Q1 2024 NCR Voyix Corp Earnings Call

Greetings and welcome to the NCR Boy X first quarter 'twenty 'twenty four earnings call. At this time all participants are in a listen only mode. A brief question and answer session will follow the formal presentation.

Operator: Greetings and welcome to the NCR Voyix First Quarter 2024 Earnings Call. At this time, all participants are on a listen-only basis. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Alan Katz, Vice President of Investor Relations. Thank you, sir. You may begin.

If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded it is now my pleasure to introduce your host Alan Katz, Vice President of Investor Relations. Thank you. Sir you may begin good morning, and thank you for joining our first quarter 2024.

Alan Katz: Good morning, and thank you for joining our first quarter 2024 earnings conference call. This morning, we issued our earnings release reporting financials for the quarter ended March 31st, 2024. The copy of the earnings release and the presentation that we will reference during this call are available on the Investor Relations section of our website, which can be found at www.ncrvoyix.com and has been filed with the SEC. With me on the call today are David Wilkinson, our Chief Executive Officer, and Brian Webb Walsh, our Chief Financial Officer.

Alan Katz: Earnings Conference call. This morning, we issued our earnings release reporting financials for the quarter ended March 31 2024.

Alan Katz: The earnings release, and the presentation that we will reference during this call are available on the Investor Relations section of our website, which can be found at www NCR Blake's dot com and have been filed with the SEC with me on the call today are David Wilkinson, our Chief Executive Officer.

Speaker Change: Brian Webb Walsh, our Chief Financial Officer.

Alan Katz: This call is being recorded, and the webcast will be available in the Investor Relations section of our website. Before we begin, please be advised that our remarks today will contain forward-looking statements. These forward-looking statements are subject to risks and uncertainties and other factors which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For additional information on these factors, please refer to our earnings release and our other reports filed with the SEC. We caution you not to place undue reliance on these statements.

Speaker Change: This call is being recorded and the webcast is available on the Investor Relations section of our website.

Speaker Change: We begin please be advised that our remarks today will contain forward looking statements.

Speaker Change: These forward looking statements are subject to risks and uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by such forward looking statements for additional information on these factors. Please refer to our earnings release and our other reports filed with the SEC.

Speaker Change: We caution you not to place undue reliance on these statements forward looking statements. During this call speak only as of the date of this call.

Alan Katz: Forward-looking statements during this call speak only as of the date of this call, and we undertake no obligation to update them. In addition, we will be discussing or providing certain non-GAAP financial measures today, which we believe are more reflective of our ongoing performance. For a full reconciliation of the non-GAAP financial measures discussed in this call, the most comparable GAAP measure in accordance with SEC regulations, please see our press release, attached as an exhibit, to our Form 8K filed this morning, and our supplemental materials, available on the Investor Relations section of our website. With that said, I would now like to turn the call over to David.

Speaker Change: Under takes no obligation to update them. In addition, we'll be discussing or providing certain non-GAAP financial measures today, which we believe are more reflective of our ongoing performance for a full reconciliation of the non-GAAP financial measures discussed in this call. The most comparable GAAP measure in accordance with SEC regulations.

Speaker Change: Please see our press release furnished as an exhibit to our form 8-K filed this morning.

Speaker Change: And our supplemental materials available on the Investor Relations section of our website with that I would like to now turn the call over to David.

David Wilkinson: Thank you, Alan, and welcome everyone to our first quarter 2024 earnings call. For the quarter, we delivered revenue and adjusted EBITDA in line with expectations. Normalized software and services revenue grew 5% as we continue to onboard new and existing customers to our commerce and digital banking platform. We executed on our transformation initiatives and saw the impact of the continued growth within our higher-margin revenue stream. We achieved solid sales results across our segments, including signing nearly 300 new customers and expanding with existing customers. I'll provide more detail on our sales activity in our segment update.

David Wilkinson: Thank you Alan and welcome everyone to our first quarter 'twenty 'twenty four earnings call for.

David Wilkinson: For the quarter, we delivered revenue and adjusted EBITDA in line with expectations.

Normalized software and services revenue grew 5% as we continue to onboard new and existing customers to our commerce and digital banking platforms.

David Wilkinson: We executed on our transformation initiatives and so all the impact that the continued growth within our higher margin revenue streams.

David Wilkinson: We achieved solid sales results across our segments, including signing nearly 300, new customers and expanding with existing customers I'll provide more detail on our sales activity in our segment updates.

David Wilkinson: We also continued converting customers to our platform and now have a total of approximately 61,000 retail and restaurant platform sites, approximately 18% of our total customer sites. The ongoing execution of our platform strategy, coupled with our increased investments in our global sales and services network, drove total segment ARR growth of 5% and software ARR growth of 6%. Now, let's turn to our restaurant segment slide on slide six.

David Wilkinson: We also continued converting customers to our platform and now have a total of approximately 61000 retail and restaurant platform sites approximately 18% of our total customer sites.

David Wilkinson: The ongoing execution of our platform strategy, coupled with our increased investments in our global sales and services network drove total segment are our growth of 5% and software are our growth of 6%.

David Wilkinson: Let's turn to our restaurant segment slide on slide six.

David Wilkinson: In the first quarter, we signed more than 230, new customers and increased our platform entertainment sites by 6% and 26% respectively.

David Wilkinson: In the first quarter, we signed more than 230 new customers and increased our platform and payment sites by 6% and 26%, respectively. Segment ARR grew 5% in the first quarter, and in our enterprise business, we announced a new multi-year agreement with Prest, one of the leading fresh juice brands in the U.S. with more than 100 locations and a growing e-commerce and wholesale business. Under our agreement, we will provide a full suite of solutions, including point of sale, back office, e-commerce, loyalty, and payments, which will simplify their operations and reporting across their physical and digital channels.

David Wilkinson: Segment are our grew 5% in the first quarter.

David Wilkinson: In our enterprise business, we announced a new multi year agreement with pressed one of the leading fresh juice brands in the U S with more than 100 locations and a growing e-commerce and wholesale business.

Under our agreement, we will provide a full suite of solutions, including point of sale back office e-commerce loyalty and payments, which simplifies their operations and reporting across their physical and digital channels.

David Wilkinson: Further our integrated consumer marketing solution will run the pressed loyalty and marketing programs, both in stores and online.

David Wilkinson: Further, our integrated consumer marketing solution will run the PREST loyalty and marketing program both in stores and online. Press moved from a smaller provider to our platform, allowing it to engage with its end users and improve the guest experience, while also driving efficiencies for its organization. In addition to signing new customers, we renewed and expanded with our existing restaurant customers this quarter, including a leading restaurant conglomerate in the U.S. who has been an NCR Voyix customer for more than 20 years.

David Wilkinson: Press moved from a smaller provider to our platform, allowing to engage with their end users and improve the guest experience while also driving efficiencies for their organization.

David Wilkinson: In addition to signing new customers, we renewed and expanded with our existing restaurant customers this quarter, including a leading restaurant conglomerate in the U S who has been an NCR of wax customer for more than 20 years.

David Wilkinson: This customer has increasingly utilized our commerce platform across their footprint of approximately 600 restaurants to improve their digital guest experience and increase customer satisfaction. In 2023, we began providing real-time data and menu cataloging for this customer.

David Wilkinson: This customer has increasingly utilized our commerce platform across their footprint of approximately 600 restaurants to improve their digital guest experience and increase customer satisfaction.

David Wilkinson: And 2023 we began providing real time data and menu cataloging for this customer thank.

David Wilkinson: In Q1 of this year, we further expanded our agreement to enable this customer to better serve their patrons ordering outside of the restaurant and deliver an experience that matches their brand promise of exceeding guest expectations. We're seeing traction in our mid-market growth efforts, signing new logos and expanding with existing customers. We continue to execute against our payments-led strategy for new mid-market customers, demonstrated by our 90-plus percent attach rate this quarter. We are growing our sales team, simplifying the sales and onboarding process, and improving our pricing and packaging, which will accelerate growth for this business. Let's move on to our retail segment on slide seven.

David Wilkinson: In Q1 of this year, we further expanded our agreement to enable this customer to better serve their patrons wondering outside of the restaurant and deliver an experience that matches their brand promise of exceeding guest expectations.

David Wilkinson: We're seeing traction in our mid market growth efforts, signing new logos and expanding with existing customers.

David Wilkinson: We continue to execute against our payments led strategy for new mid market customers demonstrated by our 90 plus percent attach rate this quarter.

David Wilkinson: We are growing our sales team simplifying the sales and on boarding process and improving our pricing and packaging, which will accelerate growth for this business.

David Wilkinson: Let's move on to our retail segment on slide seven.

This quarter, we signed more than 50, new small and mid market customers and for enterprise customers, leading to more than 800 additional sites.

David Wilkinson: This quarter, we signed more than 50 new small and mid-market customers and four enterprise customers, leading to more than 800 additional sites. We also increased our platform sites by nearly 57 percent as we continue to convert on-premise customers and onboard newly signed customers to our commerce platform. Segment ARR grew 5%, and software ARR grew 10% attributed to the powerful impact of attaching to the platform. One example of this is a multi-year expansion and renewal we signed with Sainsbury's, one of the largest grocery chains in the UK with over 1,700 store locations. For more than two decades, we have provided Sainsbury's with our on-premise point-of-sale software solution and self-tech-out technology with related services. Last month, Sainsbury's implemented our data and analytics module as part of their expanded agreement.

We also increased our platform sites by nearly 57% as we continued to convert on premise customers and onboard newly signed customers to our commerce platform.

David Wilkinson: Segment Air grew 5% and software are grew 10%.

David Wilkinson: <unk> to the powerful impact of attaching to the platform.

David Wilkinson: One example of this is a multi year expansion of renewal, we signed with Sainsburys one of the largest grocery chains in the U K with over 1700 store locations.

David Wilkinson: We're on track to connect our entire store footprint, which operates more than 22,000 lanes, to our commerce platform. As part of the contract, in 2025, we will upgrade their point-of-sale and self-checkout software to our cloud-based and in-lane solution. Sainsbury's commitment to our cloud-native platform solution will drive a payback on their investment in less than two years and drive incremental recurring revenue and adjusted EBITDA for our business over the life of the contract.

David Wilkinson: More than two decades, we have provided sainsburys with our on premise point of sale software solution and self checkout technology with related services.

David Wilkinson: Last month, Sainsburys implemented our data and analytics module as part of their expanded agreement.

David Wilkinson: We're on track to connect their entire store footprint, which operates more than 22000 lanes to our commerce platform.

David Wilkinson: As part of the contract and 2025, we will upgrade their point of sale and self checkout software to a cloud based and in line solutions.

David Wilkinson: Sainsburys commitment to our cloud native platform solution will drive a payback on their investment in less than two years and drive incremental recurring revenue and adjusted EBITDA for our business over the life of the contract.

David Wilkinson: We're excited to continue our strategic partnership to eliminate in-store complexity and deliver an enhanced guest experience. While platform conversions with enterprise customers often have longer sales cycles and take time to deploy, once implemented, they are accretive to revenue and margin and create a return on investment for our customers. Sainsbury's is a great example of how a customer can realize a fast payback on its investment when converting to the platform.

David Wilkinson: We're excited to continue our strategic partnership to eliminate in store complexity and deliver an enhanced guest experience.

David Wilkinson: Well platform conversions with enterprise customers, often have longer sales cycles and take time to deploy once implemented they are accretive to revenue and margin and create a return on investment for our customers.

David Wilkinson: Sainsburys is a great example of how a customer can realize a fast payback on its investment when converting to the platform.

David Wilkinson: Okay.

David Wilkinson: Our retail customers are increasingly focused on providing choice as part of the guest experience, which is accelerating interest in our next-generation self-checkout solution. For example, this quarter, we expanded our self-checkout contract with the leading global e-commerce retailer that I highlighted on our last call. We weren't even finished with the initial rollout when this customer doubled the number of self-checkout sites and contracted to implement our next-gen solution for the remaining installations

David Wilkinson: Our retail customers are increasingly focused on providing choice as part of the guest experience, which is accelerating interest for our next generation self checkout solution.

David Wilkinson: For example, this quarter, we expanded our self checkout contract with a leading global ecommerce retailer that I highlighted on our last call.

David Wilkinson: Not even finished with the initial rollout when this customer doubled the number of self checkout sites and contracted to implement our nextgen solution for the remaining installations.

David Wilkinson: We also expanded our relationship with the Navy Exchange, an existing point-of-sale customer, and will now be deploying self-checkout across 40 of their stores throughout the U.S., with the potential to expand to additional stores over time. We were able to expedite this expansion as a direct result of a recommendation from another government customer, the Army and Air Force Exchange, based on their experience as an NCR Voyix self-check Let's move on to slide 8.

David Wilkinson: We also expanded our relationship with the Navy exchange and existing point of sale customer and will now be deploying self checkout across 40 of their stores throughout the U S with the potential to expand to additional stores over time.

David Wilkinson: We were able to expedite this expansion as a direct result of our recommendation from another government customer the Army and Air Force exchange based on their experience as an NCR a way of self checkout technology and services customer.

David Wilkinson: Let's move on to slide eight our digital banking segment demonstrated strong financial and operational performance. This quarter. Our registered users grew 5% to more than $28 5 million and the number of active users grew 3% to more than 19.7 million while segment are our increased 7%.

David Wilkinson: Our digital banking segment demonstrated strong financial and operational performance this quarter. Our registered users grew 5% to more than 28.5 million, and the number of active users grew 3% to more than 19.7 million, while segment ARR increased 7%. In 2024, we have taken steps to now align the organizational structure and operating model of our digital banking business with our growth strategy. We've built out our senior leadership team and consolidated our four business lines into a single organization, streamlining our operations and simplifying our go-to-market.

David Wilkinson: And 'twenty 'twenty four we have taken steps to now align the organizational structure and operating model of our digital banking business with our growth strategy.

David Wilkinson: We've built out our senior leadership team and have consolidated our four business lines into a single organization streamlining our operations and simplifying our go to market.

Although our realignment is in its early stages, we have already been able to drive greater sales activity and are realizing cost efficiencies.

David Wilkinson: Although our realignment is in its early stages, we have already been able to drive greater sales activity and are realizing cost efficiency. Furthermore, we have reduced our capital investment without sacrificing research and development capacity, product innovation, or speed to market for our platform products and solutions in the first quarter.

David Wilkinson: Further we have reduced our capital investment without sacrificing research and development capacity product innovation or speed to market and our platform products and solutions.

David Wilkinson: In the first quarter we.

David Wilkinson: We expanded our relationships with over 200 existing customers, selling additional products and solutions. We continue to unlock ARPU and ARR growth across the largest customer base in the digital banking industry. One notable expansion was with a Tier 1 retail bank that will now use our platform to serve an additional portion of their customer base and further increase cost efficiencies for their business. Today, 13 of the 15 largest retail banks in the U.S. utilize our digital-first platform.

David Wilkinson: We expanded our relationships with over 200 existing customers selling additional products and solutions.

David Wilkinson: We continue to unlock ARPA and are our growth in the largest customer base in the digital banking industry.

David Wilkinson: One notable expansion was with a tier one retail bank that will now use our platform to serve an additional portion of their customer base and further increased cost efficiencies for their business.

David Wilkinson: Today 13 of the 15 largest retail banks in the U S utilize our digital first platform.

David Wilkinson: In addition to expanding our existing relationships. We also signed five new financial institutions. This quarter further expanding our industry leading client roster for.

David Wilkinson: In addition to expanding our existing relationships, we also signed five new financial institutions this quarter, further expanding our industry-leading client roster. For example, we signed a contract with Apple Bank, the largest state chartered savings bank in New York, with over 80 branches and 17 billion in assets under management.

David Wilkinson: For example, we signed a contract with Apple Bank the largest state chartered savings Bank in New York with over 80 branches and 17 billion of assets under management.

David Wilkinson: Apple Bank selected us given the strong value proposition of a comprehensive digital-first platform, a differentiated end-user experience, and the potential to drive efficiencies leveraging our technology. I would now like to provide an update on our platform offer. As we continue to invest in and improve our products and services, we will aim to strengthen our customer relationships and capture additional market share. Beginning with NCR Voyix Loyalty, our proprietary integrated customer marketing solution that allows better personalization and drives incremental revenue by combining customer data, offer management, and direct marketing into a single application.

David Wilkinson: Apple Bank selected us given the strong value proposition of our comprehensive digital first platform, our differentiated end user experience and the potential to drive efficiencies leveraging our technology.

David Wilkinson: I would now like to provide an update on our platform offerings as we continue to invest in and improve our products and services, we will aim to strengthen our customer relationships and capture additional market share.

David Wilkinson: Beginning with NCR vortex loyalty, our proprietary integrated customer marketing solution that allows better personalization and drives incremental revenue by combining customer data offer management and direct marketing into a single application.

David Wilkinson: PREST is a recent example of the increasing demand we are seeing for this solution. As mentioned earlier, our next-generation self-checkout solution delivers a more seamless checkout experience to both new and existing retail customers. Retailers continue to focus on improving the guest experience and adopting operational efficiencies in the face of a challenging labor market.

David Wilkinson: Pressed as a recent example of the increasing demand we're seeing for this solution.

David Wilkinson: As mentioned earlier, our next generation self checkout solution delivers a more seamless checkout experience to both new and existing retail customers.

Retailers continue to focus on improving the guest experience and adopting operational efficiencies in the face of a challenging labor market.

David Wilkinson: To that end, we have launched our next-gen self-checkout with over 15 customers, including Sainsbury's, to provide retailers more agility and flexibility to improve the guest experience. Based on this initial demand, we expect a broader set of customers to accelerate their implementation of this advanced technology over the next several quarters, driving additional growth for our retail segment moving forward. We also have agreements with several third parties that enhance our offering for our restaurant, retail, and digital banking customers.

David Wilkinson: To that end, we have launched our next gen self checkout with over 15 customers, including Sainsburys to provide retailers more agility and flexibility to improve guest experience.

David Wilkinson: Based on this initial demand we expect a broader set of customers to accelerate their implementation of this advanced technology over the next several quarters driving additional growth for our retail segment moving forward.

David Wilkinson: We also have agreements with several third parties and enhance our offering for our restaurant retail and digital banking customers.

David Wilkinson: These third-party applications leverage the cloud-based architecture of our platform and generate either transaction-based or recurring revenue with healthy margins. For restaurants, we are leveraging technology from Sunday to expand our pay-at-table capabilities, enabling servers to manage more tables simultaneously. As you've seen in our recent press release, we've expanded our partnership with OLO to bring new capabilities and integrated offerings to our enterprise customers. In retail, we are partnering with Everseen to help mitigate shrink by offering AI-enabled EverCheck technology for self-checkout.

David Wilkinson: These third party applications leverage the cloud based architecture of our platform and generate either transaction based or recurring revenue with healthy margins.

David Wilkinson: For restaurants, we are leveraging technology from Sunday to expand our pay at table capabilities, enabling servers to manage more tables simultaneously.

David Wilkinson: As you've seen in our recent press release, we have expanded our partnership with L O to bring new capabilities and integrated offerings to our enterprise customers.

David Wilkinson: And retail we are partnering with ever seen to help mitigate shrink by offering AI enabled ever check technology for self checkout.

David Wilkinson: Within our digital banking business, we have partnered with Emacs Technologies to offer personal financial wellness tools and support. I would like to reiterate my confidence in our ability to execute on our growth strategy of signing new customers and converting existing customers to our platform, capitalizing on our unrivaled market. We are prudently investing across our business to drive software and services revenue and enhance our products and services, further extending our runway for growth. With that, I will turn it over to Brian, who will take you through the Q1 financial results in more detail and our outlook for the remainder of 2024.

David Wilkinson: Within our digital banking business, we have partnered with <unk> technologies to offer personal financial wellness tools and support.

David Wilkinson: I would like to reiterate my confidence in our ability to execute on our growth strategy of signing new customers and converting existing customers to our platform.

David Wilkinson: Capitalizing on our unrivaled market position.

David Wilkinson: We are prudently investing across our business to drive software and services revenue and enhance our products and services further extending our runway for growth.

With that I will turn it over to Brian who will take you through the Q1 financial results in more detail and our outlook for the remainder of 'twenty 'twenty four.

Brian Webb: Thank you, David, and good morning. As a reminder, the spinoff of NCR-ATLIOS created some level of complexity in our 2023 and Q1 reported results, especially when looking at year-over-year comparisons. We are providing normalized results that exclude the impact of certain spin and divestiture-related items. My commentary today will focus on these normalized results. Please turn to slide 11.

Brian Walsh: Thank you David and good morning, as a reminder, the spinoff of NCR alios created some level of complexity in our 2023 in Q1 reported results, especially when looking at year over year comparisons we are providing normalized results that exclude the impact of certain spin and divestiture related items my commentary today will focus on.

Brian Walsh: These normalized results please turn to slide 11.

Brian Webb: First quarter total normalized revenue was $858 million, declining approximately 3% as expected, driven by a decline in hardware revenue as a result of the timing of customer refresh cycles. Normalized software and services revenue increased 5% for the first quarter to $662 million. Q1 normalized adjusted EBITDA was $122 million, which declined 2%, driven by $22 million of spin-related disenergizes and lower hardware revenue.

Brian Walsh: First quarter total normalized revenue was $858 million declining approximately 3% as expected driven by a decline in hardware revenue as a result of the timing of customer refresh cycles normalized software and services revenue increased 5% for the first quarter, the 662 million Q.

Brian Walsh: Normalized adjusted EBITDA was $122 million, which declined 2% driven by $22 million of spin related dis synergies and lower hardware revenue. Excluding these dis synergies are adjusted EBITDA would have grown by 15% year over year.

Brian Webb: Excluding these disenergies, our adjusted EBITDA would have grown by 15% year over year. The Q1 adjusted EBITDA margin was 14.2%, slightly higher than the prior year. Our Q1 adjusted EPS was 13 cents, and our weighted diluted average share count was 162.7 million. Please turn to slide 12 to go through the details of our segment results.

Brian Walsh: Q1, adjusted EBITDA margin was 14.2% slightly higher than the prior year.

Brian Walsh: Our Q1, adjusted EPS was <unk> 13 cents and our weighted diluted average share count was $162 7 million.

Brian Walsh: Please turn to slide 12 to go through the details of our segment results across our segments. We saw growth in software and services revenue, which was offset by declines in hardware adjusted EBITDA improved across all three segments. This performance was consistent with our expectations.

Brian Webb: Across our segments, we saw growth in software and services revenue, which was offset by declines in hardware. Adjusted EBITDA improved across all three segments. This performance was consistent with our expectations.

Brian Webb: Within our restaurant segment, software and services revenue grew 3%, offset by hardware, resulting in a revenue decline of 3%. Software and services revenue grew as we increased the number of platform and payment sites and realized price increases. Restaurants had solid profit performance with adjusted EBITDA increasing 25% and margin expanding 600 basis points, driven primarily by MIX and our Transformation Initiative. In retail, software and services revenue grew by 5%, offset by hardware, resulting in a total revenue decline of 7%.

Brian Walsh: Within our restaurant segment software and services grew 3% offset by hardware, resulting in a revenue decline of 3% software and services revenue grew as we increased the number of platform and payments sites and realized price increases.

Brian Walsh: Restaurants had solid profit performance with adjusted EBITDA, increasing 25% and margin expanding 600 basis points, driven primarily by mix and our transformation initiatives.

Brian Walsh: In retail software and services revenue grew by 5% offset by hardware, resulting in a total revenue decline of 7% the software and services revenue growth reflects our continued success transitioning customers to the platform and expanding with those customers.

Brian Webb: The software and services revenue growth reflects our continued success transitioning customers to the platform and expanding with those customers. As David highlighted, while the platform conversion cycle can be longer for enterprise customers, shifting our enterprise base to the platform will accelerate revenue and earnings growth over time, adjusted EBITDA group 4% as a result of revenue mix and our transformation initiatives. Within digital banking, Q1 revenue increased 7% as we continue to demonstrate cross-sell momentum and onboard previously signed customers.

Brian Walsh: As David highlighted while the platform conversion cycle can be longer for enterprise customers shifting our enterprise base to the platform will accelerate revenue and earnings growth over time <unk>.

Brian Walsh: Adjusted EBITDA grew 4% as a result of revenue mix and our transformation initiatives.

Brian Walsh: Within digital banking Q1 revenue increased 7% as we continued to demonstrate cross sell momentum and onboard previously signed customers.

Brian Webb: Adjusted EBITDA in this segment grew 10%, and margin expanded by 90 basis points driven by operating leverage and our transformation initiatives. I will now address the impact of separation on our corporate and other lines. First, we have the synergies related to the separation.

Brian Walsh: Adjusted EBITDA in this segment grew 10% and margin expanded by 90 basis points, driven by operating leverage and our transformation initiatives.

Brian Webb: This amounted to $22 million in Q1. A portion of these synergies reflect both revenue and expenses net associated with a non-core spin-related business, which we are in the process of winding down. We anticipate that this will extend beyond 2024. In the first quarter, corporate and other included $8 million of revenue associated with our commercial agreements with Atlios, which has a lower margin contribution. For the full year, we now expect revenue related to commercial agreements to total approximately $11 million. Please turn to slide 13.

Brian Walsh: I will now address the impact of separation on our corporate and other line first.

Brian Walsh: First we have the dis synergies related to the separation this amounted to $22 million in Q1, a portion of these dis synergies reflect both revenue and expenses not associated with a noncore spin related businesses.

Brian Walsh: Which we are in the process of winding down we anticipate that this will extend beyond 2024.

Brian Walsh: In the first quarter corporate and other also included $8 million of revenue associated with our commercial agreements with Atlas, which has a lower margin contribution for the full year. We now expect revenue related to commercial agreements to total approximately $11 million.

Brian Walsh: Please turn to slide 13.

We ended the quarter with 3.9 times net leverage 2.7 billion of debt and $246 million of cash.

Brian Webb: We ended the quarter with 3.9 times net leverage, $2.7 billion of debt, and $246 million of cash. As of March 31st, under our $500 million revolving credit facility, we had drawn $196 million. As expected, our leverage was higher at the end of Q1, given the use of cash based on normal seasonality. We anticipate net leverage at year-end will be approximately 3.4 times. There were a few other expected items that adversely impacted our cash flow this quarter, including $32 million of spend associated with our transformation and restructuring initiatives and $5 million related to separation expenses. These items include severance, professional fees, and other exit costs related to right-sizing our cost base.

Brian Walsh: As of March 31st under our 500 million revolving credit facility, we had drawn $196 million as expected our leverage was higher at the end of Q1, given the use of cash based on normal seasonality, we anticipate net leverage at year end will be approximately 3.4 times.

Brian Walsh: There were a few other expected items that adversely impacted our cash flow this quarter, including $32 million of spend associated with our transformation and restructuring initiatives and 5 million related to separation expenses.

Brian Walsh: These items include severance professional fees and other exit costs related to right sizing our cost base, we anticipate seeing our transformation initiatives positive impact the margin ramp up over the coming quarters. Finally, I'd like to outline our 'twenty 'twenty four guidance as a reminder, our guidance does not reflect revenue or adjust.

Brian Webb: We anticipate seeing our transformation initiatives, which have a positive impact on margin, ramp up over the coming quarter. Finally, I'd like to outline our 2024 guidance. As a reminder, our guidance does not reflect revenue or adjusted EBITDA associated with the delayed ATLEOS transfer contract. Given the first quarter performance and our current visibility for the year, we are reaffirming the 2024 guidance ranges that we communicated on our Q4 call. I'll now turn the call back to David for some additional remarks. Thanks, Brian.

Brian Walsh: EBITDA associated with the delayed Elliott's transfer countries, given the first quarter performance and our current visibility for the year. We are reaffirming the 'twenty 'twenty four guidance ranges that we communicated on our Q4 call I'll now turn the call back to David for some additional remarks.

David Wilkinson: Thanks, Brian. Before we move to Q&A, I'd like to note that this morning we announced that Jim Kelly, the current chairman of NCR Voyix, has now stepped into the role of executive chairman. I've worked closely with Jim following the spin-off from the Atlios business, and he has been integral to the development of the go-forward strategy for NCR Voyix during his tenure at the company. I am excited about working more closely with Jim in his new role.

Thanks, Brian before we move to Q&A I'd like to note that this morning, we announced that Jim Kelly. The current chairman of NCR voyage has now stepped into the role of executive Chairman.

David Wilkinson: I worked closely with Jim following the spin of the Atlas business and he has been integral to the development of the go forward strategy for NCR voyages during his tenure at the company.

Speaker Change: I'm excited about working more closely with Jim and his new role he brings a wealth of experience and leadership expertise from public companies, particularly around strategic objectives operational efficiency and payments.

David Wilkinson: He brings a wealth of experience and leadership expertise from public companies, particularly around strategic objectives, operational efficiency, and payment. Given the many important initiatives that we have underway, having him in this expanded role will be invaluable to the board and the management team. With that, I will turn it over to the operator to begin the question and answer session.

Speaker Change: Given the many important initiatives that we have underway having him in this expanded role will be invaluable to the board and the management team.

Speaker Change: With that I will turn it over to the operator to begin the question and answer session.

Speaker Change: Please open the lines.

Speaker Change: Okay.

Thank you at this time, we'll be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue. You May press star two if he would like to remove your question from the queue. We ask that you limit your questions to one and a follow up to that others may have an opportunity to ask question.

Operator: Thank you. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone. A confirmation tone will indicate that your line is busy. You may press star 2 if you would like to remove your question from the queue. We ask that you limit your questions to one and a follow-up so that others may have an opportunity to ask questions. You may re-enter the queue by pressing star 1. For participants using speaker equipment, it may be necessary to pick up your handset before pressing start.

Speaker Change: You may reenter the queue by pressing star one for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

Operator: One moment, please, while we poll for questions. Our first question comes from Matt Summerville with D.A. Davidson. Please proceed with your question.

Speaker Change: One moment, please only poll for question.

Speaker Change: Our first question comes from Matt Summerville with D. A Davidson. Please proceed with your question.

Matt J. Summerville: Thanks. Good morning.

Matt J. Summerville: Thanks, Good morning.

Matt J. Summerville: Maybe if you guys could maybe start by just talking a little bit more broadly.

David Wilkinson: Maybe if you guys could maybe start by just talking a little bit more broadly around, you know, what you're seeing in the hardware environment today. Obviously, that's an important top-line contributor, less so on the bottom line. I totally get that, but it's still an important piece of your revenue. Specifically, include some comments on what you're seeing with respect to self-checkout, some of the larger projects that you had thought maybe in late 23 would end up hitting in 24, maybe an updated view there, and then I have a follow-up. Thank you.

Matt J. Summerville: <unk>.

Matt J. Summerville: What youre seeing in the hardware environment today, obviously, we've got some important top line contributor less so on the bottom line I totally get that but it's still an important piece of your revenue specifically.

Matt J. Summerville: Include some comments on what you're seeing with respect to self check out some of the larger projects that you had thought maybe in late 'twenty three would end up hitting in 'twenty for maybe an updated view there.

Matt J. Summerville: And then.

Speaker Change: Thank you.

Speaker Change: Good morning, Matt It's David.

David Wilkinson: Yeah, good morning, Matt, and David. So, as we described, that hardware business is largely project-driven for us, and it's pretty lumpy. And we are seeing, in the back half of the year, those projects coming back that were pushed kind of, kind of late.

David Wilkinson: So the as we describe that that hardware business is largely project driven for us and is pretty lumpy.

David Wilkinson: And we are seeing in the back half of the year those projects coming back that were pushed.

David Wilkinson: Post COVID-19 the bubble that we saw so we're seeing.

David Wilkinson: Again, some of those projects will resurface in the back half of the year. In terms of self-checkout, self-checkout for us is really a holistic solution. So we're following the consumer trends of consumers looking for different ways to check out. And a lot of that is, we'll call it, unassisted checkout, whether that takes the form of a mobile device, a kiosk, or the standard self-checkout that you know and love in terms of the appliance that sits within the checkout area is making some traction too. And I would just add that.

David Wilkinson: Again, some of those projects resurface in the back half of the year in terms of self checkout self checkout for us as a as really a holistic solution. So we're following the consumer trends of consumers looking for different ways to check out and a lot of that is I'll call. It unassisted checkout, whether that takes the form of a mobile device.

David Wilkinson: He asked what are the standards I'll check out that you know and love in terms of the appliance that says, but then a large grocery chain or a large big box store. So we're going to continue to see demand it'll show up in our business a lot in software and services because that makes up a big piece of that business as the hardware thinned out a little in the way in the average selling price.

David Wilkinson: Decline a bit but we see again continued demand and as we described in our prepared remarks. Our next gen self checkout is.

David Wilkinson: Making some traction too.

Brian Webb: And I would just add that, based on the projects, we expect the hardware decline to moderate in the second half.

David Wilkinson: I would just add that based on the projects, we expect the hardware decline to moderate in the second half versus the first half.

Speaker Change: So maybe as a follow up then Brian along those lines, how should we be thinking about kind of the go forward revenue and EBITDA cadence more broadly speaking as we think about Q2 in the back half of the year relative to the $122 million of EBITDA you delivered in Q1.

Brian Webb: So maybe as a follow-up then, Brian, along those lines, how should we be thinking about kind of the go forward revenue and EBITDA cadence more broadly speaking as we think about Q2 in the back half of the year relative to the 122 million of EBITDA you delivered in Q1. Thanks. Yes, yeah, so consistent with what we said on our last call.

Brian Walsh: Yes, yeah, so consistent with what we said on our last call because our cost transformation initiatives are ramping as we go through the year because the hardware rate of decline is expected to moderate in the second half, we will see revenue and adjusted EBITDA sequentially improve as we go through the year.

Brian Webb: Yes, yeah, so consistent with what we said on our last call, because our cost transformation initiatives are ramping as we go through the year, and because the hardware rate of decline is expected to moderate in the second half, we'll see revenue and adjusted EBITDA sequentially improve as we go.

Speaker Change: Got it thanks.

Speaker Change: Our next question comes from Mike Tendon Needham <unk> co. Please proceed with your question.

Operator: Our next question comes from Mayank Tandon with Needham & Co. Please proceed with your question.

Mayank Tandon: Thank you. Good morning. Maybe just diving into ARR trends, Brian or David, could you talk about what we should expect there both on the software side and in total ARR, just in terms of the trend line that you progress through the year, and then maybe you could break it down by vertical as well?

Speaker Change: Thank you good morning, maybe just diving into air our trends are Brian or David.

Speaker Change: Could you talk about what we should expect there both on the software side and in total they are just in terms of trend line as you progress through the year and then maybe you could break it down by vertical as well.

Brian Walsh: Yes, I would say overall, we're pleased with the.

David Wilkinson: You know, I would say we're overall pleased with the growth we're seeing in software ARR and total ARR that includes services.

Brian Walsh: The growth we're seeing in software are are.

Brian Walsh: And total IRR that includes services.

David Wilkinson: As well, that for us is the... Confidence in the Strategy of Adding New Customers to Customer Growth.

Brian Walsh: Well that that for US is the is what gives us confidence in our strategy of adding new customers the customer growth, we're seeing and monetizing our base of the largest install base and the industries that we serve.

David Wilkinson: we're seeing and monetizing our base of the largest install.

David Wilkinson: Based on the industries that we serve, you know, we'll continue to see Brian.

Brian Walsh: We'll continue to see as Brian described a similar trend in terms of sequential growth.

David Wilkinson: As Brian described, a similar trend in terms of sequential growth of ARR, as you look out over the quarters, that'll be a trend across all three of the businesses. Honestly.

Brian Walsh: Our our as we look out over the quarters that'll that'll be a trend at.

Brian Walsh: And all three of the businesses.

Brian Walsh: Honestly.

Brian Webb: And I would just add one point. We published for the first time a metrics file on our website, which has a lot of financial data and KPI data. I just encourage everybody to take a look at that.

Speaker Change: And I would just add one one point, we published for the first time a metrics file on our website, which has a lot of the financial data and keep your eye data just encourage everybody to take a look at that.

Speaker Change: Got it okay.

Mayank Tandon: Got it. Okay. Well, now, let's turn to a separate question.

Speaker Change: Now, let's turn to a separate question we get this a lot from investors and I'm sure you do as well.

Mayank Tandon: We get this a lot from investors, and I'm sure you do as well. The digital banking piece is obviously doing really well. And we look at the valuations for other pure plays out there in the market. They've actually creeped up pretty meaningfully in the recent quarters. So any updates on your plans to potentially monetize the asset, just given the higher valuations in the market overall, and maybe that way, given the synergies between digital banking and retail and restaurants, it doesn't seem to be at least obvious to investors. That could obviously be a very rewarding opportunity for the shareholders over time. Any thoughts there?

Speaker Change: The digital banking piece, obviously is doing really well and we.

Speaker Change: If we look at the valuations for other pure plays out there in the market. They have creeped up actually pretty meaningfully in the recent quarters. So any updates on your plans to potentially monetize the asset just given the higher valuations in the market overall.

Speaker Change: Maybe.

Speaker Change: That way given up the synergies between digital banking and retail and restaurants. It doesn't seem to be at least are obvious to investors.

Speaker Change: That could be.

Speaker Change: By rewarding our opportunity for the shareholders over time any thoughts there.

Speaker Change: The digital banking business as you saw through the results is performing really well, where we're proud of what that team has done as I described operationally, we've consolidated that into a singular team focused on execution and we're seeing continued strong growth in.

David Wilkinson: The digital banking business, as you saw in the results, is performing really well. We're proud of what that team has done. As I described operationally, we've consolidated that into a singular team focused on execution, and we're seeing continued strong growth in that business. So right now, I agree that the value of that business is underappreciated. And that's the whole intent of what we're doing is exposing

Speaker Change: That business. So right now I agree that the value of that business is underappreciated and that's the all in kind of what we're doing is exposing the value of that are new and the new NCR voice.

David Wilkinson: is exposing the value of that and the new NCR Voyix.

Speaker Change: That being said, we always continue to explore all opportunities to maximize shareholder value.

David Wilkinson: We will always continue to explore opportunities to maximize shareholder value.

David Wilkinson: to maximize shareholder value

Speaker Change: Yes.

Speaker Change: Got it I'll get back in queue. Thank you.

Mayank Tandon: All right. I'll get back in queue. Thank you.

Speaker Change: Our next question comes from Kartik Mehta with Northcoast Research. Please proceed with your question.

Operator: Our next question comes from Kartik Mehta with North Coast Research. Please proceed with your question. Good morning.

David Wilkinson: that we see the same articles there. You know, we also had one in the UK where Simon, the CEO of Sainsbury's, came out and said that. Their customers love self-checkout, and they're continuing to deploy it, as we described in our relationship with them. So I'll point back, Kartik, to the consumer trend. This is really a consumer-driven trend. You and I, as consumers and shoppers, are really driving the requirements for both retailers and restaurants to create unassisted ways to checkout, order, or otherwise transact.

Kartik Mehta: Good morning Dave, just if you could follow up on the self-checkout. You know, there are a lot of headlines about stores wanting to reduce their footprint and self-checkout. There's even some legislation proposed in California that they'd like to get away with. And I'm wondering, based on that backdrop, what you're seeing in terms of your conversations with retailers, in terms of demand for the product, and how you'd expect that to progress over the next couple years.

Kartik Mehta: Good morning, Steve just if you could follow up on the self checkout you know there are a lot of headlines.

Kartik Mehta: Stores wanting to reduce their footprint in self checkout.

Kartik Mehta: There's even some legislation proposed in California that they'd like to get away do away with self checkout and I'm wondering based on that backdrop.

Kartik Mehta: What you're seeing in terms of your conversations with retailers in terms of demand for the product and how you'd expect that to progress over the next couple of years.

Kartik Mehta: Yeah.

Kartik Mehta: We see the same articles there. We also there was one in the UK that was Simon CEO Sainsburys came out and said that.

Kartik Mehta: Their customers love self checkout and are continuing to deploy as we described in our relationship with them. So I'll point back Kartik to the consumer trends. This is really a consumer driven trend you and I as consumers and shoppers are really driving their requirements for both retailers and restaurants to create unassisted ways to chew.

Kartik Mehta: Out order or otherwise transact with.

David Wilkinson: There with these large retailers. So I think that we're going to continue to see a strong trend, and what that looks like. They're all battling to differentiate the experience for both, Daniel Perlin, Daniel Perlin, Matt Summerville, Ian Zaffino, Matthew Roswell, Anthony Oliver, will take on different forms from mobile to kiosk to the full service that you've seen.

Kartik Mehta: There with these these large retailers. So I think that we're going to continue to see a strong trend and what that looks like they're all battling to differentiate the experience for both.

Kartik Mehta: Customers and Theyre in the labor Battle for staffing stores for peak times or are shifting labor to different value added task because they offer new capabilities and new services. So what we are believing that the trend will continue as I described earlier it will show up in our business and software and services as well as the hardware.

Kartik Mehta: We'll take on different forms from mobile to kiosks to the whole service that you've seen accepting accepting cash in some cases, so again, where we continue to have a lot of conversations around how to how to create better experience guest experiences in both restaurants and retailers and that will that will take the form of of unassisted.

David Wilkinson: Accepting cash in some cases.

David Wilkinson: So again, we'll continue to have a lot of conversations around how to create better guest experiences in both restaurants and retailers, and that will take the form of unassisted and technology-driven solutions.

Kartik Mehta: Technology driven solution.

Kartik Mehta: And then just as a follow-up on the hardware business, I know you talked a little bit about what's going to happen in the first half and second half. And in the past, you've kind of talked about how 2024 is a little bit of an anomaly because of what happened in previous years. And in 2025, you'd expect the decline to be a lot more moderated. And I'm wondering, based on your outlook and what you're seeing in the pipeline, if those comments would still apply.

Speaker Change: And then just as a follow up on the hardware business I know you talked about a little bit about what's going to happen in the first half and second half and in the past you've kind of talked about how 'twenty 'twenty four is a little bit of an anomaly because what's happened in previous years and in 2025, you'd expect the decline to be a lot more moderated and I'm wondering based on kind.

Your outlook and what Youre seeing in the pipeline if those comments would still apply.

And we see a strong pipeline I mean, Brian gave you the the the.

David Wilkinson: Yeah, we see a strong pipeline. I mean, Brian gave you the expected cadence of the numbers earlier in the answer to the earlier question, and we're pleased with the pipeline. The pipeline is healthy and growing, and it supports what we've described in terms of our reaffirmation of the full year guidance.

Speaker Change: Expected cadence of the numbers earlier on the answer to your question yes.

Speaker Change: We're pleased with the pipeline the pipeline is healthy and growing and it supports what we've described in terms of our reaffirmation of our full year guidance.

David Wilkinson: Okay, so I was just wondering, Dave, would your commentary in the past about 2025 being a more moderate decline still be valid?

Speaker Change: Okay. Yeah. So I was just wondering Dave so would your commentary in the past about 2025 being a more moderate decline still be valid.

Speaker Change: Yeah.

Dave: Yeah, I believe so I and everything we're seeing right now gives us indication as Brian said, the the projects arent covering the back half of the year at this point.

David Wilkinson: Yeah, I believe so. Everything we're seeing right now gives us indications, as Brian said, that the projects are recovering the back half of the year at this point.

Kartik Mehta: I would still believe that. Thank you very much. I appreciate it.

Speaker Change: I would still believe that yes. Thank.

Speaker Change: Thank you very much I appreciate it.

Speaker Change: Yeah.

Speaker Change: Our next question comes from Erik Woodring with Morgan Stanley. Please proceed with your question.

Operator: Our next question comes from Erik Woodring with Morgan's family. Please proceed with your question. OK. Thank you.

Erik William Richard Woodring: Good morning, guys. Historically, you haven't always quantified customers signed. And so I was just wondering if you could put some of the metrics you disclosed this morning in a bit more context. For example, the nearly 300 customers signed across retail and restaurants. Can you just give us some context of maybe how that might compare to historical quarterly run rates? Was this kind of above normal, below normal? Why would that be? You know, what's driving that? Just a little more color on how to kind of put those numbers in context would be super helpful for us. Thank you so much.

Erik William Richard Woodring: Super. Thank you so much.

Erik William Richard Woodring: Super. Thank you so much good morning, guys I know historically you over you you haven't always quantified customers signed and so I was just wondering if you could put a it put some of the metrics you disclosed this morning in a bit more context again, the the nearly 300 customers signed across retail and restaurants can you just give us some context of maybe.

Speaker Change: How that might compare to historical quarterly run rates was this kind of above normal below normal why would that be you know, what's driving that just a little more color on how to kind of put those numbers in context would be super helpful. For us. Thank you so much.

Speaker Change: Yeah.

David Wilkinson: Yeah, the number of customers we added this quarter, I would say is consistent with what we expected and consistent with past performance. We have, as we've been describing..., put an increased focus on investing more on the sales side and adding new customers. So it's a metric that we want to continue to expose you and the rest of the market to, you know, digital banking, the strong growth, normal seasonality in that digital banking business. We added four new customers and expanded our relationship with 200 customers. So in addition to adding new customers, we're still seeing the strength and the expansion of the base, but we'll continue to focus there, and performance was in line with expectations.

Speaker Change: Yeah. The number of customers. We added this quarter I would say is consistent with.

Speaker Change: With what we expected and consistent with past performance, we have as we've been describing.

Speaker Change: Put an increased focus on our investing more on the sales side and adding new customers. So it's a metric that we want to continue to expose you and the rest of the market too.

Speaker Change: Digital banking the expansion strong normal seasonality in that digital banking business. We added four new customers expanded relationships with 200 customers. So in addition to adding new customers, we're still seeing the strength in the expansion.

Speaker Change: Of the base, but will continue to focus there in performance was in line with expectations.

Speaker Change: Okay. That's helpful and then you know.

Erik William Richard Woodring: Okay, that's helpful. And then, you know, I know your goal was, or at least you just talked about getting to about 3.4 times net leverage by the end of the year. But I think the longer-term goal was to get to roughly three times net leverage. Can you just remind us, you know, is that the longer-term target? How long will it take to get there?

Speaker Change: I know your goal was or at least you just talked about getting to about 3.4 times net leverage by the end of the year.

Speaker Change: I think the longer term goal was to get to roughly three times net leverage can you just remind us is that the longer term target how long will it take to get there and in second to that you know just trends in terms of free cash flow conversion I know you're talking about this year, 25% to 28% how does that look through the year.

Speaker Change: Or how do we think about maybe the linearity of that and is that the long term run rate, we should be thinking about does that creep higher just putting all of this in context that help us understand the moving pieces on the cash side would be very helpful. Both for this year and then beyond this year for any color that you'd have and that's it for me. Thank you.

Brian Webb: Yes, so starting with leverage, as I said in my prepared remarks, we still expect to get to about 3.4 turns of leverage by the end of the year. And then from there, we'll continue to focus on improving leverage to get under, you know, three or under.

Brian Webb: And second to that, you know, just trends in terms of free cash flow conversion. I know you're talking about this year 25 to 28%. How does that look through the year? How do we think about, maybe, the linearity of that? And is that the long-term run rate we should be thinking about? Does that creep higher? Just putting all of this in context to help us understand the moving pieces on the cash side would be very helpful, both for this year and then beyond this year, for any color that you'd have. And that's it for me. Thank you. Yes, so I'm starting with leverage.

Speaker Change: Yeah, so starting with leverage we as I said.

Speaker Change: Said in my prepared remarks, we still expect to get to about three four turns of leverage by the end of the year and then from there. We continue we'll continue to focus on improving leverage to get under three or under and that that's what we need to do and plan to do with our free cash flow generation the cadence for free cash flow. This year, we used cash.

Brian Webb: And that's what we need to do and plan to do with our free cash flow generation. The cadence for free cash flow this year is that we used cash in Q1 as expected. That's normal seasonality.

Speaker Change: In Q1 as expected Thats normal seasonality, there's certain payroll things that happened in Q1, typically and that drives cash usage and then you know we're still maintaining our range of free cash flow and conversion percentages for the year and so we'd expect to see that play out balance of the year as.

Brian Webb: There's certain payroll things that happen in Q1, typically, and that drives cash usage. And then, you know, we're still maintaining our range of free cash flow and conversion percentages for the year, and so we'd expect to see that play out balance of the year. As we get into the future years, we do think we can improve free cash flow from where we are today. We've described that before, and we still feel that way. Great. Thank you. Our next question comes from Matthew Roswell with RBC Capital Markets; please proceed.

Speaker Change: As we get into the future years, we do think we can improve free cash flow from where we are today.

Speaker Change: We've described that before and we still feel that way.

Speaker Change: Yeah.

Speaker Change: Great. Thank you so much.

Speaker Change: Our next question comes from Matthew Roswell with RBC capital markets. Please proceed with your question.

Operator: Our next question comes from Matthew Roswell with RBC Capital Markets. Please proceed with your Yes, good morning. Thank you for taking the question.

Matt J. Summerville: Yes. Good morning, Thank you for taking the question.

Matt J. Summerville: I was wondering if you could expand a bit on the platform conversions and what youre seeing in terms of new clients coming on to the platform and also how our existing clients coming over whether it's waiting for renewals or sort of stepping up ahead.

Matt J. Summerville: Keith.

Keith: So all of our new customers when we describe customer adds all of those new customers are coming onto the platform. So that's that's one thing I was going to ground everybody on.

Matt J. Summerville: So all of our new customers, when we describe customer ads, all of those new customers are coming onto the platform. So that's one thing I just want to ground everybody on.

Keith: We did see an increase in <unk> platform sites up to 61000 and about 18%.

David Wilkinson: We did see an increase in platform sites up to 61,000, about 18% of our base. So we're seeing conversion as expected in that base. We're also seeing customers do that ahead of refresh cycles. So when you think about the demand that's out there for new capabilities, digital capabilities, guest experience, loyalty, new payment forms, some of the partnerships that I mentioned and the products and partnerships section of the prepared remarks, all of those capabilities are being enabled through the platform.

Keith: Of our base so what we're seeing.

Keith: Conversion as expected in that in that base. There. We're seeing also customers do that ahead of refresh cycle. So when you think about the demand that's out there for new capabilities digital capabilities or guest experience loyalty new payment forms some of the partnerships that I mentioned and the products and partnership.

Keith: Section of the prepared remarks, all of those capabilities are being enabled through the platform. So it starts with a platform connection.

David Wilkinson: So it starts with a platform connection, and then we enable all new capabilities through that platform, so we don't build it back into that legacy core base. We don't require an upgrade of the legacy point-of-sale on-premise. We can connect our legacy products to our platform to deliver those new capabilities, so right now, we're doing it based on customer needs. As they're finding new capabilities that are required, we're connecting them to the platform and delivering those needs for them in a subscription for that new capability.

Keith: And then we enable all new capabilities through that platform. So not building it back into that that legacy core base. We don't require an upgrade of the legacy point of sale on Prem we can connect our legacy block are legacy products to our platform to deliver those new capabilities. So right now we're doing it based on customer need is there.

Keith: And they're finding new capabilities that are required we're connecting them to the platform and delivering those needs for them and a subscription.

Keith: For that new capability.

Speaker Change: Okay. Thank you.

Speaker Change: Our next question comes from in Casino with Oppenheimer. Please proceed with your question.

Operator: Our next question comes from Ian Zaffino with Oppenheimer. Please proceed with your question.

Ian Alton Zaffino: Hey, good morning. This is Isaac Sellhausen.

Speaker Change: Hey, Good morning. This is <unk> on for Ian Thanks for taking all the questions. Maybe just a follow up on the last point on the restaurants business. There's been a number of renewals and expansions that you've called out with customers are you know are there.

Isaac Arthur Sellhausen: Ian, thanks for taking all the questions. Maybe just a follow-up on the last point. You know, in the restaurant business, there's been a number of renewals and expansions that you've called out with customers. You know, are the expansions pacing the way you would like and expected? Maybe you could touch on how conversations have gone with customers, maybe how long the sales process generally takes with expanding the platform, you know, specifically within restaurant chains. Thanks.

Speaker Change: Expansions patient the way you'd like than expected, maybe you could touch on how conversations have gone with customers, maybe how long the sales process generally takes with explaining the platform.

Speaker Change: Specifically within restaurant chains. Thanks.

Speaker Change: Yeah, I'd say, we have been really pleased with the conversations that we're having with our existing customer base, both in the small and mid market segments as well as the enterprise customer base.

David Wilkinson: Yeah, I'd say we have been really pleased with the conversations that we're having with our existing customer base, both in the small and mid market segments, as well as the enterprise customer base. The sales cycle is different depending on which segment of that market we're in. For example, the small to midsize is a much shorter sales cycle.

Speaker Change: The sales cycle is different depending on which segment of that market round small to mid size is much shorter sales cycle, we'll call it.

David Wilkinson: You know, three to six months on the larger side, you know, that'll expand out six to nine, some extend out to 12 months. Really, the platform conversations are all about the API capabilities that we unlock with connection to the platform and driving some of the enterprise functionality that we've been able to deliver to the enterprise customers and pushing that down into the market. So some of the things that the enterprise-scale players have had access to for a long time, we're now making available to our mid-market customers.

Speaker Change: Now three months to six months on the on the larger side.

Speaker Change: That'll that'll expand out six to nine some extend out to 12 months, but really the platform conversations are all about the the API capabilities that we unlock with can actually into the platform and driving some of the enterprise functionality that we've been able to deliver to the enterprise customers and pushing that down.

Speaker Change: Back into the mid market. So some of the things that the enterprise scale players have had access to for a long time, we're now making available to our mid market customers. So you'll see more traction we're seeing more traction you'll see us with some more wins like we announced with pressed in that.

David Wilkinson: So you'll see more traction, we're seeing more traction, you'll see us with some more wins, like we announced with Preston in that mid-market-ish space where at the lower end of the enterprise, where we're seeing a lot of demand and a lot of traction. So positive trends, good discussions with new customers, and a lot of positive feedback from our existing base.

Speaker Change: We'll call it that mid market space, where are at the lower end of the enterprise, where we're seeing a lot of a lot of demand and a lot of traction so all.

Speaker Change: Positive trends, good discussions with new customers and a lot of positive feedback from our existing base.

Speaker Change: Okay. Thanks, that's helpful. And then just a follow up on the transformation initiative that you mentioned during the quarter is that focused on any particular business.

David Wilkinson: Okay, thanks. That's helpful. And then just to follow up on the transformation initiative that you mentioned in the quarter, is that focused on any particular business? And maybe you can just outline if we will see any incremental costs, you know, going forward?

Speaker Change: And maybe you could just frame if we will see any incremental cost going forward.

Speaker Change: Yesterday, the transformation initiatives, we described $100 million cost out program of which 70 million benefits. This year and 30 million flows into next year that program is underway and we're doing well and it's really three major buckets. One is hardware design and optimization of the hardware side.

Brian Webb: Yeah, so the transformation initiatives, we described a $100 million cost-out program, of which 70 million benefits this year and 30 million close in the next year. That program is underway, and we're doing well.

Speaker Change: Which is the biggest piece about 50% is well within our services business and this is doing more remote. So this is having a different skill set now that were separated as two companies. We don't need the same skill set those are just two examples and then the other category about 25% as corporate expenses and real estate expense.

Brian Webb: And it's really three major buckets. One is hardware design and optimization on the hardware side. The second, which is the biggest piece, about 50% is within our services business. And this is doing more remote cells. This is having a different skill set now that we're separated, as two companies; we don't need the same skill set. Those are just two examples.

Speaker Change: And so that cost program is going well the transformation and restructuring costs to achieve those cost savings that you saw in the quarter that severance that that's.

Speaker Change: Exit costs related to right sizing the real estate portfolio with the portfolio.

Speaker Change: And we expect you know if I take the separation bucket plus the transformation bucket about $80 million to $90 million of spend this year in total, including what happened in the first quarter and that's in line with the free cash flow guidance that we've given.

Brian Webb: And then the other category, about 25%, is corporate expenses and real estate expenses. And so that cost program is going well, the transformation and restructuring costs to achieve those cost savings that you saw in the quarter, you know, that severance that's, you know, exit costs related to right sizing the real estate portfolio and the IT portfolio. And we expect, you know, if I take the separation bucket plus the transformation bucket, about 80 to 90 million in spend this year, in total, including what happened in the first quarter. And that's in line with the free cash flow guidance.

Speaker Change: Okay, great. Thank you very much.

Isaac Arthur Sellhausen: Okay, great. Thank you very much.

Speaker Change: Our next question comes from Alex Newman with Stephens. Please proceed with your question.

Operator: Our next question comes from Alex Neumann with Stevens. Please proceed with your question.

Alexander Blake Neumann: This is Alex speaking on behalf of Chuck Nabhan. Just on the restaurant segment, you know, we had 600 basis points of margin expansion. I think you attributed that to some transformational costs. Is that margin in the mid to high 20s something that we should expect for that segment going forward?

Alexander Blake Neumann: Hi, This is Alex on for Chuck Nap and just on the restaurant segment. We had 600 basis points of margin expansion I think you attributed that to some transformational costs is that <unk>.

Alexander Blake Neumann: Margin in the mid to high 20, something that we should expect for that segment going forward.

Brian Webb: It is, we would expect that segment to be at 26-27% for the full year, so it is something that

Speaker Change: It is we would expect that segment to be 26% to 27% for the full year. So it is something that we expect to continue.

Speaker Change: Okay, and then on digital banking as well.

Brian Webb: Okay, and then on digital banking as well, that margin also turned positive, you know, after a couple years of investment. So we see some similar margin expansion going forward. And then, just how I think about revenue, could you maybe balance what the mix of ARPU versus user growth will be for that segment? Yes, so a margin we expect.

Speaker Change: Net margin also quite positive after a couple years of investment.

Speaker Change: <unk> see some similar margin expansion going forward and then just how I think about revenue could you maybe balance what the mix of <unk> versus unit growth would be for that segment.

Speaker Change: Yeah. So our margin we expect our margin should continue to improve for digital banking, you know roughly 39% for the full year, which will be up about 1% year over year. So we do expect EBITDA to grow faster than revenue and we expect the revenue growth to be a combination of both the user growth and <unk>.

Brian Webb: Yeah, so on margin, we expect margin to continue to improve for digital banking, you know, roughly, you know, 39% for the full year, which will be up about a percent year over year. So we do expect EBITDA to grow faster than revenue. And we expect the revenue growth to be a combination of both the user growth and our pool expansion as we go through the year. Like we saw, it was pretty, pretty good split in Q1, we'd expect that to

Speaker Change: <unk> expansion as we go through the year like we saw it was a pretty pretty good split in Q1, and we'd expect that to continue.

Speaker Change: Thank you.

Speaker Change: Yeah.

Speaker Change: Our next question comes from Matt.

Operator: Our next question comes from Matt Summerville with D.A. Davidson. Please proceed with your question.

Matt J. Summerville: D. A Davidson. Please proceed with your question.

Matt J. Summerville: Thanks. Just a couple of quick follow-ups, Brian, on that $80-90 million of cash-related severance, etc., costs you expect to encounter this year. I realize it's early.

Matt J. Summerville: Thanks, just a couple of quick follow ups, Brian to that 80 to 90 million of cash related severance et cetera costs, you expect to encounter this year.

Brian Webb: What does that number roughly look like? Are you thinking about 25? I guess how much can that tail off and therefore accrete to the company's free cash flow profile and then have a follow-on?

Matt J. Summerville: I realize it's early what does that number roughly look like as you're thinking about 25, I guess, how much can that tail off and therefore accrete to the company's free cash flow profile and then I have a follow up.

Brian Webb: Yeah, that definitely does come down over time. Separation, there's a component of that that's separation-related, which goes away completely.

Speaker Change: Yes that definitely does come down over time.

Speaker Change: Separation as a component of that that separation related which goes away completely.

Brian Webb: And then the part that's around, you know, right-sizing the cost base. We'll always have incremental cost work to do as we go forward, but we would expect that number to come down. And that would be a help to free cash flow. In addition, as we, you know, improve our leverage and reduce our debt, the interest reduction would be a help to free cash flow. Holding capex steady as a percent of revenue or, you know, would help as we go forward, or actually holding capex steady and improving it as a percent of revenue would help free cash flow. So those are the drivers that give us confidence that we can improve free cash flow as we go forward. Got it. And then,

Speaker Change: And then the part that's around right sizing the cost base, we'll always have incremental cost work to do as we go forward, but we would expect that number to come down and that would be a help to free cash flow. In addition, as we.

Speaker Change: Improve our leverage and reduce our debt.

Speaker Change: Interest reduction would be a help to free cash flow holding capex steady as a percent of revenue.

Speaker Change: We would hope as we go forward are actually holding capex steady and improving as a percent of revenue with free cash flow. So those are the drivers that give us confidence that we can improve free cash flow as we go forward.

Speaker Change: Got it and then when you talk spend some time talking about customer adds in the in.

Matt J. Summerville: Got it. And then you spent some time talking about customer ads in the businesses. I was wondering if you could maybe touch on what your attrition rates have been looking like in retail restaurants and digital banking and how that maybe compares to even just a year or two ago. Again, with a focus on all three reportable sites, please. Thank you.

Speaker Change: In the businesses. So I was wondering if you could maybe touch on what your attrition rates have been looking like in retail restaurants, and digital banking and how that maybe compares to even just a year or two ago again with a focus on all three reportable segments. Please thank you.

Speaker Change: Yeah.

Speaker Change: Yeah.

Speaker Change: Yeah.

David Wilkinson: Yeah, I would tell you that we'll run through all the segments. So we're focused on adding net new customers. And we feel like we're making traction there on the, we are pretty enterprise-heavy focus. So we're, you know, we see strong retention of our enterprise customers, specifically on the retail side. When I get to the restaurant, Business, again, on the enterprise side, we see strong retention of our customer base, adding net new customers are taking share.

Speaker Change: Yeah, I would tell you that run through all of the segments. So we're focused on adding net new customers and we feel like we're making making traction there on the.

Speaker Change: We are pretty enterprise heavy focus so where we see strong retention of our enterprise customers specifically on the retail side when I get to the restaurant.

Speaker Change: Business again enterprise side, we see strong retention of our customer base, adding net new customers are taking share.

David Wilkinson: And then on the smaller end of that, we see some of the normal churn happening at that small base, you know; we can see that up to 10%. And that that small side of the business has customers, as a restaurant business, go out of business. On digital banking, we continue to see very strong renewal rates like we did with the 200 customers and expanding ARPU with our existing base by cross-selling it up, selling across the capabilities as we move to operationalize as a singular portfolio from the market into that market segment. So overall, we're feeling good about the really, really normal kind of attrition trends that we had in January.

Speaker Change: On the smaller end of that we see the normal some of the normal churn happening.

Speaker Change: That small base.

Speaker Change: We can see that up to 10% on the small side of the businesses as.

Speaker Change: As customers as our restaurant customers go out of business.

Speaker Change: On digital banking, we continued to see very strong renewal rates.

Speaker Change: 90, plus percent of our contracts and then you look at the net retention rate on on revenue and actually we're seeing some strengthening our price and then we're expanding like we did with the 200 customer and expanding RP with our existing base by cross selling and up selling across the capability.

Speaker Change: Move to operationalize it was thinking about portfolio from market into that into that market segment. So overall, we're feeling good about it really really normal kind of attrition trends that we've seen continuing.

Speaker Change: And then just lastly that comment on price is that sort of new on the digital banking side I guess I was under the impression last quarter, maybe with all the renewal activity you are seeing a maybe slight amount of price compression and then just broadly speaking on price are you.

David Wilkinson: And just lastly, that comment on price, is that sort of new on the digital banking side? I guess I was under the impression last quarter, maybe with all the renewal activity, you were seeing maybe a slight amount of price compression. And then, broadly speaking, on price, are you net positive price capture in each of the three segments? Thanks.

Speaker Change: Net positive price capture in each of the three segments. Thank you.

Speaker Change: So with digital banking on renewal, we do typically see price compression, but that price compression has been improving over the last three or four quarters.

David Wilkinson: So with digital banking on renewal, we do typically see price compression, but that price compression has been improving over the last, you know, three or four quarters. And then, outside of price compression at renewal and all three business lines, we We, we

Speaker Change: Outside of price pressure renewal in all three businesses.

Speaker Change: We go after capturing CPI related price increases and we get benefits each of the three segments.

Speaker Change: Yeah.

Speaker Change: There are no further questions at this time I would now like to turn the floor back over to David Wilkinson for closing comments.

Operator: There are no further questions at this time. I would now like to turn the floor back over to David Wilkinson for closing comments.

David Wilkinson: Yeah. Thank you in closing I'd like to thank all of our customers again for that trust that they put on US every day to help them achieve their strategic objectives.

David Wilkinson: Yeah, thank you. In closing, I'd like to thank all of our customers again for the trust that they put in us every day to help them achieve their strategic objectives. I'd also like to thank again our NCR Voyix colleagues for their contributions to our successes up to now and our investors for their ongoing support. As I stated earlier, we remain committed to serving our existing customers and taking them on the platform journey, in addition to adding new customers.

David Wilkinson: I'd also like to thank again, our NCR, who makes colleagues for their contributions to our success is up to now and our investors for their ongoing support.

David Wilkinson: As I stated earlier, we remain committed to serving our existing customers and bringing them on the platform journey.

David Wilkinson: In addition to adding new customers.

David Wilkinson: Our platform investments over the past years have provided real value to our customers and we're going to continue to connect them to the platform.

David Wilkinson: Our platform investments over the past years have provided real value to our customers, and we're going to continue to connect them to the platform. We've built a solid foundation for growth within our base and growth of new customers, specifically in the mid-market. And while we're proud of where we are, we need to do better at turning this foundation into growth, and this focus will show up in our results. I believe in the plan that we've outlined today, and I believe in this management team to execute it. Thank you, and I look forward to updating you on our continued progress on our Q2 call. This concludes today's program.

David Wilkinson: We built a solid foundation for growth within our base and growth of new customers, specifically in mid market and while we're proud of where we are we need to do better at turning this foundation into growth and this focus will show up in our results I believe in the plan that we've outlined today and I believe in this management team to execute.

David Wilkinson: Thank you and look forward to updating you on our continued progress on our Q2 call.

Speaker Change: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

David Wilkinson: Yeah.

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