NCR Voyix Corp(VYX) - 2025 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue increased 6% to $720 million, driven by higher hardware sales [24] - Reported recurring revenue increased 1% to $422 million, and 3% when excluding certain divestitures [24] - Adjusted EBITDA increased 17% to $130 million, with margin expanding 170 basis points to 18.1% [25] - Non-GAAP EPS increased 48% to $0.31, while GAAP EPS was $0.49, including a $65 million tax benefit [25] Business Line Data and Key Metrics Changes - Retail segment revenue increased 9% to $501 million, with recurring revenue up 3% to $279 million [26] - Restaurant segment revenue was flat at $212 million, with recurring revenue increasing 6% in enterprise and mid-market businesses [26] - Platform sites increased 8% to 80,000, and payment sites increased 4% to 8,600 [24] Market Data and Key Metrics Changes - The company signed 40 new retail customers in Q4, with platform and payment sites increasing 6% and 12% respectively [17] - The restaurant business signed over 150 new customers in Q4, with platform and payment sites increasing 11% and 3% respectively [20] - The company engaged with nearly 400 companies at the NRF show, signing more than 20 platform contracts, including new customers in the Philippines and Belgium [8][9] Company Strategy and Development Direction - The company is transitioning to a platform-led business model, focusing on integrated payment solutions and service capabilities [4][5] - A five-year transformation was completed, modernizing over 50 legacy applications into a unified scalable platform [6][31] - The company aims to build backlog across all markets, accelerate deployments, and drive adoption of its platform solutions in 2026 [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's competitive positioning and the strength of its platform, emphasizing the importance of building meaningful sales backlog [32] - The company anticipates revenue growth in 2026, driven by the deployment of new applications and improved recurring revenue [29][58] - Management acknowledged challenges in the SMB segment due to market dynamics and competition but expects improvements with the launch of new products [52][53] Other Important Information - The phased transition of the hardware business to Ennoconn commenced in January, expected to complete by the end of Q1 [10] - Adjusted free cash flow is projected to be between $190 million and $220 million, reflecting the benefits from the ODM transition [30] Q&A Session Summary Question: Can you provide context around the backlog metric mentioned? - Management highlighted that backlog is crucial for enterprise customers, indicating a healthy product pipeline with 20 signed contracts expected to deploy over the next 9-18 months [36][40] Question: What are the headwinds faced in the SMB segment? - Management noted that the SMB segment is the smallest and faces significant competition, but improvements are expected with the launch of new products like Aloha Next [48][52] Question: What is the expected organic revenue growth rate post-ODM transition? - Management anticipates improved organic revenue growth in 2026, particularly in software services and payments, while acknowledging potential headwinds from AI and chip pricing [57][58]