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. 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. 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. 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.
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”). 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. 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”). 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. The historical financial results of the Digital Banking segment businesses are reflected as discontinued operations in the Company’s consolidated financial statements.
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”). 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. 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. 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. Subsequent to the Spin-Off, the Company managed and reported operations in three reportable segments – Retail, Restaurants (formerly reported as Hospitality), and Digital Banking. Following the Digital Banking Sale, the Company manages and reports operations in two reportable segments – Retail and Restaurants.
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•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. Our FDMM customers include grocery stores, drug stores, and big box retailers. 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. 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.
Corporate and Other includes income and expenses related to corporate functions that are not specifically attributable to any of our two individual reportable segments. 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.
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. 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. 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. 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. 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. 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. 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. 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 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. 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 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. 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.
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Products and Services
Platform & Edge
•Platform. 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. 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. Edge is a modern software infrastructure for in-store applications (e.g POS, SCO). Edge enables retailers to run applications in physical stores with the agility and insight of digital channels. Retailers can make software changes across their estate in response to market and shopper behavior at a faster pace with lower cost. Edge replaces traditional operating systems such as Microsoft Windows running on POS or SCO devices, using open container standards, and creates a zero-trust security environment. As well as critical systems such as POS, SCO and Kiosk, Edge is an enabler of network intensive applications on store servers, such as high bandwidth video analytics, AI, and real time fraud detection.
Front-of-store Solutions
•Point-of-sale (POS). Our unified cloud-based and hybrid cloud point-of-sale software solutions enables both front and back-of-house capabilities for our retailers and restaurants of all sizes, ranging from small- and medium-sized businesses to international and multinational enterprises. We offer a consistent experience across all touch points of a restaurant or retail store, including operations, customer experience, staff and employee management, no matter how restaurants and retailers choose to engage with consumers, allowing restaurants and retailers to simultaneously drive operational efficiencies, increase profitability, and elevate the guest experience.
•Self-checkout (SCO). Our self-checkout solutions, including our next-generation technology, enable retail guests to transact independently, reducing the staff required for traditional processes. Our self-checkout technology integrates bar code scanning, computer vision, RFID and more to reduce shopper friction and improve the guest experience. We offer self-
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checkout for standalone units or in a hybrid modality, allowing retailers to pivot quickly between assisted and self-checkout lanes or cash and cashless lanes, depending on their store needs.
Back-Office Solutions
•Payments. We offer secure payment acceptance solutions, including gateway, processing and acquiring, to enable restaurants and retailers to accept electronic payments online and at the physical point-of-sale.
•Data & Analytics. We offer an analytics platform that provides our customers with meaningful, near real-time insights to improve efficiency and decision-making. It features a streamlined, cloud-native data pipeline designed to reduce processing time and transmission failures. Additionally, our platform includes cloud-native monitoring and alert capabilities, as well as scaling and resource management. Our platform enables analytics and reporting, data visualization, mobile readiness, seamless integration, and customization.
•Inventory. Our inventory solutions allow restaurants and retailers to measure, control and reduce expenses, and increase profitability. These solutions use both trends and delivery schedules to recommend purchases, negotiate contract pricing and streamline communications with suppliers, taking the guesswork out of ordering, and solution data.
•Scheduling & Labor Management. Our scheduling and labor management solutions help restaurants and retailers manage employees efficiently, with summary reports, easy-to-read, interactive schedules, mobile scheduling notifications and custom payroll data. Our operational intelligence features can improve employee productivity and enable our customers to forecast future accurately while enforcing company labor standards.
Digital Channel
•Online Ordering. We offer the infrastructure and pre-built componentry on our platform that enables restaurants to build their own web and digital applications to own the consumer experience and collect crucial data points that help improve guest satisfaction. Additionally, restaurants can offer direct ordering for curbside pickup and delivery, enable guests to order and pay on their own devices using QR codes in the restaurant, and create specific menus for dine-in, pickup and delivery to manage volume and streamline orders.
•Digital and Mobile Applications. We offer white-labeled websites and mobile applications to retailers and restaurants that allow them to own their guest relationships and integrate with NCR Voyix systems for an efficient and consistent guest experience across the physical and digital channels.
Marketing & Loyalty
•Consumer Marketing. NCR Voyix Consumer Marketing solution integrates data management, loyalty, campaign management, reporting and insights, mobile and email capabilities, enabling retailers and restaurants to elevate the guest experience and transform their brands. Enriched and continuously informed by data, the NCR Voyix Consumer Marketing solution allows users to optimize and automate marketing campaigns, focus marketing efforts on high value customers and unify store data to drive loyalty and revenue.
Add on Solutions
•Partner Ecosystem. Our partner ecosystem allows restaurants and retailers to connect their proprietary systems and third-party services to our platform through partnerships and the use of open APIs. Our customers have access to our solution partners when connected to our platform, allowing them to leverage a rich suite of add-on applications to drive increased consumer engagement. Our key solution partners’ business areas include pharmacy, shrink management, digital coupons, digital commerce and third-party delivery services.
•Aloha Kiosk. Our self-service kiosk solutions enable restaurant guests to place orders independently, allowing guests to control their dining experience and reducing the staff required for traditional order-taking and checkout processes. The Aloha Kiosk solution enables restaurants to enhance the in-store ordering process, reduce labor expenses and drive operational efficiency.
•Aloha Pay-at-Table. Aloha Pay-at-Table dramatically improves operations for all restaurant team members, from servers to accounting personnel. With Aloha Pay-at-Table restaurant guests can split and pay their checks, add customized tips and rate their service - all by just scanning a QR code at the table.
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Services
•Professional Services. We work with our customers on the co-innovation and ongoing management of software solutions and related applications and operate their business processes. We offer software implementation, integration, localization and optimization services, to help restaurants and retailers transform operations, elevate the guest experience and maximize the value of their technology.
•Field Break-Fix Services. Our global field services team provides preventative maintenance and break fix services for our customer’s incidents that cannot be solved remotely by our customer support desk.
•Connected Service Desk: Our 24/7 customer support desk service delivers ITIL-based services for both NCR Voyix and non-NCR Voyix technology, providing a single point-of-contact for service desk needs. Our comprehensive system management solutions, which include incident management, problem management and change management, help customers increase technology availability and stability and manage in-store technology. Our approach is grounded on digitally connecting to our customers sites to enable high remote resolution.
•Restaurant Managed Services. We offer services within our Restaurant portfolio to manage the high frequency, volumes and complexity of menu options and pricing changes for our customers across their locations.
•Installation Services. Our global field services team installs both software and hardware at our customers’ sites including both NCR Voyix branded hardware and non-NCR Voyix hardware.
Hardware
•Point-of-Sale hardware: We offer restaurants and retailers fixed and mobile point-of-sale and consumer display terminals, that are durable and high functioning, scalable and easily integrated.
•Self-Checkout hardware: Our self-checkout hardware is flexible and configurable to fit retailers’ store needs and deliver the frictionless experience their guests expect. Retailers can choose from card-only machines, machines that support cash transactions, tabletop devices, or full-function hardware, depending on their specific store needs.
•In-store peripherals: We offer in-store peripherals, including kiosks, kitchen display systems, printers and ordering kiosks. We also partner with third parties to deliver payment devices, enabling us to provide restaurants and retailers with a comprehensive end-to-end solution.
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 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. 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. 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. 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. 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. Information regarding
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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.
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. 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 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. 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. Such seasonality, as well as recurring annual cash-related items also cause our working capital cash flow requirements to vary from quarter to quarter depending on variability in the volume, timing and mix of sales. In addition, revenue in the third month of each quarter is typically higher than in the first and second months. 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. However, there are some services and components that are purchased from single sources due to price, quality, technology or other reasons. In the past, we have been able to obtain an adequate supply of raw materials and components for virtually all materials used in the production process. 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. Following the Hardware Business Transition, which we expect to complete during 2025, we will utilize Ennoconn as our single-source partner to supply and manufacture substantially all of our hardware products.
For additional information regarding the potential impact of these relationships on our business operations, and regarding sources and availability of raw materials, refer to the risks described under “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” in Part I, Item 1A of this Annual Report.
Products and Services Backlog
Backlog includes orders confirmed for products scheduled to be shipped, as well as certain professional and transaction services to be provided. Although we believe that the orders included in the backlog are firm commitments, we may allow some orders to be canceled by the customer without penalty. 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. Further, we have product revenue derived from term-based software license arrangements that include customer termination rights and services revenue that is recurring or transaction-based business and we do not measure backlog information for these types of transactions. Therefore, we do not believe that our backlog, as of any particular date, is necessarily indicative of revenue for any future period. 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.
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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. 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. We manage our workforce levels to align with our business strategy and management believes it has sufficient human capital to operate our businesses successfully. During fiscal 2024, our overall headcount decreased as we continued to execute on our strategy and improve organizational effectiveness.
We continuously invest in our workforce by seeking to create an inclusive environment where diversity is celebrated, and our employees feel valued and respected. We believe that providing a work environment based on respect, trust, and collaboration creates an exceptional employee experience where employees can bring their whole selves to work and thrive in their careers. 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 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. Many of these regulations and laws are evolving and their applicability and scope, as interpreted by courts and regulators, remain uncertain. 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).
Any actual or perceived failure to comply with these requirements may result in, among other things, private litigation, regulatory or governmental investigations, administrative enforcement actions, sanctions, civil and criminal liability, monetary penalties, and constraints on our ability to continue to operate our businesses. It is also possible that current or future laws or regulations could be interpreted or applied in a manner that would prohibit, alter, or impair our existing offerings, or that could require costly, time-consuming, or otherwise burdensome compliance measures from us. As we continue to grow our business, additional laws, rules and regulations may become relevant. 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.
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. 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. Further information regarding the potential impact of compliance with environmental laws and regulations is also included in Part I, Item 1A of this Report.
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”). 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
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electronically with the SEC. 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.
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. 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: [email protected]
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. NCR Voyix encourages investors to visit its website regularly, as information may be updated and new information may be posted at any time. The contents of the Company’s website are not incorporated by reference into this Form 10-K and shall not be deemed “filed” under the Exchange Act.
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