NCR Corporation

Good day and welcome to the NCR Corporation third quarter fiscal year 2022 earnings conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Michael Nelson, Treasurer and Head of Investor Relations. Please go ahead, sir.

Good afternoon and thank you for joining our third quarter 2022 earnings call. Joining me on the call today are Mike Hayford, CEO, Owen Sullivan, President and COO, and Tim Oliver, CFO. Before we get started, let me remind you that our presentation and discussions will include forward-looking statements. These statements reflect our current expectations and beliefs, but they're subject to risks and uncertainties that could cause actual results to differ materially from those expectations. These risks and uncertainties are described in our earnings release and our periodic filings with the SEC, including our annual reports. On today's call, we'll also be discussing certain non-GAAP financial measures. These non-GAAP measures are described and reconciled to their GAAP counterparts in the presentation materials. The press release dated October 25th, 2022, and on the investor relations page of our website. A replay of this call will be available later today on our website, ncr.com. With that, I would now like to turn the call over to Mike.

Thanks Michael and thank you everyone for joining us today for our third quarter 2022 earnings call. I will begin with some of my views on the business and I will also provide an update on our previously announced intention to separate NCR into two public companies. Tim will review our financial performance and then Owen, Tim and I will take your questions. Let's begin on slide four with highlights. In the third quarter, NCR delivered strong performance that included solid top-line revenue growth and significant margin expansion. The NCR team executed very well in a difficult macro environment. Additionally, NCR made significant progress against our strategic initiatives with strong execution across all of our KPIs. We continued to build positive momentum in the business as we made progress on our strategy to NCR becoming a software-led as-a-service company with higher recurring revenue streams. First, we delivered 8% year-over-year total revenue growth on a constant currency basis and 7% recurring revenue growth also on a constant currency basis in the third quarter. Second, adjusted EBITDA increased 15% on a constant currency basis from the third quarter of 2021. And finally, adjusted EBITDA margin expanded to 19.3% which represents a 230 basis point increase from the second quarter of 2022. Now moving to the business update on slide five. We had strong momentum across our strategic growth platforms, which support our company's transformation. In retail, we continue to deliver on our strategy to be the retail platform company of choice. During the third quarter, we expanded our partnership with a large CFR chain of over 950 convenience stores and gas stations. They extended their use of the NCR Commerce platform and converted to a software subscription, adding 5,000 platform lanes. This allowed them to unify the online ordering capabilities with in-store made-to-order food capabilities via the NCR Commerce platform. In self-checkout, RBR named NCR the global market leader for self-checkout for the 19th consecutive year. In the third quarter, we continued to see our customers refresh and extend self-checkout usage to help them mitigate costs. In hospitality, we continue to experience strong demand across our enterprise and SMB customers. In SMB, our payment attach rate for new customers remains 90%, driving a record high number of payment booking sites. We also expanded our relationship with Buffalo Wild Wings, which added NCR's tablet offering along with subscription software to their restaurants. to help improve guest and team member experience that will enable them to serve more tables, increase speed of service, and improve order accuracy. In digital banking, we continue to have positive momentum. In the third quarter, digital banking had 20 renewals, five new logo deals, and continued the expansion of our online digital account opening platform. Terrafina, which we acquired in 2021 to extend our account opening capabilities experienced the largest quarter in its history. In the third quarter, we also converted two large regional banks, Wintrust Bank of Chicago area and Wisconsin-based Associated Bank to our digital banking platform. These two conversions added almost 1 million new digital banking accounts. We also had success with our digital first retail banking solution where we integrate a financial institution's retail channels using our CSP or Channel Services platform. During the third quarter, Citibank selected NCR's CSP Teller solution to replace their legacy branch teller software. NCR has now two of the top five banks in the U.S. on our CSP Teller platform. In payments and network, we are making progress across both merchant acquiring and the all-point network. we are continuing to have success with our integrated payments offering for our hospitality customers, including 90% of our new SMB clients selecting NCR's payment solution. The Allpoint network continued its strong growth by delivering everyday banking transactions, including cash deposits at the financial kiosk, to more financial institutions and cardholders than ever before. In the third quarter, Allpoint extended its partnerships with a top 10 retail bank, enabling that bank to offer fee-free access to cash and cash deposits. In self-service banking, we continued momentum in our ATM as a service solution. Interest in our offering is accelerating from both community banks and large FIs globally. In the third quarter, we signed 18 ATM as a service deals. The ability of NCR to provide the scale and capability to provide a full-stack, integrated ATM-as-a-Service offering when bundled with the AllPoint network, this has given us a unique solution in the marketplace. And lastly, we will give you more details today on our plans to separate NCR into two public companies. First, I'm going to have Tim cover our financial results, and then Tim and I will provide an update on those separation activities. Tim?