Company Overview - NCR Atleos (NYSE: NATL) has a significant ATM base and retail network, focusing on ATM outsourcing and managed services both in the U.S. and internationally [1] - The company is benefiting from a growing trend among financial institutions to outsource their ATM fleets, indicating a favorable market opportunity [1] Industry Trends - The trend towards outsourcing ATM fleets by financial institutions presents a continued opportunity for growth in the ATM outsourcing and managed services sector [1]

Core Insights - India1 Payments is transitioning leadership and pivoting towards digital services by launching a banking technology arm to counter sluggish ATM growth in India [1][12] - K. Srinivas, the long-time CEO, is stepping back from daily operations but will remain as executive vice-chairman to guide strategy [2][15] - The company operates over 15,000 ATMs, holding a 40% market share among white-label operators and 53% in transactions [4][5] Company Overview - India1 Payments is the largest white-label ATM operator in India, with a significant presence in semi-urban and rural areas [5][10] - The company was established through a partnership with ICICI Venture and has grown significantly since the Reserve Bank of India opened the white-label ATM space in 2013 [6][7] - In FY25, India1 reported revenues of ₹670 crore and profits of ₹35 crore, benefiting from recent policy changes regarding interchange fees [7][8] Market Dynamics - India has approximately 250,000 ATMs, with around 36,000 being white-label machines [5] - The company faces challenges as banks are reducing ATM deployments due to a shift towards digital payments, despite high cash circulation [11] - India1 aims to expand its ATM network to 20,000–25,000 ATMs in the next five years [9] New Initiatives - India1 is launching a fintech arm named Paysis, targeting smaller banks that lack the infrastructure for transaction processing [12][13] - Paysis is already servicing rural co-operative and small finance banks, managing switching and transaction services [14] - The company plans to sign up 200 co-operative banks in the next two years, capitalizing on the vast market of over 90,000 rural banks and co-operative credit institutions [15]

Financial Data and Key Metrics Changes - Atlios reported revenue of $1.1 billion for the second quarter, with core top line growth led by traditional hardware revenue and service growth backlog conversion [10][29] - Adjusted EBITDA grew to $205 million, with a margin expansion of approximately 40 basis points year over year [30][40] - Non-GAAP fully diluted earnings per share increased by 9% year over year to $0.93 [31] Business Line Data and Key Metrics Changes - The self-service banking segment saw revenue growth of 9% year over year, reaching $733 million, driven by a 21% increase in hardware deliveries [32] - The ATM as a Service business experienced a 32% revenue growth, with significant increases in unique customers and a favorable mix shift to higher margin geographies [36] - The network segment revenue was down 2% year over year to $320 million, primarily due to lower cash withdrawal transactions [38] Market Data and Key Metrics Changes - The company reported a backlog increase of 105% year over year, setting a strong foundation for future growth [53] - Cash deposit transactions grew by 170% year over year in the U.S. retail portfolio, indicating strong demand for utility deposit services [40] - The adjusted EBITDA margin for the network segment was 27%, reflecting the impact of increased bulk cash costs [40] Company Strategy and Development Direction - Atlios aims to grow efficiently, prioritize service, and embrace simplicity as part of its strategic objectives for 2025 [13][24] - The company is focused on expanding its installed base and enhancing service offerings to drive future revenue growth [22][70] - A $200 million share repurchase program has been authorized to enhance shareholder value while balancing debt reduction [25][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance despite ongoing tariff uncertainties and macroeconomic challenges [47] - The company anticipates continued growth in free cash flow and a reduction in net leverage to below three times by the third quarter [27][44] - Management highlighted the importance of customer satisfaction and service performance improvements as key drivers of future growth [56][70] Other Important Information - The company has successfully transitioned to a pure-play independent entity following its separation from legacy NCR [22][24] - The focus on product innovation and operational efficiency is expected to enhance competitive positioning in the market [14][22] Q&A Session Summary Question: Can you talk about the average ARPU in the as-a-service backlog and its trend? - The average ARPU in the backlog is approximately $9,100, with over 8,000 units currently in backlog [51] Question: Can you quantify the as-a-service backlog? - The backlog is up 105% year over year, indicating strong momentum for the business [53] Question: Can you provide metrics on service performance improvements? - Customer health scores have increased by 160 basis points, reflecting enhanced service levels and customer satisfaction [15][56] Question: What is the company's vision for the next two to three years? - The company aims to leverage its unique capabilities to provide both shared financial utility and bank-specific fleet solutions, driving predictable and high free cash flows [70] Question: How does the company view the impact of tariffs on hardware? - Hardware revenue is approximately $800 million, and while tariffs are a concern, the company believes it can manage costs effectively and maintain competitiveness [74][80]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $1.1 billion, with core top line growth in line with expectations, primarily driven by hardware revenue and service growth backlog [7][26] - Adjusted EBITDA grew 4% year over year to $205 million, with an adjusted EBITDA margin of almost 19%, expanding approximately 40 basis points from the prior year [27][36] - Non-GAAP fully diluted earnings per share increased 9% year over year to $0.93 [28] Business Line Data and Key Metrics Changes - The Self-Service Banking segment reported revenue growth of 9% year over year, reaching $733 million, driven by a 21% increase in hardware deliveries [29] - The ATM as a Service business saw a 32% revenue increase year over year, with gross profit up 72% and gross margin expanding to 40% [32] - The Network segment revenue was $320 million, down 2% year over year, primarily due to lower cash withdrawal transactions [34] Market Data and Key Metrics Changes - The company has over 500,000 ATMs in its global installed base, with a significant increase in demand for outsourced services [8][9] - Cash deposit transactions grew 170% year over year in the U.S. retail portfolio, indicating strong market demand [16] - The company anticipates a return to growth in the Network segment, particularly with new partnerships and transaction types being added [34][88] Company Strategy and Development Direction - The company aims to grow efficiently, prioritize service, and embrace simplicity, focusing on enhancing service levels and reducing inefficiencies [6][10] - The strategic focus includes expanding the installed base of ATMs and increasing revenue from each device supported [18][19] - A $200 million share repurchase program has been authorized, reflecting confidence in the company's valuation and future cash flow generation [21][24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year guidance despite challenges such as tariffs and macroeconomic headwinds [8][44] - The company expects to generate significant free cash flow in the upcoming quarters, with net leverage projected to drop below three times [41][43] - Management highlighted the importance of customer satisfaction and service performance improvements, which have led to increased service revenue [12][54] Other Important Information - The company has streamlined its sales process and improved conversion rates, resulting in record bookings for ATM as a Service [12][81] - The impact of tariffs on hardware revenue is expected to be manageable, with ongoing adjustments to manufacturing and supply chain strategies [73][78] Q&A Session Summary Question: Can you talk about the as a service business, average ARPU, and backlog quantification? - The average ARPU in the as a service backlog is over $9,100, with a backlog growth of 105% year over year [46][50] Question: Can you quantify the service performance improvements? - Service levels have improved significantly, with customer health scores increasing by 160 basis points [51][54] Question: What is the company's vision for the next two to three years? - The company aims to leverage its unique capabilities to provide both shared financial utility and bank-specific fleet solutions, focusing on sustainable growth and profitability [62][66] Question: How does the company view the impact of tariffs on hardware? - Hardware revenue is $800 million, and while tariffs are a concern, the company has strategies in place to mitigate their impact [72][74]

Core Insights - The Brink's Company has made a strategic investment in KAL ATM Software, enhancing its ATM managed services (AMS) strategy and commitment to providing top-tier solutions to financial institutions globally [1][4]. Group 1: Investment and Strategy - The investment in KAL ATM Software is a significant step in Brink's AMS strategy, aimed at delivering best-in-class solutions [1]. - Brink's AMS solution allows customers to select the most suitable hardware and software, accommodating the diverse ATM fleets of financial institutions [2]. - The partnership with KAL is seen as a natural extension of Brink's AMS strategy, focusing on customer choice and value [3]. Group 2: Technology and Innovation - KAL's ATM software is recognized as the most advanced hardware-independent solution, ensuring seamless operation across various ATM hardware manufacturers [2]. - The collaboration aims to transform the ATM landscape by combining Brink's operational excellence with KAL's software innovation, creating a future-proof solution for financial institutions and retailers [4]. - Successful deployments of the joint solution in regions such as Asia, the UK, and the Middle East have validated the partnership's strength [3]. Group 3: Company Background - The Brink's Company is a leading global provider of cash and valuables management, digital retail solutions, and ATM managed services, operating in 51 countries and serving customers in over 100 countries [5]. - KAL ATM Software, established in 1989, specializes in software solutions for ATM networks, helping banks control costs and enhance functionality [6].

Core Viewpoint - NCR Atleos (NATL) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the changing earnings picture that impacts stock prices [1][2]. - Changes in future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements, particularly influenced by institutional investors [4]. Company Performance and Outlook - The upgrade indicates an improvement in NCR Atleos' underlying business, with expectations of earnings reaching $4.01 per share for the fiscal year ending December 2025, representing a year-over-year increase of 24.5% [5][8]. - Over the past three months, the Zacks Consensus Estimate for NCR Atleos has increased by 7.8%, indicating a positive trend in earnings estimates [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of NCR Atleos to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock movement in the near term [10].