NCR Voyix Corp
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
VYX$9.75-1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-06.
0000070866-24-000031
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0000070866-24-000037
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 139 previous paragraphs and 139 current paragraphs.
72 unchanged; 57 reworded; 8 added; 10 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 25 previous and 26 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
•Revenue of $711 million, down 12% compared to the prior year period
Current report
•Adjusted EBITDA of $93 million, down 10% compared to the prior year period
Current report
In the third quarter of 2024, the Company recorded an out-of-period correction to increase other income expense by approximately $8 million, increase other current liabilities by $4 million and increase accumulated other comprehensive (loss) income by $4 million.
Current report
Gain (Loss) on Debt Extinguishment
Current report
The gain on extinguishment of debt of $8 million for the three and nine months ended September 30, 2024 is related to the redemption discount on the 5.250% and the 5.125% Senior Unsecured Notes of $18 million, offset by the write-off of the related deferred financing fees of $10 million. Refer to Note 5, “Debt Obligations” of the Notes to Condensed Consolidated Financial Statements, for additional information.
Current report
Income tax expense was $3 million for the nine months ended September 30, 2024 compared to income tax expense of $200 million for the nine months ended September 30, 2023. The change in tax expense was primarily due to $195 million discrete tax expenses related to the internal restructuring transactions in connection with the Spin-Off for the nine months ended September 30, 2023.
Current report
The Company recognized income from discontinued operations, net of tax, of $1,162 million for the nine months ended September 30, 2024, of which $1,181 million related to income from discontinued operations, net of tax, for the Digital Banking Sale and expense from discontinued operations, net of tax, of $19 million related to the Company’s environmental remediation matters.
Current report
The Company recognized income from discontinued operations, net of tax, of $1,113 million for the three months ended September 30, 2024, of which $1,132 million related to income from discontinued operations, net of tax, for the Digital Banking Sale and expense from discontinued operations, net of tax, of $19 million related to the Company’s environmental remediation matters.
Removed paragraphs (10)
Previous report
As a result of the Digital Banking Sale, we expect our Digital Banking segment to be presented as a discontinued operation in the third quarter of fiscal 2024. Following the closing of the Digital Banking Sale, the Company expects to manage and report its businesses in the following two reportable segments: Retail and Restaurants.
Previous report
•Digital Banking - Our Digital Banking segment serves financial institutions by delivering software solutions which enable a fully integrated digital experience for consumer and business customers across all channels. We serve banks and credit unions in the United States with our cloud-based software solutions including account opening, account management, transaction processing, imaging, and branch services, among others. We are unique in our ability to offer unified banking solutions across digital (application and browser), in-branch and via interactive teller machines (“ITMs”). See our discussion above under “—Sale of Digital Banking Business” for information regarding our expected segments following the Digital Banking Sale.
Previous report
•Revenue of $876 million, down 7% compared to the prior year period
Previous report
•Adjusted EBITDA of $144 million, down 14% compared to the prior year period
Previous report
Income tax expense was $10 million for the six months ended June 30, 2024 compared to income tax expense of $12 million for the six months ended June 30, 2023. The change in tax expense was impacted by the mix of earnings between our US and non-US jurisdictions.
Previous report
The Company recognized income from discontinued operations, net of tax, of $1 million for the three months ended June 30, 2024 related to NCR Atleos. The Company did not recognize a gain or loss from discontinued operations, net of tax, during the six months ended June 30, 2024.
Previous report
Digital Banking revenue increased 9% and 8% for the three and six months ended June 30, 2024, compared to the prior year periods, due to an increase in recurring cloud services revenue, software maintenance revenue and software license revenue.
Previous report
Digital Banking Adjusted EBITDA increased 17% and 14% for the three and six months ended June 30, 2024, respectively, compared to the prior year periods due to the revenue growth described above.
Previous report
Upon the closing of the Digital Banking Sale, the Company expects to use the net proceeds primarily to reduce debt, including outstanding amounts under the term loan facility and Revolving Credit Facility, repurchases of certain senior unsecured notes, and termination of the trade receivables facility.
Previous report
(1) Represents operations of NCR Atleos through date of separation versus full quarter of NCR Atleos operations for 2023.
Reworded paragraphs (57)
Previous wording
•Results of operations. This section contains an analysis of our results of operations presented in the accompanying condensed consolidated statements of income by comparing the results for the three and six months ended June 30, 2024 to the results for the three and six months ended June 30, 2023.
Current wording
•Results of operations. This section contains an analysis of our results of operations presented in the accompanying condensed consolidated statements of income by comparing the results for the three and nine months ended September 30, 2024 to the results for the three and nine months ended September 30, 2023.
Previous wording
NCR Voyix Corporation (“Voyix”, “NCR”, the “Company”, “we” or “us”), which, prior to its name change effective October 13, 2023 was known as NCR Corporation, was originally incorporated in 1884 and is a global provider of digital commerce solutions for retail stores, restaurants and financial institutions. Headquartered in Atlanta, Georgia, we are a software and services-led enterprise technology provider of run-the-store capabilities for retail and restaurants and cloud-based digital solutions for financial institutions, serving businesses of all sizes. Our software platforms, which run in the cloud and include microservices and APIs that integrate with our customers’ systems, and our As-a-Service solutions enable an end-to-end technology-based operations solution for our customers. Our offerings include digital first software and services offerings for retailers, restaurants and financial institutions, as well as payments acceptance solutions, multi-vendor connected device services, self-checkout (“SCO”) kiosks and related technologies, point of sale (“POS”) terminals and other self-service technologies. Our solutions are designed to enable restaurants, retailers, and financial institutions to seamlessly transact and engage with their customers and end users.
Current wording
NCR Voyix Corporation (“Voyix”, “NCR”, the “Company”, “we” or “us”), which, prior to its name change effective October 13, 2023 was known as NCR Corporation, was originally incorporated in 1884 and is a global provider of digital commerce solutions for retail stores and restaurants. Headquartered in Atlanta, Georgia, we are a software and services-led enterprise technology provider of run-the-store capabilities for retail and restaurants serving businesses of all sizes. Our software platform, which runs in the cloud and includes microservices and APIs that integrate with our customers’ systems, and our As-a-Service solutions enables an end-to-end technology-based operations solution for our customers. Our offerings include software and services offerings for retailers and restaurants, as well as payments acceptance solutions, multi-vendor connected device services, self-checkout (“SCO”) kiosks and related technologies, point of sale (“POS”) terminals and other self-service technologies. Our solutions are designed to enable restaurants and retailers to seamlessly transact and engage with their customers and end users. Prior to the Digital Banking Sale, described below, on September 30, 2024, our offerings included digital solutions for financial institutions.
Previous wording
On August 6, 2024, the Company entered into a definitive agreement with an affiliate of The Veritas Capital Fund VIII, L.P. (the “Buyer”) pursuant to which the Buyer agreed to purchase the Company’s Digital Banking segment businesses (the “Digital Banking Sale”). The purchase price for the transaction consists of $2.45 billion in cash, subject to a post-closing adjustment, as well as contingent consideration of up to an additional $100 million in cash upon the achievement of a specified return on the Buyer's invested capital at the time of any future sale. The Digital Banking Sale represents the next step in the Company’s efforts to streamline its operations to focus specifically on its core software and services offerings for restaurants and retailers around the world. The Digital Banking Sale is expected to close by the end of fiscal year 2024, subject to receipt of necessary regulatory approvals and other customary closing conditions. Upon closing of the Digital Banking Sale, the Company expects to use the net proceeds primarily to reduce debt, including outstanding amounts under the term loan facility and Revolving Credit Facility, repurchases of certain senior unsecured notes, and termination of the trade receivables facility.
Current wording
On August 6, 2024, the Company entered into a definitive purchase agreement with an affiliate of The Veritas Capital Fund VIII, L.P. (the “Buyer”) pursuant to which the Buyer agreed to purchase the Company’s Digital Banking segment businesses (the “Digital Banking Sale”). On September 30, 2024, the Company completed the Digital Banking Sale. The purchase price for the transaction was $2.45 billion in cash, subject to a post-closing adjustment, as well as contingent consideration of up to an additional $100 million in cash upon the achievement of a specified return on the Buyer’s invested capital at the time of any future sale. The accounting requirements for reporting the sale of Digital Banking as a discontinued operation were met when the definitive agreement was signed. Accordingly, the financial results for Digital Banking for the three and nine months ended September 30, 2024 and 2023 are presented as net income (loss) from discontinued operations, net of tax on the Consolidated Statements of Operations. Refer to Note 2, “Discontinued Operations” for additional information.
Previous wording
On August 6, 2024, the Company announced its entry into a commercial agreement with Ennoconn Corporation (“Ennoconn”) to transition its self-checkout and point-of-sale hardware businesses to an outsourced design and manufacturing model, including the sale of certain assets relating to these businesses (the “Hardware Business Transition”). Under the terms of the agreement, Ennoconn will design, manufacture, warrant, supply and ship self-checkout and point-of sale hardware directly to the Company’s customers and the Company will sell hardware to its customer as a sales agent for Ennoconn and continue to provide its point-of sale and self-checkout software as well as key support and maintenance services.
Current wording
On August 6, 2024, the Company announced its entry into a commercial agreement with Ennoconn Corporation (“Ennoconn”) to transition its self-checkout and point-of-sale hardware businesses to an outsourced design and manufacturing model including the sale of certain assets relating to these businesses (the “Hardware Business Transition”). Under the terms of the agreement, Ennoconn will design, manufacture, warrant, supply, and ship self-checkout and point-of sale hardware directly to the Company’s customers and the Company will sell hardware to its customers as a sales agent for Ennoconn and continue to provide its point-of sale and self-checkout software as well as key support and maintenance services.
Previous wording
The Hardware Business Transition is expected to be fully implemented by early 2025 and, as a result of the Hardware Business Transition, the Company expects to record commission revenue from point-of-sale and self-checkout hardware sales as an agent for Ennoconn on a net basis, excluding the costs paid to Ennoconn.
Current wording
As a result of the Hardware Business Transition, the Company expects to record commission revenue from point-of-sale and self-checkout hardware sales as an agent for Ennoconn on a net basis, excluding the costs paid to Ennoconn. While the Company and Ennoconn are targeting January 1, 2025 to implement the new hardware model, this date is dependent upon the migration of aspects of our hardware business to Ennoconn that are not yet complete.
Previous wording
Subsequent to the Spin-Off, the Company manages and reports the following segments:
Current wording
Subsequent to the Spin-Off and the Digital Banking Sale, the Company manages and reports the following two segments:
Previous wording
Corporate and Other includes income and expenses related to corporate functions that are not specifically attributable to any of our three individual reportable segments along with certain non-strategic businesses that are considered immaterial operating segment(s) and certain countries which are expected to transfer to NCR Atleos during the remainder of 2024, as well as commercial agreements with NCR Atleos.
Current wording
Corporate and Other includes income and expenses related to corporate functions that are not specifically attributable to any of our two individual reportable segments along with certain non-strategic businesses that are considered immaterial operating segment(s) and certain countries which are expected to transfer to NCR Atleos during the remainder of 2024, as well as commercial agreements with NCR Atleos.
Previous wording
The following were significant themes and events for the second quarter of 2024.
Current wording
The following were significant themes and events for the third quarter of 2024.
Previous wording
◦Recurring revenue, increased 2% as compared to the prior year period and comprised 62% of total consolidated revenue
Current wording
◦Recurring revenue, remained flat as compared to the prior year period and comprised 57% of total consolidated revenue
Previous wording
◦Software and services revenue, decreased 3% as compared to the prior year period and comprised 75% of total consolidated revenue
Current wording
◦Software and services revenue, decreased 4% as compared to the prior year period and comprised 73% of total consolidated revenue
Previous wording
As previously disclosed, on April 13, 2023 the Company determined that a single data center outage impacting certain of its commerce customers was caused by a cyber ransomware incident. Upon such determination, the Company immediately started contacting customers, enacted its cybersecurity protocol and engaged outside experts to contain the incident and begin the recovery process. We concluded that this incident impacted operations for some customers only with respect to specific Aloha cloud-based services and Counterpoint. Our investigation also concluded no financial reporting systems were impacted. As of June 30, 2024, the Company has incurred $44 million of expenses related to the cyber ransomware incident and has recovered $20 million under our insurance policies. As of June 30, 2024, we expect to receive an additional $5 million which was recorded as an insurance receivable. We are still pursuing insurance recoveries for the remaining costs. We may incur additional costs relating to this incident in the future, including expenses to respond to this matter, payment of damages or other costs to customers or others. At this time we do not believe additional costs incurred as a result of the incident will ultimately have a material adverse effect on our business, results of operations or financial condition; however, we remain subject to risks and uncertainties as a result of the incident.
Current wording
As previously disclosed, on April 13, 2023 the Company determined that a single data center outage impacting certain of its commerce customers was caused by a cyber ransomware incident. Upon such determination, the Company immediately started contacting customers, enacted its cybersecurity protocol and engaged outside experts to contain the incident and begin the recovery process. We concluded that this incident impacted operations for some customers only with respect to specific Aloha cloud-based services and Counterpoint. Our investigation also concluded no financial reporting systems were impacted. As of September 30, 2024, the Company has incurred $46 million of expenses related to the cyber ransomware incident and has recovered $21 million under our insurance policies. As of September 30, 2024, we expect to receive an additional $6 million which was recorded as an insurance receivable. We are still pursuing insurance recoveries for the remaining costs. We may incur additional costs relating to this incident in the future, including expenses to respond to this matter, payment of damages or other costs to customers or others. At this time we do not believe additional costs incurred as a result of the incident will ultimately have a material adverse effect on our business, results of operations or financial condition; however, we remain subject to risks and uncertainties as a result of the incident.
Previous wording
During the second quarter of 2024, the Company recorded corrections related to the Spin-Off. As of December 31, 2023, total assets were understated by approximately $12 million, total liabilities were overstated by approximately $7 million, and total equity was understated by approximately $19 million. The Company evaluated the impact of these adjustments and concluded they were not material to any previously issued interim or annual consolidated financial statements.
Current wording
During the second quarter of 2024, the Company recorded corrections related to the Spin-Off. As of December 31, 2023, total assets were understated by approximately $12 million, total liabilities were overstated by approximately $7 million, and total equity was understated by approximately $19 million.
Previous wording
In February 2024, the Company identified fraudulent automated clearing house “ACH” disbursements from a Company bank account. The cumulative amount of these disbursements total $34 million, and during the six months ended June 30, 2024, we recovered $13 million related to this matter. The Company is pursuing insurance recoveries for the remainder; however, there can be no assurance that the Company will be successful in recovering additional amounts of the unauthorized ACH disbursements from the Company’s insurance providers. Although not materially impacting any previously reported periods, the misstatements resulted in the revision of interim periods in 2023.
Current wording
In February 2024, the Company identified fraudulent automated clearing house “ACH” disbursements from a Company bank account. The cumulative amount of these disbursements total $34 million, and during the nine months ended September 30, 2024, we recovered $15 million related to this matter. The Company is pursuing insurance recoveries for the remainder; however, there can be no assurance that the Company will be successful in recovering additional amounts of the unauthorized ACH disbursements from the Company’s insurance providers. Although not materially impacting any previously reported periods, the misstatements resulted in the revision of interim periods in 2023.
Previous wording
The following tables show our results for the three and six months ended June 30, the relative percentage that those amounts represent to revenue, and the change in those amounts year-over-year.
Current wording
The following tables show our results for the three and nine months ended September 30, the relative percentage that those amounts represent to revenue, and the change in those amounts year-over-year.
Previous wording
The following tables show our key strategic financial metrics for the three and six months ended June 30, the relative percentage that those amounts represent to total revenue, and the change in those amounts year-over-year.
Current wording
The following tables show our key strategic financial metrics for the three and nine months ended September 30, the relative percentage that those amounts represent to total revenue, and the change in those amounts year-over-year.
Previous wording
(2)Represents costs incurred as a result of the Spin-Off. Professional fees to effect the spin-off of NCR Atleos including separation management, organizational design, and legal fees have been classified within discontinued operations during the three and six months ended June 30, 2023.
Current wording
(2)Represents costs incurred as a result of the Spin-Off. Professional fees to effect the spin-off of NCR Atleos including separation management, organizational design, and legal fees have been classified within discontinued operations during the three and nine months ended September 30, 2023.
Previous wording
Total revenue decreased 7% for the three months ended June 30, 2024 compared to the three months ended June 30, 2023. Product revenue for the three months ended June 30, 2024 decreased 18% compared to the three months ended June 30, 2023 due to a decline in SCO and POS hardware revenues and a decrease in software license revenues. Service revenue for the three months ended June 30, 2024 decreased 2% compared to the three months ended June 30, 2023 due to a decrease in payment processing services revenue due to the divestiture at the end of 2023.
Current wording
Total revenue decreased 12% for the three months ended September 30, 2024 compared to the three months ended September 30, 2023. Product revenue for the three months ended September 30, 2024 decreased 26% compared to the three months ended September 30, 2023 due to a decline in SCO and POS hardware revenues, as well as a decrease in software license revenues for one-time revenue recognized in 2023. Service revenue for the three months ended September 30, 2024 decreased 4% compared to the three months ended September 30, 2023 due to a decrease in payment processing services revenue due to the divestiture at the end of 2023 as well as one-time installation services in 2023.
Previous wording
Total revenue decreased 6% for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. Product revenue for the six months ended June 30, 2024 decreased 19% compared to the six months ended June 30, 2023 due to a decline in SCO and POS hardware revenues partially offset by an increase in software license revenue. Service revenue for the six months ended June 30, 2024 decreased 1% compared to the six months ended June 30, 2023 due to a decrease in payment processing services revenue due to the divestiture at the end of 2023.
Current wording
Total revenue decreased 10% for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. Product revenue for the nine months ended September 30, 2024 decreased 22% compared to the nine months ended September 30, 2023 due to a decline in SCO and POS hardware revenues, as well as a decrease in software license revenue for one-time revenue recognized in 2023. Service revenue for the nine months ended September 30, 2024 decreased 3% compared to the nine months ended September 30, 2023 due to a decrease in payment processing services revenue due to the divestiture at the end of 2023 as well as one-time installation services in 2023.
Previous wording
Gross margin as a percentage of revenue inthe six months ended June 30, 2024 was 22.3% compared to 26.3% inthe six months ended June 30, 2023. Gross margin for the six months ended June 30, 2024 included $34 million of transformation and restructuring costs, $7 million of stock-based compensation expense and $9 million of amortization of acquisition-related intangible assets, offset by $5 million of net recoveries related to the cyber ransomware incident. Gross margin for the six months ended June 30, 2023 included $1 million of transformation and restructuring costs, $5 million of stock-based compensation expense, $21 million of amortization of acquisition-related intangible assets and $5 million of cyber ransomware incident recovery costs. Excluding these items, gross margin as a percentage of revenue decreased from 2023 to 2024 related to a decline in gross margin related to payments processing services due to the divestiture at the end of 2023.
Current wording
Gross margin as a percentage of revenue inthe three months ended September 30, 2024 was 23.3% compared to 24.1% inthe three months ended September 30, 2023 due to a decline in gross margin related to payments processing services from the divestiture at the end of 2023. Additionally, gross margin for the three months ended September 30, 2024 included $1 million of strategic initiative costs, $2 million of stock-based compensation expense and $3 million of amortization of acquisition-related intangible assets. Gross margin for the three months ended September 30, 2023 included $2 million of stock-based compensation expense, $11 million of amortization of acquisition-related intangible assets and $3 million of cyber ransomware incident recovery costs.
Previous wording
Gross margin as a percentage of revenue inthe three months ended June 30, 2024 was 21.8% compared to 27.9% inthe three months ended June 30, 2023. Gross margin for the three months ended June 30, 2024 included $24 million of transformation and restructuring costs, $4 million of stock-based compensation expense and $5 million of amortization of acquisition-related intangible assets, offset by $5 million of net recoveries related to the cyber ransomware incident. Gross margin for the three months ended June 30, 2023 included $1 million of transformation and restructuring costs, $2 million of stock-based compensation expense, $11 million of amortization of acquisition-related intangible assets and $5 million of cyber ransomware incident recovery costs. Excluding these items, gross margin as a percentage of revenue decreased from 2023 to 2024 related to a decline in gross margin related to payments processing services due to the divestiture at the end of 2023.
Current wording
Gross margin as a percentage of revenue inthe nine months ended September 30, 2024 was 20.1% compared to 23.4% inthe nine months ended September 30, 2023 related to a decline in gross margin related to payments processing services due to the divestiture at the end of 2023 as well as due to the one-time revenue recognized in 2023. Additionally, gross margin for the nine months ended September 30, 2024 included $31 million of transformation and restructuring costs, $1 million of strategic initiative costs, $8 million of stock-based compensation expense, $10 million of amortization of acquisition-related intangible assets, offset by $5 million of net recoveries related to the cyber ransomware incident. Gross margin for the nine months ended September 30, 2023 included $6 million of stock-based compensation expense, $29 million of amortization of acquisition-related intangible assets and $8 million of cyber ransomware incident recovery costs.
Previous wording
Selling, general, and administrative expenses were $140 million in the three months ended June 30, 2024, compared to $167 million in the three months ended June 30, 2023. As a percentage of revenue, selling, general and administrative expenses were 16.0% in the three months ended June 30, 2024 compared to 17.7% in the same period of 2023. In the three months ended June 30, 2024, selling, general and administrative expenses included $15 million of transformation and restructuring costs, $13 million of strategic initiative costs, $6 million of stock-based compensation expense, $10 million of amortization of acquisition-related intangible assets, $3 million of separation-related costs, and $1 million of cyber ransomware incident recovery costs, offset by $1 million in net recoveries related to the ACH fraud disbursements matter. In the three months ended June 30, 2023, selling, general and administrative expenses included $8 million of transformation and restructuring costs, $3 million of fraudulent ACH disbursement costs, $21 million of stock-based compensation expense, $7 million of amortization of acquisition-related intangible assets, $1 million of acquisition-related costs, $6 million of separation-related costs and $6 million of cyber ransomware incident recovery costs. Excluding these items, selling, general and administrative expenses decreased as a percentage of revenue from 2023 to 2024 due to cost mitigation actions implemented in the three months ended June 30, 2024.
Current wording
Selling, general, and administrative expenses were $113 million in the three months ended September 30, 2024, compared to $142 million in the three months ended September 30, 2023. As a percentage of revenue, selling, general and administrative expenses were 15.9% in the three months ended September 30, 2024 compared to 17.6% in the same period of 2023. In the three months ended September 30, 2024, selling, general and administrative expenses included $7 million of transformation and restructuring costs, $11 million of strategic initiative costs, $5 million of stock-based compensation expense, $4 million of amortization of acquisition-related intangible assets, and $3 million of separation-related costs, offset by $2 million in net recoveries related to the ACH fraud disbursements matter and $2 million of net recoveries related to the cyber ransomware incident. In the three months ended September 30, 2023, selling, general and administrative expenses included $1 million of transformation and restructuring costs, $5 million of fraudulent ACH disbursement costs, $16 million of stock-based compensation expense, $10 million of separation-related costs and $9 million of cyber ransomware incident recovery costs. Excluding these items, selling, general and administrative expenses decreased as a percentage of revenue from 2023 to 2024 due to cost mitigation actions implemented in the three months ended September 30, 2024.
Previous wording
Selling, general, and administrative expenses were $271 million compared to $322 million in the six months ended June 30, 2024 and 2023, respectively. As a percentage of revenue, selling, general and administrative expenses were 15.6% and 17.4% in the six months ended June 30, 2024 and 2023, respectively. In the six months ended June 30, 2024, selling, general and administrative expenses included $29 million of transformation and restructuring costs, $17 million of strategic initiative costs, $13 million of stock-based compensation expense, $20 million of amortization of acquisition-related intangible assets $4 million of separation-related costs, and $1 million of cyber ransomware incident recovery costs, offset by $2 million in net recoveries related to the ACH fraud disbursements matter. In the six months ended June 30, 2023, selling, general and administrative expenses included $11 million of transformation and restructuring costs, $5 million of fraudulent ACH disbursement costs, $41 million of stock-based compensation expense, $14 million of amortization of acquisition-related intangible assets, $1 million of acquisition-related costs, $8 million of separation-related costs and $6 million of cyber ransomware incident recovery costs. Excluding these items, selling, general and administrative expenses decreased as a percentage of revenue from 2023 to 2024 due to cost mitigation actions implemented in the six months ended June 30, 2024.
Current wording
Selling, general, and administrative expenses were $340 million compared to $427 million in the nine months ended September 30, 2024 and 2023, respectively. As a percentage of revenue, selling, general and administrative expenses were 15.9% and 17.9% in the nine months ended September 30, 2024 and 2023, respectively. In the nine months ended September 30, 2024, selling, general and administrative expenses included $34 million of transformation and restructuring costs, $17 million of strategic initiative costs, $16 million of stock-based compensation expense, $12 million of amortization of acquisition-related intangible assets and $7 million of separation-related costs, offset by $4 million in net recoveries related to the ACH fraud disbursements matter and $1 million of net recoveries related to the cyber ransomware incident. In the nine months ended
Previous wording
Research and development expenses were $55 million in the three months ended June 30, 2024, compared to $42 million in the three months ended June 30, 2023. As a percentage of revenue, research and development costs were 6.3% and 4.4% in the three months ended June 30, 2024 and 2023, respectively. In the three months ended June 30, 2024, research and development costs included $2 million of transformation and restructuring costs and $4 million of stock-based compensation expense. In the three months ended June 30, 2023, research and development expenses included $2 million of stock-based compensation expense. Excluding these items, research and development expenses increased as a percentage of revenue from 2023 to 2024 as the Company continues investing in research and development activities.
Current wording
Research and development expenses were $38 million in the three months ended September 30, 2024, compared to $29 million in the three months ended September 30, 2023. As a percentage of revenue, research and development costs were 5.3% and 3.6% in the three months ended September 30, 2024 and 2023, respectively. In the three months ended September 30, 2024, research and development costs included $4 million of transformation and restructuring costs and $2 million of stock-based compensation expense. In the three months ended September 30, 2023, research and development expenses included $1 million of stock-based compensation expense. Excluding these items, research and development expenses increased as a percentage of revenue from 2023 to 2024 as the Company continues investing in research and development activities.
Previous wording
Research and development expenses were $115 million compared to $91 million in the six months ended June 30, 2024 and 2023, respectively. As a percentage of revenue, these costs were 6.6% and 4.9% in the six months ended June 30, 2024 and 2023, respectively. In the six months ended June 30, 2024, research and development expenses included included $4 million of transformation and restructuring costs, $7 million of stock-based compensation expense and $4 million of separation-related costs. In the six months ended June 30, 2023, research and development expenses included $4 million of stock-based compensation expense. After considering these items, research and development expenses increased as a percentage of revenue from 2023 to 2024 as the Company continues investing in research and development activities.
Current wording
Research and development expenses were $129 million compared to $98 million in the nine months ended September 30, 2024 and 2023, respectively. As a percentage of revenue, these costs were 6.0% and 4.1% in the nine months ended September 30, 2024 and 2023, respectively. In the nine months ended September 30, 2024, research and development expenses included $8 million of transformation and restructuring costs, $8 million of stock-based compensation expense and $3 million of separation-related costs. In the nine months ended September 30, 2023, research and development expenses included $5 million of stock-based compensation expense. After considering these items, research and development expenses increased as a percentage of revenue from 2023 to 2024 as the Company continues investing in research and development activities.
Previous wording
Interest expense was $41 million compared to $91 million for the three months ended June 30, 2024 and 2023, respectively. Interest expense is primarily related to our senior unsecured notes and borrowings under the Senior Secured Credit Facility. The decrease in interest expense was due to the decrease in total debt outstanding.
Current wording
Interest expense was $40 million compared to $83 million for the three months ended September 30, 2024 and 2023, respectively. Interest expense is primarily related to our senior unsecured notes and borrowings under the Senior Secured Credit Facility. The decrease in interest expense was due to the decrease in total debt outstanding.
Previous wording
Interest expense was $80 million compared to $174 million for the six months ended June 30, 2024 and 2023, respectively. Interest expense is primarily related to our senior unsecured notes and borrowings under the Senior Secured Credit Facility. The decrease in interest expense was due to the decrease in total debt outstanding.
Current wording
Interest expense was $120 million compared to $257 million for the nine months ended September 30, 2024 and 2023, respectively. Interest expense is primarily related to our senior unsecured notes and borrowings under the Senior Secured Credit Facility. The decrease in interest expense was due to the decrease in total debt outstanding.
Previous wording
Other income (expense), net was expense of $5 million and $8 million for the three months ended June 30, 2024 and 2023, respectively, and expense of $25 million and $12 million for the six months ended June 30, 2024 and 2023, respectively, with the components reflected in the following table:
Current wording
Other income (expense), net was expense of $15 million and $20 million for the three months ended September 30, 2024 and 2023, respectively, and expense of $40 million and $33 million for the nine months ended September 30, 2024 and 2023, respectively, with the components reflected in the following table:
Previous wording
Foreign currency fluctuations and foreign exchange contracts within Other income (expense), net, includes a net loss of $15 million due to the impact of changes in the Lebanese pound and the Egyptian pound during the six months ended June 30, 2024. As of March 31, 2024, the operations of Lebanon and Egypt have transferred to NCR Atleos; however, we retained certain assets and liabilities under the separation and disclosure agreement which were impacted by the changes in foreign currency fluctuations.
Current wording
Foreign currency fluctuations and foreign exchange contracts within Other income (expense), net, includes a net loss of $15 million due to the impact of changes in the Lebanese pound and the Egyptian pound during the nine months ended September 30, 2024. As of March 31, 2024, the operations of Lebanon and Egypt have transferred to NCR Atleos; however, we retained certain assets and liabilities under the separation and disclosure agreement which were impacted by the changes in foreign currency fluctuations. The impact of the out-of-period correction of $8 million in expense is included in foreign currency fluctuations and foreign exchange contracts for the three months ended September 30, 2024, with $2 million of expense for the nine months ended September 30, 2024.
Previous wording
Income tax provisions for interim (quarterly) periods are based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items. Income tax expense from continuing operations was $24 million for the three months ended June 30, 2024 compared to income tax expense of $7 million for the three months ended June 30, 2023. The change was primarily driven by an unfavorable mix of earnings between our US and non-US jurisdictions in the three months ended June 30, 2024 compared to the prior year. Additionally, the Company recognized higher discrete tax expenses in the three months ended June 30, 2024.
Current wording
Income tax provisions for interim (quarterly) periods are based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent or unusual items. Income tax benefit from continuing operations was $1 million for the three months ended September 30, 2024 compared to income tax expense of $187 million for the three months ended September 30, 2023. The change in tax expense was primarily due to $195 million discrete tax expenses related to the internal restructuring transactions in connection with the Spin-Off for the three months ended September 30, 2023.
Previous wording
The Company recognized income from discontinued operations, net of tax, of $147 million for the six months ended June 30, 2023, of which $148 million related to income from discontinued operations, net of tax, for NCR Atleos and $1 million of expense from discontinued operations, net of tax, related to the Company’s environmental remediation matters.
Current wording
The Company recognized income from discontinued operations, net of tax, of $353 million for the nine months ended September 30, 2023, of which $100 million related to income from discontinued operations, net of tax, for the Digital Banking Sale, $254 million related to income from discontinued operations, net of tax, for NCR Atleos and $1 million of expense from discontinued operations, net of tax, related to the Company’s environmental remediation matters.
Previous wording
The Company recognized income from discontinued operations, net of tax, of $67 million for the three months ended June 30, 2023, of which $68 million related to income from discontinued operations, net of tax, for NCR Atleos and $1 million of expense from discontinued operations, net of tax, related to the Company’s environmental remediation matters.
Current wording
The Company recognized income from discontinued operations, net of tax, of $138 million for the three months ended September 30, 2023, of which $32 million related to income from discontinued operations, net of tax, for the Digital Banking Sale and $68 million related to income from discontinued operations, net of tax, for NCR Atleos.
Previous wording
The Company manages and reports its businesses in the following segments: Retail, Restaurants (formerly reported as Hospitality), and Digital Banking. Segments are measured for profitability by the Company’s chief operating decision maker based on revenue and segment Adjusted EBITDA. Refer to the section above entitled “Non-GAAP Financial Measures and Use of Certain Terms” for our definition of Adjusted EBITDA and the reconciliation of net income (loss) from continuing operations attributable to NCR Voyix (GAAP) to Adjusted EBITDA (non-GAAP).
Current wording
The Company manages and reports its businesses in the following two segments: Retail and Restaurants (formerly reported as Hospitality). Segments are measured for profitability by the Company’s chief operating decision maker based on revenue and segment Adjusted EBITDA. Refer to the section above entitled “Non-GAAP Financial Measures and Use of Certain Terms” for our definition of Adjusted EBITDA and the reconciliation of net income (loss) from continuing operations attributable to NCR Voyix (GAAP) to Adjusted EBITDA (non-GAAP).
Previous wording
Corporate and Other includes income and expenses related to corporate functions that are not specifically attributable to any of our three individual reportable segments along with certain non-strategic businesses that are considered immaterial operating segment(s), certain countries which are expected to transfer to NCR Atleos during the remainder of 2024, and commercial agreements with NCR Atleos.
Current wording
Corporate and Other includes income and expenses related to corporate functions that are not specifically attributable to any of our two individual reportable segments along with certain non-strategic businesses that are considered immaterial operating segment(s), certain countries which are expected to transfer to NCR Atleos during the remainder of 2024, and commercial agreements with NCR Atleos.
Previous wording
The following tables show our segment revenue and Adjusted EBITDA for the three and six months ended June 30, the relative percentage that those amounts represent to segment revenue, and the change in those amounts year-over-year.
Current wording
The following tables show our segment revenue and Adjusted EBITDA for the three and nine months ended September 30, the relative percentage that those amounts represent to segment revenue, and the change in those amounts year-over-year.
Previous wording
Retail revenue decreased 7% for both the three and six months ended June 30, 2024, respectively, compared to the prior year periods. For the three months ended June 30, 2024, the decrease in revenue is due to a decrease in hardware revenue, as well as a decrease in one-time software and services revenue as compared to the prior year period. For the six months ended June 30, 2024, the decrease in revenue is due to a decrease in hardware revenue, as well as a decrease in one-time services revenue, primarily transaction services revenue, partially offset by an increase in software-related revenue.
Current wording
Retail revenue decreased 12% and 8% for the three and nine months ended September 30, 2024, respectively, compared to the prior year periods. For the three and nine months ended September 30, 2024, the decrease in revenue is due to a decrease in hardware revenue, as well as a decrease in one-time software and services revenue, primarily transaction services revenue, as compared to the prior year period.
Previous wording
Restaurants revenue decreased 10% and 7% for the three and six months ended June 30, 2024, respectively, compared to the prior year periods. For the three and six months ended June 30, 2024, the decrease in revenue is due to a decrease in hardware revenue, offset by an increase in software-related revenue, primarily payment processing services revenues.
Current wording
Restaurants revenue decreased 8% and 7% for the three and nine months ended September 30, 2024, respectively, compared to the prior year periods. For the three and nine months ended September 30, 2024, the decrease in revenue is due to a decrease in hardware revenue. For the nine months ended September 30, 2024, this decrease was offset by an increase in software-related revenue, primarily payment processing services revenues.
Previous wording
Retail Adjusted EBITDA decreased 24% and 13% for the three and six months ended June 30, 2024, respectively, compared to the prior year periods. The decrease in Adjusted EBITDA for both periods is due to one-time software and services revenue recognized in the prior year.
Current wording
Retail Adjusted EBITDA decreased 12% for both of the three and nine months ended September 30, 2024, respectively, compared to the prior year periods. The decrease in Adjusted EBITDA for both periods is due to one-time software and services revenue recognized in the prior year.
Previous wording
Restaurants Adjusted EBITDA increased 22% and 23% for the three and six months ended June 30, 2024, respectively, compared to the prior year periods. This increase is due to favorable software and services revenue mix, along with cost mitigation actions around cost of goods and service delivery costs taken during the year.
Current wording
Restaurants Adjusted EBITDA increased 27% and 24% for the three and nine months ended September 30, 2024, respectively, compared to the prior year periods. This increase is due to favorable software and services revenue mix, along with cost mitigation actions around cost of goods and service delivery costs taken during the year.
Previous wording
Our primary liquidity needs in the ordinary course of business are to: (i) fund normal operating expenses; (ii) meet the interest and principal requirements of our outstanding indebtedness, including finance leases; (iii) fund capital expenditures and operating lease payments; (iv) remediation payments related to environmental matters; (v) meet our expected pension and postemployment plan contributions; and (vi) payments related to transformation and restructuring initiatives. We believe these needs will be satisfied in both the short and long term based on our current cash position, cash flows generated by our operations, and existing financing arrangements.
Current wording
Our primary liquidity needs in the ordinary course of business are to fund: (i) normal operating expenses; (ii) interest and principal requirements of our outstanding indebtedness; (iii) capital expenditures and operating lease payments; (iv) remediation payments related to environmental matters; (v) expected pension and postemployment plan contributions; and (vi) payments related to transformation and restructuring initiatives. We believe these needs will be satisfied in both the short and long term based on our current cash position, cash flows generated by our operations, and existing financing arrangements.
Previous wording
As of June 30, 2024, our cash and cash equivalents totaled $204 million and our total debt was $2.6 billion. Our borrowing capacity under our senior secured credit facility was $342 million as of June 30, 2024. Our ability to generate positive cash flows from operations is dependent on general economic conditions, and the competitive environment in our industry, and is subject to business and other risk factors, including as detailed in our filings with the SEC. If we are unable to generate sufficient cash flows from operations, or otherwise comply with the terms of our credit facilities, we may be required to seek additional financing alternatives.
Current wording
As of September 30, 2024, our cash and cash equivalents totaled $795 million and our total debt was $1.1 billion. Our borrowing capacity under our senior secured credit facilities was $478 million as of September 30, 2024. Our ability to generate positive cash flows from operations is dependent on general economic conditions, and the competitive environment in our industry, and is subject to business and other risk factors, including as detailed in our filings with the SEC. If we are unable to generate sufficient cash flows from operations, or otherwise comply with the terms of our credit facilities, we may be required to seek additional financing alternatives.
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Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
The aggregation of the remaining 2024 out-of-period corrections are not expected to be material to the full year results of operations for 2024. The Company evaluated the impact of these adjustments and concluded they were not material toany previously issued interim or annual consolidated financial statements.
Current report — wording carried from elsewhere
September 30, 2023, selling, general and administrative expenses included $11 million of transformation and restructuring costs, $10 million of fraudulent ACH disbursement costs, $54 million of stock-based compensation expense, $2 million of amortization of acquisition-related intangible assets, $1 million of acquisition-related costs, $18 million of separation-related costs and $15 million of cyber ransomware incident recovery costs. Excluding these items, selling, general and administrative expenses decreased as a percentage of revenue from 2023 to 2024 due to cost mitigation actions implemented in the nine months ended September 30, 2024.