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]

Core Insights - NCR Atleos Corporation (NYSE:NATL) is set to report its quarterly earnings on November 5, 2025, with analysts expecting an earnings per share (EPS) of $1.05 and revenue of approximately $1.11 billion [1][6] Institutional Ownership - Institutional investors hold 88.7% of NATL's shares, indicating strong confidence in the company's long-term growth potential [2][6] - Only 0.6% of shares are held by company insiders, suggesting internal optimism regarding the company's future [2] Analyst Ratings - The consensus price target for NATL is $41.00, with a rating score of 2.25, reflecting moderate confidence based on three hold ratings and one buy rating [3][6] - In comparison, Tianci International has a lower rating score of 1.00, indicating less favorable views [3] Valuation Metrics - NATL has a price-to-earnings (P/E) ratio of 54.04, suggesting investors are willing to pay $54.04 for every dollar of earnings [4] - The price-to-sales (P/S) ratio is 0.63, indicating the market values the company at 63 cents for every dollar of sales [4] - The enterprise value to sales ratio is 1.19, reflecting the company's overall valuation in relation to its sales [4] Financial Health - The enterprise value to operating cash flow ratio is 17.72, indicating the company's valuation at 17.72 times its operating cash flow [5] - The earnings yield is 1.85%, representing the earnings generated per dollar invested [5] - A debt-to-equity ratio of 8.62 indicates a high level of debt relative to equity, while a current ratio of 1.05 shows a reasonable capability to meet short-term obligations [5]

Core Insights - NCR Atleos Corporation has partnered with Kuwait Finance House to enhance the in-branch customer experience through the use of AI technology [1] Group 1: Company Overview - NCR Atleos Corporation is recognized as a leader in providing self-service financial access for financial institutions, retailers, and consumers [1] Group 2: Initiative Details - The collaboration involves the deployment of hyper-realistic conversational AI-powered avatars at account service kiosks in KFH branches [1] - This initiative aims to offer customers real-time assistance and improve the overall customer experience [1]

Core Insights - NCR Atleos Corporation has strengthened its partnership with Moto, enhancing cash access through the NCR Atleos Cashzone Network, which now features over 16,000 ATMs in the UK [1] Company Summary - NCR Atleos Corporation is recognized as a leader in providing self-service financial access for financial institutions, retailers, and consumers [1] - The NCR Atleos Cashzone Network is a significant asset, facilitating convenient and secure cash access [1] Industry Summary - The collaboration with Moto, the UK's leading Motorway Service Area operator, indicates a growing trend in the integration of self-service financial solutions within service areas [1]

Company Overview - NCR Atleos (NYSE: NATL) has a significant ATM base and retail network, focusing on ATM outsourcing and managed services both in the U.S. and internationally [1] - The company is benefiting from a growing trend among financial institutions to outsource their ATM fleets, indicating a favorable market opportunity [1] Industry Trends - The trend towards outsourcing ATM fleets by financial institutions presents a continued opportunity for growth in the ATM outsourcing and managed services sector [1]

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]