NCR Voyix Corp (VYX) 2024 Q3 法說會逐字稿

Forward looking statements during this call speak only as of the day, you undertake no obligation to update them.

In addition, we will be discussing in providing certain non-GAAP financial measures today, which we believe will provide additional clarity regarding our ongoing performance. For a full reconciliation of non-GAAP financial measures discussed in this call to the most comparable GAAP measure in accordance with SEC regulations.

Please see our press release furnished as an exhibit on Form 8-K filed this morning and our supplemental materials available on the Investor Relations section of our website.

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

David.

Thanks, Alan, and good morning, everyone.

I would like to welcome all of you to our third quarter 2024 earnings call.

Before I begin, I'd like to welcome our newest executive vice president, Darren Wilson, to NCR voice. As you saw in our press release, Darren has joined to lead our international retail and restaurant businesses, primarily in Europe and Asia Pacific.

In this leadership position will allow us to focus on expanding our into national presence and restaurants and retail. I'll now spend a few moments discussing our recent progress on the digital banking and hardware transactions announced in August.

Before commenting on our recent business performance and the Company's go-forward objectives.

Brian will then review our financial results for the quarter and our outlook for the remainder of the year. Beginning with digital banking.

We completed the sale on September 30th ahead of expectations. This was an important step in our plans to simplify the business and significantly improve our balance sheet with $2.45 billion and gross sale proceeds.

After estimated taxes and fees of $437 million, we utilized approximately $1.8 billion of proceeds to reduce our indebtedness.

Further positive impact of these actions reduced our annual cash interest expense by approximately $95 million.

The remaining proceeds, the company intends to utilize approximately $100 million to complete repurchases of common stock under its existing share repurchase program, which has an aggregate repurchase authority of up to $153 million and had been previously outlined in our public finance.

We believe this is the best use of proceeds given our current valuation.

Brian will discuss the details of the remaining proceeds allocation later on the call for hardware, we anticipate the agreements to become affected by year end and will provide Anaconda certain transitional services until they are fully operational in 2025.

In connection with the transaction, we have jointly notifying our affected employees who will be part of the new organization.

As a reminder, we will continue to sell hardware to our customers as a sales agent and earn a commission on the sale. But all other aspects of the contracts, including design, manufacture, delivery and warranty, will be fulfilled by Amazon.

Turning to our third quarter performance on a normalized basis, total revenue for the quarter was $708 million, a decline of 11%, driven primarily by lower hardware and hardware related install services.

Software and services revenue was flat when excluding the adverse impact of a onetime software to up from the prior year.

Normalized adjusted EBITDA for the quarter was $101 million, driven by cost actions taken in the second quarter, coupled with sales mix.

As of the third quarter, we had approximately 70,000 sites on our cloud native commerce platform, an increase of 25% from the prior year.

Software ARR and total segment ARR. increased 2% in the quarter.

Turning to our restaurant segment and the third quarter, we continued to demonstrate momentum signing more than 230 new software customers and increasing our platform and payment sites by 4% and 12%, respectively.

Software air are in total ARR both increased 1% in the quarter.

Within our enterprise division, we executed 11 renewal and expansion agreements.

These included converting existing software customers representing more than 350 sites to our cloud native commerce platform.

For example, we converted cafe Rio and a low high user to the platform at the time of renewal.

We also expanded our platform contract with hungry.

Jack's to now include our value added solution.

Under our new agreement on rejects, we will provide loyalty solutions for nearly 500 sites across Australia.

For Services, we renewed and expanded our long-standing Help Desk contract with the global coffee chain.

This quarter, we have extended our monitoring system services to their shops in Latin America while continuing to service their existing Sybase and the US and the UK.

Finally, we continue to execute against our payments attach strategy, both for enterprise and mid-market restaurants.

This quarter, we expanded agreements with two existing enterprise software customers to provide end to end payment capabilities across nearly 40 sites.

At our mid-market business.

Our payments attach rate remained strong, with 97% of new customers attaching payments to the point of sale contracts and the third quarter.

As we move into 2025 and implement our new sales strategy to drive growth, we will focus aggressively on cross selling payments and to our existing base.

Turning to our retail segment.

This quarter, we signed two new enterprise customers and more than five mid-market customers, leading to nearly 3,000 additional sites.

We increased our platform sites by 47% as we continue to convert on-premise customers and onboard new assigned customers.

Software air our increased 2% and total ARR increased 3% in the quarter.

And enterprise, we signed a new multi-year software and hosting services agreement with Endeavour Group, Australia's largest retail drinks network.

We will deliver our cloud, boosted point-of-sale software, posted loyalty solution, store insights and edge infrastructure via our e-commerce platform for over 4,000 lanes across more than 1,600 sites.

In addition, we will provide professional and implementation services for Endeavour Group.

We also demonstrated traction in our mid-market business this quarter, signing a new multi-year software and services agreement with Swedish that original convenience and fuel Bill Shea and U.S. under the agreement to deploy our point-of-sale and self-checkout software.

In addition to our edge infrastructure on speedy stops existing third-party hardware devices, which will be able to significantly reduce their downtime and improve reliability.

This win reflects our early success and our new go-to-market strategy.

Lastly, we renewed and expanded our agreement with the large US specialty closing stores.

In addition to converting this point-of-sale software customer into our cloud native commerce platform, we will also provide our loyalty and marketing solutions for their entire store footprint, which spans more than 1,500 lanes across 400 sites.

Before I turn the call over to Brian, I would like to elaborate on my comments related to our go-to-market approach for next year.

While much of the first half of 2024 was consumed with executing two major transactions for the company, the sale of the digital banking business and our hardware ODM and bring them a parallel restructuring effort was also underway to address top-line software and services group prior to 2020 for the Company, sales strategy was partial toward cross-selling and upselling the base versus attracting and signing new software and services customers.

We have now aligned our focus to drive balanced between ourselves and existing customers and capturing market share through new customers.

Additionally, we have taken various steps to better align our organization to drive long-term growth in 2025 and beyond.

The five key revenue growth actions are underway are as follows.

First beginning in 2025, we will have restructured our sales teams and implemented a revised incentive compensation plan to address new customer growth and to expand market share across our channels.

Second, to support our go-to-market sales efforts, we are using a portion of the digital banking proceeds to invest in our solution sets for both restaurants and retail, which will accelerate our speed to market for IT and cloud solutions and enable us to capitalize on growth opportunities.

Beginning in Q1, we will expand a little Homecloud to a broader segment of the domestic restaurant market during the year.

We will continue to add a feature rich capability to our platform and retail.

We are investing in edge and next-gen point-of-sale and self-checkout software solutions to acquire new customers and accelerate our efforts to migrate our existing customer base.

This acceleration or free of engineering resources, managing legacy solutions can be redeployed elsewhere, lower our future capital spend and a stickier customer relationships over time.

Third, we're launching an aggressive program to expedite the contract renewals from existing customers while also converting their legacy software to our market-leading cloud solutions.

This will be a multiyear initiative, which has been well received thus far.

Fourth and fifth of our growth strategy related changes we have made to strengthen our senior organization, which will be critical to our sales execution, product delivery and customer satisfaction.

Beginning with executive leadership.

As I stated earlier, Darren Wilson has been appointed President International with their leading our businesses in Europe.

Japan and Asia-Pac will also allow us to have enhanced attention, our largest market, the Americas, as we focus on driving growth and expanding market share.

And finally, we have attracted additional proven leaders to fill key roles across the border organization.

Since Q2, we have replaced with new sales leaders in our US restaurant segment, hired a proven Head of Development for our retail product group and most recently added a seasoned and paying us professional to lead our expanded payments initiative next year.

In summary, while work remains, we had advanced plans to align our resources, products and incentives to position the Company to return to growth.

With that, I will turn it over to Brian

Thank you, David, and good morning, everyone.

For the sale of digital basing for full year results will reflect only the continuing operations of retail and restaurant segments.

Digital Banking will be reflected as discontinued operations.

We will continue to support the visual baking business on a transitional basis for up to two years.

From closing, Mike comments today will focus on our normalized results, which exclude the impact of the digital banking divesture, along with spin related items in other completed divestitures.

For the quarter, reported revenue was $711 million.

In normalized revenue was $708 million, reflecting a decline of 11%, driven primarily by an unusually weak year in hardware.

Sales.

Reported and normalized software revenue was $245 million, which decreased 2% versus prior year for the increased 2% when excluding the one-time software to up from Q3 2020.

Through this increase was driven by attachments to the cloud native platform.

Reported and normalized services revenue was $271 million, which decreased 3% due to lower hardware installations had a normalized basis.

Adjusted EBITDA for the quarter was $101 million, while EBITDA was lower versus prior year due to spin related to synergies, we demonstrated a sequential improvement from Q2, which point we expect to show growth year over year.

As recorded adjusted EBITDA of EUR93 million was adversely impacted by $6 million of stranded costs related to digital basing.

It did not qualify for discontinued operations in $2 million from delayed country exits related to the spin.

Adjusted EBITDA margin was 13.1% as reported 14.3% on a normalized basis.

Let's turn to our segment results for the quarter.

Beginning with restaurants reported and normalized software revenue was $87 million, which was flat to prior year.

Reported normalized services revenue was $75 million, down 1%.

Total segment revenue of 200 to $11 million declined 7% on a normalized basis, reflecting the continued declines in hardware.

Adjusted EBITDA of $66 million increased 27% and margin of 31.3%, expanded more than 800 basis points on a normalized basis.

This was primarily driven by increased efficiencies in sales mix.

Turning to retail, reported and normalized software revenue was $153 million, which declined 3% due to the onetime software true up of $10 million in Q3 2020.

Through.

Excluding this impact, software revenue increased 3%.

This is revenue was $193 million, a decrease of 3% due to lower one-time hardware installation services.

Total revenue in retail declined 12% on a normalized basis due to a 28% decline in hardware sales.

Adjusted EBITDA of 100 to $8 million declined 12% in margin of 22.2% was flat on a normalized basis, driven by hardware declines in a onetime software tool.

Excluding the impact of the trust, adjusted EBITDA declined 4% in margin expanded 140 basis points.

Lastly, normalized corporate and other expense for the quarter were $73 million, which included $21 million of cellular dissynergies.

Turning to the seller of digital baking.

As we announced on September 30th, the Company completed the sale of exceeding $2.45 billion in gross proceeds.

In conjunction with the closing, we utilized $1.84 billion to pay down our debts as follows.

$1.195 billion was used to pay down a portion of the bonds 100, $92.5 million to pay off our term loan A. and another $200 million was used to pay down the revolving credit facility in Finally, $251.5 million to pay off for our accounts receivable facility.

We ended the quarter with 1.6 times net leverage based on the $430 million of pro forma 2020 for adjusted EBITDA we shared on our last call.

This leverage calculation excludes $375 million of cash for estimated digital, basically related cash tax payments.

Our net leverage has significantly improved since the second quarter, at which point our leverage was 4.1 times for the quarter.

Free cash flow through the use of $45 billion included approximately $80 million of fees related to the digital banking and transaction in other strategic initiatives.

Following the debt paydown subject to market conditions, we intend to use approximately $100 million of the proceeds to digital banking to complete the repurchase of common stock under our share repurchase program.

In addition, the sale proceeds allow greater opportunity to invest in their solutions to support the strategic objectives David described earlier, we have allocated up to $20 million over the next one to two years to accelerate the launch of our next-gen cloud solutions to achieve our go-to-market initiatives.

Turning to our outlook, we are maintaining the 2020 for revenue and EBITDA guidance provided on our Q2 call.

While we were modestly ahead of expectations in Q three on both revenue and adjusted EBITDA, this was due to timing.

We continue to expect revenue for the year to be between 2.805 billion in 2,860,000,000.000.

We adjust the EBITDA to be between EUR355 million is 335 million.

As a reminder, we will reinstate free cash flow and adjusted EPS guidance for 2025.

Before I conclude, I'd like to draw your attention to the supplementary pro forma information we have provided in connection with our earnings materials today.

This information contains year-over-year compare listens to assist with modeling the Company on a go-forward basis, our 2025 performance will be compared to these pro forma 2024 results for 2020 for pro forma financials include $170 million of free cash flow.

This does not include the $20 million of proceeds that we are allocating towards next-gen product acceleration, nor does it include the working capital benefit from the OEM model.

Our ODM model frees us up from purchasing finished goods inventory, which at the end of that third quarter was $89 million dispensing order January 2025 with DoD integrating that was expected some examples.

With that, I will turn the call over to the operator to begin the question and answer session.

Operator?

If you would like to ask a question at this time, please press star then the number one on your telephone keypad now and you will be placed in the Q in the order received.

Once again to ask a question at this time, press star then the number one on your telephone keypad.

Your first question comes from Mayank Tandon with Needham.

Your line is open.

Thank you.

Good morning by David.

I wanted to just touch on the platform strategy.

And so, I know that's been a big focus for you and you highlighted several conversions.

So, if I have my numbers right, I think you're at about 20% in terms of our platform across both retail and restaurants.

I just wanted to get a sense on how do you drive that conversion up over time?

What's a realistic target based on customer feedback as you've been having these conversations with customers? And then maybe you could square that with the impact on the P & L relative to the more traditional model of selling hardware, software and services

Good morning, Manyak.

And I know the platform strategy as we've described in and our previous releases and what we've seen in the results in terms of the platform side, growth is performing well and it's really a couple of things.

And we're driving it went as customers need new capabilities, all the new capabilities that we're delivering.

Our fees and through our platform. So, when we do new platform attach for not only seeing increased customer satisfaction and their ability to upgrade and use new capabilities.

But we're also seeing an uplift in our ARR when we make that attachment, we are in about 20%.

We're working aggressively in my prepared remarks, I talked about wanting to invest and we're aggressively going after couldn't renewals and conversions of our existing install base to trying to accelerate that, that platform conversion.

So more to come on that.

But we're seeing the economics play out in terms of going look at the cohorts of the customers that are coming on board.

We're seeing the uplift upon immediate sign on.

And then over time, we're seeing that increase in ARR with each customer can.

And I would just add that we get the RPU benefits in the air benefits, but we also get a margin benefit because software is our highest margin part of the business politically.

Then software subscription platform revenue has the highest margin,

and it's a small percentage of total revenues now.

And that's why you're not seeing and drive the whole number.

Yes, Meyer.

But as we aggressively move that the more to the biopharma and see that at a bigger impact through our,

I'm hopeful that we'll stay tuned on that.

And then maybe for Brian, any directional guidance for fiscal 25, what type of seasonality would be reflecting in our models, both on the top line and also in terms of margin trajectory?

So any color you can provide on how we should frame 2025 given all the puts and takes, it would be helpful.

Yes.

So we're going to give guidance for 25 in February on our Q4 call.

But consistent with what we said on the last call, we believe off the pro forma 2024.

We've been describing that we can grow our venture.

Got it.

Okay.

Thank you.

Your next question comes from Will Nance with Goldman Sachs.

Your line is open.

I think I appreciate taking the question.

I appreciate all the details on some of the go-to-market restructuring and kind of growth-related investments that you guys are making.

I was wondering if you could maybe talk about how you think about the pipeline to seeing those sort of play out and how we and the outside while we should be looking for in terms of KPI.s over the next few years to kind of measure the success of the go-to-market investments and next-gen investments that you're making.

Thanks.

Since the timing of those changes will be that we're making those changes internally.

We've started the process of them are in the beginning of the year would accelerate that as of the inputs are to the end of the year after digesting the other two strategic initiatives that are underway.

So now all the management team's effort and attention has focused on those items that we outlined will enter next year.

With that in place.

It's so we're executing the remainder of those changes to the balance of the year and will be in that formation or however, you want to describe that going into next year.

The KPI.s, I look at our similar or the same as what we've described.

This is our new go-to-market model will have a sense for our frontline sellers to drive new customer acquisitions.

It will have the right incentives to drive attachment to the Platform segment, EBITDA that will drive renewal of existing contracts and and will drive add-ons to existing services.

So we feel like looking at new sites, payment sites, they are our will still be the right key metrics to continue to look at how I would just add it internally as we made the investments, we're very focused on our Allied.

And so that's a key metric for us.

Got it.

That's helpful.

Appreciate that.

And just maybe if you could give any context on how you're thinking about capital allocation over the next year, understanding the share repurchase today from the net proceeds from the sale.

How are you thinking about organic cash flow generation and capital allocation next year?

Thanks.

Seth.

So we're pleased with what we've talked about today in our prepared remarks, how we've used the database, the proceeds to pay down debt, improve our leverage.

We have lenders where we want it, and we see that staying around turns or the lower.

We also today announced, as you just mentioned, the share repurchase in the 20 million of investment to accelerate our next-gen off offerings.

And so we will execute those things that we announced today.

And then going forward, we see consistent with what we've been talking about, making sure we're investing in our products, software offerings to drive growth internally and then considering tuck-in acquisitions, if there's something we can go out and buy versus build on, that will be a consideration.

And then future share repurchase will work with our Board to evaluate and consider here right now, I think the focus is executing well.

We've announced and then driving the cash flow in 2025 aluminum.

I appreciate all the color.

Thanks.

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

Your line is open.

Thanks.

A couple of questions.

First, maybe can you talk about what you're anticipating from an inflection standpoint and with respect to hardware, specifically, the dynamics you're seeing play out in the self checkout market as well as market share of their end?

And then what customer feedback he's been on employee.

It's migrating to the ODM and then I have a follow-up.

Thank you.

So the hardware market, Matt, we see has been significantly down this year overall and then the total market.

So we see going into next year that a lot of that demand will push into next year that the capital projects that are on hold this year, we think some of that will carry over.

So we I thought about hardware as end market demand being flat, maybe down a little on your point of sale being more probably more down than self checkout.

We see self checkout demand strong as we've described in the past and checkout process, a lot more than just hardware, the software and intellectual property that goes around how you have done retailer use that device to the year point of service for your customer.

So as our customers continue to look at new ways to check out their customers and create experiences in the store, we think are some new self checkout, I'll call it.

The platform is well positioned to do that increase a lot of flexibilities beta testing out new capabilities and offer.

So we're seeing a lot of strong demand for our self checkout software.

I think we'll get some refresh self checkout hardware revenues that whole some services through through it as well.

So what have you will all described as we think that is probably not going to fully recover, but we think flat, maybe slightly down what I think about the reaction of our customers to the ODM model.

I have several customers.

I've heard from the teams that have been from our largest customers that there has been no, no negative impact has all been positive.

They understand what we're trying to get done.

They like the focus that we have on software and services.

And they largely see this as the next evolution from where we were before having outsource manufacturers who is taking that logical next step.

So based allows us to provide a complete solution and then we'll leverage intercontinental film against that hardware.

Got it.

And then just as a follow-up, can you talk about in both retail and restaurants, particularly on the enterprise side of the business, what your net site count looks like, whether you're not adding customers and sites or not losing customers and site based on your performance year to date and in the third quarter overall, we're adding sites.

So net-net adding in all of our segments.

So I would tell you, we view, as we've described and you go to market model, we want to accelerate that rate, but it's a net a net add.

We haven't seen any upticks in customer attrition analysis that we've done for continuing to add new customers in both of the businesses continue to migrate customers to the platform with renewals.

So we feel we feel good about what we're doing.

In terms of the net add, I wouldn't like to see that accelerate.

Your next question comes from Matt Ross well with RBC Capital Markets.

Your line is open

throughout the morning.

Sort of following up on the on the hardware discussions.

Could you sort of remind us of the current relationship between software and services growth and hardware and how that will change going into 25 with the ODM contract?

So what I would say right now on the part of services that gets impacted by hardware in the lower hardware refresh that we've seen this year is the what we call the TSR installation revenue that we get from from implementing the hardware.

That's 20% of services that the non-recurring part, 80% that's recurring, the ongoing support of our customers.

So it's really that 20% that the tons are under pressure.

We were not refreshing and doing installed projects and the software that general linkage between hardware and software, we we are breaking that linkage between hardware and software and our customers and the enterprise space typically have clearly move those almost independent of stadiums.

And we're supporting that, that move with our edge platform and all of our next-gen software capabilities being born without announcing.

So that sense, while that was an industry trend, that's where we're headed strategically, what I think the heart of what anytime allows us to do is stay focused on that software and then provide them our high-level fashion.

They can design the best hardware for the industry does serve with faster lead times, especially lower price points and the highest quality possible.

So we announced in the retail side, the Swedish snuff announcement was one where we're using their existing hardware and helping sweat the assets.

And we see that as part of our ongoing strategy will evolve.

Switching over to expenses, Shanda.

Great.

Sort of margin quarter, especially in restaurants this year.

I'm wondering how much expense savings to use do you see remaining, especially now that kind of all the noise is moving away?

And then where would you expect to see any savings?

Would it be in segment liner would be down corporate and other?

Sure.

So on in Q2 and the Q2 call, we announced our $105 million cost cutting program that cut across payroll costs, non-payroll costs and then hand it to me or AR facility saving U.S. bank fees from doing that on those actions have largely been implemented in are behind us, and that's why we saw that up.

And even though one of the reasons from Q2 to Q3, we had a sequential improvement in EBITDA higher driven by those cost savings we still in year over year and up 35 million of a benefit from those actions in the rest were the lead into the pro forma view of 24 that we provided.

And so we get to the four 30 of adjusted EBITDA.

When we think about the on geographic geographies of those cards, it's helping the segments.

And in some of the Corporate and Other, we expect the corporate and other expenses to be on both reported and normalized, about 60 million in Q4.

So we'll see I am starting to see improvements there, but the actions really cut across all areas of the business and we're currently working additional plans for next year are mostly around non-payroll costs, where we're going to do further inventory reductions allowed that's going to be from insourcing certain functions.

So not only do we save money, but we'll have more control over over some of those functions on into that.

And we'll talk more about that as we get into next year.

Excellent.

Thank you very much.

Your next question comes from Charles and the Bob Evans with Stephens.

Your line is open.

Good morning and thank you for taking my question.

As we think about modeling the fourth quarter, I was wondering if you could give us a little color on on on the implied growth by segment.

Sir, just some color overall, and then I'll talk about the segments.

So overall, on software and services, we expect to be near the midpoint on the guidance.

And when it comes to hardware, we expect to be towards lower end, even though we over achieved in Q3, we given the backlog and visibility we have in Q2 four, we expect hardware will be on towards the lower end.

The good news on revenue overall, we still see the pro forma view that we gave on the last call me after 24 because even though hardware revenues down, we're getting a bit of a better margin on it.

So that the commissions on a pro forma view will be very similar to what we saw provided in the past.

When we think about the EBITDA, we expect EBITDA to be at the midpoint to slightly better than the midpoint of the range that we've given for the year.

So that in that, that shows more sequential improvement from Q3 into Q4.

When it comes to the segments, retail on software and services, revenue on is likely to be flattish in Q4 in EBITDA should be pretty consistent with Q3.

And for restaurants, we take 1% to 2% growth in software and services and with EBITDA also consistent with Q3, a lot of the EBITDA improvement sequentially on as we get into Q4 will come from corporate and other.

Got it.

Super helpful.

Appreciate that color.

And then a follow-up.

I wanted to ask about your payment initiative and get a better sense for what types of clients you're targeting.

But your value proposition is to those clients and whether you could compete on price went up with the acquirers of some of your larger customers, slight easing overall churn?

Our payment strategy is twofold.

I'll say this one and the S and meeting space.

So as we've described, SMB and mid-market, we have on high 90s, 97% last quarter attach rate of payments.

So we're selling a complete solution.

So very common in that segment of the market.

The value prop in that segment is one-stop shop.

You get everything you need to run fewer small restaurant or your small stores with NCR voice, then we'll lending about moving up into the higher into the mid-market or even to enterprise value proposition really becomes again that total solution.

We think all of the handoffs between the point of sale, the payment acceptance of, I guess the the gateways that processors, that whole ecosystem benefits.

Well, when you have a single provider doing that, we likely in that case or not, but in any cheaper on the payment rate itself, where we get a better total cost of ownership for our customers is owning that whole thing into end with all the integrations and testing and certifications that need to be done.

We end.

But you have described in the past, in some cases, we're leveraging our own processing, take those other cases, we're leveraging partners.

So we believe that leveraging partners is a good way to go.

And then that case, we'll be competitive on rate at the processing level, but win on ease of doing business and that total cost of ownership.

Got it.

Super helpful.

Thank you.

Your next question comes from Kartik Mehta with Northcoast Research.

Your line is open.

Good morning.

David, I wanted to ask you you talked a little bit about changing the confidence to boost for the sales force.

And I know at times something like that could have a negative impact in the short term deposits in the long term.

I'm wondering, as you can implement that you've already implemented, have you seen any changes related to that or what you're anticipating or maybe how you how that might go help with a forecast?

Therefore, we've implemented pieces of it.

We are doing it in a way that minimizes the impact to the fourth quarter results.

The teams are very focused on delivering full.

We've described what Brian just described is our fourth quarter commitments.

The real changes will take effect as we turn the calendar into January.

We'll do a beginning of the year and beginning with the sales teams.

We are normal processes to go through all of the realignment of compensation plans in November, December as we finalize our 25 plan internally and with the Board, and then we'll start to turn that into real quarter.

There's another piece of work that we're doing around the processes internally to support the sales team so that we get the sales team singularly focused on selling and we can lift a lot of those support functions and move them to the right support team internally.

All that work is underway now with the with the two goals and ready to go change, that there is that are happening inside the company in the central over that.

And great.

It's great to see Darren join.

And I'm wondering where you see the best opportunity internationally or where guarantees is an opportunity, maybe geographically or from a product standpoint and it's early days for their entire IT?

I won't.

I won't say you've got the ScreenPlay and yet these things done a lot of great ideas.

I think when we looked at what's happening in Europe, what's happening in Japan and then I separate Japan from Asia Pacific and geographically, but we definitely will be that we have that business separated.

So we've got a lot of opportunity, Japan.

I mean, that's our second largest country outside the US and getting critically focused on that.

We serve the largest retailers in advance of getting them move to the platform strategy and driving that in Europe.

We have a great installed base customers sending in Australia.

We really will negotiate market.

So there is no I've got a couple of things.

We'll look at how does the job of getting customer to test the platform faster, like we've described in the other areas, still have both retail and restaurant responsibility.

So we'll look at can we take our restaurant portfolio and expand it globally or prepayment opportunities, given the fact that obviously base and payment opportunities and the UK and other parts of the market, they eat potentially even in Japan.

And then we'll be exploring how do we get a mid-market offering with our mid-market offerings, largely driven by U.S. baseband market offer.

So how do we look further market expansion and the team strong and and the rest of the world to?

So Darren, if you look at some of those new avenues for growth while leveraging the existing team.

So everybody is excited about the they added there.

And I like the focus that is striving to get settled their focus on international, but air combat and focus on what's happening in the retail restaurant business, specifically focused on the Americas.

Perfect.

Thanks.

Appreciate it.

Your next question comes from Erik Woodring with Morgan Stanley.

Your line is open.

Yes, good morning.

Thank you for taking my questions have to as well.

And I apologize if I quantities were asking to start off for a second.

David, I'd love to understand the message that you are sending to prospective new customers on why they should move over to NCR employers, right?

This is a new strategy or at least a change in strategy or at least a change in emphasis.

And I'm just wondering what's the value prop that you're leading with they had indeed the antenna solutions?

Or is it anything beyond that?

You're offering that maybe they couldn't get from their existing providers?

And I have a heart attack.

And when you look at our history and heritage and market share in this and these industries, this our core businesses have been around retail and restaurants.

So the one of the thesis of emphasis that we gave is we're back to our core businesses and extremely focused on delivering an end and solution for retail and restaurant.

We know the industry well, we know there are challenges.

So when we talk to new clients, there's one about the platform.

We have great tech that provides all the capabilities that are required for your business in the running business.

The other side of that, as we have services capabilities that truly differentiate us most of our clients and the enterprise mid-market space, they're looking for a complete offering and then they'll want to happen, maintain it and make sure it's up and running and don't have the service capabilities and they need somebody that can scale with their business and grow with them as they grow.

We grow with them and they can trust us to continue to deliver the platform itself.

I'll talk a little of that architecture.

They believe in the architecture of the platform strategy, the open nature of how we're delivering our solutions.

And we allow not only our own technology or we're going to have great application for things like loyalty and payments and self checkout.

They can also bring their own applications that we can plug in third party.

So we have a good third-party ecosystem of partners that allow them to plug in.

So we get flexibility to our customers.

We don't have to lock them in, and it gives them a lot of opportunity to go explore and test out new offerings as they were looking to compete on differentiated solutions to their customers to us as consumers.

So we go in with a full solution, the credibility and history of what we do and and our deep knowledge in our industry, along with the green tech platform is open.

Okay.

That makes a lot of sense.

Thank you for that color around.

Maybe just as a follow up, can you maybe elaborate a bit on your capital allocation strategy?

I'm just obviously, you now past the digital banking transaction, you're looking at closing via the hardware shift.

Obviously, you talked about buybacks.

Maybe just help us understand the pace of those buyback.

And then maybe what comes next, what's your leverage goal?

And how do we think about the capital raising capital allocation priorities?

You certainly we cover this a little bit earlier, but I'll just reiterate that needs using the digital banking proceeds.

We leverage where we wanted to be.

We'll keep it at 48 million share repurchase that we'll execute.

And we also announced using 20 million of those proceeds to accelerate some of our offering investments.

So that that's the uses that we know the majority of the digital banking proceeds will we think about go forward capital allocation basis, really consistent with what we talked about before, continuing to invest internally to support our offerings on and to drive growth.

And then looking at tuck-in acquisitions, we might make sense to buy something versus build it ourselves.

And then lastly, any future share repurchase will evaluate and consider with our Board.

And that's kind of what we talked about before right now, the focus is executing what we announced in January and the cash flow than either January 2025.

No data to you that anything that sort of said?

That's the answer.

Great.

Thanks so much.

Has signed up a repeat question.

No.

Your next question comes from Ian Zaffino with Oppenheimer.

Your line is open.

Hey, good morning, guys.

This is as accounts on for Ian.

Thanks very much for taking my questions.

Just had one on the initiatives and investments you mentioned in the restaurant and retail businesses.

I guess, specifically for restaurants, maybe you could provide some high-level thoughts on what the investments with a tail and maybe how you're looking to position the segment relative your to your current market position and enterprise IT QSRs?

Yes.

Thanks.

So the work that we're doing on the portfolio for restaurants is really accelerating what we would have had in our original roadmap.

So pulling in some functionality to get a bar expansion, specifically in QSR in Q1 for we're looking to accelerate some of the value added capabilities on the on the platform.

So that customers that have connected to the platform and giving them more that they can do through the platform with our investments that that is the focus.

Do you think about some of our capabilities like kitchen payments, menu management, back office.

So those are the capabilities that we're looking to accelerate.

And when we say accelerate that, the more of the cloud enablement, we've all we've clearly got those capabilities are legacy platform is really delivering those to our cloud platform and accelerating that migration to the platform where we're focused.

And then some of that will come in the form of aggressive marketing and commercial package as some of our customers to get them back faster.

Okay.

Thank you very much.

At this time, it appears there are no further questions.

I'd like to turn the call back to NCROECEO. David Wilkinson.

I'd like to close with just the thank you to our employees and try to have a great job of executing what is on paper, a really strong set of strategic initiatives and a solid performance for Q3.

As you that we described it a lot of work ahead of us.

So the teams will be very focused on delivering to our commitments to our customers.

Also like to thank our customers for the for the confidence that analysis and trusting us with their solution.

We serve enterprise clients and mid-market clients and our mission critical to what they do every day.

And we don't take that that likely.

So we appreciate the support we have from our clients and flat.

Lastly, I would tell you that I'm really optimistic on the strategy that we have.

We laid out the pro forma and the last earnings release and the focus that we're driving as a company on-site software and services, the attention that were driving as a management team, the change that we've made, the leadership, what we're describing is going to set us up on a path and 25, like we said, to grow off of that base.

So we will provide more color on that and we'll get into February.

But we feel good about the initiatives we're actually and we feel good about the platform momentum that we have, and we're appreciative of our existing customers to thank you for your time this morning.

This concludes the NCRBOX. Third Quarter 2024 earnings call.

Thank you for attending and have a wonderful rest of your day.