Ncr Atleos Corporation · NYSE:NATL
Ncr Atleos — Q2 2024 Earnings Presentation
36 slides from Ncr Atleos's earnings presentation, Aug 14, 2024
Slide 1: Second Quarter 2024 Earnings Call
Second Quarter 2024 Earnings Call Wednesday, August 14th, 2024 Tim Oliver, President & Chief Executive Officer Paul Campbell, Chief Financial Officer Stuart Mackinnon, Chief Operating Officer 1
Slide 2: Forward-Looking Statements
FORWARD-LOOKING STATEMENTS NCR Atleos Corporation (“NCR Atleos,” “Atleos” or the “Company”) cautions that comments made during this presentation and in these materials contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of
Slide 3: Notes to Investors
NOTES TO INVESTORS NON-GAAP MEASURES. While Atleos reports its results in accordance with generally accepted accounting principles in the United States, or GAAP, comments made during this conference call and in these materials will include or make reference to certain "non-GAAP" measures, including:
Slide 4: Business Update
Business Update Tim Oliver President and Chief Executive Officer NCR Atleos Confidential 4
Slide 5: Strong Performance and Momentum
Strong Performance and Momentum On Track for a Successful Good Q2 Solid First Half 2024 Strong interest from customers with Building a track record of consistency Banks are investing in branches and better growing sales pipeline and customer with strong financial performance in consumer experiences,
Slide 6: Segment Highlights
Segment Highlights Self-Service Banking Network • Recurring revenue grew 12% y/y to 63% of segment revenue, led by • Transaction growth, more profitable mix, and operating leverage drove software and services growth double digit adjusted EBITDA growth • Operational execution drove continued improvem
Slide 7: Key Objectives for 2024
Key Objectives for 2024 2024 Objectives 2024 Initiatives Q2 2024 Progress Update Achieved critical milestones in product development and ■ Offer best-in-class solutions and service service delivery ■ Leverage existing operations Grew ATMaaS revenue 31% to $47 million with Differentiate the backl
Slide 8: Financial Review
Financial Review Paul Campbell Chief Financial Officer NCR Atleos Confidential 8
Slide 9: Q2 2024 Consolidated Financial Results
Q2 2024 CONSOLIDATED FINANCIAL RESULTS $ in millions, except percentages and per share amounts ■ Second Quarter Non-GAAP Diluted EPS of $0.81 Total Revenue/Recurring Adjusted EBITDA Fiscal Year 2023 Fiscal Year 2024 Fiscal Year 2023 Fiscal Year 2024 $1,040 $1,050 $1,081 $198 $1,000 $200 $193 $793 $1
Slide 10: Self-Service Banking
SELF-SERVICE BANKING $ in millions, except percentages Revenue Adjusted EBITDA Fiscal Year 2023 Fiscal Year 2024 Fiscal Year 2023 Fiscal Year 2024 $700 $200 +7% seq +18% seq $673 $173 +3% y/y $158 down y/y $654 $134 $628 $100 $625 $0 $550 Q2 23 Q1 24 Q2 24 Q2 23 Q1 24 Q2 24 Key Strategic Metrics Rec
Slide 11: ATM as a Service
ATM as a Service $ in millions, except units, ARPU, and percentages Revenue Gross Profit1 $50 $46 $47 +2% seq +4% seq $42 $40 +31% y/y $20 +37% y/y $36 $13.5 $13.5 $13.9 $14.4 $25 $10.5 $10 $0 $0 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Key Strategic Metrics ATMaaS Units (in thous
Slide 12: Network
NETWORK $ in millions, except units, ARPU, and percentages Revenue Adjusted EBITDA Fiscal Year 2023 Fiscal Year 2024 Fiscal Year 2023 Fiscal Year 2024 $350 $120 $101 +17% seq $326 +5% seq $309 $310 $91 +11% y/y +6% y/y $86 $250 $60 $150 $0 Q2 23 Q1 24 Q2 24 Q2 23 Q1 24 Q2 24 Key Strategic Metrics Ne
Slide 13: Segment Results Summary
Segment Results Summary $ in millions Revenue Q2 2024 Q2 2023 % Change Self-Service Banking $673 $654 3% Network 326 309 6% Technology & Telecommunications 51 49 4% Total Core Revenues $1,050 $1,012 4% Other 31 28 11% Total Atleos $1,081 $1,040 4% Adjusted EBITDA Q2 2024 Q2 2023 % Change Self-Servic
Slide 14: Product Results Summary
Product Results Summary $ in millions Revenue Q2 2024 Q1 2024 ■ Our strategy is focused on generating Services & Software $540 $514 incremental revenue and profit by facilitating efficient and convenient Transactional (Network segment) 319 303 automated banking services Hardware 191 172 Total Core R
Slide 15: Cash Flow and Financial Position
Cash Flow and Financial Position $ in millions Free Cash Flow Q2 2024 Q2 2023 Adjusted EBITDA $193 $198 Less Maintenance capital expenditures(3) ($13) ($14) Less Growth capital expenditures(3) ($11) n/m Less ATMaaS capital expenditures(3) ($8) n/m Cash paid for Taxes ($11) ($13) Cash paid for Intere
Slide 16: 2024 Financial Outlook
2024 Financial Outlook $ in millions, except per share amounts and percentages Prior FY 2024 Q3 2024 Targets Updated FY 2024 Targets Consolidated Targets Range Range Range Revenue $1,045 - $1,075 $4,200 - $4,400 $4,260 - $4,340 Adjusted EBITDA $195 - $205 $770 - $800 $770 - $800 Fully Diluted EPS (n
Slide 17: 2024 Segment Financial Outlook
2024 Segment Financial Outlook $ In millions Q3 2024 Targets FY 2024 Targets (Updated) Segments Range Range Revenue Self Service Banking $655 - $670 $2,655 - $2,690 Network $325 - $335 $1,280 - $1,310 Technology &Telecommunications $43 - $45 $188 - $197 Other – Voyix Related $22 - $25 $137 - $143 To
Slide 18: Takeaways
Takeaways Good Second Quarter Results at high-end of Guidance Solid Revenue growth in all Atleos Core businesses Implemented Strategic actions for a strong 2024 Full Year 2024 Guidance Ranges Reaffirmed & Narrowed NCR Atleos Confidential 18
Slide 19: Supplementary Materials
SUPPLEMENTARY MATERIALS NCR Atleos Confidential 19
Slide 20: Certain Terms & Key Performance Indicators (KPIs)
Certain Terms & Key Performance Indicators (KPIs) Recurring revenue - all revenue streams from contracts where there is a predictable revenue pattern that will occur at regular intervals with a relatively high degree of certainty. This includes hardware and software maintenance revenue, processing r
Slide 21: Non-GAAP Measures
NON-GAAP MEASURES While Atleos reports its results in accordance with generally accepted accounting principles (GAAP) in the United States, comments made during this conference call and in these materials will include non-GAAP measures. These measures are included to provide additional useful inform
Slide 22: Non-GAAP Measures
NON-GAAP MEASURES Net Debt. Atleos determines Net Debt based on its total debt less cash and cash equivalents, with total debt being defined as total short-term borrowings plus total long-term debt as presented on the face of the Condensed Consolidated Balance Sheets. Atleos believes that Net Debt p
Slide 23: Non-GAAP Measures
NON-GAAP MEASURES With respect to our Adjusted EBITDA, adjusted free cash flow-unrestricted and non-GAAP diluted earnings per share forward-looking guidance, we do not provide a reconciliation of the respective GAAP measures because we are not able to predict with reasonable certainty the reconcilin
Slide 24: Q2 2024 GAAP Results
Q2 2024 GAAP RESULTS $ in millions, except percentages and per share amounts Q2 2024 Q2 2023 % Change Revenue $1,081 $1,040 4% Gross Margin 253 247 2% Gross Margin Rate 23.4% 23.8% Operating Expenses 146 168 (13)% % of Revenue 13.5% 16.2% Operating Income 107 79 35% % of Revenue 9.9% 7.6% Interest a
Slide 25: Q2 2024 Operational Results (Non-GAAP)
Q2 2024 OPERATIONAL RESULTS (Non-GAAP) $ in millions, except per share amounts Q2 2024 Q2 2023 % Change Revenue $1,081 $1,040 4% Adjusted Gross Margin (non-GAAP) 276 270 2% Adjusted Gross Margin Rate (non-GAAP) 25.5% 26.0% Adjusted Operating Expenses (non-GAAP) 124 109 14% % of Revenue 11.5% 10.5% A
Slide 26: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION $ in millions Q2 2024 Q2 2023 Net Income Attributable to Atleos (GAAP) $29 $53 Transformation & Restructuring Costs 6 5 Acquisition-Related Amortization of Intangibles 23 25 Acquisition-Related Costs (4) — Separation Costs 6 33 Interest Expense 79 5 Interest Income (2
Slide 27: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION $ in millions Q2 2024 Q2 2023 Income from Operations (GAAP) $107 $79 Transformation and restructuring costs 6 5 Stock-based compensation expense 9 19 Acquisition-related amortization of intangibles 23 25 Acquisition-related costs 1 — Separation costs 6 33 Depreciation
Slide 28: GAAP to Non-GAAP Reconciliation Q2 2024
GAAP TO NON-GAAP RECONCILIATION Q2 2024 $ in millions, except per share amounts Gross Margin Operating Income from Interest & Other Income Tax Effective Net Income Diluted Earnings Gross Margin Expense Income Tax attributable to rate Expenses operations Expenses, Net (Benefit) Rate Atleos per Share
Slide 29: GAAP to Non-GAAP Reconciliation Q2 2023
GAAP TO NON-GAAP RECONCILIATION Q2 2023 $ in millions, except per share amounts Gross Margin Operating Income from Interest & Other Income Tax Effective Income Net Income Earnings per Gross Margin attributable to rate Expenses operations Expenses, Net Expense (Benefit) Tax Rate Atleos Share(1) GAAP
Slide 30: Q2 2024 Segment Results - GAAP
Q2 2024 SEGMENT RESULTS - GAAP* $ in millions Self-Service Banking Network T&T Other(1) Corporate(2) Total Unallocated Product Revenue $212 $14 $6 $15 $— $247 Service Revenue $461 $312 $45 $16 $— $834 Total Revenue $673 $326 $51 $31 $— $1,081 Cost of Products $160 $13 $4 $14 $19 $210 Cost of Service
Slide 31: Q2 2024 Segment Results - Non-GAAP
Q2 2024 SEGMENT RESULTS - NON-GAAP $ in millions Self-Service Network T&T Other(1) (4) Corporate(2) (4) Total(4) Banking Unallocated Product Revenue $212 $14 $6 $15 $— $247 Service Revenue $461 $312 $45 $16 $— $834 Total Revenue $673 $326 $51 $31 $— $1,081 Adjusted Cost of Products (non-GAAP) $160 $
Slide 32: Q2 2024 GAAP to Non-GAAP Segment Reconciliation
Q2 2024 GAAP* TO NON-GAAP Segment Reconciliation $ in millions GAAP* Transformation Costs Stock Based Compensation Acquisition Related Corporate Acquisition- Separation Costs Non-GAAP Amortization of Intangibles Related Costs Self Service Banking $160 $— $— $— $— $— $160 Network 13 — — — — — 13 T&T
Slide 33: Q2 2024 GAAP to Non-GAAP Product Reconciliation
Q2 2024 GAAP* TO NON-GAAP Product Reconciliation $ in millions Stock Based Acquisition Related GAAP* Transformation Costs Compensation Amortization of Non-GAAP Intangibles GROSS PROFIT(1) Software and Services $170 $— $— $(1) $169 Transactional 76 — — 20 96 Hardware 37 — — — 37 Corporate unallocated
Slide 34: Q1 2024 GAAP to Non-GAAP Product Reconciliation
Q1 2024 GAAP* TO NON-GAAP Product Reconciliation $ in millions GAAP* Stock Based Compensation Acquisition Related Non-GAAP Amortization of Intangibles GROSS PROFIT(1) Software and Services $162 $— $1 $163 Transactional 62 — 21 83 Hardware 29 — — 29 Corporate unallocated (38) 1 — (37) Total Core Gros
Slide 35: GAAP to Non-GAAP Reconciliation
GAAP TO NON-GAAP RECONCILIATION $ in millions Q2 2024 Q2 2023 Cash provided by operating activities $9 $80 Total capital expenditures $(32) $(14) Pension contributions $— $1 Restricted cash settlement activity $7 $5 Transfer of temporary funds back to Voyix(1) $32 $— Adjusted Free Cash Flow-Unrestri
Slide 36: Thank You
THANK YOU NCR Atleos Confidential 36