NCR Atleos Corporation Reports Strong Third Quarter 2024 Results
NCR Atleos (NYSE: NATL) reported strong Q3 2024 results with revenue of $1.08 billion, including record service revenue of $843 million. The company achieved GAAP net income of $24 million and Adjusted EBITDA of $207 million. Earnings per share reached $0.32 GAAP and $0.89 non-GAAP. Operating cash flow was $107 million in Q3, with adjusted free cash flow of $38 million. The company reaffirmed its 2024 guidance and moved non-GAAP EPS guidance to the high end of the range. In October 2024, Atleos completed debt refinancing, reducing the weighted average spread to SOFR by approximately 100 basis points on $1.7 billion of variable rate debt.
NCR Atleos (NYSE: NATL) ha riportato risultati solidi per il terzo trimestre del 2024, con un fatturato di 1,08 miliardi di dollari, inclusi ricavi da servizi record pari a 843 milioni di dollari. L'azienda ha raggiunto un reddito netto GAAP di 24 milioni di dollari e un EBITDA rettificato di 207 milioni di dollari. L'utile per azione è stato di 0,32 dollari GAAP e di 0,89 dollari non-GAAP. Il flusso di cassa operativo è stato di 107 milioni di dollari nel terzo trimestre, con un flusso di cassa libero rettificato di 38 milioni di dollari. L'azienda ha ribadito le previsioni per il 2024 e ha spostato le previsioni per l'EPS non-GAAP verso l'estremità alta dell'intervallo. Nell'ottobre 2024, Atleos ha completato il rifinanziamento del debito, riducendo il differenziale medio ponderato rispetto al SOFR di circa 100 punti base su 1,7 miliardi di dollari di debito a tasso variabile.
NCR Atleos (NYSE: NATL) reportó resultados sólidos para el tercer trimestre de 2024, con ingresos de 1.08 mil millones de dólares, incluidos ingresos por servicios récord de 843 millones de dólares. La compañía logró un ingreso neto GAAP de 24 millones de dólares y un EBITDA ajustado de 207 millones de dólares. Las ganancias por acción alcanzaron 0.32 dólares GAAP y 0.89 dólares no-GAAP. El flujo de efectivo operativo fue de 107 millones de dólares en el tercer trimestre, con un flujo de efectivo libre ajustado de 38 millones de dólares. La empresa reafirmó su guía para 2024 y movió la guía de EPS no-GAAP hacia el extremo alto del rango. En octubre de 2024, Atleos completó el refinanciamiento de la deuda, reduciendo el diferencial medio ponderado sobre el SOFR en aproximadamente 100 puntos básicos sobre 1.7 mil millones de dólares de deuda a tasa variable.
NCR Atleos (NYSE: NATL)는 2024년 3분기에 10억 8천만 달러의 매출로 강력한 실적을 발표했으며, 이 중 서비스 매출은 8억 4천3백만 달러로 기록을 세웠습니다. 회사는 2천4백만 달러의 GAAP 순이익과 2억 7천만 달러의 조정 EBITDA를 달성했습니다. 주당 순이익은 GAAP 기준으로 0.32달러, 비 GAAP 기준으로 0.89달러에 도달했습니다. 운영 현금 흐름은 3분기에 1억 7천만 달러였고, 조정된 자유현금 흐름은 3,800만 달러였습니다. 회사는 2024년 가이던스를 재확인하고 비 GAAP EPS 가이던스를 범위의 상한으로 이동시켰습니다. 2024년 10월, Atleos는 부채 재조정을 완료하여 17억 달러의 변동 이자율 부채의 SOFR 대비 가중 평균 스프레드를 약 100bp 낮추었습니다.
NCR Atleos (NYSE: NATL) a annoncé des résultats solides pour le troisième trimestre 2024, avec un chiffre d'affaires de 1,08 milliard de dollars, dont des revenus de services record de 843 millions de dollars. L'entreprise a réalisé un revenu net GAAP de 24 millions de dollars et un EBITDA ajusté de 207 millions de dollars. Le bénéfice par action a atteint 0,32 dollar en GAAP et 0,89 dollar en non-GAAP. Le flux de trésorerie opérationnel s'élevait à 107 millions de dollars au troisième trimestre, avec un flux de trésorerie libre ajusté de 38 millions de dollars. L'entreprise a confirmé ses prévisions pour 2024 et a déplacé les prévisions de BPA non-GAAP vers le haut de l'intervalle. En octobre 2024, Atleos a complété le refinancement de sa dette, réduisant l'écart moyen pondéré par rapport au SOFR d'environ 100 points de base sur 1,7 milliard de dollars de dette à taux variable.
NCR Atleos (NYSE: NATL) hat starke Ergebnisse für das dritte Quartal 2024 berichtet, mit einem Umsatz von 1,08 Milliarden Dollar, einschließlich rekordverdächtiger Dienstleistungseinnahmen von 843 Millionen Dollar. Das Unternehmen erzielte einen GAAP-Nettogewinn von 24 Millionen Dollar und ein bereinigtes EBITDA von 207 Millionen Dollar. Der Gewinn pro Aktie betrug 0,32 Dollar GAAP und 0,89 Dollar non-GAAP. Der operative Cashflow lag im 3. Quartal bei 107 Millionen Dollar, mit einem bereinigten freien Cashflow von 38 Millionen Dollar. Das Unternehmen bestätigte seine Prognosen für 2024 und verschob die EBITDA-Leitlinien zur oberen Grenze des Bereichs. Im Oktober 2024 hat Atleos die Schuldenrefinanzierung abgeschlossen und den gewichteten Durchschnittsaufschlag auf den SOFR um etwa 100 Basispunkte auf 1,7 Milliarden Dollar variabel verzinslicher Schulden gesenkt.
- Record service revenue of $843 million
- Revenue growth to $1.08 billion, up 1% year-over-year
- GAAP net income improved to $24 million from -$58 million in prior year
- Operating cash flow of $107 million in Q3
- Successful debt refinancing reducing interest spread by 100 basis points
- Gross profit margin declined to 24.3% from 25.1% year-over-year
- Adjusted EBITDA decreased to $207 million from $210 million year-over-year
- Network segment revenue declined 1% year-over-year
- T&T segment revenue decreased 6% year-over-year
Insights
Strong Q3 results showcase operational resilience with revenue reaching
The recent debt refinancing in October 2024 is particularly significant, reducing the weighted average spread to SOFR by
The reaffirmed 2024 guidance, with non-GAAP EPS moved to the high end of the range at approximately
The strategic positioning in the ATM market shows promising momentum. With a network of 600,000 ATMs, Atleos is capitalizing on key industry trends: bank branch transformation, increased ATM outsourcing and consumer adoption of advanced banking technologies. The shift toward recycling ATMs and tap technology indicates a modernization cycle that could drive hardware demand in 2025.
The shared financial utility model gaining traction among banks represents a significant market opportunity. This aligns with broader financial industry trends toward cost optimization and enhanced customer experience through automated solutions. The company's ability to generate more revenue per ATM through new transaction types and expanded services demonstrates effective market penetration.
- Strong third quarter results exceeded revenue and profit guidance
-
Revenue of
, Service revenue reached a new high of$1.08 billion $843 million -
GAAP net income of
; Adjusted EBITDA of$24 million $207 million -
GAAP fully diluted earnings per share of
; Non-GAAP fully diluted earnings per share of$0.32 $0.89 - Reaffirmed 2024 Guidance, Non-GAAP EPS guidance moved to high end of range
-
Operating cash flow of
in Q3 and$107 million year-to-date$264 million -
Adjusted free cash flow(1) of
in Q3 and$38 million year-to-date$123 million
“NCR Atleos delivered another excellent quarter. We made significant strategic progress and expanded revenue per machine through rapidly growing new transaction types, adding new customers, and capturing more service revenue from our financial institution clients. We operated exceptionally well and improved customer performance metrics, while simultaneously working to eliminate inefficiencies associated with our separation transaction. And, importantly, we reported financial results that were better than anticipated and that allow us to again affirm our full year 2024 guidance,” said Tim Oliver, President and Chief Executive Officer. “I am grateful to the 20,000 Atleos employees around the world that enabled this performance,” Mr. Oliver continued.
“As we plan for 2025, our outlook is positive. We expect to see higher demand for hardware driven by both a typical replacement calendar and a desire for more capable ATMs with recycling, tap and other technologies. The outsourcing of non-core, ATM-centric services by our financial institution clients is accelerating as they transform their branch infrastructure to both manage costs and improve their customer’s experience. The model of a shared financial utility of networked ATM’s is getting increasing attention from banks and consumers are conducting more of their regular banking at our blue-chip retail locations. Our strategy to generate more revenue from each of the 600,000 ATMs that Atleos serves is working,” Mr. Oliver concluded.
Third Quarter 2024 Operating Results
The core business segments continue to deliver strong results.
-
Third quarter revenue was
, including$1.08 billion of recurring revenue, compared to$790 million and$1.07 billion , respectively, in the prior year period.$765 million -
Third quarter gross profit was
with a gross profit rate of$262 million 24.3% on a GAAP basis, compared to and$268 million 25.1% , respectively, in the prior year period. Third quarter adjusted gross profit (non-GAAP) was with an adjusted gross profit rate of$286 million 26.5% , compared to and$288 million 27.0% , respectively, in the prior year period. -
Third quarter income from operations was
on a GAAP basis, compared to$119 million in the prior year period. Third quarter adjusted income from operations (non-GAAP) was$91 million compared to$164 million in the prior year period.$174 million -
Third quarter net income attributable to Atleos was
on a GAAP basis, compared to net loss attributable to Atleos of$24 million in the prior year period.$58 million -
Third quarter Adjusted EBITDA was
compared to$207 million in the prior year period.$210 million
(1) Adjusted free cash flow-unrestricted, as defined in the section entitled “Non-GAAP Financial Measures.” |
|
NCR ATLEOS CORPORATION REVENUE AND ADJUSTED EBITDA SUMMARY (Unaudited) (in millions) |
|
|
For the Periods Ended September 30 |
|||||||||
|
Three Months |
|||||||||
|
|
2024 |
|
|
|
2023 |
|
|
% Change |
|
Revenue by segment |
|
|
|
|
|
|||||
Self-Service Banking |
$ |
677 |
|
|
$ |
656 |
|
|
3 |
% |
Network |
|
332 |
|
|
|
335 |
|
|
(1 |
)% |
T&T |
|
46 |
|
|
|
49 |
|
|
(6 |
)% |
Total segment revenue |
|
1,055 |
|
|
|
1,040 |
|
|
1 |
% |
Other (1) |
|
23 |
|
|
|
27 |
|
|
(15 |
)% |
Consolidated revenue |
$ |
1,078 |
|
|
$ |
1,067 |
|
|
1 |
% |
|
|
|
|
|
|
|||||
Adjusted EBITDA by segment |
|
|
|
|
|
|||||
Self-Service Banking |
$ |
167 |
|
|
$ |
172 |
|
|
(3 |
)% |
Self-Service Banking Adjusted EBITDA margin % |
|
24.7 |
% |
|
|
26.2 |
% |
|
|
|
Network |
|
103 |
|
|
|
113 |
|
|
(9 |
)% |
Network Adjusted EBITDA margin % |
|
31.0 |
% |
|
|
33.7 |
% |
|
|
|
T&T |
|
9 |
|
|
|
10 |
|
|
(10 |
)% |
T&T Adjusted EBITDA margin % |
|
19.6 |
% |
|
|
20.4 |
% |
|
|
|
Other (1) |
|
3 |
|
|
|
7 |
|
|
(57 |
)% |
Corporate (2) |
|
(75 |
) |
|
|
(92 |
) |
|
(18 |
)% |
Total Adjusted EBITDA |
$ |
207 |
|
|
$ |
210 |
|
|
(1 |
)% |
Total Adjusted EBITDA margin % |
|
19.2 |
% |
|
|
19.7 |
% |
|
|
(1) |
Other represents certain other immaterial business operations, including commerce-related operations in countries that Voyix exited that are aligned to Atleos, that do not represent a reportable segment. For periods after the separation from Voyix, Other also includes revenues from commercial agreements with Voyix. |
(2) |
Corporate includes income and expenses related to corporate functions and, for periods prior to the separation from Voyix, certain allocations from Voyix that were not specifically attributable to an individual reportable segment. |
October 2024 Debt Refinancing
On October 17, 2024, the Company completed several transactions for its variable rate credit facilities enabled by improvements in its credit profile over the past year and market conditions. The effect of the transactions reduced the weighted average spread to SOFR by approximately 100 basis points on the Company’s outstanding variable rate debt of approximately
The transactions were effectuated via a First Amendment dated as of October 17, 2024 (the “First Amendment”) to the Credit Agreement dated as of September 27, 2023 (the “Credit Agreement”). The First Amendment provided for (a) an increase in the aggregate principal amount of the Company’s revolving credit commitments equal to
The Company expects the resulting reduction in spread to SOFR in conjunction with market expectations for lower variable rates over the next year may result in meaningful incremental earnings and free cash flow in 2025.
Notes to Investors
On October 16, 2023, NCR Atleos Corporation (“Atleos”, the “Company”, “we” or “us”) became a standalone publicly traded company, and its financial statements are now presented on a consolidated basis. Prior to the separation from NCR Voyix Corporation (“NCR” or “Voyix”), the Company’s historical combined financial statements were prepared on a standalone carve-out basis and were derived from Voyix’s consolidated financial statements and accounting records. Therefore, financial results for the three and nine months ended September 30, 2024 and 2023 may not be meaningfully comparable.
In this release, we use certain non-GAAP measures. These non-GAAP measures include “Adjusted EBITDA,” and others with the words “non-GAAP” or “adjusted” in their titles. These non-GAAP measures are listed, described and reconciled to their most directly comparable GAAP measures under the heading “Non-GAAP Financial Measures” later in this release.
With respect to our Adjusted EBITDA, adjusted free cash flow-unrestricted and non-GAAP diluted earnings per share guidance, we do not provide a reconciliation of the respective GAAP measures because we are not able to predict with reasonable certainty the reconciling items that may affect the GAAP net income, GAAP cash flow from operating activities and GAAP diluted earnings per share without unreasonable effort. The reconciling items are primarily the future impact of special tax items, capital structure transactions, restructuring, pension mark-to-market transactions, acquisitions or divestitures, or other events. These reconciling items are uncertain, depend on various factors and could significantly impact, either individually or in the aggregate, the GAAP measures. Refer to the heading “Non-GAAP Financial Measures” for additional information regarding our use of non-GAAP financial measures.
Full Year 2024 Guidance
$ in millions, except per share amounts |
Updated FY 2024 |
|
Previous FY 2024 Guidance |
||
Consolidated |
Guidance |
|
Low |
Mid-Point |
High |
Revenue |
Approximately |
|
|
|
|
Adjusted EBITDA |
Approximately |
|
|
|
|
Non-GAAP Diluted EPS (1) |
Approximately |
|
|
|
|
Adjusted free cash flow-unrestricted |
Approximately |
|
|
|
|
(1) Incorporates consensus average SOFR rates for the year in interest expense. |
2024 Third Quarter Earnings Conference Call
A conference call is scheduled for November 13, 2024 at 8:30 a.m. Eastern Time to discuss the third quarter 2024 results. Access to the conference call and accompanying slides, as well as a replay of the call, are available on Atleos’ web site at http://investor.ncratleos.com. Additionally, the live call can be accessed by dialing 800-753-0725 (
More information on Atleos’ third quarter earnings, including additional financial information and analysis, is available on Atleos’ Investor Relations website at https://investor.ncratleos.com/.
About Atleos
Atleos (NYSE: NATL) is a leader in expanding self-service financial access, with industry-leading ATM expertise and experience, unrivalled operational scale including the largest independently-owned ATM network, always-on global services and constant innovation. Atleos improves operational efficiency for financial institutions, drives footfall for retailers and enables digital-first financial self-service experiences for consumers. Atleos is headquartered in
Web site: https://www.ncratleos.com
X (Twitter): https://twitter.com/ncratleos
Facebook: https://www.facebook.com/Atleos.NCR/
LinkedIn: https://www.linkedin.com/company/ncratleos
YouTube: https://www.youtube.com/@ncratleos
Instagram: https://www.instagram.com/ncratleos/
Cautionary Statements
This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 (the “Act”). Forward-looking statements use words such as “expect,” “anticipate,” “outlook,” “intend,” “plan,” “confident,” “believe,” “will,” “should,” “would,” “potential,” “positioning,” “proposed,” “planned,” “objective,” “likely,” “could,” “may,” and words of similar meaning, as well as other words or expressions referencing future events, conditions or circumstances. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Act. Statements that describe or relate to Atleos’ plans, goals, intentions, strategies, or financial outlook, and statements that do not relate to historical or current fact, are examples of forward-looking statements. Examples of forward-looking statements in this release include, without limitation, statements regarding: our expectations of demand for our solutions and execution and the impact thereof on our financial results and our intention to focus our resources on meeting our ATM customers’ needs and extending our leadership position in digital-to-physical transactions following the spin-off. Forward-looking statements are based on our current beliefs, expectations and assumptions, which may not prove to be accurate, and involve a number of known and unknown risks and uncertainties, many of which are out of Atleos’ control. Forward-looking statements are not guarantees of future performance, and there are a number of important factors that could cause actual outcomes and results to differ materially from the results contemplated by such forward-looking statements, including those factors relating to:
- Strategy and Technology: transforming our business model, development and introduction of new solutions; competition in the technology industry, integration of acquisitions and management of alliance activities; our multinational operations;
- Business Operations: domestic and global economic and credit conditions; risks and uncertainties from the payments-related business and industry; disruptions in our data center hosting and public cloud facilities; retention and attraction of key employees; defects, errors, installation difficulties or development delays; failure of third-party suppliers; a major natural disaster or catastrophic event; including the impact of pandemics and geopolitical and macroeconomic challenges; environmental exposures from historical and ongoing manufacturing activities and climate change;
- Data Privacy & Security: impact of data protection, cybersecurity and data privacy including any related issues;
- 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; the impact of certain changes in control relating to acceleration of our indebtedness; our obligations under other financing arrangements; or required repurchase of any notes we may issue; any lowering or withdrawal of the ratings assigned to our future debt securities by rating agencies; our pension liabilities and write down of the value of certain significant assets;
- Law and Compliance: allegations or claims by third parties that our products or services infringe on intellectual property rights of others, including claims against our customers and claims by our customers to defend and indemnify them with respect to such claims; protection of our intellectual property; changes to our tax rates and additional income tax liabilities; uncertainties regarding regulations; lawsuits and other related matters; changes to cryptocurrency regulations;
- Governance: actions or proposals from stockholders that do not align with our business strategies or the interests of our other stockholders; and
-
Separation: the failure of Atleos to achieve some or all of the expected strategic benefits, synergies or opportunities expected from the spin-off; that Atleos may incur material costs and expenses as a result of the spin-off; that Atleos has limited history operating as an independent, publicly traded company, and Atleos’ historical and pro forma financial information is not necessarily representative of the results that it would have achieved as a separate, publicly traded company and therefore may not be a reliable indicator of its future results; Atleos’ obligation to indemnify NCR pursuant to the agreements entered into in connection with the spin-off (including with respect to material taxes) and the risk NCR may not fulfill any obligations to indemnify Atleos under such agreements; that under applicable tax law, Atleos may be liable for certain tax liabilities of NCR following the spin-off if NCR were to fail to pay such taxes; that agreements binding on Atleos restrict it from taking certain actions after the distribution that could adversely impact the intended
U.S. federal income tax treatment of the distribution and related transactions; potential liabilities arising out of state and federal fraudulent conveyance laws; the fact that Atleos may receive worse commercial terms from third-parties for services it presently receives from NCR; that after the spin-off, certain of Atleos’ executive officers and directors may have actual or potential conflicts of interest because of their previous positions at NCR; potential difficulties in maintaining relationships with key personnel; that Atleos will not be able to rely on the earnings, assets or cash flow of NCR and NCR will not provide funds to finance Atleos’ working capital or other cash requirements.
Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those set forth in the forward-looking statements. Additional information concerning these and other factors can be found in the Company’s filings with the
Non-GAAP Financial Measures
Non-GAAP Financial Measures. While Atleos reports its results in accordance with Generally Accepted Accounting Principles in
Adjusted Gross Profit (Non-GAAP), Adjusted Gross Profit Rate (Non-GAAP), Adjusted Income from Operations (Non-GAAP), Non-GAAP Diluted Earnings per Share. Atleos’ Adjusted Gross Profit (non-GAAP), Adjusted Gross Profit Rate (non-GAAP), Adjusted Income from Operations (non-GAAP), and Non-GAAP Diluted Earnings per Share are determined by excluding, as applicable, acquisition-related costs; pension mark-to-market adjustments, pension settlements, pension curtailments and pension special termination benefits; separation-related costs; amortization of acquisition-related intangibles; stock-based compensation expense; transformation and restructuring charges (which includes integration, severance and other exit and disposal costs); Voyix legal and environmental indemnification expense, and other special (expense) income items from Atleos’ GAAP gross profit, expenses, income from operations, interest and other income (expense), income tax expense, effective income tax rate, net income (loss) attributable to Atleos, and earnings per share, respectively. Due to the nature of these special items, Atleos’ management uses these non-GAAP measures to evaluate year-over-year operating performance. Atleos believes these measures are useful for investors because they provide a more complete understanding of Atleos’ underlying operational performance, as well as consistency and comparability with Atleos’ past reports of financial results.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA). Atleos’ management uses the non-GAAP measure Adjusted EBITDA because it provides useful information to investors as an indicator of performance of the Company’s ongoing business operations. Atleos determines Adjusted EBITDA based on GAAP Net income (loss) attributable to Atleos plus interest expense, net; plus income tax expense (benefit); plus depreciation and amortization; plus acquisition-related costs; plus pension mark-to-market adjustments, pension settlements, pension curtailments and pension special termination benefits; plus separation-related costs; plus transformation and restructuring charges (which includes integration, severance and other exit and disposal costs); plus stock-based compensation expense; plus Voyix legal and environmental indemnification expense; plus other special (expense) income items. These adjustments are considered non-operational or non-recurring in nature and are excluded from the Adjusted EBITDA metric utilized by our chief operating decision maker (“CODM”) in evaluating segment performance and are separately delineated to reconcile back to total reported income attributable to Atleos. This format is useful to investors because it allows analysis and comparability of operating trends. It also includes the same information that is used by Atleos management to make decisions regarding our segments and to assess our financial performance. Refer to the table below for the reconciliations of Net income (loss) attributable to Atleos (GAAP) to Adjusted EBITDA (non-GAAP).
Adjusted EBITDA margin is calculated based on Adjusted EBITDA as a percentage of total revenue. Adjusted EBITDA margin by segment is calculated based on segment Adjusted EBITDA divided by the related component of revenue. This measure is used by Atleos’ management for the reasons referenced above.
Adjusted free cash flow-unrestricted. Atleos defines Adjusted free cash flow-unrestricted as net cash provided by operating activities less capital expenditures for property, plant and equipment, 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 established in the fourth quarter of 2023 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.
Atleos’ definitions and calculations of these non-GAAP measures may differ from similarly-titled measures reported by other companies and cannot, therefore, be compared with similarly-titled measures of other companies. These non-GAAP measures should not be considered as substitutes for, or superior to, results determined in accordance with GAAP.
Use of Certain Terms
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 revenue, interchange and network revenue, Bitcoin-related revenue, and certain professional services arrangements, as well as term-based software license arrangements that include customer termination rights.
|
NCR ATLEOS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) |
|
|
For the Periods Ended September 30 |
||||||||||||||
|
Three Months |
|
Nine Months |
||||||||||||
($ in millions, except per share amounts) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Revenue |
|
|
|
|
|
|
|
||||||||
Product revenue |
$ |
235 |
|
|
$ |
252 |
|
|
$ |
722 |
|
|
$ |
748 |
|
Service revenue |
|
843 |
|
|
|
815 |
|
|
|
2,487 |
|
|
|
2,345 |
|
Total revenue |
|
1,078 |
|
|
|
1,067 |
|
|
|
3,209 |
|
|
|
3,093 |
|
Cost of products |
|
201 |
|
|
|
209 |
|
|
|
623 |
|
|
|
619 |
|
Cost of services |
|
615 |
|
|
|
590 |
|
|
|
1,850 |
|
|
|
1,739 |
|
Total gross profit |
|
262 |
|
|
|
268 |
|
|
|
736 |
|
|
|
735 |
|
% of Revenue |
|
24.3 |
% |
|
|
25.1 |
% |
|
|
22.9 |
% |
|
|
23.8 |
% |
Selling, general and administrative expenses |
|
127 |
|
|
|
160 |
|
|
|
391 |
|
|
|
445 |
|
Research and development expenses |
|
16 |
|
|
|
17 |
|
|
|
47 |
|
|
|
54 |
|
Income from operations |
|
119 |
|
|
|
91 |
|
|
|
298 |
|
|
|
236 |
|
% of Revenue |
|
11.0 |
% |
|
|
8.5 |
% |
|
|
9.3 |
% |
|
|
7.6 |
% |
Interest expense |
|
(79 |
) |
|
|
(2 |
) |
|
|
(237 |
) |
|
|
(2 |
) |
Related party interest expense, net |
|
— |
|
|
|
(4 |
) |
|
|
— |
|
|
|
(13 |
) |
Other income (expense), net |
|
(3 |
) |
|
|
5 |
|
|
|
4 |
|
|
|
6 |
|
Total interest and other expense, net |
|
(82 |
) |
|
|
(1 |
) |
|
|
(233 |
) |
|
|
(9 |
) |
Income before income taxes |
|
37 |
|
|
|
90 |
|
|
|
65 |
|
|
|
227 |
|
% of Revenue |
|
3.4 |
% |
|
|
8.4 |
% |
|
|
2.0 |
% |
|
|
7.3 |
% |
Income tax expense |
|
14 |
|
|
|
147 |
|
|
|
22 |
|
|
|
195 |
|
Net income (loss) |
|
23 |
|
|
|
(57 |
) |
|
|
43 |
|
|
|
32 |
|
Net income (loss) attributable to noncontrolling interests |
|
(1 |
) |
|
|
1 |
|
|
|
(2 |
) |
|
|
1 |
|
Net income (loss) attributable to Atleos |
$ |
24 |
|
|
$ |
(58 |
) |
|
$ |
45 |
|
|
$ |
31 |
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per share attributable to Atleos common stockholders |
|
|
|
|
|
|
|
||||||||
Basic |
$ |
0.33 |
|
|
$ |
(0.82 |
) |
|
$ |
0.63 |
|
|
$ |
0.44 |
|
Diluted |
$ |
0.32 |
|
|
$ |
(0.82 |
) |
|
$ |
0.61 |
|
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding (1) |
|
|
|
|
|
|
|
||||||||
Basic |
|
72.3 |
|
|
|
70.6 |
|
|
|
72.0 |
|
|
|
70.6 |
|
Diluted |
|
74.5 |
|
|
|
70.6 |
|
|
|
73.7 |
|
|
|
70.6 |
|
(1) |
On October 16, 2023, the date of Separation, 70.6 million shares of Atleos' Common Stock, par value |
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
|
|
(in millions, except per share amounts) |
September 30, 2024 |
|
December 31, 2023 |
|||
Assets |
|
|
|
|||
Current assets |
|
|
|
|||
Cash and cash equivalents |
$ |
395 |
|
|
$ |
339 |
Accounts receivable, net of allowances of |
|
623 |
|
|
|
711 |
Inventories |
|
351 |
|
|
|
333 |
Restricted cash |
|
279 |
|
|
|
238 |
Other current assets |
|
283 |
|
|
|
254 |
Total current assets |
|
1,931 |
|
|
|
1,875 |
Property, plant and equipment, net |
|
457 |
|
|
|
468 |
Goodwill |
|
1,954 |
|
|
|
1,952 |
Intangibles, net |
|
583 |
|
|
|
635 |
Operating lease right of use assets |
|
135 |
|
|
|
144 |
Prepaid pension cost |
|
238 |
|
|
|
219 |
Deferred income tax assets |
|
285 |
|
|
|
254 |
Other assets |
|
165 |
|
|
|
169 |
Total assets |
$ |
5,748 |
|
|
$ |
5,716 |
Liabilities and stockholders’ equity |
|
|
|
|||
Current liabilities |
|
|
|
|||
Short-term borrowings |
|
88 |
|
|
|
76 |
Accounts payable |
|
545 |
|
|
|
500 |
Payroll and benefits liabilities |
|
152 |
|
|
|
149 |
Contract liabilities |
|
304 |
|
|
|
325 |
Settlement liabilities |
|
263 |
|
|
|
218 |
Other current liabilities |
|
447 |
|
|
|
486 |
Total current liabilities |
|
1,799 |
|
|
|
1,754 |
Long-term borrowings |
|
2,906 |
|
|
|
2,938 |
Pension and indemnity plan liabilities |
|
389 |
|
|
|
389 |
Postretirement and postemployment benefits liabilities |
|
56 |
|
|
|
60 |
Income tax accruals |
|
38 |
|
|
|
36 |
Operating lease liabilities |
|
102 |
|
|
|
109 |
Deferred income tax liabilities |
|
34 |
|
|
|
34 |
Other liabilities |
|
162 |
|
|
|
141 |
Total liabilities |
|
5,486 |
|
|
|
5,461 |
Stockholders' equity |
|
|
|
|||
Atleos stockholders' equity: |
|
|
|
|||
Preferred stock: par value |
|
— |
|
|
|
— |
Common stock: par value |
|
1 |
|
|
|
1 |
Paid-in capital |
|
31 |
|
|
|
12 |
Retained earnings |
|
191 |
|
|
|
153 |
Accumulated other comprehensive income |
|
41 |
|
|
|
86 |
Total Atleos stockholders' equity |
|
264 |
|
|
|
252 |
Noncontrolling interests in subsidiaries |
|
(2 |
) |
|
|
3 |
Total stockholders' equity |
|
262 |
|
|
|
255 |
Total liabilities and stockholders' equity |
$ |
5,748 |
|
|
$ |
5,716 |
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
|
|
For the Periods Ended September 30 |
||||||||||||||
|
Three Months |
|
Nine Months |
||||||||||||
(in millions) |
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
Operating activities |
|
|
|
|
|
|
|
||||||||
Net income (loss) |
$ |
23 |
|
|
$ |
(57 |
) |
|
$ |
43 |
|
|
$ |
32 |
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
|
|
|
||||||||
Depreciation expense |
|
36 |
|
|
|
34 |
|
|
|
104 |
|
|
|
90 |
|
Amortization expense |
|
38 |
|
|
|
29 |
|
|
|
114 |
|
|
|
93 |
|
Stock-based compensation expense |
|
9 |
|
|
|
12 |
|
|
|
28 |
|
|
|
45 |
|
Deferred income taxes |
|
3 |
|
|
|
106 |
|
|
|
(9 |
) |
|
|
93 |
|
Loss (gain) on disposal of property, plant and equipment |
|
1 |
|
|
|
— |
|
|
|
5 |
|
|
|
— |
|
Bargain purchase gain from acquisition |
|
— |
|
|
|
— |
|
|
|
(5 |
) |
|
|
— |
|
Loss (earnings) from Equity Investments |
|
2 |
|
|
|
— |
|
|
|
2 |
|
|
|
— |
|
Changes in assets and liabilities: |
|
|
|
|
|
|
|
||||||||
Receivables |
|
90 |
|
|
|
22 |
|
|
|
79 |
|
|
|
39 |
|
Related party receivables and payables |
|
— |
|
|
|
(9 |
) |
|
|
— |
|
|
|
(22 |
) |
Inventories |
|
(28 |
) |
|
|
(20 |
) |
|
|
(77 |
) |
|
|
(35 |
) |
Settlement assets |
|
23 |
|
|
|
(9 |
) |
|
|
1 |
|
|
|
(8 |
) |
Current payables and accrued expenses |
|
(23 |
) |
|
|
51 |
|
|
|
77 |
|
|
|
25 |
|
Contract liabilities |
|
(3 |
) |
|
|
(18 |
) |
|
|
(24 |
) |
|
|
— |
|
Employee benefit plans |
|
(3 |
) |
|
|
(7 |
) |
|
|
(23 |
) |
|
|
(13 |
) |
Other assets and liabilities |
|
(61 |
) |
|
|
13 |
|
|
|
(51 |
) |
|
|
8 |
|
Net cash provided by operating activities |
$ |
107 |
|
|
$ |
147 |
|
|
$ |
264 |
|
|
$ |
347 |
|
Investing activities |
|
|
|
|
|
|
|
||||||||
Expenditures for property, plant and equipment |
$ |
(22 |
) |
|
$ |
(48 |
) |
|
$ |
(69 |
) |
|
$ |
(70 |
) |
Additions to capitalized software |
|
(11 |
) |
|
|
— |
|
|
|
(26 |
) |
|
|
(15 |
) |
Purchase of investments |
|
(1 |
) |
|
|
(10 |
) |
|
|
(1 |
) |
|
|
(10 |
) |
Amounts advanced for related party notes receivable |
|
— |
|
|
|
(203 |
) |
|
|
— |
|
|
|
(217 |
) |
Repayments received from related party notes receivable |
|
— |
|
|
|
8 |
|
|
|
— |
|
|
|
44 |
|
Purchase of intellectual property |
|
(5 |
) |
|
|
— |
|
|
|
(13 |
) |
|
|
— |
|
Other investing activities, net |
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
Net cash used in investing activities |
$ |
(39 |
) |
|
$ |
(254 |
) |
|
$ |
(110 |
) |
|
$ |
(269 |
) |
Financing activities |
|
|
|
|
|
|
|
||||||||
Proceeds from related party borrowings |
$ |
— |
|
|
$ |
143 |
|
|
$ |
— |
|
|
$ |
159 |
|
Payments on related party borrowings |
|
— |
|
|
|
(257 |
) |
|
|
— |
|
|
|
(314 |
) |
Proceeds from issuance of senior secured notes |
|
— |
|
|
|
1,333 |
|
|
|
— |
|
|
|
1,333 |
|
Proceeds from borrowings on term credit facilities |
|
— |
|
|
|
726 |
|
|
|
— |
|
|
|
726 |
|
Payments on term credit facilities |
|
(19 |
) |
|
|
— |
|
|
|
(55 |
) |
|
|
— |
|
Borrowings on revolving credit facilities |
|
386 |
|
|
|
— |
|
|
|
919 |
|
|
|
— |
|
Payments on revolving credit facilities |
|
(382 |
) |
|
|
— |
|
|
|
(894 |
) |
|
|
— |
|
Payments on other financing arrangements |
|
— |
|
|
|
— |
|
|
|
(2 |
) |
|
|
— |
|
Proceeds from employee stock plans |
|
2 |
|
|
|
— |
|
|
|
3 |
|
|
|
— |
|
Net transfers (to) from NCR Corporation |
|
— |
|
|
|
315 |
|
|
|
— |
|
|
|
226 |
|
Tax withholding payments on behalf of employees |
|
(1 |
) |
|
|
— |
|
|
|
(14 |
) |
|
|
— |
|
Payments on acquisition holdback |
|
(5 |
) |
|
|
— |
|
|
|
(5 |
) |
|
|
— |
|
Principal payments for finance lease obligations |
|
— |
|
|
|
(1 |
) |
|
|
(1 |
) |
|
|
(1 |
) |
Net cash (used in) provided by financing activities |
$ |
(19 |
) |
|
$ |
2,259 |
|
|
$ |
(49 |
) |
|
$ |
2,129 |
|
Effect of exchange rate changes on cash, cash equivalents and restricted cash |
|
5 |
|
|
|
13 |
|
|
|
(7 |
) |
|
|
24 |
|
Increase (decrease) in cash, cash equivalents, and restricted cash |
$ |
54 |
|
|
$ |
2,165 |
|
|
$ |
98 |
|
|
$ |
2,231 |
|
Cash, cash equivalents and restricted cash at beginning of period |
|
630 |
|
|
|
565 |
|
|
|
586 |
|
|
|
499 |
|
Cash, cash equivalents, and restricted cash at end of period |
$ |
684 |
|
|
$ |
2,730 |
|
|
$ |
684 |
|
|
$ |
2,730 |
|
The following table presents the recurring revenue and all other products and services revenue that is recognized at a point in time: |
|||||||
In millions |
Three months ended September 30 |
||||||
|
2024 |
|
|
|
2023 |
|
|
Recurring revenue |
$ |
790 |
|
|
$ |
765 |
|
All other products and services |
|
288 |
|
|
|
302 |
|
Total revenue |
$ |
1,078 |
|
|
$ |
1,067 |
|
Recurring revenue as a percent of revenue |
|
73 |
% |
|
|
72 |
% |
Reconciliation of Net Income (Loss) Attributable to Atleos (GAAP) to Adjusted Net Income Attributable to Atleos (Non-GAAP) and Non-GAAP Diluted Earnings Per Share |
||||||||||||
|
Three months ended September 30, 2024 |
|||||||||||
$ in millions, except per share amounts |
Gross profit |
Gross profit rate |
Income from operations |
Net income (loss) attributable to Atleos |
Diluted earnings (loss) per share (1) |
|||||||
GAAP Results |
$ |
262 |
24.3 |
% |
$ |
119 |
$ |
24 |
|
$ |
0.32 |
|
Plus: Special Items |
|
|
|
|
|
|||||||
Transformation and restructuring |
|
2 |
0.2 |
% |
|
7 |
|
7 |
|
|
0.09 |
|
Stock-based compensation expense |
|
1 |
0.1 |
% |
|
9 |
|
8 |
|
|
0.11 |
|
Acquisition-related amortization of intangibles |
|
20 |
1.8 |
% |
|
24 |
|
19 |
|
|
0.25 |
|
Acquisition-related costs |
|
— |
— |
% |
|
— |
|
(1 |
) |
|
(0.01 |
) |
Separation costs |
|
1 |
0.1 |
% |
|
5 |
|
5 |
|
|
0.07 |
|
Voyix environmental indemnification expense |
|
— |
— |
% |
|
— |
|
2 |
|
|
0.03 |
|
Other tax adjustments |
|
— |
— |
% |
|
— |
|
2 |
|
|
0.03 |
|
Non-GAAP Adjusted Results |
$ |
286 |
26.5 |
% |
$ |
164 |
$ |
66 |
|
$ |
0.89 |
|
(1) |
Based upon weighted average dilutive shares of 74.5 million for the three months ended September 30, 2024. |
Reconciliation of Net Income Attributable to Atleos (GAAP) to Adjusted Net Income Attributable to Atleos (Non-GAAP) and Non-GAAP Diluted Earnings Per Share |
||||||||||||
|
Three months ended September 30, 2023 |
|||||||||||
$ in millions, except per share amounts |
Gross profit |
Gross profit rate |
Income from operations |
Net income attributable to Atleos |
Diluted earnings (loss) per share (1) |
|||||||
GAAP Results |
$ |
268 |
25.1 |
% |
$ |
91 |
$ |
(58 |
) |
$ |
(0.82 |
) |
Plus: Special Items |
|
|
|
|
|
|||||||
Transformation and restructuring |
|
— |
— |
% |
|
1 |
|
1 |
|
|
0.01 |
|
Stock-based compensation expense |
|
5 |
0.5 |
% |
|
12 |
|
11 |
|
|
0.16 |
|
Acquisition-related amortization of intangibles |
|
15 |
1.4 |
% |
|
24 |
|
19 |
|
|
0.27 |
|
Separation costs |
|
— |
— |
% |
|
46 |
|
156 |
|
|
2.21 |
|
Pension market-to-market adjustments |
|
— |
— |
% |
|
— |
|
(4 |
) |
|
(0.06 |
) |
Non-GAAP Adjusted Results |
$ |
288 |
27.0 |
% |
$ |
174 |
$ |
125 |
|
$ |
1.77 |
|
(1) |
On October 16, 2023, the date of Separation, 70.6 million shares of Atleos' Common Stock, par value |
Reconciliation of Net Income (Loss) Attributable to Atleos (GAAP) to Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) (Non-GAAP) |
|||||||||||
$ in millions |
Q3 2024 |
% of Revenue |
|
Q3 2023 |
% of Revenue |
||||||
Net income (loss) attributable to Atleos (GAAP) |
$ |
24 |
|
2.2 |
% |
|
$ |
(58 |
) |
(5.4 |
)% |
Interest expense, net (1) |
|
79 |
|
7.3 |
% |
|
|
6 |
|
0.6 |
% |
Interest income |
|
(1 |
) |
(0.1 |
)% |
|
|
— |
|
— |
% |
Income tax expense |
|
14 |
|
1.3 |
% |
|
|
147 |
|
13.8 |
% |
Depreciation and amortization expense |
|
45 |
|
4.2 |
% |
|
|
38 |
|
3.6 |
% |
Acquisition-related amortization of intangibles |
|
24 |
|
2.2 |
% |
|
|
24 |
|
2.2 |
% |
Stock-based compensation expense |
|
9 |
|
0.8 |
% |
|
|
12 |
|
1.1 |
% |
Separation costs |
|
5 |
|
0.5 |
% |
|
|
46 |
|
4.3 |
% |
Acquisition-related costs |
|
(1 |
) |
(0.1 |
)% |
|
|
— |
|
— |
% |
Transformation and restructuring |
|
7 |
|
0.7 |
% |
|
|
1 |
|
0.1 |
% |
Pension mark-to-market adjustments |
|
— |
|
— |
% |
|
|
(6 |
) |
(0.6 |
)% |
Voyix environmental indemnification expense |
|
2 |
|
0.2 |
% |
|
|
— |
|
— |
% |
Adjusted EBITDA (Non-GAAP) |
$ |
207 |
|
19.2 |
% |
|
$ |
210 |
|
19.7 |
% |
(1) |
Includes Related party interest expense, net, as presented in the Condensed Consolidated Statements of Operations. |
Reconciliation of Net Cash Provided by Operating Activities (GAAP) to Adjusted Free Cash Flow-Unrestricted (Non-GAAP) |
|||||||||||||||
|
QTD |
|
QTD |
|
YTD |
|
YTD |
||||||||
$ in millions |
Q3 2024 |
|
Q3 2023 |
|
FY 2024 |
|
FY 2023 |
||||||||
Net cash provided by operating activities |
$ |
107 |
|
|
$ |
147 |
|
|
$ |
264 |
|
|
$ |
347 |
|
Total capital expenditures |
|
(33 |
) |
|
|
(48 |
) |
|
|
(95 |
) |
|
|
(85 |
) |
Change in restricted cash settlement activity |
|
(37 |
) |
|
|
3 |
|
|
|
(48 |
) |
|
|
(19 |
) |
Pension contributions |
|
1 |
|
|
|
7 |
|
|
|
2 |
|
|
|
9 |
|
Adjusted free cash flow-unrestricted |
$ |
38 |
|
|
$ |
109 |
|
|
$ |
123 |
|
|
$ |
252 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20241112748067/en/
News Media Contact
Scott Sykes
NCR Atleos Corporation
scott.sykes@ncratleos.com
Investor Contact
Brendan Metrano
NCR Atleos Corporation
brendan.metrano@ncratleos.com
Source: NCR Atleos Corporation
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