NCR Voyix Corp(US:VYX)2022-02-09 04:16Financial Performance and Key Metrics - NCR Corporation reported total revenue of $2 billion for Q4 2021, a 25% increase compared to Q4 2020, driven by strong growth across all segments [31] - For the full year 2021, revenue reached $7.2 billion, up 15% from 2020, with adjusted EBITDA increasing by 39% to $1.2 billion and adjusted EBITDA margin expanding by 300 basis points to 17.4% [36][37] - Recurring revenue grew by 25% in 2021, comprising 58% of total revenue, with adjusted EPS increasing by 51% to $2.56 [12][38] Business Line Performance - In the Banking segment, revenue increased by 40% year-over-year, benefiting from the Cardtronics acquisition, with legacy NCR Banking up 7% [40] - The Retail segment saw a 9% increase in revenue, driven by higher point-of-sale and self-checkout solutions, although adjusted EBITDA declined by 1% due to rising costs [45][46] - Hospitality revenue increased by 27% as restaurants reopened, with adjusted EBITDA flat year-over-year [50][51] Market Data and Key Metrics - Digital Banking revenue accelerated to 14% growth in Q4 2021 compared to the same quarter in 2020, with a total signed contract value up 28% year-over-year [15][43] - The Payments business experienced a 12% increase in total transactions in Q4 2021 compared to Q4 2020, with expectations for further growth through new transaction types [24] Company Strategy and Industry Competition - NCR is transitioning to a software-led-as-a-service model, aiming for 80% of revenue to be recurring and targeting 15% annual non-GAAP diluted EPS growth [73] - The company is exploring strategic actions to unlock shareholder value, as management believes the stock price does not reflect the improved performance over the past three years [27][75] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about 2022, expecting revenue growth of 12% to 15% and adjusted EBITDA growth of 21% to 27%, despite challenges from supply chain issues and inflation [58][59] - The company anticipates a gradual improvement in supply chain conditions, with hopes for a more normalized environment in the second half of 2022 [108] Other Important Information - NCR completed the acquisition of Cardtronics in mid-2021, which is expected to be accretive to EPS by 20% to 25% in its first full year [34] - The company launched a board-led strategic review process to consider various actions to enhance shareholder value [25][27] Q&A Session Summary Question: Can all business segments stand on their own? - Management indicated that while there are synergies among the segments, they are open to exploring strategic alternatives to unlock value [78][80] Question: What are the concerns regarding guidance? - Management expressed confidence in demand but highlighted concerns about cost management and inflation impacting margins [88][89] Question: What impact will LibertyX have on guidance? - LibertyX had no impact on Q4 results as the deal closed in January, but it could contribute to 2022 revenue depending on accounting methods [101] Question: How is the company managing supply chain challenges? - Management noted that while supply chain pressures remain, there are signs of improvement, particularly in semiconductor availability [106][108] Question: How have banks reacted to price increases? - Management reported that customers, including banks, have been reasonable in accepting price increases, with many passing costs onto their customers [126]