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What changed in NCR Voyix Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of NCR Voyix Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+576 added−562 removedSource: 10-K (2025-02-27) vs 10-K (2024-03-14)

Top changes in NCR Voyix Corp's 2024 10-K

576 paragraphs added · 562 removed · 367 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

44 edited+48 added−43 removed8 unchanged
Biggest changeOur progress to date includes: • Improved our supplier diversity program that utilizes small businesses, as well as minority, women and veteran-owned business enterprises • Continued to provide corporate funding and oversight of our Business Resource Groups (“BRG”) to boost engagement and increase opportunities for professional development, networking and community impact • Established collaboration between all business resource groups with a renewed focus on growing employee participation Our current roadmap for future programs includes: • Investing in the development of diverse talent through sponsorship initiatives and targeted development • Launching a series of listening sessions to promote inclusion and to drive action • Launching a targeted university diversity network to attract, hire, and grow diverse talent through key partnerships • Restructuring and redeploying a BRG leadership council focused on global inclusion with the mission to inspire action that attracts, develops and retains top diverse talent and fosters an inclusive work environment Government Regulation We are subject to a variety of laws and regulations in the United States and other jurisdictions in which we operate or where our products or services are offered.
Biggest changeOur current initiatives in this space include the following: • Development of diverse talent through sponsorship initiatives and targeted development • Our targeted university diversity network to attract, hire, and grow diverse talent through key partnerships • Continued funding and investment in our Business Resource Groups (“BRG”) through our BRG leadership council focused on global inclusion with the mission to inspire action that attracts, develops and retains top diverse talent and fosters an inclusive work environment Government Regulation We are subject to a variety of laws and regulations in the United States and other jurisdictions in which we operate or where our products or services are offered.
Our historical manufacturing activities and operations are subject to a wide range of environmental protection laws and we have investigatory and remedial activities underway at a number of facilities that we currently own or operate, or formerly owned or operated, to comply, or to determine compliance, with such laws.
Our historical manufacturing activities and operations are subject to a wide range of environmental protection laws and we have investigatory and remedial activities underway at a number of facilities that we currently own or formerly owned or operated, to comply, or to determine compliance, with such laws.
Available Information The Company makes available through its website at http://investor.ncrvoyix.com, free of charge, the reports it files with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, definitive proxy statements on Schedule 14A and Current Reports on Form 8-K, and all amendments to such reports and schedules, as soon as reasonably practicable after these reports are electronically filed or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”).
Available Information The Company makes available through its website at https://investor.ncrvoyix.com, free of charge, the reports it files with the Securities and Exchange Commission (the “SEC”), including its Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, definitive proxy statements on Schedule 14A and Current Reports on Form 8-K, and all amendments to such reports and schedules, as soon as reasonably practicable after these reports are electronically filed or furnished to the SEC pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”).
We anticipate that we will continue to have significant research and development expenditures in the future in order to provide a continuing flow of innovative, high-quality products and services and to help maintain and enhance our competitive position.
We anticipate that we will continue to have significant research and development expenditures in the future to provide a continuing flow of innovative, high-quality products and services and to help maintain and enhance our competitive position.
Copies of our filings, specified exhibits and corporate governance materials are also available, free of charge by calling or writing to: NCR Voyix—Investor Relations 864 Spring Street NW Atlanta, GA 30308 Phone: 800-225-5627 E-Mail: investor.relations@ncrvoyix.com Website: http://investor.ncrvoyix.com The Company’s website, www.ncrvoyix.com, contains a significant amount of information about the Company, including financial and other information for investors.
Copies of our filings, specified exhibits and corporate governance materials are also available, free of charge by calling or writing to: NCR Voyix—Investor Relations 864 Spring Street NW Atlanta, GA 30308 Phone: 800-225-5627 E-Mail: investor.relations@ncrvoyix.com Website: https://investor.ncrvoyix.com The Company’s website, www.ncrvoyix.com, contains a significant amount of information about the Company, including financial and other information for investors.
Information regarding the accounting and costs included in research and development activities is included 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 under “Research and Development Costs,” and is incorporated herein by reference.
Information regarding 5 Table of Contents the accounting and costs included in research and development activities is included 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 under “Research and Development Costs,” and is incorporated herein by reference.
These regulations and laws involve a variety of matters, including privacy and information security, data and personal information protection, consumer protection laws, anti-corruption laws such as the United States Foreign Corrupt Practices Act and United Kingdom Bribery Act, tax, and environmental sustainability (including climate change).
These regulations and laws involve a variety of matters, including privacy and information security, data and personal information protection, consumer protection laws, anti-corruption laws such as the United States Foreign Corrupt Practices Act and United Kingdom Bribery Act, employee matters, import and export controls, tax, and environmental sustainability (including climate change).
For additional information about government regulation and laws applicable to our business, refer to the risks described in Item 1A of this Report.
For additional information about government regulation and laws applicable to our business, refer to the risks described in Part I, Item 1A of this Annual Report.
The SEC also maintains a website (http://www.sec.gov) that contains the reports, proxy statements and information statements, and other information regarding issuers that file or furnish electronically with the SEC.
The SEC also maintains a website (http://www.sec.gov) that contains the reports, proxy statements and information statements, and other information regarding issuers that file or furnish 7 Table of Contents electronically with the SEC.
NCR Voyix will furnish, without charge to a security holder upon written request, the Notice of Meeting and Proxy Statement for the 2024 Annual Meeting of Stockholders (the 2024 Proxy Statement), portions of which are incorporated herein by reference.
The Company will furnish, without charge to a security holder upon written request, the Notice of Meeting and Proxy Statement for the 2025 Annual Meeting of Stockholders (the 2025 Proxy Statement), portions of which are incorporated herein by reference.
Even when penalties for cancellation are provided for in a customer contract, we may elect to permit cancellation of orders without penalty where management believes it is in our best interests to do so.
Even when penalties for cancellation are provided for in a customer contract, we may elect to permit cancellation of orders without penalty where we believe it is in our best interest to do so.
Our competitors vary by market segment, product, service offering and geographic area, and include Aptos, Inc., Block Inc., Diebold Nixdorf, Inc., Flooid, Fujitsu Limited, GK Software SE, HP Inc., Lightspeed, Olo Inc., Oracle Corporation, PAR Technology Corporation, Revel Systems, Inc., SAP SE, Toast, Inc., Toshiba Tec Corporation, and Upserve, Inc., among others.
Our competitors vary by market segment, product, service offering and geographic area. Key competitors include Aptos, Inc., Block Inc., Diebold Nixdorf, Inc., Fiserv Inc., Flooid, Fujitsu Limited, GK Software SE, Global Payments Inc., HP Inc., Lightspeed, Olo Inc., Oracle Corporation, PAR Technology Corporation, SAP SE, Toast, Inc., Toshiba Tec Corporation, among others.
Similarly, we seek to be disciplined in our cost management through ongoing initiatives that benefit both our long-term relationships with our customers as well as the growth and profitability targets of the company through streamlining and simplifying our product offering, increasing process automation and workforce optimization.
Similarly, we seek to be disciplined in our cost management through ongoing initiatives that benefit both our long-term relationships with our customers as well as our profitability targets through streamlining and simplifying our product offering, increasing process automation and workforce optimization. 2 Table of Contents Products and Services Platform & Edge • Platform.
However, as we continue to transition our revenue mix towards more recurring software and services revenue, our sales have become more linear over time. 5 Table of Contents Manufacturing and Raw Materials In most cases, there are a number of vendors providing the services and producing the parts and components that we utilize.
However, as we continue to transition our revenue mix towards more recurring software and services revenue, we expect that our sales will become more linear over time. Supply In most cases, there are a number of vendors providing the services and producing the parts and components that we utilize.
Further information regarding the potential impact of compliance with governmental laws and regulations is also included in Item 1A of this Report and is incorporated herein by reference.
Further information regarding the potential impact of compliance with environmental laws and regulations is also included in Part I, Item 1A of this Report.
Certain materials relating to our corporate governance, including our Code of Conduct applicable to our directors, senior financial officers and other employees, are also available in the investor relations section of our website.
Certain materials relating to our corporate governance, including our Code of Conduct applicable to our directors, senior financial officers and other employees, are also available on the corporate governance section of our website at https://www.ncrvoyix.com/company/corporate-governance.
Leveraging our brand recognition and our global distribution network, we target both new and existing customers representing a wide variety of sizes, industries and geographies. We make strategic investments in new products, capabilities and market leading services to support our offerings across segments, shaping our growth strategy.
Sales and Marketing Leveraging our brand recognition and our global distribution network, we target both new and existing customers representing a wide variety of sizes, industries and geographies. We make strategic investments in new products, capabilities and market-leading services to maintain the competitiveness of our offering.
We currently believe we have adequate resources of raw materials and components and that our portfolio of vendors providing services and producing parts has the resources and facilities to overcome most unforeseen interruptions of supply.
We currently believe we have adequate resources of raw materials and components and that our portfolio of vendors providing services and producing parts has the resources and facilities to overcome most unforeseen interruptions of supply. Historically, we have leveraged a network of third-party partners across the globe to manufacture our hardware products.
We have also granted and plan to continue to grant licenses to others under our intellectual property rights when we consider these arrangements to be in our interest. Seasonality Our sales have been historically seasonal, with lower revenue in the first half and higher revenue in the second half of each year.
We also license our intellectual property to others when, and to the extent, we consider doing so to be in our interest. Seasonality Our sales have been historically seasonal, with lower revenue in the first half and higher revenue in the second half of each year.
Competitive factors can vary by geographic area where we operate around the world, but typically include product value and quality, total cost of ownership, industry knowledge, end-to-end solution support, system integration capabilities, strategic alignment with the customers and service quality.
The competitive landscape varies by geographic area where we operate around the world, but common factors include product value and quality, total cost of ownership, industry expertise, end-to-end solution support, system integration capabilities, strategic alignment with the customers and service quality. We face a variety of competitors across all geographies in which we operate.
We also prioritize improvements in how we go to market with software-as-a-service (“SaaS”) and packaging solutions as all-in-one bundles designed around a software platform, making it easier for our customers to buy and for our teams to sell. • Allocate our capital strategically through a cost-disciplined approach to operations .
We invest in our brand and go-to-market strategies with software-as-a-service (“SaaS”) and packaging solutions as all-in-one bundles designed around our platform, making it easier for our customers to buy and for our teams to sell.
Intellectual Property We seek patent protection for our innovations (including improvements) related to our software, services, products, solutions, creations and developments where such protection is likely to provide meaningful value to us. Following the Spin-Off of NCR Atleos, we own approximately 850 patents in the United States and numerous other patents in foreign countries.
Intellectual Property We seek patent protection for our innovations, especially those related to our software, services, products and solutions, where such protection is likely to provide meaningful value to us. We own approximately 875 patents in the United States and many other patents in foreign countries. Our foreign patents are generally counterparts of our U.S. patents.
Our offerings include digital first software and services offerings for retailers, restaurants and financial institutions, as well as payments acceptance solutions, multi-vendor connected device services, self-checkout (“SCO”) kiosks and related technologies, point of sale (“POS”) terminals and other self-service technologies.
Our offerings include platform-based software and services for retailers and restaurants, as well as payment acceptance solutions, multi-vendor connected device services, self-checkout (“SCO”) kiosks and related technologies, along with other self-service technologies.
Loss of the Company’s right to use “NCR Voyix” or its “NCR Voyix” trademark or failure to register that trademark could be material. In addition to developing our intellectual property portfolio, we license intellectual property rights from third parties as we deem appropriate.
We consider our “NCR Voyix” trademarks, as well as our other trademarks, to have significant value to us. Loss of our right to use “NCR Voyix” or our “NCR Voyix” trademark or failure to register that trademark could be material. We license intellectual property from third parties as we deem appropriate.
A detailed discussion of the current estimated impacts of compliance issues relating to environmental regulations, particularly the Fox River, Kalamazoo River and Ebina matters, is reported in Item 8 of Part II of this Report as part of Note 11, “Commitments and Contingencies”, of the Notes to Consolidated Financial Statements and is incorporated herein by reference.
A detailed discussion of the regulatory and remedial environmental protection actions that impact the Company, including estimates regarding the potential financial impact of these matters, particularly the Fox River and Kalamazoo River matters, is included in Item 8 of Part II of this Report as part of Note 11, “Commitments and Contingencies”, of the Notes to Consolidated Financial Statements and is incorporated herein by reference.
Item 1. BUSINESS General The Company, which was originally incorporated in 1884, is a global provider of digital commerce solutions for retail stores, restaurants and financial institutions. Headquartered in Atlanta, Georgia, we are a software and services-led enterprise technology provider of run-the-store capabilities for retail and restaurants and cloud-based digital solutions for financial institutions, serving businesses of all sizes.
Item 1. BUSINESS General NCR Voyix is a leading global provider of digital commerce solutions for retail stores and restaurants. Headquartered in Atlanta, Georgia with approximately 14,000 employees across 30 countries, we are a software and services-led technology provider of run-the-store and digital channel capabilities for retail and restaurants, serving businesses of all sizes.
This customer focus leads to increased access to higher level customer contacts, earlier entrance into the sales cycles, and additional opportunities for upselling and cross-selling as a software and services-led company.
We act as strategic advisors to our customers, helping them reshape and reinvent their business. This customer focus leads to increased access to higher level customer contacts, earlier entrance into the sales cycles, and additional opportunities for upselling and cross-selling software, services and payments to our existing customer base.
The foreign patents are generally counterparts of our U.S. patents. We also have numerous patent applications pending in the United States and in foreign countries. Our portfolio of patents and patent applications is of significant value to us. As appropriate, the Company looks to drive additional value, including through monetization, of its patent portfolio.
We also have many patent applications pending in the United States and in foreign countries. Our portfolio of patents and patent applications is of significant value to us. As appropriate, we look to drive additional value from our patent portfolio. We have registered and unregistered trademarks, including service marks, in the United States and in foreign countries.
We prioritize the allocation of capital to the prospects that provide the best opportunities to attract and retain customers, deliver long-term growth for the company and deliver strategic value for shareholders. Based on our strategy, we will prioritize investments in our technology, repayment of debt and the repurchase of shares. We may also pursue acquisitions and/or divestitures.
We prioritize the allocation of capital to the prospects that provide the best opportunities to attract and retain customers, deliver long-term growth for the company and deliver strategic value for shareholders.
We invest in research and development to bring new solutions to market and elevate product quality. The Company focuses on its commerce platform, which enables our next-generation retail architecture, including our unique retail cloud-based point of sale solution, and our bundled solutions focused on the restaurant industry, and our digital banking platform.
We invest in research and development to bring new solutions to market and elevate product quality and to enhance our platform, which enables our next-generation architecture, including our unique cloud-based point-of-sale and self-checkout solutions, and our bundled software solutions. Customer needs drive the investment in innovative proprietary solutions and partner integrations.
We believe in the power and value of diversity and strive to build a globally inclusive workplace where all people are treated fairly. We seek to include everyone, lead with empathy, and make our communities better. We continue to review our DE&I policies, practices and programs to identify opportunities for new inclusive initiatives.
We seek to include everyone, lead with empathy, and make our communities better. We continue to review our policies, practices and programs to identify opportunities for new inclusive initiatives.
Our solutions are designed to enable retailers, restaurants and financial institutions to seamlessly transact and engage with their customers and end users. On October 16, 2023, we completed the spin-off of our ATM-focused business, which included our self-service banking, payments & network and telecommunications and technology businesses, into an independent publicly traded company, NCR Atleos Corporation (such transaction, the “Spin-Off”).
On October 16, 2023, we completed the spin-off of our ATM-focused business, which included our self-service banking, payments & network and telecommunications and technology businesses, into an independent publicly traded company, NCR Atleos Corporation (“NCR Atleos”), which was effected through a pro rata distribution of all outstanding shares of NCR Atleos common stock to holders of the Company’s common stock as of the close of business on October 2, 2023 (such transaction, the “Spin-Off”).
Our customer engagement teams consult with our clients to identify their most urgent business needs and to develop ROI-driven models with targeted delivery of additional modules or services. • Leverage our brand (and global distribution). We have rebranded from NCR to NCR Voyix, leveraging one of the best-known and respected brands in the industries we serve.
Our customer engagement teams consult with our clients to identify their most urgent business needs and to develop ROI-driven models with targeted delivery of additional software solutions or services for both new and existing customers. • Leverage our brand (and global distribution) to enhance our go-to-market.
However, backlog is included as a component of our remaining performance obligation to the extent we determine that the orders are non-cancelable. Refer to 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 for additional information on remaining performance obligations.
Refer to 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 for additional information on remaining performance obligations. 6 Table of Contents Human Capital Management The strength and talent of our workforce are critical to our success and we strive to attract, develop and retain personnel commensurate with the needs of our businesses.
Research and Development We remain focused on designing and developing solutions that anticipate our customers’ evolving needs as well as consumer preferences. Our expenses for research and development were $185 million in 2023, $147 million in 2022, and $195 million in 2021.
We also compete with certain global enterprise technology companies including IBM Corporation and CompuCom to provide technology and support services. Research and Development We remain focused on designing and developing solutions that anticipate our customers’ evolving needs and consumer preferences. Our expenses for research and development were $157 million in 2024, $139 million in 2023, and $116 million in 2022.
Our software platforms, which run in the cloud and include microservices and APIs that integrate with our customers’ systems, and our As-a-Service solutions enable end-to-end technology-based operations solution for our customers.
Our platform, which runs in the cloud and includes microservices and application programming interfaces (“APIs”) that integrate with our customers’ systems, combines with our services and hardware offerings to enable end-to-end technology-based capabilities for our customers.
Following the Spin-Off, the Company manages and reports operations in three reportable segments – Retail, Restaurants (formerly reported as Hospitality) and Digital Banking. • Retail - Our Retail segment is focused on serving retailers of all sizes, from local businesses to some of the most recognized brands in the world.
Subsequent to the Spin-Off, the Company managed and reported operations in three reportable segments – Retail, Restaurants (formerly reported as Hospitality), and Digital Banking.
As of December 31, 2023, our employees by geographic region included approximately 25% in the Asia Pacific and Japan region; 35% in the Europe, Middle East and Africa regions; 5% in the Americas, excluding the United States; and 35% in the United States. We have presence in 31 countries with employees speaking over 27 unique languages throughout.
As of December 31, 2024, we had nearly 14,000 full-time employees worldwide, with approximately 27% in the Asia Pacific and Japan region; 40% in the Europe, Middle East and Africa regions; 4% in the Americas, excluding the United States; and 29% in the United States. We also engage consultants and contractors as needed to supplement our permanent workforce.
Additionally, starting on October 17, 2023, the Company’s common stock began trading on the New York Stock Exchange under the stock symbol “VYX.” The Company retains no ownership interest in NCR Atleos. The historical financial results of NCR Atleos are reflected as discontinued operations in the Company’s consolidated financial statements.
In connection with the Spin-Off, the Company changed its name from NCR Corporation to NCR Voyix Corporation and our common stock began trading on the New York Stock Exchange under the stock symbol “VYX” on October 17, 2023. The Company retains no ownership interest in NCR Atleos.
Our strategy to expand our customer portfolio and convert customers to our platform, which will enable us to derive a greater portion of revenue and profit from subscription-based (recurring) revenue, is built on the following foundational pillars: • Focus on our customers . We encourage our employees to treat every customer as if they are our only customer.
Our strategy is built on the following key pillars: • Focus on our customer needs . We encourage our employees to treat every customer as if they are our only customer. If we provide superior service and quality products than our competitors, we believe that our customers will be more likely to buy more from NCR Voyix.
Under these agreements, we continue to provide certain products and services to NCR Atleos following the Spin-Off and utilize certain products and services provided by NCR Atleos. Operating Segments Prior to the Spin-Off, the Company managed and reported operations in the following segments: Retail, Hospitality, Digital Banking, Payments & Network, and Self-Service Banking.
We are working with Ennoconn to implement the new hardware model, including the migration of aspects of our hardware business, and we expect the Hardware Business Transition to become effective during 2025. Operating Segments Prior to the Spin-Off, the Company managed and reported operations in the following segments: Retail, Hospitality, Digital Banking, Payments & Network, and Self-Service Banking.
Our brand represents our industry-specific expertise and longevity as enterprise technology experts. We bring over 140 years of experience across restaurants, retail and banking industries. We invest in our brand and go-to-market strategies, and consider our branding to be a strong competitive differentiation with significant equity in worldwide markets. • Support our customers through innovation.
Following the Spin-Off, we rebranded from NCR to NCR Voyix, leveraging one of the best-known and respected brands in the industries we serve. We bring over 140 years of experience across restaurants and retail, and our brand represents our industry-specific expertise and longevity as enterprise technology experts.
Our solutions are sold through direct sales and through indirect channels with referral partners. Competition We face a diverse group of competitors in the Retail, Restaurants and Digital Banking industries in which we sell our digital-first portfolio of software, services and hardware.
We have established a strong network of direct sales and indirect channel relationships, such as value-added resellers and systems integrators, that leverages our market-leading products and services to drive growth. Competition We compete with a diverse array of companies in the retail and restaurants industries in which we sell our portfolio of software, services, payments and hardware solutions.
We are unique in our ability to offer unified banking solutions across digital (application and browser), in-branch and via interactive teller machines (“ITMs”). 1 Table of Contents Corporate and Other includes income and expenses related to corporate functions that are not specifically attributable to any of our three individual reportable segments along with certain non-strategic businesses that are considered immaterial operating segment(s), certain countries which are expected to transfer to NCR Atleos during 2024, and commercial agreements with NCR Atleos.
In addition, Corporate and Other includes certain non-strategic businesses that are considered immaterial operating segment(s) and certain legacy ATM operations in foreign countries that are expected to transfer to NCR Atleos in 2025, as well as commercial agreements with NCR Atleos.
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The Spin-Off was effected through a pro rata distribution of all outstanding shares of NCR Atleos common stock to holders of the Company’s common stock as of the close of business on October 2, 2023. In connection with the Spin-Off, the Company changed its name from NCR Corporation to NCR Voyix Corporation.
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Our solutions are designed to meet the unique needs of retailers and restaurants, ranging from small and medium-sized businesses to multinational enterprises, enabling them to seamlessly transact and engage with their end customers while driving efficiencies within their operations.
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In connection with and upon completion of the Spin-Off, the Company and NCR Atleos entered into various agreements to effect the Spin-Off and govern the relationship between the Company and NCR Atleos after the Spin-Off.
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The historical financial results of NCR Atleos are reflected as discontinued operations in the Company’s consolidated financial statements. On September 30, 2024, 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”).
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Such agreements include the separation and distribution agreement, transition services agreement, tax matters agreement, employee matters agreement, patent and technology cross-license agreement, trademark license and use agreement, master services agreement, manufacturing services agreement and various other transaction agreements.
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The purchase price for the transaction 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.
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Our software and solutions connect to a modern technology platform that allows retailers to run their stores like they run their digital channels, improving the experience for their customers.
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The historical financial results of the Digital Banking segment businesses are reflected as discontinued operations in the Company’s consolidated financial statements.
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These solutions are designed to improve operational efficiency, sales productivity, customer satisfaction and purchasing decisions; provide secure checkout processes and payment systems; and increase service levels. • Restaurants - Our Restaurants segment is focused on serving restaurants and food service establishments of all sizes, ranging from small and medium-sized businesses to some of the world ’ s top global food service enterprises.
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On August 6, 2024, we announced our entry into a commercial agreement with Ennoconn Corporation (“Ennoconn”) to transition our 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”).
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Our solution portfolio spans across table-service, quick-service and fast casual industries, providing competitive end-to-end solutions to “run-the-restaurant.” Our solution portfolio offers cloud-based, platform-enabled technology that is designed to improve operational efficiency, increase customer satisfaction, streamline order and transaction processing and reduce operating costs. In addition, we deliver service support, allowing our customers to focus on their core competencies.
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Under the terms of the agreement, Ennoconn will design, manufacture, warrant, supply, and ship self-checkout and point-of sale hardware directly to our customers and we will sell hardware to our customers as a sales agent for Ennoconn and continue to provide our point-of sale and self-checkout software as well as key support and maintenance services.
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Our end-to-end services are a strong differentiating factor within the market. • Digital Banking - Our Digital Banking segment serves financial institutions by delivering software solutions which enable a fully integrated digital experience for consumer and business customers across all channels.
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As a result of the Hardware Business Transition, we expect to 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.
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We serve banks and credit unions in the United States with our cloud-based software solutions including account opening, account management, transaction processing, imaging, and branch services, among others.
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Following the Digital Banking Sale, the Company manages and reports operations in two reportable segments – Retail and Restaurants. 1 Table of Contents • Retail - Our Retail segment is focused on serving enterprise and mid-market retailers across the Convenience Fuel Retail, Food Drug Mass Merchant (“FDMM”), and Department Specialty Retail industries.
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If we provide better service and quality products than our competitors, it is our belief that our customers will likely buy more from NCR Voyix. We act as strategic advisors to our clients, helping them reshape and reinvent their business.
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Our FDMM customers include grocery stores, drug stores, and big box retailers.
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Customer needs drive the investment in innovative solutions and partnerships are leveraged to embed technology-based offerings within our software.
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We offer end-to-end software, services and hardware solutions that meet the unique needs of retailers, depending on the size of their establishment and the industry in which they operate, ultimately driving operational efficiency, elevated customer experiences and enhanced service levels. • Restaurants - Our Restaurants segment is focused on serving restaurants and food service establishments of all sizes, including quick service, table service and fast casual restaurants.
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Products and Services Retail & Restaurants Given the increased adoption of digital solutions to “Run-the-Store” for retailers and restaurants around the world, and the ability to provide such solutions through one integrated technology platform, we sometimes collectively refer to our Retail and Restaurants segments as our Commerce business.
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Our restaurant software solutions, including our platform and related technology, are designed to streamline order and transaction processing, increase consumer engagement, increase kitchen productivity, and reduce operating costs. Our end-to-end service offerings further support restaurant operations and differentiate us within the market.
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This reference is often used in such instances where the strategic approach to providing our solutions to our retail and restaurant customers is generally very similar, as when our customers are connected to our shared NCR Voyix Commerce Platform or when investments and expanded capabilities can be leveraged across clients or industries.
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Corporate and Other includes income and expenses related to corporate functions that are not specifically attributable to any of our two individual reportable segments.
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We offer cloud-based, platform-enabled software and services to help enable our retail and restaurant customers to digitally augment their operations. The NCR Voyix Commerce Platform provides retailers and restaurants with end-to-end solutions, including cloud-based software and services, store operations capabilities, strategic services, consumer applications and integrated payment acceptance solutions, and in-store hardware to support their business needs.
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Following the strategic actions executed by the Company in 2024 to improve the balance sheet, streamline operations and improve cash flows, we are now focused on driving subscription-based (recurring) revenue and earnings growth through converting existing software customers to our platform and expanding their use of our proprietary cloud solutions, managed services and attached payment solutions, as well as signing new software and services customers to our platform.
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These platform-delivered solutions enable our customers to improve operational efficiency, increase customer satisfaction, streamline order and transaction processing and reduce operating costs. The wide array of general commerce and industry-specific modules available via our platform can be bundled or purchased stand-alone, which enables our clients to better serve their end-users.
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These investments enable us to maintain our strong competitive differentiation and significant equity in the global markets in which we operate. • Invest in innovative products and leading managed services.
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The bundling of services further increases the value that we bring to our customers and promotes long-term customer relationships as customers come to rely upon us across multiple facets of their business.
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We also invest in our broad services offering including 24/7 service desks and hardware maintenance and installation, to provide both remote and on-site support throughout the year, including during critical holiday periods. • Allocate our capital strategically through a cost-disciplined approach to operations .
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In addition to simplifying our customers operations, our bundled solutions often result in cost savings compared with sourcing technology from multiple vendors or developing and maintaining these in-house. 2 Table of Contents Retail Our platform-led SaaS and Services capabilities focus on digitally transforming retail store systems.
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Based on our strategy, we will prioritize maintaining a stable leverage ratio with ample liquidity, investments in our platform and related next-generation technology, and the repurchase of stock, including our Series A Convertible Preferred Stock and common stock. We may also pursue acquisitions and/or divestitures.
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This includes store operations, consumer engagement (e.g., eCommerce and loyalty programs), back office data processing and insights, payments, third party API integration for partner ecosystems, and physical endpoints in the form of hardware. Our software applications include point of sale software, self-checkout, frictionless software, and retail-specific edge application infrastructure management platform.
Added
Our cloud-native API platform powers an integrated in-store and digital solution for retail and restaurant customers. Our highly reliable and secure platform enables our customers to easily and efficiently manage their technology stacks, use data for more effective decision making, reduce the cost of IT efforts, and rapidly innovate and test new technology.
Removed
These services allow for deploying and orchestrating virtualized and containerized microservices to all of the various touch points in a store, fuel controller, pharmacy and kitchen software, loyalty and promotions, mobile ordering, back office applications including inventory, transaction and consumer data insights, cash office, and value-added payment solutions.
Added
Designed to drive digital transformation and innovation at scale for retailers and restaurants, our platform provides our customers: ◦ A robust set of NCR Voyix software applications that are designed to be omnichannel and POS agnostic; ◦ A single source and access point for all operational data including real time transaction data; ◦ System integration across their entire in-store and digital technology stack including third parties; and ◦ Software components and APIs to more efficiently power and integrate their own software development efforts. • Edge.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisks Associated with our Business & Operations • Data protection, cybersecurity and data privacy issues could negatively impact our business. • Our business may be negatively affected by domestic and global economic and credit conditions. • A downturn, consolidation or decrease in technology spend in the financial services industry could harm our digital banking business. • Disruptions in our data center hosting and public cloud facilities could adversely affect our business. • If we are unable to maintain and update our information technology systems to meet the needs of our business, our business could be adversely impacted. • If we do not retain key employees, or attract quality new and replacement employees, we may not be able to meet our business objectives. • Defects, errors, installation difficulties or development delays could expose us to potential liability, harm our reputation and negatively impact our business. • If third party suppliers upon which we rely are not able to fulfill our needs, our ability to timely bring our products to market could be affected. • Our payments-related business subjects us to additional regulatory requirements and other risks and uncertainties that could be costly and difficult to comply with or that could harm our business. • Our international operations subject us to additional risks that can adversely affect our business, financial condition and results of operations. • Our risk management efforts may not be fully effective in mitigating our risk exposure, which could expose us to losses and liability and otherwise harm our business. • A major natural disaster or catastrophic event could have a materially adverse effect on our business, financial condition and results of operations, or have other adverse consequences. 9 Table of Contents • Our historical manufacturing activities subject us to environmental exposures.
Biggest changeRisks Associated with our Business & Operations • We face extensive competition in our markets and if we do not compete effectively, we may not be successful. • Disruptions in our data center hosting and public cloud facilities could adversely affect our business. • Defects, errors, installation difficulties or development delays could expose us to potential liability, harm our reputation and negatively impact our business. • Our artificial intelligence capabilities may not operate as anticipated, which could adversely affect our reputation, revenues and profitability. 9 Table of Contents • We rely on the availability of third-party licenses, and our inability to maintain those licenses could harm our business. • Changes in U.S. or foreign trade policies and other factors beyond our control may adversely impact our business and operating results. • If we are unable to maintain and update our information technology systems to meet the needs of our business, our business could be adversely impacted. • If we do not retain key employees, or if we are unable to recruit, develop and retain qualified employees, we may not be able to meet our business objectives. • If third-party suppliers upon which we rely to manufacture our products and to supply key components necessary for our products and services are not able to fulfill our needs, our ability to timely bring our products to market could be affected. • We face uncertainties with regard to regulations, lawsuits and other related matters. • Our payments-related business subjects us to additional regulatory requirements and other risks and uncertainties that could be costly and difficult to comply with or that could harm our business. • Changes to our tax rates and additional income tax liabilities could impact profitability. • Our international operations subject us to additional risks that can adversely affect our business, financial condition and results of operations. • Our risk management efforts may not be fully effective in mitigating our risk exposure, which could expose us to losses and liability and otherwise harm our business. • A major natural disaster or catastrophic event could have a materially adverse effect on our business, financial condition and results of operations, or have other adverse consequences. • Our historical manufacturing activities subject us to environmental exposures.
Any failure to maintain high-quality customer support, or a market perception that we do not maintain high-quality customer support, could adversely affect our reputation and brand, our ability to benefit from referrals by existing customers, our ability to sell cross-sell our products and services to existing and prospective customers, and our business, financial condition, or results of operations.
Any failure to maintain high-quality customer support, or a market perception that we do not maintain high-quality customer support, could adversely affect our reputation and brand, our ability to benefit from referrals by existing customers, our ability to cross-sell our products and services to existing and prospective customers, and our business, financial condition, or results of operations.
Interruptions could also expose us to liability claims from customers and others, payment of damages or other amounts, negative publicity and the need to engage in costly remediation efforts, any of which could impact our business and reduce our revenue.
Interruptions could also expose us to other liability claims from customers and others, payment of damages or other amounts, negative publicity and the need to engage in costly remediation efforts, any of which could impact our business and reduce our revenue.
Our credit agreement governing the senior secured facilities and the indentures for our senior unsecured notes include restrictive covenants that, subject to certain exceptions and qualifications, restrict or otherwise limit our ability and the ability of our subsidiaries to, among other things: • incur additional indebtedness; • create liens on, sell or otherwise dispose of, our assets; • engage in certain fundamental corporate changes or changes to our business activities; • make certain investments (including acquisitions); • engage in sale-leaseback or hedging transactions; • repurchase our common stock, pay dividends or make similar distributions on our capital stock; • repay certain indebtedness; • engage in certain affiliate transactions; and • enter into agreements that restrict our ability to create liens, pay dividends or make loan repayments.
Our credit agreement governing the senior secured credit facilities and the indentures for our senior unsecured notes include restrictive covenants that, subject to certain exceptions and qualifications, restrict or otherwise limit our ability and the ability of our subsidiaries to, among other things: • incur additional indebtedness; • create liens on, sell or otherwise dispose of, our assets; • engage in certain fundamental corporate changes or changes to our business activities; • make certain investments (including acquisitions); • engage in sale-leaseback or hedging transactions; • repurchase our common stock, pay dividends or make similar distributions on our capital stock; • repay certain indebtedness; • engage in certain affiliate transactions; and • enter into agreements that restrict our ability to create liens, pay dividends or make loan repayments.
If we identify deficiencies in our internal control over financial reporting, we may be unable to accurately report our financial results or report to them within the timeframes required by the SEC.
If we identify deficiencies in our internal control over financial reporting, we may be unable to accurately report our financial results or to report them within the timeframes required by the SEC.
In connection with the Spin-Off, the Company and NCR Atleos entered into a separation and distribution agreement and various other agreements (including a transition services agreement, tax matters agreement, employee matters agreement, patent and technology cross-license agreement, trademark license and use agreement, master services agreement) that provide for the performance of certain services by each company for the benefit of the other for a period of time after the Spin-Off.
In connection with the Spin-Off, we and NCR Atleos entered into a separation and distribution agreement and various other agreements (including a transition services agreement, tax matters agreement, employee matters agreement, patent and technology cross-license agreement, trademark license and use agreement, master services agreement) that provide for the performance of certain services by each company for the benefit of the other for a period of time after the Spin-Off.
We are subject to certain consumer protection requirements such as oversight by the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) and the customer-facing nature of our payments-related business subjects us to increased risks of disputes with consumers, including litigation and class action litigation, and significant costs to address such matters.
Further, we are subject to certain consumer protection requirements such as oversight by the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) and the customer-facing nature of our payments-related business subjects us to increased risks of disputes with consumers, including litigation and class action litigation, and significant costs to address such matters.
Complying with these requirements and changing our policies and practices may be onerous and costly, and we may not be able to respond quickly or effectively to regulatory, legislative, and other developments. These changes may in turn impair our ability to offer our existing or planned features, products, and services, and/or increase our cost of doing business.
Complying with these requirements and changing our policies and practices may be onerous and costly, and we may not be able to respond quickly or effectively to regulatory, legislative, and other developments. These changes may in turn impair our ability to offer existing or planned features, products, and services, and also may increase our cost of doing business.
Any future lowering of our ratings likely would make it more difficult or more expensive for us to obtain additional debt financing or capital from other financing arrangements. We may be required to write down the value of certain significant assets, which would adversely affect our operating results.
Any future lowering of our ratings would make it more difficult or more expensive for us to obtain additional debt financing or capital from other financing arrangements. We may be required to write down the value of certain significant assets, which would adversely affect our operating results.
We may be unable to obtain trademark protection for our products or services and associated brands, and our existing trademark registrations and applications, and any trademarks that may be used in the future, may not provide us with competitive advantages or distinguish our products or services from those of our competitors.
We may be unable to obtain trademark protection for our products and brands, and our existing trademark registrations and applications, and any trademarks that may be used in the future, may not provide us with competitive advantages or distinguish our products and services from those of our competitors.
Our acquisitions, divestitures and other strategic transactions may not produce anticipated results, which could have a material adverse effect on our business, financial condition or results of operations. We have made and expect to continue to make acquisitions, divestitures and other strategic transactions to strengthen our business and grow our Company.
Our acquisitions, divestitures and other strategic transactions or future acquisitions may not produce anticipated results, which could have a material adverse effect on our business, financial condition or results of operations. We have made and expect to continue to make acquisitions, divestitures and other strategic transactions to strengthen our business and grow our Company.
We 18 Table of Contents have also been identified as a potentially responsible party in connection with certain environmental matters, including the Kalamazoo River matter, as further described in Note 11, “Commitments and Contingencies”, of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report; in “Government Regulations” within Item 1 of Part I of this Report; and in “Environmental and Legal Contingencies” within the “Critical Accounting Estimates” section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of Part II of this Report, and we incorporate such disclosures by reference and make them a part of this discussion of risk factors.
We have also been 22 Table of Contents identified as a potentially responsible party in connection with certain environmental matters, including the Kalamazoo River matter, as further described in Note 11, “Commitments and Contingencies”, of the Notes to Consolidated Financial Statements included in Item 8 of Part II of this Report; in “Government Regulations” within Item 1 of Part I of this Report; and in “Environmental and Legal Contingencies” within the “Critical Accounting Estimates” section of “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Item 7 of Part II of this Report, and we incorporate such disclosures by reference and make them a part of this discussion of risk factors.
Further, such benefits may be realized later than expected, and the ongoing difficulties in implementing these measures may be greater than anticipated, which could cause us to incur additional costs or result in business disruptions.
Further, such benefits may be realized later than expected, and the difficulties in implementing these measures may be greater than anticipated, which could cause us to incur additional costs or result in business disruptions.
Pursuant to the separation and distribution agreement and certain other agreements the Company entered into with NCR Atleos in connection with the Spin-Off, the Company and NCR Atleos agree to indemnify the other for certain liabilities.
Pursuant to the separation and distribution agreement and certain other agreements we entered into with NCR Atleos in connection with the Spin-Off, the Company and NCR Atleos agree to indemnify the other for certain liabilities.
Upon the occurrence of a change in control under the applicable indenture governing the applicable senior unsecured notes, holders of those notes may require us to repurchase their notes.
Upon the occurrence of a change in control under the applicable indenture governing our senior unsecured notes, holders of those notes may require us to repurchase their notes.
In connection with the Spin-Off, the Company entered into a Tax Matters Agreement with NCR Atleos, pursuant to which NCR Atleos agreed to not enter into any transaction that could cause the Spin-Off or any related transactions to be taxable to us without our consent and to indemnify us for any tax liability resulting from any such transaction.
In connection with the Spin-Off, we entered into a Tax Matters Agreement with NCR Atleos, pursuant to which NCR Atleos agreed to not enter into any transaction that could cause the Spin-Off or any related transactions to be taxable to us without our consent and to indemnify us for any tax liability resulting from any such transaction.
However, the opinion relies on certain facts, assumptions, representations and undertakings from the Company and NCR Atleos, including those regarding the past and future conduct of the companies’ respective businesses and other matters, and the opinion would not be valid if such assumptions, representations and undertakings were incorrect.
However, the opinion relies on certain facts, assumptions, representations and undertakings from us and NCR Atleos, including those regarding the past and future conduct of the companies’ respective businesses and other matters, and the opinion would not be valid if such assumptions, representations and undertakings were incorrect.
We have a number of significant assets on our balance sheet as of December 31, 2023 and the value of these assets can be adversely impacted by factors related to our business and operating performance, as well as factors outside of our control.
We have a number of significant assets on our balance sheet as of December 31, 2024 and the value of these assets can be adversely impacted by factors related to our business and operating performance, as well as factors outside of our control.
Our failure to properly and efficiently maintain and update our information technology systems, or the failure of our information technology systems to perform as we anticipate, could hinder our ability to attract new customers, cause us to incur legal liability, contractual penalties or cause us to lose existing customers, each of which could have a material adverse effect on our business, results of operations and financial condition.
Our failure to properly and efficiently maintain and update our information technology systems, or the failure of our information technology systems to perform as we anticipate, could hinder our ability to operate or to attract and support customers, or could cause us to incur legal liability, contractual penalties or cause us to lose existing customers, each of which could have a material adverse effect on our business, results of operations and financial condition.
Our failure to repurchase the senior unsecured notes of a series when required would result in an event of default with respect to such notes which could, in turn, constitute a default under the terms of our other indebtedness, if any.
Our failure to repurchase a series of senior unsecured notes when required would result in an event of default with respect to such notes which could, in turn, constitute a default under the terms of our other indebtedness.
In addition, dividends on the Series A Convertible Preferred Stock accrue and are cumulative at the rate of 5.5% per annum, payable quarterly in arrears. If we fail to timely declare and pay a dividend, the dividend rate will increase to 8.0% per annum until such time as all accrued but unpaid dividends have been paid in full.
In addition, dividends on the Series A Convertible Preferred Stock accrue cumulatively at the rate of 5.5% per annum, payable quarterly in arrears. If we fail to timely declare and pay a dividend, the dividend rate will increase to 8.0% per annum until such time as all accrued but unpaid dividends have been paid in full.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised by disclosure during this type of litigation.
Furthermore, because of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some of our confidential information could be compromised during this type of litigation.
Our software products are increasingly being offered and provided on a cloud or other hosted basis through data centers operated by the Company or third parties in the United States and other countries. In addition, certain applications and data that we use in our services offerings and our operations may be hosted or stored at such facilities.
Our products and services are increasingly being offered and provided on a cloud or other hosted basis through data centers operated by us or third parties in the United States and other countries. In addition, certain applications and data that we use in our services offerings and our operations may be hosted or stored at such facilities.
If any of our risk management policies and processes are ineffective, or if we are not successful in identifying and mitigating all risks to which we are or may be exposed, we may suffer uninsured liability or harm to our reputation, or be subject to litigation or regulatory actions, any of which could adversely affect our business, financial condition, and results of operations.
If any of our risk management policies and processes are ineffective, or if we are not successful in identifying and mitigating all risks to which we are or may be exposed, we may suffer losses or harm to our reputation, or be subject to litigation or regulatory actions, any of which could adversely affect our business, financial condition, and results of operations.
As of December 31, 2023, approximately 0.3 million shares of our Series A Convertible Preferred Stock were outstanding, representing approximately 10% of our outstanding common stock, including the Series A Convertible Preferred Stock on an as-converted basis.
As of December 31, 2024, approximately 0.3 million shares of our Series A Convertible Preferred Stock were outstanding, representing approximately 10% of our outstanding common stock, including the Series A Convertible Preferred Stock on an as-converted basis.
GOVERNANCE Our Series A Convertible Preferred Stock has rights, preferences and privileges that are not held by, and are preferential to, the rights of our common stockholders, which could adversely affect our liquidity and financial condition, and may result in the interests of the holders of our Series A Convertible Preferred Stock differing from those of our common stockholders.
RISKS ASSOCIATED WITH OUR GOVERNANCE Our Series A Convertible Preferred Stock has rights, preferences and privileges that are not held by, and are preferential to, the rights of our common stockholders, which could adversely affect our liquidity and financial condition, and may result in the interests of the holders of our Series A Convertible Preferred Stock differing from those of our common stockholders.
If we are unable to execute these initiatives as planned, we may not realize all or any of the anticipated benefits, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.
If we are unable to execute these initiatives as planned, we may not realize all or any of the anticipated benefits, which could have an adverse effect on our business, financial condition, results of operations and cash flows.
If any of these risks materialize, they could result in additional costs and expenses, exposure to liability claims, diversion of technical and other resources to engage in remediation efforts, loss of customers or negative publicity, each of which could negatively impact our business and operating results.
If any of these risks materialize, they could result in additional costs and expenses, exposure to liability claims, diversion of technical and other resources, and loss of customers or negative publicity, each of which could negatively impact our business and operating results.
Most cyberattacks are detected, prevented or mitigated by the Company’s various information technology and data protections, including but not limited to firewalls, intrusion prevention systems, denial of service detection, anomaly based detection, anti-virus/anti-malware, endpoint encryption and detection and response software, Security Information and Event Management (“SIEM”) system, identity management technology, security analytics, encryption and multi-factor authentication.
Most cyberattacks are detected, prevented or mitigated by our various information technology and data protections, including but not limited to firewalls, intrusion prevention systems, denial of service detection, anomaly-based detection, anti-virus/anti-malware, endpoint encryption and detection and response software, Security Information and Event Management system, identity management technology, security analytics, encryption and multi-factor authentication.
For example, in light of continuing global fiscal challenges, various levels of government and international 24 Table of Contents organizations such as the Organization for Economic Co-operation and Development (“OECD”) and EU are increasingly focused on tax reform and other legislative or regulatory action to increase tax revenue and establish minimum levels of corporate income tax.
For example, in light of continuing global fiscal challenges, various levels of government and international organizations such as the Organization for Economic Co-operation and Development (“OECD”) and EU are focused on tax reform and other legislative or regulatory action to increase tax revenue and establish minimum levels of corporate income tax.
In addition, during the transition services periods under these agreements, the Company’s management and employees may be required to divert their attention away from its business in order to provide services to NCR Atleos, which could adversely affect the Company’s business.
In addition, during the transition services periods under these agreements, our management and employees may be required to divert their attention away from our business in order to provide services to NCR Atleos, which could adversely affect our business.
The imposition or threat of protectionist trade policies or import or export tariffs, global and regional market conditions and spending trends in the financial, retail and restaurant industries, new tax legislation across multiple jurisdictions, modified or new global or regional trade agreements, fluctuations in oil and commodity prices, among other things, have created a challenging and unpredictable environment in which to market the products and services of our various businesses across our different geographies and industries.
The imposition or threat of protectionist trade policies or import or export tariffs, global and regional market conditions, spending trends in the retail and restaurant industries, tax legislation, modified or new global or regional trade agreements, fluctuations in oil and commodity prices, among other things, have created a challenging and unpredictable environment in which to market our products and services across our different geographies and industries.
Following an extensive investigation which included Company experts, external forensic cybersecurity experts and federal law enforcement, among others, the Company concluded that this incident impacted operations for some customers only with respect to specific Aloha cloud-based services and Counterpoint. Functionality has been fully restored to customers, and we built a new cloud environment to host the affected applications.
Following an extensive investigation which included Company experts, external forensic cybersecurity experts and federal law enforcement, among others, we concluded that the incident impacted operations for some 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.
Certain changes in control may result in an acceleration of our indebtedness or our obligations under other financing arrangements, or may require us to repurchase our senior unsecured notes or our Series A Convertible Preferred Stock.
Certain change in control transactions may result in an acceleration of our indebtedness or our obligations under other financing arrangements, or may require us to repurchase our senior unsecured notes or our Series A Convertible Preferred Stock.
Risks Associated with the Spin-Off of NCR Atleos • We may not achieve some or all of the expected benefits of the Spin-Off of NCR Atleos. • If the Spin-Off fails to qualify for tax-free treatment, it could result in substantial tax liability for us and our stockholders. • We may be held liable to NCR Atleos if we fail to perform under our agreements with NCR Atleos, and the performance of such services may negatively affect our business and operations. • Potential indemnification obligations to NCR Atleos or a refusal of NCR Atleos to indemnify us pursuant to agreements executed in the Spin-Off could materially adversely affect us.
Risks Associated with the Spin-Off of NCR Atleos • If the Spin-Off fails to qualify for tax-free treatment, it could result in substantial tax liability for us and our stockholders. • We may be held liable to NCR Atleos if we fail to perform under our agreements with NCR Atleos, and the performance of such services may negatively affect our business and operations. • Potential indemnification obligations to NCR Atleos or a refusal of NCR Atleos to indemnify us pursuant to agreements executed in the Spin-Off could materially adversely affect us.
Furthermore, the opinion is not binding on the Internal Revenue Service (“IRS”) or the courts. If the Spin-Off is determined to be taxable for U.S. federal income tax purposes, the Company’s stockholders that are subject to U.S. federal income tax and the Company could incur significant U.S. federal income tax liabilities.
Furthermore, the opinion is not binding on the Internal Revenue Service (“IRS”) or the courts. If the Spin-Off is determined to be taxable for U.S. federal income tax purposes, we and our stockholders that are subject to U.S. federal income tax could incur significant U.S. federal income tax liabilities.
If we are not successful in attracting additional customers to our commerce platform, expanding our customer base at the rate that we anticipate, implementing and managing these initiatives, or if the costs to complete these initiatives is higher than anticipated, we may not meet our growth and gross margin projections or expectations, and operating results could be negatively impacted.
If we are not successful in attracting customers to our platform, expanding our customer base at the rate that we anticipate, or if the costs to complete these initiatives is higher than anticipated, we may not meet our growth and gross margin projections, and operating results could be negatively impacted.
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. Our deferred tax assets, net of valuation allowances, totaled approximately $406 million and $461 million at December 31, 2023 and 2022, respectively.
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. Our deferred tax assets, net of valuation allowances, totaled approximately $321 million and $406 million at December 31, 2024 and 2023, respectively.
Accordingly, our risk management policies, procedures, techniques, and processes may not be sufficient to identify all of the risks to which we are exposed, to enable us to mitigate the risks we have identified, or to identify additional risks to which we may become subject in the future as we expand our product and services offerings.
As a result of our strategic transformation, our risk management policies, procedures, techniques, and processes may not be sufficient to identify all of the risks to which we are exposed, to enable us to mitigate the risks we have identified, or to identify additional risks to which we may become subject in the future as we expand our product and services offerings.
Our historical manufacturing activities subject us to environmental exposures. Our facilities and operations are subject to a wide range of environmental protection laws, and we have investigatory and remedial activities underway at a number of facilities that we currently own or operate, or formerly owned or operated, to comply, or to determine compliance, with such laws.
Our historical manufacturing activities subject us to environmental exposures. Certain of our facilities, properties and operations are subject to a wide range of environmental protection laws, and we have investigatory and remedial activities underway at a number of facilities that we currently own, or formerly owned or operated, to comply with such laws.
Risks Associated with our Finance & Accounting • Our level of indebtedness could limit our financial and operating activities and adversely affect our ability to incur additional debt to fund future needs. • The terms of the documents governing our indebtedness include financial and other covenants that could restrict or limit our financial and business operations. • Despite our current levels of debt, we may still incur substantially more debt, including secured debt, and other liabilities, which would increase the risks described in these risk factors relating to indebtedness. • If we are unable to continue to access or renew financing sources and obtain capital, our ability to maintain and grow our business may be impaired. • Our cash flows may not be sufficient to service our indebtedness, and if we are unable to satisfy our obligations under our indebtedness, we may be required to seek other financing alternatives, which may not be successful. • Borrowings under our senior secured credit facilities bear interest at a variable rate, which could cause our debt service obligations or other costs of capital under our senior secured credit facilities to increase significantly. • The terms governing our trade receivables facility, including the length of term, financial and other covenants, and obligations to remit collections on the sold receivables could restrict or otherwise limit our financial and business operations. • Certain changes in control may result in an acceleration of our indebtedness or our obligations under other financing arrangements, or may require us to repurchase our senior unsecured notes or our Series A Convertible Preferred Stock. • A lowering or withdrawal of the ratings assigned to us or our debt securities by rating agencies may increase our future capital costs and reduce our access to capital. • We may be required to write down the value of certain significant assets, which would adversely affect our operating results. • Our failure to maintain effective internal control over financial reporting or our failure to remediate our material weaknesses in our internal control over financial reporting, could have a material adverse effect on our results of operations, financial condition and cash flows.
Risks Associated with our Finance & Accounting • Our level of indebtedness could limit our financial and operating activities and adversely affect our ability to incur additional debt to fund future needs. • The terms of the documents governing our indebtedness include financial and other covenants that could restrict or limit our financial and business operations. • Despite our current levels of debt, we may still incur substantially more debt, including secured debt, and other liabilities, which would increase the risks described in these risk factors relating to indebtedness. • If we are unable to continue to access or renew financing sources and obtain capital, our ability to maintain and grow our business may be impaired. • Our cash flows may not be sufficient to service our indebtedness, and if we are unable to satisfy our obligations under our indebtedness, we may be required to seek other financing alternatives, which may not be successful. • Certain changes in control may result in an acceleration of our indebtedness or our obligations under other financing arrangements, or may require us to repurchase our senior unsecured notes or our Series A Convertible Preferred Stock. • A lowering or withdrawal of the ratings assigned to us or our debt securities by rating agencies may increase our future capital costs and reduce our access to capital. • We may be required to write down the value of certain significant assets, which would adversely affect our operating results. • Our failure to maintain effective internal control over financial reporting or our failure to remediate our material weaknesses in our internal control over financial reporting, could have a material adverse effect on our results of operations, financial condition and cash flows.
Our international operations subject us to additional risks that can adversely affect our business, financial condition and results of operations. For the years ended December 31, 2023 and 2022, the percentage of our revenue from outside of the United States was 33%, respectively.
Our international operations subject us to additional risks that can adversely affect our business, financial condition and results of operations. For the years ended December 31, 2024 and 2023, the percentage of our revenue from outside of the United States was 40% and 35%, respectively.
In addition, international, regional or domestic political unrest and the related potential impact on global stability, terrorist attacks and the potential for other hostilities in various parts of the world, public health crises and natural disasters continue to contribute to a climate of economic and political uncertainty that could adversely affect our results of operations and financial condition, including our revenue growth and profitability.
In addition, international, regional or domestic political unrest and the related potential impact on global stability, terrorist attacks and the potential for hostilities in various parts of the world, public health crises and natural disasters can create or contribute to a climate of economic and political uncertainty that adversely impacts our results of operations and financial condition, including our revenue growth and profitability.
The market for highly skilled workers and leaders in our industry is extremely competitive, and we may need to invest significant amounts of cash and equity to attract and retain new employees. We may never realize returns on these investments. Key employees may decide to leave the Company for other opportunities or may be unavailable for health or other reasons.
The market for highly skilled workers and leaders in our industry is extremely competitive, and we may need to invest significant amounts of cash and equity to attract and retain these employees. We may never realize returns on these investments. Key employees may decide to leave the Company for other opportunities.
Our international operations subject us to a variety of risks and challenges, including: • the impact of ongoing and future economic and credit conditions on the stability of national and regional economies and industries within those economies; • political conditions and local regulations that could adversely affect demand for our solutions, our ability to access funds and resources, or our ability to sell products in these markets; • the impact of a downturn in the global economy, or in regional economies, on demand for our products; • competitive labor markets and increasing wages in markets that we operate in; • currency exchange rate fluctuations that could result in lower demand for our products as well as generate currency translation losses; 17 Table of Contents • limited availability of local currencies to pay vendors, employees and third parties and to distribute funds outside of the country; • changes to global or regional trade agreements that could limit our ability to sell products in these markets; • the imposition of import or export tariffs, taxes, trade policies or import and export controls that could increase the expense of, or limit demand for our products; • changes to and compliance with a variety of laws and regulations that may increase our cost of doing business or otherwise prevent us from effectively competing internationally; • government uncertainty or limitations on the ability to enforce legal rights and remedies, including as a result of new, or changes to, laws and regulations; • reduced protection for intellectual property rights in certain countries; • implementing and managing systems, procedures and controls to monitor our operations in foreign markets; • changing competitive requirements and deliverables in developing and emerging markets; • longer collection cycles and the financial viability and reliability of contracting partners and customers; • managing a geographically dispersed workforce, work stoppages and other labor conditions or issues; • disruptions in transportation and shipping infrastructure; and • the impact of natural disasters, catastrophic events, civil unrest, war and terrorist activity on supply chains, the economy or markets in general, or on our ability, or that of our suppliers, to meet commitments.
Our international operations subject us to a variety of risks and challenges, including: • the impact of ongoing and future economic conditions on the stability of national and regional economies and industries within those economies; • political conditions and local regulations that could adversely affect demand for our solutions, our ability to access funds and resources, or our ability to sell products in these markets; • the impact of a downturn in the global economy, or in regional economies, on demand for our products; • competitive labor markets and increasing wages in markets that we operate in; • varied employee/employer relationships, existence of works councils and differing labor practices, and other challenges caused by distance, language, local expertise, and cultural differences, increasing the complexity of doing business in multiple jurisdictions; • currency exchange rate fluctuations that could result in lower demand for our products as well as generate currency translation losses; • limited availability of local currencies to pay vendors, employees and third parties and to distribute funds outside of the country; • changes to global or regional trade agreements that could limit our ability to sell products in these markets; 21 Table of Contents • the imposition of import or export tariffs, taxes, trade policies or import and export controls that could increase the expense of, or limit demand for our products; • changes to and compliance with a variety of laws and regulations that may increase our cost of doing business or otherwise prevent us from effectively competing internationally or that may impose burdensome reporting requirements on us or impose restrictions on our operations or offerings; • government uncertainty or limitations on the ability to enforce legal rights and remedies, including as a result of new, or changes to, laws and regulations; • reduced protection for intellectual property rights in certain countries; • implementing and managing systems, procedures and controls to monitor our operations in foreign markets; • changing competitive requirements and deliverables in developing and emerging markets; • longer collection cycles and the financial viability and reliability of contracting partners and customers; • managing a geographically dispersed workforce, work stoppages and other labor conditions or issues; • disruptions in transportation and shipping infrastructure; and • the impact of natural disasters, catastrophic events, civil unrest, war and terrorist activity on supply chains, the economy or markets in general, or on our ability, or that of our suppliers, to meet commitments.
The holders of our Series A Convertible Preferred Stock 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, 2024 and the three months commencing on and immediately following every 25 Table of Contents third anniversary of such date, at 100% of the liquidation preference thereof plus all accrued but unpaid dividends, and the right, subject to certain exceptions, to require us to repurchase all or any portion of the Series A Convertible Preferred Stock upon certain change of control events at the greater of (a) 100% of the liquidation preference thereof plus all accrued but unpaid dividends and (b) the consideration the holders would have received if they had converted their shares of Series A Convertible Preferred Stock into common stock immediately prior to the change of control event.
The holders of our Series A Convertible Preferred Stock 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, at 100% of the liquidation preference thereof plus all accrued but unpaid dividends, and the right, subject to certain exceptions, to require us to repurchase all or any portion of the Series A Convertible Preferred Stock upon certain change of control events at the greater of (a) 100% of the liquidation preference thereof plus all accrued but unpaid dividends and (b) the consideration the holders would have received if they had converted their shares of Series A Convertible Preferred Stock into common stock immediately prior to the change of control event.
We cannot predict with certainty when the benefits expected from the Spin-Off will occur or the extent to which they will be achieved, or that the costs or dis-synergies of the transaction will not exceed the anticipated amounts.
We cannot predict with certainty when the benefits expected from the Spin-Off or Digital Banking Sale will occur or the extent to which they will be achieved, or that the costs or dis-synergies of the transactions will not exceed the anticipated amounts.
Our use of artificial intelligence and machine learning is subject to various risks including the use of personal information, flaws in our models or datasets that may result in biased or inaccurate results, ethical considerations regarding artificial intelligence, and our ability to safely deploy and implement governance and controls for artificial intelligence systems.
In addition, our use of AI is subject to various risks including the use of personal information, flaws in our models or datasets that may result in biased or inaccurate results, ethical considerations regarding AI, and our ability to safely deploy and implement governance and controls for AI systems.
The majority of the electronic debit networks over which transactions are conducted require sponsorship by a bank, and the financial condition and results of operations of any sponsors and/or the inability to find a replacement may cause disruptions to our operations.
The majority of the payment networks over which transactions are conducted require sponsorship by a bank, and the financial condition and results of operations of any sponsor bank and/or the inability to find a replacement sponsor bank may cause disruptions to our operations.
Failure to maintain an effective system of disclosure controls and procedures and internal control over financial reporting, or our failure to remediate our existing material weaknesses in our internal control over financial reporting, could have a material adverse effect on our results of operations, financial condition and cash flows.
Failure to maintain an effective system of disclosure controls and procedures and internal control over financial reporting could have a material adverse effect on our results of operations, financial condition and cash flows.
In addition, any failure or perceived failure by us, or any third parties with which we do business, to comply with our posted privacy statements or notices, changing consumer expectations, evolving laws, rules and regulations, industry standards, or contractual obligations to which we or such third parties are or may become subject, may result in actions or other claims against us by governmental entities or private actors, the expenditure of substantial costs, time, and other resources or the incurrence of significant fines, penalties, or other liabilities.
In addition, any failure or perceived failure by us, or any third parties with which we do business, to comply with our posted privacy statements or notices, changing consumer expectations, evolving laws, rules and regulations, industry standards, or contractual obligations, may result in actions or other claims against us by governmental entities or private actors, or the incurrence of significant fines, penalties, or other liabilities.
Upon such determination, the Company immediately started contacting customers, enacted its cybersecurity protocol and engaged outside experts to contain the incident and begin the recovery process.
Upon such determination, we immediately started contacting customers, enacted our cybersecurity protocol and engaged outside experts to contain the incident and begin the recovery process.
The Company has previously recorded valuation allowances related to certain deferred tax assets due to the uncertainty of the ultimate realization of the future benefits from those assets.
We have previously recorded valuation allowances related to certain deferred tax assets due to the uncertainty of the ultimate realization of the future benefits from those assets.
In addition, actions of these stockholders may cause periods of fluctuation in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.
In addition, actions of activist stockholders may cause significant fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.
Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problems at our headquarters or facilities could result in lengthy interruptions in access to or functionality of our platform or could result in related liabilities, and our business, financial condition or results of operations could be adversely affected.
Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated catastrophic event at our headquarters or other key facilities could result in lengthy interruptions in access to, or functionality of, our platform and other offerings or could expose us to other liabilities, and our business, financial condition or results of operations could be adversely affected.
Additionally, unauthorized third parties may try to copy or reverse engineer our products or intellectual property or otherwise obtain, misappropriate or use our intellectual property and other information that we regard as confidential or proprietary to create products and services that compete with ours. Protecting our intellectual property through patents or other intellectual property rights is expensive and time-consuming.
Additionally, unauthorized third parties may try to copy or reverse engineer portions of our products or otherwise obtain and use our intellectual property and other information that we regard as proprietary to create products and services that compete with ours. Investment in protecting our intellectual property, especially through patents, is expensive and time-consuming.
In addition, these potential tax liabilities may discourage, delay or prevent a change of control of us. The Company may be held liable to NCR Atleos if it fails to perform under its agreements with NCR Atleos, and the performance of such services may negatively affect the Company’s business and operations .
In addition, these potential tax liabilities may discourage, delay or prevent a change of control of us. We may be held liable to NCR Atleos if we fail to perform under our agreements with NCR Atleos, and the performance of such services may negatively affect our business and operations .
Changes in, or unexpected interpretations of, intellectual property laws may compromise our ability to protect our intellectual property rights. Failure to obtain or maintain protection of our confidential information (including trade secrets) or other proprietary information, for example through public disclosure, could harm our competitive position and materially and adversely affect our business, financial condition and results of operations.
In addition, any changes in, or unexpected interpretations of, intellectual property laws may compromise our ability to enforce our intellectual property rights. Failure to obtain or maintain protection of our confidential information (including trade secrets) or other proprietary information could harm our competitive position and materially and adversely affect our business, financial condition and results of operations.
The amount of debt that may be borrowed or issued, refinanced, and/or repurchased, repaid, redeemed or otherwise retired, if any, will depend on market conditions, trading levels of our debt, our cash position, compliance with our debt covenants and other considerations. Any such actions could impact our financial condition or results of operations.
The amount of debt that may be borrowed or issued, refinanced, and/or repurchased, repaid, redeemed or otherwise retired, if any, will depend on market conditions, trading levels of our debt, our cash position, compliance with our debt covenants and other considerations.
An attack, disruption, intrusion, denial of service, theft or other breach, or an inadvertent act by an employee or contractor, could result in unauthorized access to, or disclosure of, this data, resulting in claims, costs and reputational harm that could negatively affect our operating results.
An attack, disruption, intrusion, denial of service, theft or other breach, or an inadvertent act by an employee or contractor, could result in unauthorized access to, or disclosure of, our data or third-party data we collect, store or process, resulting in claims, costs and reputational harm that could negatively affect our operating results or stock price.
We may not be able to obtain adequate remedies for such infringement, misappropriation or breaches.
We may not be able to obtain adequate remedies for such breaches.
We have operations all over the world and our sites in California, Texas, Florida, and India are particularly vulnerable to climate change effects. Acts of terrorism could also cause disruptions in our businesses or those of our customers, consumer demand or the economy as a whole. We may not have sufficient protection or recovery plans in some circumstances.
We have operations all over the world and our sites in California, Texas, Florida, and India are particularly vulnerable to climate change effects. Acts of terrorism could also cause disruptions in our businesses or those of our customers, and could negatively impact consumer demand or the economy as a whole.
Given our reliance on intellectual property beyond just patents, we also rely in part on non-disclosure or confidentiality agreements with parties who have access to our know-how and confidential information (including trade secrets), including employees, contractors and other third parties, which place restrictions on the use and disclosure of this intellectual property.
In order to protect our confidential and proprietary information and technology, we rely in part on non-disclosure or confidentiality agreements with parties who have access to our confidential information (including trade secrets and know-how), including our employees, contractors and other third parties, which place restrictions on the use and disclosure of this intellectual property.
Additionally, we collect, use and store personal data of our employees and the personnel of our business partners, such as resellers, suppliers and contractors, in the ordinary course of business.
Additionally, we collect, use and store personal data of our employees and the personnel of our business partners in the ordinary course of business.
If our remediation efforts are insufficient or not completed in a timely manner, or if additional material weaknesses in our internal control over financial reporting are identified or occur in the future, our financial statements may contain material misstatements and we could be required to restate our financial results, which could materially and adversely affect our business, results of operations and financial condition, restrict our ability to access the capital markets, require us to expend significant resources to correct the material weaknesses, subject us to fines, penalties or judgments, harm our reputation or otherwise cause a decline in investor confidence.
Completion of remediation does not provide assurance that our remediation or other controls will continue to operate properly or remain adequate and if additional material weaknesses in our internal control over financial reporting are identified or occur in the future, our financial statements may contain material misstatements and we could be required to restate our financial results, which could materially and adversely affect our business, results of operations and financial condition, restrict our ability to access capital markets, require us to expend significant resources to correct the material weaknesses, subject us to fines, penalties or judgments, harm our reputation or otherwise cause a decline in investor confidence.
Our obligations to the holders of Series A Convertible Preferred Stock could also limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition. The preferential rights could also result in divergent interests between the holders of our Series A Convertible Preferred Stock and holders of our common stock.
Our obligations to the holders of our Series A Convertible Preferred Stock could also limit our ability to obtain additional financing or increase our borrowing costs, which could have an adverse effect on our financial condition.
Changes of key business leaders could be disruptive to our business or delay the execution of our strategy, and as a result could cause fluctuation in our stock price. In addition, as our business model evolves, we may need to attract employees with different skill sets, experience and attributes to support that evolution.
Changes of key business leaders could be disruptive to our business or delay the execution of our strategy. In addition, as our business model evolves, we need to attract employees with different skill sets, experience and attributes.
Likewise, we sometimes make assurances to customers regarding the operability and specifications of new technologies, and our results could be impacted if we are unable to deliver such technologies, or if such technologies do not perform as planned. We face extensive competition in our markets and if we do not compete effectively, we may not be successful.
We sometimes make assurances to customers regarding the operability and specifications of new technologies, and our results could be impacted if we are unable to deliver such technologies, or if such technologies do not perform as planned.
We face a variety of competitors in the retail, restaurant and digital banking markets and our competitors also include other large companies in the information technology industry, many of which have more financial and technical resources than we do.
Our competitors also include other large companies in the information technology industry, many of which have more financial and technical resources than we do.
If the Company does not satisfactorily perform its obligations under these agreements, it may be held liable for any resulting losses suffered by NCR Atleos, subject to certain limits.
If we do not satisfactorily perform our obligations under these agreements, we may be held liable for any resulting losses suffered by NCR Atleos, subject to certain limits.
To address infringement or misappropriation of our intellectual property, we may need to file lawsuits, which can be expensive, time consuming and distracting to management and the business. Our efforts to enforce our intellectual property rights in this manner may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights.
To counter infringement or unauthorized use of our intellectual property, we may deem it necessary to file infringement claims, which can be expensive, time consuming and distracting to management. Our efforts to enforce our intellectual property rights in this manner may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights.
On any date during the three months commencing on and immediately following March 16, 2024 and the three months commencing on and immediately following every third anniversary of such date, holders of our Series A Convertible Preferred Stock will have the right to require us to repurchase any or all of our outstanding Series A Convertible Preferred Stock.
On any date during the three months commencing on and immediately following March 16, 2027, 24 Table of Contents March 16, 2030 and March 16, 2033, holders of our Series A Convertible Preferred Stock will have the right to require us to repurchase any or all of our outstanding Series A Convertible Preferred Stock.
Any of the foregoing could materially and adversely affect our business, results of operations and financial condition. Changes to our tax rates and additional income tax liabilities could impact profitability. We are a United States based multinational company subject to income taxes in the United States and a number of foreign jurisdictions.
Changes to our tax rates and additional income tax liabilities could impact profitability. We are a United States based multinational company subject to income taxes in the United States and a number of foreign jurisdictions.
If such transactions are completed, the anticipated growth and other strategic objectives of such transactions may not be fully realized or may take longer to realize than expected, and a variety of factors may adversely affect any anticipated benefits from such transactions.
If such transactions are completed, the anticipated growth and other strategic objectives may not be fully realized or may take longer to realize than expected, and a variety of factors (such as business disruption, integration, talent loss, misallocation of resources and transaction costs, among others) may adversely affect any anticipated benefits from such transactions.
In addition, our products are subject to environmental laws in a number of jurisdictions. Given the uncertainties inherent in such activities, there can be no assurances that the costs required to comply with applicable environmental laws will not impact future operating results.
In addition, our products are subject to environmental laws in a number of jurisdictions. There can be no assurance that the costs required to comply with applicable environmental laws will not negatively impact our financial condition or future operating results.
In addition, our customers who license and deploy our software may do so in both standard and non-standard configurations in different environments with different computer platforms, system management software and equipment and networking configurations, which may increase the likelihood of technical difficulties.
In addition, customers license and deploy our software in both standard and non-standard configurations and across a variety of different environments, computer platforms, system management software, and equipment and networking configurations, any of which could increase the likelihood of technical difficulties.
We cannot assure the holders of the senior unsecured notes and Series A Convertible Preferred Stock that we will have sufficient financial resources, or will be able to arrange financing, to pay the repurchase price in cash with respect to any such notes or Series A Convertible Preferred Stock that holders have requested to be repurchased upon a change in control or scheduled redemption.
There can be no assurance that we will have sufficient financial resources, or will be able to arrange financing, to pay the repurchase price in cash with respect to any our senior unsecured notes or Series A Convertible Preferred Stock upon a change in control or scheduled redemption.
We are also subject to diverse and complex laws and regulations, including those relating to corporate governance, public disclosure and reporting, environmental safety and the discharge of materials into the environment, product safety, import and export compliance, data privacy and security, antitrust and competition, anti-corruption, and labor and human resources, which are rapidly changing and subject to many possible changes in the future.
Many of the diverse and complex regulations we are subject to, including those relating to corporate governance, public disclosure and reporting, securities laws, taxes, accounting, environmental safety and the discharge of materials into the environment, product safety, import and export compliance, data privacy and security, antitrust and competition, anti-corruption, and labor and human resources, can be subject to rapid and substantial change and may continue to be subject to material changes in the future.
In addition, bank sponsorship is required in order to process transactions over certain networks and payments solutions depend on our ability to secure these “sponsor” arrangements with financial institutions.
In addition, bank sponsorship is required to process transactions over certain payment networks and our payments solutions depend on our ability to secure these “sponsor” arrangements with financial institutions. Our ability to process certain card transactions is contingent upon our continued registration with the applicable card brands.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis. We are currently in the process of implementing a remediation plan to address these material weaknesses.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeFurther, we recognize the risks associated with the use of third-party service providers and have processes designed to identify material risks related to third parties. 26 Table of Contents We conduct periodic reviews and tests of our information security program and also leverage audits by our internal audit team, tabletop exercises, penetration and vulnerability testing, simulations, and other exercises to evaluate the effectiveness of our information security program and attempt to improve our security measures and planning.
Biggest changeWe conduct periodic reviews and tests of our information security program and also leverage audits by our internal audit team, tabletop exercises, penetration and vulnerability testing, simulations, and other exercises to evaluate the effectiveness of our information security program and attempt to improve our security measures and planning.
Our CIO attends regular meetings of the executive officer team, including our Chief Executive Officer, Chief Financial Officer and other senior executive officers, and reports on cybersecurity matters as appropriate. Our Board of Directors exercises oversight over our risk management process directly, as well as through its various standing committees that address risks inherent in their respective areas of oversight.
Our CTO attends regular meetings of the executive officer team, including our Chief Executive Officer, Chief Financial Officer and other senior executive officers, and reports on cybersecurity matters as appropriate. Our Board of Directors exercises oversight over our risk management process directly, as well as through its various standing committees that address risks inherent in their respective areas of oversight.
The Risk Committee also reviews the adequacy and effectiveness of such policies, as well as the steps taken by management to mitigate or otherwise control these cybersecurity exposures and to identify future risks. Our CIO reports regularly to the Risk Committee on cybersecurity and information security and the full Board reviews significant cybersecurity matters as appropriate.
The Risk Committee also reviews the adequacy and effectiveness of such policies, as well as the steps taken by management to mitigate or otherwise control these cybersecurity exposures and to identify future risks. Our CTO reports regularly to the Risk Committee on cybersecurity and information security and the full Board reviews significant cybersecurity matters as appropriate.
We collaborate with external experts, including consultants and auditors, in evaluating and testing our information security program. Our employees and certain of our contractors are required to participate in security awareness training at least annually. The information security program is under the responsibility of the Chief Information Officer (CIO).
We collaborate with external experts, including consultants and auditors, in evaluating and testing our information security program. Our employees and certain of our contractors are required to participate in security awareness training at least annually. Our Chief Technology Officer (CTO) is responsible for oversight of our information security strategy, program, and operations.
For a description of risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition, see the risk factor “Data protection, cybersecurity and data privacy issues could negatively impact our business” in Item 1A of Part I of this Report.
For a description of risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition, see the risk factor “Our inability to protect our systems and data from cybersecurity threats or other technological risks could adversely affect our business operations, or stock price and damage our brand and reputation” in Item 1A of Part I of this Report.
The Company’s cybersecurity risk management policies and procedures include internal notification procedures which, depending on the level of severity assigned to the event, may include direct notice to, among others, the Company’s General Counsel and Chief Privacy Officer.
The CISO’s responsibilities in prior roles at large, global fintech and healthcare companies has included initiatives to identify and reduce cybersecurity vulnerabilities. The Company’s cybersecurity risk management policies and procedures include internal notification procedures which, depending on the level of severity assigned to the event, may include direct notice to, among others, the Company's General Counsel and Chief Privacy Officer.
Removed
The CIO is responsible for leading and implementing, with a cross functional team, our cybersecurity strategy, standards, and risk management policies and procedures.
Added
Further, we recognize the risks associated with the use of third-party service providers and have processes designed to identify material risks related to third parties.
Added
The CTO has over 25 years of information technology experience, including leadership experience managing global information security, IT infrastructure and engineering. He holds a doctorate in Business Administration, Master of Business Administration, and Bachelor of Engineering in Electrical and Electronics Engineering / Information Systems.
Added
In previous roles at large scale fintech and cybersecurity companies, the CTO has designed comprehensive cybersecurity programs and managed and mitigated high profile cybersecurity incidents to ensure business continuity. Our Chief Information Security Officer (CISO), who reports directly to the CTO, is responsible for day-to-day assessment and management of cybersecurity risk.
Added
Our CISO has over 20 years of experience in various roles related to information security and related technology, including previously serving as Vice President of Information Technology and Senior Vice President of Information Technology at other companies, and holds a Bachelor of Science in Math and a Master of Business Administration in 27 Table of Contents Computer Information Systems and Information Technology.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. PROPERTIES As of December 31, 2023, NCR Voyix operated 85 facilities consisting of approximately 3.6 million square feet in 25 countries throughout the world, which are generally used by all of NCR Voyix’s operating segments. On a square footage basis, 20% of these facilities are owned and 80% are leased.
Biggest changeItem 2. PROPERTIES As of December 31, 2024, NCR Voyix operated 70 facilities consisting of approximately 3.0 million square feet in 24 countries throughout the world, which are generally used by both of NCR Voyix’s operating segments. On a square footage basis, 8% of these facilities are owned and 92% are leased.
Within the total facility portfolio, the Company operates 4 research and development facilities totaling 0.2 million square feet, 100% of which is leased. The remaining 3.4 million square feet of space includes office, repair, and warehousing space and other miscellaneous sites, and is 87% leased. NCR Voyix is headquartered in Atlanta, Georgia, USA.
Within the total facility portfolio, the Company operates 4 research and development facilities totaling 0.2 million square feet, 100% of which is leased. The remaining 2.8 million square feet of space includes office, repair, and warehousing space and other miscellaneous sites, and is 84% leased. NCR Voyix is headquartered in Atlanta, Georgia, USA.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeCompany / Index 2019 2020 2021 2022 2023 NCR Voyix Corporation $ 152 $ 163 $ 174 $ 101 $ 121 S&P 500 Stock Index $ 131 $ 156 $ 200 $ 164 $ 207 S&P 500 Information Technology Sector $ 150 $ 216 $ 291 $ 209 $ 330 S&P MidCap 400 Stock Index $ 126 $ 143 $ 179 $ 156 $ 181 (1) In each case, assumes a $100 investment on December 31, 2018, and reinvestment of all dividends, if any. 28 Table of Contents Purchase of Company Common Stock On October 19, 2016, the Board approved a share repurchase program, with no expiration from the date of authorization, for the systematic repurchase of the Company’s common stock to offset the dilutive effects of the Company’s employee stock purchase plan, equity awards and in-kind dividends on the Company’s Series A Convertible Preferred Stock.
Biggest changeCompany / Index 2020 2021 2022 2023 2024 NCR Voyix Corporation $ 107 $ 114 $ 67 $ 79 $ 65 S&P 500 Stock Index $ 118 $ 152 $ 125 $ 158 $ 197 S&P 500 Information Technology Sector $ 144 $ 194 $ 139 $ 219 $ 300 S&P MidCap 400 Stock Index $ 114 $ 142 $ 123 $ 144 $ 164 (1) In each case, assumes a $100 investment on December 31, 2019, and reinvestment of all dividends, if any. 29 Table of Contents Purchase of Company Common Stock In March 2017, the Board approved a share repurchase program, with no expiration from the date of authorization, that provided for the repurchase of up to $300 million of the Company’s common stock (the “Repurchase Program”).
The timing and amount of repurchases under these programs depend upon market conditions and may be made from time to time in open market purchases, privately negotiated transactions, accelerated stock repurchase programs, issuer self-tender offers or otherwise. The repurchases will be made in compliance with applicable securities laws and may be discontinued at any time.
The timing and amount of repurchases under the Repurchase Program will depend upon market conditions, and may be made from time to time in open market purchases, privately negotiated transactions, accelerated stock repurchase programs, issuer self-tender offers or otherwise. The repurchases will be made in compliance with applicable securities laws and may be discontinued at any time.
The declaration of dividends is restricted under our senior secured credit facilities and the terms of the indentures governing our senior unsecured notes, and would be further subject to the discretion of NCR Voyix’s Board of Directors.
The declaration of dividends is restricted under our senior secured revolving credit facility and the terms of the indentures governing our senior unsecured notes, and would be further subject to the discretion of NCR Voyix’s Board of Directors.
Stock Performance Graph The following graph compares the relative investment performance of NCR Voyix stock, the Standard & Poor’s MidCap 400 Stock Index, Standard & Poor’s 500 Information Technology Sector and the Standard & Poor’s 500 Stock Index. This graph covers the five-year period from December 31, 2018 through December 31, 2023.
Stock Performance Graph The following graph compares the relative investment performance of NCR Voyix stock, the Standard & Poor’s MidCap 400 Stock Index, Standard & Poor’s 500 Information Technology Sector and the Standard & Poor’s 500 Stock Index. This graph covers the five-year period from December 31, 2019 through December 31, 2024.
Item 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information NCR Voyix common stock is listed on the New York Stock Exchange (NYSE) and trades under the symbol “VYX”. There were approximately 67,453 holders of NCR Voyix common stock as of March 11, 2024.
Item 5. MARKET FOR THE REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information NCR Voyix common stock is listed on the New York Stock Exchange (NYSE) and trades under the symbol “VYX”. There were approximately 65,537 stockholders of record of NCR Voyix common stock as of February 21, 2025.
The Company’s ability to repurchase its common stock is restricted under the Company’s senior secured credit facilities and terms of the indentures governing the Company’s senior unsecured notes, which prohibit certain share repurchases, including during the occurrence of an event of default, and establish limits on the amount that the Company is permitted to use to repurchase shares and make other restricted payments.
The Company’s ability to repurchase its common stock is subject to (i) certain restrictions under the terms of the Company’s senior secured revolving credit facility and the indentures governing its senior unsecured notes and (ii) the discretion of the Company’s Board of Directors.
Removed
Availability under this program accrues quarterly based on the average value of dilutive issuances during the quarter. On March 12, 2017, the Board approved a second share repurchase program that provides for the repurchase of up to $300 million of the Company’s common stock.
Added
In July 2018, the Board authorized an incremental $200 million of share repurchases under the Repurchase Program. As of December 31, 2024, the Repurchase Program had an existing aggregate remaining repurchase authority of $97 million. The Company purchased an additional $44 million of common stock in January and February 2025 under the Repurchase Program.
Removed
On July 25, 2018, the Board authorized an incremental $200 million of share repurchases under this program. No shares were repurchased under these programs during the twelve months ended December 31, 2023.
Added
In October 2016, the Board approved a share repurchase program, with no expiration from the date of authorization, for the repurchase of the Company’s common stock to offset the dilutive effects of the Company’s employee stock purchase plan, equity awards and in-kind dividends on the Company’s Series A Convertible Preferred Stock (the “Dilution Offset Program”).
Removed
As of December 31, 2023, approximately $153 million was available for repurchases under the March 2017 program, and approximately $919 million was available for repurchases under the October 2016 dilution offset program.
Added
In November 2024, the Board terminated the Dilution Offset Program. The Company’s 2017 Stock Incentive Plan allows shares to be surrendered to the Company to satisfy tax withholding obligations associated with the vesting of restricted stock units .
Removed
The Company occasionally purchases vested restricted stock or exercised stock options at the current market price to cover withholding taxes. For the three months ended December 31, 2023, 997,097 shares of vested restricted stock were purchased at an average price of $17.82 per share.
Added
The following table sets forth information with respect to our repurchases of shares of common stock (including shares surrendered to satisfy tax withholding) during the three months ended December 31, 2024.
Removed
This amount is calculated using formulas based generally on 50% of the Company’s consolidated net income for the period beginning in the first quarter of 2024 through the end of the most recently ended fiscal quarter, subject to certain other adjustments and deductions, with certain prescribed minimums and its use is subject to customary conditions, including the absence of an event of default.
Added
Period Total number of shares purchased (1) Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Approximate dollar value of shares that may yet be purchased under the plans or programs (in millions) (2) 10/1/2024 - 10/31/2024 5,441 $ 13.33 — $ 153 11/1/2024 - 11/30/2024 1,438,869 $ 14.32 1,432,154 $ 132 12/1/2024 - 12/31/2024 2,464,426 $ 14.34 2,461,517 $ 97 (1) For the three months ended December 31, 2024 , approximately 15,065 shares were surrendered to the Company to satisfy tax withholding obligations associated with the vesting of restricted stock units issued to employees under the 2017 Stock Incentive Plan.
Removed
These formulas are described in greater detail in the Company’s senior secured credit facilities and the indentures governing the Company’s senior unsecured notes, each of which is filed with the SEC.
Added
With respect to these surrendered shares, the price paid per share is based on the fair value at the time of surrender. (2) Represents amounts available for repurchases under the Repurchase Program. The Company’s Dilution Offset Program was terminated in November 2024.
Added
Accordingly, historic accrued availability under the Dilution Offset Program of approximately $959 million prior to the program’s termination has been omitted from the table.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 6. [Reserved] None. 29 Table of Contents Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Page Overview 31 Business Overview 32 Significant Themes and Events 31 Strategic Initiatives and Trends 31 Impacts from Geopolitical, Macroeconomic, and COVID-19 Challenges 34 Results of Operations 34 Financial Condition, Liquidity and Capital Resources 42 Critical Accounting Estimates 45 Recently Issued Accounting Pronouncements 49 30 Table of Contents
Biggest changeItem 6. [Reserved] None. 30 Table of Contents Index to Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) Page Overview 32 Significant Themes and Events 32 Strategic Initiatives and Trends 32 Business Overview 32 Macroeconomic Trends 34 Results of Operations 35 Financial Condition, Liquidity and Capital Resources 44 Critical Accounting Estimates 47 Recently Issued Accounting Pronouncements 51 31 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

131 edited+45 added−42 removed83 unchanged
Biggest change(in millions) 2023 2022 2021 Net income (loss) from continuing operations attributable to NCR Voyix (GAAP) $ (586) $ (203) $ (337) Pension mark-to-market adjustments 7 (41) (7) Transformation and restructuring costs (1) 39 96 53 Fraudulent ACH disbursements (2) 23 — — Acquisition-related amortization of intangibles 71 71 76 Acquisition-related costs (3) 1 2 3 Interest expense (4) 294 285 238 Interest income (13) (13) (8) Separation costs (5) 99 — — Loss on disposal of businesses 12 — — Loss on debt extinguishment 46 — 42 Depreciation and amortization (excluding acquisition related amortization of intangibles) 252 237 220 Income tax expense (benefit) 204 72 70 Stock-based compensation expense 150 90 121 Cyber ransomware incident recovery costs (6) 17 — — Adjusted EBITDA (Non-GAAP) $ 616 $ 596 $ 471 (1) Represents integration, severance, and other exit and disposal costs, which are considered non-operational in nature.
Biggest changeIn millions 2024 2023 2022 Net income (loss) from continuing operations attributable to NCR Voyix (GAAP) $ (202) $ (729) $ (369) Pension mark-to-market adjustments (12) 7 (41) Depreciation and amortization 206 190 189 Acquisition-related amortization of intangibles 28 41 40 Interest expense (1) 134 294 285 Interest income (9) (12) (13) Acquisition-related costs (2) — 1 2 Loss (gain) on debt extinguishment (8) 46 — Income tax expense (benefit) 4 184 52 Stock-based compensation expense 40 140 84 Transformation and restructuring costs (3) 125 28 95 Separation costs (4) 10 95 — Loss (gain) on disposal of businesses (14) 12 — Foreign currency devaluation (5) 15 — — Fraudulent ACH disbursements (6) (5) 23 — Cyber ransomware incident recovery costs (7) (13) 17 — Strategic initiatives (8) 48 — — Adjusted EBITDA (Non-GAAP) $ 347 $ 337 $ 324 (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 .
Operating Activities Cash provided by operating activities was $694 million for the year ended December 31, 2023 compared to cash provided by operating activities of $427 million for the year ended December 31, 2022. The increase in cash provided by operating activities was driven by the favorable movement in net working capital accounts.
Cash provided by operating activities was $694 million for the year ended December 31, 2023 compared to cash provided by operating activities of $427 million for the year ended December 31, 2022. The increase in cash provided by operating activities was driven by the favorable movement in net working capital accounts.
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.
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.
For the operations grouped as Other, revenue decreased 9% for the year ended December 31, 2023 compared to the prior year period due to the divestiture of a non-strategic business and declines in revenues not attributable to a reportable segment, offset by revenues from commercial agreements in 2023 with NCR Atleos following the Spin-Off.
For the operations grouped as Other, revenue decreased 15% for the year ended December 31, 2023 compared to the prior year period due to the divestiture of a non-strategic business and declines in revenues not attributable to a reportable segment, offset by revenues from commercial agreements in 2023 with NCR Atleos following the Spin-Off.
A 0.25% change in the expected rate of return on plan assets assumption for the Japanese pension plan would have increased or decreased 2023 ongoing pension expense by less than $1 million. Our expected return on plan assets has historically been and will likely continue to be material to net income.
A 0.25% change in the expected rate of return on plan assets assumption for the Japanese pension plan would have increased or decreased 2024 ongoing pension expense by less than $1 million. Our expected return on plan assets has historically been and will likely continue to be material to net income.
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 2023 postemployment plan expense is the assumed rate of involuntary turnover of 3.8%.
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 2024 postemployment plan expense is the assumed rate of involuntary turnover of 3.8%.
This section provides an analysis of our cash flows and a discussion of our contractual obligations at December 31, 2023. • 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.
This section provides an analysis of our cash flows and a discussion of our contractual obligations at December 31, 2024. • 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.
We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape. For example, foreign currency exchange rate fluctuations negatively impacted our revenue during fiscal 2023 and may continue to negatively impact our financial results in fiscal 2024.
We continuously monitor the direct and indirect impacts of these circumstances on our business and financial results, as well as the overall global economy and geopolitical landscape. For example, foreign currency exchange rate fluctuations negatively impacted our revenue during fiscal 2024 and may continue to negatively impact our financial results in fiscal 2025.
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 Stock In 2015, NCR issued 820,000 shares of Series A Convertible Preferred Stock.
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 Stock In 2015, the Company issued 820,000 shares of Series A Convertible Preferred Stock.
Segment Adjusted EBITDA For the year ended December 31, 2023 compared to the year ended December 31, 2022 Retail Adjusted EBITDA increased 7% for the year ended December 31, 2023 compared to the prior year period.
For the year ended December 31, 2023 compared to the year ended December 31, 2022 Retail Adjusted EBITDA increased 7% for the year ended December 31, 2023 compared to the prior year period.
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, 2023 to the results for the year ended December 31, 2022 as well as a comparison of the results for the year ended December 31, 2022 to the results for the year ended December 31, 2021. • Liquidity and capital resources.
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, 2024 to the results for the year ended December 31, 2023 as well as a comparison of the results for the year ended December 31, 2023 to the results for the year ended December 31, 2022. • Liquidity and capital resources.
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 2023 ongoing pension expense by less than $1 million.
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 2024 ongoing pension 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 2024 postemployment expense.
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 2025 postemployment expense.
We are also required to estimate the useful lives of intangible assets to determine the amount of 46 Table of Contents 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.
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.
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 2023 expense by less than $1 million.
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 2024 expense by less than $1 million.
The Senior Secured Credit Facilities 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 prior to September 30, 2024, 4.75 to 1.00, (ii) 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 (iii) 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 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 Credit Facilities 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.
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.
During 2024, 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 2024.
During 2025, 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 2025.
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.
Pursuant to the terms of the Spin-Off 46 Table of Contents 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.
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 estimates used to determine the fair value of long-lived assets, such as intangible assets, can be complex and require 48 Table of Contents 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 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.
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 50 Table of Contents taxes and the effects of various global income tax strategies.
The increase in our underfunded position of international plans is primarily attributable to an increase in discount rates used to measure the benefit obligation, partially offset by an increase in the fair value of plan assets. Contributions to international pension plans are expected to be approximately $13 million in 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 $13 million in 2025.
Following the Spin-Off, the Company will retain 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.
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.
As a result of this determination, we had valuation allowances of $211 million as of December 31, 2023 and $274 million as of December 31, 2022, 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.
As a result of this determination, we had valuation allowances of $153 million as of December 31, 2024 and $211 million as of December 31, 2023, 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.
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.
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 49 Table of Contents not for the costs of remediation.
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 other income (expense); plus pension mark-to-market adjustments and other special items, including amortization of acquisition-related intangibles, separation-related costs, cyber ransomware incident recovery costs, net of insurance recoveries, fraudulent ACH disbursements costs, and transformation and restructuring charges (which includes integration, severance and other exit and disposal costs), among others.
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, 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), and strategic initiative costs, among others.
The most significant legal contingencies impacting our Company are the Fox River, Kalamazoo River, and Ebina matters, which are further described in detail in Note 11, “Commitments and Contingencies”, in the Notes to Consolidated Financial Statements in Item 47 Table of Contents 8 of Part II of this Report.
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.
Our borrowing capacity under our senior secured credit facility was $351 million at December 31, 2023. 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.
Our borrowing capacity under our senior secured credit facilities was $480 million at December 31, 2024. 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.
Capital Expenditures and Other Investing Activities Our principal capital expenditures are for software (purchased and internally developed) and additions to property and equipment. We invested approximately $377 million, $377 million and $348 million in capital expenditures during 2023, 2022 and 2021, respectively.
Capital Expenditures and Other Investing Activities Our principal capital expenditures are for software (purchased and internally developed) and additions to property and equipment. We invested approximately $217 million, $377 million and $377 million in capital expenditures during 2024, 2023 and 2022, respectively.
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 Facility. Employee Benefit Plans In 2024, we expect to make contributions of $13 million to our international pension plans and $21 million to our postemployment plan.
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 2025, we expect to make contributions of $13 million to our international pension plans and $13 million to our postemployment plan.
During the years ended December 31, 2023, the Company paid cash dividends of $15 million.
During the years ended December 31, 2024, the Company paid cash dividends of $15 million.
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 while the Company has engaged in cooperative regulatory compliance activities with the government of Japan with respect to the Ebina matter, the extent of our potential liabilities continues to be subject to significant uncertainties.
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 key assumptions used in developing our 2023 expense were discount rates of 3.8% for our German pension plan and 1.0% for our Japanese pension plan, and an expected return on assets assumption of 5.0% for our Japanese pension plan in 2023. The German and Japanese plans represented 93% of the pension obligation as of December 31, 2023.
The key assumptions used in developing our 2024 expense were discount rates of 3.2% for our German pension plan and 1.2% for our Japanese pension plan, and an expected return on assets assumption of 5.0% for our Japanese pension plan in 2024. The German and Japanese plans represented 97% of the pension obligation as of December 31, 2024.
For 2024, we intend to use discount rates of 3.2% in determining the German pension plan and 1.2% in determining the Japanese pension expense. We intend to use an expected rate of return on assets assumption of 5.0% for the Japanese pension plan.
For 2025, we intend to use discount rates of 3.4% in determining the German pension plan and 1.6% in determining the Japanese pension expense. We intend to use an expected rate of return on assets assumption of 5.0% for the Japanese pension plan.
Corporate and Other includes income and expenses related to corporate functions that are not specifically attributable to any of our three individual reportable segments along with certain non-strategic businesses that are considered immaterial operating segment(s), certain countries which are expected to transfer to NCR Atleos during 2024, and commercial agreements with NCR Atleos.
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 certain countries expected to transfer to NCR Atleos subsequent to 2024, as well as commercial agreements with NCR Atleos.
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, 2023, our cash and cash equivalents totaled $262 million and our total debt was $2.6 billion.
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, 2024, our cash and cash equivalents totaled $724 million and our total debt was $1.1 billion.
Long Term Borrowings The senior secured credit facilities include a term loan facility in an initial aggregate principal amount of $200 million, of which $200 million was outstanding as of December 31, 2023.
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, 2024.
Interest Expense Increase (Decrease) (in millions) 2023 2022 2021 2023 v 2022 2022 v 2021 Interest expense $ 294 $ 285 $ 238 3 % 20 % Interest expense was $294 million in 2023 compared to $285 million in 2022. Interest expense is primarily related to our senior unsecured notes and borrowings under the senior secured credit facilities.
Interest Expense Increase (Decrease) In millions 2024 2023 2022 2024 v 2023 2023 v 2022 Interest expense $ (134) $ (294) $ (285) (54) % 3 % Interest expense was $134 million in 2024 compared to $294 million in 2023. Interest expense is primarily related to our senior unsecured notes and borrowings under the senior secured credit facilities.
Our international retirement plans were in an underfunded position of $136 million as of December 31, 2023, as compared to an underfunded position of $127 million as of December 31, 2022.
Our international retirement plans were in an underfunded position of $104 million as of December 31, 2024, as compared to an underfunded position of $136 million as of December 31, 2023.
Our net reserves for the Fox River matter, the Kalamazoo River matter and the Ebina matter, as of December 31, 2023 were approximately $22 million, $141 million, and $7 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.
Our net reserves for the Fox River matter and the Kalamazoo River matter, as of December 31, 2024 were approximately $23 million and $148 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.
Service revenue includes hardware and software maintenance revenue, implementation services revenue, cloud revenue, payments processing revenue as well as professional services revenue. Total revenue increased 1% for the year ended December 31, 2023 compared to the year ended December 31, 2022.
Service revenue includes hardware and software maintenance revenue, implementation services revenue, cloud revenue, payments processing revenue as well as professional services revenue. Total revenue decreased 11% for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Loss on Extinguishment of Debt Increase (Decrease) (in millions) 2023 2022 2021 2023 v 2022 2022 v 2021 Loss on extinguishment of debt $ 46 $ — $ 42 100 % (100) % 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, the senior secured credit facilities, and the revolving credit facility.
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.
Gross margin for the year ended December 31, 2023 included $6 million related to transformation and restructuring costs, $16 million of stock-based compensation expense, $38 million related to amortization of acquisition-related intangible assets, $32 million of separation-related costs and $16 million related to the cyber ransomware incident recovery costs.
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.
As a percentage of revenue, these costs were 4.8% in 2023 and 3.9% in 2022. In 2023, research and development expenses included $3 million of costs related to our transformation and restructuring initiatives, $7 million of separation related costs, and $13 million of stock-based compensation expense.
As a percentage of revenue, these costs were 5.6% in 2024 and 4.4% in 2023. In 2024, research and development expenses included $7 million of costs related to our transformation and restructuring initiatives, $3 million of separation related costs and $10 million of stock-based compensation expense.
Gross margin as a percentage of revenue was 25.1% in 2023 compared to 25.8% in 2022 .
Gross margin as a percentage of revenue was 21.1% in 2023 compared to 21.6% in 2022.
In 2023, there was an actuarial loss of $7 million compared to an actuarial gain of $41 million in 2022. The net actuarial loss in 2023 was primarily due to plan experience losses as well as a decrease in discount rates, partially offset by favorable returns on plan assets.
The actuarial loss in 2023 was primarily due to plan experience losses as well as a decrease in discount rates, partially offset by favorable returns on plan asset. The actuarial gain in 2022 was $41 million primarily due to an increase in discount rates, partially offset by unfavorable returns on the fair value of plan assets.
Product revenue decreased 3% due to a decline in SCO and POS hardware revenues partially offset by an increase in software license revenue. Service revenue increased 3% due primarily to growth in cloud services revenue, hardware maintenance revenue and recurring software related services.
Product revenue decreased 3% due to a decrease in SCO and POS hardware revenues partially offset by an increase in software license revenue. Service revenue increased 2% comparing the year ended 2023 to 2022 due primarily to growth in cloud services revenue, hardware maintenance revenue and recurring software related services.
Gross margin for the year ended December 31, 2021 included $32 million related to transformation and restructuring costs, $19 million of stock-based compensation expense and $34 million related to amortization of acquisition-related intangible assets.
Gross margin for the year ended December 31, 2022 included $28 million related to transformation and restructuring costs, $14 million of stock-based compensation expense and $36 million related to amortization of acquisition-related intangible assets.
As of December 31, 2023, we had outstanding $1.2 billion in aggregate principal balance of 5.125% senior unsecured notes due in 2029, $650 million aggregate principal balance of 5.000% senior unsecured notes due in 2028 and $450 million in aggregate principal balance of 5.250% senior unsecured notes due in 2030.
As of December 31, 2024, 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.
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 $20 million expense from recording a valuation allowance against deferred tax assets and a $17 million expense from nondeductible executive compensation.
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.
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, 2023. • Revenue was $3,830 million, an increase of 1% compared to prior year ◦ Recurring revenue increased 4% from the prior year and comprised 57% of total consolidated revenue ◦ Software and services revenue, increased 4% from the prior year and comprised 72% of total consolidated revenue • Adjusted EBITDA of $616 million, up 3% compared to prior year • Completed the Spin-Off of NCR Atleos on October 16, 2023 STRATEGIC INITIATIVES As a leading technology company, we seek to maintain our market position by expanding our share of wallet among existing customers and attracting new customers, leveraging our cloud-based, platform-enabled software and services offerings.
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, 2024: • Revenue was $2.8 billion, a decrease of 11% compared to prior year ◦ Recurring revenue increased 1% from the prior year and comprised 58% of total consolidated revenue ◦ Software and services revenue, decreased 3% from the prior year and comprised 73% of total consolidated revenue • Adjusted EBITDA of $347 million, up 3% compared to prior year STRATEGIC INITIATIVES As a leading technology company, we seek to maintain our market position by expanding our share of wallet among existing customers and attracting new customers, leveraging our cloud-based, platform-enabled software and services offerings.
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 together, how the 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 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.
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. 47 Table of Contents 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.
As of December 31, 2023, 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 15.9 million shares, which would represent approximately 10% of our outstanding common stock as of December 31, 2023, including the preferred shares on an as-converted basis.
As of December 31, 2024, 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 15.9 million shares, which would represent approximately 10% of our outstanding common stock as of December 31, 2024, including the preferred shares on an as-converted basis. 45 Table of Contents Cash and Cash Equivalents Held by Foreign Subsidiaries Cash and cash equivalents held by the Company’s foreign subsidiaries were $134 million and $190 million at December 31, 2024 and 2023, respectively.
For the Kalamazoo River and Ebina matters, 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.
As of December 31, 2024, 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.
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).
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).
The amount of unrecognized deferred tax liability associated with these indefinitely reinvested earnings is approximately $19 million. 48 Table of Contents 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.
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.
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.
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.
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.
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, 2023, we did not provide for U.S. federal income taxes or foreign withholding taxes on approximately $258 million of undistributed earnings of our foreign subsidiaries as such earnings are expected to be reinvested indefinitely.
As of December 31, 2024, we did not provide for U.S. federal income taxes or foreign withholding taxes on approximately $295 million of undistributed earnings of our 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 $32 million.
Interest expense was $285 million in 2022 compared to $238 million in 2021. Interest expense is primarily related to our senior unsecured notes and borrowings under the Senior Secured Credit Facility.
The decrease in interest expense was due to the decrease in total debt outstanding. Interest expense was $294 million in 2023 compared to $285 million in 2022. Interest expense is primarily related to our senior unsecured notes and borrowings under the senior secured credit facilities.
For the year ended December 31, 2022 compared to the year ended December 31, 2021 Retail Adjusted EBITDA decreased 10% for the year ended December 31, 2022 compared to the prior year period.
Segment Adjusted EBITDA For the year ended December 31, 2024 compared to the year ended December 31, 2023 Retail Adjusted EBITDA decreased 7% for the year ended December 31, 2024 compared to the prior year period.
Our offerings include digital first software and services offerings for retailers, restaurants and financial institutions, as well as payments acceptance solutions, multi-vendor connected device services, self-checkout (“SCO”) kiosks and related technologies, point of sale (“POS”) terminals and other self-service technologies.
Our offerings include platform-based software and services for retailers and restaurants, as well as payment acceptance solutions, multi-vendor connected device services, self-checkout (“SCO”) kiosks and related technologies and other self-service technologies.
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. 43 Table of Contents Material Cash Requirements from Contractual and Other Obligations In the normal course of business, we enter into various contractual obligations that impact, or could impact, the liquidity of our operations.
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.
For further information on potential risks and uncertainties see Part I, Item 1A “Risk Factors” and Item 1C “Cybersecurity”, of this Form 10-K. 33 Table of Contents Macroeconomic Trends Given the multinational nature of our business, we are subject to risks and exposures from the evolving macroeconomic environment, including the effects of increased global inflationary pressures and interest rates, fluctuations in foreign currency exchange rates, political economic slowdowns or recessions and geopolitical pressures, including the unknown impacts of current and future trade regulations.
Macroeconomic Trends Given the multinational nature of our business, we are subject to risks and exposures from the evolving macroeconomic environment, including the effects of increased global inflationary pressures and interest rates, fluctuations in foreign currency exchange rates, economic slowdowns or recessions and geopolitical pressures, including the unknown impacts of current and future trade regulations.
Key Strategic Financial Metrics The following tables show our key strategic financial metrics for the years ended December 31, the relative percentage that those amounts represent to total revenue, and the change in those amounts year-over-year.
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, the relative percentage that those amounts represent to total revenue, and the change in those amounts year-over-year.
Headquartered in Atlanta, Georgia, we are a software and services-led enterprise technology provider of run-the-store capabilities for retail and restaurants and cloud-based digital solutions for financial institutions, serving businesses of all sizes.
Headquartered in Atlanta, Georgia with approximately 14,000 employees across 30 countries, we are a software and services-led technology provider of run-the-store and digital channel capabilities for retail and restaurants, serving businesses of all sizes.
Additionally, the senior secured credit facilities include a five-year Revolving Credit Facility with an aggregate principal amount of $500 million, of which $98 million was outstanding as of December 31, 2023. The Revolving Credit Facility also contains a sub-facility to be used for letters of credit, and as of December 31, 2023, there were $51 million letters of credit outstanding.
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, 2024.
In 2023, selling, general and administrative expenses included $25 million of transformation and restructuring costs, $23 million related to the fraudulent ACH disbursements, $121 million of stock-based compensation expense, $33 million of acquisition-related amortization of intangibles, $1 million of acquisition-related costs, and $57 million in separation-related costs.
In 2023, selling, general and administrative expenses included $21 million of transformation and restructuring costs, $113 million of stock-based compensation expense, $8 million of acquisition-related amortization of intangibles, $23 million in fraudulent ACH disbursement costs, $1 million of acquisition-related cost, $54 million in separation-related costs and $2 million of costs related to the divestitures of certain non-strategic businesses.
In 2022, Other, net includes a $9 million loss recognized on the divestiture of a non-strategic business. In 2023, the Company incurred bank-related fees of $28 million, mainly related to higher interest rates incurred on the trade receivables facility compared to prior years.
In 2023, Other, net includes a $9 million loss recognized on the divestitures of certain non-strategic businesses. In 2022, Other, net includes a $9 million loss recognized on the divestiture of a non-strategic business. In 2024, the Company incurred bank-related fees of $24 million compared to $28 million and $9 million in 2023 and 2022, respectively.
For the operations grouped as Other, revenue decreased 13% for the year ended December 31, 2022 compared to the prior year period due to declines in revenues not attributable to a reportable segment.
For the operations grouped as Other, revenue decreased 61% for the year ended December 31, 2024 compared to the prior year period due to the divestiture of a non-strategic business and declines in revenues not attributable to a reportable segment. 42 Table of Contents For the year ended December 31, 2023 compared to the year ended December 31, 2022 Retail revenue was flat for the year ended December 31, 2023 compared to the prior year period.
The main driver of the increase in interest expense from 2021 to 2022 was the increase in total debt outstanding as a result of the closing of the acquisition of Cardtronics in the second quarter of 2021, combined with an increase in variable interest rates on the Senior Secured Credit Facility. 38 Table of Contents Other Income (Expense), net Other income (expense), net was expense of $79 million in 2023, income of $18 million in 2022 and expense of $13 million in 2021, with the components reflected in the following table: In millions 2023 2022 2021 Interest income $ 13 $ 13 $ 8 Foreign currency fluctuations and foreign exchange contracts (28) (17) (2) Bank-related fees (28) (9) (27) Employee benefit plans (8) 40 9 Other, net (28) (9) (1) Other income (expense), net $ (79) $ 18 $ (13) 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.
Other Income (Expense), net Other income (expense), net was expense of $36 million in 2024, expense of $76 million in 2023 and income of $18 million in 2022, with the components reflected in the following table: In millions 2024 2023 2022 Interest income $ 9 $ 12 $ 13 Foreign currency fluctuations and foreign exchange contracts (30) (28) (17) Bank-related fees (24) (28) (9) Employee benefit plans 9 (8) 40 Other, net — (24) (9) Other income (expense), net $ (36) $ (76) $ 18 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 connection with the Spin-Off, goodwill was reassigned to the reporting units using a relative fair value allocation approach. 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.
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.
During 2022, our tax rate was impacted by a $103 million expense from recording a valuation allowance against deferred tax assets in the United Kingdom and other jurisdictions. During 2021, our tax rate was impacted by a $56 million expense from recording a valuation allowance against deferred tax assets and a $55 million expense resulting from an internal entity restructuring.
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. During 2022, our tax rate was impacted by a $117 million expense from recording a valuation allowance against deferred tax assets in the United Kingdom and other jurisdictions.
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. 44 Table of Contents The Senior Secured Credit Facilities contains customary representations and warranties, affirmative covenants, and negative covenants.
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.
As a percentage of revenue, selling, general and administrative expenses were 19.3% in 2023 and 18.3% in 2022.
As a percentage of revenue, selling, general and administrative expenses were 16.2% in 2024 and 20.7% in 2023.
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.
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.
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.
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. 34 Table of Contents 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.
Recurring revenue as a percentage of total revenue Percentage of Total Revenue Increase (Decrease) (in millions) 2023 2022 2021 2023 2022 2021 2023 v 2022 2022 v 2021 Recurring revenue (1) $ 2,195 $ 2,120 $ 2,069 57.3 % 55.9 % 56.0 % 4 % 2 % All other products and services 1,635 1,673 1,623 42.7 % 44.1 % 44.0 % (2) % 3 % Total Revenue $ 3,830 $ 3,793 $ 3,692 100.0 % 100.0 % 100.0 % 1 % 3 % (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.
Recurring revenue as a percentage of total revenue Percentage of Total Revenue Increase (Decrease) In millions 2024 2023 2022 2024 2023 2022 2024 v 2023 2023 v 2022 Recurring revenue (1) $ 1,634 $ 1,617 $ 1,579 57.8 % 50.9 % 49.7 % 1 % 2 % All other revenue 1,192 1,561 1,595 42.2 % 49.1 % 50.3 % (24) % (2) % Total Revenue $ 2,826 $ 3,178 $ 3,174 100.0 % 100.0 % 100.0 % (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.
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.
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.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES General Our primary liquidity needs in the ordinary course of business are to: (i) fund normal operating expenses; (ii) meet the interest and principal requirements of our outstanding indebtedness, including finance leases; (iii) fund capital expenditures and operating lease payments; (iv) remediation payments related to environmental matters; (v) meet our expected pension and postemployment plan contributions; and (vi) payments related to transformation and restructuring initiatives.
Restaurants Adjusted EBITDA increased 23% for the year ended December 31, 2023 compared to the period year period driven by positive revenue mix and growth in services offsetting the impact of higher labor costs. 43 Table of Contents 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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeTo manage our exposures and mitigate the impact of currency fluctuations on the operations of our foreign subsidiaries, we hedge our main transactional exposures through the use of foreign exchange forward and option contracts.
Biggest changeTo manage our exposures and mitigate the impact of currency fluctuations on the operations of our foreign subsidiaries, we hedge our main transactional exposures through the use of foreign exchange forward contracts. Historically, if these contracts are designated as highly effective cash flow hedges, the gains or losses are deferred into accumulated other comprehensive income ( “ AOCI ” ).
We also use derivatives not designated as hedging instruments consisting primarily of forward contracts to hedge foreign currency denominated balance sheet exposures. For these derivatives we recognize gains and losses in the same period as the remeasurement losses and gains of the related foreign currency-denominated exposures.
We use derivatives not designated as hedging instruments consisting primarily of forward contracts to hedge foreign currency denominated balance sheet exposures. For these derivatives we recognize gains and losses in the same period as the remeasurement losses and gains of the related foreign currency-denominated exposures.
In managing market risks, we employ derivatives according to documented policies and procedures, including foreign currency contracts and interest rate swaps. We do not use derivatives for trading or speculative purposes. Foreign Exchange Risk Since a substantial portion of our operations and revenue occur outside the United States, and in currencies other than the U.S.
In managing market risks, we may employ derivatives according to documented policies and procedures, including foreign currency contracts and interest rate swaps. We do not use derivatives for trading or speculative purposes. Foreign Exchange Risk Since a portion of our operations and revenue occur outside the United States, and in currencies other than the U.S.
The Company expects that any increase or decrease in the fair value of the portfolio would be substantially offset by increases or decreases in the underlying exposures being hedged. The U.S. Dollar was stronger in 2023 compared to 2022 based on comparable weighted averages for our functional currencies.
The Company expects that any increase or decrease in the fair value of the portfolio would be substantially offset by increases or decreases in the underlying exposures being hedged. The U.S. Dollar was stronger in 2024 compared to 2023 based on comparable weighted averages for our functional currencies.
Dollar, our results can be significantly impacted by changes in foreign currency exchange rates. We have exposure to approximately 40 functional currencies and are exposed to foreign currency exchange risk with respect to our sales, profits and assets and liabilities denominated in currencies other than the U.S. Dollar.
Dollar, our results can be significantly impacted by changes in foreign currency exchange rates. We have exposure to approximately 30 functional currencies and are exposed to foreign currency exchange risk with respect to our sales, profits and assets and liabilities denominated in currencies other than the U.S. Dollar.
As of December 31, 2023, we did not have any significant concentration of credit risk related to financial instruments. 50 Table of Contents Index to Financial Statements and Supplemental Data Page Report of Independent Registered Public Accounting Firm [PCAOB ID 238 ] 52 Consolidated Statements of Operations 55 Consolidated Statements of Comprehensive Income (Loss) 56 Consolidated Balance Sheets 57 Consolidated Statements of Cash Flows 58 Consolidated Statements of Changes in Stockholders’ Equity 59 Notes to Consolidated Financial Statements 60 Note 1.
As of December 31, 2024, we did not have any significant concentration of credit risk related to financial instruments. 52 Table of Contents Index to Financial Statements and Supplemental Data Page Report of Independent Registered Public Accounting Firm [PCAOB ID 238 ] 54 Consolidated Statements of Operations 56 Consolidated Statements of Comprehensive Income (Loss) 57 Consolidated Balance Sheets 58 Consolidated Statements of Cash Flows 59 Consolidated Statements of Changes in Stockholders’ Equity 60 Notes to Consolidated Financial Statements 61 Note 1.
Dollar against foreign currencies from the prevailing market rates would have resulted in a corresponding increase in the fair value of the hedge portfolio of $18 million as of December 31, 2023 .
Dollar against foreign currencies from the prevailing market rates would have resulted in a corresponding increase in the fair value of the hedge portfolio of $3 million as of December 31, 2024 .
Dollar against foreign currencies from the prevailing market rates would have resulted in a corresponding decrease in the fair value of the hedge portfolio of $18 million as of December 31, 2023 . A 10% depreciation in the value of the U.S.
A 10% appreciation in the value of the U.S. Dollar against foreign currencies from the prevailing market rates would have resulted in a corresponding decrease in the fair value of the hedge portfolio of $2 million as of December 31, 2024 . A 10% depreciation in the value of the U.S.
Employee Benefit Plans 94 Note 11. Commitments and Contingencies 99 Note 12. Leasing 105 Note 13. Series A Preferred Stock 106 Note 14. Earnings Per Share 108 Note 15. Derivatives and Hedging Instruments 109 Note 16. Fair Value of Assets and Liabilities 113 Note 17. Accumulated Other Comprehensive Income 114 Note 18. Supplemental Financial Information 116 Note 19.
Employee Benefit Plans 91 Note 11. Commitments and Contingencies 97 Note 12. Leasing 102 Note 13. Series A Preferred Stock 104 Note 14. Earnings Per Share 106 Note 15. Derivatives and Hedging Instruments 107 Note 16. Fair Value of Assets and Liabilities 111 Note 17. Accumulated Other Comprehensive Income 111 Note 18. Supplemental Financial Information 114 Note 19.
Basis of Presentation and Significant Accounting Policies 60 Note 2. Discontinued Operations 72 Note 3. Business Combinations and Divestitures 77 Note 4. Goodwill and Purchased Intangible Assets 78 Note 5. Segment Information 79 Note 6. Debt Obligations 83 Note 7. Trade Receivable Facility 86 Note 8. Income Taxes 87 Note 9. Stock Compensation Plans 90 Note 10.
Basis of Presentation and Significant Accounting Policies 61 Note 2. Discontinued Operations 73 Note 3. Business Combinations and Divestitures 76 Note 4. Goodwill and Purchased Intangible Assets 77 Note 5. Segment Information 77 Note 6. Debt Obligations 82 Note 7. Trade Receivable Facility 84 Note 8. Income Taxes 85 Note 9. Stock Compensation Plans 87 Note 10.
For purposes of analyzing potential risk, we use sensitivity analysis to quantify potential impacts that market rate changes may have on the fair values of our hedge portfolio related to firmly committed or forecasted transactions.
For purposes of analyzing potential risk, we use sensitivity analysis to quantify potential impacts that market rate changes may have on the fair values of our hedge portfolio. The sensitivity analysis represents the hypothetical changes in value of the hedge position and does not reflect the related gain or loss on the forecasted underlying transaction.
This had an unfavorable revenue impact of 1% on 2023 compared to 2022. This excludes the effects of our hedging activities and, therefore, does not reflect the actual impact of fluctuations in exchange rates on our operating income. 49 Table of Contents Interest Rate Risk We are subject to interest rate risk principally in relation to variable-rate debt.
This had an unfavorable revenue impact of less than 1% on 2024 compared to 2023. This excludes the effects of our hedging activities and, therefore, does not reflect the actual impact of fluctuations in exchange rates on our operating income.
Approximately 93% of our borrowings were on a fixed rate basis as of December 31, 2023. The increase in pre-tax interest expense for the year ended December 31, 2023 from a hypothetical 100 basis point increase in variable interest rates would be approximately $21 million.
As of December 31, 2024, we had no borrowings under the facility. 51 Table of Contents The increase in pre-tax interest expense for the year ended December 31, 2024 from a hypothetical 100 basis point increase in variable interest rates would be approximately $3 million.
As of December 31, 2023 , we do not have any outstanding interest rate derivative contracts related to our variable rate debt. We utilize interest rate swap contracts and interest rate cap agreements to add stability to interest expense and to manage exposure to interest rate movements as part of our interest rate risk management strategy.
Historically, we utilized interest rate swap contracts and interest rate cap agreements to add stability to interest expense and to manage exposure to interest rate movements as part of our interest rate risk management strategy.
Quarterly Financial Information (Unaudited) 117 Note 20. Revised 2023 Quarterly Financial Information (Unaudited) 117 51 Table of Contents
Quarterly Financial Information (Unaudited) 115 53 Table of Contents
Removed
This is primarily done through the hedging of foreign currency denominated inter-company inventory purchases by the marketing units and the foreign currency denominated inputs to our manufacturing units. All of these transactions are forecasted.
Added
Interest Rate Risk Approximately 100% of our borrowings were on a fixed rate basis as of December 31, 2024 and we did not have any outstanding interest rate derivative contracts as of December 31, 2024. We are subject to interest rate risk related to variable-rate debt when we borrow from our Revolving Credit Facility.
Removed
If these contracts are designated as highly effective cash flow hedges, the gains or losses are deferred into accumulated other comprehensive income ( “ AOCI ” ).
Removed
The gains or losses from derivative contracts that are designated as highly effective cash flow hedges related to inventory purchases are recorded in cost of products when the inventory is sold to an unrelated third party. Otherwise, the gains or losses from these contracts are recognized in earnings as exchange rates change.
Removed
We utilize non-exchange traded financial instruments, such as foreign exchange forward and option contracts, that we purchase exclusively from highly rated financial institutions. We record these contracts on our balance sheet at fair market value based upon market price quotations from the financial institutions.
Removed
We do not enter into non-exchange traded contracts that require the use of fair value estimation techniques, but if we did, they could have a material impact on our financial results.
Removed
The sensitivity analysis represents the hypothetical changes in value of the hedge position and does not reflect the related gain or loss on the forecasted underlying transaction. A 10% appreciation in the value of the U.S.

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