NCR Atleos (NATL) Stephens Annual Investment Conference summary

Strategic focus and outlook

• Completed separation from parent company, redeployed resources to strategic initiatives, and established a clean balance sheet.

• Board encourages a shift from tactical execution to long-term strategy, focusing on leveraging a large installed base and service footprint.

• Three- and five-year strategies include expanding device capabilities, growing services, and exploring new avenues such as government and retail partnerships.

• Emphasis on protecting unique assets: global device fleet, service organization, and owned/operated devices.

• M&A will focus on bolt-on acquisitions to enhance device capabilities and expand networks, with no plans for large transformational deals.

Financial performance and capital allocation

• Achieved sub-three times leverage ahead of schedule, enabling share buybacks and increased capital flexibility.

• Cash conversion rates expected to rise from 30% to 35% next year, potentially reaching 40% the following year.

• Plans to refinance significant debt in October next year, aiming for further interest expense reduction.

• Capital allocation prioritizes share repurchases over dividends, with CapEx closely aligned to depreciation.

• Free cash flow efficiency to improve as legacy separation costs are lapped and AI-driven productivity gains are realized.

ATM as a Service strategy and growth

• ATM as a Service more than doubles ARPU compared to traditional models, with 38,000 machines fully managed and 90,000 under enhanced servicing.

• Service is highly differentiated, offering end-to-end solutions that competitors cannot fully match.

• Geographic expansion includes recent entries into LATAM, Middle East, and Spain, with best margins in North America and Western Europe.

• Sustained 30-40% growth in ATM as a Service, supported by a strong backlog and ongoing customer conversions.

• Implementation bottlenecks are due to longer integration cycles with customer IT systems, not demand.