Sign in

You're signed outSign in or to get full access.

NV

NCR Voyix Corp (VYX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was in line with company expectations and modestly ahead of Street on revenue and EPS: revenue $617M vs S&P Global consensus $605M (+2%), non-GAAP EPS $0.09 vs $0.02 (beats in bold below). Adjusted EBITDA was $75M with 12.2% margin; recurring revenue mix rose to 66% (from 56% YoY) as platform-led strategy gains traction . Revenue consensus and EPS consensus from S&P Global data.*
  • What worked: Restaurants margin expanded to 30.9%, total gross margin improved to 21.9% (+250 bps YoY) on cost actions; ARR +2% YoY; platform sites +27% YoY to 77k; company announced/continued buybacks and expanded authorization to $200M .
  • What didn’t: Total revenue declined 13% YoY on continued hardware softness (hardware -29% YoY) and exits of one-time revenue streams; retail segment EBITDA fell 24% YoY; operating cash flow was -$42M on seasonality and timing .
  • Outlook maintained: FY25 revenue $2.575–$2.650B, Adjusted EBITDA $420–$445M (16.3%–16.8%), non-GAAP EPS $0.75–$0.80, FCF (Adj., unrestricted) $170–$190M; updated diluted share assumption to 158M (from 162M prior); hardware ODM transition and tariff mitigation remain swing factors .

What Went Well and What Went Wrong

  • What Went Well
    • Gross and EBITDA margins improved YoY on cost actions: gross margin 21.9% (+250 bps YoY), Adjusted EBITDA $75M (+19% YoY) with 12.2% margin (+330 bps YoY) .
    • Restaurants resilience: segment Adjusted EBITDA rose 7% to $59M, margin 30.9% (+370 bps YoY) on mix/efficiency .
    • Recurring and platform momentum: recurring revenue +2% to $407M (66% mix); ARR $1.62B (+2% YoY); platform sites 77k (+27% YoY). CEO: “in line with our expectations... expanded key existing relationships and signed customers to the platform” .
    • Capital returns: $62M Q1 repurchases (~5M shares) and authorization increased to $200M, with another $7M in April .
  • What Went Wrong
    • Top-line pressure: revenue -13% YoY to $617M; software & services -7%; hardware -29% on weaker SCO/POS demand and exiting one-time revenue .
    • Retail margin compression: retail Adj. EBITDA $65M (-24% YoY) on hardware decline and lower-margin third-party mix; management expects recovery in Q2 .
    • Cash flow seasonality and timing: CFO flagged -$42M operating cash flow, with ~$40M customer receipts received in April .
    • Tariff headwind risk: run-rate cost $8–$12M for the balance of the year (up to $20M worst-case) despite mitigation by supplier diversification .

Financial Results

Overall performance vs prior periods and estimates

MetricQ1 2024 (oldest)Q4 2024Q1 2025 (newest)
Revenue ($M)$710 $682 $617
Adjusted EBITDA ($M)$63 $114 $75
Adjusted EBITDA Margin (%)8.9% 16.7% 12.2%
GAAP Diluted EPS$(0.52) $(0.08) $(0.17)
Non-GAAP Diluted EPS$(0.15) $0.22 $0.09
Gross Margin (%)19.4% 21.8% 21.9%
Recurring Revenue ($M)$400 $420 $407
Recurring Mix (%)56.3% 61.6% (420/682) 66.0%

Consensus vs actual (S&P Global; estimates marked with *)

  • Revenue: Q1 2025 $605.1M* vs actual $617M (beat); Q4 2024 $684.3M* vs actual $682M (slight miss) [Values retrieved from S&P Global].
  • Primary EPS: Q1 2025 $0.0225* vs non-GAAP $0.09 (beat); Q4 2024 $0.14* vs non-GAAP $0.22 (beat) [Values retrieved from S&P Global].
  • EBITDA: Q1 2025 consensus $72.1M* vs company Adjusted EBITDA $75M (note metric definitional differences) [Values retrieved from S&P Global].

Segment performance (revenue, EBITDA, margins)

SegmentQ1 2024Q4 2024Q1 2025
Retail Revenue ($M)$491 $461 $420
Retail Adj. EBITDA ($M)$86 $102 $65
Retail Adj. EBITDA Margin (%)17.5% 22.1% 15.5%
Restaurants Revenue ($M)$202 $211 $191
Restaurants Adj. EBITDA ($M)$55 $68 $59
Restaurants Adj. EBITDA Margin (%)27.2% 32.2% 30.9%

KPIs

KPIQ4 2024Q1 2025
Platform Sites74k 77k (+27% YoY)
Payment Sites7k 8k (+7% YoY)
ARR (Total)$1.64B $1.62B
Software ARR$765M $775M
Recurring Revenue ($M)$420 $407
Recurring Mix (%)61.6% (calc) 66.0%

Non‑GAAP drivers (EPS reconciliation, selected)

  • Q1 2025 non-GAAP EPS $0.09 vs GAAP $(0.17), with add-backs including transformation and restructuring ($0.08), stock-based comp ($0.07), acquisition-related amortization ($0.03), strategic initiatives ($0.03) .

Guidance Changes

MetricPeriodPrevious Guidance (Q4’24)Current Guidance (Q1’25)Change
Total RevenueFY 2025$2,575M–$2,650M $2,575M–$2,650M Maintained
Software & Services RevenueFY 2025$1,995M–$2,020M $1,995M–$2,020M Maintained
Hardware RevenueFY 2025$580M–$630M $580M–$630M Maintained
Adjusted EBITDAFY 2025$420M–$445M (16.3%–16.8%) $420M–$445M (16.3%–16.8%) Maintained
Non‑GAAP Diluted EPSFY 2025$0.75–$0.80 (assumes 162M diluted shares) $0.75–$0.80 (assumes 158M diluted shares) Share assumption lowered
Adjusted FCF – UnrestrictedFY 2025$170M–$190M; excludes ~$300M digital banking cash taxes $170M–$190M; excludes $284M digital banking cash taxes Cash-tax exclusion updated
Modeling notesFY 2025Gross hardware recognition; ODM update when transition complete; tariffs uncertain Same; FY25 assumes gross hardware recognition; tariffs with mitigations Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24, Q4’24)Current Period (Q1’25)Trend
Platform/VCP rolloutEmphasized platform-led SaaS focus; normalized S&S trends; self-checkout leader Launching cloud-native VCP apps in 2H25; sunsetting legacy on-prem; architecture validated with CIOs/CTOs Accelerating
Payments strategyPost-Digital Banking, refocus on acceptance; strengthening balance sheet Integrating Worldpay front-end; conversion from JetPay by end of summer; training sales; aim to be single partner Executing
Hardware/ODMContinued hardware declines; ODM transition planned ODM pilots this summer; full transition by year-end; tariff run-rate $8–$12M (up to $20M) with supplier mitigation Transitioning with risk
Recurring revenue/ARRRecurring mix rising and ARR growth Recurring +2% to $407M; mix 66% (from 56% YoY); ARR $1.62B (+2% YoY) Improving mix
AI/InnovationPlatform/software leadership; no explicit AI call-out VCP designed for computer vision and AI integration; real-time data/loyalty benefits Building capabilities
Macro/customer demandHardware under pressure; cost actions underway B2B attrition 1%; no client pullback; expecting sequential revenue improvement as signed deals ramp Stabilizing ex-hardware

Management Commentary

  • CEO (strategy and execution): “We signed new customers in both our retail and restaurants segments, expanded key existing relationships and signed customers to the platform... progressed on the implementation of our payments and hardware ODM agreements.”
  • Platform product vision: “We’re now launching our new cloud‑native applications via the VCP and sunsetting the sale of our legacy applications... solutions are developed once, sold through multiyear subscription contracts with escalators.”
  • Payments roadmap: “We’re integrating Worldpay’s front‑end processing capabilities... anticipated to be operational by the end of the summer... customers want one relationship to avoid complexity.”
  • Tariffs/ODM: “Current run rate of tariff‑related cost is between $8M and $12M for the balance of the year or up to $20M... we’ve initiated actions to mitigate by sourcing suppliers in lower or non‑tariff markets... ODM on track for pilot this summer, operational by year‑end.”
  • Capital allocation: “Since November 2024, we have repurchased approximately 10 million shares for $125 million... Board increased repurchase authority to $200 million.”

Q&A Highlights

  • Self‑checkout demand: Retailers remain focused on cost/shrink efficiency and automation; VCP is hardware‑agnostic and can reuse competitor hardware to land software value (reducing capex hurdles) .
  • Cost program and spend: 2025 cost program sized at ~$100M; restructuring/transformation cost needs increased to ~$65M (from $55M) as tariff mitigation includes further cost actions .
  • Payments timing and pitch: Worldpay conversion by end of summer; strong interest in “single relationship” spanning POS to acquiring; leveraging Voyix Connect (>~$700B routed) to cross‑sell acceptance .
  • Macro tone: B2B attrition ~1% and no pullback seen; sequential improvement expected as signed deals ramp; hardware still down but demand “a little better” vs COVID‑era distortions .
  • Retail margin dynamics: Q1 retail margin hit by hardware declines and lower‑margin third‑party mix; expected to recover in Q2; full‑year retail margin guide 19%–20% reiterated .

Estimates Context

  • Q1 2025: revenue $605.1M consensus vs $617M actual (beat), Primary EPS $0.0225 vs non‑GAAP $0.09 (beat), EBITDA $72.1M vs company Adjusted EBITDA $75M (note definitional differences) [Values retrieved from S&P Global].
  • Q4 2024: revenue $684.3M consensus vs $682M actual (slight miss), Primary EPS $0.14 vs non‑GAAP $0.22 (beat) [Values retrieved from S&P Global].
  • Next quarter (Q2 2025E): revenue $648.6M*, EPS $0.13*; company expects revenue decline rate to improve as signed deals ramp; guidance maintained . [Values retrieved from S&P Global].
  • Target price consensus: ~$16 across 8 estimates* [Values retrieved from S&P Global].
    Street is likely to lift near‑term EPS on Q1 beat and better mix, but maintain FY25 ranges pending visibility on tariffs, ODM execution and payments ramp (company guide unchanged) .

Key Takeaways for Investors

  • Mix shift is working: recurring revenue now 66% of sales, supporting higher quality earnings; restaurants margin near 31% provides a stable base .
  • Retail is the swing factor: hardware declines and third‑party mix compressed Q1 margins; management expects recovery as rollouts and mix improve in Q2 .
  • 2025 catalysts: (1) Worldpay go‑live and base conversion, (2) VCP cloud launches and sunsetting legacy apps, (3) ODM transition completion—each can improve growth/FCF trajectory into 2026 .
  • Tariff/ODM risk manageable but real: $8–$12M run‑rate (up to $20M) in 2025 with mitigation underway; guidance held, but watch supplier transition timing .
  • Capital returns ongoing: buyback authority to $200M provides downside support while leverage remains reasonable (~$1.1B debt, cash $573M as of Q1) .
  • Net‑net: defensible recurring base and execution on payments/platform argue for multiple stability; stock catalysts hinge on evidence of retail margin recovery and payments attach/conversion pace.

Appendix: Additional Detail on Results Drivers

  • Revenue declines were driven by SCO/POS hardware softness (-$67M YoY) and exiting ~$20M of one‑time software/services including termination of Atleos commercial agreements; recurring grew 2% to $407M .
  • Cash flow: Adjusted free cash flow (unrestricted) was -$53M in Q1, -$20M before restructuring costs; operating cash flow was -$42M; ~$40M customer receipts slipped into April .
  • Adjustments (Q1): restructuring/transformation $21M, strategic initiatives $7M, stock‑based comp $9M, acquisition intangibles amortization $6M .

Tables: Estimates vs Actuals (S&P Global; estimates marked with *)

MetricQ4 2024Q1 2025Q2 2025E
Revenue Consensus Mean ($M)684.3*605.1*648.6*
Revenue Actual ($M)682 617 —
Primary EPS Consensus Mean ($)0.14*0.0225*0.13*
Non‑GAAP Diluted EPS Actual ($)0.22 0.09 —
EBITDA Consensus Mean ($M)114.2*72.1*94.2*
Adjusted EBITDA (Company) ($M)114 75 —

Values retrieved from S&P Global.*

Further References

  • Press release and exhibits (Form 8‑K Item 2.02) – Q1 2025: Revenue/margins, ARR, segments, buybacks, FY25 guide .
  • 10‑Q (Q1 2025): recurring revenue, segment and geography detail, cash flow, debt, commitments .
  • Earnings call transcript (Q1 2025): payments/Worldpay timeline, tariffs, VCP, retail margin mix, macro tone .
  • Prior quarters (Q4 2024 press release; Q3 2024 press release) for trend and guide baselines .