Earnings call transcript Q1 2023

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Operator

Good day and welcome to the NCR Corporation First Quarter Fiscal Year 2023 Earnings Conference Call. Today’s conference is being recorded.

At this time, I’d like to turn the conference over to Mr. Michael Nelson, Treasurer and Investor Relations. Please go ahead.

Michael Nelson

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

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

periodic that started, uncertainties me include get statements. reflect but and statements current These and to they we Before are forward-looking remind and earnings to you cause materially subject from our risks discussions our actual release These our in let will results differ with expectations beliefs, our presentation including uncertainties could SEC, described that expectations. are report. risks the our and filings and those annual

the we call, release XXXX, X, on and today’s be measures. to of dated These the discussing measures and page today of will call Investor will replay On available materials, certain our A reconciled non-GAAP later in financial our on press also be ncr.com. this counterparts website. their May described are GAAP Relations non-GAAP presentation website, the

like call would that, turn over to With to Mike. I now the

Mike Hayford

Michael. update team. recent review of then and companies, provide financial into our will public also views our announced of Tim will Owen, I on then I the an business, two Thanks, with our your to and my separate questions. begin including intention Tim NCR and previously will take announcement leadership on some our I performance will

some with quarter. first the slide from on highlights begin five Let's

significant growth track free NCR expansion included cash First, revenue on to puts top delivered and which us prior to the margin that over delivered strong million flow performance and line delever $XXX spin. of solid

in the separate NCR to two fourth on companies XXXX. are public we track Second, quarter of into

on an I will comment Tim's financial on separation activities. Following update those provide our results,

basis year-over-year on recurring the currency total in X% and currency quarter. on also a delivered X% constant a growth constant we Third, revenue growth, basis revenue

basis quarter, represents the increase from quarter on X% Fourth, I the currency important growth of basis quarter XXXX. a increased adjusted the of margin EBITDA XX% think, shifting expanded without would over have which note subscription. to a of XX% constant Adjusted first XXXX. impact EBITDA this XXX X% it's the been that first to to point

Fifth, cash in flow in $XXX generated NCR the million free quarter.

the that two the of a data generated center cash cybersecurity cyber over I XX, separation. functionality us want And to free determined leverage that allowing customers a flow, million by incidents. we financial $XXX caused incident of past reduce Over the update outage an commerce impacted to experienced. have On we of quarters, subset ransomware we April for our ahead finally, on sub was single provide

on absolutely our of ATM, At set disruption how We their our this this incident limited our by None critical relatively we seriously a difficult base, time, any payments customer has to for point incident. And business contained of digital impacted or we customers. been has other retail impacting this most was and all understand of take overall majority products are the sincerely caused. our impacted apologize we for this extremely those were well banking, customers. while this way recovering functions of the

update business on the slide to moving Now, six.

progress momentum segments, We strong KPIs. against business have five across our initiatives our of of strategic all with along all our

retail to the our we through on of choice. retail, platform company deliver In strategy continue

units, with During to Services the increasing the U.K. retailer Special of A Agreement to also the NCR subscription its number multiyear help to their model in-store expanded quarter, relationship while solutions. The the committed a first self-checkout customer second in signing transform biggest NCR

boards in our of SMB provider food -- the the Enterprise, be across XX% menu to expanded enterprise SMB, to payment fast food a In payment driving for relationship hospitality, cell demand experience In we the we and strong attachment our the roughly In increase new U.S. world's customers chain customers. continue with remained for site. largest digital XX%

with digital digital we new customer to Last NCR was activity and momentum first Digital strong credit in XX more sales in the over transform members assets with than U.S. renewals. Employees' banking banking deals largest the with billion experience. to an $XX union banking XX Carolina, Union members' million X.X agreement have In banking second SECU the State North continue in and positive quarter. Credit week digital signed its

-- will digital modernized large more will regional market This new for financial digital help position first the deliver in a segment. This technology partnership union members SECU's capabilities platform deliver will advance banking modernized NCR's digital employees. and for the institution banking credit

network. merchant year both contracts high. Allpoint accelerate at Greece. signed In North Payments and expansion merchant International signed America against XX and progress and making and withdrawals with dispense acquiring continues XXX Portugal contracts market in over in merchant we ATM over the are cash six-plus Network, are a to

a During App. simple Banking Digital our Payfare we with banking secure we ATM-as-a-Service Payfare's allows partnership platform the via first continued new our added quarter with which accounts transaction code In capability their momentum workers payment a to through to access in PayXXX in self-service cash Solution. gig

globally. of There both self-service current potential banks offering regarding quarter and investors NCR in Interest is and do slowdown banking has not given community impact concern banking strong from prices. in accelerating the been large first We the environment. our in the macro expect FIs our current from a had a

Citizens Alliance full assets Bank quarter now ATM-as-a-Service total member provider including, the ATM in Alliances' where First ATM-as-a-Service of is $XXX the ATM XXX exclusive partnered with over management with we In end-to-end Union And the and for solution. billion ATMs over we Solutions first NCR members. deals signed six and Credit

Tim. to pass me let that, With over it

Tim Oliver

all of Thanks Mike to you today. and us for joining thanks

in quarter revenue, million just margins $XXX generated drove at recurring first our profit free particularly over growth summarized, gross margin the cash and in substantial flow. expanded of we As Mike

challenges, the on a and we ago in significant that year business series geopolitical compounded macroeconomic remainder of quarter had A the were the a of year. and impact across faced our first with it unanticipated

Those control recovery challenges. the reported that customers from of chain disruption to our things customer efficiency the our we efforts could. efforts support enable cost price, our and we outlined insulated financial and labor At that supply our Productivity, time metrics our level. and

augmented XXXX QX early with dis-synergies separation public have been generate actions QX the separate productivity in both now those in arising into cost any two to offset actions from companies. And to incremental planned this savings and further

This company quarter's exceptional of an separation demonstrative results strategic are financial teams effort a our and drive our the of transaction. pending accelerate results, simultaneously ready to plan for

up for top the billion year-over-year metric February. year-over-year with on start basis. X% and end level guided Starting ranges our quarter, back revenue up revenue constant every X% left a top X% painted $X.X I'll first a up at X% was in adjusted the currency for in we which the was X up Recurring of high on reported as of provided and overview FX. we slide

continue We into million revenue of sales have high would have several been what years. the $XX revenue transitioning profit revenue onetime success multiyear subscription-based The stream. recognized from shifted over recurring contracts next upfront convert to from nature will to previously these perpetual of that

to upfront then an retail million total X%. This recurring revenue The and revenue strong by to revenue self-service segment. have intentional had of Adjusted the for of revenue primarily compared ago impact growth total lowered US period shift within $XX recurring three year growth to unfavorable our revenue and deferral the dollar banking would been FX full points. about

a XX% $XX up $XXX million currency on year-over-year EBITDA as right adjusted year-over-year top the to reported and XX% million up basis. constant increased In

exchange the currency XXX Adjusted had of rates from to impact Foreign an expanded million. EBITDA quarter of basis $XX XXXX unfavorable margin points first XX%.

and and margin adjusted fuel, driven mitigation mix. The such shipping direct actions in in rate. as lower costs impact gross costs benefit as the similarly cost reductions added point was to increase a basis revenue lower component of higher-margin in a by as The well XXX of margin costs increase direct indirect

the bottom by another the $X.XX. or $X.XX non-GAAP rate The US XX% prior reduced basis. reported by EPS up The XX.X% a year about the currency XX.X% non-GAAP as strength left, reported On dollar on EPS reduced EPS versus tax in year-over-year constant that X% $X.XX. and was $X.XX up was of

separation our profitability October, capital. finally desire described anticipated million at of first from In least $XXX million flow already $XXX generated transaction cash million reduce free financial working before And generated quarters in bogey. higher we've Back free the the $XXX to both the five we leverage. we to that improvements of of two and those of in flow cash generate our our

results. in to shows segment our retail Moving top X% year-over-year Starting retail point-of-sale the driven X% in increased by hardware. X and reported adjusted for increased slide services and revenue left which as FX growth

for have revenue have FX of over deferral revenue This profit high recurring to revenue to million would revenue of that grown by recurring occurred growth next shift revenue X%. retail be roughly retail recognized points. that upfront intentional also recurring to revenue three Adjusted years. lowered seven will four would to previously in We and revenue the the upfront shifted $XX

resulting constant in component XX% XXXX taken adjusted EBITDA early and quarter First currency other even actions costs in freight from for year-over-year improvements again XXXX. XX% increased and part in mitigation the labor of well and cost as as pricing and latter adjusted

adjusted points up prior The EBITDA segment was over the The of bottom the indicators. basis retail slide XX.X% rate performance XXX key year. shows

our by our platform-based XXX% a increased Lane our model. KPI XXXXX success the subscription of or platform illustrates left customers the lanes strategy convert On lanes our of that number Platform to retail We year-over-year. to

The an lanes platform $XX of increase time rollouts for versus drives million year. was major of conversion, platform customers. lane $XXX and fuel increase the convenience At incremental by driven an in last of ARR

and than total lanes, the conversion lane traditional accelerating currently lane momentum platform have of backlog. of X% less represent conversion our a substantial While for our see lanes we

the trailing all year-over-year new impact was to was this year-over-year, to the ARPU basis. And center is drives flat once one. our rates In revenue, on calculations, opportunity platform, flat on our and revenue. upsell including cross-sell revenue further similar the Self-checkout self-checkout ARR And expansion. affect on did of functionality the a bottom XX-month currency ARR and features

results revenue payment by currency, software this processing. increase across chart and year-over-year the momentum as Hospitality segment for Hospitality increased adjusting X% services and business. and in illustrates million shows $XX cloud X% including reported services driven an or revenue, this results, and

XXX XX% software rate EBITDA mix push up services all margin rate and and expanded was reductions cost helped a points margin basis to higher. EBITDA revenue, of richer year-over-year. Adjusted XX%, Adjusted pricing

XX% and sites The on year-over-year ARR to a payment up incremental and the currently strategic while drives payment sites drives platform this of at $X,XXX. platform new on sites sites. payment site sites to Hospitality's conversion was the $X,XXX increased XX% ARR, bottom payment key average includes higher slide Platform and in average XX% metrics conversion and ARR. incremental an increased ARPU currently both sites, year platform an

an payment Combined, million incremental sites $XX additional year-over-year. and the sites ARR platform contributed in

this strategic clients and functionality to as in business SMB continue attach see momentum their enterprise platform transition expand to payments. and We clients the

was revenue user can to of Banking year-over-year. Digital in however, segment. grow Banking is higher business that Digital by enhanced recurring was The revenue was margin year-over-year our lower this offset, lumpy. due driven shows lower Adjusted two-third This flat nonrecurring count and to by increase higher and which XX, used investment slide accounts revenue marketing in R&D increased that be down revenue. XX%. nonrecurring sales, Adjusted on to Turning XX% was our led software and EBITDA rate revenue to this faster. EBITDA quarter

metrics Digital revenue. strategic business X% Banking's of Registered our users Banking's is increased include Digital active X% in this users users on the slide X%, and increase core evident in increased bottom year-over-year recurring registered and of growth ARR. year-over-year key active annual users,

revenue combined to math for segments segment is On this transaction. adjusted with The result eventual banking. XX, financials FX, easy EBITDA NCR Slide the only. some by profit indications transaction planned help the of of XX% company reflect RemainCo separation XX%. the that margin an EBITDA dis-synergies year-over-year and up after costs from retail, by form corporate the digital will you These for The unallocated currently was hospitality roll-up This combined the do adjusted directional rate and will evaluate impacted that perimeter and spin. adjustments or be of by synergies adjusted we for

year-over-year $XX driven increased transaction our is payment FX segment. the by Network to Starting or move This X% XX% Payments Payment higher in and adjusted for processing. and left. an and Network Slide top million XX. volumes revenue increase Let's in &

basis by More cash FX. costs by EBITDA million million efforts. basis $XX points to a this on million after gross the XX% year net the five rate rental last adjusted all a margin was quarters Adjusted interest the down $XX decline this approximately declined caused Adjusted compared previous was quarter same and mitigation our cash on over or on costs. ATM EBITDA hike year-over-year of our raising full aggregating three for $XX XX% rental and XX% XX rate than

Our rates. cash results. program, rental the pricing and mitigates said, our the interest to optimization been algorithm and interest or of adjustments costs protection continue and are That calculated rates which operational hedging have short-term of affect using impact some will

impact was impact interest, of an net and project As $XX additional of rest $XX a the result year. rate across during million quarter million the the we

payments slide The shows this and network bottom strategic of key metrics.

the fueled Annual X%. XX% end across network amount withdrawals of total the our bottom KPI increased recurring revenue left withdrawn Allpoint Transactions led all In and X% our year-over-year by per increase a rise ATM the in transaction growth cash center to on year-over-year this in XX-month X% amount frequency process transaction, the year-over-year. points X% globally. On network. dispensed withdrawal business bottom across in both The a of basis year-over-year. a up payment and were that merchant illustrates our the acquiring of increased trailing

Slide reported due up X% XX% constant currency the segment up revenue a XX banking results. self-service revenue flat FX-adjusted growth which in and an our was primarily basis year. Self-service banking shows basis on as prior over on recurring was to

We transitioning revenue subscription-based multiyear stream. self-service banking success into onetime perpetual continue sales have business a our from to

revenue the growth revenue the growth revenue previously upfront million to would upfront six $XX FX been quarter that have and from Adjusted shift During have to intentional points. deferral self-service recurring revenue would shifted for XX%. revenue lowered roughly banking revenue, by recurring been in recurring revenue we of

suggests in part or revenue that XXXX this results our points could million demand quarter of after a revenue now that strong growth to offering. revenue QX for year even ATM-as-a-Service as a similar recurring $XXX suggested decline six business ago While in XXXX in full shifted full outlook this our to and business year deliver of strong nearly is

Adjusted and reduction credited expenses well revenue The EBITDA related increase to FX up was be XX%. EBITDA to the as the increased direct margin rate the previous Adjusted can consistent in recurring as was margin XX% basis. fuel costs expansion from year-over-year XX% year higher-margin in in remarkable the particularly and stream. components

our segment slide of shows key bottom self-service the The banking metrics.

revenue XXX% The to On growth units in increased revenue incremental India the to to the XX,XXX significant gain traction was up recurring units. We year-over-year. services ATM growth with States. and flat. continues year-over-year left, experienced Software and shift service mix ARR in X% United

self-service for and caveats, NCR results NCR the transaction. with showcases presented and to on the and segments On slide that comprise Slide the banking, payments XX, Slide the view similar segment XX, for which similar RemainCo this separation will are combined network ATMCo after

costs of adjusted year-over-year, As segments EBITDA I corporate revenue rate adjusted adjusted said are before, XX% with The million revenue reported these combined The FX was not reflected the as X% year-over-year adjusted EBITDA for and unallocated margin up for here. or X% $XX XX%. an combined currency. for and increased

Turning and describes leverage metrics to debt which Slide cash calculations. flow to facilitate XX, free net adjusted EBITDA

an with two improvement the cash before, profitability and driven cycle generated by quarter, said higher we working days. in As in improving cash of conversion million flow the we by $XXX free capital

before generate to flow reduce goal been financial to million free in separation communicated. the $XXX well Our has transaction, leverage cash

two now the $XXX flow have are We our well and million cash generated leverage. over quarters, to free of meet positioned targeted last

profitability X.X% and slide also significant our the revolving financial times has our We robust from to sheet, cash driven leverage liquidity debt liquidity We covenants, spin net and our X.X over ample debt with stability available, ratio a under down a transaction. have XXXX by million growth within facility. remain possess metric, adjusted credit The to and and of our support balance displays $XXX strong and well QX higher to which in EBITDA improved generation. of

quarter second guidance. reaffirm On Slide we XXXX and outlook year full our our XX, present

we billion, million anticipate cash billion of For of We expect million. revenue QX $X.XX XXXX, $XX EPS to adjusted non-GAAP $XXX EBITDA $X.X of $XXX and $X.X generating to of approximately flow million $X.XX. free to

million range to For $XX the and assumed of of million. of rate shares quarter, have expense XXX we share to count a XX% tax a XXX interest million XX%

across XXXX, remaining linear relatively metrics. quarters sequential expect For the of most quarterly two we financial improvements

to With that, you back Mike.

Mike Hayford

on I'm the separation Slide Tim. going XX roadmap. with NCR And continue to Thanks,

go-to-market ready for organized Our been general under teams have the and are These ready by teams our industry unit. manager spin. are

such of areas well that functions process in shared Additionally, legal, service tax, of the there others are underway IT HR, and preparing as separation. are the treasury for

on XX of submitting then markets. We Form the the our the separation largely are planning process dependent shortly, statement registration and the and very timing state of capital will the be on SEC

the with regarding service, a already internal of separation. submitted have the revenue the tax-free We letter nature

occur this now to is quarter course, the We This the cash favorable of a fourth At of to markets the of delever in SEC the the expected through is we're the timing and and free intend process to in fourth clearing flow expecting which early separation, be environment. between generation capital dependent time, on quarter. XXXX.

Slide key on our priorities closing, In XX, looking forward are clear.

in separate benefit and on to flexibility, are and respective into financial we believe will in track from company operating distinct public First, pursuit two the increasing quarter. Upon we NCR each separation, set. fourth companies opportunity of

spinning alternative We to path that The as the in Board is of a distribution, deliver other or tax-free NCR's scenarios. the available believe to superior of to best sale NCR. ATMCo options remain could company shareholder continues value, partial value. alternative open whole unlock such But future become a in that these considering if

in Second, expect we be to mostly the cybersecurity near recovery the behind future. us

is recovery new cloud quickly included While ongoing, which path a a out our established environment. process recovery we building

have been functionality has majority and fully restored. At brought online back customer safely this been time, critical the most of our applications and securely

next our months protect from efforts system will redouble the our attack. Over to we six cyber

our executing for and focused plan teams on customers our Third, are our XXXX.

good the improvement and expect remainder to drive quarter year. shows off in are As operating sequential of and to our start the throughout XXXX the quarterly financial a we in success first

want post our I two and On of congratulate Tim finally, ATM NCR CEO companies. and will separation are NCR to qualified David lead highly to Oliver Wilkinson. assume contributed role David while the assumed CEO have SpinCo Tim And NCR role greatly the to of separation, CEO leadership will David the Designate and Tim RemainCo.

the separation form. and will companies the Commerce. President both Until smooth a final David to of as continue of with forward them working NCR continue will as Tim in look NCR of role the role as CFO execute his transition in I to effective his take and

NCR more in Board great On a earlier a be Chair thanks Martire today. want that remarks the of I congratulate two was Frank concludes companies who excited after taking creating role both Tuesday elected prepared as forward Reece this NCRs. Chair week. special also and I last, in to our then five And couldn't David personal Executive note, years This retired Tim at NCR. for Joe to for our on who

With we line questions. the Operator, will for that, questions. open open call please the for

Operator

first our Well, comes you. JPMorgan. Instructions] And thank question Paul from with [Operator Chung

Paul Chung

Hi. here. Thanks nice for execution and taking my question

active banking, then, you renewals they emerging on pressure seeing So seeing backdrop, base also were you developing? some macro just digital on trends momentum of I that can and kind expand any nice regional you seeing tough are guess, new the wins, And of then And competitive of Were there? the banks? any are on given across user deals signed? you're your kind the

Mike Hayford

Yes. Thanks, Paul.

on banking to banking, including at being businesses, number impacted, digital literally a the I these a all really did things the and risk question that ago it's couple think, months and material some of hit, On based the looked in banks across impacts we around us. on some of first this place we first self-service not regional our or taking of of bank, were

so On seen it's not at the far, digital all. impact side, what we've an banking at least

doesn't add but a little there's even bit here anything there, -- and up it's to not meaningful. So

businesses like but always going on. Those they're prior situation it look like out watch we years, consumers somewhere. for We'll to have even small we are at still end a and this, in accounts up going what's there

expect place. share good in some shifts with a a such we market strong that that end even We will would have up

So at that all. concerned stage this at about we're not

competitive. is nice meant but On us the at yes, X.X largest million do your the nice very right now were in competitive, very not that second large we a second one country question, rest that over competitive The for credit accounts. everything one, nature SECU, union is

compete We're journey. think engage meaningful. to up excited excited there. that that change on very very So they their won with particular We're I And really deal. them their how we everybody digital And clients. on help showed to

Paul Chung

And some competitor Okay. ATM nearest are you. larger from with deals on engaged Great. side, regional can ATM is separately, are these some kind pressures of given And the of spurring on environment you what you as kind Thank on then then as there? some seeing of the expand competitive remain still and – going these then a customers. your of well. Service

Mike Hayford

what's self-service as and with to build think in Yes. be I growth maybe it's a Tim years up for build out We software a I to our the to this first little in out our hardware. mean in build the it's and out services, the number chose the we competitively part have some competitors so showing banking. than industry-leading our said, ago the happened products, industry, of of stronger invest anticipated year. far to be best And our best

be We year. for full expect it the to strong

service that two the do said, is it the globe at scale, country an across to point but is bit opportunity really in across business business and a a strategy that the lower pretty can we take leverage you on that a can a little not almost at and there's ATM drive maybe this growth only where high-growth turned as here business. that we marketplace strong a into believe and And it we're the the business years win a price do continuing a on do where if you embarked we ATM, to ago better

who have can of we better are service scale capabilities Allpoint which believe desire we and that the we of deliver better our with because somebody Cardtronics. really And quality network a at because the of again seeing level, outsource coupled can and to because else

on the market. playing be to seems It

excited. quarter pipeline off clear they year with sales think of every their they into deals build I and the Every very bunch in demand. backlog up team and it they more a – then is clear turn marketplace the

another And we're to here good I expand. to whole the ATM-as-a-Service quite we're quarter. looking with excited about frankly think forward So year continuing

Paul Chung

Great. Thank you.

Operator

question with Stephens. next our come from will And Nabhan Charles

Charles Nabhan

David, Hi, on thank Tim, for appointment. good question. the afternoon congrats and you taking my

about wanted to structure. capital ask I the So

about talked couple notes of but I structure are the refinancing You intentions a with capital to to know forward? your variable and you regard could huge a speak the going your markets recently credit

Tim Oliver

have We've a used ready from Sure. that are for cash not down getting – lot We've delevering talked the in said, about some a rate for there those go thus in it's bonds buy the the take we're are those far go spin. us different and think that likely we know We've trade long-term because to out. we transaction, of there good at bonds them out transaction trade yet. will you point the of as revolver to a sanguine not revolver pay deployed to and open rate. is our two to That the advance out about If we take the market. feel

go the converts. to I'd of some love after

out have you'll anybody they're $XXX to still, show sense. We've we us economic As ask just make of seen not expensive. recall million yet converts there

generating get is the to for the all us delever So of cash now spin. you're ready to

Charles Nabhan

just that take would the I range end if either guidance. was your from as you just lot biggest know moving to And follow-up, variables mind, a a of cash flow In of parts think about cash the of the are what it. the to the range? respect I high of business how low you the the Got curious end there's flows? the to in think about with but variables range

Tim Oliver

hell this $XXX generated quarter million outpace allowed one singular was of did a job. a biggest and in end working We the a range. $XXX but coming us high million into in capital capital this the quarter, Working we of to it

So in first half of of end fully having good the the quarter end low of range. this the of I about the the year, very high done feel range

Charles Nabhan

the Appreciate Thank you. it. Got color.

Tim Oliver

Sure.

Operator

Matt will with come from Summerville And our question D.A. Davidson. next

Matt Summerville

of A transactions some mentioned numbers et withdrawals, couple around questions. you Tim cetera. ATM

those imagine could about them growth enough. write being would counter to in that you is comes kind a intuitive talk feel And as of fast to kind I see that? driving go over couldn't If that maybe I you again what maybe Because bit of that resurgence? down many

Tim Oliver

to for up big this been good year-over-year. withdrawals cash and a another transactions Others a us ATM up withdrawals were believer cash some all ATM amount were the expense of importantly felt tried volume six-year We was in cash year-over-year. time. of In about quarter, out of per high. talk withdrawn transaction And the along. We've have it. XX% at X%

about in of almost So think a increase quarter. spent XX% in the the amount cash we

behavior of like go and rather into cards much you'll if feel debit credit tighter of inferior as about very good the than a are and and cash and I'm recession our efficiency both seeing. use goods things we fleet we So consumer and fleet the perspective more the behavior we're that economic cards. sorry, things see those get from an

Matt Summerville

a there. you're maybe world through concur between few from a regional uptake you an Maybe if self-service parts the four Yeah. could standpoint? the self-checkout on seeing standpoint everything as-a-service Can do from walk the banking demand you're just seeing business. ground spend, I of said with on flat. completely you greater a guys what where comment the And maybe you minutes then on

an your was metric guys business on for it you. view that think you that I LTM year? the full Thank shared. What's

Mike Hayford

want in any to is Let with can I start and I'll this me jump -- color. with Tim self-service Mike.

outlook pointed little the at as again just the we for had year, as he little service. self-service as you out with And that's maybe and a Tim our even also than quarter a And think it look anticipated. shift last the overall stronger shared stronger started a what in quarter. firmer, first to ATM little anticipated I total banking out feels we a had than we

shift a the point the subscription. as Our mine the across three to out numbers on to growth. board I shift of service that cost points

the So subscription. service, but just to others ATM not only

growth at we So adjusted have been would instead X% of X%.

region did The in We're uptake. a a deals couple there's They're the the We've had deals all America. really a that's lot lot in We with seeing nice don't last pipeline in good or India activity. Santander. know more a I U.K. pretty seen strength doing of nice North U.S. We of pretty that year. ATM-as-a-service well. lot less a deal impacted. a movement of Regionally, of in

muni with some Santander. conversations of that had anticipated regional have credit few a We and be large community again to we're and seeing unions like then and banks more banks quite and super banks global we very

doing business think better that So, expected in again, ATM-as-a-Service. to that but than everything we I we is of shift terms anticipated,

Owen Sullivan

the Yes I this is think Owen. --

is The all America other which to our in make a strongest for comment market. the regions pretty really of market, update well. margin North point the performing We're us are is seeing significant Mike's I'd

And so good there. momentum seeing really we're

pipeline stepped of number And of we as up faster an Bank, than fast Citizens like deals deal. things First Our a we million announced we which plus them several anticipated. closed including as as was have $XX

as last throughout all keeping the are year. of pipeline been sales it's -- as pipeline We big

have did up all a has come teams job customer escalated, with within great year had year. supply but in So you that benefited tough we pipeline. really ranges we're The engineering lot we the last costs our supply commitment parts also chain recall We're a miss renegotiated the first ago converting but expensive -- quarter of we're pre back into of our last getting a we we out not we're did did throughout supply held down quarter are cost a all value chain. as everybody backlog -- seeing chain good year. -- operating And we a

have margins. a chain supply So partnership getting we're healthy -- we very

the margins. in on business revenue convert building the strong very to headwinds And despite continue that we're to gross the as recurring create the ATM-as-a-service. as-a-service they You'll model see really very, a that we with

So pretty ATM-as-a-service. bullish we're feeling the all the shifts across to

Tim Oliver

that year, seven of of thought full XX you as-a-service so presumed year we when total course gave out from business. to million what over if the ago of on would And that for which run we been guidance the from impact points the days you have hardware math about we just shifting growth $XXX

about I not top $XXX the talked but revenue we flat going in exceed to we'll on back actually which now line, year the full year. decline that more X% get So also put for full only million, for business. would we're think the a to pressure for

great, So strong, doing business is order outlook better. and is is the book

Matt Summerville

you. Thank Yes.

Operator

And from Ian our question will next with Oppenheimer. Zaffino come

Ian Zaffino

you many the very walk about how again? the you the arms Great. think because now you're cash back Thank cadence? flow just you Maybe you in this seeing thinking in got through Thanks. on that be about flow much. earlier half not the in cash typically the it this do flow I quarter. just on. trying you're quarter. cadence, around free fantastic Were Great now job to because How levers we us understand able quarter my to I'm like I'm get that it. said there cash pull it it's may pulled side trying to

Tim Oliver

so can far. reduce We only the line some, last working of right? in are capital capital You working some Yes. We year. underperformed free and flow zero items cash

some the more linear on -- coming we quarter for likely in first we dry and expectation were into year so the a against a we And to linear more had suggested overachieve powder some.

think million be feel and that it flow about percentage. free $XX could is cash guidance of in working I good a on we billion little bit. I million out number given a of of on there side various a forms. capital of quarter second isn't either $X some the huge $XX

the considerably in well with think in half the similar year. very levels of than the $XXX the year the profitability But year second the I to able be of we'll half halfway first to latter think goal year. and about of being million of spending more do half the at the midpoint the

we'll we'll be the as half home through have half halfway first a and I So, think good second well.

Ian Zaffino

you now, could what great. the some know Thanks. any get think something are. to is for know or maybe did I you us touched synergies you there. Great don't were the then now I if to or give mean as you a kind prepared that address filed? remarks? wait But it color XX could good the we additional that color in Form right even give that or have of us you of Okay, if I dis-synergies also quantify maybe job on about it the you little kind the bit. And dis-synergies about bucket

Owen Sullivan

Right.

were I we think December talked $XX that we at that looking that in million will the we million cost to motion as numbers -- costs set last as had believe early that was about actions of $XXX even dis-synergy we fall last those. offset

the We that profit you're and come through. also margin gross to have see -- those we'll actions in margin. benefit from especially starting the

through are that And where separation this. pretty in are as process. way we're So, talked lot we the good We've long a about process. going we a we feel into

color we holding cost getting you dis-synergies. savings. And those we're that ballpark and better visibility say I up the as even into offsetting are would So, gave is

Tim Oliver

at be make lot the cost as both say The actions be house in parking amount ideas to separate, it time. sure. But we separation the of let's can are gets to spin. every on the of of We're that a day. that not change longer of once go sides that two upon going accretive day into there acted For tremendous ought point in

I to million ways structure million two the going we to seems forward we'll with to thought. being additive And coming $XX that Owen, that. cost we be true. So, anticipate what have the of That's companies to $XXX of offset don't agree

Ian Zaffino

Okay. That’s color. so great you much. Thank

Operator

our will come with Roswell next RBC Markets. [Operator Instructions] And Capital Matthew question from

Matthew Roswell

lower kind for hospitality Roswell April? if any at the end evening. Aloha demand And we been Good into have quarter trends Yes. -- aggressive that then Matt guess, through given Perlin. of some what's could on the especially of the I of It's market? the unit we of for taking your recent Dan kind if thoughts the look in been at take competitors

Tim Oliver

last in both an still the the Aloha that growth more the suggests post-COVID year a competing it. revenue, And little growing hospitality balance in year. side in absence hardware growth void than SMB revenue all that the enterprise on well POS the of was business of last recurring actually experienced revenue In we're and that Most at very which from through was That is really recurring on that level. streams. challenged of we this business came quarter

Matthew Roswell

very Okay. much. Thank you

Tim Oliver

Yes.

Operator

I'll additional or back closing for question-and-answer the you. Thank Hayford any conclude conference Mike remarks. over turn the to session. now that And does Mr.

Mike Hayford

Thanks.

Just a couple closing of thoughts.

$XXX important particular start First, flow a really quarters very in we as quarter we're of lot with sheet in at The coupled XXXX head good we in that right flow of that to $XXX off a year in the fourth and we had cash the to in team get a delever success the can the we spin leverage the confidence million our to the for target excited drove so in cash against two creates we're us. million the into balance first with quarter ratio.

the well. this the around quarter spin planned are track. on be of in fourth completed was on and to schedule activities are The Secondly, that the early year teams performing

take spin. us reins join you execute today announcement want this. shareholders. take the to us they're to of my lastly, and know excited as the to I forward the and over Owen from And Tim as and the care me add strategy we've going I that to congratulations saw announced leadership the David. Again We're of in will take

really you congratulations. So about guys excited again and taking we're over

update an you you. quarter. Thank give we'll that next with So

Tim Oliver

all. Thanks

Owen Sullivan

Thanks.

Operator

conclude participation. We does Well day. conference you your do thank excellent call. thank an for you. Have That today's

NCR Voyix (VYX) 4 May 232023 Q1 Earnings call transcript