NCR Voyix Earnings Call: Mixed Sentiment and Strategic Shifts

Ncr Voyix Corporation ((VYX)) has held its Q4 earnings call. Read on for the main highlights of the call.

The recent earnings call for NCR Voyix Corporation highlighted a mixed sentiment, with both positive achievements and notable challenges. The company reported significant platform growth and strong revenue retention, alongside strategic partnerships aimed at enhancing payment capabilities. However, these positive aspects were counterbalanced by a decline in hardware revenue and delays in the ODM transition, presenting a balanced outlook for the company.

Strong Revenue Retention

NCR Voyix Corporation has maintained a robust revenue retention rate of 98% over the past three years. This impressive figure underscores the company’s ability to foster long-term customer relationships, ensuring a stable revenue stream despite market fluctuations.

Platform Growth

The company reported a substantial increase in platform growth, with approximately 74,000 sites now on the platform, marking a 26% rise from the previous year. This growth is further evidenced by the projection of 110 billion API calls by the end of 2024, showcasing the expanding reach and utilization of their platform.

Payments Expansion

In a strategic move to enhance payment capabilities, NCR Voyix entered into a 5-year non-exclusive agreement with Worldpay. This partnership aims to address $500 billion of U.S. customer payments, significantly bolstering the company’s position in the payments sector.

New Customer Wins

The company has successfully signed over 200 new software and services customers in the restaurant segment and more than 35 in retail, resulting in nearly 700 additional sites. This expansion highlights NCR Voyix’s growing influence and customer base in key market segments.

Adjusted EBITDA Growth

NCR Voyix reported a remarkable 75% increase in adjusted EBITDA, reaching $114 million in the fourth quarter. This growth was accompanied by a margin expansion of 850 basis points to 16.7%, indicating improved operational efficiency and profitability.

Hardware Revenue Decline

The company faced a 14% decline in normalized revenue, attributed to expected weakness in hardware sales. This decline highlights the challenges NCR Voyix faces in maintaining hardware revenue streams amidst shifting market demands.

Challenges with ODM Transition

NCR Voyix encountered delays in the ODM transition with Ennoconn, resulting in continued hardware revenue recognition through most of 2025. This delay poses a challenge to the company’s strategic shift towards a more recurring revenue model.

One-Time Software License Revenue Decrease

Software revenue saw a 3% decrease, primarily due to a decline in one-time perpetual software license revenue. This reduction underscores the company’s ongoing transition towards a recurring revenue model.

Q1 Revenue Decline Expected

The company anticipates a mid-teens decline in Q1 revenue, largely due to a significant hardware refresh from a large retail customer in the previous year. This expected decline reflects the challenges in maintaining consistent revenue growth.

Forward-Looking Guidance

Looking ahead, NCR Voyix outlined several key metrics and guidance details. The company expects mid to high single-digit growth in ARR and platform sites for 2025. Despite a 14% decline in reported revenue due to hardware sales weakness, the company aims to transition to a primarily recurring revenue model, targeting a shift from approximately 60% to 75% recurring revenue once the ODM is operational. Guidance for 2025 includes currency-neutral revenue between $2.575 billion and $2.65 billion and adjusted EBITDA ranging from $420 million to $445 million, reflecting an increase of 21% to 28%.

In conclusion, the earnings call for NCR Voyix Corporation presented a balanced view of the company’s current standing and future prospects. While significant achievements in platform growth and strategic partnerships were highlighted, challenges such as hardware revenue decline and ODM transition delays were also acknowledged. The company’s forward-looking guidance suggests a strategic shift towards a recurring revenue model, aiming for sustainable growth in the coming years.