Financial Data and Key Metrics Changes - 2024 was described as an outstanding year for the company, with solid operational and financial results delivered across four consecutive quarters [6] - The company aims to exit the year with EBITDA margin rates around 20%, indicating a focus on maintaining profitability [24] Business Line Data and Key Metrics Changes - The average revenue per unit (ARPU) in the backlog was noted to have shifted from approximately $12,000-$13,000 to around $10,000, reflecting a change in the mix of units being implemented [9] - By the end of the fourth quarter, the company had 28,000 ATM as a Service units, up from 22,000 in the previous quarter, although short of the 30,000 target set for the year [15] Market Data and Key Metrics Changes - Demand for hardware and as a service offerings is increasing, particularly in India and Western Europe, with the U.S. also showing positive trends [11] - The company has a significant presence in India with over 120,000 machines, indicating a strong market scale [22] Company Strategy and Development Direction - The company is focusing on higher ARPU machines in North America and Europe while also recognizing the potential in the Indian market [21] - There is an ongoing strategy to move customers towards more comprehensive outsourcing services, with 90,000 machines currently described as managed services [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and its ability to deliver financial results that improve sequentially [6] - The recurring revenue performance is tracking close to expectations, although slightly behind initial models, with belief in future growth in service levels [46] Other Important Information - The company plans to exclude certain income and expenses from EBITDA calculations to reduce volatility, which could impact reported figures by $5 million to $10 million per quarter [32] - There is an expectation to find off-balance sheet financing solutions for ATM as a Service hardware in the near future [39] Q&A Session Summary Question: Can you talk about the ARPU in the as a service backlog? - The average ARPU in the backlog has shifted to around $10,000, with some high ARPU units being implemented in the fourth quarter [9] Question: Can you provide a geographic overview of demand trends? - Demand is strong in India, Western Europe, and the U.S. for both hardware and as a service offerings [11] Question: How many ATM as a Service units were there at the end of the quarter? - There were 28,000 units at the end of the fourth quarter, up from 22,000 in the previous quarter [15] Question: What is the outlook for gross profit margins in 2025? - The company expects variability in gross profit margins due to seasonality, with a target of around 20% EBITDA margin [24] Question: Can you comment on the change in EBITDA calculation? - The new EBITDA calculation will exclude certain income and expenses to reduce volatility, particularly from pension and FX impacts [32] Question: Is there a plan for a buyback program? - The company is considering a buyback plan, especially in light of current stock trading levels and investor preferences [44] Question: What is the outlook for free cash flow targets? - Free cash flow growth is not expected to be linear, with some recent tax breaks and accrued costs impacting the current quarter [51]
NCR Atleos (NATL) - 2024 Q4 - Earnings Call Transcript