NCR Preps for Year-End Split as Digital-First Banking Results Remain Strong

As it readies to split NCR into two separate public companies, one focused on digital banking and POS systems and the other dedicated to its ATM network, the company is continuing to sign new deals for both segments.

Reporting first-quarter 2023 earnings on Thursday (May 4), NCR CEO Mike Hayford said, “We are on track to separate NCR into two public companies in the fourth quarter. Upon separation, we believe each company will benefit from increased operating and financial flexibility in pursuit of respective and distinct opportunity sets.”

Delving into Q1 results, he said that in retail systems, “we continue to deliver on a strategy to be the retail platform company of choice,” saying that in Q1, NCR expanded its relationship with the second biggest retailer in the U.K. to include self-checkout units and a professional services agreement, “for a multi-year subscription” to transform in-store solutions.

NCR has been transitioning more retail accounts to its FastLane SelfServ Checkout lanes platform, which operates on a subscription model. Chief Financial Officer Tim Oliver said, “We increased the number of platform lanes by 33,000 lanes or 125% year over year.”

In hospitality, Hayford said NCR continues “to experience strong demand across enterprise and SMB customers. In SMB, our payment attach rate for new customers remained at roughly 90% driving a 50% increase in payment sites. In enterprise, we expanded our relationship with the world’s largest fast-food chain to be the sole provider for digital menu boards in the U.S.”

Digital Banking and ATM As A Service Deliver

NCR’s digital banking business showed “positive momentum” in the quarter, he said, signing 12 new customers and renewing 12 others. Hayford called out a new deal with North Carolina’s State Employees’ Credit Union (SECU), saying, “This will deliver a modernized digital technology platform for the credit union and will advance NCR’s digital-first market position in the large regional financial institution segment.”

While acknowledging investor concern over potential impacts on NCR from the banking crisis, Hayford said, “We had a strong first quarter in self-service banking and do not expect a slowdown given the current macro environment.” In Q1, Hayford said NCR signed six ATM as a service deals, including First Citizens Bank for 500 ATMs and an end-to-end management solution, and partnered with credit union service organization (CUSO) Members ATM Alliance to be its exclusive provider of the ATM as a service solution for its credit union members.

Retail, hospitality and digital banking segments will form NCR Remain Co. (name pending) after the separation transaction, Oliver said, while its ATM business will become its own company. Oliver said, “We continue to have success transitioning our self-service banking business from one-time sales into a multi-year subscription-based revenue stream.”

He added that ATM service units increased 293% year over year to 17,000 units, with “significant growth” in India and incremental growth in the United States.

Payments & Network and self-service banking are the segments that will comprise NCR ATM Co. after the separation transaction, he said. Oliver is the CEO designee for NCR ATM Co. upon separation, while David Wilkinson , President of NCR Commerce, is the CEO designee for NCR Remain Co. Both will continue in their current roles until the businesses are separated.

During the briefing, Hayford addressed the April 13 ransomware attack that caused an outage in its Aloha POS platform used in restaurant services, saying, “We determined that a single data center outage that impacted some functionality for a subset of our commerce customers was caused by a cyber ransomware incident. At this time, we are well on our way to recovering the majority of the most critical functions impacting our customers.”