Workflow
NCR Voyix Corp(VYX) - 2024 Q4 - Earnings Call Transcript
VYXNCR Voyix Corp(VYX)2025-02-27 16:47
Filings
Slide

Financial Data and Key Metrics Changes - Reported revenue for Q4 2024 was 682million,withnormalizedrevenueat682 million, with normalized revenue at 678 million, reflecting a decline of 14% due to expected weakness in hardware sales [36] - Software and services revenue declined 2% to 521million,whileadjustedEBITDAincreased75521 million, while adjusted EBITDA increased 75% to 114 million, with margin expanding 850 basis points to 16.7% [38][39] - Total adjusted free cash flow unrestricted was 72millionforthequarter,representingaconversionrateofnearly6472 million for the quarter, representing a conversion rate of nearly 64% when excluding restructuring [44] Business Line Data and Key Metrics Changes - In the restaurant segment, software revenue increased 3% to 91 million, while services revenue also increased 3% to 72million,buttotalsegmentrevenuedeclined572 million, but total segment revenue declined 5% to 211 million due to hardware decline [40] - In the retail segment, software revenue declined 3% to 155million,whileservicesrevenueincreased4155 million, while services revenue increased 4% to 193 million, leading to a total segment revenue decline of 15% to 461million[42]−SoftwareARRincreased4461 million [42] - Software ARR increased 4% and total segment ARR increased 5% across the company [39] Market Data and Key Metrics Changes - The company signed more than 200 new software and services customers in the restaurant segment and more than 35 customers in the retail segment during Q4 [22][28] - The platform sites increased by 26% year-over-year, reaching approximately 74,000 sites [39] Company Strategy and Development Direction - The company aims to transition to a primarily recurring software and services model, with expectations to improve recurring revenue composition from approximately 60% to 75% once the ODM is operational [33] - A five-year non-exclusive agreement with Worldpay was established to enhance payment capabilities for enterprise customers, with expectations to process over 500 billion in payments through point-of-sale systems in 2024 [19] - The company plans to launch several enterprise platform solutions in 2025, with a focus on enhancing capabilities for existing customers and attracting new ones [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth opportunities in both restaurant and retail segments, highlighting strong demand for next-generation solutions and services [64][106] - The company anticipates a decline in revenue in Q1 2025 due to a significant hardware refresh from a major retail customer, but expects adjusted EBITDA to demonstrate high-teens growth compared to Q1 2024 [53] - Management acknowledged challenges in the hardware market due to customers delaying refreshes, but noted that the rate of revenue decline is expected to moderate as the year progresses [84] Other Important Information - The company repurchased 4 million shares for approximately 56millionunderitssharerepurchaseprogram[46]−Totalinventoryatyear−endwas56 million under its share repurchase program [46] - Total inventory at year-end was 208 million, with expectations of a cash flow benefit from the ODM transition [51] Q&A Session Summary Question: Timing and benefits of the payments agreement - Management expects the new payment system to be operational by the end of summer 2025, with significant revenue potential from the agreement with Worldpay [60][61] Question: Opportunities in 2025 - Management highlighted untapped potential in next-generation solutions and recurring revenue models, with significant customer interest in upcoming product launches [64] Question: Software services outlook and licensing exposure - Management indicated that approximately 30millionto30 million to 40 million of one-time software license revenue remains, but this will diminish as the company shifts to subscription models [74][75] Question: Hardware outlook and revenue comparisons - Management noted that hardware revenue is expected to decline significantly due to customer delays in refreshes, but anticipates a moderation in revenue decline as the year progresses [84] Question: Government contract details - A longstanding relationship with the Defense Commissary Agency was expanded, with incremental revenue expected to ramp up towards the end of Q1 2025 [89] Question: Retail environment and growth expectations - Management reported active conversations and opportunities in the retail market, with a focus on improving efficiencies and addressing shrinkage issues [102][106]