VYX

Core Financial and Strategic Progress

• Q2 2026 total GAAP revenue was $523 million, a 21% year-over-year decline due to the hardware business transition; excluding this impact, total revenue increased 1% year-over-year, with recurring revenue up 3%
• Adjusted EBITDA was $98 million, up 5% year-over-year, with adjusted EBITDA margin expanding 460 basis points to 18.7%; adjusted non-GAAP EPS was $0.17 per share, flat year-over-year due to a one-time tax benefit in the prior year period
• 83% of total Q2 2026 revenue is now recurring, up significantly from prior periods following the hardware transition
• Total VCP contract count reached 25 signed customers as of Q2 end, with 10 of these customers already live across more than 2,000 retail and restaurant lanes; another 1,000 lanes are expected to go live by the end of September 2026
• Remaining contract value from all signed VCP contracts hit $286 million, up 65% year-over-year, with 20% of signed VCP customers being new relationships for NCR Voyix

Product and Platform Milestones

• The core embedded VCP application portfolio has launched successfully, with focus now shifted from building core functionality to scaling adoption and delivering customer-specific capabilities
• 16 active customer evaluation labs for VCP are operational across 7 countries, feeding a growing commercial pipeline
• Development of the Leathernecks platform initiative remains on schedule for initial customer pilots by the end of 2026
• The store-in-a-box solution for small and mid-market restaurants is on track to enter customer labs by end-Q3 2026, with pilots planned for Q1 2027
• AI agent tools streamline VCP migrations for existing customers: agents automatically analyze legacy environments, migrate configurations and operational data, reducing deployment time, lowering implementation costs, and improving scalability; AI also continues to optimize customer environments post-deployment
• AI and intelligent automation is now the core focus of product innovation, with expanded capabilities across real-time inventory monitoring, supply chain operations, merchandising, and back office workflows

Segment-Specific Operational Wins

• Retail and Payments: Signed over 40 new customers in Q2, primarily in the mid-market; platform sites increased 8% and payment sites increased 13% year-over-year, with recurring revenue up 6% driven by 15% recurring software revenue growth. Key wins include a supply chain agreement with LC Foods expanding into food distribution, a reverse vending services agreement in Germany, a POS agreement with a large Colombian-Chilean home improvement retailer, and a 350-store equipment refresh for an existing Australian grocery customer. The Voyix Connect payments gateway strategy is executing in the U.S. and Latin America, with new fleet card acceptance integration for Voyager, expanding the convenience and fuel retail offering.
• Restaurant: Signed over 100 new customers in Q2; platform sites increased 12% year-over-year; enterprise and mid-market recurring revenue increased 6% (excluding the Brazil divestiture), driven by 9% services revenue growth and 3% software revenue growth. Key wins include Pizza Ranch, the first new enterprise customer for cloud-native Aloha Next, across 200+ locations, and a multi-country modernization agreement with a top Asia Pacific restaurant operator. SMB segment remains soft, and the upcoming store-in-a-box solution is targeted to address this segment's specific needs.

• Management is maintaining the full year 2026 guidance originally issued in May 2026
• Full year 2026 revenue is projected to be between $2.188 billion and $2.303 billion, representing a year-over-year range of a 2% decline to a 3% increase
• Full year 2026 adjusted EBITDA is projected to be between $432 million and $447 billion, representing 3% to 7% year-over-year growth
• Full year 2026 adjusted EPS is projected to be between $0.89 and $0.92 per share
• Full year 2026 capital expenditures are expected to remain at a similar level to 2025
• The company expects sequential improvement in both revenue and adjusted EBITDA in Q3 and Q4 2026, with Q4 typically the strongest quarter seasonally

1. Retail Segment: Reported revenue decreased 20% year-over-year to $365 million, driven by the Q1 2026 hardware business transition. Excluding this impact, retail revenue increased 4% year-over-year, with 6% growth in recurring revenue from Voyix Commerce Platform (VCP) application sales and payments pricing initiatives. Retail adjusted EBITDA increased 20% to $97 million, with an adjusted EBITDA margin of 26.6%, up 880 basis points year-over-year. Excluding the hardware impact, retail margin still increased 350 basis points.
2. Restaurant Segment: Reported revenue declined 23% year-over-year to $158 million, reflecting the hardware transition. Excluding this impact, restaurant revenue decreased 6% year-over-year, driven by delayed customer hardware refreshes, continued softness in the small and medium business (SMB) segment, and the prior year Nencore Brazil divestiture. Restaurant adjusted EBITDA decreased 15% to $58 million, with an adjusted EBITDA margin of 36.7%, up 350 basis points year-over-year due to the hardware transition. Excluding the hardware impact, restaurant margin decreased 380 basis points.
3. Corporate: Corporate expenses were $57 million for the quarter, and management expects this level to remain relatively consistent for the remainder of 2026.

• Large enterprise platform transformation projects have extended, variable timelines due to customer size, complexity, and multi-regional organizational structures, leading to non-linear VCP sales growth
• SMB restaurant segment demand remains soft due to macroeconomic pressure and cost sensitivity
• Customers are delaying hardware refreshes in the near term due to higher memory costs and macroeconomic uncertainty, creating near-term revenue pressure in the restaurant segment
• Enterprise buying cycles have lengthened as customers increase ROI scrutiny amid ongoing cost pressures, which can slow near-term sales conversion
• The legacy revenue mix still includes 17% non-recurring revenue, and the transition to a nearly fully recurring revenue model will take multiple years to complete
• Forward-looking results are subject to general macroeconomic uncertainty that could impact customer capital spending plans

Q: Are VCP adoption rates accelerating, and will faster AI-enabled installations shorten the gap between contract booking and revenue recognition? / A: Customer feedback on the new VCP platform is very positive, as it allows customers to modernize without full point-of-sale replacement and staff retraining. Over 20% of signed VCP customers are new to NCR, and the product continues to gain traction in new verticals like supply chain. Small and mid-market customers will see near-zero booking-to-revenue timelines with pre-configured store-in-a-box solutions. For large multinational customers, AI automates configuration and migration from legacy systems, cutting deployment time and cost, which speeds revenue conversion compared to traditional manual deployments.

Q: How should investors interpret remaining contract value (RCV) growth trends, and what cadence should be expected for revenue and EBITDA through the second half of 2026? / A: RCV will grow over time but will not increase linearly every quarter, as RCV is reduced as revenue is recognized from signed contracts, and large customer signings are irregular. RCV only represents VCP software revenue, excluding services, payments and hardware, and still makes up less than 6% of the total installed base, so it is too early to draw strong conclusions from quarterly sequential changes. Management maintains full-year guidance, which implies sequential revenue and EBITDA improvement in Q3 and Q4 2026, with broad-based improvement across both retail and restaurant segments, and margins expected to improve over time as more customers convert to the new platform.

Q: How are delayed hardware refreshes from high memory costs impacting the business, and what is the current competitive environment for VCP? / A: There has been some near-term pullback on hardware projects, creating a $20-30 million impact that is partially passed through via price increases. Customers can only delay refreshes temporarily, so management expects this imbalance to correct by 2027. Critically, the new VCP platform allows customers to extend the life of existing hardware by keeping software current and secure without a hardware upgrade, which actually accelerates software adoption for customers choosing to sweat existing assets. The competitive landscape has not changed significantly; while the SMB segment is competitive, VCP's differentiated cloud-native architecture and ability to deliver cost savings has resonated with customers, with 20% of VCP contracts coming from new logos.

Q: How much non-recurring revenue remains in the business, and what is the path forward for transitioning to recurring revenue? / A: 83% of Q2 2026 revenue is now recurring, leaving only 17% non-recurring. Non-recurring revenue includes project-based installation work, a small pool of one-time software licenses (projected to be ~$20 million for full year 2026, down from much higher levels historically), and one-time professional services. All new contracts signed today are multi-year recurring subscription agreements, so the share of recurring revenue will gradually increase over time as legacy non-recurring revenue atrophies.