Q3 2023 NCR Voyix Corp Earnings Call

Good day and welcome to the NCR avoid corporation third quarter fiscal year 2023 earnings Conference call. Today's conference is being recorded at this time I would like to turn the conference over to Mr. Michael Nelson Treasurer, and Vice President of Investor Relations. Please go ahead.

Good afternoon, and thank you for joining our third quarter 2023 earnings call. Joining me on the call today are NCR voyage, CEO, David Wilkinson and CFO, Brian Webb Walsh.

Focus of our discussion on today's conference call will be on NCR voyage segment results and key performance indicators for the third quarter 2023, where we'd appreciate it if you keep your questions focused on the NCR voyage segment results during Q&A.

Please note that our presentation and discussions will include forward looking statements. These statements reflect our current expectations and beliefs, but they are subject to risks and uncertainties that could cause actual results to differ materially from those expectations. These risks and uncertainties are described in.

Our earnings release, and our periodic filings with the S E C, including our annual reports on today's call will also be discussing certain non-GAAP financial measures. These non-GAAP measures are described and reconciled to their GAAP counterparts in the presentation materials. The press release dated November.

Nice 2023, and on the Investor Relations page of our website a replay of this call will be available later today on our website NCR voyage dotcom slides two and three of our earnings presentation provide further details with that I would now like to turn the call over to David.

Thank you Michael and welcome everyone to our first earnings call as NCR Boy acts please turn to slide six.

This is an exciting time as we began a new chapter in our journey as a publicly traded company.

On October 16th we successfully completed the separation of NCR at Leos.

NCR a boy acts common stock began trading on the New York stock exchange under the ticker symbol Z Y X at the market open on October 17th.

As we move forward, we are well positioned with an exceptional leadership team and a supportive board of directors that come with extensive industry knowledge and transformational expertise.

We are fully prepared to execute our vision as a focused platform led software and services company.

First I would like to thank the more than 16000, NCR vortex employees for their dedication and engagement, particularly over the last few months.

Complex transactions like these can often be disruptive, but I'm proud of how our employees contributed to the success of this transaction.

Not only did they deliver strong third quarter results, but they also maintained a high level of service excellence for our customers.

Before we dive into our discussion of the NCR vortex third quarter results I'd like to reiterate some of the key messages, we outlined in our September Investor day, particularly around service offerings competitive advantages and growth trajectory.

Please turn to slide seven.

NCR voyage is a platform led SaaS and services company that serves three essential industries retail restaurants and banks.

For fiscal year 2023 we are on pace to generate nearly $4 billion in annual revenue with approximately half of that from recurring revenues.

Software and services comprise about two and a half million dollars of our revenue.

We operate in a large and growing addressable market valued at a minimum of $25 billion and we maintain a market leadership position within the segments we serve.

This year, we were once again named the number one global provider of point of sale software for retail and restaurants by RBR.

Additionally, we're the number one independent provider of digital banking applications.

I'm proud of the solid profitable foundation for growth that NCR of Wix is built upon.

Our deep industry expertise market, leading technology and strong customer relationships are instrumental in sustaining our industry, leading position and healthy margins in this space.

We serve customers of all sizes, ranging from small and medium sized businesses.

Enterprise Blue chip companies that represent some of the worlds leading consumer brands.

We have long standing relationships with our customers, who recognize the value of our critical applications provide for their businesses.

All of our customers face the challenge of differentiating their customers and associates experiences.

This requires modernization of their technology.

We have made significant progress over the last few years transitioning from our legacy hardware only products to our market, leading cloud based SaaS solutions.

This required shifting our product focus and go to market approach.

Moving from a product focused approach to becoming a business critical solutions provider to our customers.

Our goal is to be the one stop shop for the technology, our customers need to run their businesses.

And as a result of these efforts we've seen our revenue model shift to higher recurring revenue.

In the third quarter, our recurring revenues comprised more than half of our portfolio, representing 56% of total revenues and we are projecting this to grow to approximately 65%.

By 2027.

These are high margin revenues that are predictable and foster long term relationships with our customers.

Please turn to slide eight.

As we think about our near and long term opportunities, we have a well defined strategy focused on three areas grow monetize and expand.

Let me provide further details for each area first grow.

We will capitalize on secular growth trends to expand alongside the market.

This includes acquiring new customer logos and converting existing customers from hardware products and one time software license sales to our platform based solutions, thereby reinforcing our recurring revenue streams.

Next monetize well.

We will drive revenue and ARPA expansion by offering additional value added services to our customer base and capturing a larger share of wallet.

And finally expand we will expand margins and improve profitability through our high margin value added services and.

In addition, we've also launched productivity initiatives to drive efficiencies across the organization.

In a growing market that continues to evolve through this fast paced environment. We are incredibly excited about the opportunity and runway in front of us.

The strong leadership team that are experts in the industries. We serve we are enthusiastic as we embark on our journey to deliver and create value.

Please turn to slide nine.

We have a great portfolio of solutions that enable us to deliver platform based end to end technology solutions perfectly tailored to meet our customers' evolving business needs.

For our retail and restaurant customers, we deliver modern cloud based solutions to help simplify their technology infrastructure and effectively run their restaurants and stores.

We lead with their point of sale software, which is the heartbeat of the store to create a sticky application for customer loyalty and longevity.

From there, we're able to deliver SaaS based services via our platform utilizing cloud native services and open a P eyes.

Our comprehensive technology suite supports transactional inventory and customer data as well as pricing and promotions.

Similarly, our digital banking solutions allow financial institutions to deliver a digital first differentiated experience.

Thanks, you are looking to transform branches to create a simple and convenient method for attracting and onboarding new customers.

They want to deliver advanced advisory services, and reinvent self service banking, there expanded transaction access and on demand virtual systems.

We're in a unique position to enable banks and credit unions to accelerate the strategies to create an entirely new customer experience.

And we are the only provider offering a unified customer experience for both digital and physical channels.

There are a few notable third quarter examples that I'd like to highlight.

Beginning with our retail segment designer brands implemented self checkout and signed a contract to convert their point of sale and self checkout software to subscription across over 2000 lanes.

This added platform capability to drive valuable store insights from our analytics package.

Within our restaurant segments, our team grew our platform sites by 388, and our payment sites by 517.

In SMB or payment attach rate for new customers remains at approximately 90%.

Resulting in a 41% increase in payment sites.

In the third quarter uncle, Julio's Tex-mex chain with 44 sites focused on delivering made from scratch culinary experiences became an aloha essentials subscription with payments customer.

This is a perfect example of NCR voyage, helping an emerging chain accelerate its business growth.

And enterprise Papa Murphy's, who has been a customer of NCR voyages for nearly 15 years recommitted to our software with a new three year Aloha central subscription.

Since connecting to our platform they have been able to alleviate pain points and reduce cost while providing a seamless experience for their customers at more than a thousand location.

These examples are indicative of the value our customers see in our platform.

Turning to our digital banking segment, we continue to demonstrate positive momentum.

In the third quarter digital banking sales activity was strong with five new customer deals in 'twenty, one digital banking renewables.

We also continued to experience strong cross sell and up sell momentum, particularly with our channel services platform or CSP and.

And Tara FEMA, our digital account opening platform.

We recently hosted the highly successful accelerate Twenty-twenty three digital first banking conference in Nashville, Tennessee.

With over 900 attendees, including customers prospects partners and industry analysts the conference generated a powerful impression of NCR avoid acts as an innovative customer focused and industry thought leader.

This was our highest turnout ever and it was a fantastic opportunity to connect with customers and prospects, which garnered great interests and high value orders.

Financial institutions have increased their focus on deposit growth, which is translating into reevaluating their digital banking solutions and driving strong demand for NCR boy, It's digital first banking platform solutions, where.

We're making excellent progress accelerating growth in digital banking by deepening our existing relationships signing.

Signing value added services, and creating a pipeline of new deals demonstrating the value of our partner C and our solutions.

Before I turn the call over to Brian I'd like to highlight some of our financial results for the combined NCR voyage segments I just described.

Recurring revenue grew 7% in the quarter, reflecting our.

Our strategy to shift our portfolio as we focus on our software as a service model.

This quarter recurring revenue accounted for 56% of total segment revenue, representing an increase of more than 340 basis points from the prior year.

We also gained operating leverage growing segment adjusted EBITDA by 2% on a constant currency basis, and expanding segment adjusted EBITDA margin by 90 basis points compared to the prior year.

Now I will turn it over to Brian who will take you through the details of our segment results.

Thank you David and thank you everyone for joining our call today, it's an exciting time at NCR vortex, we have certainly accomplished a lot in a short period of time, which is a testament to the talent dedication and experience of our employees.

As Michael stated at the opening of our call. The focus of my discussion will be on the NCR voyage segment results. Our growth rates presented are on a constant currency basis for better comparison purposes.

Let's turn to slide 11.

In the third quarter total segment constant currency revenue was flat compared to the prior year and on a year to date basis total segment revenue grew 2% compared to the prior year for Q3. This includes a three point headwind from shifting upfront revenue to recurring.

These results reflect our strategy to connect their customers to our SaaS based platform software and services growth offset the decline in hardware revenue, which resulted from the post COVID-19 bump in the prior year.

For the third quarter constant currency segment, adjusted EBITDA increased 2% to 249 million and segment adjusted EBITDA margin expanded 90 basis points to 26, 1%.

Year to date adjusted EBITDA for the combined segments increased 13% over the prior year and adjusted EBITDA margin expanded 240 basis points to 24, 3%.

These improvements to adjusted EBITDA were driven by the mix shift from hardware products to our SaaS based solutions and services along with cost initiatives that we implemented to improve efficiency.

Please turn to slide 12.

As I stated on the previous slide segment constant currency revenue for the third quarter was flat compared to the prior year. However, recurring revenue increased 7% over the same period.

As of the third quarter recurring revenue for the combined segments represented 56% of total revenue an improvement of 340 basis points over the prior year. These.

These results reflect our strategy to shift customers to our SaaS based platform and build our recurring revenue streams. As we have previously discussed the key tenants of our strategy include retaining our base upgrading existing customers to the platform in securing higher margin recurring revenue streams via subscription model.

Going forward, we will continue to highlight recurring revenue as we believe this important metric illustrates the ongoing shift their portfolio and we expect recurring revenues as a percent of total revenue to increase over time.

Now let me provide details on each of our segment's performance beginning with retail.

Instant currency revenue for the retail segment declined 2% from the prior year recurring revenue increased 3% and represented 47% of retail revenue in the third quarter, reflecting the shift to SaaS based revenue streams.

Our retail portfolio remains healthy and the underlying fundamentals are growing nicely in the quarter, we more than doubled the number of retail platform sites compared to the prior year, which is now over 27000 <unk>.

Annual recurring revenue or a R. R grew 4%.

Year to date constant currency revenue for the segment increased 2% recurring revenue increased 3% over the prior year and represented 46% of retail revenue.

Currency adjusted EBITDA was down 1% compared to the prior year adjusted EBITDA margin was 23.2%, which represented an expansion of 90 basis points from the prior year. These results were driven by the positive mix shift to higher margin software and services recurring revenue.

Year to date, adjusted EBITDA grew 21% and adjusted margin expanded 300 basis points over the prior year to 28%.

The improvement in adjusted EBITDA for both the quarter and the year reflect the positive mix shift cost discipline, a normalization of the supply chain.

Turning to slide 14.

Constant currency revenue for the restaurant segment was 238 million in the quarter, which was flat compared to the prior year recurring revenue grew 12% over the prior year and represented 59% of the total revenue in the quarter.

Similar to the retail segment restaurant revenue reflects the shift to SaaS based model our restaurant performance in the quarter supported by growth across the underlying key performance indicators compared to the prior year. The number of payments sites grew 41% to more than 6300 sites and the number of platforms sites grew 7%.

The nearly 31000.

Our our grew 10% to $560 million on a year to date basis constant currency revenue grew 1% over the prior year recurring revenue grew 10% and represented 59% of revenue.

Q3 constant currency adjusted EBITDA grew 16% and adjusted EBITDA margin expanded 340 basis points over the prior year to 24, 8%.

Year to date, adjusted EBITDA grew 24% and adjusted EBITDA margin improved 460 basis points over the prior year to 24.7% our adjusted EBITDA improvement for both the quarter and the year reflects the mix shift of the restaurant portfolio as well as disciplined cost management in the segment.

Turning to slide 15.

Digital banking had another strong quarter, having exceeded the rule of 40 revenue for the digital banking segment grew 7% over the prior year to 147 million and recurring revenue grew 9%. The strong revenue growth was driven by client wins strong renewal momentum and cross sell success for both therapy and are in the channel services platform.

We expect growth to continue to accelerate as we exit the year compared.

Compared to the prior year the number of registered users grew 5% to 28 million and the number of active users grew 3% to more than $19 million.

<unk> grew 9% to $520 million on.

On a year to date basis revenue grew 5% over the prior year and recurring revenue grew 6% third quarter adjusted EBIT declined 3% and adjusted EBIT margin declined 430 basis points to 39, 5% on a year to date basis, adjusted EBIT declined 7% and adjusted EBIT margin was down 480 basis points from the prior year.

The 37, 8% with adjusted EBITDA for the quarter and year to date reflect our increased investments in sales and marketing and technology to accelerate growth for this segment.

Before we open up the lines for questions I'd like to highlight that in early Q4, we divested a non strategic portion of the assets relating to our payments business, consisting primarily of merchant contracts are front end authorization platform in certain IP for cash proceeds of $82 million.

Payments remains an important part of our strategy the divested business generated roughly $40 million in annual revenue and approximately 25 million in annual adjusted EBITDA.

Investing in this portion of our business changes the baseline for revenue and adjusted EBITDA, We discussed at our Investor Day.

However, our view on our go forward modeling for revenue growth rates and adjusted EBITDA margins remains as previously described.

We have a clear strategy for growth in a large growing market, where we can take share are sustainable competitive advantages include our solid financial foundation, our resilient business model long standing customer relationships industry, leading cloud based solutions and World class customer service. This is why we went to.

Today, and why we will continue to win long term with that I will turn the call over to the operator to begin our question and answer session operator.

Thank you if you'd like to ask a question. Please signal by pressing star one on your telephone keypad, if you're using a speaker phone. Please make sure. Your mute function is turned off to allow your signal to reach our equipment again not press star one to ask a question.

We will take our first question from the line of Dan Perlin with RBC capital markets. Please go ahead. Your line is now open.

Thanks, Good evening and congratulations on the spin I'm sure. It was a herculean task.

So David I, just wanted to ask you kind of a broad question initially which is.

Now post the spin the conversations you're having with clients across kind of all three of these segments.

Maybe you can just kind of bring us up to speed on what those are like.

Are you finding that.

During the spin period, there was a little bit of a distraction and now the clients are much more focused and as a result, there are kind of ready to get back its spend with you just any kind of anecdotal information would be great. Thanks.

Sure.

Thank you for question Dan.

Overall, the conversations largely haven't changed I'll tell you the teams have not.

Not been distracted it was a herculean effort. So I appreciate you recognizing that obviously very complicated what turned into almost a 50 50 split.

NCR into Ocean voyage.

The customers are very open and receptive they see the focus that we're driving now as a platform led software and services company.

And the progress that we made and we just described in the earnings release the site growth in the platform Lane and the conversion that we're seeing in the upsell and cross sell messages working with isn't resonating in the marketplace and the functionality that we're delivering for our clients as needed more now than ever as they look to consolidate suppliers and really try.

To find more of a one stop shop. So the conversations have been positive all throughout the spin the service performance by the team has been.

Amazing to be honest with you and our customers like the new focus and a very receptive.

Yeah.

No I mean, the results seem to suggest that so so thanks for that color just a quick follow up.

You know the the payment asset you just divested I think he said it generated 40 million of revenues can you just remind us like what's what you're keeping why you decided to get rid of that business.

That impacts in any way the strategy to kind of course.

And entice.

New clients to kind of sign up with the payment and then.

With getting rid of some of that stuff. What are you what are you, replacing it with or using a third party.

Anything around that would be great. Thank you.

Yeah.

Yeah payments is still a critical part of our go forward strategy to expand our pool through the platform. So the assets that were divested or more payment contracts associated with non core non point of sale attached famous not related to retail restaurants, or our banking clients. So our strategy going forward is really.

To start payments on the point of sale software incomplete payment through processing to.

To really take paying off of our merchants and complete the payment end to end and that's been the strategy all along we don't lose any core capabilities through this through this process. We will continue to have some capabilities on our front end. We've partnered in the past we will continue to partner and have a mix of our own capabilities and partner capabilities.

We deliver that that end to end payment.

<unk> with the sticky point of sale is the yes.

That's why we want to build off of that so we're really trying to just extend that value and clip that payment coupon where we can.

It doesn't mean, we have to have 100% penetration. So the strategy has not changed just to give us a little more focused on executing the attach side of that within our core.

Got it.

Okay. Thank you so much.

Well take our next question from the line of Matt Summerville with D. A Davidson. Please go ahead. Your line is now open.

Thanks couple of questions.

David can you maybe talk a little bit about what youre seeing just more broadly speaking from a demand standpoint within the retail business, specifically comparing and contrasting between scho any pause in with respect to the former being Scho I'm curious as to whether you guys are seeing more competition.

From third party integrators in the space and then as a follow up thank you.

Okay.

The <unk> demand remains strong where we're seeing.

Market share growth. We then last RBR report comes out we were the 20 years in a row the market share leader is still double that of our nearest competitor and we believe in our numbers will tell us we're going to continue to take share as we expand this year. So the market is growing.

That RBR report will tell us that we're seeing mid single digit growth in self checkout and we see that.

Across the strong demand that strong demand signal and what we're doing.

Yes, we're seeing the expansion come in a couple of areas one expanding beyond grocery.

Convenience and fuel and specialty you will see that in one of the customer wins that we highlighted with designer brands the old DSW.

That's the shoe company, but.

That's a good example of how we're seeing shell checkout grow beyond grocery.

All of these customers are also trying to own and define their front end experience as it relates to self checkout in and that becomes a critical part of that so the different form factors that we're seeing and then the labor challenges are real and only worsening in terms of the need to have more labor hours in the store to deliver those services and then try to redistribute labor.

Creating flexible front ends on the consumer side of what's driving that demand or you know are third party research and what what we read tells us that shoppers prefer to have a choice and they like self checkout and so well while you see a few of the negative articles run stray that's not the general sentiment of the market and thats evidenced by Kantar.

Hi, adoption and <unk>.

Stores, where we deployed even we see new customers deploying it we're seeing them get north of 60% transactions through self checkout very early.

And those journeys and that's creating very strong business cases for our clients guest satisfaction is high and we're seeing our existing customers drive an increased density. So the self checkout demand as strong as we delivered the platform capabilities and start to do things with computer vision artificial intelligence start to get more of a kind of a century.

Fusion with RFID included in what we're doing with self checkout. We also see some new use cases and some of our formats as as we move forward.

A pause as you described.

The core Pas hardware business as is declining we are seeing that across the market. Its decline. This year, that's what you'll see in the numbers for us when we look at the non recurring revenue we saw strong recurring revenue growth and where you see the nonrecurring revenue that's really all point of sale hardware, that's driving that decline some of it.

Lumpy phenomenon coming out of Covid when when people were buying.

Kind of stockpiling based on supply chain challenges in other or that's just kind of a softening of demand and really an increase in self checkout demand as well.

And then the.

The other question I had David was on third party.

Competition from system.

More of a third party integrator approach trying to get into the self checkout market, if youre seeing that in your business.

The good news of our platform approach is that we can break we have this open ecosystem that we can embrace whether it's the do it yourself trend that we see with some retailers or whether it's third party integrators, we partner with a lot of the big integrators, we're not seeing them come in is really direct competition that.

Competitive landscape hasn't changed that much they're a few startups doing some things around specific technology.

We're embracing that the other benefit of our model as we move to the platform to solve a real value is in the intellectual property around the software and how consumers interact with those devices in the stores. So that value doesn't go anywhere regardless of who what other parties are involved so.

This is a rising tide will raise all boats for us in the sense that will connect to the platform. We'll monitor our model we can monetize those assets as we deploy with partners or even kind of DIY folks as well. So we feel like we're in pretty good place.

And then just as a follow up on digital banking can you maybe talk about.

Where you're at year to date from a win rate standpoint in that business versus maybe where it was at two years ago, and maybe comparing contrast, where youre at with your renewals and the success rates, you're experiencing now versus in the not too distant past there. Thanks.

Yes, we're seeing.

Mid <unk> in terms of renewal rates across that business and as we've stated in this release in the previous four quarters over that time Horizon. We won 36 net new customers. We are gaining share in digital banking, we're growing registered and active users and youre starting to see that really convert.

<unk> into the growth that we're seeing the 9% year over year IRR growth that you see is the evidence that would support that growth. There is some timing of some customers that we on boarded so those customers don't immediately show up so a lot of the big ones take a little bit longer to onboard so as those 36 net new customers start to come on board that switched.

Gives us confidence in the growth rates in that business.

Perfect. Thanks, David.

We will take our next question from the line of Eric Woodring with Morgan Stanley. Please go ahead. Your line is now open.

Hey, guys. Thank you very much for taking my for taking my question and again congrats on the on the spin.

David you alluded to some of the hardware declines.

It is kind of helping to offset the recurring revenue growth.

I'm, just curious outside of that shift that youre, making to the platform aimed to more SaaS based revenue are there any other headwinds to that to that hardware business, but you kind of need to correct. Your shore up so to speak and maybe maybe my question is outside of the conversion part of your business kind of how do you change.

The trajectory of that part of your business that isn't that is currently in decline and then I have a follow up thanks.

Yeah part part of the other headwind is as we've described in previous.

Paul does the average selling price of Asps as we get into some of these new formats, even though we're driving unit volume in things like self checkout. The form factor is a little smaller convenience is more of a kiosk that are full appliance like you would see in a grocery store that takes cash and other things. So there's there's some ASP compression that's happening in that market. That's why we see revenue growing a little.

Sure then our unit volume in the overall market share.

Market share growth for us. It's also about we're going to shift a bit of a focus too.

Go acquire some net new customers across the board and we think that'll help shore up some of the hardware declines that we see across the existing basis as people are sweating assets, a little longer and we're actually creating some of our own headwinds with our edge technology that allows us to uniquely deploy software.

On hardware and really extending the life of hardware and stores, it's a real value to our customers in the retail and restaurant segment and so you know we'll find some growth in net new customers as well to overcome some of the overall secular trends in hardware.

Okay very clear. Thank you and then we've heard a lot of positive commentary Tonight until it is really great to see you kind of carrying the momentum.

After the spin just curious if you were to take a bit of like yourself, reflecting view of the business and the management team execution, what are any areas, where you need to prioritize either improving the products or improving the go to market approach or even just improving the overall execution you know where are those holes that you.

You need to patch that can that can almost supercharge the performance that you're seeing from the rest of your business and thats. It from me. Thanks.

Thanks for recognizing the team for the great performance. They have really stepped up as you described and delivered an amazing set of results.

I would tell you that I'm gonna supercharge growth in digital banking.

You're starting to see that growth. So you see the EBITDA margin rate in digital banking down a little bit that's because we're trying to pour some gas on that fire and get more sales momentum and get in front of every financial institution, because we've done a really good job of building an amazing product there and we're winning as I describe it to 36, new customers and so I would I would.

To see us move a little faster in terms of gaining new customers and then when I answered. Your question on the hardware side. I also wanted to see is our investment thesis and that everything we've outlined is really about retaining the base connecting them to the platform, which we've seen tremendous progress against and then adding new products to grow <unk>.

I want us to focus you on adding new customers I want to we want to continue to take share in this space. So I would tell you where we want to focus is on.

It's not a wholesale shift and it's not a bunch of product gaps, it's really get faster connections through the platform, let's grow some sites.

Cross, both retail restaurants, and our digital banking.

Very clear. Thank you very much guys. Good luck.

Thanks.

Once again, if you'd like to ask a question press star one.

Our next question is from the line of Ian Zaffino with Oppenheimer. Please go ahead. Your line is now open.

Great. Thank you very much.

Just kind of wanted to follow up on the last question.

Just looking at sort of retail I guess platform sites are up.

118% so.

Great numbers, but just getting onto the legacy side can you maybe give us an idea of.

You know the magnitude of declines youre seeing there or maybe are they accelerating or they moderating is there anything on the horizon that would suggest that maybe it does moderate or is this just sort of something that we had to deal with.

<unk> 2027, when things really start accelerating like you kind of outlined on your Investor day. Thanks.

Hey, Ian.

Overall sites for us arent declare the relatively flat in the enterprise space for us. So there's no real decline there when we talk about legacy hardware business is declining but the overall.

Overall site count is relatively flat and that's the areas that we want to supercharge F&B side Youre growing digital banking side Youre growing so the conversion of the platform. We will continue to see this kind of a trajectory as we described in our Investor day. So some of the assumptions that we put out in terms of platform.

Site conversion rates against our installed base, but we still believe in all of those assumptions so the.

We describe the headwinds you know Brian did in an Investor day, a 2% headwinds over the next over 2023 and 2024, starting to shift a tailwind beyond that as we make that shift to recurring we still feel that way and have confirmed the assumptions that we made from that original investor day.

<unk> in that space.

Okay, Great and then also.

I guess, congratulations on uncle Julio's in Papa Murphy's.

We're just kind of look at the slide I think you put up the case study of the puzzle Buffalo Wild wings, but where are you in that or is this on the conversion to platform or are we in the impactful results.

Where are we and how is it tracking I guess.

First is kind of the magnitude of the increases that you've laid out in that case study.

Yeah.

Yeah, well I mean, we outlined in the Investor day, where that Buffalo Wild Wings case study was we outlined the progress that we've made we said we were about 20% converted.

On our on our restaurant sites installed base and about 10% on retail so we're tracking to those to those numbers and we're seeing those <unk> metrics play out so when we as we just described and the recent wins uncle Julio's.

Being one adding payments adds a tremendous amount of additional revenue and we're seeing that show up in our growth in the restaurant segment. So.

<unk> was up 10% year over year, that's on the back of both conversion to the platform and adding payment side. So.

We're seeing the numbers play out as we've described in our Investor day deck, we have no reason to change that.

Okay. So just maybe a quick follow up on that one so I guess when you say conversion to SaaS, you're kind of in that 39%.

Not that this client in particular would be 3900, but you are in that 3900 <unk> box right.

You're starting to see kind of that 9000, RP docs yet or.

<unk>.

That's correct.

It's client specifics so depending on how long your when we gave the pilot example in the in the Investor day deck and the F&B example, and we saw the S&P example, we gave got close to 19000. When we include payments into that site. So it's somewhat dependent on the soak time, if you will connected to the platform and how long.

Have the upsell and cross sell and some of it is the.

The pain point, where the.

We approach these as we're solving pain points for these customers.

And the real value, so we're not forcing them to the platform, where we're going in and solving a real world problem when they adopt.

The one or two services to solve that problem and then we get in there with additional with additional products. So it's timing of the cohorts. So we're in that range.

We estimate we're kind of close the year, we said on average about 3600 and <unk> across the base. So.

We're right in that range.

Great. Thank you very much.

There are no further questions at this time, Mr. Wilkinson I will turn the conference back to you for any additional or closing remarks.

Perfect. Thank you operator, and thanks again for joining the call today and as I said in the opening the employees of NCR now NCR boy acts in NCR.

It really did an amazing job to get the spin done and deliver a great quarter. So I appreciate everybody recognizing that we have a tremendous opportunity in each of our businesses.

And we are truly excited about what's in front of us in the future and we're operating from a position of strength and we will continue to build on our strong foundation, where we.

We're the market leader and we have a large base of blue chip customers, with whom we have deep and lasting relationships and we have the critical end to end solutions to continue serving these customers to help them run their stores restaurants and branches more effectively and we're winning in the market and taking share.

Cross all three segments, we serve our formula for growth is the same we're going to capitalize on the secular growth trends to win net new customers and gain market share, we're going to connect and onboard existing customers to our platform to drive deeper relationships and capture greater wallet share when we do all of this it will improve EBITDA.

And through the shift in our business and we will have continued focus on efficiencies and productivity initiatives that will expand margins and as I mentioned in my opening remarks, our customer success is our success and their growth fuels our growth.

Thank all of our customers as well, we strive to deliver consistent world class experiences to our customers and remain a market leader. We know this is the right formula to drive significant value creation. We are fully committed to delivering results to compound shareholder return I'd like to thank all the employees of NCR boy accidents here at least once more.

And thank you all for joining.

This concludes today's call. Thank you for your participation you may now disconnect.

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