Q1 2025 Earnings Report May 8, 2025 N Y S E : V Y X 1 Notes to Investors SPIN-OFF INFORMATION. On October 16, 2023, NCR Voyix completed the spin-off of NCR Atleos Corporation ("NCR Atleos") as an independent, publicly traded company. The historical financial results of NCR Atleos are reflected as discontinued operations in NCR Voyix's consolidated financial statements for periods prior to the completion of the spin-off. Accordingly, the financial information included in this presentation and the associated ...

NEWS RELEASE NCR Voyix Reports First Quarter 2025 Results ATLANTA, May 8, 2025 - NCR Voyix Corporation (NYSE: VYX) ("NCR Voyix" or the "Company"), a leading global provider of digital commerce solutions, reported financial results today for the three months ended March 31, 2025. First Quarter Financial Highlights 1 • Revenue was $617 million compared to $710 million in the prior year period. • Net loss from continuing operations attributable to NCR Voyix was $20 million, compared with a net loss of $71 mill ...

The market expects NCR Voyix (VYX) to deliver a year-over-year decline in earnings on lower revenues when it reports results for the quarter ended March 2025. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on May 8, 2025, might help the stock move higher if these key numbers are better th ...

As a result of discontinued operations treatment and post-2023 transfers and planned transfers of NCR Atleos-related operations in foreign countries, NCR Voyix's GAAP and non-GAAP combined segment results, segment results and consolidated results in this release may not be comparable with results and estimates previously reported. To provide enhanced comparability of combined segment results and consolidated results between periods, NCR Voyix has provided Normalized Adjusted EBITDA, which adjusts for these ...

Financial Data and Key Metrics Changes - Reported revenue for Q4 2024 was $682 million, with normalized revenue at $678 million, reflecting a decline of 14% due to expected weakness in hardware sales [36] - Software and services revenue declined 2% to $521 million, while adjusted EBITDA increased 75% to $114 million, with margin expanding 850 basis points to 16.7% [38][39] - Total adjusted free cash flow unrestricted was $72 million for the quarter, representing a conversion rate of nearly 64% when excluding restructuring [44] Business Line Data and Key Metrics Changes - In the restaurant segment, software revenue increased 3% to $91 million, while services revenue also increased 3% to $72 million, but total segment revenue declined 5% to $211 million due to hardware decline [40] - In the retail segment, software revenue declined 3% to $155 million, while services revenue increased 4% to $193 million, leading to a total segment revenue decline of 15% to $461 million [42] - Software ARR increased 4% and total segment ARR increased 5% across the company [39] Market Data and Key Metrics Changes - The company signed more than 200 new software and services customers in the restaurant segment and more than 35 customers in the retail segment during Q4 [22][28] - The platform sites increased by 26% year-over-year, reaching approximately 74,000 sites [39] Company Strategy and Development Direction - The company aims to transition to a primarily recurring software and services model, with expectations to improve recurring revenue composition from approximately 60% to 75% once the ODM is operational [33] - A five-year non-exclusive agreement with Worldpay was established to enhance payment capabilities for enterprise customers, with expectations to process over $500 billion in payments through point-of-sale systems in 2024 [19] - The company plans to launch several enterprise platform solutions in 2025, with a focus on enhancing capabilities for existing customers and attracting new ones [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities in both restaurant and retail segments, highlighting strong demand for next-generation solutions and services [64][106] - The company anticipates a decline in revenue in Q1 2025 due to a significant hardware refresh from a major retail customer, but expects adjusted EBITDA to demonstrate high-teens growth compared to Q1 2024 [53] - Management acknowledged challenges in the hardware market due to customers delaying refreshes, but noted that the rate of revenue decline is expected to moderate as the year progresses [84] Other Important Information - The company repurchased 4 million shares for approximately $56 million under its share repurchase program [46] - Total inventory at year-end was $208 million, with expectations of a cash flow benefit from the ODM transition [51] Q&A Session Summary Question: Timing and benefits of the payments agreement - Management expects the new payment system to be operational by the end of summer 2025, with significant revenue potential from the agreement with Worldpay [60][61] Question: Opportunities in 2025 - Management highlighted untapped potential in next-generation solutions and recurring revenue models, with significant customer interest in upcoming product launches [64] Question: Software services outlook and licensing exposure - Management indicated that approximately $30 million to $40 million of one-time software license revenue remains, but this will diminish as the company shifts to subscription models [74][75] Question: Hardware outlook and revenue comparisons - Management noted that hardware revenue is expected to decline significantly due to customer delays in refreshes, but anticipates a moderation in revenue decline as the year progresses [84] Question: Government contract details - A longstanding relationship with the Defense Commissary Agency was expanded, with incremental revenue expected to ramp up towards the end of Q1 2025 [89] Question: Retail environment and growth expectations - Management reported active conversations and opportunities in the retail market, with a focus on improving efficiencies and addressing shrinkage issues [102][106]

Group 1: Earnings Performance - NCR Voyix reported a quarterly loss of $0.08 per share, missing the Zacks Consensus Estimate of $0.07, compared to earnings of $0.34 per share a year ago, representing an earnings surprise of -214.29% [1] - The company posted revenues of $682 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.37%, but down from $963 million in the same quarter last year [2] - Over the last four quarters, NCR Voyix has surpassed consensus EPS estimates just once, while topping consensus revenue estimates three times [2] Group 2: Stock Performance and Outlook - NCR Voyix shares have declined approximately 15.4% since the beginning of the year, contrasting with the S&P 500's gain of 1.3% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.11 on revenues of $537.51 million, and $0.64 on revenues of $2.18 billion for the current fiscal year [7] Group 3: Industry Context - The Computer - Integrated Systems industry, to which NCR Voyix belongs, is currently ranked in the bottom 46% of over 250 Zacks industries, indicating potential challenges for stock performance [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5][6]

Spin-Off and Sales - On October 16, 2023, the company completed the spin-off of its ATM-focused business into NCR Atleos Corporation, with no ownership interest retained by NCR Voyix[20]. - The company sold its Digital Banking segment for $2.45 billion in cash, with potential additional contingent consideration of up to $100 million[21]. - The company completed the Spin-Off of NCR Atleos in October 2023 and the sale of its Digital Banking segment in September 2024, which may not yield the anticipated strategic and financial benefits[83]. Business Segments and Operations - Following the Digital Banking Sale, the company now operates in two reportable segments: Retail and Restaurants[23]. - The Retail segment serves enterprise and mid-market retailers, while the Restaurants segment targets various types of food service establishments, enhancing operational efficiency and customer experience[27]. - The company is focusing on small- and medium-sized businesses by increasing indirect sales channels, though the success of these initiatives remains uncertain[75]. Revenue and Financial Performance - Revenue for the year ended December 31, 2024, was $2.8 billion, a decrease of 11% compared to the prior year[214]. - Recurring revenue increased by 1% from the prior year, comprising 58% of total consolidated revenue[214]. - Adjusted EBITDA was $347 million, up 3% compared to the prior year[214]. Strategic Focus and Innovation - The company is focusing on driving subscription-based revenue and expanding its cloud solutions, aiming for improved cash flows and operational efficiency[26]. - Investments in innovative products and managed services are prioritized to enhance product quality and support customer needs[28]. - The company aims to enhance its market position by expanding its share of wallet among existing customers and attracting new customers through cloud-based solutions[213]. Risks and Compliance - The company faces risks related to cybersecurity, data privacy, and competition, which could adversely affect its business and financial condition[69]. - The company is subject to various evolving laws and regulations, which may require substantial compliance costs and could impact its operations[58]. - The company faces risks related to compliance with various international laws and regulations, including anti-corruption laws and economic sanctions, which could adversely affect its financial condition[137]. Intellectual Property and R&D - The company owns approximately 875 patents in the United States and has many pending patent applications, highlighting the value of its intellectual property portfolio[46]. - Research and development expenses increased to $157 million in 2024 from $139 million in 2023 and $116 million in 2022, indicating a focus on innovation and competitive positioning[44]. - The company faces risks related to potential challenges to its intellectual property rights, which could affect its competitive position[109]. Employee and Organizational Effectiveness - As of December 31, 2024, the company employed nearly 14,000 full-time employees globally, with a decrease in overall headcount during fiscal 2024 as part of its strategy to improve organizational effectiveness[54]. - The company’s ability to attract and retain key employees is critical for meeting its business objectives, and failure to do so may hinder growth[73]. - The company’s ability to attract and retain key employees is critical for executing its growth strategy, with a competitive labor market posing challenges[133]. Financial Health and Debt - As of December 31, 2024, the company had approximately $1.1 billion in total indebtedness and an additional $480 million available under its senior secured revolving credit facility[154]. - The company’s current level of indebtedness may limit its ability to adapt to changing economic conditions and could place it at a competitive disadvantage[156]. - The company may need to seek additional financing or restructure its debt if cash flows are insufficient to meet its obligations[161]. Cybersecurity and Data Privacy - Cybersecurity threats pose significant risks, including unauthorized access to sensitive data, which could harm the company's reputation and financial performance[97]. - A cyber ransomware incident in April 2023 impacted certain customers, but functionality was fully restored, and a new cloud environment was built[101]. - The company has incurred expenses related to the cyber incident but does not expect these costs to materially affect its financial condition[102]. Market Conditions and Competition - The company faces extensive competition in the retail and restaurant markets, with competitors having greater financial and technical resources[117]. - Economic conditions, including consumer confidence and spending trends, significantly impact the company's business, particularly in the retail and restaurant sectors[130]. - Changes in U.S. or foreign trade policies, including proposed tariffs of up to 25% on imports from Canada and Mexico, could adversely affect the company's operations and supply chain[129].

Financial Performance - Fourth quarter revenue was $682 million, down from $796 million in the prior year, representing a decrease of 14.3%[6] - Net loss from continuing operations was $9 million, significantly improved from a loss of $272 million in the prior year[6] - Adjusted EBITDA for the fourth quarter was $114 million, an increase of 75.4% compared to $65 million in the prior year[6] - Annual revenue for 2024 was $2.8 billion, down from $3.2 billion in the prior year, a decrease of 12.5%[6] - The company reported a net loss of $202 million for the full year, improved from a loss of $729 million in the prior year[6] - Total revenue for the year-to-date (YTD) 2024 was $2,826 million, down from $3,178 million in YTD 2023, representing a decrease of approximately 11.1%[27] - Total revenue for the twelve months ended December 31, 2024, was $2.826 billion, down 11% from $3.178 billion in 2023[31] - The company reported a net loss of $11 million in Q4 2024, compared to a net loss of $319 million in Q4 2023[31] - Net income for the twelve months ended December 31, 2024, was $957 million, a significant improvement from a net loss of $423 million in 2023[38] Revenue Breakdown - Annual recurring revenue (ARR) increased to $1.64 billion, up from $1.56 billion in the prior year, a growth of 5.1%[6] - Retail segment revenue decreased by 15% to $461 million in Q4 2024, while restaurant segment revenue decreased by 5% to $211 million[33] - Software & Services Revenue for Q4 2024 was $521 million, slightly down from $530 million in Q4 2023, showing a decrease of about 1.7%[28] Future Projections - The company expects total revenue for 2025 to be between $2,575 million and $2,650 million[8] - Adjusted EBITDA for 2025 is projected to be between $420 million and $445 million, representing an adjusted EBITDA margin of 16.3% to 16.8%[8] Cash Flow and Assets - Cash and cash equivalents increased to $724 million as of December 31, 2024, from $259 million a year earlier[36] - Total current assets rose to $1.671 billion, up from $1.206 billion in the previous year[36] - Net cash provided by operating activities decreased to $(132) million in 2024 from $694 million in 2023[38] - Net cash provided by investing activities increased to $2,189 million in 2024, compared to $(290) million in 2023[38] - Cash, cash equivalents, and restricted cash at the end of the period increased to $758 million in 2024 from $285 million in 2023[38] Debt and Equity - Long-term debt decreased significantly to $1.098 billion from $2.563 billion year-over-year[36] - The company completed a $100 million share repurchase, acquiring 7.3 million shares[9] - The company incurred stock-based compensation expense of $47 million in 2024, a decrease from $177 million in 2023[38] Operational Metrics - As of December 31, 2024, the company had 74,000 platform sites and 7,000 payment sites, reflecting year-over-year increases of 26% and 8%, respectively[9] - Adjusted free cash flow-unrestricted for Q4 2024 was $114 million, compared to $65 million in Q4 2023, indicating a significant increase[25] - The company’s adjusted EBITDA for the full year 2024 was $347 million, slightly up from $337 million in 2023[25] - Total gross margin for Q4 2024 was $149 million, representing 21.8% of revenue, compared to 13.9% in Q4 2023[31] Other Financial Impacts - The company reported strategic initiatives contributing $30 million to adjusted EBITDA in Q4 2024[25] - The company experienced a foreign currency devaluation impact of $0.08 on diluted earnings per share for Q4 2024[29] - The effect of exchange rate changes on cash was $(24) million in 2024, compared to $(20) million in 2023[38] - Payments on term credit facilities decreased significantly to $(200) million in 2024 from $(1,878) million in 2023[38] - The company reported a loss on divestiture of $1,544 million in 2024, contrasting with a gain of $12 million in 2023[38] - Proceeds from divestiture, net, amounted to $2,458 million in 2024, compared to $96 million in 2023[38]

Core Viewpoint - The market anticipates a year-over-year decline in earnings for NCR Voyix (VYX) due to lower revenues, with a focus on how actual results compare to estimates impacting stock price [1][2]. Earnings Expectations - NCR Voyix is expected to report quarterly earnings of $0.07 per share, reflecting a year-over-year decrease of 79.4% [3]. - Revenue projections stand at $672.78 million, down 30.1% from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 15.79% higher in the last 30 days, indicating a reassessment by analysts [4]. - A positive Earnings ESP of +142.86% suggests analysts have recently become more optimistic about the company's earnings prospects [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate being more recent and potentially more accurate [6]. - A positive Earnings ESP is a strong predictor of an earnings beat, especially when combined with a Zacks Rank of 1, 2, or 3 [8]. Historical Performance - In the last reported quarter, NCR Voyix was expected to post a loss of $0.01 per share but instead reported a loss of $0.24, resulting in a surprise of -2,300% [12]. - Over the past four quarters, the company has only beaten consensus EPS estimates once [13]. Conclusion - NCR Voyix is viewed as a potential earnings-beat candidate, but investors should consider other factors beyond earnings results when making investment decisions [16].

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $708 million, a decline of 11% primarily due to lower hardware and related install services [13][36] - Normalized adjusted EBITDA for the quarter was $101 million, reflecting cost actions taken in the previous quarter [14][38] - Free cash flow for the quarter was a use of $25 million, impacted by approximately $80 million in fees related to the digital banking transaction [45] Business Line Data and Key Metrics Changes - In the Restaurant segment, total revenue was $211 million, a decline of 7% on a normalized basis, with adjusted EBITDA increasing by 27% [40] - In the Retail segment, total revenue declined 12% on a normalized basis, driven by a 28% decline in hardware sales [42] - Software ARR and Total segment ARR increased by 2% in the Retail segment and remained flat in the Restaurant segment [20][15] Market Data and Key Metrics Changes - The company had approximately 70,000 sites on its cloud-native commerce platform, an increase of 25% from the prior year [14] - The payments attach rate in the mid-market business remained strong at 97% for new customers [19] Company Strategy and Development Direction - The company is focusing on expanding its international presence in restaurants and retail, with a new Executive Vice President appointed to lead these efforts [8] - A restructuring of the sales teams and a revised incentive compensation plan are being implemented to drive new customer growth and expand market share [28][34] - The company plans to invest a portion of the digital banking proceeds into enhancing its solution sets for restaurants and retail [29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's strategic initiatives and the potential for growth in 2025 and beyond [111] - The company is maintaining its 2024 revenue and EBITDA guidance, expecting revenue between $2.805 billion and $2.860 billion [47] Other Important Information - The company completed the sale of its digital banking business, receiving $2.45 billion in gross proceeds, which significantly improved its balance sheet [10][43] - The company ended the quarter with a net leverage of 1.6 times, a significant improvement from 4.1 times in the previous quarter [44] Q&A Session Summary Question: What is the strategy for increasing platform conversions? - Management indicated that they are aggressively working on renewals and conversions to accelerate platform adoption, currently at about 20% [51][53] Question: What guidance can be provided for fiscal '25? - Guidance for fiscal '25 will be provided in February, but management believes they can grow off the pro forma 2024 results [57] Question: What are the timelines for seeing the impact of go-to-market investments? - Management stated that changes are being implemented now, with KPIs such as new customer acquisitions and platform attachments being key metrics to monitor [60][63] Question: How is the company approaching capital allocation? - The company plans to focus on internal investments, potential tuck-in acquisitions, and future share repurchases, maintaining leverage at or below two turns [66][104] Question: What is the outlook for the hardware market? - Management expects hardware demand to remain flat, with some recovery anticipated in self-checkout hardware revenues [70] Question: What is the current net site count trend? - The company is net adding sites across all segments, with no uptick in customer attrition [73] Question: What is the relationship between software and services growth and hardware? - The company is breaking the linkage between hardware and software, allowing for independent decisions in the enterprise space [76] Question: What investments are being made in the restaurant segment? - Investments will focus on accelerating cloud enablement and expanding value-added capabilities for QSR customers [107]