NCR Voyix Corp(US:VYX)2025-08-07 13:00Financial Data and Key Metrics Changes - Total revenue for the quarter was $666 million, a decline of 8% due to continued softness in hardware sales [23] - Recurring revenue increased by 4% to $422 million, improving its percentage of total revenue by over 700 basis points to 63% [23] - Adjusted EBITDA was $95 million, an increase of 20% with a margin expansion of 340 basis points to 14.3% [23] - Software ARR and total segment ARR increased by 7% and 5% respectively [23] Business Line Data and Key Metrics Changes - In the restaurant segment, total revenue increased by 2% to $205 million, with recurring revenue also increasing by 4% to $143 million [24] - The retail segment saw total revenue decline by 12% to $454 million, while recurring revenue increased by 5% to $277 million [24] - Software and payment sites in the restaurant business increased by 41%, while in retail, platform and payment sites increased by 2513% [15][19] Market Data and Key Metrics Changes - The company had nearly 78,000 sites connected to the Boyd's Commerce platform, an increase of 16% year over year [10] - Consumer transaction volume through the VCP was more than 50% higher than the prior year, with over 500 million transaction API calls processed in June alone [11] - The number of consumer orders processed through the VCP increased nearly 60% in the first half of 2025 compared to the prior year [11] Company Strategy and Development Direction - The company plans to launch additional VCP capabilities starting in the fourth quarter and into next year, focusing on enhancing customer experiences and operational efficiencies [6][8] - There is a strong emphasis on integrating payment capabilities with software contracts, reflecting the intertwined nature of these industries [7] - The company is investing in cloud-native technologies and microservices architecture to create a competitive advantage in the market [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand environment, noting no pullback from customers and a strong interest in modernizing infrastructure [30][31] - The company anticipates continued revenue growth and improved margins, particularly in the restaurant segment, which is expected to finish the year at about 32% [46] - Management acknowledged the evolving tariff situation but maintained a stable cost estimate for the year, indicating ongoing monitoring and potential adjustments [9][50] Other Important Information - The company has initiated conversations with about 10% of customers regarding expanded service offerings, including payments [7] - Adjusted free cash flow was $37 million for the quarter, with expectations for a ramp in the second half of the year [40] - The company invested $42 million in capital expenditures during the quarter, with over 80% related to software investments [24] Q&A Session Summary Question: Demand environment across retail and restaurant - Management noted no pullback from customers, with strong interest in modernizing infrastructure and a good spread of demand across product offerings [30][32][34] Question: Free cash flow visibility - Management indicated that Q2 free cash flow was in line with expectations and that they expect to generate more in the second half due to seasonal trends [40] Question: Strength in restaurant EBITDA margin - The strength was attributed to good software and services growth, with expectations for consistent margins throughout the year [45][46] Question: Tariff exposure and mitigation actions - Management confirmed the tariff cost estimate remains unchanged and indicated ongoing discussions with customers regarding shared expenses if tariffs persist [50] Question: Cost savings initiatives - The company has executed a cost program aimed at $100 million in savings, with about 40% realized in the first half and 60% expected in the second half [55] Question: Payment business progression - Management expressed optimism about the payment business, expecting significant growth as they engage with larger customers and streamline services [68][72][94] Question: ARR and backlog for implementation - Software ARR is approaching $800 million, with a positive trend expected to continue as new products are launched [101][103]