Part I [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed consolidated financial statements for Q2 and H1 2025, showing increased net income [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 2025 revenue grew to $1.104 billion with net income of $45 million, while H1 net income more than doubled to $60 million Q2 2025 vs Q2 2024 Performance (in millions) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Total Revenue** | $1,104 | $1,080 | | **Income from Operations** | $120 | $108 | | **Net Income Attributable to Atleos** | $45 | $30 | | **Diluted EPS** | $0.60 | $0.41 | H1 2025 vs H1 2024 Performance (in millions) | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Total Revenue** | $2,083 | $2,129 | | **Income from Operations** | $214 | $180 | | **Net Income Attributable to Atleos** | $60 | $23 | | **Diluted EPS** | $0.80 | $0.31 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets reached $5.814 billion, with liabilities at $5.462 billion and stockholders' equity improving to $352 million Balance Sheet Summary (in millions) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $1,976 | $1,758 | | **Total Assets** | $5,814 | $5,544 | | **Total Current Liabilities** | $1,887 | $1,707 | | **Total Liabilities** | $5,462 | $5,293 | | **Total Stockholders' Equity** | $352 | $251 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Operating cash flow was $100 million, a decrease from prior year, with investing activities at $(37) million and financing at $(66) million Six-Month Cash Flow Summary (in millions) | Activity | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Net Cash from Operating Activities** | $100 | $157 | | **Net Cash used in Investing Activities** | $(37) | $(71) | | **Net Cash used in Financing Activities** | $(66) | $(30) | | **Cash at End of Period** | $650 | $630 | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes cover accounting policies, segment data, $2.9 billion debt, shared liabilities, and a $200 million share repurchase program [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=57&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q2 2025 revenue grew 2% to $1.1 billion, Adjusted EBITDA rose 4% to $205 million, supported by strong liquidity and a new $200 million share repurchase program [Overview](index=57&type=section&id=Overview) Atleos, a financial technology company, is transitioning to an ATMaaS recurring revenue model while managing macroeconomic pressures and seasonality - The company's strategy is to become a cash-generative business focused on delivering **ATMaaS** and shifting to a **highly recurring revenue model** to drive stable cash flow[181](index=181&type=chunk) - Atleos continues to incur **one-time separation costs** related to its spin-off from Voyix, which are expected to continue through at least **fiscal year 2025**[178](index=178&type=chunk) - The company is exposed to **macroeconomic pressures** including higher interest rates, increased logistics costs, and foreign currency fluctuations, as well as **new U.S. import tariffs** introduced in February 2025[186](index=186&type=chunk)[187](index=187&type=chunk) [Results of Operations](index=60&type=section&id=Results%20of%20Operations) Q2 2025 consolidated revenue grew 2% to $1.104 billion, with net income up 50% to $45 million, reflecting improved operational performance Consolidated Results - Q2 2025 vs Q2 2024 (in millions) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $1,104 | $1,080 | 2% | | **Total Gross Margin** | $253 | $251 | 1% | | **Income from Operations** | $120 | $108 | 11% | | **Net Income** | $44 | $29 | 52% | Consolidated Results - H1 2025 vs H1 2024 (in millions) | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Revenue** | $2,083 | $2,129 | (2)% | | **Total Gross Margin** | $486 | $472 | 3% | | **Income from Operations** | $214 | $180 | 19% | | **Net Income** | $58 | $22 | 164% | - **Recurring revenue represented 70.0% of total revenue in Q2 2025**, **down from 73.3% in Q2 2024**[194](index=194&type=chunk) - **Adjusted EBITDA increased 4% to $205 million in Q2 2025**, with the **margin expanding to 18.6% from 18.2%** in the prior year[195](index=195&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=73&type=section&id=Financial%20Condition,%20Liquidity%20and%20Capital%20Resources) Cash was $357 million, total debt $2.948 billion, with operating cash flow at $100 million and a new $200 million share repurchase program - The company's Board of Directors approved a **new Share Repurchase Program** on July 25, 2025, authorizing **up to $200 million** in common stock repurchases **over 24 months**[169](index=169&type=chunk)[265](index=265&type=chunk) Liquidity Position as of June 30, 2025 (in millions) | Item | Amount | | :--- | :--- | | Cash and Cash Equivalents | $357 | | Total Debt | $2,948 | | Borrowing Capacity | $334 | Adjusted Free Cash Flow-Unrestricted (Non-GAAP) (in millions) | Period | H1 2025 | H1 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $100 | $157 | | **Adjusted free cash flow-unrestricted** | $(8) | $85 | [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=79&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Market risks from foreign currency and interest rates are managed, with a 10% USD appreciation impacting hedges by $16 million - A hypothetical **10% appreciation of the U.S. Dollar** would **increase the fair value of the company's hedge portfolio by $16 million** as of June 30, 2025[279](index=279&type=chunk) - A hypothetical **100 basis point increase in variable interest rates** would **increase pre-tax interest expense by approximately $4 million** for Q2 2025[280](index=280&type=chunk) - The company's **ATM vault cash rental expense is sensitive to interest rates**. A **100 basis point rate increase would raise this expense by approximately $10 million** for Q2 2025, excluding the impact of hedges[281](index=281&type=chunk) [Item 4. Controls and Procedures](index=80&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The Company's principal executive officer and principal financial officer concluded that the **disclosure controls and procedures were effective as of June 30, 2025**[284](index=284&type=chunk) - **No material changes** were made to the **internal control over financial reporting** during the second quarter of 2025[285](index=285&type=chunk) Part II [Item 1. Legal Proceedings](index=81&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings are detailed in Note 9, covering shared liabilities with Voyix, including environmental and class action lawsuits - Information regarding legal proceedings is detailed in **Note 9 of the financial statements**[287](index=287&type=chunk) [Item 1A. Risk Factors](index=81&type=page&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the 2024 Annual Report on Form 10-K - **No material changes to risk factors** were reported since the **2024 Annual Report on Form 10-K**[288](index=288&type=chunk) [Item 6. Exhibits](index=82&type=section&id=Item%206.%20Exhibits) Exhibits include Sarbanes-Oxley certifications and financial statements in iXBRL format - Exhibits filed include **certifications pursuant to Sarbanes-Oxley Act rules** and **financial data in iXBRL format**[293](index=293&type=chunk)

Financial Data and Key Metrics Changes - Atlios reported revenue of $1.1 billion for the second quarter, with core top line growth led by traditional hardware revenue and service growth backlog conversion [10][29] - Adjusted EBITDA grew to $205 million, with a margin expansion of approximately 40 basis points year over year [30][40] - Non-GAAP fully diluted earnings per share increased by 9% year over year to $0.93 [31] Business Line Data and Key Metrics Changes - The self-service banking segment saw revenue growth of 9% year over year, reaching $733 million, driven by a 21% increase in hardware deliveries [32] - The ATM as a Service business experienced a 32% revenue growth, with significant increases in unique customers and a favorable mix shift to higher margin geographies [36] - The network segment revenue was down 2% year over year to $320 million, primarily due to lower cash withdrawal transactions [38] Market Data and Key Metrics Changes - The company reported a backlog increase of 105% year over year, setting a strong foundation for future growth [53] - Cash deposit transactions grew by 170% year over year in the U.S. retail portfolio, indicating strong demand for utility deposit services [40] - The adjusted EBITDA margin for the network segment was 27%, reflecting the impact of increased bulk cash costs [40] Company Strategy and Development Direction - Atlios aims to grow efficiently, prioritize service, and embrace simplicity as part of its strategic objectives for 2025 [13][24] - The company is focused on expanding its installed base and enhancing service offerings to drive future revenue growth [22][70] - A $200 million share repurchase program has been authorized to enhance shareholder value while balancing debt reduction [25][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance despite ongoing tariff uncertainties and macroeconomic challenges [47] - The company anticipates continued growth in free cash flow and a reduction in net leverage to below three times by the third quarter [27][44] - Management highlighted the importance of customer satisfaction and service performance improvements as key drivers of future growth [56][70] Other Important Information - The company has successfully transitioned to a pure-play independent entity following its separation from legacy NCR [22][24] - The focus on product innovation and operational efficiency is expected to enhance competitive positioning in the market [14][22] Q&A Session Summary Question: Can you talk about the average ARPU in the as-a-service backlog and its trend? - The average ARPU in the backlog is approximately $9,100, with over 8,000 units currently in backlog [51] Question: Can you quantify the as-a-service backlog? - The backlog is up 105% year over year, indicating strong momentum for the business [53] Question: Can you provide metrics on service performance improvements? - Customer health scores have increased by 160 basis points, reflecting enhanced service levels and customer satisfaction [15][56] Question: What is the company's vision for the next two to three years? - The company aims to leverage its unique capabilities to provide both shared financial utility and bank-specific fleet solutions, driving predictable and high free cash flows [70] Question: How does the company view the impact of tariffs on hardware? - Hardware revenue is approximately $800 million, and while tariffs are a concern, the company believes it can manage costs effectively and maintain competitiveness [74][80]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $1.1 billion, with core top line growth in line with expectations, primarily driven by hardware revenue and service growth backlog [7][26] - Adjusted EBITDA grew 4% year over year to $205 million, with an adjusted EBITDA margin of almost 19%, expanding approximately 40 basis points from the prior year [27][36] - Non-GAAP fully diluted earnings per share increased 9% year over year to $0.93 [28] Business Line Data and Key Metrics Changes - The Self-Service Banking segment reported revenue growth of 9% year over year, reaching $733 million, driven by a 21% increase in hardware deliveries [29] - The ATM as a Service business saw a 32% revenue increase year over year, with gross profit up 72% and gross margin expanding to 40% [32] - The Network segment revenue was $320 million, down 2% year over year, primarily due to lower cash withdrawal transactions [34] Market Data and Key Metrics Changes - The company has over 500,000 ATMs in its global installed base, with a significant increase in demand for outsourced services [8][9] - Cash deposit transactions grew 170% year over year in the U.S. retail portfolio, indicating strong market demand [16] - The company anticipates a return to growth in the Network segment, particularly with new partnerships and transaction types being added [34][88] Company Strategy and Development Direction - The company aims to grow efficiently, prioritize service, and embrace simplicity, focusing on enhancing service levels and reducing inefficiencies [6][10] - The strategic focus includes expanding the installed base of ATMs and increasing revenue from each device supported [18][19] - A $200 million share repurchase program has been authorized, reflecting confidence in the company's valuation and future cash flow generation [21][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance despite challenges such as tariffs and macroeconomic headwinds [8][44] - The company expects to generate significant free cash flow in the upcoming quarters, with net leverage projected to drop below three times [41][43] - Management highlighted the importance of customer satisfaction and service performance improvements, which have led to increased service revenue [12][54] Other Important Information - The company has streamlined its sales process and improved conversion rates, resulting in record bookings for ATM as a Service [12][81] - The impact of tariffs on hardware revenue is expected to be manageable, with ongoing adjustments to manufacturing and supply chain strategies [73][78] Q&A Session Summary Question: Can you talk about the as a service business, average ARPU, and backlog quantification? - The average ARPU in the as a service backlog is over $9,100, with a backlog growth of 105% year over year [46][50] Question: Can you quantify the service performance improvements? - Service levels have improved significantly, with customer health scores increasing by 160 basis points [51][54] Question: What is the company's vision for the next two to three years? - The company aims to leverage its unique capabilities to provide both shared financial utility and bank-specific fleet solutions, focusing on sustainable growth and profitability [62][66] Question: How does the company view the impact of tariffs on hardware? - Hardware revenue is $800 million, and while tariffs are a concern, the company has strategies in place to mitigate their impact [72][74]

Financial Performance Highlights - Core revenue grew by 4% year-over-year in Q2 2025[15, 49], reaching $1094 million[48] - Adjusted EBITDA margin was 186% in Q2 2025[15, 49], with Adjusted EBITDA of $205 million[49] - Adjusted diluted EPS increased by 9% year-over-year to $093[15, 49] - The company reaffirmed its FY 2025 outlook[16] Segment Performance - Self-Service Banking segment revenue increased by 9% year-over-year[23, 52] - Self-Service Banking adjusted EBITDA increased by 20% year-over-year[23] - Network segment revenue increased by 7% quarter-over-quarter[32] - ATM as a Service (ATMaaS) revenue increased by 32% year-over-year[17, 61] Key Performance Indicators - ATMaaS backlog increased by 105% year-over-year[17, 25] - Customer satisfaction scores improved by 160 basis points year-to-date[17, 24] - Cash deposit transactions in the Network segment increased by 170% year-over-year for the first half of the year[34]

Core Viewpoint - NCR Atleos reported quarterly earnings of $0.93 per share, exceeding the Zacks Consensus Estimate of $0.85 per share, and showing an increase from $0.81 per share a year ago, indicating a positive earnings surprise of +9.41% [1][2] Financial Performance - The company achieved revenues of $1.1 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.78% and reflecting a year-over-year increase from $1.08 billion [2] - Over the last four quarters, NCR Atleos has consistently surpassed consensus EPS estimates four times and topped revenue estimates twice [2] Stock Performance and Outlook - NCR Atleos shares have declined approximately 6.1% since the beginning of the year, contrasting with the S&P 500's gain of 7.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters [4] Estimate Revisions and Rankings - Prior to the earnings release, the estimate revisions trend for NCR Atleos was unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] - The current consensus EPS estimate for the upcoming quarter is $1.06 on revenues of $1.11 billion, and for the current fiscal year, it is $3.93 on revenues of $4.31 billion [7] Industry Context - The Internet - Software industry, to which NCR Atleos belongs, is currently ranked in the top 32% of over 250 Zacks industries, suggesting that stocks in the top 50% outperform those in the bottom 50% by more than 2 to 1 [8]

Q2 2025 Earnings Release [Performance Highlights & Management Commentary](index=1&type=section&id=Performance%20Highlights%20%26%20Management%20Commentary) Atleos reported strong Q2 2025 results, meeting or exceeding guidance, driven by robust demand for self-service banking technology and ATM outsourcing, reaffirming full-year guidance and announcing a $200 million share repurchase program - Management highlighted a strong quarter with strategic momentum, robust demand for self-service banking technology, and accelerating interest in ATM outsourcing, leading to a strong order book and backlog[2](index=2&type=chunk) - The Board of Directors authorized a **$200 million** share repurchase program with a two-year duration, representing approximately **10%** of the current market capitalization[3](index=3&type=chunk)[5](index=5&type=chunk) Q2 2025 Key Highlights | Metric | Value | Growth (YoY) | | :--- | :--- | :--- | | Revenue | $1,100 million | 2% | | Recurring Revenue % | 70% | N/A | | GAAP Net Income | $45 million | 50% | | Adjusted EBITDA | $205 million | 4% | | GAAP Diluted EPS | $0.60 | 46% | | Non-GAAP Diluted EPS | $0.93 | 9% | [Financial Results](index=1&type=section&id=Financial%20Results) The company's Q2 2025 financial performance showed overall revenue growth driven by the Self-Service Banking segment, offsetting declines in Network and T&T segments [Consolidated Financial Performance](index=1&type=section&id=Consolidated%20Financial%20Performance) In Q2 2025, Atleos generated **$1.10 billion** in revenue, a **2%** year-over-year increase, with GAAP net income up **50%** to **$45 million** and Adjusted EBITDA rising **4%** to **$205 million** Q2 2025 Consolidated Operating Results (YoY Comparison, $ in millions) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Revenue | 1,100 | 1,080 | 2% | | GAAP Gross Profit | 253 | 251 | 1% | | Adjusted Gross Profit | 275 | 274 | 0% | | GAAP Income from Operations | 120 | 108 | 11% | | Adjusted Income from Operations | 159 | 153 | 4% | | Net Income Attributable to Atleos | 45 | 30 | 50% | | Adjusted EBITDA | 205 | 197 | 4% | | GAAP Diluted EPS | 0.60 | 0.41 | 46% | | Non-GAAP Diluted EPS | 0.93 | 0.85 | 9% | - Net cash used by operating activities was **$23 million**, while Adjusted free cash flow-unrestricted was **$15 million**[6](index=6&type=chunk) [Segment Performance](index=2&type=section&id=Segment%20Performance) The Self-Service Banking segment was the primary growth driver, with revenue increasing **9%** and Adjusted EBITDA up **20%**, while Network and T&T segments saw mixed revenue and EBITDA changes Q2 2025 Revenue by Segment (YoY Comparison, $ in millions) | Segment | Q2 2025 Revenue | Q2 2024 Revenue | % Change | | :--- | :--- | :--- | :--- | | Self-Service Banking | 733 | 672 | 9% | | Network | 320 | 326 | (2)% | | T&T | 41 | 51 | (20)% | Q2 2025 Adjusted EBITDA by Segment (YoY Comparison, $ in millions) | Segment | Q2 2025 Adj. EBITDA | Q2 2024 Adj. EBITDA | % Change | | :--- | :--- | :--- | :--- | | Self-Service Banking | 189 | 157 | 20% | | Network | 86 | 101 | (15)% | | T&T | 9 | 8 | 13% | [Full Year 2025 Guidance](index=3&type=section&id=Full%20Year%202025%20Guidance) The company reaffirmed its full-year 2025 guidance, projecting total revenue growth of **1% to 3%**, Adjusted EBITDA growth of **7% to 10%**, and Adjusted free cash flow between **$260 million and $300 million** Full Year 2025 Guidance | Metric | 2025 Guidance | 2024 Base | | :--- | :--- | :--- | | Core Revenue (constant currency) | 3% to 6% growth | $4,175 million | | Total Revenue (constant currency) | 1% to 3% growth | $4,317 million | | Total Adjusted EBITDA (constant currency) | 7% to 10% growth | $794 million | | Non-GAAP Diluted EPS | 21% to 27% growth | $3.22 | | Adjusted free cash flow-unrestricted | $260 - $300 million | $242 million | [Financial Statements](index=5&type=section&id=Financial%20Statements) The condensed consolidated financial statements detail the company's performance, showing increased net income, growth in assets and liabilities, and a shift to net cash used in operations for Q2 2025 [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, total revenue was **$1.104 billion**, up from **$1.080 billion** in the prior year, with net income attributable to Atleos increasing to **$45 million** from **$30 million** Statement of Operations Highlights (Three Months Ended June 30, $ in millions) | ($ in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Total revenue | 1,104 | 1,080 | | Total gross profit | 253 | 251 | | Income from operations | 120 | 108 | | Net income attributable to Atleos | 45 | 30 | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets increased to **$5.814 billion** from **$5.544 billion** at year-end 2024, with total liabilities also rising to **$5.462 billion** and equity growing to **$352 million** Balance Sheet Highlights ($ in millions) | ($ in millions) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total current assets | 1,976 | 1,758 | | Total assets | 5,814 | 5,544 | | Total current liabilities | 1,887 | 1,707 | | Total liabilities | 5,462 | 5,293 | | Total stockholders' equity | 352 | 251 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used by operating activities was **$23 million** in Q2 2025, a shift from **$9 million** provided in the prior-year, with no net cash used in investing activities and **$17 million** used in financing Cash Flow Highlights (Three Months Ended June 30, $ in millions) | ($ in millions) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | (23) | 9 | | Net cash used in investing activities | 0 | (40) | | Net cash provided by (used in) financing activities | (17) | 57 | [Non-GAAP Financial Measures & Reconciliations](index=8&type=section&id=Non-GAAP%20Financial%20Measures%20%26%20Reconciliations) This section reconciles GAAP results to non-GAAP measures, adjusting GAAP net income to non-GAAP net income, and reconciling to Adjusted EBITDA and Adjusted Free Cash Flow Q2 2025 GAAP to Non-GAAP EPS Reconciliation | Metric | Value ($) | | :--- | :--- | | GAAP Diluted EPS | 0.60 | | Adjustments (Transformation, Stock Comp, etc.) | +0.33 | | Non-GAAP Adjusted Diluted EPS | 0.93 | Q2 2025 Net Income to Adjusted EBITDA Reconciliation ($ in millions) | ($ in millions) | Value | | :--- | :--- | | Net income attributable to Atleos (GAAP) | 45 | | Adjustments (Interest, Taxes, D&A, etc.) | +160 | | Adjusted EBITDA (Non-GAAP) | 205 | Q2 2025 Operating Cash Flow to Adjusted Free Cash Flow Reconciliation ($ in millions) | ($ in millions) | Value | | :--- | :--- | | Net cash (used in) operating activities | (23) | | Adjustments (Capex, Restricted Cash, etc.) | +38 | | Adjusted free cash flow-unrestricted | 15 | [Notes to Investors & Other Metrics](index=2&type=section&id=Notes%20to%20Investors%20%26%20Other%20Metrics) The company revised prior financial statements for immaterial misstatements and changed its Non-GAAP diluted EPS definition, with Self-Service Banking Annualized Recurring Revenue at **$1.685 billion** and total recurring revenue mix at **70%** - The company revised previously issued financial statements for immaterial misstatements impacting pre-tax income in fiscal years 2023, 2024, and Q1 2025[9](index=9&type=chunk) - Beginning in Q2 2025, the definition of Non-GAAP diluted EPS was changed to exclude gains and losses on remeasurement of foreign currency in hyper-inflationary countries, with historical periods recast to reflect the change[10](index=10&type=chunk) Other Performance Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Self-Service Banking** | | | | Annualized recurring revenue | $1,685 million | $1,664 million | | **Network** | | | | LTM ARPU (in thousands) | $16.2 | $15.8 | | Network Managed Units (in thousands) | 77.0 | 80.8 | | **Total Company** | | | | Recurring revenue as a % of revenue | 70% | 73% |

Group 1 - The stock of NCR Atleos Corporation (NATL) is experiencing significant attention due to high implied volatility in the options market, particularly for the Dec 19, 2025 $17.50 Call option [1] - Implied volatility indicates the market's expectation of future price movement, suggesting that investors anticipate a significant change in NCR Atleos shares, possibly due to an upcoming event [2] - NCR Atleos currently holds a Zacks Rank 4 (Sell) in the Internet - Software industry, which is in the top 29% of the Zacks Industry Rank, with the Zacks Consensus Estimate for the current quarter increasing from 82 cents to 85 cents per share over the last 60 days [3] Group 2 - The high implied volatility for NCR Atleos may indicate a developing trading opportunity, as options traders often seek to sell premium on options with high implied volatility to capture decay [4]

[PART I. Financial Information](index=3&type=section&id=PART%20I.%20Financial%20Information) [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed consolidated financial statements for Q1 2025 and 2024, including operations, balance sheets, cash flows, and detailed notes [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net income reached **$16 million** in Q1 2025, a turnaround from a **$8 million** net loss in Q1 2024, despite a **7% revenue decrease** to **$980 million** Q1 2025 vs Q1 2024 Statement of Operations Highlights | Metric | Q1 2025 (in millions) | Q1 2024 (in millions) | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $980 | $1,050 | -7% | | Income from Operations | $96 | $72 | +33% | | Net Income (Loss) | $16 | $(8) | N/A | | Diluted EPS | $0.23 | $(0.11) | N/A | - The shift from net loss to net income was primarily due to improved operational efficiency and lower operating expenses, which decreased from **$978 million** to **$884 million** year-over-year[10](index=10&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets increased to **$5.74 billion** by March 31, 2025, from **$5.55 billion** at year-end 2024, with total liabilities rising to **$5.46 billion** Balance Sheet Summary | Metric | March 31, 2025 (in millions) | Dec 31, 2024 (in millions) | | :--- | :--- | :--- | | Total Current Assets | $1,937 | $1,766 | | Total Assets | $5,739 | $5,552 | | Total Current Liabilities | $1,888 | $1,702 | | Long-term Borrowings | $2,833 | $2,855 | | Total Liabilities | $5,461 | $5,288 | | Total Stockholders' Equity | $278 | $264 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from operating activities was **$123 million** in Q1 2025, a decrease from **$148 million** in Q1 2024, with reduced cash used in financing activities Q1 2025 vs Q1 2024 Cash Flow Summary | Cash Flow Activity | Q1 2025 (in millions) | Q1 2024 (in millions) | | :--- | :--- | :--- | | Net Cash from Operating Activities | $123 | $148 | | Net Cash used in Investing Activities | $(37) | $(31) | | Net Cash used in Financing Activities | $(49) | $(87) | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies and financial results, covering segment performance, debt, spin-off related commitments, and derivative instruments - The company completed its separation from NCR Corporation (now Voyix) on October 16, 2023, and now operates as an independent publicly-traded company[24](index=24&type=chunk) - As of March 31, 2025, the company had approximately **$2.5 billion** in remaining performance obligations, with about three-quarters expected to be recognized as revenue over the next 12 months[34](index=34&type=chunk) - The company shares liability with Voyix for certain environmental matters, including the Kalamazoo River site, and has accrued **$18 million** for these shared matters as of March 31, 2025[92](index=92&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20%28MD%26A%29) Management discusses Q1 2025 financial performance, strategic shift to ATMaaS, spin-off impacts, and macroeconomic challenges, noting a **9% Adjusted EBITDA increase** despite a **7% revenue decline** [Overview](index=36&type=section&id=Overview) Atleos, a financial technology company, focuses on self-directed banking solutions and is transitioning to a recurring revenue ATMaaS model while managing macroeconomic challenges - The company's strategic focus is on delivering ATMaaS to its customer base of banks and retailers, aiming to drive stable cash flow and shift to a highly recurring revenue model[137](index=137&type=chunk) - Atleos continues to be exposed to macroeconomic pressures such as higher interest rates, increased logistics costs, and foreign currency fluctuations[142](index=142&type=chunk) [Results of Operations](index=39&type=section&id=Results%20of%20Operations) Q1 2025 total revenue decreased **7%** to **$980 million** due to strategic shifts, yet gross margin improved to **24.0%** and Adjusted EBITDA grew **9%** to **$175 million** Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $980M | $1,050M | (7)% | | Recurring Revenue | $742M | $763M | (3)% | | Net Income (Loss) | $17M | $(8)M | 313% | | Adjusted EBITDA | $175M | $160M | 9% | - The Self-Service Banking segment saw a **1% revenue decrease** but a **14% increase** in Adjusted EBITDA, driven by growth in ATMaaS and software revenue[179](index=179&type=chunk)[184](index=184&type=chunk) - The Network segment revenue decreased **4%**, partly due to lower Bitcoin transaction volumes, while Adjusted EBITDA increased **2%** from cost optimization[179](index=179&type=chunk)[182](index=182&type=chunk)[185](index=185&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=47&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) As of March 31, 2025, the company held **$352 million** in cash and **$2.97 billion** in total debt, with **$123 million** net cash from operations for the quarter - Net cash provided by operating activities decreased by **$25 million** YoY to **$123 million** in Q1 2025, primarily due to the timing of cash payments and receipts[188](index=188&type=chunk) Liquidity Position as of March 31, 2025 | Metric | Amount (in millions) | | :--- | :--- | | Cash and Cash Equivalents | $352 | | Total Debt | $2,968 | | Revolver Borrowing Capacity | $336 | - Adjusted free cash flow was negative **$23 million** for Q1 2025, compared to positive **$69 million** in Q1 2024, largely due to changes in restricted cash settlement activity[200](index=200&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks from foreign currency fluctuations across **40 currencies** and interest rate changes impacting variable-rate debt and ATM vault cash rental expenses - A hypothetical **10% appreciation** of the U.S. Dollar would increase the fair value of the company's hedge portfolio by **$13 million** as of March 31, 2025[208](index=208&type=chunk) - A hypothetical **100 basis point increase** in variable interest rates would increase pre-tax interest expense by approximately **$4 million** for the quarter[209](index=209&type=chunk) - The same **100 basis point increase** would raise ATM vault cash rental expense by approximately **$10 million** for the quarter, excluding the impact of interest rate swaps[210](index=210&type=chunk) [Item 4. Controls and Procedures](index=52&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - The Company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of March 31, 2025[213](index=213&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[214](index=214&type=chunk) [PART II. Other Information](index=53&type=section&id=PART%20II.%20Other%20Information) [Item 1. Legal Proceedings](index=53&type=section&id=Item%201.%20Legal%20Proceedings) Legal proceedings, including shared matters with Voyix post-separation, are incorporated by reference from Note 9, "Commitments and Contingencies," of the financial statements - Information regarding legal proceedings is detailed in Note 9 of the Notes to Condensed Consolidated Financial Statements[216](index=216&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors have occurred since those disclosed in the company's 2024 Annual Report on Form 10-K - There have been no material changes to the risk factors previously disclosed in the Company's 2024 Annual Report on Form 10-K[217](index=217&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Common stock repurchases are subject to restrictions from the senior secured credit facility and notes indentures, and are at the Board's discretion - The company's ability to repurchase its common stock is restricted by its credit facility and senior notes indentures[218](index=218&type=chunk) [Item 6. Exhibits](index=54&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including officer certifications, employment agreements, and iXBRL interactive data files - Exhibits filed include certifications pursuant to the Sarbanes-Oxley Act and various employment-related agreements[222](index=222&type=chunk)

Financial Data and Key Metrics Changes - First quarter core revenue was $966 million, slightly less than the prior year period on a constant currency basis, in line with expectations [25] - Adjusted EBITDA grew 9% year over year to $175 million, with a margin expansion of 270 basis points to 17.9% [27] - Non-GAAP fully diluted earnings per share increased 56% year over year to $0.64 [27] Business Line Data and Key Metrics Changes - Self-service banking revenue grew 1% year over year to $624 million, driven by a 6% increase in combined software and services revenues [28] - ATM as a Service revenue grew 24% year over year to $57 million, with a 44% increase in unique customer count [30] - Network segment revenue was $299 million, down 4% year over year, with cash withdrawal transactions approximately 3.5% lower than the prior year [33] Market Data and Key Metrics Changes - The company has an installed fleet of approximately 600,000 ATMs, with about 80,000 machines owned and operated in its own network [6] - The Allpoint network signed a partnership with Seven Eleven, adding thousands of locations for cardholders [19] - Cash deposit transactions increased more than 200% year over year, indicating strong growth in this area [33] Company Strategy and Development Direction - The company aims to grow efficiently, develop a service-first culture, and embrace simplicity in operations [12][13][15] - The focus is on generating more revenue from existing machines and enhancing service offerings to financial institutions [7][8] - The company is working on mitigating tariff impacts through pricing actions and supply chain adjustments [41][42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite external uncertainties, with over 70% of revenue coming from recurring services [11] - The company expects to generate positive free cash flow in each of the remaining quarters of 2025 [39] - Full year 2025 guidance includes core revenue growth of 3% to 6% and adjusted EBITDA growth of 7% to 10% [43] Other Important Information - The company is developing plans to mitigate potential costs from tariffs, which could impact profitability [42] - The backlog for ATM as a Service units is up 25% year over year, indicating strong demand [70] - The company is not investing further in the LibertyX business due to regulatory challenges and low profitability [98] Q&A Session Summary Question: Can you provide more color on overall backlog this year relative to last? - Management indicated that this year is expected to be the best hardware year since 2019, with strong demand and a good backlog [50][51] Question: How is leverage informing your view on potential buyback timing? - Management aims to use free cash flow to reduce leverage below three times and is considering share repurchases as a priority [55][56] Question: Can you discuss the amount of hardware impact by the segments? - Most hardware revenue will come through the self-service banking segment, with significant investments in upgrading the existing network fleet [62] Question: What is driving the strength in ATMs as a Service gross profit? - The strength is attributed to a higher number of smaller contracts in North America, which are more profitable due to scalable cost structures [86] Question: What is the game plan for LibertyX? - Management is de-emphasizing LibertyX due to regulatory changes and low profitability, focusing instead on monetizing Bitcoin at the device [98]

Financial Data and Key Metrics Changes - First quarter core revenue was $966 million, slightly less than the prior year period on a constant currency basis, in line with expectations [24] - Adjusted EBITDA grew 9% year over year to $175 million, with a margin expansion of 270 basis points to 17.9% [27] - Non-GAAP fully diluted earnings per share increased 56% year over year to $0.64 [27] Business Line Data and Key Metrics Changes - Self-service banking revenue grew 1% year over year to $624 million, driven by a 6% increase in combined software and services revenues [28] - ATM as a Service revenue grew 24% year over year to $57 million, with a 44% increase in unique customer count [30] - Network segment revenue was $299 million, down 4% year over year, with cash withdrawal transactions approximately 3.5% lower than the prior year [32] Market Data and Key Metrics Changes - The Allpoint cash withdrawals grew modestly, while cash deposits increased more than 200% year over year [32] - Adjusted EBITDA margin for the Network segment was 29%, expanding approximately 150 basis points year over year [32] Company Strategy and Development Direction - The company aims to grow efficiently, develop a service-first culture, and embrace simplicity to enhance operational efficiency [12][14] - The strategy focuses on increasing service revenue opportunities and improving customer trust through sustained excellence [13] - The company is optimistic about expanding its ATM as a Service business, particularly in North America and Europe [30][84] Management's Comments on Operating Environment and Future Outlook - Management noted that over 70% of revenue comes from recurring services, which are resilient in uncertain economic environments [10] - The company expects total core revenue to grow 3% to 6% on a constant currency basis for the full year 2025 [41] - Tariff exposure is primarily related to hardware and parts, with plans to mitigate potential costs [40] Other Important Information - The company reaffirmed its full-year 2025 guidance despite external uncertainties, expecting adjusted EBITDA to grow 7% to 10% [41] - The backlog for ATM as a Service units is up 25% year over year, indicating strong demand [66] Q&A Session Questions and Answers Question: Can you provide more color on overall backlog this year relative to last? - Management indicated that this year is expected to be the best hardware year since 2019, with strong demand and a good backlog [47][48] Question: How is the balance sheet informing your view on potential buyback timing? - The company aims to use free cash flow to reduce leverage below three times, with plans for share repurchases once cash flow stabilizes [52][54] Question: Can you comment on withdrawal transactions in North America versus the rest of the world? - Withdrawal transactions in North America were stable, while the UK experienced a high single-digit decrease [92] Question: What is the game plan for LibertyX? - Management acknowledged that LibertyX has been de-emphasized due to regulatory changes impacting profitability, and they are exploring ways to monetize Bitcoin at the device [95] Question: Are there any M&A opportunities being cultivated? - The company has a long list of potential M&A ideas, focusing on low-cost opportunities to enhance its fleet and technology [98]