NCR Voyix Corp(VYX) - 2025 Q1 - Quarterly Report

Revenue Performance - Revenue for the three months ended March 31, 2025, was $617 million, down 13% compared to the prior year period[161] - Total revenue for Q1 2025 decreased by 13% to $617 million, down from $710 million in Q1 2024[176] - Retail segment revenue decreased by 14% to $420 million for the three months ended March 31, 2025, down from $491 million in 2024[192] - Restaurants segment revenue decreased by 5% to $191 million for the three months ended March 31, 2025, compared to $202 million in 2024[194] Revenue Breakdown - Recurring revenue increased by 2% year-over-year, comprising 66% of total consolidated revenue[161] - Product revenue decreased by 31% to $153 million, while service revenue decreased by 5% to $464 million[163] - Product revenue fell by 31% to $153 million in Q1 2025, primarily due to a decline in SCO and POS hardware revenues[176] - Service revenue decreased by 5% to $464 million in Q1 2025, attributed to declines in professional services and maintenance revenue[176] - Annualized recurring revenue (ARR) for Retail increased by 4% to $1,068 million, while ARR for Restaurants decreased by 1% to $551 million[174] Profitability Metrics - Adjusted EBITDA for the quarter was $75 million, up 19% compared to the prior year period[161] - Adjusted EBITDA for Q1 2025 increased by 19% to $75 million, compared to $63 million in Q1 2024, representing 12.2% of total revenue[166] - Adjusted EBITDA for the Retail segment decreased by 24% to $65 million for the three months ended March 31, 2025, compared to $86 million in 2024[195] - Adjusted EBITDA for the Restaurants segment increased by 7% to $59 million for the three months ended March 31, 2025, compared to $55 million in 2024[196] Net Income and Loss - Net loss from continuing operations attributable to NCR Voyix was $20 million, compared to a net loss of $71 million in the prior year period[161] - Net income attributable to NCR Voyix for Q1 2025 was $(20) million, a 72% improvement from $(71) million in Q1 2024[166] Expenses and Costs - Selling, general, and administrative expenses rose to $115 million in Q1 2025, up from $110 million in Q1 2024, reflecting strategic initiatives[179] - Research and development expenses decreased by 15% to $40 million in Q1 2025, compared to $47 million in Q1 2024[180] - Interest expense significantly decreased by 62% to $15 million in Q1 2025, down from $39 million in Q1 2024, due to reduced total debt[182] - Cumulative expenses related to a cyber ransomware incident reached $47 million, with $36 million recovered under insurance policies[152] Cash and Liquidity - Cash and cash equivalents totaled $573 million as of March 31, 2025, with total debt at $1.1 billion[198] - Net cash used in operating activities was $42 million for the three months ended March 31, 2025, compared to $35 million used in the same period of 2024[201] - Capital expenditures were approximately $39 million for the three months ended March 31, 2025, down from $61 million in 2024[202] - The company has a borrowing capacity of approximately $500 million under its revolving credit facility as of March 31, 2025[213] - The company believes it has sufficient liquidity to meet expected pension, postemployment, and postretirement plan contributions, as well as other material cash requirements beyond March 31, 2025[214] Market and Economic Conditions - The company is monitoring macroeconomic trends, including inflation and tariffs, which may impact revenue and profitability[158] - The company is subject to market risks primarily from changes in foreign currency exchange rates and interest rates, managing these risks through derivatives[222] - A 10% appreciation in the value of the U.S. Dollar against foreign currencies would decrease the fair value of the hedge portfolio by $6 million, while a 10% depreciation would increase it by $8 million as of March 31, 2025[224] - The company has exposure to approximately 25 functional currencies, which can significantly impact results due to foreign currency exchange rate changes[223] Strategic Initiatives - The company completed the sale of its Digital Banking segment for $2.45 billion in cash, with potential additional contingent consideration of up to $100 million[149] - The transition of the hardware business to an ODM model is expected to become effective during 2025, allowing for commission revenue from hardware sales[151] - The company expects to achieve anticipated cost savings and benefits related to the Hardware Business Transition, although challenges remain[219] - Forward-looking statements indicate expectations regarding demand for solutions and the impact on financial results in 2025, subject to various risks and uncertainties[218] Fraud and Risk Management - The company identified fraudulent ACH disbursements totaling $34 million, recovering approximately $16 million to date[153] - The company did not have any significant concentration of credit risk related to financial instruments as of March 31, 2025[229] - Approximately 100% of the company's borrowings were on a fixed rate basis as of March 31, 2025, with no outstanding interest rate derivative contracts[226]