Key Points Connecticut-based Coliseum Capital Management added nearly. 1.1 million shares of NCR Atleos in the third quarter, helping to push the position value up by $60 million. The transaction represented a 3.7% increase relative to Coliseum’s reported 13F AUM. Coliseum now owns about 2.7 million shares worth $106.3 million, making NCR Atleos the fund's third-largest holding. These 10 stocks could mint the next wave of millionaires › Connecticut-based Coliseum Capital Management disclosed the ...

Summary of NCR Atleos Conference Call Company Overview - **Company**: NCR Atleos - **Industry**: Payments and Transaction Services - **Key Executives Present**: CEO Tim Oliver, CFO Andy Wamser Key Points and Arguments Strategic Focus Post-Separation - NCR Atleos has completed its separation from NCR, migrating 700 customer connections and exiting 200 TSA agreements, establishing a clean balance sheet [4][5] - The company is shifting from a tactical approach to a strategic outlook, focusing on long-term growth and profitability [4][6] Growth Strategy - The original growth model aimed for 3-5% annual growth with profitability growth at double that rate, targeting a cash flow conversion rate of over 50% in the coming years [5][6] - The installed base of devices has reached approximately 500,000 globally, making NCR Atleos the largest fleet operator in the world, which is expected to drive future monetization through services [6][7] ATM as a Service - The ATM as a Service strategy has been a significant growth driver, with current deployments at around 38,000 machines and a potential for over 125,000 machines with enhanced servicing [15][16] - This model is expected to more than double the Average Revenue Per User (ARPU) compared to traditional ATM lifecycle spending [15][16] Financial Performance and Capital Allocation - The company has achieved a leverage ratio of sub-three times ahead of schedule, allowing for reinstated shareholder returns through share repurchases rather than dividends [10][12] - Cash generation is ahead of schedule, with expectations to improve cash conversion rates from 30% to 35% next year, potentially reaching 40% thereafter [13][11] Hardware and Market Position - NCR Atleos has seen a 15-20% increase in device placements this year, distinguishing itself in the hardware market, particularly with its recycler technology [28][29] - The company anticipates a mini-cycle in hardware demand over the next few years, projecting strong growth in device installations [30][31] Tariff Impact - Current tariffs on components sourced from India are at 50%, impacting costs significantly, with expectations of a reduction to around 15-16% in the future [36][38] - The company is absorbing $25-$30 million in tariff costs this year but remains optimistic about maintaining profitability [37][38] Revenue Streams and Future Outlook - Deposit transactions have increased by 90% year-over-year, becoming a high-margin use case for the company [45][46] - The company is expanding its footprint in international markets, including Italy and Greece, and is targeting more rural areas for ATM placements [49][50] AI and Operational Efficiency - NCR Atleos has implemented AI in its service organization, resulting in significant cost savings and improved service levels [62][66] - Future plans include deploying AI tools across sales and corporate functions to enhance efficiency and reduce costs [62][66] M&A Strategy - The company is open to small bolt-on acquisitions that enhance its service offerings, particularly in preparation for the adoption of Stablecoin and related transaction capabilities [72][73] Additional Important Insights - The company has experienced a longer-than-expected sales cycle for the ATM as a Service model, with implementation timelines extending from three months to eight or nine months [40][41] - The management emphasizes the importance of generating predictable results and improving cash flow to attract long-term investors [67][68] This summary encapsulates the key insights and strategic directions discussed during the NCR Atleos conference call, highlighting the company's growth strategies, financial performance, and market positioning.

EXPANDING SELF-SERVICE FINANCIAL ACCESS November 20, 2025 1 Forward-Looking Statements This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the "Act"). Forward-looking statements use words such as "estimate," "expect," "target," "anticipate," "outlook," "intend," "pla ...

Core Insights - NCR Atleos reported Q3 CY2025 results with revenue of $1.12 billion, exceeding Wall Street's expectations, but missed profit forecasts significantly with a GAAP EPS of $0.34, which was 51.1% below analysts' consensus estimates [1][3][6] Revenue Performance - Revenue reached $1.12 billion, reflecting a 4% year-on-year growth and a slight beat of 0.6% against analyst estimates of $1.11 billion [6] - Adjusted EBITDA was reported at $219 million, maintaining a 19.5% margin, in line with expectations [6] Profitability Challenges - The company faced significant pressure on profitability due to elevated tariffs and a decline in U.S. payroll card transactions, which impacted the network segment revenue [3][7] - Operating margin stood at 9.8%, consistent with the same quarter last year [6] Strategic Initiatives - Management highlighted strong hardware sales and a surge in ATM-as-a-Service contracts as key growth drivers, with ATM-as-a-Service bookings reaching a record total contract value of $195 million and expected annual recurring revenue surpassing $300 million by year-end [3][7] - The company is focusing on expanding its ATM outsourcing and recurring service businesses to drive profit improvement despite ongoing cost pressures [4] Market Dynamics - The company noted that the hardware sales growth was particularly strong for its recycler product, driven by demand from major banks, although profitability can vary based on product type and region [7] - Management acknowledged the impact of elevated import tariffs, currently at 50%, and is adjusting sourcing strategies while budgeting for a lower mid-20% rate next year [7] AI and Efficiency Improvements - NCR Atleos is implementing AI-driven service optimization tools in North America, which have improved repair metrics and are set to expand to Europe, aimed at enhancing service efficiency and customer satisfaction [8]

Revenue Performance - Total revenue for Q3 2025 increased by 4% to $1,121 million compared to $1,073 million in Q3 2024[178]. - Total revenue for the three months ended September 30, 2025, was $1,121 million, reflecting a 4% increase from $1,073 million in the same period of 2024[178]. - For the nine months ended September 30, 2025, total revenue was $3,202 million, slightly up from $3,197 million in the same period of 2024[178]. - Consolidated revenue for the three months ended September 30, 2025, increased by 4% to $1,121 million compared to $1,073 million in 2024, driven by a $62 million increase in core business segment revenues[195]. - Consolidated revenue for the nine months ended September 30, 2025, was flat at $3,202 million compared to $3,197 million in 2024, with core business segment revenue increasing by 3%[196]. Recurring Revenue - Recurring revenue for Q3 2025 was $783 million, representing 69.8% of total revenue, a decrease from 73.2% in Q3 2024[178]. - Annualized recurring revenue (ARR) increased to $1,712 million in Q3 2025 from $1,645 million in Q3 2024, representing a growth of 4.1%[180]. - Recurring revenue as a percentage of Self-Service Banking (SSB) revenue decreased to 57% in Q3 2025 from 61% in Q3 2024[180]. Net Income and Profitability - Net income attributable to Atleos for Q3 2025 was $26 million, a 24% increase from $21 million in Q3 2024[179]. - Net income attributable to Atleos for Q3 2025 was $26 million, a 30% increase from $20 million in the same period of 2024[193]. - Net income attributable to Atleos for the nine months ended September 30, 2025, was $79 million, a 103% increase compared to $39 million in 2024[179]. EBITDA and Margins - Adjusted EBITDA for Q3 2025 was $219 million, representing 19.5% of total revenue, up from 19.1% in Q3 2024[179]. - Adjusted EBITDA for the three months ended September 30, 2025, was $219 million, representing an adjusted EBITDA margin of 19.5%[188]. - Adjusted EBITDA rose by 21% to $196 million for the three months ended September 30, 2025, compared to $162 million in the prior year[216]. - Adjusted gross margin rate for Q3 2025 was 26.5%, compared to 26.1% in Q3 2024[190]. - Total gross margin for Q3 2025 improved to 24.2%, up from 23.9% in Q3 2024[193]. Expenses - Selling, general and administrative expenses for the three months ended September 30, 2025, increased by 13% to $143 million, representing 12.8% of total revenue[199]. - Research and development expenses increased by 20% to $18 million in Q3 2025 from $15 million in Q3 2024[193]. - Research and development expenses for the nine months ended September 30, 2025, increased by 21% to $52 million, accounting for 1.6% of total revenue[202]. - Interest expense decreased to $68 million in Q3 2025 from $79 million in Q3 2024, a reduction of 14%[193]. Cash Flow and Debt - Cash provided by operating activities decreased by $139 million to $125 million for the nine months ended September 30, 2025, compared to $264 million in the prior year[229]. - As of September 30, 2025, cash and cash equivalents totaled $412 million, while total debt stood at $2,912 million[238]. - The company has a borrowing capacity of $348 million under its Revolving Credit Facility as of September 30, 2025[238]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $125 million, compared to $264 million for the same period in 2024[242]. - Adjusted free cash flow-unrestricted for the nine months ended September 30, 2025, was $114 million, slightly down from $123 million in 2024[242]. Strategic Initiatives - The company aims to shift towards a highly recurring revenue model to drive stable cash flows and returns to stockholders[165]. - Atleos is focusing on expanding its ATMaaS offerings to meet global demand for ATM access and digital currency solutions[165]. - The company expects to utilize cash flows to invest in business growth strategies and repay indebtedness over time[240]. - The company has a share repurchase program authorized for up to $200 million over 24 months, with no repurchase activity reported during the three and nine months ended September 30, 2025[237]. Macroeconomic Factors - The company is navigating macroeconomic pressures, including higher interest rates and increased logistics costs, which may impact business performance in the short term[170]. - The company emphasizes the importance of generating positive cash flows from operations, which are subject to economic conditions and competitive environment[239]. Spin-off and Corporate Structure - The spin-off from NCR Corporation was completed on October 16, 2023, establishing Atleos as a standalone publicly-traded company[162]. - The company expects to continue incurring one-time separation costs related to the spin-off, projected to last through at least fiscal year 2025[163]. Revenue Breakdown - Product revenue rose to $274 million in Q3 2025, up 17% from $234 million in Q3 2024, while service revenue increased slightly to $847 million[193]. - Self-Service Banking revenue for the nine months ended September 30, 2025, rose by 7% to $2,099 million from $1,967 million in 2024, contributing 65.6% of total revenue[196]. - Self-Service Banking revenue increased by 11% to $744 million for the three months ended September 30, 2025, compared to $672 million in the prior year[215]. - Hardware revenue surged by 25% to $235 million, driven by demand related to the industry refresh cycle[215]. - Network revenue decreased by 1% to $328 million for the three months ended September 30, 2025, primarily due to a decline in withdrawal volumes[219]. - Telecommunications & Technology (T&T) revenue fell by 13% to $40 million for the three months ended September 30, 2025, due to decreases in hardware maintenance and installation revenue[223].

Financial Data and Key Metrics Changes - The company achieved a core top-line growth of 6% and a 7% increase in EBITDA, with an impressive 22% growth in earnings per share [20][22] - Adjusted EBITDA reached $219 million, reflecting an 8% year-over-year increase in the core business [20][21] - Free cash flow generated in Q3 was $124 million, aligning with expectations and supporting the full-year outlook [23] Business Line Data and Key Metrics Changes - The self-service banking segment saw revenue grow 11% year-over-year, reaching a new quarterly high of $744 million, driven by a 25% increase in hardware deliveries [24] - The ATM as a Service segment experienced a 37% year-over-year growth, with significant additions to total contract value and customer count [12][26] - The network segment's revenue declined by 1% year-over-year to $328 million, impacted by lower payroll card transactions [28] Market Data and Key Metrics Changes - The company reported a 90% increase in cash deposit volumes, indicating strong market enthusiasm for modern banking solutions [30] - The number of ATMs in the network grew to approximately 81,000, reflecting an increase in device count and new retail customers [32] Company Strategy and Development Direction - The company aims to establish a track record of consistency and transparency while focusing on capital allocation strategies that prioritize debt reduction, business investment, and shareholder returns [33][34] - The strategic priority includes advancing customers through the continuum of ATM outsourced services to full outsourcing [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year 2025 guidance ranges, with expectations for continued growth in free cash flow conversion and profitability [36] - The company anticipates a recovery in the network business and expects to see growth in the fourth quarter [54] Other Important Information - The company has successfully completed its separation from legacy NCR, allowing resources to focus on growth [5] - The company plans to initiate a $200 million share repurchase program in the fourth quarter [34] Q&A Session Summary Question: Impact of lower prepaid card transaction volumes on the network business - Management noted that prepaid volumes have stabilized at lower levels, with expectations for a return to growth in the fourth quarter [38][39] Question: Expectations on tariffs affecting the business - Management indicated that the total impact of tariffs for the year is expected to be around $25 million, with future planning assuming a 25% tariff rate [40][41] Question: Transaction mix and profitability in the network business - Management stated that withdrawal transactions still make up the majority of revenue, but deposit transactions are increasing significantly, contributing to higher margins [42][44] Question: Growth expectations for ATM as a Service - Management projected a 40% growth rate for ATM as a Service in both Q4 and 2026, with strong backlog and high-quality contracts [45][46] Question: Future trajectory of adjusted EBITDA growth - Management expects to convert headwinds into tailwinds, with continued growth in ATM as a Service and hardware sales, leading to a projected growth rate of 45% [54]

Financial Performance - Core revenue increased by 6% year-over-year to $1112 million[22, 49] - Adjusted EBITDA grew by 7% year-over-year to $219 million, with a margin of 195%[22, 49] - Adjusted diluted EPS increased by 22% year-over-year to $109[22, 49] - Adjusted Free Cash Flow – Unrestricted was $124 million[51] Segment Results - Self-Service Banking revenue grew by 11% year-over-year, with Adjusted EBITDA increasing by 21%[27] - Network segment revenue decreased by 1% year-over-year, but LTM ARPU increased by 2%[36, 67] - ATMaaS revenue grew by 37% year-over-year, with gross profit increasing by 65%[58] 2025 Outlook - The company projects core revenue growth of 3% to 6% in constant currency for fiscal year 2025[74] - The company anticipates total Adjusted EBITDA growth of 7% to 10% in constant currency for fiscal year 2025[74] - The company expects fully diluted EPS (non-GAAP) to grow by 21% to 27% in fiscal year 2025[74] - The company forecasts Adjusted Free Cash Flow – Unrestricted to be between $260 million and $300 million[74]

Core Insights - NCR Atleos reported quarterly earnings of $1.09 per share, exceeding the Zacks Consensus Estimate of $1.01 per share, and showing an increase from $0.89 per share a year ago, resulting in an earnings surprise of +7.92% [1] - The company achieved revenues of $1.12 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.09% and up from $1.08 billion year-over-year [2] - NCR Atleos has outperformed consensus EPS estimates in all four quarters over the past year and has topped revenue estimates twice in the same period [2] Earnings Outlook - The future performance of NCR Atleos shares will largely depend on management's commentary during the earnings call and the sustainability of the stock's price movement based on recent earnings and future expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.40 on revenues of $1.16 billion, while for the current fiscal year, the estimate is $3.98 on revenues of $4.36 billion [7] Industry Context - The Internet - Software industry, to which NCR Atleos belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Revenue Growth - Total Revenue increased 4% year over year to $1.12 billion, with 70% derived from recurring revenue streams[6] - ATM hardware revenue grew 24% year over year, contributing to the expansion of the global installed base[1] - ATM as a Service (ATMaaS) revenue grew nearly 40% year over year, with expectations of over 40% growth in Q4[6] - Core Revenue, excluding Voyix, improved 6% to $1.11 billion, driven by growth in ATMaaS and hardware demand[5] - Total revenue for Q3 2025 was $1,121 million, a 4.5% increase from $1,073 million in Q3 2024[22] - Product revenue increased to $274 million in Q3 2025, up 17.1% from $234 million in Q3 2024[22] - Service revenue remained stable at $847 million in Q3 2025 compared to $839 million in Q3 2024[22] - Annualized Recurring Revenue (ARR) for Q3 2025 reached $1,712 million, up from $1,645 million in Q3 2024, indicating a growth of 4.1%[39] - Recurring revenue accounted for 70% of total revenue in Q3 2025, compared to 73% in Q3 2024[39] - Total revenue for Q3 2025 was $1,121 million, a 4.5% increase from $1,073 million in Q3 2024[39] Profitability Metrics - Net Income attributable to Atleos rose 24% to $26 million, maintaining a net income margin of 2%[8] - Adjusted EBITDA increased 7% to $219 million, with an adjusted EBITDA margin of 19.5%[9] - Gross Profit for Q3 2025 increased 6% to $271 million, with a Gross Margin of 24.2%[7] - Gross profit for Q3 2025 was $271 million, representing a gross margin of 24.2%, up from 23.9% in Q3 2024[22] - Adjusted Diluted Earnings per Share increased 22% to $1.09, compared to $0.89 in the prior year period[6] - Basic net income per share attributable to Atleos common stockholders was $0.35 for Q3 2025, up from $0.29 in Q3 2024[22] - Diluted earnings per share (Non-GAAP) for Q3 2025 was $1.09, compared to $0.89 in Q3 2024, reflecting a growth of 22.5%[41] Cash Flow and Liquidity - Net Cash Flow from operating activities was $27 million, with Adjusted Free Cash Flow at $124 million[10] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $125 million, compared to $264 million for the same period in 2024[26] - Cash and cash equivalents at the end of Q3 2025 were $587 million, down from $684 million at the end of Q3 2024[26] - Net cash provided by operating activities in Q3 2025 was $27 million, down from $107 million in Q3 2024[43] - Adjusted free cash flow-unrestricted for Q3 2025 was $124 million, significantly higher than $38 million in Q3 2024[43] Assets and Liabilities - Total assets as of September 30, 2025, were $5,650 million, an increase from $5,535 million as of December 31, 2024[24] - Total liabilities as of September 30, 2025, were $5,319 million, slightly up from $5,312 million as of December 31, 2024[24]

Core Insights - NCR Atleos Corporation reported total revenue of $1.12 billion, marking a 4% year-over-year increase, with 70% derived from recurring revenue streams [1] - Core revenue, excluding Voyix, reached $1.11 billion, reflecting a 6% year-over-year growth [1] - The revenue growth for ATM as a Service (ATMaaS) accelerated to 37% year-over-year, with expectations of over 40% growth in Q4 [1] - Net income attributable to Atleos was $26 million, an increase of 24% year-over-year [1] - Adjusted EBITDA stood at $219 million, representing a 7% year-over-year increase [1] - Diluted earnings per share were reported at $0.34 [1]