NCR Atleos (NATL) Q1 2026 earnings summary

Executive summary

• Revenue grew 7% year-over-year to $1.04 billion, driven by Self-Service Banking hardware and ATMaaS growth, while Network revenue was flat and T&T declined due to lower project volumes.

• Net income rose 69% to $22 million, with EPS of $0.30 basic and $0.29 diluted, reflecting gains from divestitures and improved defined benefit plan income.

• Gross margin compressed to 22.4% from 23.7% due to higher tariffs, increased vault cash costs, and component price inflation.

• A merger agreement with Brink's was signed, with closing expected in Q1 2027, subject to regulatory and shareholder approvals.

• Transformation plan targets $125–$150 million in annualized EBITDA growth by 2028, with over 1,000 cost savings and revenue initiatives identified.

Financial highlights

• Product revenue increased 17% to $221 million; service revenue rose 4% to $822 million.

• Recurring revenue accounted for 72.3% of total revenue, up 2 percentage points year-over-year.

• Income from operations decreased 10% to $84 million due to workforce optimization and strategic initiative costs.

• Net cash used in operating activities was $9 million, down from $123 million provided in the prior year, mainly due to working capital changes.

• Q1 2026 revenue was $517 million, down 1.4% year-over-year; net loss attributable to shareholders was $18 million or $0.20 per share, slightly improved from a $18.8 million loss last year.

Outlook and guidance

• Management expects elevated component costs and macroeconomic pressures to continue impacting gross margin for the remainder of the year.

• Anticipates no further share repurchases in 2026.

• Expects to recognize revenue on three-quarters of $2.3 billion in remaining performance obligations over the next 12 months.

• Local Media revenue expected up low single digits in Q2 2026; expenses flat.

• Management aims for at least 30% EBITDA improvement over the next two years.