NCR Voyix Corporation

Good day, ladies and gentlemen, and welcome to the NCR FOIC's third quarter 2024 earnings call. Our host for today's call is Alan Katz. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I would like to now turn the call over to your host. Mr. Katz, you may begin.

Good morning, and thank you for joining our third quarter 2024 earnings conference call. This morning, we issued our earnings release reporting financials for the quarter ended September 30th, 2024. A 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.ncrvoix.com and have 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. This call is being recorded and the webcast is available on the Investor Relations section of our website. Before we begin, please be advised that remarks today will contain forward-looking statements. These forward-looking statements are subject to risks, 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. 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 and providing certain non-GAAP financial measures today, which we believe will provide additional clarity regarding our ongoing performance. For a full reconciliation of non-GAAP financial measures discussed in this call to the most comparable GAAP measure in accordance with SEC regulations, please see our press release, furnished as an exhibit on Form 8-K filed this morning. and their supplemental materials available on the investor relations section of our website. With that, I would now like to turn the call over to David. David?

Thanks, Alan, and good morning, everyone. I would like to welcome all of you to our third quarter 2024 earnings call. Before I begin, I'd like to welcome our newest executive vice president, Darren Wilson, to NCR Voice. As you saw in our press release, Darren has joined to lead our international retail and restaurant businesses primarily in Europe and Asia Pacific. This new leadership position will allow us to focus on expanding our international presence in restaurants and retail. I will now spend a few moments discussing our recent progress on the digital banking and hardware transactions announced in August, before commenting on our recent business performance and the company's go-forward objectives. Brian will then review our financial results for the quarter and our outlook for the remainder of the year. Beginning with digital banking, we completed the sale on September 30th, ahead of expectations. This was an important step in our plans to simplify the business and significantly improve our balance sheet with $2.45 billion in gross sale proceeds. After estimated taxes and fees of $437 million, we utilized approximately $1.8 billion of proceeds to reduce our indebtedness. Positive impact of these actions reduced our annual cash interest expense by approximately $95 million. Of the remaining proceeds, the company intends to utilize approximately $100 million to complete repurchases of common stock under its existing share repurchase program, which is an aggregate repurchase authority of up to $153 million and has been previously outlined in our public filings. We believe this is the best use of proceeds given our current valuations. Brian will discuss the details of the remaining proceeds allocation later on the call. For hardware, we anticipate the agreement to become effective by year-end and will provide Anacon certain transitional services until they are fully operational in 2025. In connection with the transaction, we have jointly notified our affected employees who will be part of the new organization. As a reminder, we will continue to sell hardware to our customers as a sales agent and earn a commission on the sale. But all other aspects of the contract, including design, manufacture, delivery, and warranty, will be fulfilled by Anacon. Starting through our third quarter performance, on a normalized basis, total revenue for the quarter was $708 million, a decline of 11% driven primarily by lower hardware and hardware-related install services. Software and services revenue was flat, when excluding the adverse impact of a one-time software true-up from the prior year. Normalized adjusted EBITDA for the quarter was $101 million, driven by cost actions taken in the second quarter, coupled with sales mix. As of the third quarter, we had approximately 70,000 sites on our cloud native commerce platform, an increase of 25% from the prior year.