Nexi Earnings: Volume Normalisation a Headwind, but Margin Expansion Is Positive

Nexi NEXI reported second-quarter EBITDA of EUR 436.1 million, up 10.1% from the same period a year ago, on a good performance in merchant solutions and issuing solutions. Costs saw a normalisation in the second quarter, growing 4.4% overall, which, paired with a 7.3% revenue growth, culminated in an EBITDA margin expansion of 132 basis points to 52.2%. We maintain our EUR 15.8 per share fair value estimate and narrow moat rating.

Volume growth in the merchant solution segment has slowed year over year after the business enjoyed a boost from COVID-19 normalisation last year. Revenue growth in the segment was still decent at 8.3%, however.

Issuing solutions continues to perform well, with revenues up 8.2% driven by up-selling and cross-selling of Nexi’s solutions across geographies.

Nexi continues to see inflationary pressures filter through its operating expenses although it noted a slowdown in the second quarter. This trend should continue for the second half of the year, setting up further margin improvements as the payment services provider enjoys the benefits of its operational leverage.