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]

Q1 2025 Financial Performance - Core revenue reached $966 million, a decrease of 2% year-over-year, or 1% on a constant currency basis[47] - Core recurring revenue was $729 million, up 1% year-over-year in constant currency[49] - Adjusted EBITDA increased by 9% year-over-year to $175 million, with core Adjusted EBITDA up 11% year-over-year[51, 54] - Adjusted EBITDA margin expanded by 270 bps from Q1 2024 to Q1 2025[21, 54] - Adjusted diluted EPS grew by 56% year-over-year to $064[52, 54] Segment Performance - Self-Service Banking segment revenue decreased by 1%, but increased by 1% in constant currency[47] - Services & Software revenue in Self-Service Banking grew by 4%, or 6% in constant currency[47] - ATM as a Service (ATMaaS) revenue increased by 24% year-over-year[31, 49] - Network segment revenue decreased by 4%, or 2% in constant currency[47] - Allpoint cash withdrawal transactions increased by 2% year-over-year[41] - Cash deposit transactions increased by 200% year-over-year, reaching an annual run rate of $1 billion in cash deposits[41] Key Strategic Metrics - ATMaaS unique customers increased by 40% year-over-year[31] - Network segment LTM ARPU increased to $16,129[34] Full Year 2025 Outlook - The company reaffirmed its full year 2025 guidance[21] - Core revenue is projected to grow by 3% to 6% in constant currency[78] - Total Adjusted EBITDA is expected to grow by 7% to 10% in constant currency[78] - Adjusted free cash flow is projected to be between $260 million and $300 million[78]

Core Viewpoint - NCR Atleos reported quarterly earnings of $0.64 per share, exceeding the Zacks Consensus Estimate of $0.54 per share, and showing an increase from $0.41 per share a year ago, indicating an earnings surprise of 18.52% [1][2] Financial Performance - The company posted revenues of $980 million for the quarter ended March 2025, which was 2.49% below the Zacks Consensus Estimate and a decrease from $1.05 billion in the same quarter last year [2] - Over the last four quarters, NCR Atleos has surpassed consensus EPS estimates three times but has only topped revenue estimates once [2] Stock Performance - NCR Atleos shares have declined approximately 13.8% since the beginning of the year, compared to a decline of 4.7% for the S&P 500 [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.07 on revenues of $1.08 billion, and for the current fiscal year, it is $4.01 on revenues of $4.32 billion [7] - The trend of estimate revisions for NCR Atleos is mixed, which could change following the recent earnings report [6] Industry Context - The Internet - Software industry, to which NCR Atleos belongs, is currently ranked in the top 37% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - The performance of NCR Atleos may also be influenced by the overall industry outlook [8]

Revenue Performance - First quarter 2025 revenue was $980 million, with 76% ($742 million) coming from recurring revenue streams, compared to $1.05 billion and 73% in the prior year period[6][7]. - Total revenue for the three months ended March 31, 2025, was $980 million, a decrease of 6.7% from $1,050 million in the same period of 2024[19]. - Product revenue decreased to $189 million, down 21.3% from $240 million year-over-year, while service revenue slightly decreased to $791 million from $810 million[19]. - The self-service banking segment generated $624 million in revenue, while the network segment contributed $299 million, reflecting a decline of 1% and 4% respectively year-over-year[9]. Profitability Metrics - GAAP net income for the first quarter was $17 million, a significant improvement from a net loss of $8 million in the prior year[6][7]. - First quarter diluted earnings per share were $0.23 on a GAAP basis, compared to $(0.11) in the prior year, while non-GAAP diluted earnings per share increased 56% to $0.64[6][7]. - Adjusted EBITDA for the first quarter grew 9% year-over-year to $175 million, with an adjusted EBITDA margin of 17.9%, up from 15.2% in the prior year[6][7]. - Total gross profit increased to $235 million, representing a gross margin of 24.0%, compared to 21.0% in the prior year[19]. - Adjusted net income attributable to Atleos was $48 million, with an adjusted diluted earnings per share of $0.64 for the three months ended March 31, 2025[33]. Cash Flow and Financial Position - Adjusted free cash flow-unrestricted for the first quarter was $(23) million, indicating a need for improved cash management strategies[7]. - Cash and cash equivalents decreased to $352 million from $419 million at the end of the previous quarter[21]. - Net cash provided by operating activities was $123 million, down from $148 million in the prior year[23]. - Adjusted free cash flow-unrestricted for Q1 2025 was $(23) million, a decline from $69 million in Q1 2024[38]. Customer Growth and Market Strategy - The number of unique customers for ATM as a Service increased by 40% year-over-year, contributing to a 24% increase in revenue from this segment[6]. - The company is focused on expanding its global installed base of 600,000 ATMs to generate incremental services revenue, emphasizing its growth strategy in self-service banking solutions[3]. Guidance and Future Outlook - The company reaffirmed its full-year 2025 guidance, expecting core revenue growth of 3% to 6% and total revenue growth of 1% to 3%[10]. Historical Comparisons - For Q1 2024, Atleos reported a GAAP net loss of $8 million, resulting in a diluted loss per share of $(0.11)[34]. - Non-GAAP adjusted net income for Q1 2024 was $30 million, with a diluted earnings per share of $0.41, reflecting a significant improvement from the GAAP results[34]. - Adjusted EBITDA for Q1 2024 was $160 million, representing 15.2% of revenue, compared to $175 million or 17.9% of revenue in Q1 2025[37]. - Gross profit for Q1 2024 was $221 million, with a gross profit margin of 21.0%[34].

Market Overview - Markets experienced significant fluctuations in April, primarily influenced by changing trade news, including new tariffs announced by President Trump, which led to a sharp stock reaction [1] - The S&P 500 has seen five consecutive days of gains but remains down over 1% for the month, with investors now focusing on a week filled with corporate earnings and key economic data such as GDP, inflation, and jobs reports [1] Value Investing - In volatile market conditions, value investing is particularly relevant as value stocks, often trading below their true worth, can provide stability [2] - Investing in solid, undervalued companies is suggested as a safer strategy, with specific stocks highlighted for their high earnings yield [3] Earnings Yield Metric - Earnings yield, calculated as annual earnings per share (EPS) divided by market price, is a useful metric for identifying attractively valued stocks [4] - A higher earnings yield indicates undervaluation compared to stocks with lower yields, which are seen as overpriced [4] Stock Screening Criteria - A primary screening criterion for stock selection is an earnings yield greater than 10%, supplemented by estimated EPS growth for the next 12 months being greater than or equal to the S&P 500 [7] - Additional criteria include an average daily volume of at least 100,000 and a current price of $5 or more [8][9] Stock Recommendations - **Equinox Gold Corp. (EQX)**: A Canadian mining company with a projected earnings growth of 355% and 30.4% for 2025 and 2026, respectively, and a Zacks Rank 1 [10][11] - **NCR Atleos Corp (NATL)**: Provides digital banking solutions with an estimated earnings growth of 24.5% and 22.4% for 2025 and 2026, respectively, also holding a Zacks Rank 1 [12][13] - **AerSale Corp (ASLE)**: Offers aviation products and services with projected earnings growth of 289% and 23% for 2025 and 2026, respectively, and a Zacks Rank 1 [14][15] - **Qifu Technology, Inc. (QFIN)**: An AI-driven Credit-Tech platform with expected earnings growth of 22.4% and 12.12% for 2025 and 2026, respectively, and a Zacks Rank 1 [16][17]

Core Viewpoint - NCR Atleos (NATL) has shown a 5.3% increase in stock price over the past four weeks, with a mean price target of $43.20 indicating a potential upside of 59.8% from the current price of $27.04 [1] Price Targets and Analyst Estimates - The mean estimate consists of five short-term price targets with a standard deviation of $14.38, where the lowest estimate is $29 (7.3% increase) and the highest is $60 (121.9% increase) [2] - A low standard deviation among price targets suggests a high degree of agreement among analysts regarding the stock's price movement [9] Earnings Estimates and Analyst Sentiment - Analysts have shown increasing optimism about NATL's earnings prospects, as indicated by a strong agreement in revising EPS estimates higher, which correlates with potential stock price increases [11] - Over the last 30 days, one estimate has increased, leading to a 7.8% rise in the Zacks Consensus Estimate for the current year [12] Zacks Rank and Investment Potential - NATL holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside [13]