Core Insights - NCR Atleos reported Q3 CY2025 results with revenue of $1.12 billion, exceeding Wall Street's expectations, but missed profit forecasts significantly with a GAAP EPS of $0.34, which was 51.1% below analysts' consensus estimates [1][3][6] Revenue Performance - Revenue reached $1.12 billion, reflecting a 4% year-on-year growth and a slight beat of 0.6% against analyst estimates of $1.11 billion [6] - Adjusted EBITDA was reported at $219 million, maintaining a 19.5% margin, in line with expectations [6] Profitability Challenges - The company faced significant pressure on profitability due to elevated tariffs and a decline in U.S. payroll card transactions, which impacted the network segment revenue [3][7] - Operating margin stood at 9.8%, consistent with the same quarter last year [6] Strategic Initiatives - Management highlighted strong hardware sales and a surge in ATM-as-a-Service contracts as key growth drivers, with ATM-as-a-Service bookings reaching a record total contract value of $195 million and expected annual recurring revenue surpassing $300 million by year-end [3][7] - The company is focusing on expanding its ATM outsourcing and recurring service businesses to drive profit improvement despite ongoing cost pressures [4] Market Dynamics - The company noted that the hardware sales growth was particularly strong for its recycler product, driven by demand from major banks, although profitability can vary based on product type and region [7] - Management acknowledged the impact of elevated import tariffs, currently at 50%, and is adjusting sourcing strategies while budgeting for a lower mid-20% rate next year [7] AI and Efficiency Improvements - NCR Atleos is implementing AI-driven service optimization tools in North America, which have improved repair metrics and are set to expand to Europe, aimed at enhancing service efficiency and customer satisfaction [8]