Reported Revenue: $682 million for Q4 2024. Normalized Revenue: $678 million, reflecting a 14% decline due to hardware sales weakness. Software and Services Revenue: Declined 2% to $521 million; increased 1% excluding terminated agreements. Adjusted EBITDA: Increased 75% to $114 million; margin expanded 850 basis points to 16.7%. Software ARR: Increased 4% in Q4 2024. Total ARR: Increased 5% in Q4 2024. Platform Sites: Approximately 74,000, a 26% increase from the prior year. Restaurants Segment Revenue: Declined 5% to $211 million; Adjusted EBITDA increased 36% to $68 million. Retail Segment Revenue: Declined 15% to $461 million; Adjusted EBITDA increased 13% to $102 million. Adjusted Free Cash Flow Unrestricted: $72 million for the quarter. Net Leverage: 1.6 turns based on $419 million of pro forma 2024 adjusted EBITDA. Share Repurchase: 4 million shares repurchased for approximately $56 million in Q4. 2025 Revenue Guidance: $2.575 billion to $2.65 billion, reflecting a 9% to 6% decline. 2025 Adjusted EBITDA Guidance: $420 million to $445 million, representing a 21% to 28% increase. Non-GAAP EPS Guidance: $0.75 to $0.80 for 2025. 2025 Adjusted Free Cash Flow Unrestricted Guidance: $170 million to $190 million.

Warning! GuruFocus has detected 7 Warning Signs with VYX.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

NCR Voyix Corp (NYSE:VYX) reported a strong revenue retention rate of 98% over the last three years, indicating stable customer relationships. The company has seen a 26% increase in platform sites, reaching approximately 74,000 sites by the end of 2024. NCR Voyix Corp (NYSE:VYX) signed significant new contracts, including a multiyear platform and payments contract with Yogurtland and a $335 million contract with the Defense Commissary Agency. The company is transitioning to a recurring revenue model, with expectations to increase recurring revenue composition from 60% to 75% after exiting hardware. NCR Voyix Corp (NYSE:VYX) has entered a five-year nonexclusive agreement with Worldpay to enhance its payment solutions, potentially unlocking new revenue streams.

Negative Points

The company experienced a 14% decline in reported revenue due to expected weakness in hardware sales. NCR Voyix Corp (NYSE:VYX) is facing challenges in exiting hardware sales, with the ODM transition delayed, impacting revenue guidance. There is a decline in software revenue by 3% due to a decrease in onetime perpetual software license revenue. The company is undergoing cost reductions, including headcount reductions, which may impact employee morale and operations. NCR Voyix Corp (NYSE:VYX) faces potential risks from tariffs, which could impact hardware margins and customer pricing.

Story Continues

Q & A Highlights

Q: Can you elaborate on the timing and potential benefits of the new payments agreement with Worldpay? A: James Kelly, CEO: The agreement with Worldpay is expected to be operational by the end of summer. This will allow us to migrate existing accounts and start selling to new retail customers domestically. We plan to expand these capabilities to Latin America and Europe subsequently. This represents a significant new revenue source for NCR Voyix, as our US customers processed over $500 billion in payments through their point-of-sale in 2024.

Q: What are the key opportunities you see for the retail segment in 2025? A: Darren Wilson, President, Retail and Payments: There are significant opportunities in next-generation solutions and recurring revenue models, especially in services. We have several customers in the pipeline for our future state products, which include both product lines and services. We also plan to integrate payments functionality later in the year.

Q: How does the company plan to address the decline in hardware sales and the impact on revenue? A: Brian Webb-Walsh, CFO: We expect hardware revenue to decline due to reduced refreshes by customers. However, we anticipate that the rate of revenue decline will moderate as we go through the year, with deals sold in the second half of last year ramping up. We are also focusing on growing our software and services revenue.

Q: Can you provide more details on the government contract and its impact on revenue? A: Brian Webb-Walsh, CFO: The $335 million contract with the Defense Commissary Agency is a long-standing relationship that has expanded significantly. We will see incremental revenue from this contract starting towards the end of the first quarter.

Q: What are the strategic priorities for NCR Voyix under the new leadership? A: James Kelly, CEO: Our focus is on growth, particularly in payments and software. We aim to leverage our investments in next-generation solutions and expand our customer base. The alignment of payments and software is a key area of opportunity, and we are committed to executing on our growth objectives.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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