NCR Voyix (VYX) Q3 2024 earnings summary

Executive summary

• Completed sale of Digital Banking business for $2.45B, using proceeds to pay down $1.84B in debt, repurchase shares, and strengthen the balance sheet, recognizing a $1.5B pre-tax gain.

• Transitioning hardware business to an outsourced design and manufacturing model with Ennoconn, targeting January 2025 for implementation, with NCR Voyix acting as sales agent.

• Q3 2024 revenue declined 12% year-over-year to $711M, reflecting hardware declines, while software and services showed positive trends.

• Adjusted EBITDA for Q3 2024 was $93M (13.1% margin), with normalized adjusted EBITDA at $101M (14.3% margin).

• Net loss from continuing operations was $31M, a significant improvement from $266M loss in Q3 2023.

Financial highlights

• Q3 2024 normalized revenue was $708M, down 11% year-over-year; software & services revenue was $516M, down 2%.

• Gross margin for Q3 2024 was 23.3% (down from 24.1%); product revenue fell 26% and service revenue fell 4%.

• Net loss from continuing operations attributable to common stockholders: $(35)M in Q3 2024; diluted EPS $(0.24).

• Adjusted free cash flow (nine months): $(123)M; operating cash flow was a use of $25M, including $80M in transaction-related fees.

• Interest expense decreased 52% year-over-year in Q3 2024 due to lower debt.

Outlook and guidance

• Maintains full-year 2024 guidance: total revenue $2.805B–$2.86B, adjusted EBITDA $355M–$375M, adjusted EBITDA margin 12.6%–13.1%.

• Free cash flow and adjusted EPS guidance to be reinstated in 2025.

• Hardware revenue expected to be ~5% of total, with software & services at 95% post-divestitures.

• Q4 expectations: software and services near midpoint of guidance, hardware at lower end, EBITDA at or slightly above midpoint.

• Plans to use ~$100M from Digital Banking sale for share repurchases over next 12 months.