NCR’s Planned Business Split in Full Swing Despite Declines in Sales

The planned separation by NCR into two publicly traded companies — one focused on online commerce, and the other centered around ATMs — is in full swing, senior company executives told investors and analysts as part of the company’s recently released second-quarter financial results.

“We have made significant progress preparing for the separation into two public companies, which we anticipate will occur in the fourth quarter, and are in a strong financial position and carrying positive momentum,” NCR CEO Michael Hayford said of the split, which was first announced in September 2022.

In terms of financial performance, NCR reported Q2 revenue of nearly $2 billion, a 1% decline compared to the previous year. Hardware sales also declined, and the impact of the strong U.S. dollar compared to the previous year had an unfavorable effect of $18 million on revenue, particularly in the retail and self-service banking segments.

Despite these challenges, the company generated $154 million of free cash flow in the second quarter, attributing it to higher profitability and anticipated improvements in working capital. This exceeded the company’s goal of generating at least $500 million of free cash flow over the past three quarters, a goal Hayford said will enable the firm “to decrease financial leverage in preparation for the separation transaction” in Q4 this year.

In line with its ongoing business strategy, the company announced that NCR Voyix, the new digital commerce business, will combine the retail hospitality and digital banking segments. This move is expected to streamline operations and enhance the customer experience. The combined revenue for these segments increased by $20 million or 2% year over year in the quarter under review, with recurring revenue showing a 5% increase.

In other news, NCR and Autobooks have joined forces to add integrated digital invoicing, payment acceptance and accounting features to NCR Digital Banking for financial institutions.

The partnership, announced in a Thursday (Aug. 3) press release, offers users a suite of integrated payments and cash management solutions, designed specifically for small businesses.

“Together, Autobooks and NCR are delivering leading digital-first payment and receivables tools, helping financial institutions strengthen relationships and loyalty with the critical small business market, Autobooks Chief Marketing Officer Derik Sutton said.