Core Insights - Coliseum Capital Management increased its stake in NCR Atleos by nearly 1.1 million shares in Q3, raising its investment by approximately $60 million, bringing the total position to 2.7 million shares valued at $106.3 million as of September 30 [2][3][7] Company Overview - NCR Atleos operates in the financial technology sector, focusing on self-service banking solutions, including ATMs and payment network services, with a global presence [6][9] - As of the latest market close, NCR Atleos shares were priced at $37.07, with a market capitalization of $2.7 billion and a revenue of $4.3 billion for the trailing twelve months (TTM) [5] Financial Performance - NCR Atleos reported $1.1 billion in revenue for Q3, reflecting a 4% year-over-year increase, while net income rose by 24% to $26 million [12] - The company's ATM-as-a-service business saw a nearly 40% growth, indicating rising demand and the addition of new customers in the Middle East and Latin America [12] Investment Implications - Coliseum's increased stake represents 10.4% of its reported equity assets, making NCR Atleos the fund's third-largest holding, which reflects a significant allocation in a high-conviction portfolio [4][11] - The timing of the investment is notable as NCR Atleos stabilizes post its 2023 spin-off from its digital commerce business, with recent growth and service momentum providing a clearer outlook for the standalone company [10]

Financial Data and Key Metrics Changes - First quarter core revenue was $966 million, slightly less than the prior year period on a constant currency basis, in line with expectations [24] - Adjusted EBITDA grew 9% year over year to $175 million, with a margin expansion of 270 basis points to 17.9% [27] - Non-GAAP fully diluted earnings per share increased 56% year over year to $0.64 [27] Business Line Data and Key Metrics Changes - Self-service banking revenue grew 1% year over year to $624 million, driven by a 6% increase in combined software and services revenues [28] - ATM as a Service revenue grew 24% year over year to $57 million, with a 44% increase in unique customer count [30] - Network segment revenue was $299 million, down 4% year over year, with cash withdrawal transactions approximately 3.5% lower than the prior year [32] Market Data and Key Metrics Changes - The Allpoint cash withdrawals grew modestly, while cash deposits increased more than 200% year over year [32] - Adjusted EBITDA margin for the Network segment was 29%, expanding approximately 150 basis points year over year [32] Company Strategy and Development Direction - The company aims to grow efficiently, develop a service-first culture, and embrace simplicity to enhance operational efficiency [12][14] - The strategy focuses on increasing service revenue opportunities and improving customer trust through sustained excellence [13] - The company is optimistic about expanding its ATM as a Service business, particularly in North America and Europe [30][84] Management's Comments on Operating Environment and Future Outlook - Management noted that over 70% of revenue comes from recurring services, which are resilient in uncertain economic environments [10] - The company expects total core revenue to grow 3% to 6% on a constant currency basis for the full year 2025 [41] - Tariff exposure is primarily related to hardware and parts, with plans to mitigate potential costs [40] Other Important Information - The company reaffirmed its full-year 2025 guidance despite external uncertainties, expecting adjusted EBITDA to grow 7% to 10% [41] - The backlog for ATM as a Service units is up 25% year over year, indicating strong demand [66] Q&A Session Questions and Answers Question: Can you provide more color on overall backlog this year relative to last? - Management indicated that this year is expected to be the best hardware year since 2019, with strong demand and a good backlog [47][48] Question: How is the balance sheet informing your view on potential buyback timing? - The company aims to use free cash flow to reduce leverage below three times, with plans for share repurchases once cash flow stabilizes [52][54] Question: Can you comment on withdrawal transactions in North America versus the rest of the world? - Withdrawal transactions in North America were stable, while the UK experienced a high single-digit decrease [92] Question: What is the game plan for LibertyX? - Management acknowledged that LibertyX has been de-emphasized due to regulatory changes impacting profitability, and they are exploring ways to monetize Bitcoin at the device [95] Question: Are there any M&A opportunities being cultivated? - The company has a long list of potential M&A ideas, focusing on low-cost opportunities to enhance its fleet and technology [98]