Core Insights - James Kelly has been appointed as the CEO of NCR Voyix in February of this year, previously serving as the Executive Chair of the Board [1] - Kelly has extensive experience in the payments industry, having previously been the CEO of EVO Payments [1] Company Overview - NCR Voyix is under the leadership of James Kelly, who has a long-standing career in the payments sector [1] - The transition in leadership marks a significant change for NCR Voyix as it aims to enhance its strategic direction in the payments industry [1]

Summary of NCR Voyix Conference Call Company Overview - **Company**: NCR Voyix - **CEO**: Jim Kelly, who took over in February 2023 after serving as Executive Chair of the Board and previously CEO of EVO Payments [1][7] Key Industry Insights - **Industry**: Payments and Point-of-Sale (POS) technology - **Historical Context**: NCR Voyix has transitioned from a hardware-centric company to a platform company, focusing on cloud-native applications to replace legacy systems [10][11] Core Points and Arguments 1. **Balance Sheet Improvement**: The company has focused on addressing its balance sheet, particularly after the spin-off of its ATM business and the sale of its digital banking business [7][8] 2. **Operational Challenges**: NCR Voyix has faced operational challenges, including the impacts of COVID-19 and a failed sale process in 2021-2022, leading to a need for repositioning [8][10] 3. **Customer Retention**: The company boasts a low revenue attrition rate of 1%, indicating strong customer loyalty, primarily among enterprise clients [10] 4. **Platform Transition**: The shift to a platform model is aimed at enhancing customer experience by providing better data access and management capabilities [12][17] 5. **Payments Strategy**: NCR Voyix is focusing on integrating payments into its offerings, with an annual transaction volume of over $1.3 trillion, potentially reaching close to $2 trillion when including fuel transactions [19][20] 6. **Market Positioning**: The company aims to simplify the payment process for customers by offering an end-to-end solution, reducing the complexity of dealing with multiple vendors [20][21] 7. **Revenue Growth Timeline**: Expected revenue growth from the new payments strategy and cloud software is anticipated to begin showing results in the fourth quarter of the current year, with significant growth expected in the following year [27][28] 8. **Self-Checkout Technology**: The self-checkout segment remains important, with ongoing efforts to reduce shrinkage through technology improvements [38][40] 9. **Tariff Impact**: The company has estimated a tariff impact of $8 million to $12 million, which is expected to be a permanent price increase, and plans to pass some costs onto customers [43][48] 10. **Service Organization**: NCR Voyix has a robust service organization with 8,000 employees dedicated to customer support, which is seen as a competitive advantage [54][56] Additional Important Insights - **Customer Engagement**: The CEO has personally engaged with over 70 customers to understand their needs and expectations [11][12] - **AI and Technology**: The company is exploring AI to enhance its product offerings and improve operational efficiency [67] - **Financial Metrics**: The company has removed $240 million in costs and is focused on margin expansion through automation and efficiency improvements [75][76] - **Future Outlook**: The CEO expresses optimism about the company's future, citing a strong customer base and employee tenure as key strengths [81][82] This summary encapsulates the key points discussed during the NCR Voyix conference call, highlighting the company's strategic direction, operational challenges, and future growth opportunities.

Industry Overview - Mobile payments have evolved into a comprehensive financial ecosystem, driven by fintech innovation and smartphone adoption, with global fintech investment reaching $44.7 billion in H1 2025 despite economic challenges [2] - The global mobile payments market was valued at $3.84 trillion in 2024 and is projected to grow to $4.97 trillion in 2025, with an expected surge to $26.53 trillion by 2032, reflecting a 27% CAGR [4] Key Players - Capital One is enhancing its mobile payments capabilities through a digital-first banking platform and a robust credit card network, integrating with digital wallets like Apple Pay and Google Pay [5][7] - PayPal serves 438 million active accounts globally, leveraging unmatched transaction data to provide merchants with insights that enhance customer loyalty and sales [8] - Marqeta's next-gen card issuing platform supports businesses in embedding digital payments into their applications, with a 29% year-over-year increase in total processing volume to $91 billion in Q2 2025 [13] - NCR Voyix is innovating in mobile payments for retail and restaurant sectors, with solutions that improve speed and customer experience, achieving a 16% year-over-year growth in platform sites [16] Technological Innovations - Emerging technologies like blockchain and AI are enhancing transaction transparency, processing speed, and fraud mitigation [2] - PayPal's "Tap to Pay" feature utilizes NFC technology to convert smartphones into contactless payment terminals, facilitating seamless mobile e-commerce [10] - Marqeta's open API architecture allows for customizable payment experiences, supporting real-time processing and secure interactions [12] Market Trends - The COVID-19 pandemic accelerated the demand for contactless payment solutions, prompting regulatory responses focused on data privacy and financial inclusion [4] - The rise of "super apps" like WeChat Pay and Alipay is transforming consumer behavior by integrating various services into a single platform [2] - The growth of e-commerce and improved digital infrastructure are significant factors driving the adoption of mobile payments [3]

Core Viewpoint - Momentum investing contrasts with the traditional "buy low and sell high" strategy, focusing instead on "buying high and selling higher" to capitalize on fast-moving stocks [1] Group 1: Momentum Investing Strategy - Momentum investing can be risky as stocks may lose momentum if future growth does not justify their high valuations [1] - A safer approach may involve investing in bargain stocks that have recently shown price momentum [2] Group 2: Stock Analysis - NCR Voyix (VYX) - NCR Voyix (VYX) has seen a price increase of 1.9% over the past four weeks, indicating growing investor interest [3] - VYX has gained 16.1% over the past 12 weeks, demonstrating its ability to deliver positive returns over a longer timeframe [4] - The stock has a beta of 1.66, suggesting it moves 66% more than the market in either direction [4] - VYX has a Momentum Score of A, indicating a favorable time to invest [5] - The stock has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which attract more investors [6] - VYX is trading at a Price-to-Sales ratio of 0.68, indicating it is reasonably valued at 68 cents for each dollar of sales [6] Group 3: Investment Opportunities - VYX is identified as a strong candidate for investment, with potential for further price appreciation [7] - There are additional stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting more investment opportunities [7] - Zacks offers over 45 Premium Screens to help identify winning stock picks based on various investing styles [8]

Group 1: Industry Analysis - The oil and gas industry is characterized as a boom-bust, cyclical sector that requires patience and experience for successful investment [2] - The software area related to NCR Voyix is fast-moving and subject to constant innovation, indicating a need for adaptability in investment strategies [2] Group 2: Company Overview - NCR Voyix (NYSE: VYX) is currently not considered a viable investment option due to the considerable work needed before it can be deemed attractive [2] - The analysis of oil and gas companies includes a comprehensive breakdown of balance sheets, competitive positions, and development prospects [1]

Core Viewpoint - NCR Voyix (VYX) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Performance - The Zacks rating system is based on changes in a company's earnings picture, which is a strong predictor of near-term stock price movements [2][4]. - For NCR Voyix, the recent upgrade reflects an improvement in the company's underlying business, likely leading to an increase in stock price as investors respond positively to this trend [5][10]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - The system maintains a balanced distribution of "buy" and "sell" ratings, ensuring that only the top 20% of stocks receive a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [9][10]. Earnings Estimate Revisions for NCR Voyix - NCR Voyix is projected to earn $0.79 per share for the fiscal year ending December 2025, with no year-over-year change expected [8]. - Over the past three months, the Zacks Consensus Estimate for NCR Voyix has increased by 10.3%, reflecting a positive trend in earnings estimates [8].

Summary of the Conference Call Company Overview - The conference call was held at the Oppenheimer Technology Conference featuring NCR Voyex, with CEO Jim Kelly discussing the company's recent performance and strategic direction [1][4]. Key Highlights from the Quarter - The company reported slightly higher revenue than expectations, primarily driven by hardware sales, despite experiencing margin compression [5]. - Earnings met both consensus and internal expectations for the quarter [5]. - The restaurant segment underwent leadership changes following a split in 2023, with a new team now in place, including a chief revenue officer with extensive experience in the restaurant industry [6][7]. Strategic Initiatives - The company is transitioning from a hardware-centric model to a platform-based approach, focusing on software and services [11]. - An agreement with Anicom is in progress, expected to be completed by the end of the year, which will change how revenue is reported, moving from hardware sales to software services and commissions [14][15]. - The company aims to provide clearer financial reporting by separating software, services, and hardware commissions in its P&L [15]. Market Opportunities - The restaurant and retail segments are seeing strong performance, with a focus on acquiring new enterprise customers and improving existing relationships [19][30]. - The company has signed 13 customers for its new microservices cloud-native applications, with positive feedback on the platform [20][21]. - The total spend through the company's point of sale systems is approximately $1.3 trillion, presenting a significant opportunity for growth in payment processing [42][43]. Competitive Landscape - The company faces perception challenges in the SME market but has a strong position in the enterprise space due to its extensive service capabilities [34][36]. - The competitive landscape in the enterprise sector is less crowded, with few competitors able to match the company's service infrastructure [36]. Payment Solutions - The company has partnered with Global Payments to enhance its payment processing capabilities, allowing for an end-to-end solution for customers [40][41]. - The transition to this new payment system is expected to be completed by September, with significant growth potential in payment processing revenue [43][49]. Financial Performance and Capital Allocation - The company has improved its balance sheet by selling a non-core business for $2.5 billion and paying down significant debt [62]. - Future capital allocation will focus on free cash flow generation, with ongoing share buybacks and potential investments in AI to enhance operational efficiency [66][67][69]. Risks and Challenges - The company is facing higher tariffs on products, which may impact costs and pricing strategies moving forward [58][59]. - There is a need to improve billing and collection systems, which are still largely based on legacy infrastructure [63]. Conclusion - NCR Voyex is positioned for growth through strategic shifts towards software and payment solutions, with a focus on enhancing customer relationships and operational efficiency. The company is optimistic about its future prospects, particularly in the payments sector and enterprise market [50][56].

Financial Data and Key Metrics Changes - Total revenue for the quarter was $666 million, a decline of 8% due to continued softness in hardware sales [23] - Recurring revenue increased by 4% to $422 million, improving its percentage of total revenue by over 700 basis points to 63% [23] - Adjusted EBITDA was $95 million, an increase of 20% with a margin expansion of 340 basis points to 14.3% [23] - Software ARR and total segment ARR increased by 7% and 5% respectively [23] Business Line Data and Key Metrics Changes - In the restaurant segment, total revenue increased by 2% to $205 million, with recurring revenue also increasing by 4% to $143 million [24] - The retail segment saw total revenue decline by 12% to $454 million, while recurring revenue increased by 5% to $277 million [24] - Software and payment sites in the restaurant business increased by 41%, while in retail, platform and payment sites increased by 2513% [15][19] Market Data and Key Metrics Changes - The company had nearly 78,000 sites connected to the Boyd's Commerce platform, an increase of 16% year over year [10] - Consumer transaction volume through the VCP was more than 50% higher than the prior year, with over 500 million transaction API calls processed in June alone [11] - The number of consumer orders processed through the VCP increased nearly 60% in the first half of 2025 compared to the prior year [11] Company Strategy and Development Direction - The company plans to launch additional VCP capabilities starting in the fourth quarter and into next year, focusing on enhancing customer experiences and operational efficiencies [6][8] - There is a strong emphasis on integrating payment capabilities with software contracts, reflecting the intertwined nature of these industries [7] - The company is investing in cloud-native technologies and microservices architecture to create a competitive advantage in the market [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand environment, noting no pullback from customers and a strong interest in modernizing infrastructure [30][31] - The company anticipates continued revenue growth and improved margins, particularly in the restaurant segment, which is expected to finish the year at about 32% [46] - Management acknowledged the evolving tariff situation but maintained a stable cost estimate for the year, indicating ongoing monitoring and potential adjustments [9][50] Other Important Information - The company has initiated conversations with about 10% of customers regarding expanded service offerings, including payments [7] - Adjusted free cash flow was $37 million for the quarter, with expectations for a ramp in the second half of the year [40] - The company invested $42 million in capital expenditures during the quarter, with over 80% related to software investments [24] Q&A Session Summary Question: Demand environment across retail and restaurant - Management noted no pullback from customers, with strong interest in modernizing infrastructure and a good spread of demand across product offerings [30][32][34] Question: Free cash flow visibility - Management indicated that Q2 free cash flow was in line with expectations and that they expect to generate more in the second half due to seasonal trends [40] Question: Strength in restaurant EBITDA margin - The strength was attributed to good software and services growth, with expectations for consistent margins throughout the year [45][46] Question: Tariff exposure and mitigation actions - Management confirmed the tariff cost estimate remains unchanged and indicated ongoing discussions with customers regarding shared expenses if tariffs persist [50] Question: Cost savings initiatives - The company has executed a cost program aimed at $100 million in savings, with about 40% realized in the first half and 60% expected in the second half [55] Question: Payment business progression - Management expressed optimism about the payment business, expecting significant growth as they engage with larger customers and streamline services [68][72][94] Question: ARR and backlog for implementation - Software ARR is approaching $800 million, with a positive trend expected to continue as new products are launched [101][103]

Company Performance - NCR Voyix reported quarterly earnings of $0.19 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, compared to a loss of $0.54 per share a year ago [1] - The earnings surprise for this quarter was +35.71%, following a previous quarter where the company delivered a surprise of +350% [2] - The company posted revenues of $666 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.02%, but down from $876 million year-over-year [3] Future Outlook - The sustainability of NCR Voyix's stock price movement will depend on management's commentary during the earnings call and future earnings expectations [4] - The current consensus EPS estimate for the upcoming quarter is $0.25 on revenues of $666.5 million, and for the current fiscal year, it is $0.79 on revenues of $2.6 billion [8] - The estimate revisions trend for NCR Voyix was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [7] Industry Context - The Computer - Integrated Systems industry, to which NCR Voyix belongs, is currently in the top 33% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [6]

Part I. Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) NCR Voyix's financial statements for the period ended June 30, 2025, reflect decreased total revenue primarily from lower product sales, a shift from net loss to slight net income from continuing operations due to reduced expenses, a decrease in total assets driven by reduced cash, and negative operating cash flow heavily impacted by a large tax payment related to the Digital Banking Sale [Condensed Consolidated Statements of Operations](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For the second quarter of 2025, total revenue decreased to $666 million from $722 million in Q2 2024, an 8% decline driven by a 24% drop in product revenue, yet the company improved its operating results to $14 million income from operations and achieved breakeven net income attributable to NCR Voyix, a significant improvement from prior-year losses Consolidated Statements of Operations Summary (Q2 & H1) | In millions, except per share data | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total revenue** | **$666** | **$722** | **$1,283** | **$1,432** | | Product revenue | $185 | $244 | $338 | $465 | | Service revenue | $481 | $478 | $945 | $967 | | **Income (loss) from operations** | **$14** | **($34)** | **($6)** | **($53)** | | **Net income (loss) attributable to NCR Voyix** | **$0** | **($73)** | **($17)** | **($113)** | | **Diluted net income (loss) per common share** | **($0.03)** | **($0.53)** | **($0.18)** | **($0.84)** | - The company successfully reversed its operating loss from the prior year, achieving **$14 million in operating income** for Q2 2025, compared to a **$34 million loss** in Q2 2024, primarily due to reductions in cost of services, SG&A, and R&D expenses[12](index=12&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, NCR Voyix's total assets decreased to **$3.98 billion** from **$4.45 billion** at year-end 2024, primarily due to a significant reduction in cash and cash equivalents, while total liabilities also decreased to **$2.84 billion**, and total stockholders' equity saw a slight decline Balance Sheet Summary | In millions | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total current assets** | **$1,222** | **$1,671** | | Cash and cash equivalents | $276 | $722 | | **Total assets** | **$3,984** | **$4,452** | | **Total current liabilities** | **$1,054** | **$1,420** | | **Long-term debt** | **$1,099** | **$1,098** | | **Total liabilities** | **$2,841** | **$3,245** | | **Total stockholders' equity (deficit)** | **$867** | **$931** | - The company's cash position decreased substantially by **$446 million** during the first six months of 2025[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended June 30, 2025, the company experienced a net cash outflow of **$284 million** from operating activities, a sharp reversal from the prior year due to a significant tax payment, with investing activities using **$75 million** and financing activities using **$86 million**, resulting in an overall **$440 million** decrease in cash, cash equivalents, and restricted cash Cash Flow Summary (Six Months Ended June 30) | In millions | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | **($284)** | **$27** | | **Net cash provided by (used in) investing activities** | **($75)** | **($81)** | | **Net cash provided by (used in) financing activities** | **($86)** | **$15** | | Effect of exchange rate changes | $5 | ($14) | | **Increase (decrease) in cash, cash equivalents, and restricted cash** | **($440)** | **($53)** | | Cash, cash equivalents and restricted cash at beginning of period | $758 | $285 | | **Cash, cash equivalents and restricted cash at end of period** | **$318** | **$232** | - Financing activities included **$69 million** for repurchases of common stock in the first half of 2025, a change from zero repurchases in the prior-year period[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail significant corporate actions including the completed spin-off of NCR Atleos and the sale of the Digital Banking business, both now discontinued operations, alongside the transition of its hardware business to an outsourced model, segment information for Retail and Restaurants, approximately **$1.1 billion** in debt obligations, and ongoing commitments and contingencies, notably significant environmental liabilities related to the Kalamazoo River - The company completed the spin-off of NCR Atleos on October 16, 2023, and the sale of its Digital Banking segment on September 30, 2024, with both now reported as discontinued operations[24](index=24&type=chunk)[26](index=26&type=chunk) - NCR Voyix announced a commercial agreement with Ennoconn to transition its self-checkout and point-of-sale hardware businesses to an outsourced design and manufacturing (ODM) model[27](index=27&type=chunk) - As of June 30, 2025, the company's remaining performance obligations were approximately **$1.1 billion**, with over three-quarters expected to be recognized as revenue in the next 12 months[40](index=40&type=chunk) - The company has a total reserve of **$134 million** for the Kalamazoo River environmental matter as of June 30, 2025, but notes that potential liability could more than double this amount[117](index=117&type=chunk)[118](index=118&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the 8% YoY revenue decline in Q2 2025 to **$666 million**, primarily due to lower hardware sales, offset by 4% recurring revenue growth and a 20% increase in Adjusted EBITDA to **$95 million**, while liquidity was impacted by a **$284 million** tax payment leading to negative operating cash flow, with strategic focus on an outsourced hardware model and software/services-led offerings [Overview](index=32&type=section&id=Overview) NCR Voyix, a global provider of digital commerce solutions for retail and restaurants, has undergone significant transformation, completing the spin-off of NCR Atleos and the sale of its Digital Banking business, transitioning its hardware business to an outsourced model, and continues to manage the financial impact of a 2023 cyber ransomware incident and fraudulent ACH disbursements - The company completed the spin-off of NCR Atleos on October 16, 2023, and the sale of its Digital Banking business on September 30, 2024, with both now treated as discontinued operations[153](index=153&type=chunk)[154](index=154&type=chunk) - The company is transitioning its self-checkout and point-of-sale hardware business to an outsourced design and manufacturing (ODM) model with Ennoconn, which will change its revenue recognition for hardware to a net commission basis[156](index=156&type=chunk) - As of June 30, 2025, the company has incurred **$47 million** in expenses related to a 2023 cyber ransomware incident and has recovered **$36 million** through insurance[160](index=160&type=chunk) - Fraudulent ACH disbursements totaling **$34 million** were identified in February 2024, with approximately **$16 million** recovered as of June 30, 2025[161](index=161&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) For Q2 2025, total revenue fell 8% YoY to **$666 million**, and 10% for H1 2025 to **$1.28 billion**, driven by a significant drop in product revenue, though service revenue grew 1% and recurring revenue increased 4% to 63.4% of total revenue, while gross margin improved to 23.0% and operating expenses decreased, leading to a **$14 million** operating income in Q2, reversing a prior-year loss Q2 2025 vs Q2 2024 Performance | In millions | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Total revenue | $666 | $722 | (8)% | | Product revenue | $185 | $244 | (24)% | | Service revenue | $481 | $478 | 1% | | Total gross margin | $153 | $126 | 21% | | Income (loss) from operations | $14 | ($34) | n/m | - Recurring revenue grew **4%** in Q2 2025 to **$422 million** and now constitutes **63.4%** of total revenue, up from 56.2% in the prior year, highlighting the company's strategic shift[175](index=175&type=chunk) - The Retail segment's revenue decreased by **12%** in Q2 2025 due to lower hardware and software license sales, while the Restaurants segment's revenue increased by **2%**, driven by payments processing and hardware maintenance[220](index=220&type=chunk)[221](index=221&type=chunk)[222](index=222&type=chunk) - Adjusted EBITDA for Q2 2025 was **$95 million**, a **20% increase** from **$79 million** in Q2 2024[178](index=178&type=chunk)[182](index=182&type=chunk) [Financial Condition, Liquidity and Capital Resources](index=45&type=section&id=Financial%20Condition%2C%20Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company held **$276 million** in cash and **$1.1 billion** in total debt, with liquidity significantly impacted by a **$284 million** tax payment that led to negative **$284 million** operating cash flow and negative **$40 million** adjusted free cash flow, though **$478 million** remains available under its revolving credit facility, providing sufficient liquidity for obligations Liquidity Position as of June 30, 2025 | In millions | Amount | | :--- | :--- | | Cash and cash equivalents | $276 | | Total debt | $1,100 | | Borrowing capacity under credit facility | $478 | - Operating cash flow was negative **$284 million** for the first six months of 2025, compared to a positive **$27 million** in the prior year, driven by a **$284 million** tax payment on the Digital Banking Sale[229](index=229&type=chunk) - The company repurchased **$69 million** of its common stock during the first six months of 2025 under its share repurchase program[231](index=231&type=chunk) - Adjusted free cash flow for the six months ended June 30, 2025 was negative **$40 million**[233](index=233&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is primarily exposed to market risks from foreign currency exchange rates across approximately 25 functional currencies, managed through hedging, and interest rates, with approximately 100% of borrowings at a fixed rate as of June 30, 2025, minimizing interest rate risk, while credit risk from customers is monitored with no significant concentrations reported - The company has exposure to approximately **25 functional currencies** and uses financial instruments like forward contracts to hedge its main transactional exposures[248](index=248&type=chunk) - As of June 30, 2025, approximately **100%** of the company's debt was on a fixed-rate basis, mitigating exposure to interest rate fluctuations, with no interest rate derivative contracts outstanding[251](index=251&type=chunk) - A sensitivity analysis showed that a hypothetical **10% appreciation** of the U.S. dollar would decrease the fair value of the hedge portfolio by **$2 million**, while a **10% depreciation** would increase it by **$3 million**[249](index=249&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, ensuring timely and accurate reporting of SEC-required information, with no material changes to internal control over financial reporting during the second quarter of 2025 - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[255](index=255&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal controls[256](index=256&type=chunk) Part II. Other Information [Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, including a pending appeal in a class-action lawsuit concerning deferred compensation plans where a court ruled against it, and manages significant environmental liabilities from historical operations, notably the Kalamazoo River, for which it holds a **$134 million** reserve, with NCR Atleos obligated to contribute **50%** of costs for certain matters after an annual threshold - A court entered a final judgment against the company in a class-action lawsuit regarding deferred compensation plans, and the company has appealed the decision and filed a **$45 million** supersedeas bond to stay the judgment[98](index=98&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk) - The company retains responsibility for historical environmental liabilities, with NCR Atleos obligated to contribute **50%** of costs for certain matters (including the Kalamazoo River) after an annual **$15 million** funding threshold is met[103](index=103&type=chunk) - The reserve for the Kalamazoo River environmental matter was **$134 million** as of June 30, 2025, and the company notes that the ultimate liability could potentially more than double this amount[117](index=117&type=chunk)[118](index=118&type=chunk) [Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the company's risk factors from those described in its Annual Report on Form 10-K for the year ended December 31, 2024, and investors are advised to consider the previously disclosed risk factors - The company states that there have been no material changes in its risk factors from those described in the 2024 Annual Report on Form 10-K[260](index=260&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On May 6, 2025, the Board amended the company's share repurchase program, increasing total authority to **$200 million** and expanding it to include Series A preferred stock, under which approximately **0.83 million** shares were repurchased for about **$7.3 million** during Q2 2025, with **$200 million** remaining available for future repurchases as of June 30, 2025 - On May 6, 2025, the Board amended the share repurchase program, increasing the total aggregate authority to **$200 million** and expanding it to include both common and Series A preferred stock[261](index=261&type=chunk) Share Repurchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased as Part of Program | Remaining Authority (in millions) | | :--- | :--- | :--- | :--- | :--- | | April 2025 | 830,385 | $8.86 | 825,808 | $28 | | May 2025 | 32,456 | $10.56 | — | $200 | | June 2025 | 2,129 | $10.82 | — | $200 | - The company's ability to repurchase stock is subject to restrictions under its credit facilities and senior note indentures, which are based on formulas including consolidated net income and leverage tests[264](index=264&type=chunk) [Other Information](index=52&type=section&id=Item%205.%20Other%20Information) During the fiscal quarter ended June 30, 2025, no director or officer of the company adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement - No director or officer adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the second quarter of 2025[266](index=266&type=chunk) [Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including certifications by the principal executive and financial officers and the Interactive Data File (iXBRL) - The exhibits include CEO and CFO certifications pursuant to the Sarbanes-Oxley Act and the company's financial statements formatted in iXBRL[269](index=269&type=chunk)