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01/11 07:36
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals mixed signals. While there is a decline in total revenue and ongoing restructuring costs, the company shows growth in recurring revenue and adjusted EBITDA. The partnership with Worldpay and increased share repurchases are positive, but concerns over economic sensitivity and unclear responses on tariffs and restructuring impact create uncertainty. Overall, the sentiment is balanced, leading to a neutral prediction for stock price movement.
Total Revenue $617,000,000, declined $93,000,000 or 13% year-over-year due to continued softness in hardware sales and exiting $20,000,000 of one-time software and services revenue.
Recurring Revenue $407,000,000, increased 2% year-over-year, now represents 66% of total company revenue.
Software ARR Decreased 1% year-over-year, but adjusted for timing of certain items, it modestly increased.
Total Segment ARR Decreased 1% year-over-year, but adjusted for timing of certain items, it modestly increased.
Platform Sites Increased 27% to 77,000 sites year-over-year.
Adjusted EBITDA $75,000,000, increased 19% year-over-year, margin expanded 330 basis points to 12.2%, driven by 2024 cost actions.
Restaurant Segment Revenue $191,000,000, declined 5% year-over-year due to timing of certain revenue items and expected hardware declines.
Restaurant Segment Adjusted EBITDA $59,000,000, increased 7% year-over-year, margin expanded 370 basis points to nearly 31%, driven by efficiency initiatives and sales mix.
Retail Segment Revenue $420,000,000, declined 14% year-over-year due to expected hardware and one-time revenue declines.
Retail Segment Adjusted EBITDA $65,000,000, decreased 24% year-over-year, primarily due to declines in hardware revenue and gross profit.
Corporate and Other Expenses $49,000,000, decreased 37% year-over-year, reflecting cost initiatives implemented in 2024 and 2025.
Adjusted Free Cash Flow A use of $20,000,000 for the quarter before considering $33,000,000 of cash expenditures related to restructuring and other strategic initiatives.
Share Repurchases Approximately 5,000,000 shares for $62,000,000 during the first quarter; total repurchased since November 2024 is approximately 10,000,000 shares for $125,000,000.
Aloha Menu: Aloha Menu is a standalone menu management system that allows restaurants to centralize the building and maintaining of their menu across all geographies and channels, including POS, kiosk, mobile and online ordering.
Voyage Commerce Platform (VCP): The VCP will enable customers to transform their physical locations into digital experience channels for shoppers and diners, with cloud native applications launching later this year.
New Customer Signings: In the first quarter, nearly 200 new software and services customers were signed in the restaurant segment, and over 30 in the retail segment.
International Expansion: Two executives have been appointed outside the U.S. to enhance international market understanding and customer engagement.
Operational Efficiency: The company is transitioning to a recurring subscription billing model, moving away from one-time revenue streams.
Cost Mitigation: Actions are being taken to mitigate tariff impacts by sourcing suppliers in markets with lower or no tariffs.
Product Strategy Shift: The company is focusing on developing in-house cloud architecture and edge microservices, moving away from acquiring third-party applications.
Share Repurchase Program: An amended share repurchase program has been adopted, increasing the total authority to $200 million.
Tariff Costs: The company is facing tariff surcharges for certain service parts from China-based suppliers, with a current run rate of tariff-related costs estimated between $8,000,000 and $12,000,000 for the balance of the year, potentially rising to $20,000,000 if all suppliers implement surcharges.
Supply Chain Challenges: The company is actively seeking to mitigate tariff impacts by sourcing suppliers in markets with lower or no tariffs.
Hardware Sales Decline: The company reported a decline in hardware sales, which negatively impacted total revenue by $67,000,000, contributing to a 13% overall revenue decline.
Economic Sensitivity: The company operates in markets sensitive to economic fluctuations, with ongoing discussions indicating that customers are focused on cost efficiency and automation.
Restructuring Costs: The restructuring plan is expected to incur costs of approximately $65,000,000, which may increase due to additional restructuring needs.
Regulatory Issues: The company is monitoring the evolving trade and tariff environment, which poses ongoing regulatory risks.
Customer Spending Plans: Despite economic uncertainties, customer spending plans appear stable, with low revenue attrition reported.
Product Innovation and Marketing: Nick East appointed as Chief Product Officer to oversee product innovation and marketing across the company’s platform architecture.
Cloud Native Platform and Payment Initiatives: Progress on cloud native platform and payment initiatives expected to launch in the second half of the year, driving revenue growth into 2026.
Share Repurchase Program: Completed $25 million in share repurchases, increasing total authority to $200 million.
Voyage Commerce Platform (VCP) Strategy: Transitioning from legacy applications to VCP, launching cloud native applications to enhance customer experience and drive recurring revenue.
International Expansion: Two executives based outside the U.S. to enhance understanding of global customer needs and trends.
Revenue Guidance: Expect currency neutral revenue between $2.575 billion and $2.650 billion, reflecting a 6% to 9% decline.
Adjusted EBITDA Guidance: Expect currency neutral adjusted EBITDA between $420 million and $445 million, representing a 21% to 28% increase.
Adjusted Free Cash Flow Guidance: Expected between $170 million and $190 million, reflecting a conversion rate of 40% to 43%.
Tariff Related Costs: Current run rate of tariff-related costs estimated between $8 million and $12 million, potentially up to $20 million.
Earnings Per Share Guidance: Non-GAAP diluted earnings per share expected between $0.75 and $0.80.
Share Repurchase Program: In March and April, NCR Voyage completed an additional $25,000,000 of share repurchases amounting to 2,600,000 shares under the existing program. Since the beginning of the repurchases in November, approximately 10,000,000 shares have been repurchased for a total of $125,000,000. The board adopted an amended share program, increasing the total aggregate purchase authority under the company’s share repurchase program to $200,000,000.
The earnings call reveals a decline in revenue and attendance, impacted by macroeconomic headwinds and reliance on premium formats. Despite some positive indicators, such as international growth and a share buyback plan, the overall financial performance is weak. The Q&A highlights potential future opportunities but does not offset current challenges. Given the absence of strong positive catalysts and the market's sensitivity to economic conditions, the stock is likely to experience a negative reaction in the short term.
The earnings call summary reveals mixed signals. While the restaurant segment shows growth, the retail segment faces declines, impacting overall financial health. The Q&A session provides limited clarity on new payment relationships and revenue impact, suggesting uncertainty. Positive factors include recurring revenue growth and new partnerships. However, the lack of guidance on financial details and previous challenges in retail weigh on sentiment. Without market cap data, the overall prediction remains neutral due to balanced positives and negatives, with no strong catalysts to drive significant short-term price changes.
Earnings call summary shows strong financial performance with increased EBITDA and recurring revenue, despite a decline in hardware sales. The Q&A section highlights positive demand across sectors, strong cost-saving initiatives, and growth in the payment business. Management's optimistic guidance and increased share repurchase authority further support a positive outlook. However, some uncertainty remains due to tariff exposure and unclear responses on certain topics, keeping the sentiment from reaching 'strong positive.' Overall, the stock is likely to see a positive movement in the next two weeks.
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