Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NCR Voyix Corp (VYX, Financial) completed the sale of its digital banking segment ahead of schedule, generating $2.45 billion in gross proceeds, which significantly improved the company's balance sheet.
- The company reduced its indebtedness by approximately $1.8 billion, leading to a reduction in annual cash interest expense by about $95 million.
- NCR Voyix Corp (VYX) saw a 25% increase in sites on its cloud-native commerce platform, indicating strong growth in its digital transformation efforts.
- The company signed more than 230 new software customers in its restaurant segment, demonstrating momentum in expanding its customer base.
- NCR Voyix Corp (VYX) is investing in next-gen cloud solutions and restructuring its sales teams to drive growth, indicating a strategic focus on future expansion and market share capture.
Negative Points
- Total revenue for the quarter declined by 11%, primarily due to 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.
- The company experienced a 28% decline in hardware sales within its retail segment, impacting overall revenue.
- Adjusted EBITDA was lower compared to the prior year due to spin-related synergies, despite sequential improvement from Q2.
- NCR Voyix Corp (VYX) anticipates hardware demand to remain flat or slightly down, which could continue to pressure revenue growth.
Q & A Highlights
Q: Can you elaborate on the platform strategy and how you plan to increase conversion rates for retail and restaurant segments?
A: David Wilkinson, President and CEO, explained that the platform strategy is focused on delivering new capabilities through their platform, which enhances customer satisfaction and ARR. They are currently at about 20% platform conversion and are aggressively pursuing renewals and conversions of their existing install base to accelerate this process.
Q: What are the expectations for fiscal 2025 in terms of seasonality and margin trajectory?
A: Brian Webb-Walsh, CFO, stated that detailed guidance for 2025 will be provided in February. However, they expect to grow off the pro forma 2024 results and maintain a focus on improving margins.
Q: How should we measure the success of the go-to-market investments and next-gen investments?
A: David Wilkinson highlighted that the KPI metrics will focus on new customer acquisitions, platform segment EBITDA, renewal of existing contracts, and add-ons to existing services. They are also focused on improving their ARR and RPU benefits.
Q: What is the current relationship between software and services growth and hardware, and how will it change with the ODM contract?
A: Brian Webb-Walsh explained that the linkage between hardware and software is being broken, with a focus on software and services. The ODM model will allow them to focus on software while leveraging partners for hardware, which should result in faster lead times and lower costs.
Q: Can you provide insights into the payment initiative and its value proposition to clients?
A: David Wilkinson stated that their payment strategy is twofold, targeting SMB and mid-market with a high attach rate of payments. The value proposition includes a complete solution offering, ease of doing business, and a better total cost of ownership, especially in the enterprise segment.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
