NCR Voyix NYSE: VYX reported a 20% decline in third-quarter revenue as it transitioned its hardware business, while growth in recurring software revenue and a jump in the value of contracts for its Voyix Commerce Platform offered signs of progress in its software strategy.
The company also promoted Darren Wilson to president, putting the retail and restaurant businesses under his leadership, and said its Aloha Next restaurant product had gone live at its first site.
Revenue for the quarter ended Sept. 30 fell to $539 million. Excluding the hardware transition, revenue declined 3%, primarily because of lower hardware and related installation services, partially offset by 1% growth in recurring revenue, Chief Financial Officer Brian Webb-Walsh said.
NCR Voyix reaffirmed its full-year adjusted EBITDA and free cash flow guidance but said it now expects revenue at the lower end of its previously issued range because of delayed hardware purchases and related installation revenue.
Contract Value Rises as Platform Sales Expand
The company added 10 contracts for its embedded Voyix Commerce Platform, or VCP, applications during the quarter, bringing the total number of customers to 35. Remaining contract value reached $440 million, up 151% from a year earlier and 54% sequentially.
Chief Executive Officer Jim Kelly highlighted six enterprise customer signings during the quarter but cautioned that the pace of contract growth may vary. “I don’t expect every quarter to be of this magnitude,” he said.
Among the retail agreements, NCR Voyix renewed its first VCP contract with Ahold Delhaize USA, which Wilson said has more than 1,000 live trading lanes across over 100 stores. The customer is continuing to roll out the grocery and fuel software across its 29,000 lanes. The company also announced expanded agreements with A.S. Watson and Rutter’s, and a VCP agreement with Cencosud in Argentina.
In restaurants, Wilson cited Aloha Next contracts with First Watch, Sbarro and Bruster’s Real Ice Cream. Aloha Next is live at a Bruster’s corporate-owned location, and a store-in-a-box offering remains on track for launch by year-end, he said.
Hardware Transition Weighs on Revenue
Third-quarter adjusted EBITDA fell 2% to $120 million, reflecting higher corporate expenses compared with a prior-year period that benefited from transition service agreements, Webb-Walsh said. Adjusted EBITDA margin expanded to 22.3% from a year earlier, largely because of the hardware transition; excluding that impact, the margin was essentially flat.
GAAP diluted earnings from continuing operations were $0.08 per share, compared with a loss of $0.15 a year earlier. Non-GAAP diluted earnings rose 7% to $0.32 per share.
Retail revenue declined 19% to $377 million, reflecting the hardware transition and a prior-year one-time government hardware sale. Excluding those impacts, retail revenue was flat. Retail recurring revenue increased 4%, supported by 8% growth in recurring software revenue, while segment adjusted EBITDA rose 19% to $107 million.
Restaurant revenue fell 23% to $162 million, or 5% excluding the hardware transition. Webb-Walsh attributed the decline on that basis to lower one-time installation services and continued pressure among small and midsize restaurant customers. Restaurant adjusted EBITDA slipped 1% to $73 million.
Payments and Restaurant Outlook
Payment sites declined 1% to 8,400, as pressure in the small and midsize restaurant business outweighed growth in retail. Kelly said payment sites associated with Voyix POS contracts would begin to appear once systems go live, which he estimated would be well into 2027.
Kelly said he was confident the small and midsize restaurant business would stabilize during 2027 as Aloha Next reaches the market. He also said the company’s announcement of the new product last year, before a version for that market was ready, had made selling to those customers more difficult.
In commercial fuel payments, Kelly estimated the opportunity at at least $500 billion, though he noted margins are thin. Rutter’s was the company’s first convenience and fuel retail customer to take its commercial fuel payments offering, he said.
Leadership and Cash Flow
As president, Wilson will oversee sales, customer operations and support, product development, deployment and payments, reporting to Kelly. NCR Voyix also named Brendan Tansill president of retail and payments, reporting to Wilson.
Adjusted free cash flow before restructuring was $62 million in the quarter, helped by working capital improvements that included cash inflows related to the hardware transition. Restructuring outflows totaled $43 million, including a previously disclosed $24 million one-time litigation payment.
NCR Voyix ended the quarter with $275 million in cash and net leverage of two times. It repurchased about $8 million of common shares during the quarter and completed the sale of its Japan banking business in September, generating $32 million in gross proceeds.
About NCR Voyix (NYSE:VYX)
NCR Voyix Corporation NYSE: VYX is a global technology company that provides software, hardware and services for businesses in the retail, restaurant and financial services industries. Its solutions are designed to help companies manage transactions, customer engagement, payments, inventory and other commerce-related operations across physical and digital channels.
The company's offerings include point-of-sale systems, self-checkout technology, payment solutions, order and fulfillment tools, loyalty programs, digital commerce platforms and related hardware and support services.
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