Executive Summary

Q3 2025 delivered core revenue growth and EPS above expectations: Revenue $1.121B (+4% y/y) and Adjusted EPS $1.09 (+22% y/y), both at the high end of guidance; Adjusted EBITDA $219M (+7% y/y) with margin expansion to 19.5% .
Wall Street consensus was modestly exceeded: EPS $1.09 vs $1.07*, Revenue $1.121B vs $1.113B*; EBITDA comparison is definition-sensitive (company reports Adjusted EBITDA $219M while S&P consensus tracks EBITDA at $219M* and actual at $184M*) .
Self-Service Banking led with record revenue ($744M, +11% y/y) and Adjusted EBITDA ($196M, +21% y/y), driven by robust hardware (+24% y/y) and ATMaaS revenue (+37% y/y to $67M) with strong backlog and 700 bps margin uplift in ATMaaS to 40% .
Network revenue declined 1% y/y on lower prepaid payroll card transactions and lower DCC, with higher vault cash costs (+$9M); deposit volumes rose 90% y/y and units expanded to ~81k, signaling improving fundamentals .
Guidance reaffirmed; management expects FY revenue at the high end of range, Adjusted EBITDA at the low end, and EPS/FCF near the midpoint; share repurchases to begin in Q4; net leverage at 2.99x exiting Q3, tracking to ~2.8x by year-end .

What Went Well and What Went Wrong

What Went Well

Record Self-Service Banking performance: revenue $744M (+11% y/y) and Adjusted EBITDA $196M (+21% y/y), margin up 220 bps to 26.3% as banks outsource more services .
ATMaaS acceleration: revenue +37% y/y to $67M, ARR up 37% to $268M, gross margin 40% (+700 bps y/y); best quarter ever for ATMaaS bookings (~$195M TCV) including first customers in Latin America and Middle East .
Hardware outperformance: ATM hardware revenue +24% y/y, supported by recycler product demand and record production in Chennai, reducing lead times from months to weeks .
Quote: “Core top-line growth was 6%, led atypically but not unexpectedly by traditional hardware revenue and the conversion of services backlog... Profitability ramped nicely and was at the high end of our expectations” .
Capital strength: Adjusted Free Cash Flow $124M in Q3; net leverage 2.99x, tracking to ~2.8x entering Q4; share repurchases expected to start in Q4 (10b5-1 plan) .

What Went Wrong

Network softness: segment revenue down 1% y/y from significantly lower U.S. prepaid payroll card transactions and fewer international visitors (DCC), despite improving surcharge-free and deposit trends .
Cost headwinds: vault cash costs increased by $9M y/y; tariffs had ~$7M gross impact within Self-Service Banking in Q3 .
Mix effects: recurring revenue share dipped to 70% due to strong hardware mix, vs 73% prior-year; Network Adjusted EBITDA margin compressed to 28.4% (from 30.7%) on macro transactional headwinds .
Analyst concern: prepaid payroll card volumes down ~15–16% y/y in U.S. cities with large migrant workforces; trends stabilized but at lower levels .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD Billions)	$0.980	$1.104	$1.121
GAAP Diluted EPS ($)	$0.23	$0.60	$0.34
Adjusted Diluted EPS ($)	$0.64	$0.93	$1.09
Adjusted EBITDA ($USD Millions)	$175	$205	$219
Adjusted EBITDA Margin %	17.9%	18.6%	19.5%
Net Income ($USD Millions)	$17	$45	$26
Adjusted Free Cash Flow ($USD Millions)	($23)	$15	$124

Segment performance

Segment	Q1 2025 Revenue ($M)	Q2 2025 Revenue ($M)	Q3 2025 Revenue ($M)	Q1 2025 Adj. EBITDA ($M)	Q2 2025 Adj. EBITDA ($M)	Q3 2025 Adj. EBITDA ($M)	Q1 2025 Margin %	Q2 2025 Margin %	Q3 2025 Margin %
Self-Service Banking	$624	$733	$744	$153	$189	$196	24.5%	25.8%	26.3%
Network	$299	$320	$328	$88	$86	$93	29.4%	26.9%	28.4%
T&T	$43	$41	$40	$8	$9	$8	18.6%	22.0%	20.0%

ATMaaS and Network KPIs

KPI	Q1 2025	Q2 2025	Q3 2025
ATMaaS Revenue ($M)	$52	$62	$67
ATMaaS ARR ($M)	$230	$249	$268
ATMaaS Gross Margin %	—	40%	40%
ATMaaS RPU ($)	$8,600	$8,300	$8,300
Network LTM ARPU ($000s)	$16.1	$16.2	$16.2
Network Managed Units (000s)	77	77	80.9
Deposit Volume Growth	+200% y/y (annual run-rate $1B, 1H)	+170% y/y (1H)	+90% y/y (Q3)

Estimate comparison (S&P Global consensus; asterisk denotes SPGI values)

Metric	Q1 2025 Estimate*	Q1 2025 Actual	Q2 2025 Estimate*	Q2 2025 Actual	Q3 2025 Estimate*	Q3 2025 Actual
Primary EPS Consensus Mean ($)	0.565*	0.64	0.84*	0.93	1.07*	1.09
Revenue Consensus Mean ($)	0.9995B*	$0.980B	$1.0820B*	$1.104B	$1.1131B*	$1.121B
EBITDA Consensus Mean ($M)	171.5*	175 (Adj. EBITDA)	197.3*	205 (Adj. EBITDA)	219.0*	219 (Adj. EBITDA)/184* (EBITDA)
EPS - # of Estimates	4*	—	5*	—	4*	—
Revenue - # of Estimates	4*	—	5*	—	4*	—

Values retrieved from S&P Global. Note: Company reports Adjusted EBITDA; SPGI “EBITDA” may not be directly comparable to Adjusted EBITDA; definition differences can drive divergence.*

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Core Revenue Growth (cc)	FY 2025	3%–6%	Reaffirmed 3%–6%	Maintained
Total Revenue Growth (cc)	FY 2025	1%–3% (Voyix down ~$100M)	Reaffirmed 1%–3%	Maintained
Total Adjusted EBITDA Growth (cc)	FY 2025	7%–10%	Reaffirmed 7%–10%	Maintained (management now sees low end)
Adjusted Diluted EPS Growth	FY 2025	21%–27%	Reaffirmed 21%–27%	Maintained (tracking midpoint)
Adjusted Free Cash Flow ($M)	FY 2025	$260–$300	Reaffirmed $260–$300	Maintained (tracking midpoint)
Net Leverage Target	YE 2025	~<3.0x	~2.8x by YE	Improved
Capital Return	Q4 2025 onward	$200M authorization announced (Q2)	Repurchases to begin in Q4 via 10b5-1	Initiation timing set

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
ATMaaS growth & profitability	Q1: Revenue +24% y/y, ARR +54%, RPU $8.6k; Q2: Revenue +32% y/y, gross margin +900 bps to 40%, ARR $249M	Q3: Revenue +37% y/y to $67M; gross margin 40% (+700 bps y/y); ARR $268M; best TCV bookings ~$195M; expansion to LatAm & Middle East	Accelerating growth with high-quality backlog
Hardware demand & recycler	Q2: Hardware revenue +18% y/y; recycler upgrades; lead times improving	Q3: Hardware revenue +24% y/y; record Chennai output; recycler demand strong; lead times now weeks	Strong cycle continuing
Tariffs	Q2: Tariff uncertainty acknowledged; plan to mitigate	Q3: ~50% current tariff; mgmt budgeting 25% for 2026; potential to 15–18% expected; ~$25–30M 2025 impact	Risk moderating, plan-based mitigation
Vault cash costs/interest rates	Q2: Hedge wind-down, higher bulk cash costs; sensitivity to rate cuts	Q3: Vault cash costs +$9M; mgmt sees benefit from expected rate cuts; ~$13M benefit for 50 bps	Headwind stabilizing; possible tailwind
Network transactions	Q1: Allpoint withdrawals +2% y/y; deposits +200% y/y; ARPU record	Q3: Prepaid payroll cards -15–16% y/y; deposits +90% y/y; managed units ~81k	Mixed: stabilization and deposit strength
AI/service optimization	Q2: AI dispatch launched in North America	Q3: AI dispatch improved first-time repair and time-to-repair; rollout to UK/EU in Q1; preventive maintenance tool test in 2026	Scaling across regions
Capital return	Q2: $200M authorization announced	Q3: Repurchases to start in Q4; 10b5-1 plan	Execution beginning

Management Commentary

“The third quarter was an exceptional quarter from a strategic and competitive perspective… Core top-line growth was 6%… Profitability ramped nicely and was at the high end of our expectations” .
“Seven quarters in, our financial performance in every quarter has been very similar to our guided ranges” .
“We have also crossed the originally targeted threshold leverage level of three times and are on path to be at about 2.8 times at year-end… we expect to begin repurchasing Atleos shares in the upcoming trading window and to establish a 10B51 plan” .
“These AI tools have delivered meaningful improvement in both first-time repair and time-to-repair metrics through automated dispatching… roll these tools out in the U.K. and Europe in Q1” .
“Demand for our ATM outsourced services is also strong… best quarter ever for ATM as a Service bookings, approximately $195 million of total contract value” .

Q&A Highlights

Network prepaid payroll cards: volumes down ~15–16% y/y, stabilized by August/September; management expects Network to return to growth in Q4 .
Tariff outlook: current 50% rate; budgeting 25% for next year with potential decline to 15–18%; 2025 impact ~$25–30M; plan-based mitigations underway .
ATMaaS growth trajectory: targeting ~40% growth in Q4 and 2026; backlog quality strong with margins expanding; TCV ~$195M in Q3 .
Hardware cycle: selling ~60% more recyclers y/y; installing ~20% more devices vs last year; hardware strength seeds 5–7 year service/software revenue streams .
Vault cash optimization: ~$2.6B US and $3.6B total; algorithm-driven cash refills reduce visits/costs; rate cuts provide EBITDA tailwind .

Estimates Context

EPS and revenue both modestly beat consensus in Q3: EPS $1.09 vs $1.07*, revenue $1.121B vs $1.113B*, sustaining beat momentum vs Q2 and Q1 .
EBITDA comparison is definition-sensitive: company emphasizes Adjusted EBITDA ($219M) while SPGI consensus “EBITDA” shows estimate $219M* and actual $184M*; investors should anchor on company’s Adjusted EBITDA for guidance and margin progression .
Given management’s commentary (revenue tracking to high end; EBITDA at low end; EPS/FCF at midpoint), Street models may need to adjust EBITDA mix and Network cost assumptions while staying constructive on SSB/ATMaaS growth .

Values retrieved from S&P Global.*

Key Takeaways for Investors

SSB and ATMaaS are the structural growth engines with proven margin scalability; prioritize these drivers in the model (ARR build, mix shift to higher-margin geographies) .
Hardware upside is strategically positive: it seeds multi-year recurring revenue and has not diluted margins given pricing/productivity; hardware strength should support 2026 services/software growth .
Network headwinds are stabilizing, with deposits and new partnerships (branding, Canada Access Cash) offsetting prepaid card softness; watch unit growth and ARPU resilience .
Tariff and vault cash headwinds are being mitigated; potential rate cuts and tariff normalization could become tailwinds in 2026—risk-reward improving .
Capital structure improving: net leverage ~2.99x and trending to ~2.8x; share repurchases beginning in Q4 provide a tangible capital return catalyst .
Guidance reaffirmed with revenue bias to high end; monitor Q4 execution (hardware deliveries, ATMaaS implementations) for confirmation of EPS/FCF midpoint trajectories .
Near-term trading: beats on EPS/revenue plus buyback initiation can support sentiment; medium-term thesis rests on ATMaaS scaling, hardware-driven installed base growth, and margin expansion in recurring services .

NCR Atleos Corp (NATL)·Q3 2025 Earnings Summary