NCR Voyix Corporation Q2 FY2025 earnings call

Key Points

• Jim Kelly mentioned the company continued executing key initiatives, won new customers in restaurant and retail, signed existing customers to Voyix Commerce platform, and gained interest in cloud products and payment capabilities. Upcoming VCP capabilities, retail and restaurant product launches, and progress on payments pilot and migration were highlighted.
• Nick East discussed VCP platform progress: nearly 78,000 sites connected, 50%+ growth in consumer transaction volume and nearly 60% growth in consumer orders in H1 2025, rapid adoption of Picklist Assist across over 22,000 checkout lanes, and increasing adoption of Edge virtualization solution.
• Beimnet Tadele talked about restaurant performance: signed over 200 new software and services customers, recurring revenue up 4%, progress on sales transformation, international expansion, and focus on small and mid-market restaurants.
• Darren Wilson discussed retail performance: signed nearly 50 software and service customers, recurring revenue up 5%, platform and payment sites growth, and new contracts in Japan, U.K., and government business.
• Brian Webb-Walsh provided segment results and highlighted adjusted EBITDA growth driven by cost actions, and discussed recurring revenue and segment EBITDA details for restaurants and retail.

For the quarter, total revenue was $666 million, down 8%. Recurring revenue increased 4% to $422 million (63% of total revenue). Software ARR and total segment ARR increased 7% and 5%, respectively. Platform sites increased 16% to 78,000 sites and payment sites increased 3% to 8,400 sites. Adjusted EBITDA was $95 million, up 20% with margin at 14.3%.

• Restaurants: Recurring revenue increased 4% to $143 million, total segment revenue increased 2% to $205 million. Segment adjusted EBITDA increased 10% to $68 million, margin at 33.2%.
• Retail: Recurring revenue increased 5% to $277 million, total segment revenue declined 12% to $454 million. Segment adjusted EBITDA decreased 7% to $81 million, margin at 17.8%.

Guidance

• Expect revenue to range from $2.575 billion to $2.65 billion.
• Adjusted EBITDA expected to range from $420 million to $445 million.
• Non-GAAP diluted EPS expected to be between $0.75 and $0.80.
• Adjusted free cash flow expected to be between $170 million and $190 million. CapEx expected to continue at Q2 rate, closer to $170 million vs original $150 million.

Risks

• Tariff-related cost to the business: Estimated between $8 million and $12 million for the year. The tariff situation is evolving, and the company is monitoring the potential impact and will reassess mitigation strategy if circumstances change.

Q: Are there any noticeable differences or willingness to invest in the current backdrop across retail and restaurant?

A: Jim Kelly said not seen pullback from customers, met over 50 larger customers with most focused, and 13+ committed to next-gen solution. Darren Wilson added good spread of demand across retail product portfolio. Beimnet Tadele mentioned customers looking to improve customer experience and drive cost down.

Q: On free cash flow, any key components to be mindful of and visibility into second half?

A: Brian Webb-Walsh said Q2 was in line with expectations, free cash flow tends to be stronger in second half, EBITDA and margins ramp in second half based on cost work and ramping revenue, CapEx expected to continue at Q2 rate.

Q: Update on cost savings initiatives for this year and next?

A: Brian Webb-Walsh said cost program sized at $100 million, 2/3 vendor spend, 1/3 labor, ~40% savings hit in first half, ~60% in second half, and planning for next year is premature but will be discussed in next quarters.

Q: Buffalo Wild Wings renewal, competitive process and tipping points?

A: Beimnet Tadele highlighted team transformation, product investment, and deep multiyear relationship. Jim Kelly added company has been through change, now singularly focused on software, and executives are engaging with customers.

Q: Payment business progress over next 12-18 months?

A: Jim Kelly said customers want one relationship for all services, payments critical, seeing success with mid-market, beginning to engage larger customers, Darren Wilson added strong domestically and actively standing up pay capability in EMEA.

Q: Restaurant competition perspective?

A: Beimnet Tadele said restaurant space has been innovative, company's entrenched position, investment in product, and multiyear relationships drive momentum. Jim Kelly added company is predominantly enterprise-focused.

Q: ARR backlog and software revenue growth?

A: Jim Kelly said software ARR was around $700 million and approaching $800 million, focus on new products, and expect growth as Voyix POS is launched. Darren Wilson and Beimnet Tadele added mix shift towards recurring revenue and multifaceted relationships driving ARR lift.