Thank you all very much for joining us today. Really appreciate it. My name's Dan Perlin, I head up the Fintech practice here at RBC, and I'm delighted to have our next presenting company, NCR Voyix. From the company, we have Brian Webb-Walsh, who's the Chief Financial Officer. Brian, thank you so much for being here. Thank you for having us. Longtime supporter of the conference. What I thought we would do at a high level to start off is just really talk about the evolution that has undergone this company really in the past year or so, and then maybe frame that picture of what the long-term vision is for that evolution. Sure. What I would say is I've been with the company now for three years, and during that time we obviously split into two companies with Atleos and Voyix. A year after we split into two companies, we also divested our digital banking division, and we used the proceeds from that divestiture to significantly clean up the balance sheet, reduced our leverage to just over two turns of leverage. From there, this year in April 1st, we finalized our hardware transaction with Ennoconn, where we moved to an ODM model. A lot of the hardware responsibilities moved to Ennoconn, and now we're selling the hardware on their behalf and earning a commission. All of those things have made the company a much more focused, just over $2 billion of revenue, retail restaurant, business focused on software services and payments. We believe this new business model, we can grow revenue consistently over time and grow EBITDA faster than revenue as we drive margin improvement by selling higher margin software and payments offerings, then through efficiencies, and then generate good free cash flow with that business model. Yeah. That's what we're focused on. The other thing I'd mention is we've done a lot of cost work over the last couple of years. As we've gone from an $8 billion company to a $2 billion company, we've had to do a lot of cost work, and that's pretty much behind us. Going forward, it'll be more normal efficiencies that we drive. Yeah. It's been a huge transition. Yeah, it has. The way you just summarized it does not give it credit for the amount of work you've put into this. Let's take the gratuitous question about just what's happening in the world today as you're seeing it, recent trends, and if you could distill that down to what you're seeing in restaurant versus what you're seeing in retail. Yeah. I would say it's pretty consistent in both. The demand we see from both sides of our segments is pretty consistent. Our offerings typically provide efficiencies for our customers or improve customer experience for their customers. Even when there's some pressure that they're dealing with, our offerings tend to help with that pressure. The other thing I'd mention, as we move to the Ennoconn model, now 80% of our revenue is recurring revenue. Very little of that is based on transactional volume, it's a pretty stable business model, we really haven't seen any impacts from the macro environment. Okay. When you look at across the world, you've got the U.S. practice and then you have a very big practice kind of rest of the world. What are some distinctions that you would draw in terms of maybe where the technology has evolved to or needs to go? Again, similar situations like geopolitical tensions and those kinds of things. Yeah. Again, we have a good global footprint. Our retail business is very international. Restaurants isn't as international, but our enterprise customers and restaurants, a lot of them we serve across the globe. Our services footprint, both where we install technology and maintain technology, is global. This is a big competitive advantage for the company. Again, we've seen pretty consistent demand in and outside the U.S. I would also say our next generation applications are relevant both in the U.S. and outside, that's an important lever in all geographies. There's not a lot of distinction, but our advantage from where we sit is this global footprint because a lot of people don't replicate that. Yep. I want to also speak to some of your structural differences relative to competition. Okay. Oftentimes, everyone talks about the SMB environment and there's lots of competitors there. You guys are quite big in enterprise, so maybe just draw a distinction between how big that business is, where you focus there versus the SMB side. Yeah. The vast majority of our business is mid-market or enterprise, mostly enterprise. In there, we have long-term relationships with our customers. It's more like partnerships where we help them deliver their business and their operations, working with our IT teams. There's a lot of complexity across geographies as we're doing that. Our services model and software are really advantage when it comes to enterprise and mid-market. SMB is more competitive, it's more price sensitive, and when we focus in that area, we do better when there's multiple sites, so call it 10 locations. That's where we can add some more value. Enterprise is where the majority of our revenue is, and that's where our strength is. Got it. Let's spend a moment on the Voyix Commerce Platform. This is clearly the central technology that you guys have developed over the past couple of years. It seems like all new engagements are going to fall into that. Same with converting existing clients. Maybe spend a moment about what was the vision behind that, how it's architected, why it's beneficial to both the client as well as Voyix. What we call the VCP applications or Voyix Commerce Platform applications, these are our next generation software applications, and we've modernized them using AI. We've basically taken our feature library of over 30,000 features, and we modernized them on a modern architecture that's microservices based. Customers have access to the features that they currently have, but they have it on a modern architecture, and it allows them to maintain process flows consistent with how they're operating today. What does this modern platform do? It allows us to deploy innovation faster and in a modular way. It's less downtime for the customers, but it also lets the customers make changes faster. If they're updating menus or changing promos, they can do it much faster than they would be able to do on legacy technology. It drives an ROI for them, and for us, it drives stickier customer relationships, better retention, but also more recurring revenue because we get more revenue as we implement the next gen applications. Help us size this opportunity for you as a company. I know that in the past you've talked about having roughly 400 or so enterprise clients. How do we think about where that sits today? How big of an opportunity can that potentially be over time, and how much does that really represent of the company? What I would say is that the VCP applications are the largest growth driver for the company and the center of our strategy over the coming years. If you think about where we are, we on the Q1 earnings call, we talked about having 21 customers signed up for the VCP applications out of the 400 customers. Inside of that 21 customers, we said there's a remaining contract value of $293 million for those customers. 85% of that is existing customers, 15% is new logo. It's heavily weighted towards our existing customers. You can also see that 21 out of 400 customers, we're in early days of this opportunity, and there's a lot more opportunity going forward. Yeah. That was a new KPI that you Yeah introduced. I suspect it took some time to want to put that out in the market. Why bring that out now, and is it going to be consistent? We plan on keeping it consistent and both I think the number of customers that have converted, which is now 22 customers, versus 21 customers at the end of Q1, and then the amount of the backlog, that'll be something that we'll continue to report on. I think it's an important KPI for investors to watch because that'll be a sign of our progress in getting customers converted to these applications. How do we think about that in terms of transitioning from the $293 million that you talked about into a revenue number over time? Yeah. What I would say is, one, on average, contracts are typically five years, there's some ramp to the contracts in some cases. The other important element that I didn't mention before is that when we convert customers from legacy applications to these new applications, we typically get anywhere from a two to five times uplift on what the customer was paying for software maintenance in terms of what they're now going to pay as a subscription revenue stream. That's where we get the uplift on our side. Embedded in this backlog is that uplift, over time as we ramp and deploy, that we recognize that revenue. Typically you can think about a five-year timeline. Okay. If we were building that up into a chart, where does that 2x to 5x revenue uplift come from? That's basically the old software maintenance that we were charging, now in subscription, it's going to be in the software line, you'll see growth in the software line as we do this. Okay. How does professional services fall into that realm? Yeah. Professional services today sits within software. We still see that as an important element of our business when we're deploying for customers and doing integrations for customers. Over time, some of that may end up in the subscription line and some of that could come down. The overall net benefit we view as positive and a much healthier, more consistent revenue stream that's recurring, that has price escalators. That's how we view it, that it's a net positive, even if professional services were to come down a bit. Yeah. Price escalators. I'm wondering, how does pricing play into the growth algorithm of the company going forward? I think in the past it would've been harder to manage because it was so disparate in so many ways, and now it feels like it's a little more concise. Yeah. We've brought a lot of discipline around price, both how we're going to market with our new offerings and how we're pricing them, to be competitive, but also at market rates. When we get into the payments opportunity a little bit, one of the levers there is our gateway where we haven't been charging market-based rates, and bringing that to a market-based rate is an opportunity. Just general discipline around CPI escalators, and pricing escalators in our business model. We've done a lot better over the last year and a half doing that. Okay. That'll continue to benefit us as we go forward. Yeah. Are those in contracts now? Like the CPI escalators are actually in? We are putting them in contracts as we do new contracts. Okay. You mentioned payment monetization, so let's go there. Okay. Maybe spend a moment talking about where the organization was before you decided to go down the payment gateway, then you also have this partnership with Worldpay. How did you have all this payment flow through the system but never monetize? Now how do you actually monetize it? Because I don't think the actual flow of the transaction changed much. Yeah. What I would say is the payments business today is roughly $100 million for us in revenue, that is heavily skewed towards the SMB part of the market. That's where we get most of our processing revenue. The opportunity going forward is to, again, on the gateway. In the past, we've embedded and bundled that with software, we haven't charged market-based rates. Going forward, charging market-based rates is a big opportunity on the gateway. The second opportunity, we have transactions flowing through our systems. Call it the volume would be $1.3 trillion globally, $800 billion in North America, a lot of that is enterprise volume that we haven't monetized through payments. As we're doing next-gen software deals, attaching payments is the big opportunity on the processing side, we've been building out all the capabilities to be able to do that, to be able to handle the enterprise work. It's the combination of the gateway and the processing that give us a big payments opportunity going forward. Yeah. It's huge. On the gateway side, you're obviously putting these fees in today. The clients have to notice. How are they responding? Yeah. When we look at our pricing and whether it's the uplifts on the software or the pricing for payments, we're looking at the what is the total return on investment for the customer. We're saving them money with other vendors and giving them incremental capabilities, driving efficiencies, better customer experience. We always look at what we call the BIM model, Business Impact Model, and what are the returns to the customer. That's a very important part of how we sell and how we look at it. The other lens is making sure we're competitive against our competition. That's how we think about it. Okay. On the other side of the equation, where you've got $800 billion of volume, that's mostly in retail? Is that also in restaurants? It's in both, skewed towards retail, just given the size. it tends to be Sure more enterprise Yep size clients. Yes. How are they dealing with you as a payment provider, in partnership, obviously, with a very large-scale provider? I would say we're in early days of this opportunity. As we're taking our software to the customers, we're talking to them about payments and our capabilities. I think they're open-minded to it and willing to do it with us, assuming we have the same capabilities that they have today, which is what we're working to build out. When we have conversations, a lot of these conversations are led by Jim, the customers are receptive. Jim and the whole team is spending a lot of time out with customers. Yep, okay. across the globe. Got it. Let's pivot to AI. It's a hot topic. Yeah at the conference, and pretty much any topic or conference you go to nowadays. How are you guys utilizing AI in the business today? Do you view it as a potential accelerator to revenue down the road? Obviously, there's a lot of efficiency tools, but I'd be interested to know both sides of that equation, how you're thinking about it. Yeah. What I would say is, what I talked about upfront, using AI to modernize our legacy applications to the next-gen applications. That is a huge accelerator for us on the revenue side and what drives the VCP opportunity. There's also things like Picklist Assist, which we have connected to our self-checkout. If a customer has our self-checkout hardware and software, they can get a Picklist Assist software from us, which uses computer vision to recognize the item at the self-checkout. which speeds up the checkout process, but it also helps with shrink. That's an example of AI that we're using that's deployed in 60,000 lanes today. On the efficiency side, we're working on the services part of our business to drive efficiencies and better outcomes for both us and our customers. Like in our call center, think about in how we route drivers as they're going to maintain equipment for our customers. That's where we see a lot of the opportunity on the efficiency side. Obviously, looking at it for the corporate functions, too. We're looking at it in both lenses, and it's an important part of what we're doing. Okay. How do we think about the impact that AI can potentially have in and around professional services in any way? That tends to be more of a physical world attribute, so maybe less so, but there's also a pretty interesting logistical process that you guys have to undergo with that business. Yeah, I think it could help accelerate deployments. We're looking at that now. It could make things like integrations easier and faster, which will benefit both us and our customers over time. Again, it could have some impact on the professional services revenue, but we think we more than make up for that on the subscription revenue that's higher quality, higher margin revenue, that's stickier over time. Yeah. What about onboarding? It can also make onboarding faster and easier. We're looking at, for deployments and onboarding, using AI to help accelerate that. We're in earlier days on that, but it's definitely something we're currently focused on. Okay. Let's go into more specifics around the verticals, specifically around restaurant. We'll go into that segment. It sounds like the demand environment there hasn't changed much. How does it fare across enterprise, mid-market, and SMB? Because I feel like there are some differences as you think about it in that context. Yeah, I think the differences are where our strengths are. Again, for restaurants, the enterprise is where they stickiest in our global footprint, partnering with their IT teams to help them operate and deliver for their customers. That's where we're the strongest. I would say mid-market, when a customer is starting to expand and grow, they're looking to take their single provider, SMB provider that they currently have, and find somebody they can scale with and grow, which that's our competitive advantage again. That's where we're really strong. SMB, that's where they are price sensitive. It's very competitive, as you mentioned before. They're looking for typically a single provider to provide everything, but over time, they kind of outgrow that, and that's where we tend to do better when there's multiple sites involved. The other thing I'd mention is we're launching our next-gen product in this space later this year. It's called Aloha Next for SMB. When we get that into the market, we believe it'll help us stabilize this part of the business for us because it hasn't been as strong. That's something we're actively working on. Yeah. I know you're launching it, have you not brought it out to market a little bit for beta or? I feel like there's been some feedback loop on this that maybe. So- you could share with us What I would say is that we've been demoing our new software applications across retail and restaurants and getting very positive feedback. The SMB, and we do have demos and kind of videos that show the simplicity of what this product will look like. Truly to bring it to market is later this year. Okay. International expansion is a very, very popular theme across the entirety of restaurant POS. Maybe talk about how you already have established a distribution asset, whereas others are trying to create their own. That makes it, in my opinion, a huge competitive advantage, even in the SMB side, for that matter. Yeah. What I would say there, again, our global footprint, I agree, is an advantage. On the retail, we're very international. For restaurants, for enterprise customers, we support them across the globe, some of them, and when they're in multiple geographies, and we can continue to build on that and build on our retail footprint. There'll be more and more synergies both on the software side and the services side as we go forward. That's something we'll look to do is to build on the retail footprint for restaurants. Got it. Payment attach rate in restaurants, I suspect higher than retail. Maybe you can speak to that point a little bit. In the SMB part of restaurants, it's very high, 95+%. Sometimes we quote 100%. That's because it has the SMB part of the business, and again, that's where the majority of our existing payments revenue comes from today. Yep. For enterprise, both restaurants and retail, that's the attach rate is ahead of us mostly, and that opportunity is ahead of us. Okay. Let's switch gears and go over to the retail segment for a bit. There's a lot of things going on here. You've got new platform migrations, you've got net new logos, you've got payment attach rates. How do we weigh those as an investor kind of looking at the company, especially with all these new things that are coming your way, in terms of the growth algorithm for retail? Yeah. In the near term and at the moment, converting our customers to the VCP applications is the biggest driver of growth for us. On the payment side, we've done some work around our gateway pricing, but some of the payments attached, and even the gateway will come as we kind of proceed and attach those things to our VCP applications. Pricing's also a lever that's helping us this year. I would see right now, a lot of the growth is coming from the application conversion, and then over time, payments and new logos become a bigger part of the equation in the growth algorithm. But right now, it's heavily on the conversion side. Okay. You have pretty good line of sight, I suspect, on those conversions? We do, because we have the backlog, and we have the 22. We know how many demos we've done. As of the earnings call, it was over 200. Then, we kind of have a pipeline of what we're trying to actively convert. Okay. Now you've got the ODM implementation kind of underway. Maybe take a step back and explain why that was significant, what it changed, and how it's going to change the dynamics of the company going forward. Yeah. The ODM model basically removed a lot of the hardware responsibility to our partner, Ennoconn. Now when we sell hardware, we're earning a commission. We're recognizing the commission on the hardware sale instead of the gross hardware revenue. It shrinks our overall revenue, but it gives us more- Yeah recurring revenue, more software services, and payments revenue as a percent of total, which positions us to grow that revenue and have less volatility going forward, because hardware in the past could be lumpy. Yep. That's the positive on the revenue side. From a profitability perspective, it improves margin, because when you recognize the hardware on a net basis, it just improves margin. This year, with three quarters, we get about a 300 basis point improvement in margin, just from three quarters of that. We also free up the balance sheet. There's about $90 million of finished goods and raw materials that we had for hardware. That comes off our balance sheet as we do this, so it's helping working capital this year, and it's helping the balance sheet going forward. It's just simplifying what we have to work on. We don't have to worry about logistics and supply chain for hardware. Again, we're focused on the things we should be focused on. Yeah. Speaking of margins and free cash flow, can you share with us how you think the trajectory of that will play out? I heard you on the 300 basis points, how do we think that plays out throughout the remaining three quarters? What I would say about this year, Adjusted EBITDA, we expect to grow 3%-7%, which is growing faster than revenue. That's improving margin. Part of the margin improvement will be the 300 basis points I just talked about, but there's been a lot of cost work. The revenue initiatives, especially on the retail side, will see good margin improvement outside of the impact from the ODM model. There will be some in restaurants, but to a lesser extent. We expect good performance this year. As I think beyond this year, given we're focused on higher margin software and payments initiatives, we believe that we can continue to expand margin and grow Adjusted EBITDA faster than revenue from that, and from efficiencies that we can drive with AI and other means. That's how I would look at profitability. From a free cash flow perspective, this year we're making significant improvement on free cash flow, both with and without restructuring compared to last year. That's really working capital improvements, the Ennoconn dynamic I talked about. As we get into next year, we expect further improvements because we've been spending over the last year and this year a lot of money on restructuring and transformation. That, again, is largely behind us. We expect the restructuring transformation line to come down more to $30 million-$40 million, which will allow us to have much better free cash flow compared to this year in 2027. That's how we're thinking about free cash flow. Got it. On capital allocation here near the end, prioritization for buyback, debt paydown, organic initiatives. You've got a lot of opportunities across that spectrum. How are you thinking about prioritizing those? What I would say is that the leverage that we're at today, which has improved, as I talked about earlier, just over two turns, is where we think it should be, roughly. Our capital allocation will go to investing in the company. That's mostly through CapEx and software CapEx. We have been returning capital to shareholders through preferred and common repurchases. We anticipate that'll continue to be part of the equation. From an acquisition perspective, we haven't worked on anything, and we're not working on anything as we sit here today. Over time, modest acquisitions that add to our end-to-end offerings, where we could maybe buy something instead of build it, that'll be something we probably consider in the future. We're not currently looking at anything. That's kind of how we're thinking about it. Okay. In the last 15 seconds, rolling all of this discussion up, understanding that the company's evolving and going through all these transitions, but is becoming a much cleaner, crisper story. How do we think about the longer-term growth algorithm as you guys are trying to get to that pose? Yeah. I think the important points are the transformation and cleaning up the company. A lot of that is behind us, and now going forward, we have a much more focused retail restaurant company, just over $2 billion software payment services that we can consistently grow. This year, at the midpoint of our guidance, we're flattish on revenue if you adjust for the ODM change. We think with all the initiatives we have, we can build on that going forward, and we're trying to build on it as fast as possible. Again, with that, we think EBITDA grows faster than revenue because we're focusing on higher margin initiatives. Yeah. We have efficiency opportunities still to drive. The free cash flow I talked about, but we can keep growing free cash flow as we continue to generate more revenue in EBITDA. That's how we're looking at it. Awesome. Brian, sounds like you guys are moving in the right direction. Thank you so much for being here. Really appreciate it. Thank you for hosting us. You bet. Appreciate it. You bet. Thank you.