NCR Corporation Aktie

Thank you for standing by. My name is Carly, and I will be your conference operator today. At this time, I would like to welcome everyone to the NCR Voyix Corporation Second Quarter 2026 Earnings Conference Call. [Operator Instructions]

I would now like to turn the call over to Sarah Jane Schneider, Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining our second quarter 2026 earnings conference call. This morning, we issued our earnings release reporting financials for the quarter ended June 30, 2026. A copy of the earnings release that we will reference during this call is available on the Investor Relations section of our website, which can be found at www.ncrvoyix.com and have been filed with the SEC.

With me on the call today are Jim Kelly, our Chief Executive Officer; Nick East, our Chief Product Officer; Darren Wilson, President, Retail and Payments; Beimnet Tadele, President, Restaurants; and Brian Webb-Walsh, our Chief Financial Officer. This call is being recorded, and the webcast is available on the Investor Relations section of our website. Before we begin, please be advised that remarks today will contain forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

For additional information on these factors, please refer to our earnings release and our other reports filed with the SEC. We caution you not to play undue reliance on these statements. Forward-looking statements during this call speak only as of the date of this call and we undertake no obligation to update them.

In addition, we will be discussing or providing certain non-GAAP financial measures today, which we believe will provide additional clarity regarding our ongoing performance. For a full reconciliation of the non-GAAP financial measures discussed in this call to the most comparable GAAP measure in accordance with SEC regulations, please see our press release furnished as an exhibit to our Form 8-K filed this morning and our supplemental materials available on the Investor Relations section of our website.

With that, I would now like to turn the call over to Jim. Jim?

Good morning, and thank you for joining us. For the second quarter, revenue increased 1%, adjusting for the ODM transaction; recurring revenue increased 3%; and adjusted EBITDA increased 5% compared to the prior year. These results reflect continued progress across the business, driven by the commercial actions we took last year to strengthen our installed base, combined with continued growth in software, services and payments.

We are seeing improved operating performance while building momentum behind our Voyix Commerce platform. our product portfolio is now modernized, creating an integrated cloud-native software payments and services offering that resonates with customers. We now have 10 of the 25 signed VCP customers live across more than 2,000 lanes and expect another 1,000 lanes live in production by the end of September.

Customer engagement continues to strengthen. Increasingly, conversations are centered on enterprise-wide platform transformation rather than individual products. Customers are looking for solutions that simplify operations, improve security and provide greater speed and flexibility. We believe our integrated platform is well positioned to meet those needs. Enterprise technology decisions take time. Customers typically move through [indiscernible] with demonstrations, customer lives and finally, commercial agreements.

Given the scale of replacing a point-of-sale environment that has often been in place for decades, the time line of this process can vary based upon the size and complexity of the customer. Execution doesn't end with a signed contract, accelerating deployments while reducing implementation cost remains another top priority. During the quarter, we completed our first fully remote Voyix POS installation with a large European grocery retailer in roughly half the time of a traditional deployment.

We expect to reduce remote installation times less than 1 hour per store, lowering cost for our customers while significantly increasing our deployment capacity. Nick will discuss how automation and AI are helping us scale even further. In summary, we continue to make solid progress across our strategic priorities, increasing customer adoption, expanding recurring revenue and positioning NCR Voyix for sustainable long-term growth.

With that, I will turn the call over to Nick.

Thanks, Jim. Earlier this year, we reached an important milestone with the successful launch of our embedded Voyix commerce platform application portfolio. Our focus has shifted from building the core VCP applications for each of our industry verticals to scaling customer adoption through targeted innovation and the rapid delivery of customer-specific capabilities.

Since mid-2025, we have signed 25 VCP contracts reflecting strong demand from both existing and new customers. We also have 16 active customer lives across 7 countries where customers are evaluating our VCP applications as they progress towards commercial agreements. Developments of [indiscernible] next remains on schedule and is expected to begin initial pilots by year-end. Our store-in-a-box solution for small and mid-market restaurants will be available for customer lives by the end of the third quarter followed by pilots in the first quarter of next year.

These milestones further expand our deployment pipeline and support future recurring software revenue growth. For existing customers, AI agent dramatically simplify software upgrades to the VCP by analyzing existing environments and seamlessly migrating configurations, application settings and operational data for the platform. The results get faster deployments, lower implementation costs, greater consistency and a highly scalable migration model.

After deployment, those same AI agents continue optimizing customer environments, delivering ongoing operational value. Beyond deployments, our innovation strategy is increasingly centered on intelligent automation and agentic AI. At the [ MAX ] coming this October, we'll participate in a fireside discussion with one of the industry's largest pure retailers on how AI and next-generation commerce technologies are reshaping convenience retail and the future of commerce.

The event will also showcase the latest innovations across the VCP. We first introduced these AI features at the NRA show in May, demonstrating how computer vision can monitor inventory in real time and automatically trigger actions across point of sale, digital ordering and marketing systems. Since then, we've expanded these capabilities into retail while extending AI across inventory management, supply chain operations, merchandising and back-office workflows.

Our industry is evolving beyond systems as simply record transactions. Customers increasingly expect software that understand what's happening across their business recommend actions and execute them autonomously. Our role is to help retailers and restaurants automate their operations, make informed decisions, operate more efficiently and improve performance across the enterprise to delight our customers.

With that, I'll turn the call over to Darren.

Thanks, Nick. Our retail business signed more than 40 new customers during the quarter, primarily in the mid-market. Platform and payment sites increased 8% and 13%, respectively, while recurring revenue grew 6% driven by 15% growth in recurring software revenue. In the U.S., we recently signed a Voyix supply chain agreement with LC Food, extending our grocery and CFR capabilities into food distribution. .

This win demonstrates the versatility of our VCP applications and further expands our reach into this large adjacent market. Our interest from food and beverage distributors continue to build. We are focused on converting that momentum into additional sales. In Europe, we signed a recurring services agreement in Germany with a leading reverse vending provider, further diversifying our service business.

In Latin America, we signed a Voyix POS agreement with a large home improvement retailer in Colombia and Chile. -- further expanding our platform footprint in the region. Finally, in Australia, we secured a large equipment refresh across approximately 350 stores for an existing grocery customer. Following the ODM transaction, we continue to support the hardware needs of our customers.

Turning to payments. This quarter, we continued executing our gateway strategy, converting customers in the U.S. and Latin America to Voyix Connect at market pricing. Our certifications continue. We expect to expand this strategy across Canada, Europe and Asia Pacific. Additionally, we signed a new agreement with Voyager to expand fleet card acceptance through Voyix Connect. We now have direct integrations with Voyager, Core pay and WEX, strengthening our convenience and fuel offering. With that, I turn the call over to Benny. .

Thanks, Darren. In the second quarter, our restaurant business signed over 100 new customers. Platform size increased 12% and payment types decreased 1%. Enterprise and mid-market recurring revenue increased 6%, driven by 9% growth in services revenue and 3% growth in software revenue when excluding last year's noncore Brazil divestiture. .

Offsetting the performance of our mid-market and enterprise business was a continued softness in SMB. Market interest in the Aloha Next continues to build. During the quarter, we signed an agreement with Pizza Ranch, making them the first new enterprise customers to adopt the Aloha Next. The agreement includes Aloha Next and Voyix Pay across more than 200 locations. Winning in one of the industry's most operationally demanding restaurant segments continues to validate the market-leading technology and related benefits of our cloud-native platform.

Internationally, we signed an agreement with one of the largest restaurant operators in Asia Pacific to modernize the Aloha point-of-sale environment and centralized data management across multiple countries and brands. This established a foundation for future adoption of Aloha Next while expanding our footprint across the region. The National Restaurant Association show marked the formal launch of Aloha Next, our modernized restaurant application.

Customer reaction was very positive, generating strong engagement that continues to translate into active customer lives and a growing pipeline. Finally, our services business continues to strengthen our revenue base. This quarter, we renewed our relationship with a leading global coffee chain and secured a new engagement with a major global QSR brand to support their technology in the U.S. and Canada.

Together, these wins reinforce our position as a trusted partner for many of North America's largest restaurant operators. With that, I'll turn the call over to Brian.

Thank you, Benny, and good morning. For the quarter, total revenue decreased 21% to $523 million, reflecting the transition of the hardware business at the end of Q1. Excluding this impact, total revenue increased 1%, driven by recurring revenue growth of 3%. Within recurring revenue, software increased 6% and services increased 1%, supported by actions taken last year to correct efficiencies and legacy agreements in addition to our payments initiatives and new product sales.

Platform sites increased 10% to 85,000 and payment sites increased 2% to 8,500. Importantly, our platform site metric primarily represents legacy point-of-sale applications tied to subscription contracts. Beginning in 2027, we will provide updated metrics that reflect the sale of our modernized point-of-sale and related solutions. This, along with our remaining contract value will be more indicative of future financial performance.

Adjusted EBITDA of $98 million increased 5%, driven by revenue growth, coupled with our cost actions. Adjusted EBITDA margin expanded 460 basis points to 18.7%, reflective of the hardware transition, revenue growth and efficiency actions. Excluding the hardware impact, adjusted EBITDA margin expanded 80 basis points.

Non-GAAP EPS of $0.17 per share was flat year-over-year due to a higher tax rate as the prior year period benefited from a onetime tax benefit. GAAP EPS was a loss of $0.03 per share in the quarter, primarily due to restructuring and transformation in addition to stock-based compensation and amortization of intangibles. In the second quarter, we signed 4 mid-market contracts for our embedded VCP applications, bringing our total customers to 25. Our VCP contracts represent $286 million of remaining contract value, up 65% year-over-year.

Turning to our segment results. Reported retail revenue decreased 20% to $365 million, which reflects the hardware transition. Excluding this impact, retail revenue increased 4% driven by 6% growth in recurring revenue from VCP application sales and payments pricing initiatives. Retail adjusted EBITDA increased 20% to $97 million, driven by revenue growth coupled with our cost initiatives, adjusted EBITDA margin increased 880 basis points year-over-year to 26.6% due to a combination of the hardware transition, revenue growth and our efficiency actions.

Excluding the hardware impact, retail margin increased 350 basis points. Turning to restaurants. Reported revenue declined 23% to $158 million, reflective of the hardware transition. Excluding this impact, restaurant revenue declined $10 million or 6% in the quarter. The decline was driven by lower-than-anticipated hardware installations as customers have delayed refreshes likely into next year, declines in SMB and the divestiture in Brazil.

We expect the SMB trend to moderate as we launch our store-in-the-box solution, which Nick outlined in his remarks. Restaurant adjusted EBITDA decreased 15% to $58 million, driven by lower revenue and mix. Adjusted EBITDA margin was 36.7%, an increase of 350 basis points year-over-year due to the hardware transition.

Excluding this impact, restaurant margin decreased 380 basis points. Lastly, corporate expenses were $57 million for the quarter, and we expect this to remain relatively consistent for the balance of the year. As a reminder, in the third quarter of 2025, corporate expenses benefited from the completion of the [indiscernible] transition service agreements resulting in lower prior year expenses.

Adjusted free cash flow was $56 million for the quarter before restructuring. This quarter benefited from working capital improvements, including cash inflows related to the hardware transition. Restructuring outflows of $30 million were lower than expected due to a delayed $24 million payment for litigation, which was subsequently paid in July. We invested $41 million in capital expenditures and continue to expect our CapEx for the year to be similar to 2025.

We repurchased approximately $11 million of common shares during the quarter. We ended the quarter with a net leverage position of 2x based on our net debt at June 30 and the last 12 months adjusted EBITDA. Turning to our full year 2026 outlook. We are maintaining the guidance we provided in May and expect revenue to be between $2.188 billion and $2.303 billion and adjusted EBITDA to be between $432 million and $447 million with adjusted EPS between $0.89 and $0.92.

I'll now turn the call over to the operator for Q&A.

[Operator Instructions] Your first question is from Kartik Mehta with Northcoast Research.

Jim, last quarter, you said you had, I think, 22 wins for the VCP platform. I'm wondering, as you talk to customers, are you seeing the adoption accelerate and just what you're seeing or hearing from your customers as regards to their desire to adopt the new platform. .

Actually, I was at dinner last night with Darren and Benny and Nick, with a customer. I think I saw 6 customers last week, all of which are either already in a pilot or one of them is a pilot, the rest of them are coming here to see the new CEC that we've talked about before. I would say the feedback across all the customers I've seen, which is well over 100 are very excited about the fact that NCR has this new application based on their existing infrastructure. Not having to change a point of sale since we're essentially giving them the same one, just modernized and not having to retrain their staff and all the other stuff that we've said in the past has been very positive.

I think the recognized, though, for restaurants, we only launched it officially in May and January for retail. While we did have some sales early last year kind of presales of the product, these are very large enterprise organizations, many of them are multinational. So you're dealing with organizations spread around the world. So my expectation is you'll continue to see -- we'll continue to see that number move up. I don't know they don't -- this is the RCV. I don't know that it will ever be completely linear. It's not a revenue growth. This is selling multiyear contracts to existing customers.

But even on the new side, if you just do a count of customers over 20% of what we've signed to date, reflects new relationships for the company. So I think we feel as positive as ever in the trajectory and the acceptance of the product, again, recognizing that in some of the markets, I think we are, I think, now at 2,000 lanes, predominantly in grocery. So CFR restaurants, we just sold a supply chain, which was the first one, which is a segment we've never talked about before, but we have a pretty significant place in supply chain as well. So this is still early days and I'm extremely optimistic about the trajectory of where we're going.

Jim, and then I think Nick talked about it too, which is using AI and automation for installs. Does that, in the future, quicken booking to revenue because you're able to install these so much quicker. .

Yes. I'll let Nick cover. But that, as I said in my comments, as did Nick, I think that's a big differentiator for the future. which is using agents to be able to read the legacy and for existing customers and install, but I'll let him give you more color.

Yes, Kartik, the rate at which you can get a customer live after adoption, either migrated from our existing software or moving to the new -- net new customers moving to our platform really depends on the customer size and complexity. So we talked about store-in-a-box, restaurant-in-the-box at the bottom end of the market, the idea is that we get them installed immediately. You ship it out, you unbox it, it's preconfigured and you're up and running straight away.

So the gap between bookings and then driving the go-live is virtually 0 for the really large complex multinational customers, there's a project to do. And that's where we've been working really hard on AI agents to do exactly what you say. So imagine you've got a customer with a complicated menu, catalog, a whole set of pricing and promotion than what AI agents are helping us to do with our migration blueprint tools is analyze the existing, create the capability to automate the configuration over to the new platform.

That part of it, what we've also been able to do this quarter is also accelerate deployment through remote installation, even in some of the most complex environments. And I think it's also surprised the IT teams of our largest customers. That we can convert, for example, a very large grocery store for the old to the new in a couple of hours overnight without a single person on site. So I think the combination of AI tools and some of the automation we've built into the platform, means that we are definitely accelerating the rate at which customers can go live.

Yes. The way I would describe it, Kartik simplistically for me, I'm not as sophisticated in this as Nick is this like when you get a new iPhone out of the box, you put one against the other, and it transfers all the existing information over to the new. And we're able to do that even with an on-prem application for the cloud applications that we already have. We've already perfected that process. So it's important to the customers because the way it's been done historically takes a long period of time and a lot of resources. This is short on resources, and it's going to be a lot less expensive for them.

I mean it will be profitable for us because it's predominantly a software application, but we are -- I think that's part of the pitch to customers as well as they come in and they say, what's the effort to be able to move it over. And I think you know the last thing is, as you know, we're also -- the contracts we're signing are multiyear contracts. These are traditional subscription. It's different to what the company has done historically, which more is a as they open a store, then it drives revenue. That's no longer the model for the company.

Your next question comes from Mayank Tandon with Needham & Company.

This is Brandon on for May. To kind of build off the last question, I'm just wondering if you can talk about the overall visibility in the guide as you enter the back half of the year, taking into account like the macro as well as the new like product ramps in RV. .

Yes. I think as you follow the company, our installed base is -- half of it is services. These are today, multiyear contracts. So visibility is generally pretty strong relative to the primary drivers, which is software and services today. Payments is a much smaller piece, at least currently. And since hardware is not being reported, that's been historically the area is very lumpy. It still has an impact of -- I think it did this quarter restaurants delayed purchases. So there is some impact to us, I guess, relative to economy. But generally, as we said in the guidance, that we are maintaining the guidance we gave at the beginning of the year.

Okay. I was just wondering if you can talk about the demand for the new platform. I know it's early, but in terms of verticals, are you seeing anything different on the go-to-market side versus restaurant and retail and SME and enterprise? .

Yes. I'll let some of the other guys add to this. Just coming back to what I said earlier. Traditionally, I think we talk about grocery and CFR predominantly, but the company has -- I guess, restaurant, but we have other verticals that have not been getting any attention in the past, but as a result of our project F1, where we've modernized those primary applications, we've modernized the entire suite of what the company has owned over the years. And that's one of the reasons, as I mentioned, we just had a press release out, I believe we did, a press release out for supply chain. So that's a vertical we've not spoken on these calls yet or we will have a release out.

So I think the strength of each of the verticals look very good, as I mentioned earlier, but I don't know, Darren, do you want to...

Yes, sure. I think we're seeing consistent demand across the verticals. As I put in my prepared remarks, we signed more than 40 customers in the mid-market spanning all the verticals kind of referenced or that are core focal area, adding on supply chain, as Jim said. But equally, as also announced, we're starting to get that traction on payments as well with the Voyix Connect signings that I referenced.

So good, healthy trends across all our existing customers but also new logos, as Jim touched on, with the 20% of the business being from new logos. So yes, good go-to-market traction. The -- we're very focused on demoing the new products, both at shows, but also through our customer experience centers around the world. and that is receiving very, very positive feedback. I pass over to Benny.

Yes. So on the restaurant side, I would describe the market as cautiously optimistic. I think the pressure on cost, like Jim described continues for them. So there's a lot of focus on bottom line improvement and efficiencies. Traffic largely back is what we're seeing, but at the same time, consumer spend is still stretched. And you hear from restaurants costs on food or even insurance and energy, things like that. .

And it's doing a couple of things for us. As you look at the mid-market and enterprise segment, that is now a very heavy focus on ROI buying journey. So not necessarily a spending freeze, but what does create return on investment from efficiency on the operations side, AI, automation, ease of training and onboarding of resources augmentation resources. So on that side, what we see is maybe a tad longer of buying journey as the buying committee have more scrutiny on what returns the best for their investment. But it aligns very well with our value proposition on Aloha Next and the wider platform strategy.

And in fact, since we launched Aloha Next at NRA, I've been very encouraged by the moment and we're seeing similar to what Darren described, we've had a number of demos that I talked about in the prepared remarks. We have a number of lives going on and in some, having contractual discussions also on track to go live by the end of this year. So all of that is very encouraging in terms of what we're seeing in the market. On the SMB end of the market, it's a very different buying journey, a very cost-sensitive and economic sensitive as well as simplicity of deployment and in management of the solution. Hence, why we're bringing the Aloha Next restaurant in a box solution to really align with that segment buying behavior as well as operational behavior. So as we launch that, I feel very good about that as well.

Maybe I'd add 1 thing, Brian. If I look across retail and restaurants, and there's some very specific customer conversations you've had recently, exactly what Aron and many have both said, the advantage we have with customers who have both retail and restaurants, and there are a lot of them, right? There's a real convergence between -- particularly in the convenience market between food offerings and convenience. So what they're looking to do under this sort of slightly pressurized consumer market is reduce cost and find synergies but also find ways of driving revenue up and loyalty and value for each of those customers.

One of the things there is customer last week who was so interested in our ability to do that across the new platform because the technology stack allows us to combine our retail and restaurant operations and drive synergy that they're flying at tomorrow to delve into that so that we can drive that cost synergy for them, but also be able to do more cross-sell and hub sell. So I think there are some -- some compression in the market is also opportunity to help use technology to drive out costs and drive our customer value, and we're getting a lot of interest from customers in that market to do that.

Your next question is from Matt Summerville with D.A. Davidson.

Just a couple of questions. I know you touched on RCV, but I wanted to double back to that. How should we expect RCV that metric to kind of play out from here? We saw a year-on-year deceleration in Q2 relative to the growth you saw in Q1. We saw a little bit of a sequential decline what conclusions should we be drawing from this newer metric you're providing? And how should that metric evolve from here? .

Yes. So the metrics will grow over time as I mentioned earlier, it's not completely linear. So if I sign 4 customers that are relatively small compared to some of the largest customers that we've already signed, then the number either stagnates or in this case, goes down because RCV also represents is revenue. So that's the earnings that are going to start coming into the company because they start immediately on signing of the contract.

So that has a natural tendency to decline. It goes up by signing additional contracts. It represents less than maybe 6% of our installed base. So it's still in its infancy. And I would -- I don't know that you can expect -- I mean I'd like to expect, but I know you can expect every quarter, it's going to go up sequentially in the exact same way. These are very large organizations. They are multinational, most of them or at least a large segment of them.

And the conversations are early. So I think as this year progresses and into next year, those numbers will continue to rise, but at the same time, there is a downward pressure because that represents the revenue that we will start recording the software part of the revenue. It does not include the services. It does not include payments. Obviously, it does not include hardware sales. So this is just isolating software under long-term multiyear contracts. So I have no doubt you'll continue to see it move up. I just don't know every single quarter.

It will be linear or it will be a compare that makes logical sense because if you think about it, these are specific companies that are moving to this contract to these -- for our existing base moving to this -- these new applications. But as I mentioned earlier as well, that we've got, I think, 20% of what we've signed thus far in terms of customers are new to NCR entirely.

Got it. And then as a follow-up. -- any -- how should we be thinking about the remaining sort of revenue and EBITDA cadence across the 2 businesses in Q3 and Q4. And I say that in the sense that I know there's some timing on product launches, et cetera. So how does the rest of the year kind of play out in the businesses? .

Yes. So Matt, it's Brian. What I would say is that, obviously, in my prepared remarks, we're maintaining the guidance for the year on revenue, so down 2% to up 3%, and that implies sequential improvement in Q3 and Q4 and Q4 is from a seasonal perspective, it's usually our strongest quarter, and we continue to see it that way. And we'd expect contribution from both segments sequentially to see improvements. And then on EBITDA, same thing EBITDA maintaining the 3% to 7% growth. We operated in the first half in line with that.

So we see consistent performance in the second half growth wise, which implies again, sequential improvement in adjusted EBITDA and in margins, and we would see that contribution across both segments.

Matt, just to add to what Brian said as the as more of these contracts -- as more of our customers convert to the new application, there's obviously additional value to us because there are some cost savings and enhancements through the product to our customers. So we anticipate as well the margins going into next year will continue to improve as a result. I'd also mention that the conversations around payments have all been very constructive as well. And while we -- I think for all our SME restaurants and many of the small retail, we provide almost 100% penetration on -- for new customers with payments.

But even for the large enterprise that have signed up or in the process of signing up for the new application, payments is front and center. So our expectation -- my expectation is a very high percentage of those customers will begin using us for payments.

Your next question is from Jack Evans with Goldman Sachs.

Congratulations on the results. Just a couple of quick ones. Of course, we've been spending a lot of time with the higher memory costs, if you look at the hardware environment, Brian, I appreciate the comments on the push out. Any color you could provide on how that's impacting broader discussions with current customers and future customers and where that may be impacting the P&L in the near term? And the confidence that you guys have and kind of seeing that rebalance in 2027? .

Yes. So if I look at the quarter in Q2, hardware was relatively flat, down a little bit on a net basis. But we did see the pressure that we talked about on the install revenue inside of the restaurant business. So we are seeing a little bit of cautiousness on project work from customers and a little bit on hardware as the memory chip cost is an issue for customers. As we've said before, that's a $20 million to $30 million issue for us that we're passing on through price. And so we do see a little bit of pullback because of that. And we think the balance of the year into next year we probably stay pretty consistent to the operating environment we're currently in.

Yes. But they can delay only generally for so long. At some point, they have to refresh, either parts aren't available or the product is no longer available to continue in its current form. So I would expect, while we've seen some delays, and that's 1 of the things that Benny highlighted, I'm expecting that will get itself sorted out.

Yes. I make 1 other comment. When we look at the software side of the business, what we are able to do for hardware that has life and it's still and the customer wants to be able to push out their refresh cycle. Our new platform is able to leverage and sweat those assets. So we've done quite a lot of work to make sure they're not forced to do an upgrade.

For example, there is sort of a well-known cycle where a new upgrade to Microsoft Windows as an operating system on a point of sale or a self-checkout device requires an upgrade to a newer chipset, with only new platform will be able to avoid that so we can keep the customer current and keep them secure without them having to upgrade an asset that still has life. So I think the swings and roundabouts to that, customers are looking for sweating their assets -- the customers were looking to sweat our assets a little bit longer. We have a software solution for them, and that means they're adopting the software faster. And so that price pressure is -- can be quite positive to accelerate the software discussion for us.

Got it. That makes a lot of sense. It seems like there's a lot of flexibility, which is good to hear. I guess in terms of, I guess, the second question, any color you could provide on the competitive environment and extending that question, I guess, also into kind of the go-to-market as well. It seems like you guys are -- have signed several distribution partnerships. It seems like those seem to be working out well. Any color on both competitive environment and kind of the updated distribution strategy, particularly with the recent launch of VCP.

Yes. I don't know that there's been any significant change relative to the competitors, I would say, back to my earlier comments. When I meet with customers, that is not really the discussion especially since changing out a point of sale is difficult and changing to somebody else is even more difficult. So I'm not finding that as anymore or necessarily less than what we've seen over the last year. We still see RFPs. I would say the restaurant side probably sees a little bit more than we see on the retail side, just the number of players that are trying to move into enterprise base. I think for SME, obviously, I think you know that well, that's a very competitive space and puts pressure on where we are. I don't know, do you have any...

Echo that. No significant change through the year and nothing on the sites either in terms of significant changes. What we've certainly seen from the shows we've been to recently is an incredible interest in our platform dilution VCP as you outlined. So I think the story, the modernization, the demos, the lives are all proof points. I think the 20% of new logos are all proof points of the story, the message, the solution is really starting to resonate and win as a differentiator. But we can't be complacent, of course. But so we're continuing to gear up on proactively sharing the continued development in the product solution.

And I think the reference clients and proof points of as we're rolling out the expanded lanes and sites. So steady as it goes really in terms of the complex environment.

I'm going to add 1 more piece. I would tell a story of a customer that was just in last week, I went to dinner with them. It's kind of the routine, we have dinner the night before they come in and they spend pretty much the entire day here talking about, especially if it's an existing customer, you talk about their existing applications and then we go and show them a demo of the new one. This customer had not seen that was in the CSR space, they had not seen the product yet.

And I would say at dinner, I think they were fairly skeptical that they were going to see something that much different. I would say, halfway through the demonstration the CIO stopped the conversation and said he's never seen anything like this, and he's ready to move forward on this and on payments. So I think the competition is always going to be out in any of the space as we are. But I think we have something clearly differentiating for us, but I think it's also differentiating the architecture of how it's designed from cloud to edge and micro services, the speed at which this product enables customers to make changes plus, as Nick was saying, saves them a bunch of money on Microsoft and other costs of running their stores. I think we're in a really good position. It's just -- it's still early days. I mean we're talking about the first 6 months of launching this product. So we're very optimistic about the future.

Your next question is from Parker Lane with Stifel.

This is Jack McShane on for Parker. My first question is on the restaurant side of the house. Last quarter, it seemed like you were calling out SMB is more of the key headwind. This quarter, it seems to be a little bit more focused on macro in consumer traffic in the quarter. How much do you feel like is in your control, which I would presume would be the SMB portion versus out of your control, which would be the macro?

I'll get started. Thanks, Jack. So if you stand back and look at the macroeconomics, I described a couple of trends, right? So first of all, there is definitely continued pressure on the bottom line of restaurants. Last year, this year, there is pressure on labor cost, food cost like, I said, even insurance and energy costs are coming up. So they are feeling the cost pressure, no doubt about that. But I don't see that as having a spend freeze for restaurant technology spend. And particularly, when you think about the Aloha Next and the platform strategy that's coming to market, it actually aligns to the buying desire right now. In fact, there is a study that was out earlier this year that indicated most CIOs, about 50% are looking to increase spend in technology, but aligned very specifically to improved efficiency, improved operational simplification AI, automation, data and insight, so a data-driven operational management.

All of these things quite nicely align with what we're bringing to market. And hence, why I'm very encouraged with the momentum that we're seeing with our conversations since the launch of Aloha Next. So in that dynamic, that is in our control. Now the buying committees like I said, more scrutinous, the buying cycles could be a tad longer, but it really is resonating. And I believe that is, to a large extent, the buying habits are in our control. The second dynamic, though, is the SMB segment that you talked about, the buying habits of that specific segment is very price-oriented and simplification of deployment and management and rolling out the solution for SMB specifically is going to help us address and that's why we're focused on that.

Maybe the third one, you're right. In this quarter, we talked about the deferred refreshment installment, which is largely on the onetime side of our revenue mix, not on the recurring, not on the software side, but these are store refreshed hardware upgrades and things like that. We will see some deferment that what we've seen this quarter, and that would have been impacted by macroeconomic. But largely on the recurring revenue on the software and the launch of Aloha Next, we feel pretty good about.

Great. Yes. That was very helpful. And then I wanted to ask Brian, just for an update on the nonrecurring share of the business. You've been taking portions off the income statement for some time now, now in a pretty material way with hardware. You guys have been talking about moving more and more services to recurring models. Can you just give us an update on like what remains in the business that's nonrecurring and kind of the level of urgency to get any sort of nonrecurring business out of the model?

Yes. Thanks for the question. So the really good news is 83% of our revenue was recurring in Q2. So it's a significant improvement with the new hardware model. And we do have 17% that's still nonrecurring, and that's going to be onetime install work that's project-based within services. that will still stay there and be a revenue source over time. In software, we have a couple of onetime streams, 1 onetime software licenses, which has gotten a lot smaller, it's going to be down probably close to $20 million this year.

So that's been coming down over the last 5 years as the company shifted to subscription. That will eventually go to zero. And then we have onetime professional services that will become recurring and over time come down. There may be still a little bit of that, but it should come down from where it is today. But we will still have some onetime revenue in the model, but we can improve on that 83% as we get into the next year and the year beyond with some of those dynamics.

Just to add to that. So everything that we're signing now are a different structure of contracts. So it's a multiyear fixed agreement with CPI or CPI plus in each one of them. So what you see today in the company is kind of an amalgamation of what was, at one point, onetime licenses for software, software maintenance and then a lot of professional services, probably about 1/4 of our revenue represents what's called professional services, which is software updates or changes that the customers are asking for the on-prem application.

So over time, that's all going to atrophy and what it's going to be replaced with is the Voyix Commerce platform applications. And as people want to enhance that, it has the ability for us to do the upgrades or it has extensions where they can actually do it themselves. So it will move in a different direction. But again, we're really early in the cycle. So the percentage that Brian mentioned, that will continue to move up, but it's not going to move up materially early. It's going to take some time.

Your final question is from Matt Inglis with RBC.

This is Matthew Inglis on for Dan at RBC. So you mentioned an expansion of the gateway strategy in Canada, Europe and APAC. How should we think about that time line and just the size of that opportunity. And then can you remind us of the uplift in the economics of those international volumes once converted?

Yes. Thank you. So the the gateway is the same as we talk about here for the U.S., the Voyix commerce. I mean the Voyix Connect, I'm sorry, is what we call it. Today, it processes or runs through at 800 billion in volume domestically. So as we move to the Voyix Commerce platform, which is obviously cloud, the connection point will be Voyix Connect in all markets that we're in. And then from that entry point, we will connect to third parties, local acquiring companies, some of which I may -- and Darren may have worked at in the past. But whatever is best for the local market. It will represent a new revenue source for us that we don't currently enjoy in the existing base, but it's going to apply to the new -- I mean, the new applications not -- it's not being retrofitted to the legacy.

Not as looking backwards, it's all looking forward because the effort, the cost to retrofit to legacy applications, honestly, it's not worth it to the customers today or us. But going forward, we want better control and security around connecting to our platform. So it's all going to go through Connect.

Got it. And what's the time line then for expanding into those new regions? .

Well, the time line is -- it also correlates with when the customers sign up. So as they sign up in those markets and they ultimately get past pilot and go live, so you can say '27 for Europe and Asia would be -- it's already live for, obviously, the U.S. and Latin America. They're working on standing it up in Europe and Japan in Southeast Asia next year.

There are no further questions at this time. I will now turn the call back to Jim Kelly for any closing remarks.

All right. Thank you, operator, and thank you all for your continued interest in NCR Voyix.

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect.

Thank you for standing by. My name is Kathleen, and I will be your conference operator today. At this time, I would like to welcome everyone to the First Quarter 2026 NCR Voyix Corporation Earnings Conference Call. [Operator Instructions] And now I would like to turn the call over to Sarah Jane Schneider, the Vice President of Investor Relations. Please go ahead.

Good morning, and thank you for joining our first quarter 2026 earnings conference call. This morning, we issued our earnings release reporting financials for the quarter ended March 31, 2026. A copy of the earnings release that we will reference during this call is available on the Investor Relations section of our website, which can be found at www.ncrvoyix.com and has been filed with the SEC.

With me on the call today are Jim Kelly, our Chief Executive Officer; Nick East, our Chief Product Officer; Darren Wilson, President, Retail and Payments; Benny Tadele, President, Restaurants; and Brian Webb-Walsh, our Chief Financial Officer. This call is being recorded, and the webcast is available on the Investor Relations section of our website.

Before we begin, please be advised that remarks today will contain forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements.

For additional information on these factors, please refer to our earnings release and our other reports filed with the SEC. We caution you not to place undue reliance on these statements. Forward-looking statements during this call speak only as of the date of this call, and we undertake no obligation to update them.

In addition, we will be discussing or providing certain non-GAAP financial measures today, which we believe will provide additional clarity regarding our ongoing performance. For a full reconciliation of the non-GAAP financial measures discussed in this call to the most comparable GAAP measure in accordance with SEC regulations, please see our press release furnished as an exhibit to our Form 8-K filed this morning and our supplemental materials available on the Investor Relations section of our website. With that, I would now like to turn the call over to Jim. Jim?

Good morning, and thank you for joining the call, where we will provide updates on our first quarter performance and our strategic priorities. Both total revenue and software and services revenue were essentially flat, while adjusted EBITDA increased 5%, driven by early sales momentum from the Voyix Commerce Platform applications, coupled with the ongoing cost actions implemented in 2025.

Reflective of the growing demand for our Voyix Commerce Platform solutions, this year, we have conducted nearly 200 product demonstrations for new and existing retail and restaurant customers, including at NRF and other industry trade shows across key markets, including the U.K., Australia, Japan and Argentina.

We have also upgraded our customer experience center in Atlanta to showcase our latest innovations, enabling both existing customers and prospects to experience their benefits across key verticals, including grocery, convenience and fuel, restaurants, department store and specialty retail and supply chain. These demonstrations will soon be available virtually via our website.

As I mentioned in my concluding remarks on our earnings call in February, we would begin sharing additional financial insights pertaining to the company's Voyix Commerce Platform application sales initiated in early 2025 and including Q1 2026. While these new software sales represent less than 5% of our roughly 400 enterprise customers globally, we are seeing initial momentum across the U.S. and Europe as those were the first 2 regions where the new software applications were made available.

Since its launch, the company has signed 21 new platform contracts through Q1 2026 with a remaining contract value for those customers of approximately $293 million, 13% of which relates to new customers. We are very encouraged by this early success, coupled with the ongoing engagement across our broader installed base and prospective customers.

Turning to our ODM. We implemented our agreement at the end of the first quarter and as of April 1, now recognize only net commission revenue on hardware. Founded in 1885 as a hardware manufacturer, we had already outsourced all manufacturing, assembly and logistics by 2022 while continuing to carry inventory on our balance sheet.

The Ennoconn transition completed at the end of March after more than a year of preparation, represented the final step in our evolution of coming a software and services-led business supported by payments and hardware sales.

Finally, this March, we announced the sale of our Japan-based banking technology business for $32 million in sale proceeds. This business is now reflected in discontinued operations with the transaction expected to be completed by year-end. Inclusive of this divestiture, we generated nearly $2.5 billion in net proceeds since the spin-off of our ATM business.

This includes the divestitures of our 4 noncore businesses between 2023 and 2026 and the anticipated working capital benefit from the ODM agreement. These sale proceeds enabled us to return capital to shareholders through common and preferred share repurchases, while also supporting debt reduction and targeted investments in our products and infrastructure.

By year-end, we expect to have returned approximately 10% of the proceeds to shareholders post-spin. Building on our momentum, we continue strong customer validation of our Voyix Commerce Platform across both retail and restaurants with growing adoption of our integrated software payments and services offering. These wins reinforce our ability to convert innovation into durable multiyear growth. Darren and Benny will provide additional detail on this momentum in their remarks. And with that, I will turn the call over to Nick.

Thanks, Jim. I'd like to begin by discussing the opportunities AI is creating for our business. On prior calls, we have discussed how we are using AI to accelerate the modernization of our global library of 40,000 unique retail and restaurant features into cloud-native applications on the Voyix Commerce Platform. Our ability to apply AI to migrate customers from legacy environments to an agile foundation for ongoing innovation is now translating into tangible commercial results.

Recent customer wins, along with growth in remaining contract value for our VCP applications reinforce strong long-term customer confidence in our solutions. We have also been embedding intelligence directly into the workflows our customers depend on, such as with Picklist Assist, our self-checkout solution, which uses camera vision to identify items, reduce shrink and accelerate checkout.

Picklist Assist is now live in nearly 60,000 lanes across the globe with consumer engagement and customer feedback exceeding our expectations. In 2 weeks, we'll be at the National Restaurant Association Show in Chicago, showcasing Aloha Next alongside a comprehensive portfolio of restaurant applications embedded within the VCP. For example, we will leverage computer vision and agentic restaurant operations to help restaurants increase sales and reduce waste, and we will demonstrate menu pricing informed by competitive intelligence and real-time analytics powered by generative AI.

Both of these solutions deliver actionable insights directly into restaurant workflows and day-to-day decision-making. Given the heightened focus on AI and its impact on technology valuations, I want to articulate 4 core attributes of our platform offering that we believe underpin the durability of our model before turning the call over to Darren.

First, our software revenue model is fundamentally tied to customers' physical sites, devices, transaction volumes and API usage. These are real-world operational drivers of value that are not being compressed by Agentic AI. Second, NCR Voyix software operates at the center of a highly regulated environment with significant compliance requirements, including fiscal and tax, PCI, fuel and weight and measure certifications. Our customers depend on us to maintain compliance as requirements evolve and to deliver a clear technology path forward without disrupting their daily operations.

This regulatory complexity reinforces the critical role we play in their businesses. As we continue to go to market with our VCP applications, we will attach payments as a core component of our end-to-end offering. Over time, this will enable us to both scale our payments business and further entrench our solutions within our customers' regulatory and operational workflows.

Third is the network effect created by third-party integrations into the Voyix Commerce platform, connecting our platform into customers' enterprise solutions such as supply chain, loyalty, ordering and accounting systems. Today, the VCP has more than 300 third-party integrations that power the daily operations of thousands of customers.

As we continue to expand and open our APIs, agentic systems can more seamlessly integrate with the VCP, further increasing its value to customers and partners alike. And finally, data. As more transactions flow in from multiple channels and as more lanes, devices and third-party systems connect to the platform, its value compounds driving better performance, deeper insights and improved outcomes across our customer base.

As an example, last month, for one customer alone, our platform processed around 115 million transactions and the related data of more than 900 million items sold. As we move through the balance of the year, we are focused on building on our momentum, deepening customer engagement, scaling adoption of our embedded VCP applications and converting our innovation road map into sustainable growth and long-term value creation. With that, I will turn the call over to Darren.

Thanks, Nick. Beginning with payments, our strategy is showing strong momentum. We're successfully updating our contracts for Voyix Connect, our proprietary gateway to be tied to transaction volume with revenue building as we scale this initiative.

Turning to retail. In the first quarter, our retail business signed nearly 70 new customers, primarily mid-market. Our platform and payment sites increased 6% and 13%, respectively. Total recurring revenue increased 5%, with recurring software revenue increasing 8%. Market adoption of our enhanced platform offering continues to gain momentum as reflected in strong customer engagement across the sales cycle from initial demo through store rollout.

Year-to-date, our product teams have delivered more than 130 demos to new and existing retail customers worldwide. These engagements showcase our end-to-end portfolio as customers continue to shift away from individual products and towards integrated solutions spanning software, payments and support services.

We remain focused on the efficient deployment of our platform solutions to meet the needs of our enterprise customers. We recently completed our most significant deployment of Picklist Assist for a large enterprise retailer in the U.S. across more than 35,000 self-checkout lanes.

For point-of-sale and self-checkout, we continue to advance deployments through a phased approach from lab testing to initial store launches and broad site deployment. Deployment velocity has already increased for 2 large grocers in the U.S. and Europe, and we look forward to continuing this momentum with additional customer rollouts.

As announced in March, we signed a 5-year agreement with Pilot, North America's largest travel center operator. Under the expanded partnership, Pilot will deploy Voyix POS to CFR together with additional related platform capabilities.

The microservices-based architecture of the Voyix Commerce Platform will enable seamless delivery across pilot locations and support the activation of new capabilities such as payments, further advancing Pilot's guest-centered strategy.

We also signed a new platform contract with Stater Brothers as announced earlier this week, a regional grocer with nearly 170 stores across Southern California and existing NCR Voyix customer. Stater Brothers has chosen to adopt Voyix POS in an effort to support continued innovation for their business. With this win, we now have 22 signed contracts for our embedded VCP applications.

Finally, turning to services. This quarter, we continued to expand our services relationship with enterprise customers across the globe. Beginning in the U.S., we signed a new 3-year agreement with a large discount retailer to support their phase remodeling plan, which includes hardware installation and remote support.

In Europe, we expanded our long-standing relationship with Lidl, a large German-based grocery chain to both continue to provide installation services in Spain and now support their store openings in France. in Argentina, we secured a new service agreement with Carrefour, the largest retailer in the market to provide help desk and hardware maintenance support.

Finally, in Japan, we secured a multiyear contract with a leading department store and a new NCR Voyix customer to provide hardware installation services across their store footprint. With that, I turn the call over to Benny.

Thanks, Darren. In the first quarter, our restaurant business signed 100 new customers. Platform and payment sites increased 9% and 1%, respectively. For enterprise and mid-market, recurring revenue increased 6% as recurring services revenue increased 13% and recurring software revenue was flat.

Offsetting the performance of our mid-market and enterprise businesses was the continued softness in SMB. We expect this trend to begin to moderate with the launch of Aloha Next for SMB, our restaurant-in-a-box solution later this year. In 2026, we have continued to execute contract renewals across our enterprise customer base, including with Shipley Do-Nuts, California Pizza Kitchen and Pei Wei, reinforcing the durability of our relationships. While these customers have renewed with our existing Aloha point-of-sale technology, they have expressed strong enthusiasm for Aloha Next with very positive feedback on its ability to maintain their same capabilities and interface.

As such, these renewal agreements include plans for the customers to begin engaging with Aloha Next in lab environments over the coming months positioning them for implementation as it becomes broadly available. Additionally, we are continuing to expand our enterprise restaurant business internationally. As I discussed on our third quarter call in November, we signed a multiyear agreement with Marco's Pizza, one of the fastest-growing pizza chains in the United States to support its global expansion efforts. Following an initial rollout in Mexico, we have continued to win additional international Marco's Pizza locations, most recently signing their business in the Bahamas.

Turning to our mid-market business. Our ability to equip operators with enterprise-grade capabilities, including software, payments and services continue to differentiate NCR Voyix. As a partner that helps emerging brand scale, we believe our position will be further strengthened by the launch of Aloha Next. For example, this quarter, we executed an agreement with Gyro Hut, a Mediterranean fast casual brand with locations in Texas to provide point-of-sale and add-on capabilities such as kitchen display systems, inventory management and multiunit reporting and data.

Wins like Gyro Hut are central to our expanding mid-market strategy. By partnering early in a brand's growth curve, we can grow alongside them. The momentum behind Aloha Next continues to build, and we currently have several enterprise RFPs in flight with it as a core component of our bid. We're very encouraged by the response of the nearly 60 demos and early labs we have conducted this year.

Customer feedback has been very positive, particularly around our market-leading modern architecture, which brings faster deployment speed, ease of management and a reduced total cost of ownership. I attended the Restaurant Leadership Conference at the end of April and met with both current customers and prospects, all of whom echoed the same sentiment. They're energized by the innovations they are seeing, including our AI-powered features that make intelligence the new standard. With that, I will turn the call over to Brian. Brian?

Thank you, Benny, and good morning. Our results for the quarter were in line with our expectations and demonstrate the progress we have made to streamline our organization, including the recent sale of our Japan banking business, which is now reflected in discontinued operations. For the quarter, total revenue decreased 1% to $606 million. Both recurring software and recurring services revenue increased 4%, while nonrecurring hardware and installation services revenue declined.

Platform sites increased 7% to 83,000 and payment sites increased 3% to 8,500. Going forward, we'll be highlighting recurring revenue rather than ARR. However, we will still continue to report ARR in our metrics file. Adjusted EBITDA increased 5% to $78 million as margin expanded 80 basis points to 12.9%, driven by cost actions.

Non-GAAP EPS increased 25% to $0.10 per share due to a lower-than-expected tax rate this quarter. However, we still anticipate our tax rate for the year will be approximately 21%. GAAP EPS was a loss of $0.04 per share in the quarter, driven by costs incurred due to the hardware ODM implementation. As Jim mentioned, we ended the first quarter with 21 customer contracts for our embedded VCP software applications, generally structured as 5-year subscription agreements at market terms. These contracts represented $293 million of remaining deal value, up 75% year-over-year and 15% sequentially.

Turning to our Retail segment results. Total revenue increased 2% to $427 million and recurring revenue increased 5% to $279 million, primarily driven by the increase in our VCP application sales and payments pricing initiatives implemented in the second half of 2025. Retail adjusted EBITDA increased 20% to $78 million as margin increased 280 basis points year-over-year to 18.3%, driven by software and payments revenue growth, coupled with our cost initiatives.

Turning to restaurants. Total segment revenue of $179 million declined 6%, which reflects lower hardware sales, onetime services and declines in our SMB business. Restaurants recurring revenue increased 1%, driven by growth from our mid-market and enterprise business. Restaurant adjusted EBITDA decreased 8% to $54 million and margin decreased due to lower revenue. Lastly, corporate expenses increased $4 million to $54 million, driven by our exit of the TSAs.

Adjusted free cash flow before restructuring was $71 million versus use of cash in the prior year. This year benefited from favorable changes in working capital, cash inflows related to the implementation of the ODM agreement and a delayed tax refund received in the first quarter. Cash flows related to the ODM are recognized under GAAP as cash from investing activities and included in our definition of adjusted free cash flow.

Restructuring was $41 million in the quarter as previously discussed. We invested $36 million in capital expenditures during the quarter, a decrease of $3 million versus the prior year. We continue to expect our CapEx for the year to be similar to 2025. Following the incremental repurchase authorization we secured at the end of February, we repurchased approximately 9 million of common shares in the first quarter. We ended the quarter with a net leverage position of 2.1x based on our net debt as of March 31 and the last 12 months of adjusted EBITDA.

Turning to our 2026 outlook. We're updating our full year guidance originally provided in February to reflect the divestiture of the Japan banking business as detailed in today's outlook table. Importantly, after normalizing both 2025 actual results and our initial 2026 guidance, to exclude the Japan Banking business, we now expect full year 2026 revenue of $2.188 billion to $2.303 billion and adjusted EBITDA of $432 million to $447 million, representing pro forma revenue change of approximately a decline of 2% to 3% growth and adjusted EBITDA growth of approximately 3% to 7% year-over-year.

We have also included a schedule in our metrics file that adjusts historical 2025 results for the impacts of Japan and hardware, providing a clearer view of the pro forma business. Based on this updated profile, we expect 2026 seasonality for revenue to be broadly consistent with 2025.

For adjusted EBITDA, we anticipate year-over-year growth to be more weighted towards the fourth quarter relative to the second and third quarters as our sales momentum builds and cost initiatives take hold. I will now turn the call over to the operator for Q&A.

[Operator Instructions] And your first question comes from the line of Will Nance of Goldman Sachs.

If I could just maybe pick up where you left off there on the shape of the year. I was wondering if you could provide a little bit more color on just how you're thinking about the cadence of margins across the 2 segments as we progress through the year.

Thanks, Will. What I would say about the segments and the rest of the year, we expect continued good performance in retail, driven by the software and payments initiatives. And we expect EBITDA to be strong as well like we saw in Q1.

And then on restaurants, we expect the revenue and EBITDA declines to moderate as we go through the year. And if I think about margin, we'd expect after we normalize for that hardware, the retail margins would improve year-over-year and the restaurant margins for the full year would be pretty stable year-over-year.

Okay. That's great. That's very helpful. And then I appreciate all the details on Ennoconn and the pro forma in the prior year. We'll take a look at that. If I could just ask a question on some of the disclosures around remaining contract value from the new platform. I was wondering if you could just talk about time lines around how this will translate to revenue over time and when we could start to see some of this coming through the P&L.

Yes. I would just say that if you look at the remaining deal value, our contract value, typically, those are 5-year agreements, and they would ramp as the deployments ramp. So just keep that in mind as you're modeling it. But obviously, the strong growth year-over-year would indicate that it's contributing to the P&L.

Will, and while those -- while we showed the aggregate balance that's currently under contract, some of that is in the P&L this year, and it will continue to grow over time. So what we're showing is we're having very strong momentum. We didn't disclose the numbers last year. We're waiting for annualizing of the contracts, but they continue to ramp.

The reaction from the marketplace continues to be very strong. We had 6 customers here last week seeing demos. So we are very optimistic. That's why we talked about it at the end of last quarter or at the year-end last month in February, excuse me, and then we'll start sharing more as the time moves on.

Great. Well, congrats on the milestone there.

And your next question comes from the line of Dan Perlin.

I wanted to just follow back up on the VCP platform disclosures as well. Jim, is there just any context you can give us kind of as we think about what it previously looked like? I mean, obviously, 21 new contracts is fantastic and then the $293 million kind of rolling through. I'm just trying to think about how that obviously, it's up a lot, but like how that ramped? It feels like it ramped pretty quickly in the past, I guess, maybe a quarter or 2.

Well, I would -- as we've described, so last -- if we started -- when I started last year, we really had one customer of size that had a few stores in. Today, they're well over 10 stores. I think in the aggregate, we have 100 with 500 lanes that are operating today. So it's no longer the idea. It's actually in production in the stores as I just described.

I think in terms of the ramp, a lot of it, and Darren can speak to it, a lot of it came during the fourth quarter -- third and fourth quarter of last year. And then it's obviously rolled into this year as well. We just announced Stater Brothers this week. We also had Pilot, which was announced right after our February call.

Prior to NRF, this was kind of presales type of engagements with customers, showing them labs -- demos and labs. But after NRF, which I think you were there, too, we shared with our investor base or the people that wanted to see it in person, it has definitely picked up. And as I just mentioned, we're seeing customers come in here at a rate that I've not seen in the last 2 years I've been involved in with NCR.

And what really is compelling is that we have 400 very large customers spanning the globe in retail restaurants in all the verticals that we highlighted in the comments, we're able to give them exactly what they have, but in an architecture, which is not something there -- that they currently have, but it's definitely something they aspire to because of the speed at which they can then innovate going forward, and in particular, with AI becoming more prevalent in product.

You put those 2 things together, they want a modern architecture now so that they can be -- continue to be relevant in the market. I think Nick wants to add some thoughts.

Yes. And if you kind of think about what happened in the past, this is a fairly typical move from a license and then maintenance revenue line to a subscription revenue line. And if you think of some of the customers who are now moving on to the VCP, they would have bought licenses some time ago, and that would have been a lump of revenue when the license was contracted.

Now we're moving from a sort of ongoing software maintenance annuity to a subscription annuity. So you'd expect, particularly with large customers who want to go on a 5-year agreement because it's a major program, then you would see those larger subscription contracts. And in the past, we would have seen a software maintenance line rather than a full subscription line. So I think if you compare the contract value -- contract value now to what we have had in the past, that's one of the major shifts.

Yes. One other piece that I think Brian mentioned during his comments, Dan, is that in our revenue and earnings this year are some of the contracts that were signed last year. So they're starting to show up in the earnings, and they're going to continue to escalate.

If you think of a funnel, what's going in is that 5-year contract, as Nick just said, what's coming out is a piece of that each year. We've moved away from what used to be here called PayGo, pay-as-you-go, where you get paid either through a license or you get paid when you open up a store when the store goes live. So it's more of a traditional SaaS structure going forward, recognizing there is a ramp in period.

These customers, they take anywhere from 9 to 18 months to 2 years to ready themselves to do an upgrade. But the upgrade of this system is really on us, and it's very quick to implement. It's much different than what they've experienced in the past.

And your next question comes from the line of Parker Lane of Stifel.

In the prepared remarks, you highlighted the data advantage of VCP as a real differentiator. And obviously, you sit on a wealth of transaction history and data there. Can you just talk about how that data advantage is widening with VCP versus your historical platform and applications?

Yes. Thanks for the question, Parker. So yes, if you think about the previous platform, much of that work was done on-premise, the software resided on-premise and then went either into a customer's data center for the transaction volume or into a single-tenant hosted cloud environment.

With our VCP, we have this cloud-native multi-tenant environment where all transactions flow for all of our customers. So we have visibility. The customer gets the benefit because they get real-time insights from the data directly as the transactions flow from all of their stores or restaurants.

And obviously, all of that data flows through our platform, which gives us the ability also to provide customers with additional insight and also to learn more. And as you rightly point out, we have essentially an enormous distributed data set from every single point-of-sale, self-checkout, kiosk, restaurant system in 35 countries.

So the more of our customers that migrate onto that platform, the more of the data flows into the platform, the more insights we can provide and the more integration benefit we can give to customers. Obviously, that also means we can benefit ourselves from providing insights and leveraging that data for our customers' behalf.

I just want to add, it's not specific to your question, but just as a point of clarification because years ago, when the company stood up the platform, so the platform is GCP.

When they stood up the platform, they took legacy or we took legacy applications and engineered a way for the customers, our customers to be able to extract some level of data by what we refer to as attached to the platform. So sending transactions up to effectively aggregate amongst locations and then collate and have a report and insights.

Today, what we've talked about, the $300 million that is referenced in the speech, the entire system, the application are sitting in the cloud at that point. So it's a completely different architecture from beyond the fact that it's in a microservices structure, we're no longer selling applications that are monolithic sitting on a point of sale in a restaurant or retail. And I think that's an important distinction because we talk to attach to the cloud, that is a different structure today where the applications are actually physically there. Go ahead.

Yes. And just maybe to draw out some of the benefits as well. So you mentioned that we mentioned in the prepared remarks, I think the example I gave was for one particular customer who in the month of April, we processed 150 million of their transactions, and that represented about 900 million items sold.

So all of that data associated with what was sold flows through the platform, yes, the average basket size, the SKU count, the pricing, the promotions and so on, that all flows through the platform. And then if you think of the opportunity we have with AI on top of that data, which is what we'll be showing NRA in about 10 days' time, is you can then use both Agentic AI and generative AI to provide insights into the data. So it's not just the fact that we have the data flowing through the platform, which gives real-time value, it's what we can leverage with AI on top of that to be able to bring additional value to the customers.

And the case study I gave in the prepared remarks is the Picklist Assist, we've rolled out across 35,000 lanes. So the more we roll that out, which is essentially product recognition and self-checkout, the AI tools in terms of product recognition and return on investment across multiple retailers and in terms of the consistent product types really starts to accelerate the customer benefits.

Appreciate that feedback. And just looking back at this remaining contract value, obviously, really nice growth there in VCP to start. When you look at the customers that have taken a look at the demos or converted into a deal, are you finding that those are folks that would have otherwise been looking at an upgrade or renewal in the near term, and this is just a natural transition?

Or are you also finding folks that maybe signed a contract in the last 2 or 3 years that just see a real opportunity to advance their operations on this platform, and they're going to go forward regardless of when they would have done an upgrade or renewal?

I think it's more of the former. I think they see the benefit of it. And one of the challenges our customers have is they're running on 20- and 30-year-old applications. And their customers, their end customers at a grocery store or a restaurant have different expectations of what will be available for them in terms of data or being able to run promotions, all the stuff that we take advantage of in our personal lives, it's not always as resident in some of the markets that we support.

So my sense is that the market is very efficient. We've done some press releases. So that gets people's attention. NRF, I think, was a very good opportunity for us to showcase what the company has been working on for years, but we've also had a show in Europe.

I was at one in Tokyo early in this year. There's another one coming in Singapore. So I think some of it is we're doing what we can without spending a massive amount in marketing to get the word out on the benefits of this product. And we've talked about it as a company for a number of years. It's what we have described the benefit of AI for us to be able to give to our customers exactly what they have.

So you're not changing the way the store runs. You don't have to retrain your staff and your staff could be tens of thousands or 50,000 people to run these grocery stores or restaurants. That is -- that's an important selling feature, being able to put the customer back to where they are today, but in an architecture or a structure that enables them to move faster. It's one of the key features of the selling.

But it is with 130 demos and 22 customers signed as per my remarks, it's kind of all the above that you said. It's from new logos to existing customers accelerating the deployments quicker than they ordinarily would because the benefit of the tool is they can keep their existing hardware in store and essentially upgrade their infrastructure from a monolithic to a microservice application.

So that's an enormous benefit for them in terms of accelerating the deployment schedule. And then we've got the standard kind of end of contract or annualizing of the contract process in terms of the renewals. So it's a combination of all the above.

What I'm really pleased with is the sales cadence of all the sales teams across retail and restaurant in terms of proactive nature of sharing the message and the fundamentally different model now that we're deploying across the organization.

I guess the last is relative to one of your comment was we don't need to wait to a customers' existing contract comes to end. We're happy to step out of that contract into a new one. And I would say probably for most, if not all, the ones other than the new ones, they probably were already in the contract.

And I think again, Benny's case on the restaurant side, where we're still earlier that sort of behind the retail side. To the extent somebody is renewing, they're renewing with the expectation they're going to see the new product in the lab sometime this year.

[Operator Instructions] And your next question comes from the line of Dillon Bandi of Northcoast Research.

Looking at chip and hardware costs have been kind of elevated. Have you guys seen any margin impact from that? And if you are seeing that, have you been able to pass those costs on to your customers?

So we are seeing higher chip costs and we are including that in our price to the customer. So it doesn't impact us. And we have seen relatively healthy volume levels for hardware.

No, go ahead, sorry. I was going to say as everybody is aware, we're also shifting out of the direct hardware business as of April 1. So we are still selling.

And the nice thing is the software that we're selling that we've just talked about the new applications, we've been able to squeeze it into older hardware, as Darren was mentioning, so not to force customers. There's not a requirement to buy new hardware to be able to run the new software. depending on how old it is, that's not a requirement. We're trying to make it as easy as possible to transition to the new architecture.

Including hardware, that's not our own.

Yes. Yes. We're not -- I wouldn't say we're entirely hardware agnostic, but if somebody wants to use somebody else's hardware, we're not standing in the way of that.

But we're certainly seeing a change in customer behavior because chip and hardware costs across every channel is obviously increasing. So the buying pattern and trying to seek earlier delivery and certainty of delivery is kind of changing our dialogue with customers. So it is actually enhancing our process in terms of getting more confirmed quicker orders because they're wanting to beat the price hike. But as Brian said, we are firmly passing through any increased hardware chip or supply chain associated costs.

Great. That's really helpful. And then just kind of another line of thought here. Looking at your guys' recent wins, are you seeing greater traction in the retail or restaurants business? And then kind of how is the demand environment been different between those 2 verticals?

You want to start, Ben?

Yes. I'll start off by saying from what you said in my prepared remarks, we're very encouraged with the growth we're seeing actually before I even talk about the demand in the enterprise and mid-market segments. That is very consistent to the conversations we've been having over the past few quarters.

And on top of that, as I said in my remarks, the demos that we've conducted about 60 demos, a number of actually labs that we have in enterprise space. And then on top of that, the number of RFPs that we have, significant growth than what we've seen in the past couple of years.

So that gives me a lot of confidence that the demand is not just stable, but growing. And the feedback we've been getting is very positive on Aloha Next. As Jim just mentioned, we are a little bit earlier in the product rollout cadence compared to retail.

But already the positive remarks that we're getting is not just the positivity, but also the quality of the feedback has been around resiliency and speed. And when I think about speed, it's not just speed of deployment, but it's also the speed at which the restaurants can keep up with their configuration, management, pushing down promotions, managing their menu.

And then the overall cost structure of their technology management, right, really reduced. So all of this is driving a lot of speed. And Darren talked about the cadence of deployment that how the retailers are pushing faster migration because they want to recognize this value. We're seeing the same thing. So demand remains very high. In mid-market, we announced one of the wins today.

And again, there, a very similar theme to the data question that you heard. We are talking to a lot of customers that in today's environment with the new entrants that they've been using in their space as they try to grow, they're actually faced with challenge to access data.

And in this current environment where they're trying to manage their cost structure, analytics, multiunit management, all of these remain very fast. So we're seeing healthy demand, very encouraged to what we're seeing in the second half as we prepare to launch Aloha Next.

Yes. Similar story to Benny. On the retail side, obviously, the sales cycles are very long in enterprise, but they're shortening dramatically as the message around the demos about the core solution and the adjacencies in terms of speed, loyalty, data, insights, micro services, flexibility, leveraging existing hardware or third party, those hooks and levers are truly landing in terms of speeding up the more greater efficiency, lowering the friction with our retailers.

So we're seeing very strong demand across all markets, all territories. across the retail business. So we're very pleased with the demand and the sales approach of the team.

Yes. Maybe to add on, I think in that question, there's also this theme hidden that is how is the market at least in restaurants, we're seeing, yes, food costs stabilizing as you've seen, consumer probably demand returning, people are visiting restaurants more and more, but what they're not doing is that discretionary spend hasn't returned yet.

People are not buying that extra drink or ordering dessert and so on. So what restaurants are faced with is how do I manage my cost structure. Labor costs still remain high. So anything that drives efficiency, anything that allows them to improve their margin.

The data and AI remains very important, I think, not necessarily just to augment employees, but also to really optimize the cost structure is really important. So I'm excited again to what we're going to showcase that NRA that Nick talked about that really starts to address this, and this is driving a lot of the demand that we see.

And your next question comes from the line of Matt Summerville of D.A. Davidson.

A couple of questions. Just getting back to the remaining contract value, given that that's sort of a new statistic, where would you like to see that number kind of exiting 2026 and building into '27? Is there any way to help us dimensionalize that? And then underpinning that, is there a way that you can quantify the magnitude of funnel that supports that go-forward view on the RCV? And then I have a follow-up.

So I guess to answer your first question. [indiscernible] I expect it to be bigger. Look, it's early stages. We didn't do this last year for just that reason because we didn't really have compares. Now the compare also is against the first quarter of last year.

And so it's still very early last year in the sales cycle. I see it accelerating. It is really all we're doing right now. The GC is sitting in the room, and she's constantly complaining about all the RFPs and stuff that we're working on. I have customers coming in that, I would say, last year had a completely different view on NCR.

And for me, it's nice to feel. It's a completely different conversation than what I experienced last year. And the mindset for our customers has shifted because in the past, it was, well, I have this 20- and 30-year-old application. As I said to them, how many people have a 20- or 30-year-old car they're trying to keep running and running and running.

And I think our customers have been successful in as we in keeping this going for a very long period of time. But they would like to see something new. And NCR, while it acquired a lot of things over the years, this is the first time we're really bringing something of scale to the market that we built ourselves in-house with an amazing engineering team. So yes, I think it's going to continue to grow.

I guess if we took the uplift that Nick was talking about, as we say market terms, it's what's the new price off of what we historically charge for software maintenance. We feel that, that market, I think we've done well in terms of the investment in this product is pretty significant over the years.

But I think it's still early for us to kind of give a long-range view on it. But I think the trend -- I mean I don't know that it's going to grow at 70% quarter after quarter. And I don't think that's a failure if it doesn't because these are our existing and new customers. They go through -- most of them are RFP cycles because they're enterprise. So there could be some ups and downs to it.

But yes, I expect that number to only get bigger and bigger and bigger over time. The cadence, I think this will be a good year. That's why we went ahead and put the numbers out there that we're off to a good start, and I expect that to continue.

And I think you said about the quality of quantifying the funnel. All I can say is the discipline of driving a proper sales management funnel. Our sales support team has been very busy in building those processes to ensure there is ruthless discipline in the customer engagement, both in restaurants and retail across all our existing customers and a discipline in terms of the RFP approach in terms of the new product messaging in terms of core and adjacencies that we're focused on.

So those demos and the follow-through and the discipline and the engagement and the touch points and the sales discipline is firmly there. Our entire kind of sales ecosystem is driven around driving up the remaining contract value funnel and pipeline to drive that delivery momentum over the next few years. So there's a lot of dedicated effort on that funnel management.

The other piece is the contracts we have today, on a very limited basis, do we end to service something, mainly a branch of an existing application because we're trying to bring it back to the mothership instead of continuing to support these bespoke solutions.

But that is kind of the next horizon for us, which will cause customers to be more interested if they're trying to stay with what they have for one reason or another. At some point, we're going to end to service. We have a lot of resources against keeping these old products running.

And it's better for the customer. It's better for us if we come to an end sooner rather than later. But we haven't come out with specifics yet. I think that will be later this year, and I think that will spur some additional growth.

Got it. And then just 2 final ones. Can you remind me what -- how sort of the cost-out cadence looks as you move through the year and ultimately, what the aggregate net cost-out number is? And then just quickly on restaurants, when does the SMB headwind begin to flip to a tailwind for you guys specifically?

So I'll start on the cost side, Matt. So our cost program is about $90 million this year. A lot of those actions are already behind us. They're either taken last year or at the early part of this year. And most of it's around labor. And there are some initiatives in development, product development and services that do continue. And so we'll get a little bit more benefit as we get into Q4, but a lot of it is behind us already in terms of actions taken.

Just to give you an order of magnitude, since the spin, the company has taken out 20% of payroll cost through the end of last year. So it's -- it was kind of a byproduct as I get feedback internally as a $2 billion becoming an $8 billion company, you're going to add a lot of cost, but the opposite also happens.

So an $8 billion becoming a $2 billion company. That's one of the reasons that we've gone through the announcements that we have, but you never say it's completely over. But at this stage, that's not a focus of the company. The focus of the company, the divestitures are largely, if not entirely behind us. So the focus is entirely on bringing product to market to new and existing customers.

And then on the SMB, I mean, again, I'll start off by saying very encouraged with the growth that we're seeing on enterprise and mid-market. That will continue. And overall, including for SMB, the inflection point that in restaurants we're seeing is tied to the Aloha Next launch. Specifically for SMB, it is tied to Aloha Next for SMB, which is restaurant in a box.

Again, we're not seeing a demand challenge. We actually see really good signals as we prepare for that launch. As I have said, we have been talking to both our direct SMB customers as well as in the dealer channel, which remains a very interesting channel for us.

We've shown to some of our dealer channel, the larger ones as well as customers in that segment, very positive feedback. The internal mechanics that Darren talked about the sales operation, not just for enterprise, but also on the SMB side, there's a lot of work being done to prepare for that.

So to your question of when does that inflection happen, it's really in that second half as we launch Aloha Next going into next year, we'll start to see that because it's going to be all about ease of deployment, ease of management of the solution as well as the overall economics, the package economics with embedded payments, the early signal tells us that, that will be the inflection point.

I want to add to that, Matt. So in the enterprise space, very hard to switch out. A much different competitor profile in enterprise or even mid-market than in the SME space. Coming from payments, as you know, I did, lots of [indiscernible], software companies running around the SME space, lots of small merchants that turnover quite high as it is and restaurants in particular, was fairly high.

So having an application, which we do, even Aloha Cloud, which I think is fit for some segments, but not all of the SME space. Part of our challenge is just the product, having a competitive product in the marketplace. It's not a performance. It's not the sales force. It's -- Aloha Cloud didn't meet the needs of the market.

We had this massive investment in this platform that we've been talking about. We weren't taking advantage of it. on the restaurant side. During last year, Nick, Benny, myself finally came to a conclusion that we needed to pivot. And it's one of the reasons that SME is a little bit behind, but I have confidence that Benny, Miguel, the rest of the team are going to catch up really quickly. And engineering is laser-focused on getting a product for the market by the second -- early second half of next year. My year is confused.

Okay. There are no further questions at this time. I will now turn the conference back over to Jim Kelly, the CEO, for the closing remarks.

Thank you, operator, and thank you all for your continued interest in NCR Voyix.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Thank you for standing by, and welcome to NCR Voyix Corporation's Q4 2025 Earnings Conference Call. I'd like to remind everyone that this call is being recorded. [Operator Instructions] I would now like to turn the call over to Ms. Sarah Jane Schneider, Vice President, Investor Relations. Your line is now open.

Good morning, and thank you for joining our fourth quarter 2025 earnings conference call. This morning, we issued a copy of our earnings release reporting financials for the quarter and year ended December 31, 2025. A copy of the earnings release and the presentation that we will reference during this call are available on the Investor Relations section of our website which can be found at www.ncrvoyix.com and have been filed with the SEC.

With me on the call today are Jim Kelly, our Chief Executive Officer; Nick East, our Chief Product Officer; Darren Wilson, President, Retail and Payments; Benny Tadele, President Restaurants; and Brian Walsh, our Chief Financial Officer. This call is being recorded, and the webcast is available on the Investor Relations section of our website.

Before we begin, please be advised that remarks today will contain forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For additional information on these factors, please refer to our earnings release and our other reports filed with the SEC. We caution you not to place undue reliance on these statements. Forward-looking call speak only as of the date of this call, and we undertake no obligation to update them.

In addition, we will be discussing or providing certain non-GAAP financial measures today, which we believe will provide additional clarity regarding our ongoing performance. For a full reconciliation of the non-GAAP financial measures discussed in this call to the most comparable GAAP measure in accordance with SEC regulations, please see our press release furnished as an exhibit to our Form 8-K filed this morning and our supplemental material available on the Investor Relations section of our website.

With that, I would now like to turn the call over to Jim. Jim?

Thanks, S.J., and good morning, everyone. Thank you for joining us for our fourth quarter and the end earnings call. Our results for both the quarter and the full year reflects positioning of the company now as a platform-led business supported by our leading service capabilities and integrated payment solutions. Reflecting on 2025, my initial objective as CEO was to strengthen our executive leadership across retail and products. Retail represents 70% of our revenue, making this a critical leadership role as we work to achieve sustainable growth.

Accordingly, I appointed Darren as President of Retail and Payments, to strengthen our long-standing customer relationships, reorganize and fortify our sales organization and deliver our platform solutions to market. Since stepping into the role, Darren has appointed new leadership across 3 of our 4 regions, revamped the sales compensation plan and played a key role in outlining expectations for our platform solutions. As we began our transition, it became clear that while we had a strong product team, we lacked centralized product leadership at the executive level.

Nick was appointed our first Chief Product Officer across both retail and restaurant. Nick originally joined the company through a prior acquisition and brought the right combination of technology expertise and deep company knowledge to step into this role. Nick has been instrumental in accelerating the launch of our new platform solutions and repositioning us as a platform powered company. The most consequential achievement in 2025 was completion of a 5-year transformation that rebuilt the company's solid foundation from the ground up.

More than 50 legacy on-premise applications were modernized and unified into a single scalable platform built to power the mission-critical operations customers rely on every day. In addition to these achievements, we continue to advance the company's financial initiatives, which began in 2024 with the sale of the Digital Banking business and the announcement of the hardware ODM agreement. We executed a series of cost actions to address the termination of our transition services agreements with Neste and NCR Atleos in the second half of the year to align our cost structure with the go-forward revenue. At the same time, we streamlined numerous internal operations and source key functions and began consolidating redundant systems. These actions not only reduced our reliance on third parties but drive long-term efficiencies as we focus on our growth objectives.

A clear illustration of the market's confidence in our go-forward strategy is reflected in the feedback received at the NRF Show in New York this January. Our successful execution was on full display as we launched our modernized products, providing a strong foundation from which to scale. We engaged with nearly 400 companies, including more than 100 new prospects and hosted an investor event featuring live demonstrations of our Voyix portfolio. We are very encouraged by the response from both new and existing customers and the demand our new offering is already generating as reflected in the more than 20 platform contracts we have signed, including 3 in the fourth quarter. This includes 2 new retail customers in the Philippines, and Belgium and our first enterprise restaurant platform customer, Chipotle.

In parallel to our product initiatives, we continue to broaden our payments offering across geography and industry verticals. We are enhancing our proprietary gateway Voyix Connect to be able to scale our payments business together with the rollout of our platform solutions as we also expand our payment capabilities. Darren will discuss our recent progress in more detail later on the call.

Next is services. With global scale and deep domain expertise, we operate inside some of the most complex retail restaurant and fuel environments in the world, providing hardware maintenance, installation services, 24/7 help desk and platform management. Our services business represents over 50% of the total revenue today and remains a clear competitive differentiator for our enterprise business. We're leveraging our service organizations to expand our existing customer relationships and win new business, particularly as we deploy our new platform solutions. This will improve operational efficiency and deployment speed for both retailers and restaurants.

Finally, as we recently announced, the phased transition of our hardware business to ENACOM commenced in early January. We remain on track to complete the transition by the end of the first quarter. Brian will provide additional details on the financial impact later on the call.

And with that, I will turn the call over to Nick.

Thanks, Jim, and good morning. The launch of our platform solutions has generated exceptionally strong interest from customers, investors and industry analysts. NRF serves as a global stage to formally introduce our microservices-based applications and represented the most modern, comprehensive software launch in the company's history. For the first time, we were able to showcase a fully integrated modern cloud platform that leverages our extensive global software including our extensive library of more than 30,000 unique features developed over the past 3 decades across geographies and vertical markets.

Our sale discussions have since shifted away from individual products and for the adoption of a comprehensive set of capabilities spanning point of sale, does checkout, supply chain in -- as well as integrated payments and support services. Our end-to-end offering provides the flexibility, agility, security and insights for retailers and restaurants to enhance the consumer experience and drive operational efficiencies. The capabilities we previewed at NRF will be lab ready by the second quarter with initial customer deployments scheduled for the back half of the year. This represents a meaningful step on our path towards broader commercialization and scaling of our platform. Based on the more than 20 customer contracts we have already signed, we have a backlog that we expected to be consistently over the next 9 to 18 months, which aligns with the enterprise market segment and the technology road maps of our customers.

In addition, we've developed and demonstrated a store-in-a-box offering for MY Fuel and will launch our restaurants and grocery offerings in the second half of the year. These offerings price to meet the expectations of small and mid-market customers could be self deployed in under 15 minutes. This again demonstrates the innovation and speed at NCR Voyix Box.

In 2026, our product team is focused on AI innovation for the platform. For example, we're now leveraging AI to examine the business logic of the live production stores to be able to accelerate new implementations, deliver seamless updates and lower deployment costs for both the customer and the company. Further, our platform is designed for innovation at pace in the cloud and at the edge, allowing customers such as Chipotle to innovate their operations, utilizing the extensibility of our platform architecture and the game-changing acceleration of AI.

Since NRF, we continue to engage new and existing customers in our last and at major trade shows globally. Darren recently returned to EuroShop in Dusseldorf, where our [indiscernible] generated strong interest and reinforce demand for our platform solutions. Next month, Jim will attend RetailTech Japan to showcase our localized applications. And in May, Benny will be at the National Restaurant Association Show in Chicago. We are building on this early momentum to meet the growing demand for our modern cloud to edge solutions.

With that, I will turn the call over to Darren.

Thanks, Nick. Good morning. I'd like to begin with an update on our payment strategy. We continue to scale our payments capabilities across industry verticals and geographic markets. Voice Connect, our proprietary gateway serves as the conduit between our platform and third-party authorization processes. More broadly, the gateway becomes a single integration layer for our platform. Historically, third parties have the ability to connect directly into individual applications. Going forward, all third-party integrations, including payments will read through the gateway, improving security, consistency and scalability.

In the U.S., we continued to progress on [indiscernible] Voice Connect with Corpay Omix to be able to support commercial fuel payments. We achieved certification with Corpay in January and expect to be certified by WEX in the second quarter. We also migrated our remaining customers from the JetPay front-end platform. Our U.S. payment offering now includes both Gateway and processing, and we are registered as an acquirer. Internationally, we remain focused on expanding Voyix Connect to integrate with local acquirers and enable processing through in-market referral partners to scale our payments business more quickly. For example, we recently signed a referral agreement in Mexico to support payment acceptance for our customers in Latin America. We will look to form similar relationships for our customers in Canada and Europe with our enhanced gateway functionality later in the year.

Lastly, we continue to implement pricing escalators where appropriate across certain retail and restaurant contracts. These escalators are being introduced upon renewal with most agreements structured on a 3- to 5-year terms. As a result, the financial act will build gradually over time. Our primary focus remains embedding our end-to-end payment solutions for both new and existing customers as they adopt our platform offerings. This deepened integration removed intrigues between POS and payments, lower customer costs and complexity, expands recurring revenue and increases long-term value for both our customers and the company.

Turning to retail. In the fourth quarter, our retail business signed 40 new customers. Our platform and payment sites increased 6% and 12%, respectively. Software ARR increased 8% and total ARR increased [indiscernible] in the quarter. The launch of Voyix calls and our fully integrated platform solutions continue to show early signs success and attract new customers, as demonstrated by 2 new enterprise logos we secured in the fourth quarter. These customers choose to adopt the Voyix Commerce platform because the flexibility functionality and operational efficiencies it provides. These solutions will allow them to integrate their entire technology estate, including third-party applications improve both instore and above store functionality and seamlessly adopt additional capabilities following the initial rollout.

In APacific, we signed a 6-year contract with 7-Eleven Philippines, the #1 convenience retailer in Philippines and will implement Voyix POS CFR across more than 4,500 stores beginning later this year. Similarly, we secured a long-term agreement with Colruyt Group a leading Belgium-based grocery chain with stores across Belgium, Luxembourg and France to implement Voyix POS for grocery across more than 850 stores. The rate at which we are attracting retailers to our platform solutions has further accelerated following our demonstrations at the trade shows we recently ended.

I'm confident that this trend will continue as we also ramp our initial platform contracts following our upcoming deployments across our global footprint.

With that, I will turn the call over to Benny.

Thanks, Darren. In the fourth quarter, our restaurant business signed more than 150 new customers. Platform and payment sites increased 11% and 3%, respectively. Software ARR increased 3% and total ARR increased 6% when excluding our SMB business. Our enterprise and mid-market segments maintained steady growth this quarter while SMB performance was impacted by headwinds related to market dynamics and the legacy nature of our current SMB offering.

In the fourth quarter, we renewed and expanded our long-standing relationship with [indiscernible], a fast casual chain with nearly 500 locations across the U.S., Canada. Our new 5-year agreement includes managing their service desk operations and delivering more to technology support. Additionally, as an existing user of Aloha point of sale, Red Robin will now be the first enterprise table service brand to adopt Aloha order pay, our next-generation handheld solution to improve ordering speed and guest satisfaction.

As shared in November, the launch of Aloha Next enabled us to renew and expand our partnership with Chipotle through an exclusive 6-year global agreement. The rollout remains on schedule, with Aloha Next now in their lab and both teams remain aligned on readiness milestones. In addition to Chipotle, we are now in 2 additional enterprise restaurant labs underscoring the confidence global brands are placing in our latest technology. We are advancing the deployment of additional platform capabilities, including menu and smart manager. Menu is being rolled out to multiple enterprise customers next month, enabling real-time unified menu management across channels.

Smart Manager is already in pilot with multiple customers. these early implementations are providing valuable insights into sequencing and workflows, which we expect will accelerate which we expect will accelerate the launch of additional capabilities throughout the year and further strengthen our value proposition for restaurant operators.

As Nick mentioned, Aloha and Expro SMB, our modern and cloud-native store-in-the-box solution will launch in the second half of the year. Designed for the SMB space, it streamlines workflows, reduces costs, supports quick self-installation and allows restaurants to easily scale features as they grow. As we enter 2026, we are encouraged by the momentum in our enterprise pipeline and the depth of customer engagement. Our strategy is resonating in the market, and we are well positioned to accelerate growth in the year ahead. In our SMB business, we are reengaging with customers in preparation for the launch of Aloha Next. We will look to sell our latest solution into our existing base and to new prospects to address the recent performance of this business and enhance the growth profile of our restaurant segment.

I will now turn the call over to Brian.

Thank you, Benny, and good morning. Our results for the quarter and for the year were in line with our expectations and reflect the progress we have made to streamline our organization and repositioned the company as a platform-led business supported by our leading services offerings and integrated payments capabilities. For the quarter, total revenue increased 6% to $120 million due to higher hardware sales in the period. Reported recurring revenue increased 1% to $422 million and 3% when excluding a certain divestiture and other noncore items.

Software ARR and total ARR both increased 3% when excluding the divestiture. Platform sites increased 8% to 80,000 and payment sites increased 4% to 8,600. Adjusted EBITDA increased 17% to $130 million as margin expanded 170 basis points to 18.1% driven primarily by our cost containment actions, partially offset by lower fees earned from the transitional service agreements with NCR Alios and Condestin.

Non-GAAP EPS increased 48% to $0.31 and while GAAP EPS was $0.49 in the fourth quarter. The GAAP EPS included a $65 million tax benefit related to a legal entity restructuring we completed in Q4. The cash from this will likely be received in the first half of 2017.

Turning to our segment results. Retail segment revenue increased 9% to $501 million, primarily due to higher hardware sales, recurring revenue increased 3% to $279 million, driven by an improvement in software revenue. Segment adjusted EBITDA increased 12% to $114 million as margin increased 70 basis points year-over-year to 22.8%, driven by renewed growth coupled with our cost initiatives.

Turning to restaurants. Total segment revenue of $212 million was flat, which reflects hardware growth, offset by a decline in onetime software and services revenue and weaker performance in the SMB business, as Benny outlines. Recurring revenue increased 6% within our enterprise and mid-market businesses. Segment adjusted EBITDA decreased 3% to $66 million as margin decreased 110 basis points to 31.1% and due to lower onetime software and services revenue compared to the prior year period.

Lastly, net corporate and other expenses decreased $9 million or 15% to $50 million.

Turning to our cash flow. Our cash flows across the company's operating, investing and financing activities reflect the restructuring actions we took during the year to support the go-forward organization. Adjusted free cash flow, excluding restructuring for the full year was $136 million, about $40 million below expectations due to timing, including a $13 million delayed tax refunds and higher working capital used primarily from increased hardware sales in Q4. Restructuring cash outflows of $109 million were related to severance, stranded costs from the spin-off and the sale of digital banking infrastructure investments and to a lesser extent, ODM transition costs.

We invested $46 million in capital expenditures during the quarter and $165 million for the year, inclusive of accelerated product investments. These investments directly enable the launch of our new platform solutions, unveiled at the NACC show last October and the NRF show this January. In December, we also sold a noncore warehouse and training facility, which generated an additional $60 million in cash for the quarter as we continue to streamline our footprint. Finally, we repurchased approximately 69,000 shares or 25% of the Series A convertible preferred stock for $74 million in addition to $4 million of common shares. We ended the quarter with net leverage position of 2.1x based on our net debt as of December 31 and the full year adjusted EBITDA.

Turning to our 2026 outlook. We expect reported revenue of $2.21 billion to $2.325 billion, down 13% to 18% due to the ODM implementation. We expect to complete the OEM transition by March 31. Thereafter, hardware will be sourced through Enicon, and we will earn a commission rather than carry inventory. On a pro forma basis, adjusting for the change in hardware revenue recognition for Q2 to Q4 and the prior year, revenue is expected to be down 2% to up 3%. Adjusted EBITDA is expected to be $440 million to $445 million or 4% to 7% growth. Non-GAAP adjusted EPS is expected to be between $0.93 and $0.96, or 3% to 6% growth.

Seasonality remains consistent with 2025 with Q1 expected to be the lowest quarter. For both retail and restaurants, we expect recurring revenue to improve throughout the year. We expect margins for both segments to step up in Q2 upon implementing the hardware ODM model, Restaurant margin will improve modestly through the year, and retail margins should show additional expansion as we ramp the deployment of our platform solutions beginning in the third quarter. Adjusted free cash flow is expected to be between $190 million to $220 million reflecting the partial year working capital benefit from the ODM transition effective April 1, offset by approximately $120 million of anticipated cash outlays related to the following: severance actions taken in 2025 and 2026, stranded costs associated with the completion of the spin-off of the ATM business and the sale of the digital banking business, costs related to the ODM transition, interim infrastructure investments and an accrued litigation matter. We anticipate the elevated restructuring will step down in 2027.

I will now turn the call over to Jim for closing remarks.

In 2025, we completed a heavy lift. Using AI and our application library, we modernized more than 50 legacy solutions into a unified cloud to edge platform. That 5-year effort leaves us with a modern architecture full feature capability and the ability to serve all segments of the market domestically and internationally on one integrated platform. I view this as a 3-year term with year 1 complete.

Now we move from transformation to scaling. In 2026, the focus is building backlog across all markets, accelerating deployments and driving adoption across retailers and restaurants. We are no longer building the platform. We are selling it and delivering it. I am confident in our competitive positioning and in the strength of our platform, what gives me the strongest belief in our ability to deliver is our seasoned sales leadership and the team behind them. They know our markets, maintain deep, trusted enterprise relationships and understand how to position the comprehensive value of our platform and are executing with discipline and focus.

A critical component of that conviction is building meaningful sales backlog this year. Enterprise implementation takes time making backlog a key -- the backlog we built in 2026 begins to accelerate revenue in the second half of the year and into '27 and beyond. As a reminder, we support approximately 400 of the world's leading enterprise retail and restaurant customers across the 35 markets in which we operate. As a modernized infrastructure, we are well positioned to continue to deliver the full functionality they rely on today through a modern platform that provides materially greater capability. This is complemented by new customer logos. We are winning in the market, accelerating recurring revenue and overall revenue growth this year into next.

I will now turn the call over to the operator for Q&A.

[Operator Instructions] Your first question comes from the line of Matt Summerville with D.A. Davidson.

Backlog was mentioned a couple of times by both Jim and Nick in the prepared remarks. Is there any sort of framing up, you can provide around that metric that you're seemingly emphasizing in terms of comparison versus the prior year, the prior couple of year period and how that informs the sort of inflection you're pointing to in the back half of the year when it comes to organic revenue? And then I have a follow-up. .

Thanks, Matt. I think as I described on the call, our customer base while we cover the full spectrum from SME to enterprise, the enterprise side is our most significant segment. And that group, as I mentioned in the comments, that takes time for them to modernize. So I said 9 to 18 months, that's what I've seen here. Sometimes it takes -- it's taken even longer because to some extent, we move at the pace that they're willing to take the upgrades.

We're on the beginning of this, the modernization of the applications that some of you saw when we were just playing it at NRF in January. Those are the products that are now the 25 demos that we've done since NRF. Those are the products that we will expect the customers to start signing contracts, some of which, as we said, we've got 20 already in the time. So those are all in process to be deployed this year into next year. I had a customer here yesterday, we have 2 tomorrow heading to Japan for the show in Japan. Darren just came back from Dusseldorf. Booth was packed just like it was at NRS.

And the sales organization, as I mentioned in my prepared comments. One of the things Darren, Benny, myself, Brian, there was a big team worked on a revamp of the compensation plan because when you look at the organization over the last 20 years, really have not had a new product other than the acquisition of Edge, there's nothing of scale that was new to the market. It was largely a regurgitation of applications that have been around for a long period of time. So this is the first time that the company has come to market with something material. All cloud powered are platform powered.

Specifically to the question, this new sales structure rewards our sales organization, which I'm hopeful is listening for signing accounts. And I was with the North American group with Darren and their leadership, Scott, the other day, they're here in Atlanta. As I shared with them, it's my job and the operational side of the organization, the combination of people from our CIO and George who runs operations to deliver the product and that's where backlog comes in. It's not something new to the company. We've always looked at it. But today, it's a more important feature for us to focus on or KPI. And I think at some point, we'll start sharing that more broadly with the market. But for right now, that's a bellwether to us, and we see it starting to build because we have 20 customers that have already purchased the product signed contracts, and we're going to do better to try to accelerate those deployments this year than maybe we have in the past. There's a greater keener focus on it as we've addressed other components of it. I think Nick would like to add a comment to that, too.

Yes, Matt, maybe I'll give you kind of a couple of concrete examples because it does vary by customer and also by the product that they're adopting. Run now over the next 2 weeks, we have a customer who is rolling out our AI biggest assist functionality. And that's a simple add-on. So the deployment sort of may it rolls to all the stores and it will go live, they have a couple of months of pretesting and then it will just roll. So in terms of the actual deployment of technology, end-to-end, that's probably 3 to 4 months across the larger state.

But then you look into some other customers where it's kind of -- it's much more kind of much more like heart surgery, a major point-of-sale change. And equally, in the retail space, in particular, there are periods that are seasonal where you just can't make change. So that period, you haven't adopted the new tech by around about the beginning of November, then there's a freeze because that's such an important critical time for retailers to make their revenue and margin targets for the year. And that flows again in January. So any period, any rollout that's quite complex. It spans more than a year is always in the retail space in particular, we're going to have to bridge one of those lockdown periods, sort of blackout periods or technology change. So it does depend very much on the extent to which we needed to make a change in that second broader integrate it with other components, whether it's a simple add-on like the [indiscernible] or whether it's a more complex transformation.

Yes, there's components to it. So this product, as we've already deployed it deploys within an hour into a store environment. But then there's a training component of it. And it's completely new for our customers. It's Nick doesn't like this analogy, but I analogize it to the iPhone. So we don't manage our iPhones or Android if you're Nick. Somebody else does, but we have the benefit of it. And that's the same model. That's the primary model. It's not exclusive, but it's primary model that we're offering to our customers. So there is a trading component. Even though we're able to provide exactly what they've seen the day before, the migration because we're able to emulate the screens, modernize, but emulate everything the features, et cetera, there still is a learning curve that the stores have to go through.

And Darren mentioned 7-Eleven Philippines, which we just signed. That was what, 4,000 or 5,000 stores. So that's going to take some time. And that's what I'm just sensitizing you all to is that backlog is an indication of the health of the product. And as that builds, that's revenue that's accumulating and will get deployed across, as we've said several times, 9 to 18 months, we'll try to do it as fast as possible. But in the end as Nick partly said, this is heart surgery for these guys. This is the most -- this is the way they make money. This is the way their companies operate. So it has to go smoothly because it's they're depending on us, and they want to make sure there's no disruption to their stores. So when they open up that they can transact. So anyway, hopefully, that clarifies what you were thinking.

Appreciate the color. And then as a follow-up, I'm just hoping you guys can expand a little bit on Benny's SMB comments and headwinds you saw in the quarter. Is this something more acute or something more chronic and kind of frame up what that means as far as the guide for '26.

Sure. I don't know that off the top of my head of the exact percentage of the business. The SME is the smallest piece by far, really in both segments in restaurants since that's the question. If you look at the history here, NCR long before I was here, but I used to compete against it when I was at payments companies. When they started acquiring their dealer network, at least components of their dealer network, they ended up with a large population of customers. So unless you have a large population of sales force to continue to replenish, we all know that the SMB market is one that contracts. So I think since the acquisition, I'm guessing that we've seen some level of contraction in that space.

I think what's happening more recently has a lot to do with our -- the announcement around the Aloha Next. The application that we're selling into the marketplace. Unlike the enterprise space, where you don't have this massive number of ISVs selling software against that's not the competition profile for an enterprise market, retail or restaurants. But in the SME space, having done it for 25 years, there's a massive amount of software competition, it's not hard to get into the point-of-sale space for SME, whether you're successful or not doesn't necessarily matter. So there's a lot more competition.

And frankly, our product set, which has been our Aloha called Essentials or more recently and not that much more recently, it's been around for a while, which is the Aloha Cloud, which was the main state -- kind of the next mainstay here for the SME market. I don't think that ultimately hit the bid for what our customer base was looking for. Plus, it was not leveraging all the benefits that are embedded in the retail side of the house. And so that's why I made the decision over the summer that we were going to pivot. It's one of the reasons we were able to announce Chipotle because it's the architecture that they are ultimately looking for on the enterprise space. But as we said in the comments, I think Nick mentioned in his comments, we have what we refer to as a store in the box, a restaurant to retail grocer, major oil or, I guess, that's the group.

We're now in a position by the second half of the year to be able to -- because we have all the infrastructure, it's just basically building the applications, which with the benefit of our team and AI and the library of technology we have embedded in the Aloha today, we'll be able to give the SMA team a very competitive product in the marketplace. So as I think Benny said in his comments, the market dynamics, yes, we have competition. There's really good competition within that space. But at the same time, I don't think we've had the right product to meet the competition into address what the customers are leaving. So I don't think this is -- I don't think it is bad necessarily. I think it's just the reality of the company didn't get on the next gen fast enough and we're there now. And so I'm expecting that we'll start to see this number improve over time. But I'll let Benny who runs it, so what he'd like to add to it.

I think Jim summarized it very well. So it may be if I articulate the 3 things that we see is one, as Jim stated, there is a historical how did we manage this business, the acquisition process, et cetera,. But the second one is, if you look at the market, the key difference between enterprise and SMB is, a, the buying journey itself is very much focused on what's the lowest pricing it's faster convergent change. When we talk about the competition, it's not necessarily just the product competition, highly fragmented, the number of people who participate easy to enter, et cetera. So when you add on top of that, the third component, which is the product that we had in that, I have made maybe legacy is it has a compounding effect. So I would say, a, you look at other components of our business, not the largest segment. It is actually the smallest both in restaurant but for the company as a whole.

But the second is when we have Aloha Next now launched in the second half as Nick said as a store in a box, which is easy to implement very cost effective, that would start to impressive.

Your next question comes from the line of Karthik Mehta with Northcoast Research.

Jim, you've made a lot of changes at the company. It seems like things were moving in the right direction. You're on this ODM hardware transition. Once that's complete, what do you think is the organic revenue growth rate of this business. .

Well, thank you, Karthik. I think it's going to change, obviously, as I said in my comments, I mean, '26, I think will improve over what we've seen in the software services and payments line, taking out hardware, and that's the range that we gave. One of the headwinds we're going to see that the market is the impact of AI and the consumption of chips around the world. We're now moving away from being the supplier of that, but it is a reality that the market place is seeing price increases. So there could be an impact to that.

But going back to the first question, with the build backlog and our ability to accelerate deployment, I'm very confident that we're going to see ARR grow total revenue growth well into '26 and end of it to '27 as we deploy these applications. On the retail side, in particular, as people -- as customers have added locations over the years, it's largely been the same price. I've said this numerous times in earlier calls that there wasn't a culture here of increasing price, in particular, on the retail side. I think the restaurant side solve some of that on annual renewals. So there'll be a step-up for the software. It's in our view, leading the market on both the retail and restaurant side, given its configuration.

And then we have the payment fees. And one of the changes I've made on payments is instead of trying to retrofit legacy applications that since there is seemingly a very strong desire to move into the modern architecture, we're going to put payments together with the new sales as opposed to trying to retrofit what's been there in the past. So my expectations, as I summarized in the end, is that this is going to be a good year, and I think next year is going to be even better.

Perfect. And just a follow-up, Darren, in your prepared remarks, you talked about the third-party integration and maybe change there. What's the benefit? Is there a revenue benefit, cost benefit, cross-sales benefit? What's the benefit of Voyix from the changes you're making?

Thanks, Karthik. I mean the key benefit that we're seeing from a customer service position is one throat to choke. What we're seeing from the backlog of 21 deployments that we're working on now is where we're working with numerous third parties. We're trying to orchestrate the multiple stakeholders supplying or supporting a customer can result in problems with implementations, where we've got our integration, and it's just us, it is one solution we're controlling truly the end-to-end proposition and deployment and service model. So there's one numbers call that can help across the full range of hardware, software and services solutions that we provide to the customer.

And then, of course, the real benefit, the ultimate benefit is that we've got the pricing upside because essentially, Karthik, it's additional upside revenue from for us because essentially, we are just switching that revenue from the third-party payments provider to ourselves, often at similar costs or we can often incentivize in terms of the whole package that we're providing to the customer. So the step-up in revenue upside is follows as well. But ultimately, in all the conversations we've been having with clients about their appetite for payments has actually been the customer service proposition, one provider, one seamless joined proposition. Because ultimately, whilst the AI debate is here and thriving data and loyalty and impersonalization are a critical kind of pain points or differentiators for retailers.

So them having the full end-to-end payments data in our platform. that's really tracking from supply chain through SKU, through checkout, through reconciliation and settlement is truly drilling up that end-to-end and then feeding into their loyalty proposition. So it covers many facets in terms of the real benefit of the full holistic position.

[Operator Instructions] Your next question comes from the line of Dan Perlin with RBC Capital Markets.

It's Matt Roswell filling in for Dan this morning. Two questions. First, more of a guidance modeling question. And can you walk through some of the puts and takes around the adjusted EBITDA and adjusted EBITDA margin. I'm thinking things like accelerated investments, the ODM transition, et cetera.

So thank you, Matt. So the range of $440 million to $455 million, it's about a 3.5 to 4-point margin improvement over last year, and some of that about at 250 to 300 basis points of that is from the shift to the ODM model April 1. And then the rest of it is margin improvement as we deliver cost actions that we've already taken and new actions as we go through the year and accelerated investments, those were last year, that was more of a CapEx item. So that's not really impacting the EBITDA. So the EBITDA is growing 4% to 7%. It's growing a little bit faster than revenue.

We do have some things that were overcoming from the prior year like TSA fees that were helping us last year that are gone this year as we've exited those TSAs. So that's a little bit of the reason why the EBITDA growth isn't quite as strong as it was last year.

Okay. Excellent. And then a bigger picture question. Where do we stand with the Worldpay agreement in terms of payments?

The agreement was signed a year ago in '25. So that is complete. It's the implementation, the migration off of Jeff Pay. I think Darren mentioned that's fully complete. So now it's selling new customers, but -- so I think we had 100% of the SME market, so in the end, many of the bid market. On the enterprise side, as I mentioned, the pivot that we've done has moved away from trying to retrofit a legacy application because as we talk to customers. And as I said, we had customers here yesterday. We have customers here today. It's a lot easier if we're selling something new than to try to ask them to go back and retrofit the way daywork payments today is do it holistically as a new install. So I'm less focused on pushing what I had said earlier in the year, I'm more interested now that we've been able to modernize the applications at light speed, frankly, over the last 5 months.

Some of that was the accelerated investments in IT spend and the rest of it was our experience and AI. So I think the plan is completely the same as it was before. It's just -- it's less of a retrofit. It's more of a new sale opportunity.

That concludes our question-and-answer session. I will now turn the call back to Mr. Jim Kelly, CEO, for closing remarks.

Thank you, operator, and thank you all for your continued interest in NCR Voyix.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to the NCR Voyix Third Quarter 2025 Earnings Conference Call.

[Operator Instructions]

This call is being recorded on Thursday, November 6, 2025. And I would now like to turn the conference over to Sara Schneider. Thank you. Please go ahead.

Good morning, and thank you for joining our third quarter 2025 earnings conference call. This morning, we issued our earnings release reporting financials for the quarter ended September 30, 2025. A copy of the earnings release and the presentation that we will reference during this call are available on the Investor Relations section of our website, which can be found at www.ncrboyds.com and have been filed with the SEC.

With me on the call today are Jim Kelly, our Chief Executive Officer; Nick East, our Chief Product Officer; Beimnet Tadele, President, Restaurants; Darren Wilson, President, Retail; and Brian Webb-Walsh, our Chief Financial Officer. This call is being recorded, and the webcast is available on the Investor Relations section of our website.

Before we begin, please be advised that remarks today will contain forward-looking statements. These forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. For additional information on these factors, please refer to our earnings release and our other reports filed with the SEC. We caution you not to play undue reliance on these statements. Forward-looking statements during this call speak only as of the date of this call, and we undertake no obligation to update them.

In addition, we will be discussing or providing certain non-GAAP financial measures today, which we believe will provide additional clarity regarding our ongoing performance. For a full reconciliation of the non-GAAP financial measures discussed in this call to the most comparable GAAP measure in accordance with SEC regulations, please see our press release, furnished as an exhibit to our Form 8-K filed this morning and our supplemental materials available on the Investor Relations section of our website.

With that, I would now like to turn the call over to Jim.

Thanks, Sarah, and good morning, everyone. Thank you for joining us for our third quarter earnings call. Beginning with our performance, we are pleased with our third quarter results, which reflect continued progress towards the financial and operational objectives we set at the beginning of the year. I previously outlined a clear strategy to reposition the company as a software-led business supported by robust payments and service capabilities. We remain focused on executing against each of our strategic initiatives and driving profitable growth for the company.

A key milestone in our strategic shift to becoming a platform powered software and services provider, is the outsourcing of our hardware business. The ODM implementation remains on revised schedule with a phased transition to Anacom beginning in January. Cross-functional teams across engineering, supply chain and technical operations are actively finalizing readiness activities, validating integrations and preparing customer support processes to ensure a smooth transition. This shift will reduce capital intensity, streamline our operating model and enable greater focus on our high-margin software and services businesses.

We are also modernizing legacy commercial structures across our installed base as multiyear software and services contracts come up for renewal, we are introducing price escalators to better align pricing with the value we deliver. We are applying the same disciplined approach to our payments contracts. This, coupled with the completion of the migration from the former JetPay front end will provide us a foundation to scale payments more broadly. Our focus on expanding our payments presence across the enterprise, grocery, fuel and restaurant verticals will further strengthen recurring revenue and enhance our long-term growth profile.

Looking ahead, the company's primary growth driver will be the acceleration of innovation across the Voyix Commerce platform. NCR Voyix has the advantage of deep domain experience in nearly 3 decades of enterprise software development backed by more than 50 proprietary applications and thousands of purpose-built features created in direct response to customer needs. We understand how retailers and restaurants operate. And what they require to run their stores efficiently, serve their customers and scale their businesses.

We have now paired that industry experience and extensive application library with AI-enabled development, significantly accelerating the time to market for our micro services architecture and new platform capabilities. Further, this approach enables us to extend the VCP to additional vertical and geographic markets at a faster pace and with greater precision as the new solutions are deployed across our customer base, we expect higher margin software and connected payments revenue to represent a greater portion of our total revenue and enhance our growth profile.

Customer engagement continues to reinforce our strategy and product direction. At the next show last month, we previewed only our next-generation platform solutions and the feedback was overwhelmingly positive. We demonstrated our ability to deliver the cloud capabilities customers have been asking for to align with their modernization priorities and validate the relevance of our platform road map. We expect this momentum to continue as we prepare for the NRF show in January, where we will introduce a broader suite of software and payment innovations for additional retailers.

On January 9, we will have the honor of ringing the closing bell at the New York Stock Exchange to commemorate 100 years since our initial public offering in 1926, a milestone achieved by only 40 public companies in the NYSE's history. This achievement reflects both the longevity and our ability to adapt and lead through market change. As we celebrate a century of progress, we remain guided by the same commitment to innovate and disciplined execution that has defined our success for generations.

With that, I will turn the call over to Nick, who will discuss our product acceleration initiatives and the formal introduction of the VCP and micro services architecture at the NRF Show.

Thanks, Jim, and good morning. Our software journey began 15 years ago with strategic investments and acquisitions to build a portfolio of category-leading retail and restaurant applications. Today, these solutions power a significant share of global cause serving retailers and restaurants across more than 35 countries and representing approximately $1.4 trillion in transaction volume. Our software constitutes a significant portion of the industry's business logic library, the comprehensive brain trust that represents a massive collection of codified industry wisdom.

That software value and the transaction volumes it powers every day is undeniable, but it's also trapped within a prior generation architecture, making it slower to update and harder to integrate. The kind of friction modern architectures eliminate and our customers have demanded. Beginning in 2018, we initiated a push for modernization that is now reaching a tipping point. First, we built a SaaS-based micro services platform in the cloud, which today connects nearly 78,000 of our retail and restaurant sites and enables online and in-store transactions, 24/7 some of the largest operators in the world.

Second, we re-architected our powerful monolithic applications into micro services, unified them on a modern code base with open APIs and secure resilient operations baked in. And third, we acquired the industry's only edge native application engine designed to meet the run time challenges of modern retail and restaurant environments, enabling customers to deliver change in their physical locations at the pace of their best digital channels and without the dependency on any specific hardware manufacturer.

Consumer expectations continue to rise as technology cycles accelerate. Our customers are seeing us as a partner who will help them move faster, innovate confidently and scale profitably. NCL Voyix is positioned to be the platform powered leader in unified commerce for Retail and Restaurants. Our mission is simple: to enable our customers to accelerate new possibilities, to make every experience seamless so they keep their customers coming back. Our domain and technology experts are leveraging our extensive software footprint, together with the modern architecture of the Voyix Commerce platform to accelerate the delivery of our next-generation applications across our entire portfolio now with the added advantage of AI-enabled development tools.

AI is not merely layered on top of our platform, rather it is integrated into the build, deployment and support of our customer environments. AI is enabling us to accelerate the availability of our application across markets and formats. As an example of bringing innovation to market this quarter, 3 grocery brands went live in the U.S. and Europe with our new modernized point-of-sale application. Each migrated from an older on-premise point of sale and began a state-wide rollouts that will accelerate in 2026.

The go-lives exceeded customer expectations, underscoring the agility and reliability of our platform and its role in delivering improved customer experiences. We expect this momentum to build in 2026 with more customers migrating from our current solutions and new customers adopting our platform applications for their differentiated market capabilities. We are also seeing increasing demand for cloud-native micro services-based architectures in the restaurant space, driven by the same forces we've experienced in retail, the need for faster innovation, easier integration and more flexible deployments. Given our deep expertise and proven success in modernizing retail technology, we have chosen to bring our market-leading restaurant point-of-sale application onto the same VCP architecture.

This creates a unified modern foundation across our businesses, accelerating our road map and enhancing value for retailers and restaurants and an increasing number of brands that operate combined Retail and Restaurant formats. As an illustration into how this modern architecture has been received, we showcased the integration of our cloud-native microservices kitchen application within convenience store environments at the MAX show last month in Chicago. Customers will be able to place food orders directly from a modern pump interface and pick them up inside the store, enhancing convenience while creating new in-store revenue opportunities.

The integration of our kitchen application into the retail point of sale was completed in less than a week as both were built on the microservices architecture. To validate our expansion efforts, we recently completed a comprehensive competitive market analysis, supported by a third-party research firm with engagements from industry analysts to assess our positioning. The results of this 6-month review were clear. Our strategy is aligned with that of our existing customers and the broader market.

The VCP enables retailers and our restaurants to simplify their ability to accelerate their business. Additionally, our product road map delivers solutions to both enhance the consumer experience and optimize operational efficiencies, while our proprietary domain assets are highly differentiated. As we now shift into activation mode, rolling out our commercial programs and scaling our production environments, we remain excited about the outcomes our initiatives will drive for both our customers and our business. We look forward to showcasing our latest innovations at the National Retail Federation show in New York this January. This will be followed by 6 additional conferences across the markets we serve.

We invite investors to join us at the Javits Center to experience the solutions firsthand and engage with our teams and customers. With that, I'll turn the call over to Benny to discuss our Restaurant's performance.

Thanks, Nick. In the third quarter, our restaurant business signed more than 200 new software and services customers. Our platform and payment sites increased 6% and 2%, respectively. Software ARR increased 3% and total ARR increased 7% in the quarter. In our Enterprise division, we signed a multiyear platform and point of sale agreement with Marcos Pizza, one of the fastest-growing pizza chains in the United States to support its global expansion efforts.

The initial phase of this rollout will commence in Mexico before the end of the year, followed by subsequent international locations. This partnership reflects the strength of our global footprint and offering, and we anticipate further growth in our enterprise business worldwide. As Jim and Nick mentioned, the company recently made the decision to leverage our edge-enabled microservices architecture to bring our Aloha next-generation point of sale to market, beginning with enterprise restaurants.

The customer response to the initial preview of our edge-enabled microservices architecture has been incredibly positive, validating our strategy and reinforcing the depth of our enterprise relationships. We plan to begin lab testing the Aloha next-generation point-of-sale for targeted formats in the first quarter of 2026, with a broad availability across all segments by the third quarter. I'm excited about the significant growth opportunity as we deploy our edge-enabled dual cloud microservices applications and continue transforming the future of restaurant operations. In payments, customer adoption of our payments gateway solution continues to grow. This quarter, 1 of our existing software customers and Mexican fast casual restaurant was nearly 600 sites selected Work Connect as their payment gateway interface.

Additionally, we continue to execute on our pricing initiatives, moving to a model based on transaction volume, which provides a solid foundation for our business and is in line with the market. I will now turn the call over to Darren to discuss our retail performance.

Thanks, Benny. Good morning. In the quarter, our retail business signed over 30 software and services customers. Our platform and payment sites increased 16% and 9%, respectively. Software ARR increased 11% and total ARR increased 4% in the quarter. Over the last 2 years, we have signed more than 15 mid-market and enterprise customers for our Voyix point-of-sale and self-checkout solutions, which will be implemented over the coming months. We continue to enhance the Voyix commerce platform with value-added applications and direct integrations that serve both new and existing retail customers. Most recently, we significantly expanded our domestic fuel offering, signing long-term agreements for commercial fleet card acceptance with 2 of North America's largest providers.

These agreements will enable us to serve as both a point-of-sale provider and full service payments processor for both consumer and commercial fuel transactions at over 18,000 locations. By managing the entire transaction life cycle, we are enhancing the value of our integrated payments capabilities and strengthening our overall value proposition. This also materially expands our addressable market for payments in the U.S. with nearly $600 billion in volume running through our fuel payment gateway and $800 billion in consumer card volume, we now have the ability to target approximately $1.4 trillion in U.S. payment volume.

We also launched our next-generation loyalty solution, Voyix loyalty. The delivery of this cloud-native and micro services-based application facilitated a multiyear agreement with HEB, the largest grocer in Texas and a new NCR Voyix customer. We will enable promotion execution across HEB's nearly 400 store footprint through a direct integration into HEB's in-house point-of-sale software, demonstrating the agnostic design of the VCP and its edge-enabled microservices applications.

Additionally, we signed an expanded multiyear agreement with a regional grocery store alliance, encompassing nearly 300 stores across 3 brands in the Northeastern United States. Through this partnership, we will now deliver a full suite of next-generation platform solutions, including Voyix point of sale and self-checkout, loyalty and hardware maintenance across their entire state. Finally, in services, we expanded our long-standing relationship with a large multinational wholesale grocer, becoming the exclusive service integrator for over 20,000 lanes across 2,000 stores in Belgium and the Netherlands.

In addition to providing hardware maintenance, we will now provide vendor management and be the sole point of contact for all the brand's technology-related services. This large-scale expansion demonstrates the strength of our Services division and its ability to meet the complex needs of our global customers.

With that, I will turn the call over to Brian.

Thank you, Darren, and good morning. For the quarter, total revenue of $684 million declined 3% due to lower hardware sales and onetime software and services revenue. Recurring revenue increased 5% to $425 million, driven by 7% growth in Restaurants and 4% growth in Retail. Software ARR and total segment ARR increased 8% and 5%, respectively, platform sites increased 12% to $78,000 and payment sites increased 3% to nearly 8,500.

It's important to note that the majority of our customer base consists of large enterprise brands whose entire store or restaurant footprint is converted to the platform once connected in its entirety. As such, platform site growth can fluctuate depending on the timing of a complete onboarding. Adjusted EBITDA of $125 million increased 32% as margin expanded 490 basis points to 18.3%. This was primarily driven by larger-than-anticipated hardware margins and the previously announced cost actions.

Turning to our segment results. Beginning with Restaurants. Total segment revenue of $210 million was flat, which reflects an increase in recurring revenue, offset by declines in onetime services revenue. Recurring revenue increased 7% to $146 million, driven by payments growth and the ramping of a new large customer agreement. Segment adjusted EBITDA increased 12% to $74 million as margin expanded nearly 400 basis points to 35.2%. This improvement was driven by revenue mix, coupled with the previously announced cost actions. Turning to Retail. Total segment revenue declined 4% to $467 million, primarily due to declines in harbor sales and onetime software and services revenue.

Recurring revenue increased 4% to $276 million, driven by the ramp of a new large customer agreement and platform revenue growth. Segment adjusted EBITDA declined 17% to $90 million, driven by lower revenue and customer adjustments tied to prior year delayed software implementations now resolved, along with favorable expenses in the prior year period. Adjusted EBITDA margin decreased 290 basis points year-over-year to 19.3%, but increased 150 basis points sequentially as expected.

Lastly, net corporate and other expenses improved to $39 million, which reflects the previously discussed cost initiatives. Adjusted free cash flow was $42 million for the quarter before considering $23 million of restructuring cash expenditures and $3 million of accelerated product investments. We invested $38 million in capital expenditures during the quarter. For the full year, we expect CapEx to be approximately $160 million, inclusive of accelerated product investments.

Restructuring cash outflows totaled $23 million for the quarter. We have now exited all of our remaining TSAs with NCR Atleos, are winding down our PSAs with [indiscernible] and are approaching the ODM implementation. In connection with these initiatives, we have taken incremental cost actions including headcount reductions in the third quarter. Therefore, we now expect transformation restructuring cash outflows for 2025 to be approximately $100 million. Our net leverage position was 2x at the end of the third quarter based on our net debt as of September 30 and the last 12 months adjusted EBITDA.

Turning to the outlook. We now expect revenue to be between $2.65 billion and $2.67 billion. Hardware revenue is anticipated to be above prior expectations, while software and services revenue will be slightly below. The lower software and services revenue is primarily due to customer adjustments tied to prior year delayed software implementations, which have now been resolved. Adjusted EBITDA is now expected to range between $420 million and $435 million and non-GAAP diluted EPS is expected to be between $0.85 and $0.90.

We expect adjusted free cash flow to be between $170 million and $175 million, excluding restructuring and transformation costs and accelerated product investments. With that, I will turn the call back over to Jim for closing remarks.

We are encouraged by the progress across the business. Our innovation engine is accelerating. Our pipeline is strengthening, and customer engagement remains constructive and aligned with our strategy. We are focused on disciplined execution and position the company for sustainable, profitable growth.

I will now turn the call over to the operator to begin the question-and-answer session. Operator?

Before beginning the Q&A portion, the company has an additional item to announce.

Thank you, operator. I'd like to highlight an additional update this morning. A new 6-year exclusive agreement with Chipotle, deepening a trusted partnership that stands more than 25 years was signed this morning. Under this agreement, Chipotle will expand their relationship with NCR Voyix and become the first to implement our Aloha next-generation point-of-sale and supporting applications across 4,000 restaurants worldwide. Built on the Voyix commerce platform, dual-cloud edge-enabled microservices architecture, this first-of-its-kind solution in the restaurant industry, reflects our multiyear investment in microservices technology.

I'll add to that, that this work dates back for a number of months. We would have liked to have it at the start of the call, but we only finished it early this morning. And I would like to thank the team at Chipotle in addition to Benny, Miguel and their teams and our GC, Kelly Sterrett, and LoRa and the rest. This was a big effort. And I think for the company, this is a very big event. I think it's a clear indication that there is a change at the company.

I don't think there's a better way to see it than have a relationship that's 25 years renew for another 6 years with us. And it's really based on the product set that Nick has been talking about and the company has mentioned on a number of calls since I've been involved and also our ability to execute at a level that we are -- our customers are expecting.

So with that, I'll turn it back over to the operator and let's go to questions. Operator?

[Operator Instructions]

And your first question comes from the line of Matt Summerville from D.A. Davidson.

Congrats on that one, by the way. Can we talk about the price escalators you referenced, the magnitude we should be sort of expecting how much revenue is ultimately impacted by that and would be set a benefit from what you're doing there? And maybe more importantly, can you talk about how this maybe differs from Voyix's historical practice? And then I have a follow-up.

Sure. I think if you go back to whether it was the the year-end call or the first quarter was -- I think I've mentioned this before, but the company historically had not had escalators in all of its agreements. In some areas, it did, but typically did not. And even if it did, it was unclear if they were actually billing them accordingly. So we've just gotten back to make sure the ones that were actually in the agreements are there. And we're charging accordingly.

And then secondly, where they're absent as the contracts renew. So on the retail side, it tends to be every 5 years as a general rule and restaurant tends to be 3 years. I don't think we've scoped order of magnitude. I mean these are not extreme increases. This is more cost of living plus something as opposed to some material increase. So I think what we'll see, and we've already started to see it. It's relatively small since it's just gotten started.

But we are seeing increases on the revenue and earnings line as a result of this. And this is really the value that we're providing, supporting these are very tired old legacy applications that are continuing to operate at our customers. And for the company to be able to continue to invest in its business, keeping a 5-year contract flat over a 5-year time period just degrades its value in years 2, 3, 4 and 5 because, obviously, we experienced cost escalators as well. And that's not the primary focus.

Our primary focus is to sign new customers and then ultimately to launch all the products that Nick outlined on the call, which we expect to see we will have at NRF in January for the market.

And then just to talk about the payment side of the business. I would think these new relationships on fuel and convenience have to be more needle moving in nature. Is there a way for you to somehow quantify or directionally quantify what that maybe adds to the payment side of the business and maybe when we can expect to get a little bit more granular [indiscernible] on the payments performance.

Sure. I think it's a good question because a lot of what I've been outlining since I stepped into this role are the opportunities kind of the TAM for the company that it's not taken advantage of in the past. So just because -- which is your last question about the opportunities on escalating prices appropriately for contract renewals, et cetera. These are these are early days.

I mean, this is a company that's been around for 145 years. This is not like the credit card industry, where you just decide to raise prices and you raised prices across the board, either in concert with the brands or on your own initiative. That's what this is. These are long-standing important relationships for us. We're just kind of equaling the table. But I think on the -- if you're referencing the commercial side, I think we've already given the opportunity domestically, we touched $800 billion in the U.S. alone today on our Voyix Connect platform.

But what we announced right after -- during or right before and after next, the convenience show in Chicago a few weeks ago, was 2 very important relationships, 1 for pay and the second one, [indiscernible]. That enables us, even though we're in the business in the sense that our point of sales support commercial fuel, we have never been on the commercial fuel payment side. And as a result, it's more difficult to do the retail for [indiscernible] if you're not really providing a complete relationship for the customer.

And that's what the future holds for us is that for our large relationships on commercial fuel are just fuel in general, we're not just the point of sale any longer. We're at the point of sale and/or a payments solution for both commercial and retail. So to give you an order of magnitude. And these are estimates that we -- our data -- we don't touch the payments today, but we see it flowing through through the point of sale. It's 17 billion transactions domestically and roughly $500 billion in volume.

So the U.S. combined between what's on our Voyix Connect and what's on another application called Epsilon. You're talking about $1.3-or-so trillion in the U.S. That's our TAM opportunity to now have the ability to go to customers and say, "Hey, we're not just the point of sale. We can also provide payments and in this area on commercial, we can provide it. That, together with retail that you would see in a gas station, 18,000 gas stations. It was something that Nick and I who were at Next in last month, we -- this was very well received because the alternative is our customers have us for the point of sale.

They have somebody generally is an intermediary and then they have somebody who's doing the payments. So this gives us the opportunity to provide 1 solution, which takes a lot of noise out of the system. Now some people say, well, they like multiple players. But the problem with multiple players is we have to integrate to multiple players. We have to manage multiple players. And things always slip through the cracks. There's changes that are not well coordinated. So for us to provide a single solution all the way to the actual receipt of payments is, in my view, and I think what we've heard from our customers is going to be very well accepted.

This is not just for our new next-generation Voyix pause point of sale. But in terms of timing, I think was your other question, this can also get retrofitted onto our existing applications because they already do commercial fuel at the point of sale as well as just fuel more generally. Our preference is to launch this together with our next gen, and that's -- that was the push at Next and that's also going to be what we're going to be focused on between now and January and then also at NRF.

[Operator Instructions]

Your next question comes from the line of Dan Perlin from RBC Capital Markets.

Congratulations on that Chipotle expansion. That's obviously very significant for you guys, and clearly a showcase win for the Aloha platform. The question I had yes -- and that's huge. The question I had is you've obviously had an opportunity to have conversations and actually implement the payment gateway strategy in terms of pricing. I'm just wondering what those conversations are like. I know you're talking about the value that you provide and now that, that's in motion.

I'm just wondering what the market is kind of absorbing there. And then secondarily, it sounds like Global and Worldpay is closing now in the first quarter, so a little bit sooner than expected. I'm just wondering what that might offer you potentially in terms of potential accelerants, so to speak, with opportunities around Worldpay?

Okay. Look, we have a really good -- obviously, I've worked at Global. We have a really good relationship as I do with Cameron and other people there. And I do -- I think the combination of the 2 actually works very favorably to us because globally is global, more so than Worldpay and Worldpay has some capabilities that Global does it. So I think the combination will be additive for us. I didn't know that it was accelerating in terms of its close, we're at the tail end of migrating on both sides, getting off of the legacy Jetpay application.

I think in terms of the reaction from customers, I think they're all very positive. I actually have a large customer coming in next week. We're going to talk specifically on payments. I think they all like the conversation from what I was mentioning in my comment where my comments with Matt, having multiple intermediaries, especially in the technology world, just generally provide something that's going to break. Somebody doesn't update it doesn't flow all the way through and present issues. So I haven't seen any pushback as everybody just dropped their existing relationship and switch to us, no. That's going to take time. I think people appreciate that. But as I said earlier, in my comments, all this -- what I've been laying out are the opportunities ahead. There's huge opportunities on payments.

There's huge opportunities on our next-gen application, on services, et cetera. So that you understand where the future of the company lies not within just our existing customers but new customers. I mean it's a big organization. It's going to take some time to turn the organization, but our attrition is still at 1%. So is that we're losing customers. We just have to execute on it. And again, Chipotle, I think, is a very good kind of watershed event for us where a relationship when I first joined in February, was not nearly as strong as it is today.

I've gotten to know both Scott and Kurt through the process. And as our team has gotten to know them, we did some innovation work for them during their RFP process that they were very pleased with. So I think the notion of selling other services into our customers that wasn't core to us previously like payments it's not as though we are additive in terms of cost, if anything, we might be able to reduce cost for them and definitely reduce complexity.

Because in the end, that's what the customers are looking for, they are looking for cost, savings. They're looking for efficiency, and they're looking for a solid relationship that they can rely on, which they do with us.

And your next question comes from the line of Parker Mark Lane from Stifel.

Jim, you mentioned the ODM phasing project is going to kick off in January. Just wondering if you can give an update on how long you expect that to take place and what the phasing of that project actually looks like.

Sure. So I think, again, on the background on this, we had earlier expectations that would go faster. There was some technology challenges on their side. And so we pulled back, obviously, hardware remains important to us and obviously to our customers, but this is a better, I think where we're moving as a company. This is still the right direction. The expectation, there's effectively 3 major facilities that have to switch over. So we are intending to start that the first -- not the first day, but the first week or second week of January start moving it in pieces.

I believe we'll retain our employees that would otherwise transfer across that have already been alerted to this during the roughly 90-day period. I think the expectation is 90 days. I could it extend beyond that? Anything is possible, but we're trying to do this in a way that has 0 impact to our customers. And as well makes it an easy transition for our employees.

During the first quarter, we'll continue to report gross revenue as we have today, but my current expectation is that by the beginning of the second quarter, that will be on a net accounting basis as we've outlined from the beginning.

Got it. And then in your conversation in your salespeople's conversations with your customers, I was wondering if there's any insights they're sharing on the health of the consumer. And how that's informing their willingness to spend into '26. And I guess more importantly, as a backdrop, what sort of cyclicality have you historically seen around technology investments in response to consumer sentiment there?

Okay. We want to let everybody have something to say on this call. So I'll say a little bit, and then I'll let Darren and Benny who deal with the customers on that basis probably more than I do. I mean my -- Chipotle is an example. This is a significant investment on their side. They're looking for the technology that we have to offer that we haven't. We offered this on the retail side. The restaurant side, historically has gone a different direction. It was more of a monolithic application Aloha Cloud, which was being [indiscernible] out to replace the legacy application, which we refer to as Essentials versus '19.

So I think where you're able to add value together with lowering costs, I have not seen a reluctance to customers in terms of buying. And I can use an example -- when I was at the next, I was the first time I've attended especially the trade show industry, we had 3 brand-new products. We had no legacy products in both. Two of the products had only been -- only come together in 3 weeks before the show. That's how fast we're innovating.

There were lines for one of them in particular, which is around our commercial fuel or fuel replacement application. And the major players in that space were very interested in what we had to show because it looked very similar to what they have today. And I think that's a key that we have. And as Nick said this in his comments, we have a library of over existing applications. We know what our customers want because we're servicing it today. So we can modernize what they want. They're not having to transition to something new or reformat the way they're organizations work.

And in the end, it does lower the cost because we have the ability to manage the store as opposed to and you're not using third-party operating systems that provide cost updates, et cetera, it's just easier. I'll stop talking and let Darren and Benny give you your view.

Thanks, Jim, parker. Yes, the conversations with our customers through the shows or 1 and 1 around the globe continue on a very healthy nature. Many of our enterprise customers are looking at infrastructure or capability upgrades, be that on new or existing hardware solutions. But ultimately, therefore, our micro services play and open API models are having real appeal in terms of either elongating or within their existing hardware assets or coming with new hardware propositions.

But bolting on to that is a real appeal about enhancing the servicing or the services solutions for them as an added value feature. So those -- they are very healthy conversations globally on that basis. And there's a real appetite for a unified commerce type model. And therefore, as Jim has outlined, bolting on the -- our payments gateway and our payment solution is having universal appeal.

Now these are long-term contracts with ourselves and with payments provider. So there's been a lot of questions about the timing of this. I think as Jim has alluded to previously, the typical contract duration in retail is 5 years, in restaurant, it's shorter in terms of 3. So that gives you the kind of renewal cycle of the materiality of the contract, but bolting on the additional capabilities in the interim is coming.

And typically, a payments contract would normally be a 3-year cycle in both verticals. So that opens up the scale of the conversations and opportunities to switch on that unified commerce capability into our customers. In terms of health or consumer, as we see various earnings releases from many of our retailers around the globe. I think universally, it's steady. I think some -- in some markets, grocery supermarkets are saying that they're having probably the best consumer stability or growth record for many years.

I know there's a reporting kind of steady, low single-digit performance. I think we're starting to see a trend to that unified commerce model in terms of consumer behavior looking at the multiplicity of channels into the retail -- the retailers we support. And I think, again, we're well positioned for that. So I don't think there's any massive revolution coming in terms of growth potential or otherwise. But I think the steady evolution is encouraging as we speak today today.

So I'll pass over to Benny or Nick.

Yes. I mean I'd add to that I speak to customers a lot. And I mentioned in my prepared remarks, I was also in -- we've taken some grocery chains live on our new stack this quarter, and I visited those customers and was in store. I can tell you they were extremely busy. I don't think I can recall a single conversation with the customer that's grounded in a lack of consumer confidence. In fact, what I would say is making our customers hungrier to compete for their consumer business.

So the key conversation is how do they ensure they deliver the right experience to consumers keep returning to them. And that's really the technology cost. They want to be able to deliver faster experiences. They want to be able to make sure that those customers have a competing offer. And that's where -- that's why they want to invest in technology because technology enables them to do that. Technology enables them to be more loyal and also to be able to offer competing offers more quickly. That's the main conversation.

It's like how can we more quickly bring better competitive experiences to our customers. And those are technology investments investments that they're not just willing to make and talk about it when they are making. That's really about speed, being able to accelerate the journey for their end consumers. There are specific cases where they're also investing, I would say things like loss and waste. So it's important for our customers. They do have a focus on cost control, amongst rising costs.

So we do have offers and discussions about making sure but we reduced loss and waste for our customers in both retail and restaurants. I would say the core theme is actually looking to invest in technology in order to attract and remain loyal to their consumer base and compete over those customers.

It's similar in restaurants is the same trend. I acknowledge that there is economic pressure. I don't know a lot of restaurants, logistics, food cost labor cost, labor shortage, et cetera. That has actually an opposite effect in terms of looking at technology, restaurants when we have conversations or having more and more conversations on how can I leverage technology to create either the revenue acceleration, which Nick talked about, can I get more consumers into the door, do I understand on a one-to-one basis.

My diners so that I can provide the service required and repeat customer same-store sales growth, et cetera, but also efficiency, efficiency in terms of automation. So technology that can easily integrate so that you can manage the the journey of the consumer from online ordering, coming into the restaurant, understanding what is available in the restaurant so that you can actually offer up and make that one-to-one offer, et cetera. all the way to automation so that I can transfer some of the things that required heavy labor from employees, store managers and free them up and have less labor costs.

All of those things are technology conversations. So we're having those conversations whether it's in the super auto cycle that I referred to that we're in. We're actually seeing a lot of ours looking at innovations and creations like Chipotle example that Jim provided around the innovation during therapy cycle, 1 of the key things is the ability to renovate the ability to to capture revenue and the ability to create automation inside the restaurant. So we're having a healthy conversation, a pretty good pipeline. I think that's what we're seeing.

And there are no further questions at this time. I will now hand the call back to Jim Kelly for any closing remarks.

Thank you, operator, and thank you all for your continued interest in the company.

And this concludes today's conference call. Thank you for participating. You may all disconnect.

Thanks, everyone, for joining us. We're very excited to have James Kelly here with us, CEO of NCR Voyix.

Jim took over earlier this year in February and was previously Executive Chair of the Board. And prior to his time at Voyix, he's CEO of EVO Payments, has had a long career in the payments industry before taking over to NCR.

So thanks for joining us, Jim.

Glad to be here. Actually, it's my first time. It's a long trip.

Yes. No, it is. But you come here from the scenery in the weather.

Yes, exactly. It was very foggy when I landed at midnight.

All right. So well, welcome to the conference. It's been less than a year since you've taken over as CEO. I wanted to kick it off.

I was hoping you can give an overview of kind of what you're bringing into the role? What your priorities are? How is your priority shifting as you've taken over?

Okay. So just by background, again, I joined initially in October of '23 as the Chairman, as you stated in May. And last year, there's a lot around addressing the balance sheet.

So this was a spin-off of our ATM business and the sale of a digital banking business. The spin-off was in '23 -- the end of '23. And the sale banking business was June of last year. And that was -- that, together with helping to work with the current CEO who was at the time -- prior to that have been the Head of the Retail business had moved into the CEO role with the split. And given my background running several public companies, as you said, in payments, but also the most recent one, we doubled somewhat in software, but we tried to keep those separate, generally.

And my interest was to fix the balance sheet coming into this year, was to address some operational challenges the company has had in the past. If you look at the history, the company has gone through, as everybody did, they went through COVID, they went through a failed sale process in '21, '22. And then it morphed into a split.

So a lot of changes at the organization, in particular at the CEO role. I think the Board's view is we wanted to make sure that the company was on really good footings going forward, particularly because we have some amazing products coming to market and NRF in January and also on the restaurant side as well. So it was just repositioning operationally. And I think they asked me to step into a full-time role here just given my background in operations and leading public companies.

Yes. Great. So I guess, as you step into the role, what's kind of your primary goal to -- what are the operations you're most focused on? What are kind of key initiatives over the next year?

We have historically -- this is a company that's 145 years old, started in the hardware business. They still think of themselves to some extent as being in the hardware business. As you remember, last year, in addition to the sale of digital banking, we announced a relationship with Ennoconn, which is owned by -- or partially owned by Foxconn. The outsourcing, it's called ODM structure.

Our expectation was to have that done by the end of last year, some technology got in the way. We're still targeting to have it implemented by the end of this year. So going into next year, this is a platform company and that's the big shift for employees, for our customer base. The customers have been with us 20 or 30 years. Our attrition rates on revenue is 1%. So these are great customers. They're predominantly enterprise. So when you think of our competition, we're focused on enterprise first, mid-market, and we do have some SMB, but that's not the predominance of what we do.

And the #1 growth for the launch at the end of this year into next year is to get the product right for the platform. These are cloud native applications that will replace the legacy on-premise applications, like I said, that have been there for a long time. They're long in the tooth, a lot of tech debt and our customers I've seen now 70 of them personally, either some over video, but most of them in person have traveled in with over 75% of our employees, then across India, Europe, Latin America and Europe in the last 6 months.

Parts of that is how I learned. I learned about the business. I mean I would run a software company of this size previously. It also gives me a chance to understand the needs of our customers. While as I said earlier, some of the unkept promises we're trying to make up for. But in the end, the customers are on our side. They want to see this transformation move as smoothly and quickly as possible. If you look at what we do as our core business is point of sale. So the point of sale is how these companies make money.

While services, I think, is a differentiator and now payments are being introduced to the mix, the core focus is the launch of the platform into next year on both the retail and restaurant side.

So maybe you can talk a little bit about what it means to be a platform company, what it looks like kind of on the ground as you go to these customers? And like fundamentally, how does the customer experience change when they experience NCR as a platform company instead of a hardware company?

If you look at it today, our customers run their stores. So whether it's grocery, convenience, fuel, restaurants, these are legacy applications, like I said several times that have been there for a number of years. But as consumers themselves, they all have iPhones, they watch Netflix, there's somewhere between 13,000 and 16,000 platform companies today in existence.

And it's just a very simple concept. We all take it for granted. We watch a movie on Netflix and it's a drama, tomorrow, I'm going to see other dramas suggested to me. That's what our customers ultimately want to do is understand the buying patterns of their consumers.

And unfortunately, given the structure of applications that were written 30 years ago, that's just not available to them. And they've been very patient with changing the point of sales, one of the most difficult things a company a CEO can do because that's how they make money. All their money comes through the sale, at the point of sale, whether it's above store or in-store, that's the differentiator.

So from their standpoint, they just want to see it see the product in practice. They want to see a number of customers who have accepted it so that they can reference it. It's a very small industry. Any one of those verticals are very small. They know each other. And we have a great reputation. We've been around for a very long period of time. And I think they're a little impatient that we haven't brought this to market sooner.

And as I said, there's been a number of distractions over the last couple of years. I think those distractions that have positioned the company to be in the best position it's been a great looking balance sheet but also in a fantastic product that we're coming to market with, surrounded by now payments and enhanced services.

And when you talk to these clients who've been on kind of the legacy platforms for a while, how disruptive is it to swap out the platform? Is it a different kind of front user-facing software platform? Do they have to retrain, how are you thinking about managing that transition?

Yes, as I said before, today, they manage the stores tomorrow, we'll manage the store. So like your iPhone, you're not managing the phone, somebody manages it remotely. You can access applications just like they'll be able to access features, but that will be our responsibility to manage the store for them. So I think that's a value enhancement to where they are today, and it's something there.

I think beyond the managing of the store though, back to what I was just mentioning, the access to data to make decision -- buying decisions for their customers is really what the differentiator is going to be.

Great. Okay. I wanted to maybe switch gears and talk a little bit about the payments opportunity.

We covered the payments and fintech space here at Goldman. You have a long history in the payment space. It seems like this is one of the first things that you saw as an opportunity for the company when you took over. Can you talk about what was the prior state of payments at Voyix? How is the strategy shifting what is Worldpay going to do to change the way you go to market?

Okay. So yes, I've spent 25 years in payments, both a Global and then a company called EVO Payments, which we sold to Global a few years ago. it's interesting, there's a little time thing in front of us. And we were doing a tour. I was first on the board, and there's a little convenience store inside the corporate office, and there was a red number up on the screen, I remember asking the former CEO, what does that represent? And he said it was the volume of business that goes through our point of sale.

So on an annual basis, if you look at across all our markets, we're touching over $1.3 trillion just on the credit side. And if you add fuel to that on top of it, I bet you were pushing close to $2 trillion. So put that up against any acquirer.

My last company was $150 billion in volume, and we had $700 million of revenue and sold it for $4.5 billion. So there's a huge payment opportunity it's just -- if you go back to its history, a 145-year-old company, the focus was hardware and later service software, some services, but payments was not something that NCR would have thought of. They were thinking of ATMs or digital banking. They didn't realize that there was value sitting right there.

And the value to the customer -- to our customers is that they don't have to have multiple parties involved because while it runs through the point of sale, the transaction, it doesn't turn into cash until the credit card clears. So we can offer it cradle to grave, so to speak, end to end, then that's a differentiator from what they have today. It takes a lot of the noise out it deals with the complexity if there's a change at the point of sale or the change at the processor, they change update firmware or something else, then we're able to -- if it's our process that you're mentioning WorldPay, so we selected WorldPay because of the complexity of our customer base, which is fuel, convenience and grocery, the former JetPay acquisition that the company made in 2019 didn't have that capability.

On the positive side, all our SMB restaurants that we sign up, we take 100% payments, 99%. So now we're working through our existing customer base to expose them to the capabilities that we can now offer them so that there's 1 relationship instead of multiple.

So just as an order of magnitude in the U.S. alone, we touch on an annual basis, $12.5 billion transactions run through our point of sale, runs through our connected system. So $800 billion of volume in the U.S. as part of the $1.3 trillion. That's already on our system. It's already our customers. We're just going to them to expose the capability that we have on the endpoint, which is Worldpay that they can now take advantage of.

Got it. And when I think about the convergence of software and payments, we've seen that happen really fast at the SMB side.

How do you see that happening with the enterprise customer base? And how do you think about the catalyst to get some of these enterprise merchants to switch?

I think the initial reaction when I said this in February was, well, people like to have not all their eggs in one basket, so to speak. But the reality is they have all their eggs in our basket. So if we can offer them payments, we already have the capabilities to do it. I think it's an easy switch.

Now switch conceptually, Practically speaking, there's work to do, and it's not going to happen overnight. I mean it's taken a long time to get to where they are today. But I think over the course of this year and next year, we have a team that's dedicated, one to teaching our sales organization, how to sell payments; and two, to be a partner when the process is ongoing with our customers. So we have already had some customers convert over to us. They've said, yes, so we have to work through the process. And we're out talking to all our customers. And so far, the reception has been very positive.

Great. Okay. And then I guess the last question on this. You mentioned that this is a longer-term initiative. What's a reasonable time line investors should be focused on to start seeing some of the impact of the payment strategy?

I would say it's not just payments. I think it's all these components. I mean there's been a lot of change with the organizations. Last year, we took out $240 million of cost as we exited the digital banking business on top of the sales and top of ODM.

So some of that is rolled into this year. While our top line is not where we'd like it to be, the earnings have continued to grow. My sense is I will start seeing it. I'll see you before you'll see it for obvious reasons. But I'll start to see it I will let you know often and loud as soon as I do. But I would say it's fourth quarter at the earliest. So one of the ways to think about this, the 75% of our revenue comes from services, people doing things and 25%. If you take out hardware, 25% is software.

So we have conversations going on, escalating prices on the software maintenance, which has been around for a long period. At the same time, we're selling new software, the cloud platforms that I just mentioned. Same thing on the 75%, which is the services piece. Historically, the company has not inflated the price of the service over time. It's been flat, generally speaking.

So we'll start seeing that over time. I would say on the retail side, our customer contracts are generally every -- the 5-year contracts that we'll see 20% a year. And on the restaurant, they align with payments, so it's every 3 years. So it will slowly build. But as it starts to build, it will start to accelerate, too, because they have a compounding effect.

So I think I'll see some of it early in the fourth quarter. But going into next year, I would expect to see payments, the sale of subscription software for the platform and services on top of that. And at the same time, you'll see hardware. So probably some hardware that will leak into the first quarter because we're migrating. We're not going to do it all one big bang. But past the first quarter, at this stage, my feeling is that we would finish the ODM, so you'll be looking at the company as a net of hardware. We'll have a commission associated with it, but we won't have the gross hardware number that you've seen in the past.

Got it. So just to understand that it sounds like still on track for getting ODM up and running, but looking to transition it gradually. So we'll still see some gross hardware revenue early next year?

At this stage, if you saw in the Q, if you read the Q. But if you saw in the Q that we said it would be commencing at the end of the year.

The fourth quarter is an important quarter for any company. We're a calendar company. And we have commitments to customers, and we don't want to cause any disruption where January is a much slower month. But it's moving along the revised time line that we talked about at the end of last year.

Got it. Okay. Makes sense. So I want to maybe take a deeper dive into the retail segment and just talk about the growth algorithm. There's been a lot going on. You have this ongoing shift from on-premise systems to a cloud-native architecture. And I think the prior management teams have been flagging the impact that, that has on kind of current period revenue and the impact that has longer term for the business.

You've also added an element of payments to the story. So I guess, when you think about the retail growth algorithm, how do you think about kind of near term where you're still undergoing that transition? And then maybe 18 to 24 months out, when do we start to see an inflection in some of the reported revenue metrics?

Yes. When you talk retail across the board as opposed to just software, in particular. Again, I think the time line is the same. I think we'll start to see retail NRF is the big kickoff. So that's when we'll have the booth and all the rest and the customers on-site. So there'll be a lot of conversations, meetings, obviously, around that.

One the things said, we're also going to focus on this year is beyond delivering into our existing customer base. The company has been very insular focused on existing customers. It's exposed to making the tent bigger. And so my focus is more on -- since we have this new, I think, market-leading application for the segments that I've mentioned, that we're going to be as focused on forming new relationships as servicing our existing relationships.

So I think that's part of a shift as well. So I think the time line is once a contract signed, just like any other SaaS organization we're starting, the billing occurs then as opposed to at the point of actually installation. Installation takes time. These are organizations that have 1,000 lanes, 2,000 lanes. It takes time to install. So there's -- it's not an SMB business where you're signing 10,000 merchants a month, and you're signing 1 customer that has 10,000 lanes. And we have 18,200 fuel locations across the U.S. So rolling that out is not instantaneous, but you'll see the revenue start to build over time, and I think you'll start to see that by the second quarter of next year. The next year is a big year for a number of things because we've spent the time fixing some components of the business. The balance sheet, I said, operational as well. And now with the product coming to market, we're excited about next year.

All right. Just another one on the retail side. On the self-checkout, I think self-checkout business used to be a big focus in kind of prior renditions of the company's disclosures and communications. It was a big chunk of the retail segment. I imagine a lot of that was on the hardware side, so probably less going forward. But maybe just talk about that because you have some marquee customers with Walmart and Whole Foods, really impressive relationships, long-standing relationships for the company.

How do you think about the software opportunity in the self-checkout space?

Yes. When you mentioned the hardware, yes, there are some instances, I don't think we sell any hardware without some software. Our software in there, the drivers are our software. Sometimes it's -- most of the times, it's holistically our software. I think, yes, there was a big spike, well preceded me and self-checkout.

I think as consumers, we like that convenience. We don't want to see a long line if we have 10 items or 20 items to get out of the store quickly. I haven't -- I've been to a lot of these stores and met with these -- the leadership of the organizations.

They still like self-checkout. I think the self-checkout has gotten a bit of a maybe unfair reputation of it's driving a lot of shrink as a result...

Of COVID, right?

Yes, well, even past but there's other technology that we're working on that's in the field today around camera technology, video technology to be able to sort it out. I think AI will continue to assist in that endeavor.

I don't think my -- I mean it's fairly limited, but my impression talking to the leadership of these organizations, they want self-checkout. They just want it to not be a source of losses. And I think as that starts to gel around lower shrink, then you're going to see that continue to move because what's the alternative? If you don't have a self-checkout, you're going to have to put another lane in and that's going to be people and that's going to be cost as well. So you're trying to balance the two off.

Makes sense. All right. And then just on the hardware side, how are you thinking about tariffs? I think this past quarter, you left your estimate of the impact from tariffs embedded in the guide unchanged, which is I think, $8 million to $12 million, if I'm not mistaken.

Correct.

Has there been any changes to that? And just any thoughts on kind of mitigation strategies?

Yes. So I think I got this one. Well, I got it wrong twice because I think today, we did the earnings called, Trump made a change and somebody corrected me on the call.

So look, I don't have any better crystal ball than anybody else. I did misread. I thought at least through the first part of the year. I mean, I was a new CEO, lots of changes in the company. I thought these would be more of a head fake than they were -- than they've seen been. I mean they're here to stay -- yes. Well, maybe that was -- it was just so egregious some of them in terms of the size that I was just surprised that they would sustain. And then obviously, they've moved around. I looked at before the last earnings call, I think there was something like 27 changes, public changes, tweets about these as to how they were going to change.

So for the first half of the year, I was more inclined -- in the first quarter, we didn't see any. It was really just the second quarter that we started to absorb some of them. And we did what we could to mitigate by pushing back to customers and saying, well, we're just not going to order that printer for you because it's a 25% tariff to it. So we'll just have to sweat the existing one a little bit longer. Otherwise, there's a tariff coming and they didn't want to pay it.

But going into the back half of the year, I mean, we have treated related to parts and we have related to hardware currently, we are assembling in Mexico, and we're 51% over. So under the U.S. MCA, we're good. That hasn't changed. I mean that's up for next year. So we'll have to see what that looks like.

But for right now, my feeling has evolved that this is almost a permanent price increase. And so we're more inclined to where applicable in our contracts to push those on to the customers because they're not going to go away. And hardware, in particular, it's not a big margin business for us for anybody. So I'm not inclined to lose money on hardware, if I don't have to.

Sure. Yes. No, that makes sense. And I guess, like, do you feel -- the idea of like let's sweat the hardware? Do you think the $8 million to $12 million can encompass any element of demand destruction for people who do say let's just try to wait another year before we bite the bullet?

Our tariffs certainly $8 million to $12 million in the size of $700 million. It's not a lot of money. So I don't think anybody, and when you put it across the customer base, this number just disappears. I think it's more of an emotional thing. But we have absorbed some. I mean some of our second quarter had that in there.

Makes sense. Okay. Just on the field services side, I mean, I think it's been one of the things that like you and prior management has always emphasized that the ability to kind of field a fleet of trucks, get people on-site, fix things when they're broken, pick up the phone when people are calling in is just a big differentiator, the ability to service these big enterprise customers at scale is a huge part of the moat on the enterprise part of the business.

Can you talk a little bit about that? It sounds like you're talking a little bit more about pricing initiatives in that business. How do you feel about just kind of the size and resources and kind of scope of the services organization?

Well, I would -- I mentioned in the beginning that the focus for this year is getting this product, this platform solutions out to our customers because that's what they're looking for. When you talk about competition, in particular, for someone to displace this at scale, we have 8,000 people in this group between professional services, hardware installation, hardware maintenance and then a call center that does 7/24 servicing out of Serbia and Bosnia.

It's quite an amazing organization. It doesn't get the credit, sometimes that it should, but we're supporting -- I was in -- as a few months ago. You walk around the building. It's a multistory building. I think it's one of the largest employers in Serbia. And you see banners of all our major customers, and then there's a group of people and their job is to support that customer for all their needs within their stores, if their systems go down, monitoring their systems, taking help desk call center. It's very, very efficient.

And I think we're where we have to do a better job is instead of doing it as a bespoke, I want a little this and a little of that is put it together as a package. So it's easier to buy a package. It's like buying a car, buy a car off a lot or customize it. We've been very oriented to customization of the company. It's kind of its culture, and we're going to try to standardize, make it easier to consume as a customer, but also sell as an organization.

So I have I have high expectations for all our groups, but definitely on the services side. I think we -- there's a guy named George Sloan, who runs it. He and his team are fantastic, and they're do whatever it takes to support our customers.

Got it. All right. Let's talk a little bit about the restaurant side of the business. I guess one of the narratives in the integrated POS more broadly is about the competitive nature of the space, and that's especially true in the SMB and mid-market part of the space. You're one of the market leaders in the enterprise side, which hasn't seen the same degree of competition. So what are you focused on to make sure that the increased competitive intensity down market doesn't eventually come up market?

Well, I don't think there's anything can do to prevent it other than we'll have super happy customers at the right price then -- but look, I've heard from CEOs in the past, changing out a point of sale is the last thing. Anybody have seen enough of it. And they've seen enough of it that is not something they want to do. So I think we would have to really step on our toe in a material way.

It's not to say they won't go up for RFPs. I mean you hear -- I hear it when obviously, they come out. But for someone to support at scale, they either have to have a partner or a third party be the on-site, and we have displaced a lot of those situations, even last year, some of the companies that we announced, we didn't say the names of the companies because we're restricted. But these are very large multinational organizations that have tried to use third parties, but one we just announced this year, same thing, they were using, I don't know, 10 different subs, and it was too much of a pain to manage them.

So ultimately, they want simplicity in their life, too, to be able to manage a relationship. So I -- look, there's always going to be competition, but I think we're extremely well positioned. You look at the last 5 years, all the changes that we've gone through and competition trying to get to that scale, the names that we all know for them to move to that scale, it's not just the product, it's everything else. It's the installation of the product and the supporting of it thereafter. And if you're not able to do that, if you can't convince them that you can do that, then I think it's very hard to take out the incumbent.

Yes. And just on the enterprise space, does the payment strategy on the retail side extend to the enterprise part of the restaurant? Do you think you can do payments for franchisees of...

We just signed one. The answer is yes. I have no doubt that we can do that.

Great. Okay. And then, I guess, on the product side, where are you investing on the restaurant space? And where are you -- what are you hearing from clients around the most important areas for Voyix to deliver?

Yes. I think on the restaurant space, we still -- while we have a local cloud in the market, that is still a monolithic application. It's not microservices. It wasn't built that way. So that is something that we're taking a look at. I think AI is also having an increasingly attractive opportunity.

It is an increasingly attractive opportunity for us. in terms of speed to market on applications. Because if you look at the company, we have a library originally as I've been told have not validated this, but one of the employees that have been here for a long time, said 140 applications required over the history of the company. There's 50 that are in operation today. There's 25 that are kind of the core ones. So we have a really deep library of technology. And I think AI can be very helpful for us as we refresh that going forward.

Okay. I wanted to maybe just touch on kind of some more financial-oriented metrics.

I'm not the CFO anymore. That was a long time ago.

That's a sneaky way of getting it. Well, look, I think more from a philosophical perspective, I think about the journey that Voyix has been on to take a lot of cost out of the business. You're also investing a lot at the same time. I think about Jeff Sloan and the Board was always very focused on Global Payments and driving margin expansion, no matter what they had going on.

So just what's your philosophy around prioritizing margin expansion and driving efficiencies while also investing?

Jeff got that from me. If you look at Global, we a good ton of cost out, see it. And here, we took $240 million out last year. So there are still -- and I've got questions today when I was meeting on the one-on-ones. We have a lot of -- we have multiple accounting systems, not one general ledger. We have multiple billing systems -- we have multiple sales force systems. We have a lot of manual labor that was just a product, I guess, as we -- as the company years ago, started to offshore labor.

I think it was in their mind, faster to offshore labor than to go through the effort of automate instead. So our focused AI aside, our focus is to automate as much as we can. I think it eliminates human error. It improves, obviously, the speed. So I agree with Jeff. I will tell you to mention that. But I agree with Jeff that efficiency is margin expansion is something when we gave the pro forma last year after the Ennoconn because we have to the digital banking Ennoconn deals.

That was one of the things that we wanted to show the market that if you take out hardware, we're north of 20% margin business. Which is, for us, I think, a very good place to start. And I think that number is going to continue to ratchet up as we sell more product at a much higher margin because if software is a bigger component of revenue, it's a much higher incremental margin payments as well as a very high incremental margin.

So all these things will be additive to margin to the bottom line. And then in particular, we're very focused on cash flow. That's something that -- we had a lot of noise into this year as we've had reductions in other stuff in the numbers, investments, as you said. And as Brian had said on the call -- our last call, some of those investments will creep into this year, probably more so than we thought at the start of the year.

But in the end, these are all around automating the organization, making it more efficient in the long term. At some point, we have to do this. We're doing both at the same time. We're focused on the revenue and all the growth needs needed there at the same time, trying to make the company as efficient as possible.

Great. And then just on the capital allocation front. I mean, I think about the journey the company has been on the significant improvement in the balance sheet position. I think you had some leftover after some of the transactions to do a little bit of share repurchases.

What's kind of your thought on more steady-state allocation for the company? And what's sort of the journey on over the next couple of years?

Yes. Some of the questions I've been getting is, what's M&A look like? We did some small buyout of our back end this quarter. But I don't see M&A as a driver for us, really the driver of things I've just talked about, the product, the platform, services, payments, in particular, buying another organization, there is more confusion into the organization.

So I think for going into next year, the cap could buybacks be part of that. I mean we have an authorization out there today. We did 125 since I've been, I guess, I was the Chairman -- Executive Chairman before this, but over the last -- since the closing of the Digital Banking deal, we did $125 million in buyback.

In the end, that's not -- it has had some help at points in time?

But yes, at some point, that will be a bigger focus of the company. I don't think it will be the back half of this year, but I think it will -- going into next year, it will be definitely something we'll look at.

Got it. Makes sense. I guess in the last minute that we have left, as we look into the next year, what are some of the key kind of signposts that we should be looking at to measure Voyix's performance? And are there any final thoughts you'd leave investors following the company.

Yes. I think the signpost is we have to do a better job in reporting the numbers. We're still coming off a legacy reporting structure. So there's numbers that are mixed together. Payments are mixed in with software with services.

So there's work being done internally to split that out to make it easier to understand what the company is, how it's performing. Again, I think we'll start to see some uptick in the back half of this year and definitely into next year. I've asked what's my expectations I don't lead into what percentage we're going to grow at this point. It's still early for me.

I think we need to understand what the business looks like a little bit better. But I think the company is -- I think it's a great company, personally. It's the reason I stepped into this role. I think we have an amazing customer base. We have an amazing employee base that the average tenure is probably 20 years.

So there's an NCR way within the organization. I think it's -- what's the North Star. Now we understand what the North Star is with the product being -- it's not a product I created, but with the product being ready with payments being ready, I'm very optimistic about next year.

Great. Well, I think we'll leave it there. But thanks so much for taking the time to be with us today. I appreciate your support of the conference.

Thank you very much.