NCR Voyix Corp(US:VYX)2025-11-06 11:49Financial Performance - Revenue for the third quarter of 2025 was $684 million, a decrease of 3% compared to the prior year period[168]. - Recurring revenue increased by 5% year-over-year, comprising 62% of total consolidated revenue[168]. - Net loss from continuing operations attributable to NCR Voyix was $17 million, an improvement from a net loss of $29 million in the prior year period[168]. - Adjusted EBITDA for the third quarter of 2025 was $125 million, up 32% compared to the prior year period[168]. - Total revenue for the three months ended September 30, 2025, was $684 million, a decrease of 3% compared to $708 million in 2024[175]. - Product revenue for the nine months ended September 30, 2025, was $538 million, down 21% from $683 million in 2024[175]. - Service revenue for the three months ended September 30, 2025, was $484 million, a slight decrease of 1% from $490 million in 2024[175]. - Total revenue for the nine months ended September 30, 2025, decreased by 8% to $1,967 million, with product revenue down 21% to $538 million[190]. - Service revenue for the nine months ended September 30, 2025, decreased by 2% to $1,429 million, despite an increase in payments processing revenue[190]. - Retail revenue decreased by 10% to $1.341 billion for the nine months ended September 30, 2025, compared to $1.495 billion in 2024, mainly due to declines in hardware and software license revenue[223]. - Restaurants revenue decreased by 1% to $606 million for the nine months ended September 30, 2025, compared to $614 million in 2024, attributed to lower one-time implementation services revenue[224]. Expenses and Margins - Total gross margin for the nine months ended September 30, 2025, improved to 23.1%, up from 20.1% in 2024[175]. - Selling, general and administrative expenses for the three months ended September 30, 2025, were $111 million, a decrease of 2% from $113 million in 2024[175]. - Research and development expenses for the nine months ended September 30, 2025, were $112 million, down 13% from $129 million in 2024[175]. - Total operating expenses for the three months ended September 30, 2025, remained flat at $151 million compared to 2024[175]. - Gross margin for the three months ended September 30, 2025, was 24.3%, an increase from 23.6% in the prior year, driven by improved service gross margins[192]. - Interest expense for the three months ended September 30, 2025, decreased by 63% to $15 million, primarily due to a reduction in total debt outstanding[204]. - Interest expense decreased to $44 million for the nine months ended September 30, 2025, down from $120 million in the same period of 2024, primarily due to a reduction in total debt outstanding[206][207]. Corporate Actions - The company completed the spin-off of its ATM-focused businesses into an independent company, NCR Atleos, on October 16, 2023[155]. - The sale of the Digital Banking segment was completed for $2.45 billion in cash, with potential additional contingent consideration of up to $100 million[156]. - The transition of the hardware business to an ODM model is expected to commence in January 2026, involving a commercial agreement with Ennoconn Corporation[158]. Cybersecurity and Fraud - Cumulative expenses related to a cyber ransomware incident reached $47 million, with $36 million recovered under insurance policies as of September 30, 2025[161]. - The company identified fraudulent ACH disbursements totaling $34 million, recovering approximately $16 million as of September 30, 2025[162][163]. Market Strategy - The company is focused on expanding its market share by leveraging cloud-based solutions and investing in innovative products to enhance customer satisfaction[166]. - Annualized Recurring Revenue (ARR) for Retail increased by 4% to $1,095 million, and for Restaurants increased by 7% to $584 million compared to the previous year[186]. Cash Flow and Debt - Cash and cash equivalents totaled $282 million as of September 30, 2025, with total debt at $1.1 billion[228]. - Net cash used in operating activities was $270 million for the nine months ended September 30, 2025, compared to cash provided of $38 million in 2024, primarily due to tax payments related to the Digital Banking Sale[230]. - Capital expenditures were approximately $119 million for the nine months ended September 30, 2025, down from $178 million in the same period of 2024[231]. - The adjusted free cash flow-unrestricted for the nine months ended September 30, 2025, was $(27) million, with net cash provided by operating activities (GAAP) at $(270) million[234]. - The total debt as of September 30, 2025, was $1.1 billion, with $650 million in senior unsecured notes due in 2028 and $403 million due in 2029[235]. Foreign Currency and Credit Risk - The company is exposed to foreign currency exchange risks with approximately 25 functional currencies, impacting sales, profits, and assets[249]. - A 10% depreciation in the value of the U.S. Dollar against foreign currencies would have resulted in a corresponding increase in the fair value of the hedge portfolio of $2 million as of September 30, 2025[250]. - Approximately 100% of the company's borrowings were on a fixed rate basis as of September 30, 2025, with no outstanding interest rate derivative contracts[252]. - The company utilizes interest rate swap contracts and interest rate cap agreements to manage interest rate risk and stabilize interest expenses[253]. - There is a potential concentration of credit risk related to accounts receivable and financial instruments, which includes the risk of nonperformance by counterparties[254]. - The maximum potential loss from credit risk may exceed the amounts recognized on the balance sheet, managed through credit approvals and monitoring procedures[254]. - The company does not require collateral for large transactions with customers, which could expose it to significant losses if customers default[254]. - As of September 30, 2025, there was no significant concentration of credit risk related to financial instruments[255]. - The company believes that reserves for potential losses are adequate[255].