Diebold Nixdorf Incorporated Common stock

Hello, good day, and welcome to Diebold Next Door's fourth quarter and full year 2025 earnings call. My name is Ellie, and I'll be coordinating today's call. Following our speaker's remarks, there will be a question and answer session. In order to ask a question, please press star followed by one on your telephone keypad. Thank you. I'd now like to turn the call over to our host, Maynard Um, Vice President of Investor Relations. Maynard? Please go ahead.

Hello, and welcome to our fourth quarter and full year 2025 earnings call. To accompany our prepared remarks, we posted our slide presentation to the investor relations section of our website. Before we start, I'll remind all participants that you'll hear forward-looking statements during this call. These statements reflect the expectations and beliefs of our management team at the time of the call, but they are subject to risks that could cause actual results different materially from these statements. You can find additional information on these factors in the company's periodic and annual filings with the SEC. Participants should be mindful that subsequent events may render this information to be out of date. We will also discuss certain non-GAAP financial measures on today's call. As noted on slide three, a reconciliation between GAAP and non-GAAP financial measures can be found in the supplemental schedules of the presentation. With that, I'll turn the call over to Octavio, who will begin on slide four.

Good morning and thank you for joining us. 2025 marked a defining year for Diebold Nakesport. We strengthened our foundation, delivered on our commitments, and most importantly, demonstrated that we are now operating a sustainable free cash flow generator with significantly more stable and predictable financial profiles. We grew revenue. expanded adjusted EBITDA to $485 million, and more than doubled free cash flow to a record $239 million. These results reflect the disciplined execution, the strength of our lean operating model, and a portfolio increasingly aligned to long-term automation trends in banking and retail. Today, the conversation will center on the durability of our operating model, our ability to generate strong and consistent cash flow, and the opportunities we have to deploy that capital in ways that drive long-term shareholder value. What matters most to us and what our results clearly demonstrate is that we are delivering on what we said we would do, quarter after quarter. This consistency is increasing predictability in our model and strengthening confidence in our long-term outlook. Our core businesses remain strong, and our growth initiatives are gaining traction. In banking, we are expanding our role beyond the ATM to orchestrate the broader branch and transaction ecosystem through expanded service offerings, software-enabled automation, cash management solutions, and innovative hardware. helping financial institutions operate more efficiently while improving the consumer experience. In retail, momentum continues to build, with three consecutive quarters of revenue growth as we expand in North America, win new logos, and scale AI-driven solutions that help customers reduce shrink, increase throughput at checkout, and operate more intelligently. We also delivered a record fifth consecutive quarter of positive free cash flows. Importantly, we also received two credit rating upgrades this year. Independent validation that our operating model and financial model continues to improve. With net leverage around one times and free cash flow growing, returning capital to shareholders will remain a core part of our value creation framework. Today, we're a stronger and more predictable company with multiple ways to win and create value. we are entering the year with momentum, a fortress balance sheet, and a clear focus on delivering another year of profitable growth and cash generation. With that, let me walk you through our key takeaways for the year. Please move to slide five. Slide five reflects the consistent execution and financial progress we delivered throughout 2025, reinforcing the strength of our operating model. We delivered strong year-over-year improvement across our key financial metrics, meeting and in several areas exceeding the commitments we established at the beginning of the year. Order entry grew 17% year-over-year, supported by healthy demand across both banking and retail, and demonstrating the continued relevance of our solutions as customers prioritize automation, efficiency, and innovation. Revenue performance reflects disciplined execution across the portfolio. In banking, the core ATM business remains stable, while our strategic growth initiatives gained traction. In retail, the core businesses in Europe recovered and strengthened as the year progressed, with accelerating momentum in the U.S. behind our SmartVision AI solution. We recently completed a pilot with one of the world's largest retailers in the U.S., and are now transitioning into multiple live store implementations, an important step towards scaling the opportunity. Adjusted EBITDA grew to $485 million, reaching the higher end of our guidance, with margins expanding 60 basis points. This improvement reflects the structural benefits of our lean operating model, continued cost discipline, and operating leverage as we simplify the business and scale more efficiently. Free cash flow was a standout in 2025. We generated a record $239 million, more than doubling prior year's cash flow and representing approximately 49% conversion, well above our original outlook and approaching our 2026 target of greater than 50%. We expect this momentum to continue. Stronger working capital, lower interest expense, and higher profitability demonstrate the growing cash generating capability of our models and enhance the financial flexibility to invest in growth while returning capital to shareholders. Adjusted earnings per share reached $5.59 for fiscal year 2025. We more than doubled EPS year over year, even excluding certain non-cash, non-operational favorable tax benefits. One year into our three-year plan, The financial algorithm we outlined is taking hold, and we are executing as committed. That consistency is strengthening confidence in our outlook and reflects an operating model with multiple ways to win and create value. Slide 6 highlights the growth engines that are strengthening the durability of our revenue and expanding our long-term opportunity across banking, retail, and services. we're gaining traction in the areas that matter the most, automation, software and service recurring revenue, all of which support higher quality growth over time. In banking, our role continues to expand beyond the ATM as financial institutions modernize their branches and optimize cash and transaction ecosystems. By automating manual processes, Reducing cash and transit visits and improving staffing efficiency, our solutions deliver measurable operational value for our customers, while positioning us to capture a larger share of their technology spend. During the year, our branch automation solutions built momentum with large multi-year wins in Europe and a key new multi-million dollar win in North America, reinforcing the relevance of our strategy across major markets. We also expanded the DN Series portfolio with the introduction of the DN Series 300 and 350. Combined with our VCP7 software that enables interoperability across devices are helping customers increase availability, lower operating costs, and simplify branch operations. Fit for Purpose continues to gain traction across both high capacity and our smaller energy efficient configuration. Notably, we received certification from one of the largest public banks in India, positioning us to compete in all public bank tenders and opening the door to one of the fastest growing ATM markets globally. In retail, we are encouraged by the momentum we are seeing, particularly in North America, where we secured nine new logos, including a win with one of our top targeted grocery accounts. The strategy that established our leadership position in Europe, centered around openness and modularity, is now gaining traction in North America and significantly expanding our addressable market. Our smart vision AI solution continues to differentiate our portfolio and generate strong customer interest. At the NRF show, we engage with more than 800 customers, partners, and prospects, reinforcing the growing relevance of AI-driven capabilities as retailers focus on shrink reduction, checkout throughput, and smarter store operations. In services, our focus remains on being the most trusted service provider in the industry. We continue to optimize our service and repair centers globally, improving turnaround times, driving greater consistency and quality, which led to higher uptime for our customers. This, coupled with the completed North America rollout of our enhanced field service technician software, resulted in our best SLA performance of the year. With this, we are strengthening customer loyalty, supporting product pull-through, and increasing the lifetime value of our install base, further enhancing the recurring nature of our revenue. In operations, teams have fully embraced leads. bringing new ideas to reshape legacy paradigms about how and where work gets done. Our local-for-local sourcing and manufacturing strategies are strategic advantages for our company and have allowed us to navigate market challenges like tariffs in 2025 and provide a strong foundation as we enter the new year. By leveraging common platforms and components across our ATM and branch automation portfolio, we are driving greater efficiency, scale, and simplified operations for our customers. Across the company, working capital improvements drove great results. Day's inventory outstanding and day sales outstanding again improved year over year. Tom will share details on the significant improvements in a moment. While we remain disciplined in our expectations, the traction we are seeing across the growth engines increases our confidence in the power of our model as we move into 2026. All these advancements position the company to deliver more predictable performance while expanding our long-term growth runway. Now let's turn to slide seven. Slide seven highlights how lean is becoming a structural advantage for us as we systematically lower our cost base, improve working capital, and continue to expand margins. What began as a manufacturing initiative has now scaled across supply chain, services, and business operations, embedding continuous improvement into how we operate and creating a more robust and scalable enterprise. Across global manufacturing, The implementation of a dynamic Kanban system spanning more than 400 high-use items has driven an approximately 30% sustained reduction in inventory, while eliminating expedites and improving part availability. These actions are releasing working capital, strengthening cash conversion, and enhancing operational predictability. In our shared business services organization, cross-functional teams from 11 countries Standardized order processing and accelerating invoice cycles. Reducing processing time by 17% and improving collection efficiencies. Just as importantly, these improvements are repeatable and are now being scaled across additional geographies. This is how we approach LEED. Identify structural efficiencies, institutionalizing them, and then extending those benefits across the entry. Our progress has also been recognized externally, including being named by Newsweek as one of America's most responsible companies, reflecting the strength of our supply chain, ethical standards, and community engagement. Proof that operational excellence and responsible business practices can advance together. As Lean continues to expand across the organization, we see meaningful opportunity to unlock further efficiencies strengthen margins, and improve cash flow. Importantly, many of the financial improvements Tom will discuss next are being enabled by these structural efficiencies. Lean is not a one-time initiative. It is a core capability that is reshaping how we operate. With that, I'll turn it over to Tom to walk through our financial results.