Diebold Nixdorf Incorporated Common stock

Hello, good day and welcome to Diebold Nixdorf's second quarter 2026 earnings call. My name is Paige 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 one to raise your hand. 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 second quarter 2026 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 to differ 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 Participants should be mindful that subsequent events may render this information to be out of date.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, reconciliations 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.

Thank you, Maynard, and good morning, everyone. Thank you for joining us. Commercial momentum remained strong during the quarter. Order entry increased 3% year-over-year and 6% sequentially. First-half order entry reached its highest level in four years. Backlog grew sequentially to $814 million, and we remain on track to deliver on our full-year outlook. Revenue increased 1% year-over-year and 4% sequentially to $928 million. Adjusted EBITDA grew to $121 million, an increase of 8% year-over-year and 22% sequentially, while adjusted earnings per share increased 17% year-over-year to $1.10. Across the business, we continue to execute the strategic priorities we've discussed throughout the year. In banking, we continue to expand our branch automation strategy beyond the ATM, with growth in teller cash recyclers, transaction middleware, and managed services. Retail delivered another quarter of strong growth across all our regions. We also achieved record service level performance, meeting or exceeding our customers' expectations, and continue improving the efficiency of our operating model through lean initiatives. At the same time, we also navigated several challenges. Higher memory costs in our electronic point of sale portfolio continue to be a headwind. We have taken pricing, sourcing, and other mitigation actions. And while memory pricing environment remains uncertain, we expect these actions to continue gaining traction through the third and fourth quarters. In response to the evolving memory market dynamics, we made the strategic decision to increase inventory to secure components and support customer deployment schedules in the second half of the year. This inventory investment contributed to lower free cash flow during the quarter, and we expect inventory to remain elevated through the third quarter before normalizing in the fourth. Tariff refunds recognized in adjusted EBITDA from prior period costs largely offset the impact of higher memory costs during the quarter. Tom will provide additional detail on these items in his remarks. Importantly, underlying customer demand remains healthy. Our diversified portfolio and global footprint continue to be a competitive advantage and our order book, growing backlog and customer deployment schedules continue to support not only our confidence in the full year outlook, but also in the durability of the momentum we're building across the business. Let's now turn to slide five to review our banking strategy. The bank branch continues to evolve. As routine transactions become more automated, employees can spend more time providing financial advice and strengthening customer relationships. At the same time, banks increasingly want integrated technology partners that help them automate routine transactions, improve branch operations, and better connect the physical and digital customer experience. Our core ATM franchise continues to deliver. During the quarter, we secured several important wins, including a new customer in the UK for approximately 1,100 DN Series units, together with a long-term service agreement. In Mexico, a key customer refreshed its fleet with 600 DN Series recyclers. And in South Africa, one of the country's largest banks selected Diebold Nixdorf to replace their entire legacy fleet. Building on our leadership in ATMs, our strategy is to expand deeper into the branch through teller cash recyclers, branch automation solutions, and managed services. We're seeing encouraging momentum from this strategy. During the second quarter, we achieved record teller cash recycler shipments from our North Canton facility, reflecting growing customer adoption and reinforcing our confidence in this under-penetrated market. We're also gaining traction with our branch automation solutions, which combined our ATM and telecraft recycler hardware, managed services, and our dynamic transaction middleware platform. Our dynamic transaction middleware platform connects self-service, assisted service, digital banking, and core banking systems, simplifying transaction management across the enterprise while giving us a unique position within our customer's branch infrastructure. Today, most of the top five financial institutions in North America rely on dynamic transaction middleware to process millions of transactions every day. That install base provides a solid foundation to expand our software, automation, and managed services as customers continue modernizing their branch networks. Recent deployments with Lloyds in the UK and ViStar Credit Union in the US demonstrate this strategy in action. At Lloyds, our branch automation solution is live in an initial pilot across two high traffic branches, representing an important first step that position us for broader deployment across the Lloyds branch network over time. At Vysar, our end-to-end branch automation solution supports more than 200 advanced ATMs through our managed services offering, helping simplify operations and enhance the member experience. These deployments demonstrate how our integrated portfolio expands our opportunity well beyond the ATM, allowing us to deliver greater value through software services and automation while strengthening customer relationships. Our fit for purpose product designed for the India market continues to gain traction. Our pipeline is growing and we believe India represents one of our most attractive long-term growth opportunities given the size of the market and our relatively modest market share position today. Finally, in Brazil, one large public sector bank tender has shifted into the second half with the associated revenue originally expected in 2026 now expected primarily in 2027. While this affects timing, it does not change our full year outlook and we remain confident in our ability to capture our share of this opportunity. Turning to retail, revenue grew approximately 25% year over year. Retailers continue to invest in technology to create a more seamless shopping experience across physical and digital channels, while improving labor productivity and reducing shrink. Our strategy is to build on our market leadership in Europe while accelerating growth in North America through innovative store technology, AI-enabled solutions, and managed services. We're seeing momentum across each of these priorities. In North America, we're converting our growing pipeline into new logo wins. During the quarter, we secured self-checkout wins with two grocers, a point-of-sale deployment with a quick-serve restaurant chain, and a service agreement with a large fashion retailer supporting technology deployments across hundreds of stores. Across Europe, our checkout solutions continue to lead the market. We secured a more than 4,000-unit point-of-sale order with an existing customer in Germany, 1,600 units with a retailer in Romania, and an 800-unit new logo win in Germany. In addition, we won a 1,500 self-checkout lane deployment with one of the United Kingdom's largest browsers. Our SmartVision AI solution is gaining meaningful commercial traction. We've deployed hundreds of lanes year to date, and new multi-year contracts signed this quarter will expand deployments to thousands of lanes by the end of 2026. Most notably, we signed dynamic SmartVision AI deployment contracts for 1,400 new lanes across two large European grocers, representing the largest new deployments to date. These wins demonstrate that retailers are increasingly deploying AI at the enterprise scale. Together, our market leadership in Europe, growing momentum in North America, and the rapid adoption of the Smart Vision AI platform give us confidence that our retail business remains in the early stages of significant long-term growth opportunities. Turning to slide seven. For the second consecutive quarter, we achieved record service levels in both North America and globally. Based on customer feedback and available market data, we believe we're leading the industry in response times and availability. These improvements strengthen our customer relationships today and position us to win additional business over time. Service margins improved 10 basis points sequentially, despite the near-term impact of our North America fleet renewal program. This investment is improving technician safety, increasing parts availability, strengthening repair execution, and improving fuel efficiency, creating a stronger service platform for the future. The actions we've taken are delivering measurable results. With the largest phase of our investment cycle now behind us, we expect to leverage the stronger operational foundation to continue improving service margin in the quarters and years ahead. As we continue expanding our installed base through color cash recyclers, branch automation solutions, and retail, we're also expanding higher value service opportunities. Combined with the operational improvements we've made, this gives us confidence in our expectation of up to 50 basis points of service margin expansion this year and continued improvement over time. Now let's turn to slide eight. Our lean operating system continues to be a foundational element on how we run the business. Across the company, we're applying lean principles to improve productivity, simplify operations, increase capacity, and deliver a better experience for our customers. These efforts are making our business more efficient, more scalable, better positioned to support profitable growth. One example comes from our Powderborn manufacturing facility. As customer demand increased, the team implemented flow manufacturing and added a fourth production line without increasing operating costs. The result was 25% increase in output and improved safety, demonstrating how lean enables us to grow efficiently while improving operational performance. In North Camden, lean initiatives reduced dispatch times by more than 50%. shortened receiving and shipping lead times by two days and generated greater than $200,000 in annual labor savings. These improvements increase responsiveness, improve productivity, and enhance the experience we deliver to customers. We are also applying Lean to our service operations through our Plan for Every Part initiative. By improving parts availability and inventory planning, we're reducing incomplete service calls and helping technicians resolve customer issues on the first visit. This directly supports the record service level agreements we discussed earlier and strengthens both customer satisfaction and operational performance. Our commitment to innovation continues to be recognized externally. During the quarter, our dynamic transaction middleware platform received two international industry awards, recognizing our leadership in payment technology. These examples demonstrate that lean is much more than a manufacturing initiative. It is the operating system that drives continuous improvement across our company. Every productivity gain, process improvement, and quality enhancement strengthens our ability to execute for our customers, expand margins, and support sustainable long-term growth. With that, I'll turn the call over to Tom to review our financial performance in more detail.