NCR Voyix (VYX) Goldman Sachs Technology Communacopia and Technology Conference summary

Strategic vision and recent actions

• Completed spin-out of ATM business and sale of Digital Banking for $2.45B, focusing on core software and services for retail and restaurants.

• Transitioned hardware to an outsourced design and manufacturing model with Ennoconn, reducing supply chain risk and shifting to net revenue accounting for hardware.

• Rightsized cost structure, including an 800-employee reduction and $75M in savings, to align with the new business model.

• Cleared HSR process for Digital Banking sale; transaction on track with timing dependent on financing.

• Pro forma outlook for 2025 includes top-line growth, expanded Adjusted EBITDA margins, and 40% free cash flow conversion.

Hardware transformation and operational changes

• Ennoconn partnership enables full design, manufacturing, and warranty for hardware, allowing focus on bundled solutions without supply chain liability.

• Hardware revenue will be recognized as sales commission at 90% gross margins, stabilizing revenue and reducing volatility.

• Go-to-market model shifts most sellers to focus on software and services, with a small team handling hardware referrals.

• Hardware business now limited to vendor management and light configuration, with Ennoconn handling all production.

Cost optimization and capital allocation

• Executed cost programs post-spin and Digital Banking sale, including vendor savings of $30M and further opportunities in process simplification and IT consolidation.

• Pro forma free cash flow for 2024 set at $170M, with improved conversion to 40% and potential for further gains as CapEx remains flat.

• $2B net proceeds from Digital Banking sale to reduce leverage to 1.6x, with $150M additional cash for investment, share repurchase, or tuck-in M&A.

• Upsized tender offer executed, maintaining flexibility for future capital deployment.