NCR Voyix Completes Strategic Overhaul: Q2 Results and Major Portfolio Restructuring

NCR Voyix (NYSE: VYX), the global digital commerce solutions provider, has unveiled a comprehensive restructuring plan coupled with its Q2 2024 financial results. The company is implementing three major strategic initiatives designed to streamline operations and enhance shareholder returns.

Digital Banking Asset Sale Marks Major Shift

In the centerpiece of its restructuring, NCR Voyix has inked a definitive agreement with Veritas Capital to sell its Digital Banking division for $2.45 billion in cash, plus contingent consideration of up to $100 million tied to future performance metrics. The transaction is slated to close by year-end 2024, pending regulatory clearances.

The Digital Banking business, which operates across seven global facilities with approximately 1,600 employees, generated $579 million in revenue during 2023 while serving roughly 1,300 financial institutions across North America. This sale represents a pivotal transition for NCR Voyix as it refocuses on its restaurant and retail segments.

Proceeds from the Digital Banking sale will be allocated primarily toward debt reduction, with management projecting the company’s net leverage ratio to reach approximately 2.0x net debt/Adjusted EBITDA on a pro forma basis following transaction completion.

Hardware Business Transitions to Outsourced Model

The company is simultaneously shifting its point-of-sale and self-checkout hardware operations to an outsourced design and manufacturing (ODM) framework through a partnership with leading supplier Ennoconn. Under this arrangement, NCR Voyix will maintain its customer relationships and serve as a sales agent, while Ennoconn assumes responsibility for all hardware design, manufacturing, and warranty obligations.

This transition structurally changes how NCR Voyix recognizes hardware revenue—shifting from full revenue recognition to net commission recognition following implementation. The move is designed to reduce capital intensity and hardware-related revenue volatility beginning in 2025.

Aggressive Cost Reduction Program Underway

NCR Voyix has initiated a multi-phase cost management initiative that has already eliminated approximately $75 million in annualized payroll expenses as of Q2 2024, including both operational and capitalized costs. Management is actively pursuing an additional $30 million in annualized non-payroll cost reductions, anticipated following the Digital Banking transaction close and ODM agreement implementation.

Q2 2024 Financial Performance

The company reported GAAP revenue of $876 million for the second quarter, compared with $946 million in the prior year period. Adjusted EBITDA declined to $144 million from $168 million year-over-year. The company posted a net loss from continuing operations of $74 million, or $(0.54) per diluted share, though non-GAAP diluted earnings reached $0.09 per share.

Breaking down by segment, Retail revenue totaled $517 million with Adjusted EBITDA of $87 million. Restaurants generated $201 million in revenue with $62 million in Adjusted EBITDA, representing a 22% year-over-year improvement. Digital Banking contributed $154 million in revenue with $63 million in Adjusted EBITDA, posting a 17% margin expansion.

Software & Services revenue reached $656 million, with total segment Annual Recurring Revenue (ARR) standing at $2.2 billion. Software ARR specifically increased to $1.3 billion from $1.2 billion in the prior year.

Full Year 2024 Guidance Reshaped

Reflecting the planned Digital Banking divestiture and transition to ODM hardware operations, NCR Voyix has updated its 2024 outlook. On a continuing operations basis, the company expects Software Revenue of $1,000M to $1,020M, Services Revenue of $1,040M to $1,060M, and Hardware Revenue of $765M to $780M, generating total revenue of $2,805M to $2,860M.

Adjusted EBITDA from continuing operations is projected at $355M to $375M, representing an adjusted margin of 12.6% to 13.1%.

On a pro forma basis, assuming all announced transactions and cost actions had commenced January 1, 2024, the company estimates 2024 revenue at $2,150 million with Pro Forma Adjusted EBITDA of approximately $430 million, equating to a ~20% margin. Pro Forma Adjusted Free Cash Flow-Unrestricted is projected at $170 million with a conversion rate of approximately 40%.

Strategic Rationale and Long-Term Direction

These actions represent the continuation of NCR Voyix’s portfolio optimization strategy initiated with the October 2023 spin-off of its ATM business into NCR Atleos. CEO David Wilkinson emphasized that today’s announcements support the company’s realignment toward its core restaurant and retail customer base while positioning the organization for sustained revenue and earnings growth.

The combined impact of the Digital Banking sale, debt reduction from transaction proceeds, hardware business model transformation, and cost efficiency programs is anticipated to reduce financial leverage, stabilize hardware revenue patterns, align the cost structure with the new operating model, and create a platform for accelerated growth and margin expansion in 2025 and beyond.