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

Three months ended June 30, 2026 compared with three months ended June 30, 2025. Net sales increased by $15.6, driven by a net favorable currency impact of 2.3% and stronger electronic point of sale business, partially offset by lower Banking product volumes. Banking net sales decreased by $41.1, primarily due lower volume in Middle East, Africa and Europe, partially offset by a net favorable currency impact of 2.3% and higher pricing. Banking net sales represented 68.6% and 74.2% of total net sales for the three months ended June 30, 2026 and 2025, respectively. Retail net sales increased by $56.7, primarily due to increased products net sales driven by stronger electronic point of sale business and a net favorable currency impact of 2.1%. Retail net sales represented 31.4% and 25.8% of total net sales for the three months ended June 30, 2026 and 2025, respectively.

Six months ended June 30, 2026 compared withsix months ended June 30, 2025. Net sales increased by $66.2, driven by a net favorable currency impact of 4.2% and stronger electronic point of sale business, partially offset by lower Banking product volumes. Banking net sales decreased by $46.3, primarily due to lower volume in North America and Europe, partially offset by a net favorable currency impact of 3.7% and higher pricing. Banking net sales represented 69.3% and 74.5% of total net sales for the six months ended June 30, 2026 and 2025, respectively. Retail net sales increased by $112.5, primarily due to increased products net sales driven by stronger electronic point of sale business and a net favorable currency impact of 5.7%. Retail net sales represented 30.7% and 25.5% of total net sales for the six months ended June 30, 2026 and 2025, respectively.

Services gross margin decreased 50 and 60 basis points in the three and six months ended June 30, 2026, respectively, primarily due to continued investments in our technician capabilities and coverage, as well as fleet and fuel costs in key strategic markets, partially offset by tariff recoveries of $3.0. Product gross margin increased 110 and 80 basis points in the three and six months ended June 30, 2026, respectively, primarily due to favorable geographic mix of ATM machines sold in the period, tariff recoveries of $10.0 and improved pricing, partially offset by higher memory cost and stronger EPOS mix.

Selling and administrative expense increased $8.1, or 5.3%, in the three months ended June 30, 2026 and increased $13.5, or 4.4%, in the six months ended June 30, 2026, compared to the corresponding periods in 2025 primarily due to transformation costs related to continuous improvement initiatives. Transformation costs were $14.5 and $26.5 for the three and six months ended June 30, 2026, respectively and $6.3 and $13.1 for the three and six months ended June 30, 2025, respectively. Refer to Note 11 to our condensed consolidated financial statements for additional information. Research and development costs reflect the Company's ongoing investment in hardware and software innovations and enhancements in service offerings.

Foreign exchange, net includes realized gains and losses, primarily related to volatility in foreign currency exchange rates, particularly the Euro and Brazilian Real against the U.S. dollar, mitigated by the Company's derivative instruments during the six months ended June 30, 2026. Refer to Note 12 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 above. The changes in net income were also impacted by an increase in income tax expense for the three and six months ended June 30, 2026 compared with the prior year periods. The effective tax rate was higher in 2026 primarily due to decreased interest expense deductibility in 2026. Refer to Note 8 to our condensed consolidated financial statements for additional information regarding tax expense.