NCR Voyix Corp SEC 10-K Report
NCR Voyix Corp, a global leader in providing end-to-end software, services, and hardware solutions for the retail and restaurant industries, has released its 2024 10-K report. The report details the company's financial performance, business operations, strategic initiatives, and the challenges it faces in the current market environment.
Financial Highlights
Total Revenue: $2,826 million, a decrease of 11% compared to the prior year, primarily due to a decline in hardware revenues and one-time software license revenue recognized in 2023.
Total Gross Margin: $579 million, representing 20.5% of total revenue, down from 21.1% in 2023, impacted by the divestiture of payment processing services and one-time revenue recognized in 2023.
Income (loss) from operations: $(37) million, reflecting a decrease in operating income due to lower revenue and gross margin.
Net income (loss) from continuing operations attributable to NCR Voyix: $(202) million, compared to $(729) million in 2023, showing an improvement despite the revenue decline.
Adjusted EBITDA: $347 million, up 3% compared to the prior year, indicating improved operational efficiency and cost management.
Business Highlights
Revenue Segments: NCR Voyix operates in two main segments: Retail and Restaurants. The Retail segment focuses on enterprise and mid-market retailers across various industries, offering end-to-end software, services, and hardware solutions. The Restaurants segment serves food service establishments of all sizes, providing software solutions to streamline operations and enhance customer engagement.
Geographical Performance: The company operates globally with significant presence in the United States, Europe, Middle East, Africa, Asia Pacific, and the Americas (excluding the United States). The United States accounted for 60% of total revenue in 2024, with notable contributions from other regions as well.
New Product Launches: NCR Voyix continues to innovate with its cloud-native API platform and Edge software infrastructure, which enhance digital transformation for retail and restaurant customers. The platform supports omnichannel operations and integrates with third-party systems, while Edge enables agile in-store application management.
Future Outlook: NCR Voyix is focused on driving subscription-based revenue growth by converting existing software customers to its platform and expanding the use of its cloud solutions. The company plans to leverage its brand and invest in innovative products and managed services to maintain competitive differentiation and enhance customer experiences.
Strategic Initiatives
Strategic Initiatives: NCR Voyix is focused on maintaining its market position by expanding its share of wallet among existing customers and attracting new customers through its cloud-based, platform-enabled software and services offerings. The company is investing in innovation to enhance digital adoption in the retail and restaurant segments, aiming to improve end-user satisfaction through a combination of innovation and service. Key pillars driving these initiatives include focusing on customer needs, leveraging the brand to enhance go-to-market strategies, investing in innovative products and services, and strategically allocating capital through a cost-disciplined approach.
Capital Management: The company completed the spin-off of its ATM-focused businesses into NCR Atleos and sold its Digital Banking segment for $2.45 billion in cash, with potential additional contingent consideration. NCR Voyix transitioned its hardware business to an outsourced design and manufacturing model with Ennoconn Corporation, which will impact revenue recognition. The company reduced its total debt to $1.1 billion and maintained a cash position of $724 million as of December 31, 2024. It also paid $15 million in cash dividends on its Series A Convertible Preferred Stock and has a borrowing capacity of $480 million under its senior secured credit facilities.
Future Outlook: NCR Voyix plans to continue its strategic focus on recurring revenue streams, which are expected to provide more predictable revenues and earnings. The company anticipates further investment in its platform-driven technology to support the transition from legacy systems to modern cloud-based solutions. Additionally, NCR Voyix aims to manage its capital strategically, focusing on cost discipline and exploring opportunities for sustainable growth. The company expects to make contributions of $13 million to its international pension plans and $13 million to its postemployment plan in 2025.
Challenges and Risks
Strategic Risks: The company's growth strategy involves significant transformations, such as the Spin-Off of its ATM-focused business and the sale of its Digital Banking segment. If these initiatives do not yield the anticipated benefits, the company's operating results could be negatively impacted. Additionally, the transition of the Hardware Business to an outsourced design and manufacturing model presents risks related to execution and potential delays.
Cybersecurity and Data Privacy Risks: The company is increasingly vulnerable to cybersecurity threats, as evidenced by a ransomware incident in April 2023. The evolving nature of cyber threats, including the use of artificial intelligence by threat actors, poses a significant risk to the company's operations and reputation.
Regulatory Risks: The company is subject to evolving global data privacy and security laws, such as the EU GDPR and the CCPA, which may require substantial compliance costs. Additionally, changes in U.S. or foreign trade policies, including tariffs and trade restrictions, could adversely impact the company's operations and supply chain.
Operational Risks: The company's reliance on third-party suppliers and partners, such as Ennoconn for hardware manufacturing, introduces risks related to supply chain disruptions and quality control. The company's ability to integrate third-party applications and software is also critical to its platform's success.
Financial Risks: The company's level of indebtedness could limit its financial and operating activities, and changes in control could trigger acceleration of debt obligations. The company also faces risks related to changes in tax laws and potential additional income tax liabilities.
Market Risks: The company operates in highly competitive markets, and failure to compete effectively could result in loss of market share. Economic conditions, both domestic and global, could impact consumer spending in the retail and restaurant sectors, affecting demand for the company's products and services.
Management's Discussion and Analysis: Management is focused on executing its growth strategy by transforming the company into a platform-led software and services provider. This includes expanding its customer base, developing new solutions, and enhancing its services capabilities. The company is also investing in artificial intelligence to improve its product offerings and operational efficiency.
Quantitative and Qualitative Disclosures About Market Risk: The company is exposed to foreign currency exchange rate fluctuations, which may adversely affect its financial results. Additionally, changes in interest rates could impact the company's cost of capital and financial performance.
SEC Filing: NCR Voyix Corp [ VYX ] - 10-K - Feb. 27, 2025