NCR - Earnings call transcript Q1 2021

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Operator

Good day, everyone and welcome to the NCR Corporation First Quarter Fiscal Year 2021 Earnings Conference Call. Today’s call is being recorded. And now at this time, I would like to turn the call over to Mr. Michael Nelson, Vice President of Investor Relations. Please go ahead..

Michael Nelson

you our thank earnings quarter and call. afternoon, for first joining XXXX Good

the Mike today CEO; me call Joining on are COO; Tim Owen and Hayford, Oliver, CFO. Sullivan, and President

we our to that started, uncertainties risks our me include get that A Relations to With website, statements. of actual results reflect but April measures replay and presentation on On in this will statements current our measures. the differ These and to filings and call I financial they and and our earnings XX, turn we the are Before are that, discussing call the forward-looking remind cause you subject GAAP of discussions those These our let non-GAAP would report. will to expectations These press Investor be beliefs, materially release our SEC, could on counterparts expectations. ncr.com. presentation the in XXXX, risks are later materials, also uncertainties and like described the release dated non-GAAP annual including page reconciled today periodic be with certain from our website. described available will call, to Mike. today’s now their over and

Michael Hayford

And Tim level I review recurring financial outlook our questions. into second thank software NCR shift quarter views and an focused a a on our then, business, everyone, XXXX Michael, and the begin Tim on you, today revenue. performance and some services first us to my Owen, of then Thanks, an earnings for will will your with for our joining with call. I quarter. of take becoming company and including higher the update

recurring X Let’s growth, first highlights cash revenue that with significant accelerated included quarter. NCR begin flow the expansion production. margin delivered strong solid performance and on from Slide some

of our the length when facing pandemic. over geographies, our to to focused we ago, green business. certain We customer parts were and uncertainty believe taking we depth businesses customers. prepandemic care A to unprecedented remains of experience dividends relentless and there shoots on brand starting are starting regarding year is across our Although return uncertainty levels in in of stay our care to I improved We of asked focused satisfaction focus on pay taking that, loyalty. were employees. that team the

the we from crisis, a we than in stronger were Although position much haven’t fully a year still are we today ago. recovered

momentum execution. building our in are and We strategy as-a-Service improving NCR

increase from EBITDA First, to XX.X% an the the XXX basis we represents quarter in adjusted points of first quarter, expanded of margin XXXX. which first

X% delivered we Second, recurring the total revenue revenue. revenue quarter. That XX% of recurring in growth brings to

our progress continue make We our consistent with recurring steady to XX/XX/XX which is increasing goals. revenue

revenue. of shift the free we quarter, are the NCR services strong cash time that mix and the excited and flow flow. many represents first NCR’s the in cash quarter years proposed has with NCR will revenue to combined of delivered in recurring we strategy as-a-Service accelerate opportunity The in very which We $XX Third, million free Cardtronics about the the year. positive flow generated further generated first transaction cash software, finally, And free

shareholder We on midyear course, remain and close for XXXX, have the approval. to regulatory subject, the completed successfully track to financing of and transaction

Now moving to Slide X.

achieve continued to our transition strategy have NCR strategic on our drive We progress our to focused remain goals. and executing XX/XX/XX and as-a-Service

our positive momentum margin our quarter. against accelerate with in the EBITDA progress We as significant these Banking, platform, deals we XX% continue banking particularly to target. In XX goals, first in expansion have made adjusted digital new we margin have towards signed

business deals done quarter. with continue as including model. to business existing strong banking with clients shift Banking software products, three the to growth with We also had cross-sell the we a continues in recurring success new

growth our integrating strong our continued our saw banking solutions quarter assets physical momentum solutions. First Digital multi-vendor into The strategy, digital well end-to-end ATM with first as our as in

beginning multiyear projects. engagements to software are we with addition, to professional In shift service that aligned are our

starting ATM signed retail solution banks transformation states. to retailers in for Berkshire’s in is Grocer, POS agreement. with Arka, with recently regional being as-a-Service the and more acceleration a the We XXX offering, super to will signed ATM upgrade respond. cycle first a Emerald believe this leading In cloud-based is retail quarter, we of are and are receiving by one consumer in need demand, XX-year retail next-gen stores NCR The software. interest a drive solution. Retail, deal NCR driven Texas-based digital We our to our We grocer gaining increased than in with traction an our new as-a-Service three France Emerald which is across point-of-sale

continued is customers. seeing model Hospitality, We geographies hardware are also of in of existing our customers our increased and consumer self-checkout accelerate. to service In momentum new ability demand experienced in We quarter. first Essentials, preferences the proving payments customers better adoption solutions. This attract as which bundle services across and itself software, and Aloha

Stake quarter, IT sold Payment all into is rate and also attach restaurants. sites subscription direct sold strong at over their in entered as sites. point-of-sale subscription-based end-to-end NCR NCR over Aloha sales Stake our for XX% new XX% restaurants bundles. and During the services for first & into with Shake of support agreement roughly through XXX support recently of offices & of an globally hardware software, Shake to were

our NCR as-a-Service strive of become steward will and focus efficient strategy executing transformation on we As an our drive more even the to businesses, we our of resources.

with advancing platforms improving let me of With growth that, productivity. our care our taking and pass Tim. customers, on to over strategic focus to capability product our continue investments in We our

Tim Oliver

phone tuning Mike, to of on today. for all and thanks you, you the Thank in

launched ago little is financial As strategy evident Mike results. our a both starting just in competitive years of described, the execution that was to two over be a and

top or X% versus sequentially. on consolidated XXXX was Slide solid to growth Xst up million hospitality by Starting overview of in our or Revenue million our driven segments. $X.XX presents which revenue financial was down quarter, the Turning left, X, quarter the first retail and X% billion, our $XX performance. top the of $XX

in our Although of still This can business last X to major are average hardware linearity. $XXX million QX revenue improved is QX step-down from some orders, there an lumpiness we sequential the QX compares result that the year’s over decline driving and significantly over seasonality in from to years.

cost XX.X%. quarter. revenue margin Adjusted XX% rate adjusted strategy our XX% recurring top comprised shift or our attributable Importantly, direct operations; EBITDA the significant expanded permanent more savings. in to X% almost in right, cost cost increased to recurring improvement In XXX is more basis and call, three detailed to productivity and the $XX and in that in than to places. things: annual revenue On was our $XXX million Recurring layers indirect; growth EBITDA our in $XXX again up productivity reduction improvements streams profitable the we million. of last right, to revenue more revenue the million our ratably overhead to year-over-year This accelerated. points accumulated

linearity million add XXXX of efficiencies from operations EBITDA. judiciously to The preserve acquisitions. adjusted the rates, back high Similar the cost further will discussion generated revenue, first first our businesses in guidance of and have to in importantly, the of the growth many particularly with million cases productivity tax benefits. identify the QX to free both of improved quarter. the tax those years current in we and due flat already both and in of synergistic we years. quarter $XXX generated are and $XX full-year roughly first the rate decline While years. in $XX bottom the represents driving of XXXX of This in a we XX%, to cash decline most maybe of sequential of cash performance of our decrease roughly And non-GAAP we of fourth fourth the intend each decline to the the was and over QX first up quarter last flow and higher from free the The that NCR XX% quarter higher we cash positive $XX generated of our quarters in of a compares EPS use X the X from income QX of $XX XX.X% first to compares rate up million quarters than to average an finally, $X.XX, flow year has first quarter. million In was XXXX of XXXX in sequential quarter. XX.X% to $X.XX compares in left, from The prior or an in discrete average prior million time tax

Banking attributable to X% decreased revenue lower our that of Moving or sales. more year-over-year, than decline million X, $X which Slide segment ATM banking to all hardware results. describes with

sale the and trend and pull-through ATM Software recognized are This and and that despite revenue business more and that traditionally with was software revenues shift lower the streams both the with revenue. hardware recurring to predictable its hardware services durable, replacing of extended increased revenue services valuable. of

improved rates levels, to trend to pre-COVID more Our with banking above sales funnel close also has positively. starting

sales value EBITDA the year-over-year revenue. year $XX much component. XX% QX from Our lower Banking and a mix than XXXX twice recurring richer and or increased now value has subscription larger total was funnel signed contract despite more ago. adjusted a million the

shows a XXX a expanded to lower by a bottom and As metrics XX.X%. the increased adjusted key our while expenses. rate year-over-year was rate revenue basis was for expanded revenue EBITDA adjusted points Banking XXX sequential profitability by EBITDA margin X%, slide driven points. EBITDA On improved of The down margin segment. adjusted both basis result, and the sequentially and mix XX%, The basis, the of favorable

banking eventual registered prior places. And a digital in period while compared the wins decline despite On year-over-year. a the X% typical segment have quarter revenue drove XXXX. described the first Digital in will revenue, Recurring wins current of the the in QX XX% the and rate generation, we growth to banking year-over-year increased Banking that right revenue conversion at X-month lag in left, banking did to conversion Mike users increased total quarter. X% grow

strong. driven retail. X prior of expanded margin $X.XX broad-based Retail services or lanes EBITDA Platform by XXX Lower the increased year-over-year, on to rate basis depicted Slide revenue XX% page, million Retail segment accompanied double-digit Retail year-over-year, compared dollar. uniformly first both by performance and $XX shows self-checkout strong points for customer adjusted revenue were demand, the the results, cost increased quarter on by or increased year key demonstrates million increased metrics to of discipline, by while quarter. XX% conversion incremental and year-over-year, we our the This three the $XX growth XX% XX.X%. geography. revenue. by driven adjusted XX% first to Moving which EBITDA EBITDA revenue by Self-checkout with impact

to returned to versus XX% shows reopen, the this increased growth. POS implementation first revenue And recurring million importantly, locations Hospitality X% our expand. restaurants business of rework segment we results, We our accelerating of which Slide or are in and see solutions. as rates adoption see quarter next-generation beginning year-over-year X software retail and continue XXXX. Hospitality $XX increased revenue to existing

value quarter. Our more from contract than signed doubled ago year first the total

Our to is stronger, pipeline adding we sales catalyze to getting effort our trend. this improving selling and resources are

year first million the down first graph which higher bundle has XX% recurring adjusted by has expenses. at and revenue. metrics X% revenue due caused bottom and as abated. stabilized sequentially. was or to Aloha grew Recurring quarter than last Essential services, right in software, year single rate prior EBITDA in was key Aloha closure quarter First from Recurring quarter when of compared a into attrition hardware more the Hospitality’s and sites sites, from XX% XXXX and operating flat tripled increased revenue the $XX sequentially. restaurant lower to this include offering the grew payments and business the revenue Essentials

XX% that and We and quarter. are quarter our familiar described Slide or, first inverse, to first the XX% XX% XX. an strategic to revenue, our strive sales. now provide revenue less our of more margin XX% generate XX% this from the of year. we targets in XX% in hardware driven quarter fourth quarter XXXX our revenue results increase from for and drive the software software valuable aim more decline of higher to XX% for was from of services represented XXXX. first quarter rate. and revenue. And total recurring, adjusted Recurring the revenue to of more XX% compared be We to the our a to in revenue aspire by XX% you. In than from discrete which XX% Turning is revenue first as represented very to The EBITDA predictable the revenue We of in services of resilient, fourth XX/XX/XX quarter, SCO

and XXXX to XX.X% Slide present As quarter compared net significant to XX, debt cash emphasized, I’ve made metric, in progress adjusted in margin of and calculations. of facilitate XX.X% adjusted rate leverage this already quarter. EBITDA with we metrics On XX.X% in flow, first free the we fourth an EBITDA the

As trend in strong of free cash compared Free and the secured longer I notes. approximately are flow in debt We X.X. described amended be important original X.X and X-year excess lower transaction, these to the so the challenged days total A widen level those million. transaction, The to close, close new not about anticipation to year’s to plan to two our $XX also billion Slide under extended incremental with hand of X.Xx, senior become debt the this linear an We traditionally cash Receivables million outlook more and borrowings first group. transactions average allow within appreciate our of quarter our X-point $XX eventual $X.X times with last earlier, have than of flow shows of free we we inventory extended with categories well strong, of quarter with year. quarter our sales an leverage Cardtronics outflow through metric, XX%, the cash days, is structured credit on my will which interest partnership financial with covenant quarter standalone net-debt-to-adjusted-EBITDA same of days ended At of than last We issued of Versus days covenants. NCR is forecasted QX aggregate basis. XXXX, of a position quarter left facility QX covenant days. operationally. the in down a maximum weighted XX, funds execute and leverage of absence by the ended down And augmented which credit slide X with ratio first improvement provided the a is cash were leverage NCR X $X.X from provides a the us which delever first greatly of from rapidly will of of on would XX%, our in X.X%, all times. down XX of for that all significantly a of billion were debt available, in our post-close our senior and $XXX In these of We with and improved Term outstanding lending well model. slide the new an for remain our This full X.Xx. million support the XXXX X.X borrowing. transactions. Loan our These facility

at analysis. While reported the transaction efforts current successful midyear completion facilitate intend proposed quarter our that your would complicate of second report the and in our format both to our we modeling to Cardtronics results,

to for to competitive growth. relative So signals NCR will that demand X% both comprised for expect of growth and XXXX’s QX, support revenue end improving results, from and is Strengthening XX%. markets our we currently position

revenue EBITDA and as to expect to QX more to NCR back streams QX. expand his from continue On performance to it we be XX%. that, productive, finally, free proof We improved our in recurring we growth flow our to more our will adjusted of generation the valuable for similar a point in to particularly be more Mike to linearity. closing comments. competitive margin is Hospitality another I expect than XXX cash emerging by With that second turn that XXXX rate we expect pandemic points quarter company. and growth profitability, strong XXX drive is And I expect to to basis businesses Retail in cash rate more and also similar

Michael Hayford

Tim. Thanks,

accretive of strategic EPS expected transaction on transaction cash the expired on about the Hart-Scott-Rodino our is generation scale by update the Now NCR our non-GAAP May XX%. strategy regulatory XX% XX/XX/XX United the shareholder for advancing period as on the our proposed It Cardtronics the to will as-a-Service subject excited Cardtronics shareholder flow anticipate and review first be addition shareholders and for scheduled will transaction the to enhance to targets significant March is and We accelerate year shareholders. for transaction believe years. NCR will at is combination roughly in a unique close provide and transaction very the will and our by under to XX, a meeting Cardtronics. We two We turning the still It approval. both perspective, and midyear, their financially remain to an Cardtronics Xth. of drive the NCR. customers I Kingdom. South that with regulatory Slide Africa to and is and XX. our value to From consistent opportunity vote want accretive waiting to strategically while

to Slide turning XX. Now

are priorities Looking key forward, our clear.

NCR we our will strategy. as-a-Service accelerate First, continue and XX/XX/XX to

notable to strive build We and momentum. made positive progress on have the

momentum growth we flow shift have more to positioned well the while linearity our accelerated revenue business recurring improving in of to stream. we Second, cash drive are a and as revenue and revenue

concludes we Cardtronics ground time. to once expect the the are we leverage our of margin continue for bring returns And call highest the closes. up our goal Thank flow expansion. to please opportunities continue the Third, increasing the cash shareholders. opportunities and Fourth, lower remarks That capital for And operator, you that, transaction we will the open the us growth With that structure preparing drive allocate to today. hit positive to along open for cost free will your executing combination of will return a for finally, and running line. we prepared questions. operating on driving will and with with the

Operator

of Katy take Stanley. [Operator Instructions] you. from And will our we Thank Morgan first question Huberty

Kathryn Huberty

questions. you, thank of couple a Yes

Is of seasonality a is revenue to you with mix? is it through X% of have function recurring revenue do sequential follow-up. of I timing the look a XQ. But if when is XQ hardware just a on coming deals about you up First, year? Or X% see at something having pre-COVID strong. this that there increasing guidance in below basis, Then

Tim Oliver

Katy, this is Tim.

You are right. exactly

revenue much gotten more have we historically typically better As our happened to had first we in a happened shift to have streams, than from QX. QX would the in linear quarter -

point-of-sale the so QX, Hospitality the would business. there, but that be in heavy And at quarters the that QX. in comes growth to of the for the and about bit going it trend continues last a several quarter little talked sequential expect to into is into hardware I sequential when modest have SCO growth particularly more growth we

Kathryn Huberty

Okay. And in it up that XQ, of sequentially is EBITDA that down expansion hardware is is Tim, because year-on-year, why is but I assume the mix?

Tim Oliver

Yes.

sit it I’m certain as we So not here now, be will lower.

I think some cost did I advantageous growth my in little do revenue the pretty significant demonstrate QX. a and in in second little bit we a quarter, mix is see higher QX. less

So hit will opportunity rate now, the to come in was range, some we look, growth there would this right is if it just where below in margin modestly that able are the But to be of end yes, that places. now for expect quarter. I high

Kathryn Huberty

lastly, And what Can retail just and Okay. in then you in Hospitality for TCV the on seeing you comment you particular? segments. Banking pipeline the around pipeline commented are on and

Tim Oliver

Go Yes. Owen. ahead,

Owen Sullivan

is Owen. the driving retail what The the side is this business is house Katy, Yes, of is which the both on software TCV.

seeing really momentum good are some We there.

that in talking the forecasting about refresh about were talked have December. We or we cycle back

us. level that as number of to is come along with that TCV convert strong, available And lanes seeing the really are number we is the a is self-checkout And reflection that to the coming are We the that. of fruition. so activity

of did comment are with the retail the a to little goes mix in a software They what the along energized see Tim’s first the we we out the business, getting think going but there. is I of really others, like the we and right the hand in more about second are will but mix, they bit We But drive quarter, that glove. hardware momentum it about So are back in quarter. number. to probably big

Kathryn Huberty

Okay, Thank great. Congrats you. on the quarter.

Tim Oliver

you. Thank

Owen Sullivan

Thanks.

Operator

hear Fargo. will we Next, of Willi Wells from Tim

Timothy Willi

since people good could more a talking about of know business both competitive you has in that just been are is been there product My I you where your have question position, substantial comments competitive others versus way follow-up, and you position. of and Mike, of investment any Thank standout through of than to better? Tim, sort you your if a that think arrived, think And focus Mike. a everybody. there your sort I’m feel then and appreciating first referenced wondering and times improvements numerous improved afternoon them the about - line so X probably other, you all like I

Michael Hayford

a little board, for been some thanks initiatives. and the the on three business lines again, bit we very Tim say specific Yes. focused question. have all I across of would

little see in bit numbers. you think the I a

Aloha current so of we Emerald starting starting a have were lot to cloud-based Hospitality to pandemic, I the to new to success multiple up. with new attaching payments of with had refreshes our the think the restaurants. if Hospitality POS. we driving challenges and of market metrics, in to in have we those bit starting Aloha see end market sales are The start is bundled we are side at we architecture. channels they Retail, success those stores, in that are have And are little up now year, of A and really get enterprise POS and to what pick is of opening it years back the in and believe, on you you you with they We give Retail. had the have because we a that done market. good in Essentials. we the SMB last your really reinvesting there, available large more starting good starting year. the upgrade are SMB to number the retail It to again need to a is that have get this need busy, upgrades,

are see quite that is well. want that. that, I success going in starting to we mention So to

and clients with of of of a on ability You a are SCO coming say, is cost SCO, the then is pandemic, all labor self-service. are by to scope. that drive bit conversation the lot It driving little bit started seeing around our the out I driven get now that should labor seeing a little pandemic to it

NPS only when across result, on our they improved board, you business as are we product on our sat improves year do get sales. service not in investment, in, the in have or the well. And know, scores, because Scores, Promoter last product We went up customer a the we as we Net that better but also quite are more service,

that. to are starting see then And last a Digital came show good continuing year, well it into we So banking lastly, very is to And XXXX. back had XXXX.

So literally across the year. board, Retail, Hospitality, Banking, good digital banking to start have had a the really

Timothy Willi

help Thank revenue really you. able and your can And there, hospitality this being some understaffed, We a then opportunity whether a on that just there in really labor the environment system of services And restaurants. table there manage about the are products? not if I’m and market is restaurant other walk they is checkout them product you my hire. that into get it this around are follow-up or are for real POS built was hear and at really lot where definitive people shortages base cross-selling opportunities suite given if curious even that labor that to and labor-type within products into kind to some customer

Michael Hayford

the times, table, ability sense a to menu pop table when a can mean, straight and it just table two, the a Again, you you Well, order most order and two for wait in things the you table, wait the quick to staff. ability the ability through a the drive to the at are those can pay I kitchen. to a

it Our to back it went system, integrated because kitchen. is the Aloha, with back

money an online ordering end, and BSP, front-end for client, the If food. customers you Again, through you system. can kitchen. then them some Aloha can Platform, the drinks right we and our the have Integrated order out Service with a table, runners through our Business are front goes your put into that taking our

don’t most the you have reenter, aggregators third-party platforms which Eats. in Uber So like Grubhub coming with to or

it you it see they POS the through kitchen. in are the into If Aloha straight the reordering into restaurant,

of accounts, interest having and just the capability have integration technology in interactions. in lot enterprise the that we staff some to So minimize having a

well we in self-service. So we think pretty talent poised are that for

Timothy Willi

Excellent. I and on the thoughts Thank you. the the all details appreciate call.

Operator

next Hoeffler has Stephens our of Joel question.

Joel Hoeffler

hoping starting I coming could I Great. I if have earlier, then but might missed if the acquiring a you and follow-up. to were up as that more base was Hospitality for customer existing about for business win payment attach renewal. have is this some the of you rates And talk

Michael Hayford

Yes.

So sites. and up new going putting about on we Aloha talk central

So new Aloha client, Greenfield existing a it be to be or Essentials client Aloha could could upgrading client.

with those in see restaurants with rates is to are larger can is you starting that. into the out still whether are accounts, sell gone have larger to We whether it So enterprise attach actually build and situations, nice started and strong. very XX or SMB it a a pipeline

some see those I start to think over we into will convert of customers time.

Point and to We get well have Store head with actually had starting some is Emerald. momentum as payments, so Hospitality with is of retail retail or

starting the to would every payment across attraction. call, say is long a game. this are board, payments get I So

integrating, the the our We POS when complete fee can the are want payment. we adding to transaction. And functionality of we going to the just attach moving point keep We differentiate integrated with keep we that transaction and collect payments sale start will to a merchant that. keep for to and

Owen Sullivan

are And Dirk only that thing hospitality add the things the on team, feet would and They of to they number market double I two to on. in very the to path on in is they here, street the space. are that his focused have the as gone

number in and product SMB are We the the a good of that. market feet particular, we about on very we think feature, So street, so This double functionality competitive. the are our when in on look to feel we we is the about path salespeople. at a battle

they the settlement net bundled in really lead on we the a The as to strategy marketplace. other payments. have And have to is pricing have done do strategy we fact, a thing built SMB is what payment-first that with a

volume. So at the are day, it against payments settlement bringing the and on of the with we table, net all is Essentials the a basis end Aloha payments to

talked Mike I XX% and the So a about the on and clear, loud low message sites. will of is receptivity, tell you growth

more than that. We are happy

are planned. in that overachieving rate on we what the had versus activity We attach

Joel Hoeffler

is or you I are update follow-up extent the how that. on super partners to My that That helpful. customers thinking guys appreciate can, Cardtronics question the acquisition? any is, about

Michael Hayford

to Yes. about get can’t I an We can’t inbound go calls we well as and do an as and or market is offering. together. Cardtronics executive. talk messages, whether obviously talking it go mean We clients,

retail So of of it has literally using are would the anecdotal. vast products it very banks customers, some Cardtronics. it is majority using say right, again, are so joint or our whether more the clients some input also the is these been I of And around retail are positive, boy.

of the other So the they do together, us." services network it banks would positive. here or things also some has again, it very far, us, that and have been that and could They relationships to Cardtronics. guys "Well, Some you from are us offline come some is, really but anecdotal, so they very with use say, use help

Operator

Next, we Company. The Dan of will hear from Benchmark Kurnos

Daniel Kurnos

let’s in maybe on are logos guys their space on call pandemic to obviously, If existing what almost Hospitality doubling that for just Owen, of meaningful than up impacted reopening versus maybe any the the you that cropped have it, struggling are seeing more way feet other we hospitality a because were doors just the vertical. new between, there back is and logos a way kind Thanks. the out can street. second, go any parse

haven’t of are look, much. there having And really we again there. quarter. Thanks guess, I the I the get of uptick for banking just too we so all nice kind a the touched breakouts here. on digital kind trajectory had that conversations you Mike, It then, can Just the sense of in a know

about shoots, assets. seeing some talked physical have You of integration green

granularity kind of on of this you how see Just can over sort trajectory balance year any you give of that be other us would improving the helpful.

Owen Sullivan

Sure.

So on I that the a base. lot we hospitality; customer certainly with say our would absorbed

stretching the all, helping existing material Mike been in them was the absorb that think things of Promoter space. with out. our Net in Scores; there I has suspending and body because I the referenced movement are for terms customers, we so them think probably punches collaborated hospitality you And most really payments with

there that stepped What loyalty in loyalty are strong. the step the very but vast and good. new of just that couldn’t we been attrition Aloha sites very, from is been majority So footprints. in base up has out, from coming those are customer seeing survive the has the really The

we yet. of customers the settlement those existing of made street bundle are on Essentials, payments are we even reopen some tolerable volume The this to move isn’t to is the minimal the because his we come has directionally of new And approach down for this volume Aloha or the but receptivity their not which that are the though starting good upfront taken, capital, net right, shop out there. out Now are it, really is seeing Dirk but team pickup. have and that a really stores,

payment which the or these cost is volume structure looking the So sensitive, are is new folks for. exactly what

strong. So we has are new loyalty seeing the opening and footprints really up, of performance survived customers been in really those that it good

were of looking you what if quarter. are know the is that the in we seeing don’t for, I kind that what activity is first but from So

Michael Hayford

December feature at on product had only And banking, with function go-to-market Xrd digital we interact also that the on and the team, on Investor Day with and our digital marketplace. product talked have built our the the with so we banking not investment, how but with Yes. literally then back set, our we

that to into rate aspire get growth we double-digits. So

of can digits. we acquisition we billion happen Associated with Bank, announced approach we the range, very Part XXXX, was banks the in of dividends double think which so $XX large we as above, some scale. think are that We believe of the we think can in The Interest that those both of get a $XX announced I a we there. Bank, is announced going business. integrating is and part Terrafina. of deals. on going XXXX, I billion we paying said our brought big couple DX, to but We don’t into Terrafina

it put in partnered in have They omnichannel we so opening. put mobile; do the or the We front the they front multichannel put can in into We of with them digital. that brand, past. ATM. of They that it in put account

branch So are the digital moving products, a a the consumer, we ATM they to ITM. moving experience an retail marketplace that starting segment and in looking particularly really of with or to have where for different

all are QXs the have so out with is We and providers there core as well. really the really to so digital we them, a believe our The date legacy we that you bank out to all been business a on some it have product in cores, guys the have good competing anybody is against doing not for today. know, strong platforms today, are and our we their play as and up mobile believe share important side We Alkermes. digital else winning partner, of particularly is there are as the whole the And side. some of cut retail the

Joel Hoeffler

it. color Perfect, appreciate thanks I all the for guys.

Operator

Chung question. of our has JPMorgan Paul next

Paul Chung

taking thanks Hi my for question.

on is just about out, out generation pretty you going the this are how a that bit free typically like on so do going working anything bump to we a structural going in XQ, as call there? anything very see want quarter, lighter, well? So to cash, well, cap there? so looks think usage to Are payables across strong on You looks smooth XQ year? you as so strong QX

Tim Oliver

the quarter the a have receivables story last, had we Yes, great most of and been let’s again, three receivables quarters. over say, on

While institutionalized those processes more call, they across our comment become, improvements organization. completely necessarily to yet, let’s the aren’t

than XX to receivables. days overall, days. days on think still longer We the work work going quarter, will And our now that. much got to continue way duration; too XX the We our They are in on still we in in I are that. right XX, are, of

as we year-end, then work through low we that XX been as have will and days the XX as or at year. down go We

in performance, up great side this that really raw typically, on side, inventory and inventory company the the draw QX next inventory ramps On down quarters. tick then buys over several the

on as it out in you higher we that issues with be liked to more shipping time just or our And We quarter time. time, buying - than raws. a in quarter would but we little the in the are not more just have globally. finished there linear seeing are finished goods in a closed do And in that more is just some remember, to fashion had

that continue clean we But you should play our the QX. So there to of into that every a I the that out, that for as is think linearly believe free as up but half have cash little range going little in of little which, in million million north the first, flow be higher $XXX bit year flow we free free out cash across reason $XXX will second to expect plays if full-year, the get the bit still to of I a year better the in tend year. go, we half than the a each to of flow first cash quarter

Paul Chung

the what just Wow. of the And of attracted you is given then kind there? and Terrafina, fintechs more interest there? And that is you capabilities follow-up great. banking, then expansive kind Okay. any contribution are what a solution, And That more full on asset? kind from respective and seeing of thoughts to community

Michael Hayford

Yes.

or and on digital So mobile Terrafina, like We really opening starting account platform. the a account like with, we opening project. to do the so ability

then can Second, go we’d to the fact channels. like that other they

then an take probably Machine. into can do an ITM, Interactive more Teller we or As then call opening center. on the same ATM a can And branch I a said, ITM, that we or

it then is we multiproduct. it And is multichannel, important. is So think that really

will does bid. it small it opening, do So deposit a account opening, will go installment was if it to mortgage

of it be built as really serve front built really built back And opposed offices customer the for customer. the breadth that ability office has it products. is for It to to to So direct. then lastly, is whole

sales, it Terrafina, So clients. in products. also or helping really not It running is for is self-service is fits digital banking is up nicely. retail only strategy, but integrated. banking our our really which It fit and it for It nicely and for with self-directed to drive

Paul Chung

you. Thank

Operator

Summerville Next, hear we of D.A. from will Matt Davidson.

Matt Summerville

a of Just questions. couple

First, can again, has impacted with by you that of been do challenges microprocessors it sort business has way supply day, every the all cetera? of your about logistical or chain with et and read challenges to freight, any in whether basically just

Owen Sullivan

position. Yes. Owen. with say Matt, we have been date, really I to is this would our comfortable

to or had may talked around I you supply done think chain over the the so, recall, what we year quite as our a reestablished about as footprint reevaluate bit manufacturing last in our more moving as the we quite candidly, but those that certain over last globe, COVID supply localized chains, Brazil creating geographies redundancies redundancies. with is the were or year, Chennai. hit also tested And we

test. in able to the that were we So the put chain supply we infrastructure put place to

going need. what that we have comfortable pretty forward are we We

in in but We done current we redundancy and But that we have place things given supply and is issues, if right believe getting well now, reassess really where chain conditions, of the materially Adrian need. the have have alternatives microprocessor really certainly looked and a us are moved we positioned. are that a have we’d aware bad good we and his and then at. way, to job team That

Michael Hayford

were I now, around team figure little get year mean scramble ago, very ship you to we to that. how sue a raised a to a has us our going to stock over constant battle materials challenged going A China. with

have We in India now. a right plant

bad pandemic’s the other know, country hitting the all on you globe. as as India As any

battling trying a The figure still for literally but for it a job team is does been going us forward. great year. over to day have every we this this So out, a single risk

Matt Summerville

And then quarter of was lastly, the what top the in towards ongoing recurring more revenue the and the can Tim, you impact a talk, line model? shift bottom with on to respect

Tim Oliver

Yes.

growth Banking So space. Banking growth, in one quarter, predominantly about about more of and point a third the probably costs of one us quarter, two but Retail for in it one thirds still point this in

Matt Summerville

you. Thank it. Got

Operator

from of [Operator Instructions] hear Mehta NCR. now will Kartik We

Kartik Mehta

FIs size-wise, or seeing lot you you is ATM that are in about it as-a-Service. interest just seeing domestic I’m type demand and you Mike, internationally Good are wondering talked what asset as size-wise afternoon of well? a

Michael Hayford

it I announced Yes. we last We did week. Europe just think a we in announced later, deal

particularly will midsized credit banks. few still tell discussions banks, overseas. we over it I last a States, early So union, we the in be a out bigger we little thought to again, more you maybe XX-months. smaller to going are ATM are the going it And would community is rolling as-a-Service. But be fairly stage in be the

at In area early large of this That through are it out some value that it have off-prem ATMs the terms opportunity of to but capability a compelling their operate smaller is combine. Cardtronics, we do as as to terms maybe to probably dialogue. and in focus an take as the interested a a a in to If In cases, we they run. bring run had we other on it They a driving very globe is broader we get banks very offering is have cases, fleet where fleet. with only, so will Again, stage, process we in on XX/X. our scale. want called anybody could now off-prem bit We little we have them. exploring right larger is merger

So upscale today, that it has think been will smaller. We quickly.

Kartik Mehta

And Mike, last just question.

market you As that comparing characterize you you How how look side of at kind losing are you gaining, happening competition? in think the you Aloha share? maintaining, business? terms on of would of Are what do offering, the is

Michael Hayford

Yes.

It ability support, the there. Aloha is ability validated. is And product to about called it then the the small that really be And not side, pure to which use best and know, we So is and think capability. ability it about cloud-based. upgrades. you Aloha’s is really the our products install, still very enterprise cloud, in the got serving drive two is components Aloha a by as has out the markets, continuing is it. have we Silver, to to about cloud it product to far

very So well. enterprise do we on the side,

On of into side, we have the some rebuilt it, SMB channel marketplaces. Owen the talked about our

the We on have been to adding drive feet a and success. continuing street

that numbers. You see in can Aloha our Essential

the stronger other There industry product, is you product product think is more talk there. and There the I some in you and the in space. they if more look SMB the got, our out say, to competitors product people product. But waiting any have know using I We product, X in who and the staff. at would the love servers particular

walk challenges If you use a and and is product, look somebody can at you labor Aloha. want in it

ability the a demand to install, those XX addressing channel, our over ability is there, our to distribution, have get we out we and last are So think our I man -- biggest it challenge been months.

Operator

And we Ian Oppenheimer. of will Zaffino now hear from

Unidentified Analyst

Hey for guys is on Ian. [Mark] it

if a us the a has by lot Just can it attrition the driving that, restaurant driver or if or and the actually been is is I else region Thanks. see it like And caused one. there majority a where where anything is? forward? of is you like quick you do attrition of seems so, not, rate that attrition Aloha, sense On rate then guess, going give like closures,

Michael Hayford

to clients enterprise that Is In market XXXX. It the we fairly SMB, up we is mean to And and Owen share system. was straightforward. in is It That I Dirk connecting pick to tell enterprise, stopped attrition and an those. a is at in and little as Yes. closely. opposed quarter-to-quarter. now ones, or losing. hard, last track track why again, better our hard dramatically we SMB trading it year stopped are went they very you they the particularly And as away. - torn enterprise see the in

First quarter but on that. following lower tracking was he’s that, attrition, been dramatically

to Our of view restaurants reopened. your of take so periodical space, pick, XX% that XX% the not closed industry up, an read

business, when going restaurants because opened down space that in literally is reopen in new and pandemic. back or to You win spaces be for same build goal entities back the closed going a the is in there our is and so to out And location. walk eating be on win back your somebody to the those high can that up street that demand going to up

going versus our continue numbers to on add So net losses. we throughout XXXX think get forward, will better

Unidentified Analyst

much. very you Thank

Operator

And appears Mike comments. additional call this I time, closing questions at turn are the no will for there Hayford to or further any over it

Michael Hayford

to it. us Obviously, we What out is today. global I pandemic Thanks we say think It you seeing we Thanks. all again would the of joining yet. of are for fully moves. don’t are

on will difficult back Obviously, very in a of are quarter. will customers our about a asked depending to us. that believe formula. starting feel is simple throughout coming from as our in to at. the was in end on you our And and pay about pandemic, large the year, a it the But are it. where starting in do of progress is during really We NCR customer. at the team difficult brunt to we India, we they look That focused feel the XXXX are, more are the that. goal India, the have stay they buy pretty see partner, in feeling take a a we that, whole It good we dividends. staff year, In we first Brazil the year and where in you compatriots better still So is

my of we our is our customers the see buying And the first may script, to in shoots as These based is performance, be call is that called green last you call doing As we that or and give our buying these and us optimism are shoots, been quarter pay in them have to strategic we started the are green optimism work a in in I dividends. the strategy X.X our that and some optimistic on are little success they investments, initiatives. more them, they we buying working. our starting but numbers today our years

makes a starting Our us joining XXXX come execution that today. better little through, forward. us and about feel going Thanks bit for is to

months. three see you in will We

Operator

today’s conclude Thank your all does conference. for That you participation.

now may You disconnect.

NCR Voyix (VYX) 27 Apr 212021 Q1 Earnings call transcript