NCR Voyix Corporation Q4 FY2025 earnings call

CEO strengthened executive leadership across retail and product, appointed Darren as President of Retail and Payments and Nick as Chief Product Officer. Completed five-year transformation rebuilding software foundation. Executed cost actions, had successful display at NRF show, launched modernized products. Expanded payments offering, retail business signed 40 new customers, restaurant business signed over 150 new customers. Advanced deployment of platform capabilities

Retail segment revenue increased 9% to $501 million, primarily due to higher hardware sales. Recurring revenue increased 3% to $279 million, driven by an improvement in software revenue. Segment-adjusted EBITDA increased 12% to $114 million, as margin increased 70 basis points year-over-year to 22.8%, driven by revenue growth coupled with cost initiatives. Restaurant total segment revenue of $212 million was flat, which reflects hardware growth offset by a decline in one-time software and services revenue and weaker performance in the SMB business. Recurring revenue increased 6% within our enterprise and mid-market businesses. Segment-adjusted EBITDA decreased 3% to $66 million, as margin decreased 110 basis points to 31.1% due to lower one-time software and services revenue compared to the prior year period. Services business represents over 50% of the total revenue and remains a clear competitive differentiator. The phase transition of our hardware business to Enercom commenced in early January and remains on track to complete by the end of the first quarter

Expect reported revenue of 2.21 billion to 2.325 billion down 13% to 18% due to ODM implementation. Adjusted EBITDA expected to be $440 million to $445 million, or 4% to 7% growth. Non-GAAP adjusted EPS is expected to be between 93 and 96 cents, or 3 to 6% growth. Q1 expected to be the lowest quarter. Recurring revenue expected to improve throughout the year. Margins for both segments to step up in Q2 upon implementing hardware ODM model. Adjusted free cash flow expected to be between $190 to $220 million

Execution risks related to deploying platform solutions, market dynamics impact on SMB business, risks from AI and chip supply affecting hardware and related aspects

Q: Backlog was mentioned, frame around metric.

A: Enterprise side takes time to modernize, 20 contracts signed, sales org revamped comp plan.

Q: SMB comments, acute or chronic.

A: SME is smallest segment, competition fierce, pivot to Aloha Next.

Q: Organic revenue growth post ODM.

A: Expect ARR and total revenue grow, software step up, payments integrated with new sales.

Q: Third-party integration benefit.

A: One throat to choke, customer service, pricing upside, end-to-end data benefit.

Q: Guidance modeling and World Pay Agreement.

A: Adjusted EBITDA margin affected by ODM and cost actions, World Pay Agreement implementation complete, focus on new sales