NCR Voyix (VYX) Q2 2024 earnings summary

Executive summary

• Announced sale of Digital Banking segment to Veritas Capital for $2.45 billion plus up to $100 million contingent consideration, expected to close by year-end 2024.

• Transitioning hardware business to an outsourced design and manufacturing model with Ennoconn, shifting to an agent/commission model for hardware sales.

• Implemented a multi-phase cost alignment program, targeting $75 million in annualized payroll cost reductions and $30 million in non-payroll savings.

• Completed spin-off of NCR Atleos in October 2023, with financials recast to reflect discontinued operations.

• Strategic actions aim to reduce leverage, moderate hardware revenue variability, and position for accelerated growth and margin expansion.

Financial highlights

• Q2 2024 GAAP and normalized revenue was $876 million, down 7% year-over-year; adjusted EBITDA was $144–$145 million, down from $168–$183 million; adjusted EBITDA margin was 16.4%–16.6%.

• Net loss from continuing operations was $74 million, compared to $51 million in Q2 2023.

• Adjusted EPS for the quarter was $0.09, with a non-GAAP tax rate of 59%.

• Recurring revenue represented 62% of total revenue in Q2 2024, up from 56.6% a year ago.

• Cash balance at June 30, 2024 was $204 million; total debt was $2.6 billion; net leverage ratio at 4.1x, expected to decline to ~2.0x post-divestiture.

Outlook and guidance

• 2024 revenue expected between $2.805 billion and $2.86 billion; adjusted EBITDA guidance is $355–$375 million (margin 12.6%–13.1%).

• Pro forma 2024 revenue (post-divestiture/outsourcing) expected at $2.15 billion, with adjusted EBITDA of $430 million (20% margin), and adjusted free cash flow of $170 million (40% conversion rate).

• Pro forma net leverage expected to be approximately 2x post-transaction.

• Following the Digital Banking sale, the company will report two segments: Retail and Restaurants.