified. We've always talked about how no customer, from a customer concentration perspective. And certainly the mix of our own end markets that we support with the addition of B2B, govern and ISV, and the acceleration from being a leader -- a category leader in a particular vertical to now being the challenger in many verticals.

So what the big takeaway was when we put that stat out there, it's humbling to see that customers empower us and then trust us that we're winning volume from customers. If you think about 19%, its typically faster than the end customer growth itself, which means that it's wallet share that we're gaining and it sets us up well for us to continue executing going forward.

And all of that is driven by a couple of big building blocks. The first is, we think, a category leading net promoter score, listening and embedding our customers into our own roadmap in terms of their requirements and being relentlessly focused on their execution. And the output is really what we're seeing today is great engagement, very good visibility into where they're going with us and ultimately a significant building block for our growth trajectory.

[Timothy Chiodo, analyst]

And to your point, you've been doing this for a long time, and I wanted to see if we could squeeze in an interesting question. Whether it relates to your platforms business or working with ISVs in general, I think many investors appreciate that the role that the ISV takes in the process, meaning how much they want to take on in terms of responsibilities and risk, et cetera, those can all have impacts on the various unit economics either to the ISV or to the payments company.

In your years doing this, have you seen any kind of a meaningful shift in those commissions? I mean, generally, the thought is that they've gone up over time. What has been the trend over the last 10 years in your view, and has there been anything different over the last, call it, 2 to 3?

[Philip Fayer, executive]

You're putting me on the spot with everyone here. But it's fascinating. Right? If you think about it, Tim, is you go back to the early or late 2000s where the ISV was a referral model, right, when they're earning 20%, 30% of the commission. And then all of a sudden, the ISV realized that the software part of their own business is nice, but the greater upside is in payments.

And many of them were breakeven at best businesses. If you think about some of the even public companies, the relevance of payments, and that includes Shopify, Lightspeed and many others, is a critical aspect to their own strategies. And that has evolved over the last 15 years where payments is a must do.

And then you have the potential benefits of what the ISV can do is a simpler onboarding, single sign on for both service and payments, cleanliness of data and greater stickiness with respect to the end merchant.

So it's a no brainer that we've evolved to where we sit today, but not every ISV is alike. And I think that's something that gives us a really good position, because we're entering into a fairly mature market where folks have moved from referral to ISO to potentially PayFac and we're entering right at the right time.

But not every ISV wants to be taking a liability, and not every ISV wants to have that journey or at least wants to have that journey upfront. So payment companies need to realize that we have to adapt our solution stack to the growing needs of ISVs, and their requirements are going to change over time.

Certainly, the biggest focus on profitability from ISVs will be around payments. And as such, I think that bodes well for us as we continue investing in the ISV market that allows us to enter the market with effectively every incremental gross profit dollar falls to the bottom line. So it puts us in a nice position versus protecting revenue that may have change in commissions.

From a commission standpoint, yes, it's evolved. It's gone from what I remember the 20%, 30% higher up. But what you're seeing in lot of payment companies and we've seen that everywhere is allocating capital to buyback commissions to keep them at that particular level. That has been an industry trend and I'm assuming that will continue.

[Operator]

The next question we have is from Todd Coupland of CIBC.

[Thomas Ingham, analyst]

I wanted to ask about market conditions. Phil, you talked about having a prudent outlook with NI to the economy for 2024. It seems like some of your peers, certainly in the second half of '23 had improving results. And I was just wondering if you could talk about your view of current market conditions.

[Philip Fayer, executive]

The only thing I can double click, Todd, is on volume and activity from our customers. And volume year-to-date with respect to January and February and first few days of March has been very strong. And we're seeing continuous engagement across all of our end markets.

Last year, we saw some moving around on same store sales. Surprisingly, we thought after the first quarter, second quarter had more headwinds on the same store sales perspective and that has improved. So I would say market conditions so far are fairly stable.

[Thomas Ingham, analyst]

And I wanted to follow-up on your AI point. Do the payments companies have access to the customer data for training models or will it simply be using AI to be more efficient with your own operations? Talk about some of the possibilities and where it might go for Nuvei.

[Philip Fayer, executive]

Yes. We're initially -- so very, very good question, Todd. You have merchant facing products for AI and then you have internal. Certainly, for merchant facing, that's part of our regular road map.

So if you think about, like, even basic reporting, instead of building canned templates for reporting, you could just ask what you want from a control panel and provide the data out. So there's a tremendous amount of opportunities around that. There's opportunities around transaction routing, which we have been spending time on to drive greater authorizations and improvements and learning patterns to drive transactions from a fraud and approval perspective. So that is merchant facing.

What we're focused very much is internal. How do we make the lives easier for our folks? How do we become more efficient? Some great analysis that we've done with a third party was how do we get all the customer service data to take the call time from, say, 11 minutes to 7 minutes or from 11 minutes to 5 minutes.

These are things that we find really, really compelling, and there are great use cases across every single department for us to drive greater efficiencies, greater engagement with our employees and more satisfaction, while helping us continue scaling on a profitability perspective.

[Operator]

The next question we have is from John Davis of Raymond James.

[John Davis, analyst]

So really appreciate the color on the strategic fit of Till. But hoping you can give us a little bit more on the financial impact, specifically on EBITDA, kind of, in 1Q and what's baked in for the full year?

[David Schwartz, executive]

Hey, John, it's David. So, Till, like we said, it was a capability buy, something that we liked in terms of what they did for our ISV, B2B channel. So, certainly, from a revenue perspective, although it's small and growing, it is a nice growth rate.

And I'd say that from what we're seeing in terms of kind of a go forward, it's -- like we said, it's a drag on EBITDA margin and that's why you see flat throughout the year. But effectively, what we see as we exit the year is really to kind of be able to improve that and be breakeven.

And look, there's all the other items we talked about too from an EBITDA margin perspective that we're driving. We're very much EBITDA margin focused. So you can imagine that what we really like to tell is the capabilities. Like, we understood that it would be a drag, but those capabilities outweighed.

From a short term financial perspective, we are very much focused on the medium and longer term, and we think that it really will help us drive the ISV space in the U.S. and globally, but also be part of our expansion plan within APAC. So, it's like a double whammy. It really brought us a couple of things we're really excited about. So, I think that's the way to think about it. But margin progression throughout the year, similar to revenue will improve.

[John Davis, analyst]

Okay. So maybe to put just a finer point, all else equal, on an organic basis, you would expect margin expansion this year, it really is just Till that's driving margins down on a year-over-year basis midpoint.

[David Schwartz, executive]

Exactly. You got it. Exactly right.

[John Davis, analyst]

And then just on Global Commerce, appreciate World Cup and lapping or kind of the customer loss. Can you help us dimensionalize, because, obviously, World Cup is in the fourth quarter. That'll go away, but we'll still have customer loss for a few more quarters. So I think we deceled about 1,300 basis points from 25 to 12. So just trying to break that decel out between World Cup and customer loss.

[Philip Fayer, executive]

I'll take that. I think we wouldn't want to double click specifically into it. Honestly, World Cup was a significant event. The customer was a top 10 customer that we offboarded. We're going to lap that in the first half of the year.

So from a building block perspective, what I love to point to is continuous scaling in our Global Commerce with 30 plus percent volume. We're going to continue seeing volume growth across the organization accelerate. So for 2024, we'll see between 20% and 24% based on the outlook versus exiting at 19%. So really good momentum in the business.

The 2 headwinds that we have in Global Commerce are specifically World Cup for Q4 and just lapping the customer that will happen in the first half of the year.

[Operator]

The next question we have is from Jason Kupferberg of Bank of America.

[Jason Kupferberg, analyst]

And I appreciate the conservatism in the outlook. It sounds like that's the case both revenue and EBITDA wise. Phil, I wanted to follow-up on your comments around the verticalization. Like you said, you've now, obviously, opened the aperture a bit in terms of the number of verticals that you actively participate in and pursue.

Can you just give us a sense right now what you're seeing in terms of demand and pipeline on a relative basis across those verticals? Which ones are particularly robust and which ones perhaps are less so?

[Philip Fayer, executive]

Certainly. Thanks, Jason. We focus on mid-market to enterprise clients that operate -- and specifically we're talking about the Global Commerce, and we'll get to B2B in a second. But we focus on customers that are mid-market to enterprise that have international presence, right?

And with that, then we break it down to 6 different verticals where we build a vertical team from a commercial perspective and account management perspective, naturally embedded with a product team to build solutions that are bespoke and changing from those end markets.

We spent equally, Jason, in every single one of them, and we're pretty excited about going from a leadership position in one market to the challenger position in others. I'd really urge you to take a double click on the sheer amount of press releases from the wins that we've been having across the board.

I couldn't tell you just one of because when we end up looking at the pipeline, we really see it across all major verticals with significant tailwind opportunities really across travel, digital goods, marketplaces and platforms. Obviously, on the social gains perspective, we continue helping our current customers and naturally in our leadership position with gains we extended.

So we're excited to see the opportunities. None of our customers are standing still. I think that's the other thing that's very interesting, is they all have their own growth trajectories that we get to execute on. So you have your pipeline with respect to new business, Jason. But you certainly have your pipeline from your own customers on their own journeys, which is often equally, if not more, exciting than the new business in years.

So all combined, very good momentum. I could call out our momentum in travel. I could certainly call out our momentum with marquee customers, be it Microsoft and others that we've onboarded, even to mention the Familiprix opportunity here in Quebec, which is one of our major retailers. And that success is certainly parlaying into all other end markets.

With respect to B2B, specifically, we have signed a significant expansion, with respect to the end ERP platforms that we support. So if you think about B2B as -- we enable the platform, but the verticals that we support are driven by where the platform has success. So we don't actually drive the end customer target, we drive the B2B enablement. And that has been on a wonderful journey as we've gone from a handful of partners to multi partners, from U.S. only to expanding into Canada last year with a fantastic roadmap to go international and really good engagement with partners.

So we're just starting on B2B, but B2B is less vertical specific, more platform specific, because it is a direct sales engagement integration to ERP and then a direct sales to the VAR and then an indirect sales to the end merchant, if that makes sense.

[Jason Kupferberg, analyst]

Just a quick one for David. Can you quantify the Till revenue contribution both for Q1 and full year '24?

[David Schwartz, executive]

Hey, Jason. It's -- like we said, it's in early stage, so it's not a significant amount of revenue. Overall, it's going to contribute really from the capabilities perspective in the near term and longer term, it's really what's going to drive revenue on the ISV side. So I'll leave it at that for now at this point, Jason.

[Operator]

This ends the allotted time for Q&A, and I'll turn it back to Chris Mammone.

[Christopher Mammone, executive]

Thanks again for joining us today. Please reach out to the IR team with your follow-up questions.

In the next few weeks, we're planning to attend investor conferences hosted by Wolfe and Bank of America, and we hope to see many of you during those appearances. Bye for now.

[Operator]

This concludes today's conference. Thank you for joining us. You may now disconnect your lines.