NCR Voyix Corporation

02/26/2026 | Press release | Distributed by Public on 02/26/2026 06:32

Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (MD&A)
This section should be read in conjunction with the audited Consolidated Financial Statements and related Notes included in Item 8 of Part II of this Report. Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. See "Forward-Looking Statements" and "Risk Factors" in Item 1A of this Annual Report for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements that could cause future results to differ materially from those reflected in this section.
Our discussion within MD&A is organized as follows:
•Overview. This section contains background information on the Company, a summary of significant events and initiatives during the year and an overview of trends that impact or may impact our financial performance in order to provide context for management's discussion and analysis of our financial condition and results of operations.
•Results of operations.This section contains an analysis of our results of operations presented in the accompanying Consolidated Statements of Operations by comparing the results for the year ended December 31, 2025 to the results for the year ended December 31, 2024 as well as a comparison of the results for the year ended December 31, 2024 to the results for the year ended December 31, 2023.
•Liquidity and capital resources.This section provides an analysis of our cash flows and a discussion of our contractual obligations at December 31, 2025.
•Critical accounting estimates. This section contains a discussion of the accounting policies that we believe are important to our financial condition and results of operations and that require judgment and estimates on the part of management in their application. In addition, all of our significant accounting policies, including critical accounting policies, are summarized in Note 1, "Basis of Presentation and Significant Accounting Policies", in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report.
SIGNIFICANT THEMES AND EVENTS
As more fully discussed in later sections of this MD&A, the following were highlights for the year ended December 31, 2025:
•Revenue was $2.7 billion, decreased 5% compared to prior year
◦Recurring revenue increased 3% from the prior year and comprised 62% of total consolidated revenue
◦Software and services revenue, decreased 3% from the prior year and comprised 74% of total consolidated revenue
•Adjusted EBITDA of $425 million, increased 22% compared to prior year
EXECUTIVE OVERVIEW
NCR Voyix is a global platform-powered leader in unified commerce for shopping and dining, empowering our customers to deliver quality experiences to consumers through our cloud-based platform, microservices-based applications and comprehensive service offerings.
Completion of NCR Atleos Spin-Off Transaction
On October 16, 2023, the Company completed the spin-off of its ATM-focused businesses, including our self-service banking, payments & network and telecommunications and technology businesses, into an independent, publicly traded company, NCR Atleos. Accordingly, the historical financial results of NCR Atleos are reflected as discontinued operations in the Company's consolidated financial statements. Refer to Note 2, "Discontinued Operations", in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report, for additional information.
Sale of Digital Banking Business
We completed the sale of our Digital Banking segment businesses (the "Digital Banking Sale") to an affiliate of The Veritas Capital Fund VIII, L.P. (the "Buyer") on September 30, 2024. The purchase price for the Digital Banking Sale was $2.45 billion in cash, subject to a post-closing adjustment, as well as contingent consideration of up to an additional $100 million in cash upon the achievement of a specified return on the Buyer's invested capital at the time of any future sale. The historical financial results of the Digital Banking segment businesses are reflected as discontinued operations in the Company's consolidated financial statements. Refer to Note 2, "Discontinued Operations", in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report, for additional information.
Transition of Hardware Business to ODM Model
In August 2024, the Company announced its entry into a commercial agreement with Ennoconn Corporation ("Ennoconn") to transition its self-checkout and point-of-sale hardware businesses to an outsourced design and manufacturing model including the sale of certain assets relating to these businesses (the "Hardware Business Transition"). Under the terms of the agreement, Ennoconn will design, manufacture, warrant, supply and ship self-checkout and point-of sale hardware directly to the Company's customers, and the Company will sell hardware to its customers as a sales agent for Ennoconn and continue to provide its point-of sale and self-checkout software as well as key support and maintenance services. As a result of the Hardware Business Transition, the Company will record commission revenue from point-of-sale and self-checkout hardware sales as an agent for Ennoconn on a net basis, excluding the costs paid to Ennoconn. In January 2026, we announced the commencement of the implementation phase of this new hardware model and began migrating certain aspects of our hardware business to Ennoconn.
STRATEGIC INITIATIVES
Our strategy is to advance our position as the platform-powered leader in unified commerce for shopping and dining at a time when consumer expectations for seamless, personalized and frictionless experiences continue to rise across both retail and restaurant environments. Today's consumers expect to shop, order, pay and receive service effortlessly, whether online, in store, curbside or through mobile channels. They increasingly favor brands that deliver speed, consistency and convenience at every interaction. These heightened expectations have placed pressure on retailers and restaurants to modernize their operations and adopt technologies that can support real-time engagement and continuous innovation across digital and physical touchpoints. Guided by our mission to make the consumer experience seamless, we focus on delivering integrated, scalable solutions that enable restaurants and retailers to differentiate their brands and operate more efficiently in a rapidly evolving commerce landscape. By combining hardware, software, services and payments into a unified suite of offerings, we can deliver to customers an end-to-end value proposition that is difficult to match. As the adoption of our platform and solutions accelerates, we expect to strengthen customer relationships, enhance recurring revenue streams and broaden monetization opportunities across our Voyix Commerce Platform. To achieve our goals, we are focused on: (i) delivering a modern suite of SaaS solutions, (ii) expanding adoption of our integrated payment solutions, (iii) scaling our differentiated services offerings and (iv) investing in innovation to further expand our platform capabilities.
Ongoing Business Trends
Retail and Restaurants
Within the retail and restaurant industries, businesses around the world are under constant pressure to meet consumer demands for speed, convenience, personalization and security. These companies, in turn, are requiring their technology providers to rapidly enhance and expand their capabilities to meet ever-increasing consumer requirements. As a result, competition in these industries continues to intensify. Today, software and payment companies, in particular, are focused on investing in technology, expanding their use of data and automation and utilizing cutting-edge tools to meet these rising demands.
NCR Voyix serves customers of all sizes, from small- and medium-sized companies to large, blue-chip enterprises, representing some of the world's leading consumer brands. Many retailers and restaurants are facing challenges to distinguish themselves from their competitors, sparking attempts at differentiation through personalized and seamless consumer experiences to win in their respective markets. Creating differentiated experiences for consumers requires companies to perform advanced data analytics and use other technologies to determine how to best tailor experiences to meet demand and deploy changes rapidly.
We recently introduced our modernized suite of microservices-based applications, natively integrated with our proprietary, cloud-based platform. Within this suite of SaaS applications, we now deliver our next-generation point-of-sale and self-checkout solutions for retail and restaurant customers, which are vital to collect a wide variety of important data points, including, among others, transactional, consumer, inventory, pricing and promotional. We expect to continue to transition customers from legacy solutions to
these modernized SaaS applications and other innovative offerings, and we believe that this transition will benefit customers by providing end-to-end capabilities, driving value for our customers' businesses and for consumers.
Our current offerings largely consist of SaaS solutions and related services that are purpose-built to deliver unified commerce capabilities to the shopping and dining industries, which marks a shift in business model from our historical, hardware-driven model. We made this strategic change to our business model in order to deliver solutions to retail and restaurant customers that enable them to provide high-quality consumer experiences, while positioning us to innovate quickly and drive long-term growth opportunities.
Macroeconomic Trends
Global Trade and Macroeconomic Environment
The U.S. and other global markets currently are experiencing increased volatility due to the effects of, among other things, recent changes in imposed or threatened tariffs and other trade policy changes by the U.S. and other countries, escalating geopolitical and civil conflict, including, but not limited to, Eastern Europe and the Middle East, inflationary pressures, such as increasing prices for goods and services, changing fiscal and/or monetary policies in the U.S. and elsewhere, and fluctuating currency exchange rates, elevated unemployment rates, global shortages of microchips and and other technology components, primarily driven by the adoption of artificial intelligence, and, in some locations around the world, decreased economic conditions that indicate the potential for near-term recessions or slowdowns.
Given our geographic presence and the multinational composition of our customer base, our business and financial performance could be impacted by the evolving global economic landscape. We are subject to a variety of risks posed by the current macroeconomic environment, and we are continuously monitoring the direct and indirect impacts of these circumstances. U.S. foreign trade policy continues to evolve under the current presidential administration, including the recent announcement of a number of new tariffs in the wake of the U.S. Supreme Court's February 2026 decision to uphold a ruling that invalidated certain tariffs previously imposed. It is currently unknown if these tariffs will remain in place, be expanded or be removed, and we do not know whether foreign countries will adopt retaliatory trade policies in response to these new tariffs. As a result of these developments, we do not know the full extent of the impact of the recently invalidated tariffs or of the new tariffs recently imposed, and there is much uncertainty surrounding the long-term effects that they will have on economic conditions within the U.S. and elsewhere.
As a result of these uncertainties, we may be impacted in the future within the markets in which we operate; however, we have taken steps to mitigate part of the impact of these tariffs and are currently analyzing opportunities to further address the impact of these tariffs. Economic pressures on retail and restaurant businesses and on consumers could negatively affect our revenue and profitability in future periods. The current trade policy environment is expected to continue to evolve, but we cannot forecast the impact that these or other changes will have on our business and financial performance.
Recent U.S. Legislation
On July 4, 2025, Public Law 119-21, commonly referred to as the One Big Beautiful Bill Act ("OBBBA"), was enacted in the U.S., which included significant changes to the federal income tax system. There were no material impacts on our consolidated financial statements for the year ended December 31, 2025 resulting from the enactment of the OBBBA. We will continue to evaluate the full impact of these legislative changes as more guidance becomes available.
As we continue to execute on our strategy to shift to recurring revenue, our revenues and earnings will become more predictable; however, the broader implications of these macroeconomic events on our business, results of operations and overall financial position, particularly in the short term, remain uncertain.
For further discussion of trends, uncertainties and other factors that could affect our operating results, see the section entitled "Risk Factors" in Part I, Item 1A of this Form 10-K. For further information on exposures to foreign exchange risk, refer to Item 7A, "Quantitative and Qualitative Disclosures about Market Risk", in this Report.
Revision
During the third quarter of 2025, the Company identified errors in previously issued financial statements related to the historical pre-Spin-Off operations of NCR Atleos that impact their revenue and certain expense items which were reported as Income (loss) from discontinued operations. The Company evaluated the impact of these errors and concluded that they were immaterial to all
previously issued financial statements, individually and in the aggregate. However, the Company is revising the previously issued financial statements to correct these errors, as well as certain previously identified out-of-period adjustments related to the Spin-Off, into the appropriate period (fiscal 2023). The correction of these items resulted in a decrease to previously reported net income (loss) from discontinued operations, net of tax, of $5 million and $6 million for the years ended December 31, 2023 and 2022, respectively. The correction also resulted in a $0.04 and $0.04 per share decrease to previously reported basic and diluted earnings per share from discontinued operations for 2023 and 2022, respectively, with the same impact to total net income per share. The net impact of this revision decreases the opening balance of retained earnings (deficit) by $8 million at December 31, 2022 as compared to what was previously reported. The net impact of this revision increases retained earnings (deficit) by $12 million and increases accumulated other comprehensive income (loss) by $10 million at December 31, 2023 as compared to what was previously reported. The impact of the revision did not affect the Company's reported balances of continuing operations or cash flows for any reporting period.
Out-of-period Adjustments
In the first quarter of 2023, the Company recorded a $10 million out-of-period adjustment to increase operating expenses and increase an employee-related liability in order to correct for an understatement of such same balances during the fourth quarter of 2022.
In the second quarter of 2024, the Company recorded an out-of-period adjustment to decrease revenue by $10 million, decrease accounts receivable by $5 million, and increase contract liabilities by $5 million. The amount related to periods prior to 2024 was $4 million of revenue.
During the third quarter of 2024, the Company recorded an out-of-period adjustment related to foreign currency to increase other expense, net, by approximately $8 million, increase other current liabilities by approximately $4 million and increase accumulated other comprehensive income (loss) by approximately $4 million. The amount related to 2023 was $2 million of other expense, net.
The Company evaluated the impact of the out-of-period adjustments and concluded they are not material to the consolidated financial statements for any of the periods presented.
ACH Disbursements
In February 2024, the Company identified fraudulent automated clearing house "ACH" disbursements from a Company bank account. The cumulative amount of these disbursements totaled $34 million, and we recovered $16 million related to this matter. The Company is pursuing insurance recoveries in connection with this matter; however, there can be no assurance that the Company will be successful in recovering additional amounts of the unauthorized ACH disbursements from the Company's insurance providers.
For further information on potential risks and uncertainties see Part I, Item 1A "Risk Factors" and Part II, Item 9A "Controls and Procedures" of this Annual Report.
Cyber Ransomware Incident
As previously disclosed, in April 2023 the Company determined that a single data center outage impacting certain of its commerce customers was caused by a cyber ransomware incident. Following investigation, the Company concluded that the incident impacted operations for customers only with respect to specific Aloha cloud-based services and Counterpoint. Functionality was fully restored to all impacted customers, and we built a new cloud environment to host the affected applications.
As of December 31, 2025, the Company has incurred a cumulative $47 million of expenses related to the cyber ransomware incident and has recovered $37 million under our insurance policies.
For further information see Item 1C "Cybersecurity" of this Form 10-K.
RESULTS OF OPERATIONS
The following results of operations present the continuing operations of NCR Voyix for the years ended December 31, 2025, 2024 and 2023. All results from Digital Banking and NCR Atleos are presented within income (loss) from discontinued operations for these periods.
Key Strategic Financial Metrics
The following tables show our key strategic financial metrics for the years ended December 31, 2025, 2024 and 2023, the relative percentage that those amounts represent to total revenue, and the change in those amounts year-over-year.
Recurring revenue as a percentage of total revenue
Percentage of Total Revenue Increase (Decrease)
In millions 2025 2024 2023 2025 2024 2023 2025 v 2024 2024 v 2023
Recurring revenue(1)
$ 1,676 $ 1,629 $ 1,612 62.4 % 57.8 % 50.9 % 3 % 1 %
All other revenue 1,011 1,189 1,554 37.6 % 42.2 % 49.1 % (15) % (23) %
Total Revenue $ 2,687 $ 2,818 $ 3,166 100.0 % 100.0 % 100.0 % (5) % (11) %
(1) Recurring revenue includes all revenue streams from contracts where there is a predictable revenue pattern that will occur at regular intervals with a relatively high degree of certainty. This includes hardware and software maintenance revenue, SaaS solutions revenue, payment processing revenue, and certain professional services arrangements as well as term-based software license arrangements that include customer termination rights.
Revenue by type
Percentage of Total Revenue Increase (Decrease)
In millions 2025 2024 2023 2025 2024 2023 2025 v 2024 2024 v 2023
Software and services revenue $ 1,986 $ 2,049 $ 2,108 73.9 % 72.7 % 66.6 % (3) % (3) %
Hardware revenue 701 769 1,058 26.1 % 27.3 % 33.4 % (9) % (27) %
Total Revenue $ 2,687 $ 2,818 $ 3,166 100.0 % 100.0 % 100.0 % (5) % (11) %
Revenue by geography
In millions 2025 % 2024 % 2023 %
Revenue by Geographic Area
United States
$ 1,641 61 % $ 1,706 61 % $ 2,056 65 %
Americas (excluding United States)
188 7 % 239 8 % 230 7 %
Europe, Middle East and Africa
587 22 % 566 20 % 531 17 %
Asia Pacific
271 10 % 307 11 % 349 11 %
Total revenue $ 2,687 100 % $ 2,818 100 % $ 3,166 100 %
Net income (loss) from continuing operations attributable to NCR Voyix and Adjusted EBITDA(2) as a percentage of total revenue
Percentage of Total Revenue Increase (Decrease)
In millions 2025 2024 2023 2025 2024 2023 2025 v 2024 2024 v 2023
Net income (loss) from continuing operations attributable to NCR Voyix $ 42 $ (201) $ (733) 1.6 % (7.1) % (23.2) % n/m n/m
Adjusted EBITDA(2)
$ 425 $ 348 $ 333 15.8 % 12.3 % 10.5 % 22 % 5 %
(2) Refer to our definition of Adjusted EBITDA in the section entitled "Non-GAAP Financial Measures and Use of Certain Terms" below.
Non-GAAP Financial Measures and Use of Certain Terms:
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") Our management uses the non-GAAP measure Adjusted EBITDA because it provides useful information to investors as an indicator of strength and performance of the Company's ongoing business operations, including funding discretionary spending such as capital expenditures, strategic acquisitions, and other investments. We determine Adjusted EBITDA based on GAAP net income (loss) from continuing operations attributable to NCR Voyix plus interest expense, net; plus income tax expense (benefit); plus depreciation and amortization (excluding acquisition-related amortization of intangibles); plus stock-based compensation expense; plus pension mark-to-market adjustments and other special items, including amortization of acquisition-related intangibles, acquisition-related costs, loss (gain) on disposal of businesses, loss (gain) on extinguishment of debt, separation-related costs, cyber ransomware incident recovery costs net of insurance recoveries, fraudulent ACH disbursements costs net of recoveries, foreign currency devaluation, transformation and restructuring charges (which includes integration, severance and other exit and disposal costs), strategic initiative costs and litigation costs, among others. The special items are considered non-operational or non-recurring in nature, so are excluded from the Adjusted EBITDA metric utilized by our chief operating decision maker in evaluating segment performance and are separately delineated to reconcile back to total reported income (loss) from continuing operations attributable to NCR Voyix. This format is useful to investors because it allows analysis and comparability of operating trends. It also includes the same information that is used by our management to make decisions regarding the segments and to assess our financial performance. Refer to the table below for the reconciliations of net income (loss) from continuing operations attributable to NCR Voyix (GAAP) to Adjusted EBITDA (non-GAAP).
Our definitions and calculations of these non-GAAP measures may differ from similarly-titled measures reported by other companies and cannot, therefore, be compared with similarly-titled measures of other companies. These non-GAAP measures should not be considered as substitutes for, or superior to, results determined in accordance with GAAP.
In millions 2025 2024 2023
Net income (loss) from continuing operations attributable to NCR Voyix (GAAP) $ 42 $ (201) $ (733)
Pension mark-to-market adjustments (13) (12) 7
Depreciation and amortization 199 206 190
Acquisition-related amortization of intangibles 25 28 41
Interest expense(1)
60 134 294
Interest income (8) (9) (12)
Acquisition-related costs(2)
- - 1
Loss (gain) on debt extinguishment - (8) 46
Income tax expense (benefit) (73) 4 184
Stock-based compensation expense 34 40 140
Transformation and restructuring costs(3)
124 125 28
Separation costs(4)
- 10 95
Loss (gain) on disposal of businesses (3) (14) 12
Foreign currency devaluation(5)
- 15 -
Fraudulent ACH disbursements(6)
- (5) 23
Cyber ransomware incident recovery costs(7)
- (13) 17
Strategic initiatives(8)
16 48 -
Litigation costs(9)
22 - -
Adjusted EBITDA (Non-GAAP) $ 425 $ 348 $ 333
(1)During the three months ended September 30, 2023, it was determined that the transactions underlying the unrealized gains on terminated interest rate swap and cap agreements reported in Accumulated other comprehensive income were probable of not occurring under ASC 815, Derivatives and Hedging. As such, $18 million of unrealized gains were recognized in Interest expense. Refer to Note 15, "Derivatives and Hedging Instruments" in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report.
(2) Represents professional fees, retention bonuses, and other costs incurred related to acquisitions, which are considered non-operational in nature.
(3) Represents integration, severance, and other exit and disposal costs, which are considered non-operational in nature. Included in transformation and restructuring costs for the year ended December 31, 2025 was a gain of $10 million related to the sale of property, plant and equipment.
(4) Represents costs incurred as a result of the Spin-Off. Professional fees to effect the Spin-Off including separation management, organizational design, and legal fees have been classified within discontinued operations through October 16, 2023, the separation date.
(5) Represents gains and losses recognized during the year due to changes in valuation of the Lebanese pound and the Egyptian pound.
(6) Represents company identified fraudulent ACH disbursements from a company bank account. Additional details regarding this item are discussed in Note 1, "Basis of Presentation and Significant Accounting Policies" in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report.
(7)Represents expenses to respond to, remediate and investigate the April 13, 2023 cyber ransomware incident, net of insurance recoveries, which is considered a nonrecurring special item. Additional details regarding this cyber ransomware incident are discussed in Note 1, "Basis of Presentation and Significant Accounting Policies" in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report.
(8) Represents professional fees related to strategic initiatives which are considered non-operational in nature, as well as certain costs incurred related to the Hardware Business transition.
(9) Represents costs related to a certain litigation matter, net of expected indemnity recoveries from NCR Atleos, as discussed in Note 11, "Commitments and Contingencies" in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report.
Other Performance Metrics
Adjusted free cash flow-unrestricted NCR Voyix management uses the non-GAAP measure called "adjusted free cash flow-unrestricted" to assess the financial performance of the Company. We define adjusted free cash flow-unrestricted as net cash provided by (used in) operating activities less capital expenditures for property, plant and equipment and capitalized software, plus/minus collections of previously sold trade receivables purchased from third parties, restricted cash settlement activity, cash activity related to acceleration projects, cash taxes paid for the Digital Banking Sale, cash activity related to environmental discontinued operations plus acquisition-related items, and pension contributions and settlements.
We believe adjusted free cash flow-unrestricted information is useful for investors because it relates the operating cash flows from the Company's operations to the capital that is spent to continue and improve business operations. In particular, adjusted free cash flow-unrestricted indicates the amount of cash available after capital expenditures for, among other things, investments in the Company's existing businesses, strategic acquisitions and repayment of debt obligations. Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures, since there may be other non-discretionary expenditures that are not deducted from the measure. Adjusted free cash flow-unrestricted does not have a uniform definition under GAAP, and therefore the Company's definition may differ from other companies' definitions of this measure. These non-GAAP measures should not be considered a substitute for, or superior to, cash flows from operating activities under GAAP.
Refer to the section titled "Financial Condition, Liquidity and Capital Resources" in Part I, Item 7 of this Form 10-K for additional information.
Annualized Recurring Revenue ("ARR") ARR is calculated using recurring revenue, excluding software licenses sold as a subscription, for the last three months times four, plus the rolling four quarters for term-based software license arrangements that include customer termination rights. The Company believes this metric may be useful to investors in evaluating the achievement of strategic goals related to the conversion of the retail and restaurant businesses to recurring revenue streams over time. ARR is an operating metric and does not necessarily reflect the pattern of revenue recognition in accordance with GAAP and should not be considered a substitute for GAAP revenue. ARR does not have a uniform definition and, therefore, the Company's definitions may differ from other companies' definitions of this measure.
In millions
2025 2024 2025 v 2024
Retail
Annualized recurring revenue $ 1,119 $ 1,078 4 %
Restaurants(1)
Annualized recurring revenue $ 559 $ 562 (1) %
(1)Annualized recurring revenue for 2024 includes a $6 million impact to revenue related to a divested non-strategic business.
Consolidated Results
The following table shows our results for the years December 31, 2025, 2024 and 2023, the relative percentage that those amounts represent to revenue, and the change in those amounts year-over-year.
Percentage of Revenue(1)
Increase (Decrease)
In millions 2025 2024 2023 2025 2024 2023 2025 v 2024 2024 v 2023
Product revenue $ 774 $ 867 $ 1,163 28.8 % 30.8 % 36.7 % (11) % (25) %
Service revenue 1,913 1,951 2,003 71.2 % 69.2 % 63.3 % (2) % (3) %
Total revenue 2,687 2,818 3,166 100.0 % 100.0 % 100.0 % (5) % (11) %
Product gross margin 88 100 117 11.4 % 11.5 % 10.1 % (12) % (15) %
Service gross margin 546 477 546 28.5 % 24.4 % 27.3 % 14 % (13) %
Total gross margin 634 577 663 23.6 % 20.5 % 20.9 % 10 % (13) %
Selling, general and administrative expenses 453 458 658 16.9 % 16.3 % 20.8 % (1) % (30) %
Research and development expenses 155 157 139 5.8 % 5.6 % 4.4 % (1) % 13 %
Income (loss) from operations $ 26 $ (38) $ (134) 1.0 % (1.3) % (4.2) % (168) % (72) %
(1)The percentage of revenue is calculated for each line item divided by total revenue, except for product gross margin, service gross margin and total gross margin, which are divided by the related component of revenue.
Revenue
Percentage of Total Revenue Increase (Decrease)
In millions 2025 2024 2023 2025 2024 2023 2025 v 2024 2024 v 2023
Product revenue $ 774 $ 867 $ 1,163 28.8 % 30.8 % 36.7 % (11) % (25) %
Service revenue 1,913 1,951 2,003 71.2 % 69.2 % 63.3 % (2) % (3) %
Total revenue $ 2,687 $ 2,818 $ 3,166 100.0 % 100.0 % 100.0 % (5) % (11) %
Product revenue includes our hardware and software license revenue streams. Service revenue includes SaaS solutions, software maintenance, professional services, installation services, payment processing and hardware maintenance.
Total revenue decreased 5% for the year ended December 31, 2025 compared to the year ended December 31, 2024. Product revenue decreased 11% due to a decline in hardware revenues, as well as a decrease in software license revenue for one-time revenue recognized in 2024. Service revenue decreased 2% due to a decrease in one-time installation services revenue, professional services revenue and SaaS solutions revenue, offset by an increase in payment processing revenue and hardware maintenance revenue as compared to the prior year.
Total revenue decreased 11% for the year ended December 31, 2024 compared to the year ended December 31, 2023. Product revenue decreased 25% due to a decline in hardware revenues, as well as a decrease in software license revenue for one-time revenue recognized in 2023. Service revenue decreased 3% comparing the year ended 2024 to 2023 due to a decrease in payment processing service revenue due to the divestiture at the end of 2023. The decline in service revenue was also related to revenue from non-recurring installation services in 2023, slightly offset by an increase in hardware maintenance and professional services revenue.
Gross Margin
Percentage of Revenue(1)
Increase (Decrease)
In millions 2025 2024 2023 2025 2024 2023 2025 v 2024 2024 v 2023
Product gross margin $ 88 $ 100 $ 117 11.4 % 11.5 % 10.1 % (12) % (15) %
Service gross margin 546 477 546 28.5 % 24.4 % 27.3 % 14 % (13) %
Total gross margin $ 634 $ 577 $ 663 23.6 % 20.5 % 20.9 % 10 % (13) %
(1) The percentage of revenue is calculated for each line item divided by the related component of revenue.
Gross margin as a percentage of revenue was 23.6% in 2025compared to 20.5% in 2024. The overall increase in gross margin as a percentage of revenue was driven by an increase in service gross margin, mainly stemming from improved margins for SaaS solutions, professional services, software maintenance and payment processing revenue compared to the prior year. These improvements in service gross margin were primarily due to the cost reduction initiatives implemented by the Company beginning in 2024, as well as a reduction in transformation and restructuring and strategic initiatives costs as compared to the prior year. Included in gross margin for the year ended December 31, 2025 was $18 million related to transformation and restructuring costs, $6 million of strategic initiative costs, $4 million of stock-based compensation expense and $12 million related to amortization of acquisition-related intangible assets. Gross margin for the year ended December 31, 2024 included $46 million related to transformation and restructuring costs, $20 million of strategic initiative costs, $10 million of stock-based compensation expense and $14 million related to amortization of acquisition-related intangible assets, offset by $5 million of net recoveries related to the cyber ransomware incident.
Gross margin as a percentage of revenue was 20.5% in 2024 compared to 20.9% in 2023 due to a decline in gross margin related to payment processing revenue from the divestiture at the end of 2023, as well as one-time software license revenue and non-recurring installation service revenue recognized in 2023. Additionally, gross margin for the year ended December 31, 2024 included $46 million related to transformation and restructuring costs, $20 million of strategic initiative costs, $10 million of stock-based compensation expense and $14 million related to amortization of acquisition-related intangible assets, offset by $5 million of net recoveries related to the cyber ransomware incident. Gross margin for the year ended December 31, 2023 included $4 million related to transformation and restructuring costs, $15 million of stock-based compensation expense, $33 million related to amortization of acquisition-related intangible assets, $31 million in separation-related costs and $16 million in cyber ransomware recovery costs.
Selling, General and Administrative Expenses
Percentage of Total Revenue Increase (Decrease)
In millions
2025 2024 2023 2025 2024 2023 2025 v 2024 2024 v 2023
Selling, general and administrative expenses $ 453 $ 458 $ 658 16.9 % 16.3 % 20.8 % (1) % (30) %
Selling, general, and administrative expenses were $453 million in 2025 as compared to $458 million in 2024. As a percentage of revenue, selling, general and administrative expenses were 16.9% in 2025 and 16.3% in 2024. The overall decrease in selling, general and administrative expenses in 2025 is due to the Company's cost reduction initiative implemented beginning in 2024, as well as the impact of the now terminated transition services agreement related to the Digital Banking Sale. Additionally, in 2025, selling, general and administrative expenses included $96 million of transformation and restructuring costs, $10 million of strategic initiative costs, $25 million of stock-based compensation expense and $13 million of acquisition-related amortization of intangibles. In 2024, selling, general and administrative expenses included $55 million of transformation and restructuring costs, $26 million related to strategic initiative costs, $20 million of stock-based compensation expense, $14 million of acquisition-related amortization of intangibles and $8 million in separation-related costs, offset by $5 million in net recoveries related to the fraudulent ACH matter and $8 million of net recoveries related to the cyber ransomware incident.
Selling, general, and administrative expenses were $458 million in 2024, compared to $658 million in 2023. As a percentage of revenue, selling, general and administrative expenses were 16.3% in 2024 compared to 20.8% in 2023. In 2024, selling, general and administrative expenses included $55 million of transformation and restructuring costs, $26 million related to strategic initiative costs, $20 million of stock-based compensation expense, $14 million of acquisition-related amortization of intangibles and $8 million in separation-related costs, offset by $5 million in net recoveries related to the fraudulent ACH matter and $8 million of net recoveries related to the cyber ransomware incident. In 2023, selling, general and administrative expenses included $21 million of transformation and restructuring costs, $23 million in fraudulent ACH disbursement costs, $113 million of stock-based compensation expense, $8 million of acquisition-related amortization of intangibles, $1 million of acquisition-related costs, $54 million in separation-related costs and $2 million of costs related to the divestitures of certain non-strategic businesses. Excluding these items, selling, general and administrative expenses decreased from 2023 to 2024 due to cost mitigation actions implemented, including a reduction in employee-related costs.
Research and Development Expenses
Percentage of Total Revenue Increase (Decrease)
In millions
2025 2024 2023 2025 2024 2023 2025 v 2024 2024 v 2023
Research and development expenses $ 155 $ 157 $ 139 5.8 % 5.6 % 4.4 % (1) % 13 %
Research and development expenses were $155 million in 2025, compared to $157 million in 2024. As a percentage of revenue, these costs were 5.8% in 2025 and 5.6% in 2024. The overall decrease in research and development expenses in 2025 is due to the Company's cost reduction initiative implemented beginning in 2024. Additionally, in 2025, research and development expenses included $13 million of costs related to our transformation and restructuring initiatives and $5 million of stock-based compensation expense. In 2024, research and development expenses included $7 million of transformation and restructuring costs, $10 million of stock-based compensation expense and $3 million of separation-related costs.
Research and development expenses were $157 million in 2024, compared to $139 million in 2023. As a percentage of revenue, these costs were 5.6% in 2024 compared to 4.4% in 2023. In 2024, research and development expenses included $7 million of transformation and restructuring costs, $10 million of stock-based compensation expense and $3 million of separation-related costs. In 2023, research and development expenses included $3 million of costs related to our transformation and restructuring initiatives, $7 million of separation-related costs, $12 million of stock-based compensation expense and $1 million in cyber ransomware recovery costs. Excluding these items, research and development expenses increased from 2023 to 2024 as the Company continues to invest in research and development activities related to our platform.
Gain (loss) on Extinguishment of Debt
Increase (Decrease)
In millions
2025 2024 2023 2025 v 2024 2024 v 2023
Gain (loss) on extinguishment of debt $ - 8 (46) (100) % n/m
The gain on extinguishment of debt of $8 million in 2024 is related to the redemption discount on the 5.250% senior notes due 2030 and the 5.125% senior notes due 2029 of $18 million, offset by the write-off of the related deferred financing fees of $10 million.
The loss on extinguishment of debt was $46 million in 2023 related to the premium paid for early redemption of $24 million of the 5.750% senior notes due 2027 and the 6.125% senior notes due 2029, as well as the write-off of deferred financing fees of $22 million related to the senior unsecured notes and the senior secured credit facilities.
Refer to Note 6, "Debt Obligations" of the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for additional discussion on the financing transactions.
Interest Expense
Increase (Decrease)
In millions
2025 2024 2023 2025 v 2024 2024 v 2023
Interest expense $ (60) $ (134) $ (294) (55) % (54) %
Interest expense was $60 million in 2025 compared to $134 million in 2024 and $294 million in 2023. Interest expense is primarily related to our senior unsecured notes and borrowings under the senior secured credit facilities. The decrease in interest expense each year was due to the decrease in total debt outstanding.
Other Income (Expense), net
Other income (expense), net was income of $3 million in 2025, expense of $33 million in 2024 and expense of $75 million in 2023, with the components reflected in the following table:
In millions 2025 2024 2023
Interest income $ 8 $ 9 $ 12
Foreign currency fluctuations and foreign exchange contracts (3) (27) (27)
Bank-related fees (4) (24) (28)
Employee benefit plans 8 9 (8)
Other, net (6) - (24)
Other income (expense), net $ 3 $ (33) $ (75)
Foreign currency fluctuations and foreign exchange contracts within Other income (expense), net, includes a net loss of $15 million due to the impact of changes in the Lebanese pound and the Egyptian pound during 2024. As of March 31, 2024, the operations of Lebanon and Egypt have transferred to NCR Atleos; however, the Company retained certain assets and liabilities under the separation and disclosure agreement which were impacted by the changes in foreign currency fluctuations.
In 2025, the Company incurred bank-related fees of $4 million compared to $24 million and $28 million in 2024 and 2023, respectively. The decrease in bank-related fees from 2023 to 2024 and 2024 to 2025 is related to the termination of the trade receivables facility during the third quarter of 2024.
Employee benefit plans within other income (expense) net includes the components of pension, postemployment expense, other than service cost, as well as actuarial gains and losses from the annual pension mark-to-market adjustment. In 2025, there was an actuarial gain of $13 million compared to an actuarial gain of $12 million in 2024. The net actuarial gains in 2025 and 2024 were primarily due to plan experience gains as well as increases in discount rates and favorable returns on plan assets. The actuarial loss in 2023 was $7 million primarily due to plan experience losses as well as a decrease in discount rates, partially offset by favorable returns on plan asset.
Included in Other, net for 2025 are expenses of $22 million for a certain litigation matter, net of expected indemnity recovery from NCR Atleos. Refer to Note 11, "Commitments and Contingencies" of the Notes to Consolidated Financial Statements for additional information. Additionally, included within Other, net for 2025 is a $10 million gain on the sale of property, plant and equipment and a $3 million gain on the sale of a non-strategic business during the year.
In 2023, Other, net includes a $9 million loss recognized on the divestitures of certain non-strategic businesses.
Income Taxes
Increase (Decrease)
In millions
2025 2024 2023 2025 v 2024 2024 v 2023
Income tax expense (benefit) $ (73) $ 4 $ 184 n/m (98) %
Our effective tax rate was 235% in 2025, (2)% in 2024, and (34)% in 2023. During 2025, our tax rate was impacted by a $66 million benefit due to entity restructuring activities. During 2024, our tax rate was impacted by a $57 million expense from recording a valuation allowance against deferred tax assets. During 2023, our tax rate was impacted by a net $226 million expense related to the Spin-Off of NCR Atleos. Also during 2023, our tax rate was impacted by a $31 million expense from recording a valuation allowance against deferred tax assets and a $17 million expense from nondeductible executive compensation.
While we are subject to numerous federal, state and foreign tax audits, we believe that appropriate reserves exist for issues that might arise from these audits. Should these audits be settled, the resulting tax effect could impact the tax provision and cash flows in future periods. During 2026, the Company expects to resolve certain tax matters related to U.S. and foreign jurisdictions. These resolutions could have a material impact on the effective tax rate in 2026.
We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical
taxable income/loss, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies.
Income (Loss) from Discontinued Operations, net of tax
Increase (Decrease)
In millions
2025 2024 2023 2025 v 2024 2024 v 2023
Income (loss) from discontinued operations, net of tax $ 20 $ 1,158 $ 305 (98) % 280 %
In 2025, the income from discontinued operations was $20 million, net of tax, of which $6 million related to income from discontinued operations, net of tax, for the Digital Banking Sale, $6 million income from discontinued operations, net of tax related to NCR Atleos and income from discontinued operations, net of tax, of $8 million related to the Company's environmental remediation matters.
In 2024, the income from discontinued operations was $1,158 million, net of tax, of which $1,178 million related to income from discontinued operations, net of tax, for the Digital Banking Sale, $10 million related to a loss from discontinued operations, net of tax, related to NCR Atleos and a loss from discontinued operations, net of tax, of $10 million related to the Company's environmental remediation matters.
In 2023, the income from discontinued operations was $305 million, net of tax, of which $115 million related to income from discontinued operations, net of tax, for the Digital Banking Sale, $240 million related to income from discontinued operations, net of tax, related to NCR Atleos and a loss from discontinued operations, net of tax, of $50 million related to the Company's environmental remediation matters.
Refer to Note 2, "Discontinued Operations" of the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for additional information.
Revenue and Adjusted EBITDA by Segment
The Company manages and reports its businesses in the following segments: Retail and Restaurants. Segments are measured for profitability by the Company's chief operating decision maker based on revenue and segment Adjusted EBITDA. Refer to the section above entitled "Non-GAAP Financial Measures and Use of Certain Terms" for our definition of Adjusted EBITDA and the reconciliation of net income (loss) from continuing operations attributable to NCR Voyix (GAAP) to Adjusted EBITDA (non-GAAP).
Corporate and Other includes income and expenses related to corporate functions that are not specifically attributable to any of our two individual reportable segments along with certain non-strategic businesses that are considered immaterial operating segment(s) and commercial agreements with NCR Atleos.
The following table shows our segment revenue and Adjusted EBITDA for the years ended December 31, the relative percentage that those amounts represent to revenue and the change in those amounts year-over-year.
Percentage of Revenue(1)
Increase (Decrease)
In millions 2025 2024 2023 2025 2024 2023 2025 v 2024 2024 v 2023
Revenue
Retail $ 1,842 $ 1,956 $ 2,177 68.6 % 69.4 % 68.8 % (6) % (10) %
Restaurants 818 825 886 30.4 % 29.3 % 28.0 % (1) % (7) %
Total Segment Revenue 2,660 2,781 3,063 99.0 % 98.7 % 96.8 % (4) % (9) %
Other 27 37 103 1.0 % 1.3 % 3.2 % (27) % (64) %
Total Revenue $ 2,687 $ 2,818 $ 3,166 100.0 % 100.0 % 100.0 % (5) % (11) %
Adjusted EBITDA by segment
Retail $ 350 $ 383 $ 411 19.0 % 19.6 % 18.9 % (9) % (7) %
Restaurants $ 267 $ 251 $ 197 32.6 % 30.4 % 22.2 % 6 % 27 %
(1)The percentage of revenue is calculated for each line item divided by total revenue, except for Adjusted EBITDA, which are divided by the related component of revenue.
Segment Revenue
For the year ended December 31, 2025 compared to the year ended December 31, 2024
Retail revenue decreased 6% for the year ended December 31, 2025 compared to the prior year period. The decrease in revenue is mainly related to a decrease in hardware revenue and software license revenue, as well as a decrease in installation services revenue and professional services revenue for one-time revenues recognized in the prior year. These decreases are partially offset by an increase in hardware maintenance and software maintenance revenue as compared to the prior year. Retail recurring revenue increased 4% in 2025 as compared to 2024.
Restaurants revenue decreased 1% for the year ended December 31, 2025 compared to the prior year period driven by a decrease in installation revenue, SaaS solutions revenue, software maintenance revenue, professional services revenue and software license revenue, mainly related to one-time non-recurring revenue recognized in the prior year. These decreases in revenue are partially offset by an increase in payment processing revenue, hardware revenue and hardware maintenance revenue as compared to the prior year. Restaurants recurring revenue increased 2% in 2025 as compared to 2024.
For the operations grouped as Other, revenue decreased 27% for the year ended December 31, 2025 compared to the prior year period due to declines in revenue related to the commercial agreements with NCR Atleos in 2025.
For the year ended December 31, 2024compared to the year ended December 31, 2023
A comparison of the results of operations for 2024 versus that of 2023 was included in our Annual Report on Form 10-K for the year ended December 31, 2024.
Segment Adjusted EBITDA
For the year ended December 31, 2025compared to the year ended December 31, 2024
Retail Adjusted EBITDA decreased 9% for the year ended December 31, 2025 compared to the prior year period due to lower one-time software and services revenue in the current year as well as increased labor costs year over year.
Restaurants Adjusted EBITDA increased 6% for the year ended December 31, 2025 compared to the prior year period due to favorable software and services revenue mix, as well as cost mitigation actions implemented beginning in 2024.
For the year ended December 31, 2024compared to the year ended December 31, 2023
A comparison of the Segment Adjusted EBITDA results for 2024 versus that of 2023 was included in our Annual Report on Form 10-K for the year ended December 31, 2024.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
General Our primary liquidity needs in the ordinary course of business are: (i) normal operating expenses; (ii) interest and principal requirements of our outstanding indebtedness; (iii) capital expenditures and lease payments; (iv) remediation payments related to environmental matters; (v) pension and postemployment plan contributions; and (vi) transformation and restructuring initiatives. We believe these needs will be satisfied in both the short and long term based on our current cash position, cash flows generated by our operations and existing financing arrangements.
As of December 31, 2025, our cash and cash equivalents totaled $231 million and our total debt was $1.1 billion. Our borrowing capacity under our senior secured credit facilities was $476 million at December 31, 2025. Our ability to generate positive cash flows from operations is dependent on general economic conditions and the competitive environment in our industry, and is subject to the business and other risk factors described in Item 1A of Part I of this Report. If we are unable to generate sufficient cash flows from operations, or otherwise comply with the terms of our credit facilities, we may be required to seek additional financing alternatives.
The following table summarizes our cash flows from operating activities, investing activities and financing activities. The Consolidated Statements of Cash Flows include the results of continuing and discontinued operations.
For the year ended December 31
In millions 2025 2024 2023
Net cash provided by (used in) operating activities $ (210) $ (132) $ 694
Net cash provided by (used in) investing activities (134) 2,189 (290)
Net cash provided by (used in) financing activities (175) (1,560) (839)
Operating Activities Cash used in operating activities was $210 million for the year ended December 31, 2025 compared to cash used in operating activities of $132 million for the year ended December 31, 2024. The increase in cash used in operating activities was driven by the payment of taxes related to the Digital Banking Sale of $284 million, as well as movement in the net working capital accounts.
Cash used in operating activities was $132 million for the year ended December 31, 2024 compared to cash provided by operating activities of $694 million for the year ended December 31, 2023. The increase in cash used in operating activities was driven by discontinued operations, movement in net working capital accounts and employee related payments in 2024.
Capital Expenditures and Other Investing ActivitiesOur principal capital expenditures are for software (purchased and internally developed) and additions to property and equipment. We invested approximately $165 million, $217 million and $377 million in capital expenditures during 2025, 2024 and 2023, respectively. We expect to continue investing in our internally developed software, purchased software and property and equipment to support our business. During 2024, the Company paid $300 million to terminate its trade receivables facility and reacquired all of the outstanding trade receivables that had previously been sold by it. The Company collected $8 million of purchased trade receivables during 2025, as compared to $212 million during 2024. Additionally, during 2025, the company received proceeds of $16 million related to the sale of property, plant and equipment. During 2024, the Company disposed of certain corporate-owned life insurance policies and received proceeds of $36 million and received proceeds of $2.5 billion related to the Digital Banking Sale.
Financing ActivitiesFinancing activities mainly related to borrowings and repayments under our senior secured credit facilities as well as our unsecured senior notes. Financing activities also included dividends paid on the Series A preferred stock, proceeds from employee stock plans as well as payments made for share repurchases and tax withholding payments on behalf of employees for stock based awards that vested. During 2025, the Company repurchased $74 million of preferred shares and $74 million of common stock under our share repurchase program.
The following table summarizes information related to cash flows from discontinued operations related to the Digital Banking Sale and the Spin-Off of NCR Atleos:
For the year ended December 31
In millions 2025 2024 2023
Net cash provided by (used in) operating activities $ - $ (302) $ 594
Net cash provided by (used in) investing activities - (57) (189)
Net cash provided by (used in) financing activities - - 1
Net cash used in operating activities of discontinued operations related to environmental obligations were $37 million, $20 million and $19 million for fiscal years 2025, 2024 and 2023, respectively.
Adjusted free cash flow-unrestricted NCR Voyix management uses a non-GAAP measure called "adjusted free cash flow-unrestricted" to assess the financial performance of the Company. We define adjusted free cash flow-unrestricted within the section titled "Non-GAAP Financial Measures and Use of Certain Terms" in Part I, Item 7 of this Form 10-K. The table below reconciles net cash provided by operating activities to NCR Voyix's non-GAAP measure of adjusted free cash flow-unrestricted for the twelve months ended December 31, 2025:
In millions
Twelve months ended December 31, 2025(1)
Net cash provided by (used in) operating activities (GAAP) $ (210)
Capital expenditures (165)
Restricted cash settlement activity 26
Cash taxes paid for the Digital Banking Sale
284
Pension contributions 26
Collections on purchased trade receivables 8
Cash activity related to environmental discontinued operations 37
Acceleration projects 21
Adjusted free cash flow-unrestricted (non-GAAP) $ 27
(1)Adjusted free cash flow-unrestricted for 2024 is not meaningful for comparison purposes given the presentation of cash flows due to the Spin-Off of NCR Atleos and the Digital Banking Sale.
Long Term Borrowings The senior secured credit facilities include a term loan facility in an initial aggregate principal amount of $200 million, of which there was no outstanding balance as of December 31, 2025. Additionally, the senior secured credit facilities include a five-year Revolving Credit Facility with an aggregate principal amount of $500 million, of which there was no outstanding balance as of December 31, 2025. The Revolving Credit Facility also contains a sub-facility to be used for letters of credit, and as of December 31, 2025, there were $24 million letters of credit outstanding.
As of December 31, 2025, we had outstanding $650 million aggregate principal balance of 5.000% senior unsecured notes due in 2028, $403 million in aggregate principal balance of 5.125% senior unsecured notes due in 2029 and $52 million in aggregate principal balance of 5.250% senior unsecured notes due in 2030.
See Note 6, "Debt Obligations", of the Notes to Consolidated Financial Statements included in Item 8 of this Report for further information on the senior secured credit facilities and senior unsecured notes.
Employee Benefit Plans In 2026, we expect to make contributions of $14 million to our international pension plans and $19 million to our postemployment plan. See Note 10, "Employee Benefit Plans", of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report for additional discussion on our pension and postemployment plans.
Series A Convertible Preferred StockIn 2015, the Company issued 820,000 shares of Series A Convertible Preferred Stock. As of December 31, 2025, there were approximately 200,000 shares that remained issued and outstanding with a redemption value of approximately $207 million. Holders of Series A Convertible Preferred Stock are entitled to a cumulative dividend at the rate of 5.5% per annum, which are payable in cash or in-kind at the option of the Company. During the years ended December 31, 2025 and 2024, the Company paid cash dividends of $15 million. The holders also have certain redemption rights or put rights, including the right to require us to repurchase all or any portion of the Series A Convertible Preferred Stock on any date during the three months commencing on and immediately following March 16, 2027, March 16, 2030 and March 16, 2033.
Prior to the close of business on October 17, 2023, the Series A Convertible Preferred Stock was convertible at the option of the holders at any time into shares of common stock at a conversion price of $30.00 per share, or a conversion rate of 33.333 shares of common stock per share of Series A Convertible Preferred Stock. As a result of the Spin-Off, the conversion rate of the Series A Convertible Preferred Stock was adjusted pursuant to its terms to 57.560 shares of common stock per share of Series A Convertible Preferred Stock, effective immediately after the close of business on October 17, 2023. As of December 31, 2025, the maximum number of common shares that could be required to be issued upon conversion of the outstanding shares of the Series A Convertible Preferred Stock was 11.9 million shares, which would represent approximately 8% of our outstanding common stock as of December 31, 2025, including the preferred shares on an as-converted basis.
Cash and Cash Equivalents Held by Foreign Subsidiaries Cash and cash equivalents held by the Company's foreign subsidiaries were $120 millionand $134 million at December 31, 2025 and 2024, respectively. Under current tax laws and regulations, if cash and cash equivalents and short-term investments held outside the U.S. are distributed to the U.S. in the form of dividends or otherwise, we may be subject to additional U.S. income taxes and foreign withholding taxes, which could be significant.
Material Cash Requirements from Contractual and Other ObligationsIn the normal course of business, we enter into various contractual obligations that impact, or could impact, the liquidity of our operations. The following table and discussion outlines our material obligations as of December 31, 2025 on an undiscounted basis, with projected cash payments in the years shown:
In millions Total Amounts 2026 2027-2028 2029-2030 2031 & Thereafter
Debt obligations $ 1,105 $ - $ 650 $ 455 $ -
Interest on debt obligations 183 56 112 15 -
Estimated environmental liability payments 111 40 41 20 10
Lease obligations 346 68 101 82 95
Purchase obligations 356 246 67 43 -
Litigation matters 22 22 - - -
Total obligations $ 2,123 $ 432 $ 971 $ 615 $ 105
For purposes of this table, we used interest rates as of December 31, 2025 to estimate the future interest on debt obligations outstanding as of December 31, 2025 and have assumed no voluntary prepayments of existing debt. See Note 6, "Debt Obligations" of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report for additional disclosure related to our debt obligations and the related interest rate terms.
The estimated environmental liability payments included in the table of material cash requirements shown above are related primarily to the Kalamazoo River environmental matter. As of December 31, 2025, all of the Company's remedial obligations for the Fox River and Ebina matters have been completed. For the Kalamazoo River matter, the amounts shown are our expected payments, net of the payment obligations of co-obligors and an estimate for payments to be received from indemnification parties. Following the Spin-Off, the Company retained the responsibility to manage the identified environmental liabilities and remediation, subject however to an indemnity obligation by NCR Atleos to contribute 50% of the costs of certain environmental liabilities after an annual $15 million funding threshold is met. Given the uncertainty of timing and amount of the indemnity payments, these amounts are not reflected within the table above after 2026. For additional information, refer to Note 11, "Commitments and Contingencies", of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report.
Our lease obligations are primarily for future rental amounts for our world headquarters in Atlanta, Georgia, as well as for certain sales facilities in various domestic and international locations and leases related to equipment and vehicles.
Purchase obligations represent committed purchase orders and other contractual commitments for goods or services. The purchase obligation amounts were determined through information in our procurement systems and payment schedules for significant contracts.
Litigation matters represents costs of a certain legal matter, net of expected indemnity recoveries from NCR Atleos, as discussed in Note 11, "Commitments and Contingencies" of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report.
We have a liability related to our uncertain tax positions. Due to the nature of the underlying liabilities and the extended time often needed to resolve income tax uncertainties, we cannot make reliable estimates of the amount or timing of cash payments that may be required to settle these liabilities. Additionally, the Company's current tax liability was $13 million and $336 million as of
December 31, 2025 and December 31, 2024, respectively, presented within Other current liabilities on the Consolidated Balance Sheets. The decrease in the tax liability is due to tax payments made in 2025 related to the Digital Banking Sale. For additional information, refer to Note 8, "Income Taxes", of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report.
Our international employee benefit plans, which are described in Note 10, "Employee Benefit Plans", of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report, could require significant future cash payments. Our international retirement plans were in an underfunded position of $98 million as of December 31, 2025, as compared to an underfunded position of $104 million as of December 31, 2024. The decrease in our underfunded position of international plans is primarily attributable to an increase in the fair value of plan assets, partially offset by an increase in the discount rates used to measure the benefit obligation. Contributions to international pension plans are expected to be approximately $14 million in 2026. Following the Spin-Off, NCR Atleos assumed the U.S. and certain international pension plan assets and liabilities, along with the associated deferred costs in accumulated other comprehensive loss, which were previously sponsored by the Company. Pursuant to the terms of the Spin-Off transaction documents, the Company is required to contribute 50% of the annual costs of the NCR Atleos U.S. pension plan to the extent NCR Atleos contributes more than $40 million on an annual basis beginning with the plan year ending December 31, 2024.
We also have product warranties that may affect future cash flows. These items are not included in the table of obligations shown above, but are described in detail in Note 11, "Commitments and Contingencies", of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report.
The senior secured revolving credit facility contains customary representations and warranties, affirmative covenants, and negative covenants. The negative covenants limit the Company's and its subsidiaries' ability to, among other things, incur indebtedness, create liens on the Company's or its subsidiaries' assets, engage in fundamental changes, make investments, sell or otherwise dispose of assets, engage in sale-leaseback transactions, make restricted payments, repay subordinated indebtedness, engage in certain transactions with affiliates and enter into agreements restricting the ability of the Company's subsidiaries to make distributions to the Company or incur liens on their assets.
The senior secured revolving credit facility also contains a financial covenant that does not permit the Company to allow its consolidated leverage ratio to exceed (i) in the case of any fiscal quarter ending on or following September 30, 2024 and prior to September 30, 2025, 4.50 to 1.00 and (ii) in the case of any fiscal quarter ending on or following September 30, 2025, 4.25 to 1.00, in each case subject, to (x) increases of 0.25 in connection with the consummation of any material acquisition and applicable to the fiscal quarter in which such acquisition is consummated and the three consecutive fiscal quarters thereafter, and (y) a maximum cap of 5.00 to 1.00.
The senior secured revolving credit facility also includes provisions for events of default, which are customary for similar financings. Upon the occurrence of an event of default, the lenders may, among other things, terminate the loan commitments, accelerate all loans and require cash collateral deposits in respect of outstanding letters of credit. If the Company is unable to pay or repay the amounts due, the lenders could, among other things, proceed against the collateral granted to them to secure such indebtedness.
CRITICAL ACCOUNTING ESTIMATES
Our consolidated financial statements are prepared in accordance with GAAP. In connection with the preparation of these financial statements, we are required to make assumptions, estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosure of contingent liabilities. These assumptions, estimates and judgments are based on historical experience and are believed to be reasonable at the time. However, because future events and their effects cannot be determined with certainty, the determination of estimates requires the exercise of judgment. Our critical accounting policies are those that require assumptions to be made about matters that are highly uncertain. Different estimates could have a material impact on our financial results. Judgments and uncertainties affecting the application of these policies and estimates may result in materially different amounts being reported under different conditions or circumstances. Our management continually reviews these assumptions, estimates and judgments to ensure that our financial statements are presented fairly and are materially correct.
In many cases, the accounting treatment of a particular transaction is specifically dictated by GAAP and does not require significant management judgment in its application. There are also areas in which management's judgment in selecting among available alternatives would not produce a materially different result. The significant accounting policies and estimates that we believe are the most critical to aid in fully understanding and evaluating our reported financial results are discussed in the paragraphs below. Our senior management has reviewed these critical accounting estimates and related disclosures with our independent registered public accounting firm and the Audit Committee of our Board of Directors. See Note 1, "Basis of Presentation and Significant Accounting
Policies", of the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report, which contains additional information regarding our accounting policies and other disclosures required by GAAP.
Revenue RecognitionWe enter into contracts to sell our products and services, which may be sold separately or bundled with other products and services. As a result, interpretation and judgment are sometimes required to determine the appropriate accounting for these transactions, including: (1) whether performance obligations are considered distinct that should be accounted for separately versus combined, how the transaction price should be allocated among the performance obligations and when to recognize revenue for each performance obligation; (2) developing an estimate of the stand-alone selling price, or SSP, of each distinct performance obligation; (3) combining multiple contracts that may impact the allocation of the transaction price between product and services; and (4) estimating and accounting for variable consideration, including rights of return, rebates, expected penalties or other price concessions as a reduction of the transaction price.
Our estimates of SSP for each performance obligation require judgment that considers multiple factors, including, but not limited to, historical discounting trends for products and services, pricing practices in different geographies and industries, gross margin objectives and internal costs. Our estimates for rights of return and rebates are based on historical sales returns and credits, specific criteria outlined in customer contracts or rebate agreements and other factors known at the time. Our estimates for expected penalties and other price concessions are based on historical trends and expectations regarding future occurrence.
Changes in judgments with respect to these assumptions and estimates could impact the timing or amount of revenue recognition. Additional information regarding our revenue recognition policy is included in Note 1, "Basis of Presentation and Significant Accounting Policies", in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report.
Inventory ValuationWe assess the valuation of our inventory on a periodic basis and make adjustments to the value to properly provide for potential exposure due to slow-moving, excess, obsolete or unusable inventory. Inventories are written down to net realizable value based on forecasted usage of part, sales orders, technological obsolescence and inventory aging. These factors can be impacted by market conditions, technology changes, changes in strategic direction and customer demand and require estimates and management judgment that may include elements that are uncertain. On a quarterly basis, we review the current net realizable value of inventory and adjust for any inventory exposure due to age, obsolescence or excess of cost over net realizable value.
Goodwill Goodwill is tested at the reporting unit level for impairment on an annual basis during the fourth quarter or more frequently if certain events occur indicating that the carrying value of goodwill may be impaired. A significant amount of judgment is involved in determining if an indicator of impairment has occurred. Such indicators may include a decline in expected cash flows, a significant adverse change in legal factors or in the business climate, a decision to sell a business, unanticipated competition or slower growth rates, among others. Consistent with the examples of such events and circumstances given in the accounting guidance, we believe that a goodwill impairment test should be performed immediately before and after a reorganization of our reporting structure when the reorganization would affect the composition of one or more of our reporting units. In this circumstance, performing the impairment test immediately before and after the reorganization would help to confirm that the reorganization is not potentially masking a goodwill impairment charge.
In the evaluation of goodwill for impairment, we have the option to perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a reporting unit to its carrying amount, including goodwill. Under the qualitative assessment, an entity is not required to calculate the fair value of a reporting unit unless the entity determines that it is more likely than not that its fair value is less than its carrying amount. If under the quantitative assessment the fair value of a reporting unit is less than its carrying amount, then the amount of the impairment loss, if any, is determined based on the amount by which the carrying amount exceeds the fair value up to the total value of goodwill assigned to the reporting unit. Fair values of the reporting units are estimated using a weighted methodology considering the output from both the income and market approaches. The income approach incorporates the use of a discounted cash flow ("DCF") analysis. A number of significant assumptions and estimates are involved in the application of the DCF model to forecast operating cash flows, including revenue growth rates, EBITDA margins and discount rates. Several of these assumptions vary among reporting units. The cash flow forecasts are generally based on approved strategic operating plans. The market approach is performed using the Guideline Public Companies ("GPC") method which is based on earnings multiple data. We perform a reconciliation between our market capitalization and our estimate of the aggregate fair value of the reporting units, including consideration of a control premium. Refer to Note 4, "Goodwill and Purchased Intangible Assets" in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for additional information.
Valuation of Long-lived Assets and Amortizable Other Intangible Assets We perform impairment tests for our long-lived assets if an event or circumstance indicates that the carrying amount of our long-lived assets may not be recoverable. In response to changes in industry and market conditions, we may also strategically realign our resources and consider restructuring, disposing of,
or otherwise exiting businesses. Such activities could result in impairment of our long-lived assets or other intangible assets. We also are subject to the possibility of impairment of long-lived assets arising in the ordinary course of business. We consider the likelihood of impairment if certain events occur indicating that the carrying value of the long-lived assets may be impaired and we may recognize impairment if the carrying amount of a long-lived asset or intangible asset is not recoverable from its undiscounted cash flows. Impairment is measured as the difference between the carrying amount and the fair value of the asset. We use both the income approach and market approach to estimate fair value. Our estimates of fair value are subject to a high degree of judgment since they include a long-term forecast of future operations. Accordingly, any value ultimately derived from our long-lived assets may differ from our estimate of fair value.
We make strategic acquisitions that may have a material impact on our consolidated results of operations or financial position. We allocate the purchase price of acquired businesses to the assets acquired and liabilities assumed in the transaction at their estimated fair values. The estimates used to determine the fair value of long-lived assets, such as intangible assets, can be complex and require significant judgments. We use information available to us to make fair value determinations and engage independent valuation specialists, when necessary, to assist in the fair value determination of significant acquired long-lived assets. The determination of fair value requires estimates about cash flow forecasts, discount rates, revenue growth rates, EBITDA margin, customer attrition rate, and other future events that are judgmental in nature. While we use our best estimates and assumptions as a part of the purchase price allocation process, our estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, we may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Any adjustments subsequent to the measurement period are recorded to our consolidated statements of income. We are also required to estimate the useful lives of intangible assets to determine the amount of acquisition-related intangible asset amortization expense to record in future periods. Additional information regarding our acquisitions is included in Note 3, "Business Combinations and Divestitures", in Notes to Consolidated Financial Statements in Item 8 of Part II of this Report.
Pension and Postemployment Benefits We sponsor foreign defined benefit pension and foreign and domestic postemployment plans. As a result, we have significant pension and postemployment benefit costs, which are developed from actuarial valuations. Actuarial assumptions attempt to anticipate future events and are used in calculating the expense and liability relating to these plans. These factors include assumptions we make about interest rates, expected investment return on plan assets, involuntary turnover rates, and rates of future compensation increases. In addition, our actuarial consultants advise us about subjective factors such as withdrawal rates and mortality rates to use in our valuations. We generally review and update these assumptions on an annual basis at the end of each fiscal year. We are required to consider current market conditions, including changes in interest rates, in making these assumptions. The actuarial assumptions that we use may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates, or longer or shorter life spans of participants. These differences may result in a significant impact to the amount of pension or postemployment benefits expense we have recorded or may record. Ongoing pension and postemployment expense impacts all of our segments. Pension mark-to-market adjustments, settlements, curtailments and special termination benefits are excluded from our segment results as those items are not included in the evaluation of segment performance. See Note 5, "Segment Information and Concentrations", in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for a reconciliation of our segment results to income from operations.
The key assumptions used in developing our 2025 expense were discount rates of 3.4% for our German pension plan and 1.6% for our Japanese pension plan, and an expected return on assets assumption of 5.0% for our Japanese pension plan in 2025. The German and Japanese plans represented 98% of the pension obligation as of December 31, 2025. Holding all other assumptions constant, a 0.25% change in the discount rate used for the German and the Japanese pension plans would have increased or decreased 2025 ongoing pension expense by less than $1 million. A 0.25% change in the expected rate of return on plan assets assumption for the Japanese pension plan would have increased or decreased 2025 ongoing pension expense by less than $1 million. For 2026, we intend to use discount rates of 4.0% in determining the German pension plan and 2.8% in determining the Japanese pension expense. We intend to use an expected rate of return on assets assumption of 5.5% for the Japanese pension plan.
We recognize additional changes in the fair value of plan assets and net actuarial gains or losses of our pension plans upon remeasurement, which occurs at least annually in the fourth quarter of each year. The remaining components of pension expense, primarily net service cost, interest cost, and the expected return on plan assets, are recorded on a quarterly basis as ongoing pension expense. While it is required that we review our actuarial assumptions each year at the measurement date, we generally do not change them between measurement dates. We use a measurement date of December 31 for all of our plans. Changes in assumptions or asset values may have a significant effect on the annual measurement of expense or income in the fourth quarter.
The most significant assumption used in developing our 2025 postemployment plan expense is the assumed rate of involuntary turnover of 3.8%. The involuntary turnover rate is based on historical trends and projections of involuntary turnover in the future. A 0.25% change in the rate of involuntary turnover would have increased or decreased 2025 expense by less than $1 million. The
sensitivity of the assumptions described above is specific to each individual plan and not to our pension and postemployment plans in the aggregate. We intend to use an involuntary turnover assumption of 3.8% in determining the 2026 postemployment expense.
Environmental and Legal Contingencies Each quarter, we review the status of each claim and legal proceeding and assess our potential financial exposure. If the potential loss from any claim or legal proceeding would be material and is considered probable and the amount can be reasonably estimated, we accrue a liability for the estimated loss. To the extent that the amount of such a probable loss is estimable only by reference to a range of equally likely outcomes, and no amount within the range appears to be a better estimate than any other amount, we accrue the amount at the low end of the range. Because of uncertainties related to these matters, the use of estimates, assumptions and judgments, and external factors beyond our control, accruals are based on the best information available at the time. At environmental sites, or portions of environmental sites, where liability is determined to be probable but a remedy has not yet been determined, we accrue for the costs of investigations and studies for the affected areas but not for the costs of remediation. As additional information becomes available, we reassess the potential liability related to our pending claims and litigation and may revise our estimates. Such revisions in the estimates of the potential liabilities could have a material impact on our results of operations and financial position. When insurance carriers or third parties have agreed to pay any amounts related to costs, and we believe that it is probable that we can collect such amounts, those amounts are reflected as receivables in our Consolidated Balance Sheet.
The most significant legal contingencies impacting our Company are the Fox River and Kalamazoo River matters, which are further described in detail in Note 11, "Commitments and Contingencies", in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report. The Company has been identified as a potentially responsible party ("PRP") at both the Fox River and Kalamazoo River sites.
As described below and in Note 11, "Commitments and Contingencies", in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report, while litigation activities have been concluded with respect to the Fox River matter and regulatory compliance activities have been completed with respect to the Ebina matter, the extent of our potential liabilities continues to be subject to significant uncertainties. The uncertainties related to the Kalamazoo River matter include the total cost of clean-up as well as the solvency and willingness of the co-obligors or indemnitors, and other responsible parties, to pay. As relates to Fox River, uncertainties remain with respect to the final reconciliation of the indemnitors' payment obligations.
Our net reserves for the Fox River matter and the Kalamazoo River matter, as of December 31, 2025 were approximately $23 million and $111 million, respectively, as further discussed in Note 11, "Commitments and Contingencies", in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report. The Company regularly re-evaluates the assumptions used in determining the appropriate reserve for these matters as additional information becomes available and, when warranted, makes appropriate adjustments.
Income Taxes We recognize deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax basis of assets and liabilities. The deferred tax assets and liabilities are determined based on the enacted tax rates expected to apply in the periods in which the deferred tax assets or liabilities are anticipated to be settled or realized.
We regularly review our deferred tax assets for recoverability and establish a valuation allowance if it is more likely than not that some portion or all of a deferred tax asset will not be realized. The determination as to whether a deferred tax asset will be realized is made on a jurisdictional basis and is based on the evaluation of positive and negative evidence. This evidence includes historical taxable income, projected future taxable income, the expected timing of the reversal of existing temporary differences and the implementation of tax planning strategies. Projected future taxable income is based on our expected results and assumptions as to the jurisdiction in which the income will be earned. The expected timing of the reversals of existing temporary differences is based on current tax law and our tax methods of accounting. As a result of this determination, we had valuation allowances of $181 million as of December 31, 2025 and $153 million as of December 31, 2024, related to certain deferred income tax assets, tax loss carryforwards, including interest expense carryforwards and foreign tax credits in jurisdictions where there is uncertainty as to the ultimate realization of a benefit from those tax assets.
If we are unable to generate sufficient future taxable income, or if there is a material change in the actual effective tax rates or the time period within which the underlying temporary differences become taxable or deductible, or if the tax laws change unfavorably, then we could be required to increase our valuation allowance against our deferred tax assets, resulting in an increase in our effective tax rate.
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest benefit that has a greater than fifty percent
likelihood of being realized upon settlement. Interest and penalties related to uncertain tax positions are recognized as part of the provision for income taxes and are accrued beginning in the period that such interest and penalties would be applicable under relevant tax law until such time that the related tax benefits are recognized. As described in Note 1, "Basis of Presentation and Significant Accounting Policies" and Note 8, "Income Taxes", in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for disclosures, on October 16, 2023, in connection with the Spin-Off, the Company completed a series of legal entity restructurings including both an internal and external spin-off transaction. These transactions are subject to tax laws in the U.S. and non-U.S. jurisdictions, which resulted in the use of significant judgments by management as it pertains to the interpretation and application of tax laws in the U.S. and non-U.S. jurisdictions to determine the potential taxability of the transactions.
The provision for income taxes may change period-to-period based on non-recurring events, such as the settlement of income tax audits and changes in tax laws, as well as recurring factors including the geographic mix of income before taxes, state and local taxes and the effects of various global income tax strategies. As of December 31, 2025, we did not provide for U.S. income tax or foreign withholding taxes on undistributed earnings of certain foreign subsidiaries as such earnings are expected to be reinvested indefinitely. The amount of unrecognized deferred tax liability associated with these indefinitely reinvested earnings is approximately $27 million.
Refer to Note 8, "Income Taxes", in the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report for disclosures related to foreign and domestic pretax income, foreign and domestic income tax (benefit) expense and the effect foreign taxes have on our overall effective tax rate.
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
A discussion of recently issued accounting pronouncements is described in Note 1, "Basis of Presentation and Significant Accounting Policies", of the Notes to Consolidated Financial Statements in Item 8 of Part II of this Report, and we incorporate by reference such discussion in this MD&A.
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