NCR Atleos Corp

Previous wording

•Results of operations. This section contains an analysis of our results of operations presented in the accompanying Condensed Consolidated Statements of Operations by comparing the results for the three months ended March 31, 2025 to the results for the three months ended March 31, 2024.

Current wording

•Results of operations. This section contains an analysis of our results of operations presented in the accompanying Condensed Consolidated Statements of Operations by comparing the results for the three and six months ended June 30, 2025 to the results for the three and six months ended June 30, 2024.

Previous wording

Beginning in February 2025, the United States introduced trade policy actions that have increased or proposed to increase import tariffs across a wide range of countries at various rates. Multiple countries countered with reciprocal tariffs and other actions in response. The U.S. government stated that it is willing to negotiate with different countries regarding the tariffs. Atleos currently imports finished goods and service parts to the United States from numerous countries that are impacted by the tariff rate changes. The Company is currently analyzing the impacts of the tariffs and actions that can be taken to moderate and/or minimize their effects; however, the trade policies and responses and their related impacts are rapidly evolving. The Company believes that the impact on the Company’s performance of these trade policy actions was not material in the first quarter of 2025.

Current wording

Beginning in February 2025, the United States introduced trade policy actions that have increased or proposed to increase import tariffs across a wide range of countries at various rates. Multiple countries countered with reciprocal tariffs and other actions in response. The U.S. government is negotiating with different countries regarding the tariffs. Atleos currently imports finished goods and service parts to the United States from numerous countries that are impacted by the tariff rate changes. The Company continues to actively monitor tariff developments, analyze their potential impact and review actions that can be taken to moderate and/or minimize their effects; however, the trade policies and responses and their related impacts are rapidly evolving, and it is likely that additional developments will occur in the coming months. The Company believes that the impact of these trade policy actions on the Company’s performance was not material in the second quarter of 2025.

Previous wording

The following tables show our key strategic financial metrics for the three months ended March 31, 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 six months ended June 30, the relative percentage that those amounts represent to total revenue, and the change in those amounts year-over-year.

Previous wording

(1) Refer to our definitions of Annualized recurring revenue, ATM as a Service units, LTM ARPU and Network Managed Units in the section entitled “Non-GAAP Financial Measures and Use of Certain Terms.”

Current wording

(1) Refer to our definitions of Annualized recurring revenue, recurring revenue, LTM ARPU and Network Managed Units in the section entitled “Non-GAAP Financial Measures and Use of Certain Terms.”

Previous wording

The following tables show our results for the three months ended March 31, 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 six months ended June 30, the relative percentage that those amounts represent to revenue, and the change in those amounts year-over-year.

Previous wording

(1)The percentage of revenue is calculated for each line item divided by total consolidated revenue, except for Adjusted EBITDA, which are divided by the related segment component of revenue.

Current wording

(1)The percentage of revenue is calculated for each line item divided by total consolidated revenue.

Previous wording

Gross margin as a percentage of revenue forthe three months ended March 31, 2025 increased to 24.0% compared to 21.0% forthe three months ended March 31, 2024, primarily due to the impact of cost mitigation actions implemented, and an increase in the favorable mix of higher margin software and services revenue, partially offset by increased labor costs. Adjusted gross margin as a percentage of revenue (non-GAAP) increased from 23.2% to 26.2%, due to the same factors that impacted GAAP gross margin as a percentage of revenue discussed above.

Current wording

Gross margin as a percentage of revenue forthe six months ended June 30, 2025 increased to 23.3% compared to 22.2% forthe six months ended June 30, 2024, primarily due to the impact of productivity improvements, cost mitigation actions, and an increase in the favorable mix of higher margin software and services revenue, partially offset by higher rental costs on our vault cash arrangements and incremental supply chain costs resulting from U.S. tariff policies. Adjusted gross margin as a percentage of revenue (non-GAAP) increased from 24.3% to 25.4% due to the same factors that impacted GAAP gross margin as a percentage of revenue discussed above.

Previous wording

Selling, general, and administrative expenses were $122 million in the three months ended March 31, 2025, compared to $132 million in the three months ended March 31, 2024. Cost optimization efforts have contributed to lower total selling, general and administrative spend compared to the prior year period, led by a decrease in labor and facility costs, allowing investment in technology infrastructure and other strategic initiatives. As a percentage of revenue, selling, general and administrative expenses decreased to 12.4% in the three months ended March 31, 2025 compared to 12.6% in the three months ended March 31, 2024, primarily driven by higher separation-related costs and stock-based compensation expense in the prior year period, partially offset by the impact of lower Voyix-related revenues relative to the nominal cost base associated with those revenue streams. Adjusted selling, general and administrative expenses as a percentage of revenue (non-GAAP) increased from 10.6% to 11.1% primarily due to the Voyix-related revenue impact described above. The core business selling, general and administrative spend was flat as a percentage of revenue compared to the prior year period.

Current wording

Selling, general, and administrative expenses decreased $16 million and 170 basis points to 10.5% of revenue in the three months ended June 30, 2025, compared to the three months ended June 30, 2024. The Company recognized a gain on the sale-leaseback of certain owned ATMs associated with ATM as a Service and Network contracts and benefited from a continued focus on cost optimization efforts, led by a decrease in facility costs, allowing investment in technology infrastructure and other strategic initiatives. The Company also recognized lower separation-related costs, transformation and restructuring costs and stock-based compensation expense in the current year period, partially offset by the impact of lower Voyix-related revenues relative to the nominal cost base associated with those revenue streams. Adjusted selling, general and administrative expenses as a percentage of revenue (non-GAAP) decreased from 10.4% to 9.1% primarily due to the sale-leaseback transaction, cost optimization, and the continued decrease of Voyix related revenue costs.

Previous wording

Research and development expenses were flat in the three months ended March 31, 2025, compared to the prior year. As a percentage of revenue, research and development expenses increased to 1.7% from 1.6% in the three months ended March 31, 2025 and 2024 due to an increase in people costs.

Current wording

Research and development expenses were $17 million in the three months ended June 30, 2025, compared to $11 million the three months ended June 30, 2024. As a percentage of revenue, research and development expenses increased to 1.5% from 1.0% in the three months ended June 30, 2025 and 2024, respectively, due to an increase in people costs.

Previous wording

Interest expense was $67 million and $79 million in the three months ended March 31, 2025 and 2024, respectively. Interest expense is primarily related to our senior secured notes and borrowings under the Senior Secured Credit Facility. The change in interest expense was primarily due to a decrease in variable interest rates following the debt restructuring activities in the fourth quarter of 2024 and the reduction in the outstanding balance of the Term Loan Facilities. Refer to Note 4, “Debt Obligations”, for further details regarding our outstanding debt.

Current wording

Interest expense decreased $10 million in the three months ended June 30, 2025 as compared to 2024, primarily due to a decrease in variable interest rates following the debt restructuring activities in the fourth quarter of 2024 and the reduction in the outstanding balance of the Term Loan Facilities. Refer to Note 4, “Debt Obligations”, for further details regarding our outstanding debt.

Previous wording

Other income (expense), net decreased by $6 million in the three months ended March 31, 2025 compared to the prior year period primarily driven by an increase in the Voyix environmental indemnification expense.

Current wording

Other income increased by $8 million in the three months ended June 30, 2025 compared to the prior year period primarily driven by the gain on divestiture of a non-core business.

Previous wording

Income tax expense was $10 million for the three months ended March 31, 2025 compared to income tax expense of $4 million for the three months ended March 31, 2024. The change in the three months ended March 31, 2025 compared to the prior year period was primarily driven by higher income before taxes applied to the estimated annual effective income tax rate. The Company did not recognize net material discrete tax expense or benefit in either period.

Current wording

Income tax expense was $19 million for the three months ended June 30, 2025 compared to income tax expense of $4 million for the three months ended June 30, 2024. The change in the three months ended June 30, 2025 compared to the prior year period was primarily driven by higher income before tax applied to the estimated annual effective income tax rate. In the three months ended June 30, 2025, the Company also recognized a $5 million expense related to a change in estimated deferred tax provision offset by a $3 million benefit related to the release of uncertain tax position reserves. In the three months ended June 30, 2024, the Company recognized a $9 million benefit related to a change to foreign tax inclusions.

Previous wording

Product revenue includes our hardware and software license revenue streams as well as Bitcoin-related revenues. Service revenue includes hardware and software maintenance revenue, implementation services revenue, cloud revenue, payments processing revenue, interchange and network revenue, as well as professional services revenue.

Current wording

Services revenues include hardware maintenance revenue, transaction services revenue and ATM as a Service revenue. Software revenues include cloud revenue, software license and maintenance revenues as well as professional services revenues. Transactional revenue includes payments processing revenue, interchange and network revenue and Bitcoin-related revenue. Hardware revenue primarily includes revenue from the sales of ATM hardware.

Previous wording

Revenue and Adjusted EBITDA by Segment

Current wording

Self-Service Banking Revenue and Adjusted EBITDA

Previous wording

T&T revenue decreased 16% for the three months ended March 31, 2025 compared to the prior year period due to a 12% decrease in hardware maintenance and installation revenue and 2% decrease in hardware revenue driven by a decline in customer projects. Foreign currency fluctuations also had an unfavorable impact of 2% on the revenue comparison.

Current wording

T&T revenue decreased 20% for the three months ended June 30, 2025 compared to the prior year period due to decreases in hardware maintenance and installation revenue, and hardware revenue driven by a decline in customer projects.

Previous wording

T&T Adjusted EBITDA decreased 20% for the three months ended March 31, 2025 compared to the prior year period due to the decrease in revenue described above.

Current wording

T&T Adjusted EBITDA decreased 6% for the six months ended June 30, 2025 compared to the prior year period due to the decrease in revenue described above.

Previous wording

Atleos’ management uses a non-GAAP measure called “Adjusted free cash flow-unrestricted” to assess the financial performance and liquidity of Atleos. We define Adjusted free cash flow-unrestricted as net cash provided by operating activities less capital expenditures, less additions to capitalized software, plus/minus the change in restricted cash settlement activity, plus/minus net reductions or reinvestment in the trade receivables facility due to fluctuations in the outstanding balance of receivables sold, plus/minus financing payments/receipts of owned ATM capital expenditures, plus pension contributions and settlements, and plus legal and environmental indemnification payments made to Voyix. Restricted cash settlement activity represents the net change in amounts collected on behalf of, but not yet remitted to, certain of the Company’s merchant customers or third-party service providers that are pledged for a particular use or restricted to support these obligations. These amounts can fluctuate significantly period to period based on the number of days for which settlement to the merchant has not yet occurred or day of the week on which a reporting period ends. We believe Adjusted free cash flow-unrestricted information is useful for investors because it indicates the amount of cash available after these adjustments for, among other things, investments in Atleos’ existing businesses, strategic acquisitions, and repayment of debt obligations. Adjusted free cash flow-unrestricted does not represent the residual cash flow available, since there may be other non-discretionary expenditures that are not deducted from the measure. Adjusted free cash flow-unrestricted does not have a uniform definition under GAAP, and therefore Atleos’ definition may differ from other companies’ definitions of this measure. This non-GAAP measure should not be considered a substitute for, or superior to, cash flows from operating activities under GAAP.

Current wording

Atleos’ management uses a non-GAAP measure called “Adjusted free cash flow-unrestricted” to assess the financial performance and liquidity of Atleos. We define Adjusted free cash flow-unrestricted as net cash provided by operating activities less capital expenditures, less additions to capitalized software, plus/minus the change in restricted cash settlement activity, plus/minus net reductions or reinvestment in the trade receivables facility due to fluctuations in the outstanding balance of receivables sold, plus proceeds from sale-leaseback transactions of owned ATMs used in ATM as a Service and certain Network arrangements, plus pension contributions and settlements, and plus legal and environmental indemnification payments made to Voyix. Restricted cash settlement activity represents the net change in amounts collected on behalf of, but not yet remitted to, certain of the Company’s merchant customers or third-party service providers that are pledged for a particular use or restricted to support these obligations. These amounts can fluctuate significantly period to period based on the number of days for which settlement to the merchant has not yet occurred or day of the week on which a reporting period ends. We believe Adjusted free cash flow-unrestricted information is useful for investors because it indicates the amount of cash available after these adjustments for, among other things, investments in Atleos’ existing businesses, strategic acquisitions, and repayment of debt obligations. Adjusted free cash flow-unrestricted does not represent the residual cash flow available, since there may be other non-discretionary expenditures that are not deducted from the measure. Adjusted free cash flow-unrestricted does not have a uniform definition under GAAP, and therefore Atleos’ definition may differ from other companies’ definitions of this measure. This non-GAAP measure should not be considered a substitute for, or superior to, cash flows from operating activities under GAAP.

Previous wording

Summarized cash flow information for the three months ended March 31, is as follows:

Current wording

Summarized cash flow information for the six months ended June 30, is as follows:

Previous wording

The Company’s operating activities generated net cash of $123 million and $148 million for the three months ended March 31, 2025 and 2024, respectively. The $25 million decrease was driven primarily by the timing of cash payments to and from customers, vendors, employees, and tax and regulatory authorities. These decreases were partially offset by improvements in the timing of cash receipts on advance billings and the timing of cash settlement payments to our merchant partners, which is impacted by the date the period closes.

Current wording

The Company’s operating activities generated net cash of $100 million and $157 million for the six months ended June 30, 2025 and 2024, respectively. The $57 million decrease was driven primarily by the timing of cash payments to and from customers, vendors, employees, and tax and regulatory authorities. Specifically, the U.S. Internal Revenue Service provided disaster relief to all State of Georgia taxpayers due to the impact of Hurricane Helene. Therefore, we did not make an estimated payment for U.S. federal income tax purposes in the fourth quarter of 2024. That tax payment was due in the second quarter of 2025 and negatively impacted cash flows from operating activities in the second quarter of 2025 by $14 million. These decreases were partially offset by improvements in the timing of cash receipts on advance billings and the timing of cash settlement payments to our merchant partners, which is impacted by the date the period closes.

Previous wording

Long Term Borrowings The Senior Secured Credit Facility consists of term loan facilities in an aggregate principal amount of $1,580 million, of which $1,373 million was outstanding as of March 31, 2025. Additionally, the Senior Secured Credit Facility provides for a five-year Revolving Credit Facility with an aggregate principal amount of $600 million, of which $240 million was outstanding as of March 31, 2025. The Revolving Credit Facility also contains a sub-facility to be used for letters of credit, and as of March 31, 2025, there were $24 million letters of credit outstanding.

Current wording

Long Term Borrowings The Senior Secured Credit Facility consists of term loan facilities in an aggregate principal amount of $1,580 million, of which $1,354 million was outstanding as of June 30, 2025. Additionally, the Senior Secured Credit Facility provides for a five-year Revolving Credit Facility with an aggregate principal amount of $600 million, of which $240 million was outstanding as of June 30, 2025. The Revolving Credit Facility also contains a sub-facility to be used for letters of credit, and as of June 30, 2025, there were $26 million letters of credit outstanding.

Previous wording

Employee Benefit Plans In 2025, we expect to make contributions of $2 million to our international pension plans, $23 million to our U.S. pension plan, $23 million to our postemployment plan, and $1 million to our postretirement plans. For additional information, refer to Note 8, “Employee Benefit Plans”, of the Notes to Condensed Consolidated Financial Statements.

Current wording

Employee Benefit Plans In 2025, we expect to make contributions of $7 million to our international pension plans, $23 million to our U.S. pension plan, $23 million to our postemployment plan, and $1 million to our postretirement plans. For additional information, refer to Note 8, “Employee Benefit Plans”, of the Notes to Condensed Consolidated Financial Statements.

Previous wording

Cash and Cash Equivalents Held by Foreign Subsidiaries Cash and cash equivalents held by the Company’s foreign subsidiaries at March 31, 2025 and December 31, 2024 were $264 million and $329 million, respectively. Under current tax laws and regulations, if cash and cash equivalents and short-term investments held outside the U.S. are distributed to the U.S. in the form of dividends or otherwise, we may be subject to additional U.S. income taxes and foreign withholding taxes, which could be significant.

Current wording

Cash and Cash Equivalents Held by Foreign Subsidiaries Cash and cash equivalents held by the Company’s foreign subsidiaries at June 30, 2025 and December 31, 2024 were $252 million and $329 million, respectively. Under current tax laws and regulations, if cash and cash equivalents and short-term investments held outside the U.S. are distributed to the U.S. in the form of dividends or otherwise, we may be subject to additional U.S. income taxes and foreign withholding taxes, which could be significant.

Previous wording

Summary As of March 31, 2025, our cash and cash equivalents totaled $352 million and our total debt was $2,968 million. Our borrowing capacity under our senior secured credit facility was $336 million at March 31, 2025.

Current wording

Summary As of June 30, 2025, our cash and cash equivalents totaled $357 million and our total debt was $2,948 million. Our borrowing capacity under our senior secured credit facility was $334 million at June 30, 2025.

Previous wording

See discussion in Note 1, “Basis of Presentation and Summary of Significant Accounting Policies”, of the Notes to Condensed Consolidated Financial Statements for recently issued accounting pronouncements.

Current wording

See discussion in Note 1, “Basis of Presentation and Significant Accounting Policies”, of the Notes to Condensed Consolidated Financial Statements for recently issued accounting pronouncements.

Previous wording

•Finance and Accounting: our level of indebtedness; the terms governing our indebtedness; incurrence of additional debt or similar liabilities or obligations; access or renewal of financing sources; our cash flow sufficiency to service our indebtedness; interest rate risks; the terms governing our trade receivables facility; any lowering or withdrawal of the ratings assigned to our debt securities by rating agencies; our pension liabilities; and the write down of the value of certain significant assets;

Current wording

•Finance and Accounting: our level of indebtedness; the terms governing our indebtedness; incurrence of additional debt or similar liabilities or obligations; access or renewal of financing sources; our cash flow sufficiency to service our indebtedness or fund our share repurchase program; interest rate risks; the terms governing our trade receivables facility; any lowering or withdrawal of the ratings assigned to our debt securities by rating agencies; our pension liabilities; and the write down of the value of certain significant assets;

Previous wording

•Our Common Stock: Atleos’ stock price may fluctuate significantly; substantial sales in the public market may cause the price of Atleos’ common stock to decline; dilution of ownership percentages; certain provisions in Atleos’ governing documents may prevent or delay an acquisition; the exclusive forum provision in Atleos’ bylaws could limit a stockholder’s ability to bring a claim against Atleos; and actions or proposals from stockholders that do not align with our business strategies or the interests of our other stockholders.

Current wording

•Our Common Stock: Atleos’ stock price may fluctuate significantly; substantial sales in the public market may cause the price of Atleos’ common stock to decline; dilution of ownership percentages; certain provisions in Atleos’ governing documents may prevent or delay an acquisition; changes in, or the elimination of, our share repurchase program could affect our stock price and increase its volatility; the exclusive forum provision in Atleos’ bylaws could limit a stockholder’s ability to bring a claim against Atleos; and actions or proposals from stockholders that do not align with our business strategies or the interests of our other stockholders.