The following is a summary of the NCR Atleos Corporation (NATL) Q1 2024 Earnings Call Transcript:
Financial Performance:
NCR Atleos Corporation reported total company revenue of $1.05 billion for Q1 2024.
Services revenue grew by 8%, driving a 7% increase in recurring revenue to $763 million.
Adjusted EBITDA increased 11% YoY to $162 million and diluted adjusted earnings per share were $0.41.The company generated approximately $69 million of adjusted free cash flow in the quarter.
Reduction in the net leverage ratio to below 3.5x.
Despite pleasing EBITDA growth, adjusted free cash flow remained flat due to a $19 million cash payment for debt.
The company anticipates a total increased interest cost on the debt for the year to be $290 million.
The company is working towards a cash flow conversion rate of 25% in the first half of the year.
Business Progress:
The company secured 12 new ATM-as-a-Service deals, including their first one in Hong Kong and now supports clients in 12 countries.
Won key contracts in cash-intensive growth markets such as Mexico, Egypt, and Turkey and added a second large U.S. bank to the deposit network.
Extended relations with CVS and 7-Eleven Canada and notched high FinTech transaction volumes.
The company introduced an AI-driven tool to improve customer service and implemented productivity initiatives for cost management.
NCR Atleos is on track with the separation from NCR Voyix, expecting full separation by Q3 that will enable further cost savings.
The company successfully launched a partnership with a leading gig economy payment solution and activated the first retail deposit locations in the U.K.
Plans to reduce indebtedness quickly, perform predictably, and attract new investors. Unit scale growth for Self-Service Banking expected to drive total segment margins improvement.
With their ATM-as-a-Service model, they aim to target 30,000 units by the end of the year.
The company is considering instituting a stock repurchase program as part of its capital return strategy.
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