NCR (VYX -6.45%), a leading provider of digital commerce solutions for the retail and restaurant sectors, released its second quarter fiscal 2025 earnings on August 7, 2025. The company surpassed analyst estimates with GAAP revenue reaching $666 million, well above the expected $648.62 million. Non-GAAP earnings per share came in at $0.19, topping the $0.13 consensus. Revenue (GAAP) fell from $722 million in the prior-year period, but operational improvements contributed to stronger earnings and margins. Adjusted EBITDA climbed to $95 million, a 20.3% year-over-year increase. Overall, the quarter showcased notable progress in recurring revenue and profitability, even as legacy hardware sales continued to decline.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.19 | $0.13 | $(0.20) | $0.39 |
| Revenue | $666 million | $648.62 million | $722 million | (7.8%) |
| Adjusted EBITDA (Non-GAAP) | $95 million | $79 million | 20.3% | |
| Software & Services Revenue | $499 million | $501 million | (0.4%) | |
| Recurring Revenue (ARR) | $1.68 billion | $1.60 billion | 5.0% |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Strategic Focus
NCR’s business centers on digital transaction technologies, targeting retailers and restaurants worldwide. Its offerings include software platforms, payment processing, managed services, and point-of-sale hardware. Since 2023, it has refocused by spinning off its ATM division and selling its Digital Banking segment. The company now concentrates on software and platform-based solutions that deliver recurring revenue through subscriptions.
The business has identified several key areas to drive future success. These include transitioning to a cloud-based, subscription model, leveraging its strong global distribution footprint, and outsourcing hardware design and production. Investment in research and development, especially for its Voyix Commerce Platform—a software platform supporting retail and restaurant operations—and related managed services, remains central to its long-term strategy.
Quarter in Review: Operational and Financial Highlights
The quarter saw NCR posting GAAP revenue of $666 million, Revenue of $666 million represented a 7.8% decrease from the prior year period, but well ahead of analyst forecasts. Non-GAAP earnings per share was $0.19, marking a significant rebound from a $0.20 loss in Q2 2024. Adjusted EBITDA reached $95 million, up by more than 20% from last year’s $79 million, Adjusted EBITDA margin expanded to 14.3% from 10.9% in Q2 2024.
Annual recurring revenue (ARR) increased to $1.68 billion from $1.60 billion in the prior year period. Software annual recurring revenue (ARR) was $799 million compared to $748 million in the prior year period. However, overall Software & Services revenue remained essentially flat, at $499 million versus $501 million previously, highlighting some near-term growth pressure as hardware receded.
Segment performance in the second quarter revealed a mixed picture. Revenue in the Retail segment dropped 12% to $454 million (GAAP), mainly due to lower hardware sales. The Restaurants segment posted 2% revenue growth, reaching $205 million, and adjusted EBITDA for Restaurants improved to $68 million, up 10% (non-GAAP). The shift away from hardware was clear in the hardware revenue figures, which fell sharply from $244 million in Q2 2024 to $185 million (GAAP). Gross margin (GAAP) increased to 23.0% from 17.5% in Q2 2024, reflecting a more efficient cost structure and targeted cost reductions. Operating income (GAAP) improved from a loss of $34 million in Q2 2024 to a $14 million profit.
NCR also continued its platform expansion. As of June 30, 2025, there were over 78,000 platform sites—a 16% increase—and 8,000 payment sites, up 3%. Higher platform adoption is important for the company’s transformation toward recurring fee-based services. Payment site growth slowed, but management is optimistic about improvement following the integration of WorldPay’s payment processing capabilities, expected to be operational by the end of the summer. Although restructuring and tariff mitigation continued to impact operating costs, cash flow remained under pressure, primarily due to outflows linked to taxes on the recent Digital Banking sale and ongoing restructuring.
NCR continued to invest in developing its core solutions, including the Voyix Commerce Platform and Aloha Menu, a menu management system. The Aloha Menu allows restaurants to centralize the management of their menus across different locations and sales channels. Product innovation is also being driven by ongoing investment in managed services—the provision and remote management of customer IT infrastructure. Despite the challenging transition, share repurchases continued, with 826,000 shares bought for $7 million during the quarter.
Looking Ahead: Guidance and Investor Considerations
Management maintained its outlook for fiscal 2025. It projects total revenue between $2.58 billion and $2.65 billion for FY2025. It expects Software & Services revenue to reach between $1.995 billion and $2.020 billion for full-year 2025. Hardware revenue for the full year is forecasted at $580 million to $630 million. Adjusted EBITDA is expected in the range of $420 million to $445 million for FY2025. Non-GAAP diluted earnings per share are forecasted between $0.75 and $0.80 for full-year 2025. Adjusted free cash flow-unrestricted is projected at $170 million to $190 million for FY2025, excluding restructuring, transformation, strategic initiatives, and one-time tax effects.
The company is focused on completing the outsourcing of its hardware production to Ennoconn this year. Investors may wish to monitor progress on subscription adoption, payment site growth after the WorldPay integration, and further execution of the recurring revenue strategy. Top-line revenue remains pressured by ongoing legacy transitions, but margin improvements and recurring revenue gains show signs of operational progress.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
