NCR Voyix (VYX) 7 Feb 232022 Q4 Earnings call transcript

Good day and welcome to the NCR Corporation Fourth Quarter Fiscal Year 2022 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, sir.

you earnings our call. thank full quarter and XXXX year afternoon for fourth joining and Good

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

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

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

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

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

to in strong way begin products are and different positive our some X year. the the of this highlights with Maybe our with marketplace. out all on five a XXXX demand segments, Slide We momentum Let’s from is winning this closed business past business. across in say

ability higher revenue and of our strategy against our NPS. score, as-a-service measure satisfaction, streams. we progress do and A focus is cross-sell initiatives run restaurant of additional contingent net company run our a our to to store, to strategy promoter advance To or have software-led part make the run to continue as significant We It key becoming customer a which to upsell we so, services clients. recurring the on our with maniacal banking. is self-directed on strategic

initiated is not very following XXXX, we NPS went the in NPS an say improve. to When we a was a We strategy then our XX. the then XX, we score, XXXX, in our am on to good. XX year, to continue year proud XX. improved Each XX, I And to to which to

happy XX% These growth improved years, XX%, adjusted NCR strong throughout XX growth, year. revenue and revenue geopolitical in So executing key our constant delivered significant to total promoter is to recurring a of are currency a software-led a of on we the transforming a given we company. basis. into extraordinary strategy quite the macroeconomic from our have particularly In X XXXX, and XX. EBITDA NCR customers, score net improvement. as-a-service We That’s which challenges that now results, XX% navigated all growth and

Slide strong XXXX external Now I in to all put the mind, uncontrollable external be headwinds perspective it thought macro would to we Keep X, headwinds almost to the execution in were moving endured. in impacts. relative helpful our

addressing currency constant impacts great and of X well up basis a on teams held a XXXX. did the quarters revenues Our job very the last our over cost

time year the strain. this began we pandemic, the Omicron continued First, with

shut countries our and NCR which transaction February year. were we shut down For In example, in well, down office volumes. our we most impacted not as operate, January is alone. Unfortunately, of were last businesses

Ukraine in exited in that and impacted the Russia country. a the suspended Second, war region, in sales business we and our

component costs, XXXX. higher and significantly impacted in margins, in resulted transportation disruptions which chain particularly our adversely of the first supply Third, quarter

by levels procurement reduce designing elevated. sources and have Fourth, highest the XX reached our adjusted Nonetheless, are teams and While chain inflation to impact. years. certifying impacts the the remain supply components easing, alternative costs engineering in more over

fuel costs, rates transportation and interest component inflation higher history. the rates in of and costs fastest And to wage accelerated increased addition fifth, one escalated. In

an rates second XXXX, exchange foreign headwind. incremental Finally, of in half the represented

XXX year, external and initiatives NCR against For Despite the by points full all strong points. by with KPIs. dollar stronger the well basis headwinds, across U.S. XXX executed reduced very revenue these our our EBITDA adjusted growth strategic growth basis

Although faced the inflation abate we like persist. headwinds other still interest beginning are in some headwinds of XXXX to and

in the that slowdown, incremental least savings market are a into expectations in NCR expected we potential cost anticipation to global has Looking U.S. in and XXXX, taken suggest the of fourth at quarter moderate In abroad. additional drive XXXX. recession actions

these XXXX, Throughout headwinds. offset we actions to many had take to

head are nature. permanent Others Some we of temporal were as XXXX. savings cost into those in

with able total staffing impact section XXXX, Tim provide our The cost were we was During our further. more XXXX, into to levels we attrition. details to reduce X%. headcount will approximately his even by later. reduce needed to some Heading in reduce our

Slide Now on moving to X. update the business

the strategy strong all have across deliver choice. from RBR the year. retail of the by The company number the as our business In also global momentum XXth one point-of-sale We retail, NCR to software to for the RBR year We for a be leader in vendor our were recognized named X consecutive on row. segments. we global platform for continue consulting fifth of self-checkout

X,XXX stores experience over the the is platform Commerce and Stop with to its During connecting omni-channel NCR Love’s partnership customers. extended quarter, Country their fourth lanes Travel enhance the to to and NCR

momentum winning have continue upgrade in We imperative retail for positive software. to point-of-sale

grocery the well the turn ordering a verticals convenience support expansion with retailers convenience and into XXX mobile strong NCR across self-checkout, in Midwest, see their the store enhance and big-box specialty Trip, we to retail. and as across continue such new fuel regional to Quick as experience. department In chain strategy as stores customer over our and demand

help them increased are mitigate embracing costs. usage to customers self-checkout Our labor

demand and Valley, is a enabled deploying XX-year kitchen to hospitality, tablets their efficiencies operational Aloha orders. online In of improve to ability its Hot enhance to with integrations their a committed customer to partner channels. deepen NCR’s digital serve integrated Kitchen Cheese platform, customers NCR new across a to customer alongside customers. to revamping X-year we experience NCR handling through strong E. X-year E. in continue Chuck Aloha Cheese, of SMB Chuck enterprise through to which NCR, our agreement

We as hospitality operator to also customers. our future integrated quarter, merchant Salad XXX fourth site its NCR and all Chicken payments shows our In the with traction offering payment gain a continue existing Chick, locations. for for processor

renewal we renewals, In digital quarter, the the was fourth strong in one continue history. momentum. banking quarters of which banking, with to In activity the positive have largest company’s XX digital represented

the logo deals, had new which wins. all we During quarter, also competitive fourth XX are

Wintrust large XXXX, X platform. year our strong For and a digital it digital we regional banking Bank, to banking Bank two Associated conversions new million the banks, year added for as These digital was accounts. converted full two banking almost

our our NCR solution digital-first a for had success retail signed services financial we retail against using Allpoint five U.S. the channels CSP both during channel integrate also on DFB where and In banks merchant top acquiring platform the with banking, in XXXX. network. Network, two We of or by the making platform. and our DFB institution banking Payments teller NCR’s are progress CSP we

our continuing our payment NCR’s to solution. roughly selecting offering for SMB XX% hospitality new have including We customers, payment success clients our of with integrated are

delivering the In Allpoint before. stores. exclusive network. extending than the million by with services Walgreens The transactions have agreement of majority access to free surcharge over Allpoint network of customers. P&C ATM XX XXXX, Bank on We the XX million Allpoint partnered their cards more now the ever strong the quarter, of across In growth fourth expanded and cardholders making provider ATM continued NCR its long-term with than financial to NCR network institutions a more Walgreens,

largest also states. convenience We key U.S., network partners, extended Circle Circle our which brands of store in the XX than notably X,XXX Allpoint Allpoint activated on most NCR’s X across with stores the network merchant K K, more

Service U.K. partnership NCR extended than network more the we and we In transform, its as Santander solution. self-service a the offering a X,XXX ATM our accelerating large ATM our with as momentum FIs In ATMs and in a fourth Service both Interest the from signed banking U.K. including XX globally. run of to continue as self-service Santander NCR, in connect selecting ATM its across community banks is quarter, service deals, banking, longstanding

The bank help ATM to including NCR. maintenance management is management, channel, hardware shifting monitoring, a and the of processing, cash operational software, transaction self-service desk

NCR ATM India’s integrated capabilities when lastly, into of a and by including Zealand ATM is Baroda, of During which marketplace. of separate offering us stack Bank and public of two the bundled on New of XX has as full a largest as Service with deals, Allpoint XXXX. retail given companies the banks. XXXX, the end the the scale a provide unique service signed a to NCR’s X Bank we we track are to in network ability And solution

update on Following results, I Tim’s will comments activities. financial our separation the provide an on

to that, me pass over let it Tim. With

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

to by to our improvement a completes of a year As a sequential drive external quarter difficult litany Mike year effort described, solid described start while challenges. determined the quarterly confronting fourth after a very

during supply modestly extraordinary about negative due interest Omicron April, totaled described chain quarter of scarcity XXXX costs on the in from impact Russia, EBITDA. wave earnings first that higher QX Last the unexpected COVID we impacts new call, then our $XX war to and to rates million

historically anticipate rapid worsening time, total an million. of could supply remainder issues the interest year forecast eventual inflation would rate increases, and Russia accurately but a additional impact predicted dollar. million the dramatic from these availability, chain That U.S. of exit challenges we year have the of the our of strengthening component a that then the the impact $XXX high XX-year forecasted COVID over and and At of for $XX wave, full not

cost with factors stretch the the XXXX above XXX through aggregate, were success EBITDA the million. QX. platform enhanced difficult to more KPIs actions in as-a-service launched to tactical and control simultaneously macroeconomic productivity points XX% the that targets. that In Even and exited EBITDA against second our to rates and of deterioration cost further P&L ability than half We $XXX impressive almost In the the significant year, with productivity grind factors drive response, in preserves of in start impacted insulate those allowed extrinsic up offerings. in expanded our basis team’s margin and eventually our March by expand momentum strategic were to and incremental P&L from the across pricing

level quarter performance. financial Slide I’ll our top with fourth of a start overview X on

top down to X% Starting up and for guided revenue X% left, the quarter the we a Recurring reported in results year-over-year was those revenue up similar currency $X October, up QX. on adjusted reported was X% constant as in year-over-year were and on billion, when basis. As X% back very fourth FX.

primarily million We have recognized revenue and multiyear recurring had to would The our shifted of sales revenue. from transitioning roughly upfront dollar within success previously these revenue subscription-based million profit contracts of $XX an The continue nature banking streams. U.S. segments. very impact been that $XX into high unfavorable onetime to retail perpetual self-service of have strong

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

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

reported In and versus as the up been constant on the $XXX of the impacted on bottom X use the by until $X.XX for or strength I’ll was and free The dollar finally, cash that first EPS of later. year, quarters And basis. tax flow year-over-year non-GAAP by capital, then up up $X.XX. XX.X% X% more The $X.XX. persistent of X% reported about predicted which was the prior cash U.S. reduced have working and improvements had XX% $X.XX, cash in left, year. million EPS EPS in due non-GAAP currency rate was a flow the leverage to about a

XX% Revenue constant highlights inclusion a XXXX that Normalizing year. up legacy full for Adjusted FX, growth. of $XXX our had reported million strong up of Recurring contributed of banking acquired our X results, on XXXX. Slide $X.X by revenue, impact shows retail a revenue all outpaced primarily again benefited up constant self-service Cardtronics, currency revenue. when and across dollar in XX% to XX% growth, on was within reported currency was for full U.S. the up basis. strong strategic our financial XX% up year-over-year growth unfavorable an impact year-over-year progress X% on Remember FX year XX% the adjusted basis, revenue revenue billion, the up our very June makes and and driven our the segments five and was total of Cardtronics platforms. of which segments. now The of for of from for

For revenue the million, Retail of revenue impact shift reduced our self-service year, primarily by also $XXX full to banking in segments. recurring and

FX up Adjusted and rate as In up up EBITDA XX.X%, slightly currency EBITDA the had $X.X $XX a top year-over-year. million. basis. right, constant reported adjusted an unfavorable billion, XX% of remarkably, XX% was margin was on year-over-year impact

together both the full currency was up year-over-year ago interest count and quickly QX. assure in both $X.XX, And than XXXX. And of benefit year in flow higher than of caused quarter. though QX a for left, generated XX% I’ll on our EPS Slide to OEM that of and generation flow. a changes more cash all in in will was availability grow evident year from in challenges cash higher timing XX. On X% impact free the Higher and detail now and flow the investment EBITDA. impacted benefited nonlinear million working to non-GAAP revenue cash EPS generated the were less on reductions Both in we employee to provide a the repairs. up continue purposeful rate for for year. chain that these before tax the of caused share P&L issues labor the constant harvest $XXX are Supply parts programs and abating basis of and from effects bottom on More they we’ve capital costs, cost fourth

on Retail X, slightly quarter on left, top Starting for X% was to and the segment in down a shows adjusted X% retail full down was lower revenue Fourth Slide which year-over-year sales. Moving basis. year hardware revenue constant our FX currency results. up

cost EBITDA EBITDA margin adjusted particularly component quarter The POS was a adjusted was currency impacted was inflation XXX year-over-year adjusted and year on flat points, for basis. was by the year contracted X% full up declined Retail XX.X%. down year and adjusted first full basis of Full X% devices year. EBITDA half EBITDA the on Fourth year-over-year currency. during rate constant rate X%

north are from QX, And the expanded margin of points start slow rate the year While recovery a almost XX comparisons adjusted points basis basis of retail because QX exited rates prior year. XX%, difficult of the margin fourth in quarter XXX with over EBITDA levels. the

We sales transitioning streams. to subscription-based from perpetual success have revenue continue retail our onetime business multiyear into

deals over that were million second segment The key to bottom very next that million revenue upfront X have strategic including roughly indicators. shows the in QX in to the would of nature of alone. be The $XX will contracts of mentioned previously Most this high The shift these shifted the revenue occurred of Mike XXXX. profit recognized occurred key year, of X recurring that performance $XX half years. retail slide in the strategic wins

illustrates left, of by platform-based retail of On to our the fuel our platform lanes, of a than success platform that increased the major to our lane more convenience was lanes by rollouts The subscription We XXX%. KPI our number increase driven customers. platform customers convert model. strategy our at

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

ARR lanes. higher business currency all increased ARPU impact generated the in of ARR And by center year-over-year. And those year X self-checkout platform full X% full the points Similar year-over-year revenue growth. In our revenue, on X% to new reduce the is by bottom rates calculations. did for revenue. our about increased of Self-checkout this on

XX results and momentum our this shows Slide segment across business. Hospitality illustrates

For adjusting the for $XX increased currency. full XX% year, or hospitality revenue million

store Our growth. X%, enterprise services driven technology refreshes openings, by and was new up business

XXX XX%. with drove up and success mix platform for full payments was XX%. richer products year profitability year-over-year million for A the Our improvements. basis $X sales Full reported indirect year Adjusted payments. the by to was and cost more quarter and rate points absorption revenue improving as adjusting Fourth EBITDA expanded EBITDA increased SMB XX% margin of adjusted revenue by X% X% up currency. driven business our and platform or

and EBITDA up to ARR. this combined Hospitality’s adjusted points productivity quarter services margin of cost bottom XX% better are mix XX%. platform slide include the margin strategic EBITDA sites strong Fourth expanded metrics of Better and rates. year-over-year. payment sites, was Adjusted rate XXX key with on and basis software drove

up sites. and platform platform Payment new increased the year, on full and higher at payment increased both new XX% the XX%. ARPU For X% ARR sites sites year-over-year was

We platform SMB continue strategic services as this to add clients and the shift and momentum to business payments. in clients enterprise attach see

our to Slide increased cross-sell and EBITDA with million or improvements. year-over-year X% up success up X% Banking or margin Full $XX shows absorption XX%. drove Fourth momentum adjusted quarter increased Digital banking Full renewal channel revenue adjusted A EBITDA adjusted adjusted an EBITDA quarter XX%. by rate driven with to year revenue richer of XX, mix Turning segment. year-over-year revenue EBITDA margin strong X% profitability X% year which was client and increasing digital year-over-year. and at million indirect Terafina year-over-year, was platform. service Fourth improving wins, an $X rate cost

registered active in Digital consolidation-driven Both Banking’s active in bottom two about metrics annual revenue. key users outgrown increased users, midyear year-over-year, recurring X% having business revenue that the two-thirds and drive results XXXX, was this slide include de-conversions in of this impacted strategic and the year-over-year. X% ARR of users, and registered which up

and adjusted Normalizing XX% year segment. inclusion constant a adjusted quarter for Fourth XX% payments or Cardtronics, for network adjusted and Full revenue Let’s was to the our million the adjusted increased year addition for effect segment. Network XX%, and rates. at Starting full top of and left, Payments million basis. is this XX% increased the of Payments the when $XX up full or of year-over-year XX% increased FX. revenue in year-over-year of revenue and Most occurred Slide for year results FX move currency when This FX. for on $XXX the the of XX. XX% Network Cardtronics legacy X% EBITDA and

our Cardtronics and optimization productivity result would that program, impact benefited million of results XXXX and hedging The a combination in incremental renting our revenue While $XX XXXX. in will interest by all in million rates $XX and are of have impacted cost profitability, in further fleet of in of through and That rental XXXX. comparative million operational short-term approximately XXXX in EBITDA reduced effective results. costs will inclusion another rates cost primary $XX goes the our cost the significantly driver strong XXXX ATM of cash net protections goods, of $XX cash results, mix EBITDA’s full price said, an and and million a XXXX year interest

the EBITDA rate for slide XXX margin EBITDA full XX%, network from shows was adjusted points X% quarter adjusted those due rate when primarily in bottom this to rental key cash of margin and contracted down FX. strategic metrics. EBITDA The XX% year. X% Adjusted the for quarter Fourth year-over-year year, and to Adjusted basis the payments declined prior costs. fourth higher

On the processed the were Allpoint illustrates migrate as increased Network Transactions access them acquiring expanding Annual transactions, to our X% year-over-year. increased In merchant across recurring the our and terminals are year-over-year. payments These installed in to up XX% center the revenue the our business this our that KPI merchant points networks. bottom for XX% acquiring and endpoints bottom, year. Network, full left, we the Allpoint NCR base.

X% up shows our currency segment X% banking constant down and self-service on currency quarter up constant revenue Slide reported year-over-year revenue XX a was full on was basis. as basis. results. reported as Fourth and Self-service X% flat banking year a

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

to revenue. that recurring $XX fourth profit high we previously as software million licenses roughly would of shifted the occurred have In revenue upfront quarter,

year, impact of shift full revenue for was recurring $XXX For banking million. the to self-service the the

business the per this This effect a than accelerates. of be margins less hardware our million defer will We profit lower closer software. as in has as ATM the ATM accompanying impact as revenue XXXX future Service dollar expect $XXX to to

basis. to Full particularly year. significant an the fourth strong EBITDA the constant year-over-year productivity and and consistent up Full year-over-year XX%. was cost on pressures, up of overcome in basis. first the a half year year adjusted FX X% EBITDA on declined Very in the quarter X% fourth was margin Adjusted was was rate adjusted cost X% rate and able was increased XX% quarter EBITDA currency XX%

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

continues mix and shift growth left, XX,XXX year-over-year our was significant Service to the ARR increased the similar On units in India United units. XX%. at as growth States. ATM revenue incremental last to in The year with and software to gain services up recurring over revenue We a X% traction to XXX% experienced year-over-year.

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

in in million the we XXXX. quarter I As flow generated said earlier, cash of free which more the all generated of $XXX than represented cash we

While results full the the insufficient. quarter were were solid, results year

half inventory proportion in issues Looking $XXX million forward, lapse combination of cash capital in and improvements, at significant free profitability XXXX, million we the $XXX benefits, and that expect working further compensation flow of cash a the of the year. the and with timing particularly higher generation to of the coming of first

later our have complete to total before We at leverage contemplated been company about $XXX year. least by our clear million, we this transaction intention reduce spin

operating the was reducing described can looking QX, activities cash cash overseas results. that Beyond delivered in ways and generate in discussions, concentrated aid to the effort early repatriate at to we’re some a actioned leverage. segment other In

completed importantly Service, to ATM financing non-recourse first a growth this also for is We strategy. arrangement which as funding crucial our

This leverage due credit net our EBITDA the debt $XXX well available metric debt address covenants with finally, with We ratio higher million voluntary and a $XX XXXX our liquidity QX any to over shows in facility. from And to made of X.Xx, significant remain mandatory to contributions. profitability. to U.S. push our adjusted also down a underfunding and pension slide program contribution within we out have million revolving X.Xx under

liquidity a ample our strength and We have strong financial the strategy. balance growth to support sheet,

by on X; are January consumer-led That are streams; are guidance, they may our as mean exchange accompanying that our January that forecast in full have they the as global rates present the million uncertainty, revenue described very interest as currency assumptions this we also macro forward straight have dated curve as underlie the that of proven only guidance said, first assumed Slide soon following: quarter On and or the become them X; are for the X our accurately rates XXXX and year multi-varied we good years issued. guidance. described can the we that correctly After after XX, that by at business ATM that forward economy the our growth experience will defers rates a of $XXX that XXXX Service recession reported constrain drive currency exchange rates in and will that and modest years. first tougher future a nonrecurring ATM revenue in of of These ease hardware that margin the the rates the year should from comparisons pernicious rates into the half. assumptions effect half second interest but

mean cost that to be our productivity also needed They efforts reduce extended. and to drive

dis-synergies additional quarter, fourth that cost in resulting anticipate XXXX contemplated cost the allowed the of While from initiated expected transaction. significant to price dis-synergies to the we drive and challenges actions sufficient that XXXX’s that taken from the spin to preemptively first half, wrap incremental in offset are than In recovery savings and in effect offset necessary spin. actions takeout are address of the actions half the XXXX in we to a any further second profitability more

excludes the you intend that impact of stock-based already walk our calculation our want with peers with guidance adjusted alignment compensation compensation. our result of EPS to page, better expense. own calculation change the calculation exclude I post-spin I to Before stock-based of EBITDA This that non-GAAP our we in pure-play through both change will to and of highlight

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full service basis. after for of million, as currency XXXX, impact the revenue to on the $X billion of expect shift the we year and So $X.X a $XXX a ATM of constant billion

the and rates full forward only a half would the year suggest FX, it will a first drag will in notable impact very of calendarization. While from impact be year modest

expand XX%. We on billion to EBITDA I’ll expected more expect adjusted billion. EBITDA on next to $X.XX EBITDA margins roughly slide. to the detail Adjusted $X.XX are provide be to

That to is be is $X.XX million assumed EPS our convention. share. to $X.XX million, an under or comparable expected In $X.XX a guidance of new XXXX, calculating $XXX methodology. we Non-GAAP increase our range for $X.XX to of interest prior under $X.XX EPS to expense $XX

of as rate provide assumptions count a the XX% XXX.X update and of a We in XX% reported another also these versus Obviously, XXXX. a potential assumed XXXX XXX million in impacts The will outcomes, of EPS we shares share these million and by range of tax have versus necessary. shares two combination $X.XX. quarterly

the quarterly I to million some flow full As your XXXX. expect more alignment discussed QX assure calendarization earlier, year I models, than a XXXX. linear cash we the million of on also generate and want free of $XXX to with To $XXX basis to provide thoughts on

of expect QX. million from billion last on to we billion, the reported a $X.X currency-neutral up revenue XXXX, $X.X QX basis For $XX

We adjusted million. expect EBITDA $XXX approximately of

We million. flow $X.XX $XXX generate between free cash to EPS expect of to $X.XX expect $XXX non-GAAP and and million

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

we of results improvement the described remainder the our linear expect most in quarterly across ultimately aggregating sequential For relatively to XXXX, metrics, annual financial guidance.

will Slide and had finally, about including the wave and rate expedited expectations order magnitude, XXXX. freight, external of last prior of that war – for you the our our have first XX walk of XX items Ukraine translation, red the In Slide component finally, I a bar, juxtaposing relative drivers, the the provides bucket. impacts, same under we exchange discrete impacts in aggregated through in we against and the XXXX for for costs high-level pandemic. impacts talked the our realized outlook interest expense, XXXX illustration EBITDA XXXX

together, effects in these $XXX million XXXX. totaled about Taken

similarly $XXX indirect sized permanent global direct across to since million of fuel were two inflation overall structure our our that XXXX. with but about launched raws, there The actions in our This effects bucket material actions contractor etcetera. costs. labeled of XX% been and cost improved reduced impact, increases X%. more $XXX targeted close totaled benefit Most bar fast actions includes was nearly our X planned address bars next actions uncontrollable About NCR on offset labor, actions labor, red that these and will were and parts, cost both together, Qs of In X labor aggregate, pricing. replaced million. To to these these spend commodities, XX% includes that remaining and freight, costs in temporal the have permanent our were we

impactful. In far XXXX, page. those external Bringing down the less same will impacts be

interest effect We costs. wrap from will residual have

The follow-on the other the started to sufficient fewer shocks. in from and in more premium than the are freight than the we to with that Russia positive XXXX were to more expect our planned attrition a inflation cost from launched both headcount of last X% XXXX. transaction. have In spin items from more manageable costs. These temporal almost dis-synergies we actions force. And with reductions those of About like the impact anticipate base were into swung remainder replace we actions another half ease and to cover were and and are entered sustainable round year’s XXXX level. to reductions ship XXXX We excess of like either actions a QX, net built exit or the

the years, million. shift around recurring is across both you by and is And acceleration an can revenue volume in increased see finally, read muted to as in $XXX you our columns, remaining pricing growth that the

turn you, I’ll back to it that, With Mike.

Tim. Thanks,

Slide XX. to Moving

and other thoughts to via to and public provide We a intend into separate network traditional ATM two NCR’s the form for In Let payments into payment, separating of tax-free NCR network the and includes companies. services all on existing shareholders. hospitality banking. hardware, businesses spin-off on our NCR’s integrated merchant and tightly to me software and entity business, distribution segments our and shares of business, ATMCo new existing is banking payments self-service our update an which except self-service words, NCR. services and retail of NCR’s

restaurant company. NCR Banking Digital our a will Services include the businesses as We will to deliver service Merchant banking our markets continue NCR its growth upgrade and software-led win and run the spending NCR hospitality, business. be where retail, to we continued First solutions. a those the to These see expect in technology business operate believe digital-first to transformation payment run positioned imperatives. for continue to store, on

made help customer-first us company. as in significant a sure believe They take and to position. us, the actions and of company around goal one are to advantage we move Moving markets to taken We markets a our align is organization to represent we enormous make XX. our NCR we X for over our have into the serve. services past two has organizations. strides continue to into transform software-led our Slide market-leading opportunity number we The years will customers

a provider NCR left and XX, leading the RemainCo provider on world one number serve Our digital-first for to the banking serve side solutions. of enable NCR the RemainCo be one demand banks restaurants software growing be will platforms differentiated be in the Page number company their NCR provider with will anticipated a have or to them of of clients point-of-sale DFB self-checkout, of the markets and higher-growth integrated to is serving experience. that and retailers, and

XX, and continue SpinCo side which ATM ATMCo, software will hardware will Page is network. in the world the have ATM of provider be the ATM the to of one middleware NCR number and surcharge-free largest on multi-vendor labeled applications right-hand

back a that business differentiated be can us growth margins as-a-service generation and offering We We is stable expected will of flow cash ATM will options drive ATM revenue capture to share expanding as continue will continue allow solutions. shift value. that should best our as-a-service the we sale to unlock through for with dividend in become with to delivering But have our available more that ATMCo wallet to company spinning such remains solid the superior path the We alternative recurring NCR whole offering. could open future that believe we a to is NCR’s payment. NCR, shareholder as cash shareholders a Board ATMCo partial transaction a to in a of believe considering alternative off scenarios. or that tax-free deliver deliver value

an our separation Slide of roadmap. overview XX provides

of We unit. together under our and plan. office the the teams defined ready have spin. majority for put our by Operationally, industry general organized separation teams business a manager are a are These have management separation business

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state We the registration flow of capital and XX statement, the between timing of Form through the de-lever expected our of be cash on separation submitting on dependent and end working SEC the free XXXX. are the largely approval intend We of markets. then is will to separation generation now and occur to by

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

significant our First, we strategic progress have initiatives. growth executing made

momentum expect in will the to are marketplace. strategic business. winning, Our to positive to and build direction, on win KPIs we the and NCR continue the continue in in the trending right is we

Second, have to streams, revenue to momentum higher execute continue the continue of business. with NCR transforming company will strategy in we software-led our as-a-service we to a recurring

are we on focused Third, our structure. improving cost

leverage streamline these cost for our along focused into companies. are efficiencies action with his we strong positive as had finally, generate take NCR identified we in to margin costs on out cash Tim operating expect expansion. to two section. cost And have Fourth, public We should referenced in flow, Fifth, separating drive actions, XXXX.

legal end a in the to structures spin are We through be opportunity the and organizational execute separation XXXX the execute and arises. to of expect the position if working the by earlier and

call questions. day. With prepared the will open line. This remarks open the we for concludes our that, please the Operator, for

come And Instructions] our Chung with Paul from question will [Operator first JPMorgan.

question. my taking for Thanks Hi.

of the working Where back-end the you and And CapEx after did XXXX for outsized kind about expectations would more do we benefit How in uniform guide, free year. of to be more flow cash on ‘XX, a levels, puts takes somewhat cap? job due the flow working cap loaded good can guys throughout a do would over And and of about ‘XX back expect thought a saw talk reversion there you year cash flow. then of have a the think free heavy kind I cash cash there? course of flow just on back you investment year So, some the this year?

it questions $XXX – about of expect this we in I million CapEx, have lot A Yes. would year. there.

be is year. be I higher. slightly cash flow million I $XXX to this to going think on do linear expect it’s much the more

investment – we We a benefit said harvested benefit, and we we QX. see in in working out the as from of took cash this back half year As the some some there were the that of come the timing P&L organization, capital in first have perspective. of cost script, benefit the in the flow will outstripped

You And can make are we first in that think performance. inventory see our to that flow more the cash quarter. on I progress going in

good have consistent cash we think flow very we is to are right, I our described a very with quarter. that guidance So, ago, quarter a what going fourth

We first quarter, path a and after to then we are have a strong going on more get linear will that. back

full So, predict guess closer in easy nice head which that’s of the the a end year. start for guidance that – it’s dollar, range the perfectly on but to to page QX, high will us not the I I we the are to give the described

can Thank the you NRF? where talk of showcasing regions, for you performance you be ‘XX. self-checkout, Got it. longer momentum are across near-term, about kind How that And then some product, the can very in so, ‘XX and in where monitoring verticals? you. solution about And here then follow-up a pace then and And Talk impactful too, you term? seeing a strong ‘XX, Halo expectations on just had long-term?

will on product three was I currency. of the in full this growth points is take questions. SCO let that actually Mike There as-reported went an to year X% The Yes. basis. growth

would very same. currency with would much on expect we SCO. basis, the next have that constant what high-single So, And about growth at expected X% mid a line growth in that is to digit year, I

excited product, worlds. Yes. those kind we ability are. a the Halo saw technology the NRF, does they items of at vision-based has. can’t for that, one it identify scan pretty It about But It is best capability which are of has that has challenges you on and the it. that scan to the of what Paul, both which also appropriately,

You can the still code. scan UBC

a A the self-checkout we of in restaurants, for food convenience that use. is perfect have and growth in So, it’s it’s fit easy to lot environment. stores and fast seen

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

perhaps you Obviously, your some in, be like that slowdown? follow-up. you you questions. of have a talk funnel rates Can of pronounced at more in relative to and incoming for sounds order couple are indicative moderate baking your go becoming maybe And your of A seeing Are guidance framework? Are there then I outlook forward you about may a look whom ‘XX. what seeing recession Thanks. things some regard? the into suggesting it level

No.

strong. been is The of I beginning be at would book uptake It’s order the efforts strong. as think strong the very we would as our have the year. on it as-a-service about hope

of we book. the any So, seen have not yet rollback order

the reported. likely give be you about on banking year rate me to color think down as company reported. think is a total X% some Let you for Self-service growth across because the the growth total if I X%

accelerating up the we shift Now, recurring if the are to you X% but in business. revenue, that’s back in add shift recurring that revenue

X% be expansion. with really going think, a to so margin decline, we nice And it’s

in to business. probably is points of points X X there that expansion think I margin

into Network back XX%. those both to two invest are got going and grow have growth. businesses are businesses, We going Both Digital & Payments Banking that to nearly

ATMs. which And off so and rip a of there little their hospitality self-checkout retail, it’s when think it’s down non-recurring occur, margin – building maybe streams come revenue businesses bit, hardware. year. retail that the to And bit about It’s leaves rates low-single in are and into they a consumer-led points hospitality where coming grow the in took POS as think you little will really, of each a invest about in then growth, roaring digits likely couple we we a a in in our recession and model, if

our are this affected and the could it, it we so If wrong aren’t for we our to upside and be revenue And year. our for a isn’t there customers plan. adjust hardware recession moderate there don’t in by expectations or

for us through seen ability impact a to shift is so Yes. our numbers, look demand the specifically, in execute to to no. to to you have moderation so strategic as Tim’s Matt, growth subscription. the some answer of comments, just at revenue plan is the and to-date, literally add And the streams simple our Tim we walking

in off fastest backlog. XXXX was that in strong It ATM taken XXXX. backlog we than so a the continues very success we maybe be into it’s And strong. anticipated. little are sales faster – to The was The as-a-service very

strong to had an got backlog a a quarter, and sales will and to the portend continues & platform to strong extremely business fourth lot migration have to very but of sites. very, then since logos, have have new Banking a a potential future strong that for Network, lanes strong recon have in there, pipeline outlook. backlog very I lot XXXX renewals, Payments through the so say, Digital we platform business hospitality, of And get of would terms

margin that look banking, So, We some we probably little taking spread margin advantage about haven’t concerned interest seen more the outlook a as in spread, just of ‘XX. yet. at the for marketplace banks

they think all I are the looking risk. at same

And are I But spending. that outlooks year, we for just on our they again, And the economic the slowdown in based be to we the so reading. cautious to-date, seen will in capital to year outlook later start is on that. trying haven’t think

second follow-up, only quarter-over-quarter just a but quick look a timing the the & Network, I at this, call, had and in given on it of to like basis. And then it. looked Payments Got just as a

I endpoints little ARR. had I you But Transactions dynamic there little bit just was if at current So, deck, it down bit but looked it’s back be quarter-on-quarter. helpful. that, would not were appeared FX to as perhaps speak down to you. look be slide ARR. QX, of a in quarter-on-quarter Thank realize like can is an kind and that driving to go your a

That’s Yes. we in do. seasonality a what typical

nice season comes QX tax around. pickup in to are a You going as see

on able endpoints year going – to line if QX, There seasonality I top moved that transaction we That’s to numbers higher. is the the moving good dependent X% end They can’t there are right will in more the modest remember. numbers know go them. are takes fact that to is because the annually. points growth a deliver full the heavily key and and in transactions. be it why out. growth So, downdraft in a that don’t business transaction But The is to the transaction direction I seasonality are we higher. more

Thank you, guys.

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

afternoon my for and taking Good questions. thank you Hi.

to wanted more. drill segments little into the Just a

take if would organic First the growth what then look the quarter? within LibertyX out to of And fourth were Payments, Banking far as you like as secondly, rate all, for Digital top to in still know that I as past, trajectory Is grower. referred it double-digit the it for line? a that as a of you the goes, fair to on business think

Yes.

me fourth had Let little Banking. But customers, extremely XXXX an we again, the referenced, was terms a digit Digital we that – start on low-double for the are high in with as with a quarter. little extending I do drove cause anything I We Digital seeing our bit us in don’t Absolutely, trends Tim revenue what think, may digit, Banking. think our to quarter. there fourth it be based renewal in light impacted concern. which high-single quarter, is the in which

think – LibertyX, in do you mind. the what I get overall without

is about $XX LibertyX a million million quarter. $XX to

you quarter if when take-outs ‘XX quick talked still and million as guidance of to just then range of in a And a in million could ballpark $XXX thinking some million prior it. Got back follow-up, about for ‘XX? $XX dissynergies. your $XXX that refer Is from the I to cost about

Yes.

tried actions $XXX We in see items of pressure in we to walk, supposed as more from so XX% actions done have permanent And the then this the they across on or calendarize it’s different XX, ruler cost million get in you cost external year. and that out out, got to aggregate. Page fiscal inflation next efforts roll out nature. walk. of one casual both any casual if I don’t About those were discrete EBITDA, says we all walk temporal million played kind think did forces I it because necessarily year to in take-out XXXX. $XXX of causal actions – they about and your total or called and The of deck at these say of

XX% need hard that So, spending to that not was discretionary been add backfilling costs permanent. the opened, and about there some have positions we and back of cost-out and raining

external then, considerably net wrap in this the Moving and around to year inflation the and year. we to into million impacts from really the since and We our those simply moderate cover turned the ‘XX items temporal couple or us cover to negative expect actions. in $XXX benefits last a impacts the of effect need then of fact, so

this allow the call XXXX, together, about it million add talked have – transaction. $XX you actions $XXX there dissynergies us $XXX page. hit then million like about negative will to in permanent to if we looks million If numbers on in those So, spin the associated is of with of it, synergies, aggregate, which let’s

split, we $XX We each we that of million, have out, presumed – about this we the NewCo. million model it that on be and be think side as as it the offset it year. able the be across cost We will $XX plays across keep when year will will to down

beyond have found we of from here several for help that we described the So, time to keep two at being opportunities negative companies. efficiency actions that the of the launch the a

Erik Stanley. a question take with will from Morgan we Woodring And

guys. taking for the question. Hey Thanks

X% of talked kind gross much have with us and but and through walk maybe you where to You model around takes the next factors there like up the I help from the through just look in looks EBITDA XXXX guide less, there. like are and your more And next. follow-up know revenue then is in OpEx Meaning year? maybe guess. kind high I do puts thinking maybe some I just to the you you Can of talked a margins and you to flat Tim, us we leverage level, through, about at about at plan how us X%, the versus midpoint. have is of XXXX, comes nicer talk it up

took other our costs right. to diversify efficiencies at act will a reduce of more our XXXX. most entirely was nearly have gross It’s efforts question came to that supply re-qualify there. transportation this in and to pay we going year. remember that because this be That’s and actions we margin nicely chain, have the The year, parts are good direct that made OpEx, It because the Yes. to going cost costs you from savings came savings help we indirect back to quickly

recovery than expect at would be most I OpEx. rather to the gross So, of in margin

And tax interest anything kind expense right? and want rate, measure of count. as guiding in to interest much some kind get I a I Super. improvements else That’s So, rate EBITDA free Was helpful. sure the missing? to sorry, understand make Okay. just Is year-over-year of held disclosures. make these really am nice just want mostly then that I obviously bit of some maybe there as I that EPS items, flow. back others. share am in the regardless more of to change follow-up, and I cash as a sure I tax rate, that – why has

associated more little is share right. with count $X.XX than $X.XX is interest exactly with There a are both and You there and rate. associated expense tax

you, Perfect. Okay. Thank guys.

that what in That’s $X.XX aggregate.

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

Thank us you. joining today. everybody Thanks for

three year had the finish of for challenges to forward big pretty some Obviously, delivering is quarters excited XXXX. to our team team a our think XXXX. I look the last a thank a strong you very and to We just whole about at solid through we working the XXXX. start great and

what’s us a and executing very products. later looking very This We you but strategic there, going are XXXX. for modestly thank on feel good environment. good We expect be, to initiatives, our feel we out spin-off Again, the challenging to we it again, our joining today. about about in forward

Well, participation. excellent We an Have do today’s thank day. that thank conclude you does for conference. your you. And