DIEBOLD NIXDORF, Inc

Results of Operations. The following discussion of the Company’s financial condition and results of operations provides information that will assist in understanding the financial statements and the changes in certain key items in those financial statements. The following discussion should be read in conjunction with the condensed consolidated financial statements and the accompanying notes that appear elsewhere in this Quarterly Report on Form 10-Q.

(1)The Company calculates constant currency by translating the prior-year period results at the current year exchange rate. The Company calculates constant currency by translating the prior-year period results at the current year exchange rate.

Three months ended September 30, 2025 compared with three months ended September 30, 2024. Net sales increased $18.1, or 2.0%, including a net favorable currency impact of $26.3 primarily related to the euro. After excluding the favorable currency impact, net sales decreased by $8.2. Banking net sales decreased $0.4 or 0.1%, including a net favorable currency impact of $14.5, related primarily to the euro. After excluding the favorable currency impact, net sales decreased $14.9, driven by lower ATM unit sales volume. Banking net sales represented 73.0% and 74.5% of total net sales for the three months ended September 30, 2025 and 2024, respectively. Retail net sales increased $18.5 or 7.8%, including a net favorable currency impact of $11.8 primarily related to the euro. After excluding the favorable currency impact, net sales increased $6.7 primarily due to increased Products net sales driven by stronger electronic point of sale business. Retail net sales represented 27.0% and 25.5% of total net sales for the three months ended September 30, 2025 and 2024, respectively.

Nine months ended September 30, 2025 compared with nine months ended September 30, 2024. Net sales decreased $60.7, or 2.2%, including a net favorable currency impact of $22.4 primarily related to the euro. After excluding the favorable currency impact, net sales decreased by $83.1. Banking net sales decreased $47.8 or 2.3%, including a net favorable currency impact of $3.7, related primarily to the euro. After excluding the favorable currency impact, net sales decreased $51.5, driven by lower ATM unit sales volume. Banking net sales represented 74.0% and 74.1% of total net sales for the nine months ended September 30, 2025 and 2024, respectively. Retail net sales decreased $12.9 or 1.8%, including a net favorable currency impact of $18.7 primarily related to the euro. After excluding the favorable currency impact, net sales decreased $31.6 primarily due to first-half market headwinds related to Products that we expect to recover in the second-half of 2025. Retail net sales represented 26.0% and 25.9% of total net sales for the nine months ended September 30, 2025 and 2024, respectively.

Services gross margin decreased 50 and 70 basis points in the three and nine months ended September 30, 2025, respectively, primarily due to operational cost pressures and other investments associated with North America business expansion and continuous improvement. Product gross margin increased 180 and 170 basis points in the three and nine months ended September 30, 2025, respectively, primarily due to favorable geographic mix of ATM machines in the periods as well as improved pricing.

Selling and administrative expense decreased $13.7, or 8.3%, and $21.5 or 4.5%, in the three and nine months ended September 30, 2025, respectively, compared to the corresponding periods in 2024 primarily due to lower spending related to refinancing activities and lower transformation costs related to continuous improvement initiatives. Research and development costs reflect the Company's ongoing investment in hardware and software innovations and enhancements in service offerings.

Interest expense decreased $16.6, or 43.2%, and $55.5, or 46.0%, in the three and nine months ended September 30, 2025, respectively, due to the refinancing of the Company's debt completed on December 18, 2024. Foreign exchange gain (loss), net includes realized gains and losses, primarily related to the unfavorable impact of a strengthening Brazilian real against the U.S. dollar and a broader weakening of the U.S. dollar, mitigated by the Company's derivative instruments during the three and nine months ended September 30, 2025. Refer to Note 11 to our condensed consolidated financial statements for additional information regarding derivative instruments not designated as hedges.

Changes in net income were a result of the fluctuations outlined in the previous sections. The change in net income is also impacted by a decrease in income tax expense for the three and nine months ended September 30, 2025 compared with the prior year periods. The effective tax rate is significantly lower in 2025 primarily due to (i) improved interest expense deductibility in 2025 and (ii) non-recurring discrete tax expense in 2024 and non-recurring discrete tax benefit in 2025. Refer to Note 3 to our condensed consolidated financial statements for additional information regarding tax expense.