NCR Atleos (NATL) Q2 2024 earnings summary

Executive summary

• Q2 2024 results were at or above the high end of guidance, with revenue up 4% year-over-year to $1.081 billion and recurring revenue up 9% to $793 million, representing 73% of total revenue.

• Adjusted EBITDA was $193 million (17.9% margin), with GAAP net income of $29 million and adjusted free cash flow of $16 million.

• Strategic initiatives included efficiency gains, successful separation from NCR Voyix, and expansion of ATM as a Service and network utility banking.

• The company reaffirmed and narrowed full-year 2024 guidance, citing strong first-half results and a robust sales pipeline.

• Transition to a recurring revenue model and asset-light ATM as a Service continued, with new clients, geographies, and transaction types added.

Financial highlights

• Q2 2024 revenue was $1.081 billion, up 4% year-over-year; recurring revenue was $793 million, up 9% year-over-year and 73% of total revenue.

• Adjusted EBITDA was $193 million (17.9% margin), down 3% year-over-year; GAAP net income was $29 million, with diluted EPS of $0.39 and non-GAAP EPS of $0.81.

• Adjusted free cash flow for Q2 2024 was $16 million; year-to-date free cash flow reached $85 million.

• Gross margin rate (GAAP) was 23.4%; adjusted gross margin rate was 25.5%.

• Total debt as of June 30, 2024, was $2.92 billion to $3.08 billion; cash and cash equivalents ranged from $298 million to $374 million.

Outlook and guidance

• Full-year 2024 revenue guidance reaffirmed and narrowed to $4.26–$4.34 billion; adjusted EBITDA guidance at $770–$800 million; non-GAAP EPS outlook at $2.90–$3.20.

• Adjusted free cash flow guidance for FY 2024 raised to $190–$220 million.

• Q3 2024 revenue expected at $1.045–$1.075 billion, adjusted EBITDA at $195–$205 million, and adjusted EPS at $0.71–$0.81.

• Management expects continued growth in recurring revenue streams and ongoing transition to software-led solutions.

• Separation-related costs are expected to continue through at least fiscal year 2024.