Q3 2022 revenue up 28% y/y supported by strong strategic execution, UAE consumer spending and high growth in regional tourism

  • Q3 2022 revenue growth of 28% y/y and full year 2022 financial guidance reiterated, of 27-29%1 revenue growth and modest underlying EBITDA margin expansion.
  • UAE direct-to-merchant business delivering accelerated revenue growth and growing market share  during 2022, through new merchant wins and strength in the SME segment.
  • In the UAE and Jordan, the value of domestic payments processed with merchants grew 19% y/y, supported by strong consumer confidence. The value of international payments grew 84% y/y reflecting the UAE’s position as a leading tourist hub.
  • Record new merchant wins in the UAE including four hotels under the Abu Dhabi National Hotel group such as Le Meridien, Radisson Blue and Sheraton; and Sharjah Airport International Free Zone.
  • Approved to receive2 a Category 1 License by the Central Bank of the UAE under the recently enacted Retail Payments Services & Card Scheme Regulations.
  • Positive licensing updates to access new revenue pools. Egypt direct-to-merchant services will launch in Q4, having received license approval. Approved2 to receive a Major Payment Institution license from the Saudi Central Bank to commence merchant payment services.
  • Saudi Arabia market entry progressing to plan, with existing clients providing a 20%+ underpin to the revenue target and a healthy customer pipeline in place.

Nandan Mer, Chief Executive Officer, commented:

“We continue to make positive strides in executing against our strategy, delivering yet another high growth quarter with 28% y/y revenue growth. During the period we won record levels of new business in the UAE and continued our market entry in Saudi Arabia. I am also thrilled to see Network leading the industry with positive licensing updates in the UAE, Egypt, Kenya and Saudi Arabia. We face the future with excitement knowing we have several growth levers available, supported by the scale, capabilities, people and trusted brand to fulfill our purpose; of helping the economies and customers we serve to grow and prosper.”

Strong revenue performance driven by buoyant UAE economy

Network delivered robust Group revenue growth of 28% y/y during the third quarter of 2022, supported by strategic execution, strong economic fundamentals and consumer confidence in the UAE. The company’s Merchant Solutions revenue was up 39% y/y, reflecting growth across both the Middle East, as well as from the Group’s acquisition of DPO Group in Africa. UAE and Jordan domestic payment volumes (which represent spending from consumers domiciled in the region) increased 19% y/y and international volumes (which represent consumer spending by overseas visitors) saw stellar growth of 84% y/y, reflecting the UAE’s position as a leading destination for international tourists. Significantly, online TPV (excluding Government & airline TPV) grew 36% y/y and SME increased 41% y/y, in line with Network’s strategy to target SMEs with new capabilities and value-added-services.

Network’s Issuer Solutions business also achieved strong growth during the quarter with revenue up 15% y/y, reflective of the large number of customers signed in the prior year and ongoing strength in the number of transactions.

Given the company’s strong performance during the quarter, Network reiterated its 2022 guidance of 27-29%1 y/y revenue growth and modest EBITDA margin expansion.

Accelerated new merchant wins, supported by SME wins

Network delivered another quarter of record new merchant wins with rates above those seen in the first half of the year. Notable names include four hotels under the Abu Dhabi National Hotel group such as Le Meridien, Radisson Blue and Sheraton; and Sharjah Airport International Free Zone. The pace of SME signings accelerated through the period, supported by the recent launch of ‘DPO Pay’ services in the UAE and tap-on-phone signings. The company’s Issuer Solutions business signed four new financial institutions during the quarter, totaling 13 new wins year-to-date.

Expanding relationship with Emirates NBD to provide merchant payment services

The company will be expanding its relationship with Emirates NBD Bank PJSC, one of the Middle East’s leading financial institutions, providing merchant acquiring services to Emirates NBD’s large corporate banking clients. Emirates NBD is already a long standing and major customer for Network, where it provides a range of Issuer Solutions and value-added services to the bank across the UAE, Egypt and Saudi Arabia. This partnership represents the first extension of the relationship into Merchant Solutions, where Network will provide white-labelled merchant payment acceptance services to a number of Emirates NBD’s institutional clients in the UAE; including payment acceptance terminals, processing and settlement of funds. The partnership will also extend to SME merchants, through a referral agreement that spans digital payment acceptance, lending and other banking services. The partnership will increase Network’s merchant reach and scale in the UAE, whilst also supporting Emirates NBD in providing additional services to their existing and potential corporate and SME banking clients.

Enhancing capabilities and value-added-services

The company maintained its focus on offering a differentiated proposition for its clients by extending its capabilities and value-added-services. During the quarter Network launched SHAREPay digital wallet, enabling members of UAE loyalty programme SHARE to pay, earn and redeem across major shopping malls and hotels. It also rolled out the WooCommerce plugin for SME merchants, enabling the creation of an online store in 48 hours.

Kingdom of Saudi Arabia processing progressing to plan with a healthy customer pipeline

Network continues to make good progress with its Saudi market expansion having signed two new customer wins earlier in the year. With a healthy customer pipeline in place, the company is on track with its medium-long term revenue target in the Kingdom of USD 50 million.