Revenue Performance - Recurring revenue for Q3 2024 reached $790 million, representing 73.3% of total revenue, an increase of 3% from $765 million in Q3 2023[200]. - Total revenue for the nine months ended September 30, 2024, was $3,209 million, a 4% increase from $3,093 million in the same period of 2023[200]. - Total revenue for the three months ended September 30, 2024, increased by 1% to $1,078 million compared to $1,067 million in the same period of 2023[218]. - Total revenue for the nine months ended September 30, 2024, increased by 4% to $3,209 million compared to $3,093 million in the same period of 2023[226]. - Service revenue for the three months ended September 30, 2024, increased by 3% to $843 million, driven by growth in transaction processing services and ATM as a Service revenue[225]. - Service revenue for the nine months ended September 30, 2024, increased by 6% to $2,487 million, supported by significant growth in transaction processing services and ATM as a Service revenue[228]. - Self-Service Banking revenue increased by 3% for both the three and nine months ended September 30, 2024, with software-related revenue rising approximately $51 million year-over-year[254]. - Network revenue increased by 3% for the nine months ended September 30, 2024, driven by a $38 million increase in transaction processing services revenue[255]. Profitability Metrics - Net income attributable to Atleos for Q3 2024 was $24 million, a significant improvement from a loss of $58 million in Q3 2023, marking a 141% increase[201]. - Adjusted EBITDA for Q3 2024 was $207 million, slightly down from $210 million in Q3 2023, representing 19.2% of total revenue[201]. - Net income for the three months ended September 30, 2024, was $23 million, a significant improvement compared to a net loss of $57 million in the same period of 2023[218]. - Adjusted EBITDA for Self-Service Banking decreased by 5% for the nine months ended September 30, 2024, attributed to higher labor costs and separation dis-synergies[258]. - Adjusted EBITDA for Network increased by 4% for the nine months ended September 30, 2024, due to higher transaction volumes and cost optimization initiatives[259]. Cost and Expense Management - Selling, general and administrative expenses (SG&A) as a percentage of revenue (GAAP) decreased to 11.8% for the three months ended September 30, 2024, from 15.0% in the same period of 2023[215]. - Selling, general and administrative expenses for the three months ended September 30, 2024 were $127 million, down from $160 million in 2023, representing a decrease of 21%[234]. - Research and development expenses (R&D) as a percentage of revenue (GAAP) remained stable at 1.5% for the three months ended September 30, 2024, compared to 1.6% in the prior year[216]. - Research and development expenses for the nine months ended September 30, 2024 were $47 million, down from $54 million in 2023, a decrease of 13%[237]. Cash Flow and Debt - Cash provided by operating activities was $264 million for the nine months ended September 30, 2024, down from $347 million in the same period of 2023, reflecting a decrease of $83 million[264]. - Adjusted free cash flow-unrestricted for the nine months ended September 30, 2024, was $123 million, down from $252 million in the same period of 2023, reflecting a decline of about 51%[267]. - As of September 30, 2024, the total cash and cash equivalents amounted to $395 million, while total debt stood at $3,067 million[273]. - The Senior Secured Credit Facility had an outstanding principal amount of $1,530 million as of September 30, 2024, with an additional $180 million drawn from a $500 million Revolving Credit Facility[267]. Market and Operational Challenges - The company is navigating macroeconomic pressures such as higher interest rates and increased logistics costs due to geopolitical challenges[194]. - The company is evaluating the potential impact of the OECD's Pillar Two Framework on future tax provisions and cash flows[247]. - The company expects fluctuations in transaction volume to continue due to seasonality, with lower revenue typically occurring in the first quarter[198]. - The delayed transfer of seven legal entities to Atleos is estimated to have resulted in a revenue decline of approximately $3 million for the three months and $22 million for the nine months ended September 30, 2024[222]. Strategic Initiatives - The company is transitioning to a highly recurring revenue model to drive stable cash flow and capital returns to shareholders[188]. - Atleos plans to continue pursuing acquisitions to enhance its portfolio and expand its customer base[190]. - The company is focused on delivering "ATM as a Service" to a large customer base, leveraging new ATM transaction types including digital currency solutions[188].
NCR Atleos (NATL) - 2024 Q3 - Quarterly Report