SEC Filing | NCR VOYIX

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ncr-20230930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________________

FORM 10-Q

________________________

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


			For the quarterly period ended September 30, 2023


or


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________


			Commission File Number: 001-00395

________________________

NCR VOYIX CORPORATION

(Exact name of registrant as specified in its charter)

________________________


Maryland						31-0387920
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

864 Spring Street NW

Atlanta, GA 30308

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (937) 445-1936

NCR Corporation

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	VYX	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

As of November 9, 2023, there were approximately 141.2 million shares of the registrant's common stock issued and outstanding.

Table of Contents

TABLE OF CONTENTS


PART I. Financial Information

	Description	Page

Item 1.	Financial Statements	3

	Condensed Consolidated Statements of Operations (Unaudited) Three and Nine Months Ended September 30, 2023 and 2022	3

	Condensed Consolidated Statements of Comprehensive Income (Unaudited) Three and Nine Months Ended September 30, 2023 and 2022	4

	Condensed Consolidated Balance Sheets (Unaudited) September 30, 2023 and December 31, 2022	5

	Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended September 30, 2023 and 2022	6

	Condensed Consolidated Statements of Changes in Stockholder’s Equity (Unaudited) Three and Nine Months Ended September 30, 2023 and 2022	7

	Notes to Condensed Consolidated Financial Statements (Unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	65

Item 4.	Controls and Procedures	66

PART II. Other Information

	Description	Page

Item 1.	Legal Proceedings	67

Item 1A.	Risk Factors	67

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	69

Item 5.	Other Information	70

Item 6.	Exhibits	71

	Signatures	74

Table of Contents

Part I. Financial Information

Item 1. FINANCIAL STATEMENTS

NCR Voyix Corporation

Condensed Consolidated Statements of Operations (Unaudited)


In millions, except per share amounts	Three months ended September 30				Nine months ended September 30
	2023		2022		2023		2022
Product revenue	$	560	$	590	$	1,657	$	1,720
Service revenue	1,457		1,382		4,237		4,115
Total revenue	2,017		1,972		5,894		5,835
Cost of products	465		524		1,399		1,560
Cost of services	925		957		2,864		2,902
Selling, general and administrative expenses	331		264		956		886
Research and development expenses	54		40		175		164

Total operating expenses	1,775		1,785		5,394		5,512
Income (loss) from operations	242		187		500		323

Interest expense	(85)		(74)		(259)		(204)
Other income (expense), net	(44)		(1)		(55)		9
Income (loss) from continuing operations before income taxes	113		112		186		128
Income tax expense (benefit)	236		43		280		56
Income (loss) from continuing operations	(123)		69		(94)		72
Income (loss) from discontinued operations, net of tax	—		—		(1)		5
Net income (loss)	(123)		69		(95)		77
Net income (loss) attributable to noncontrolling interests	1		—		1		1
Net income (loss) attributable to NCR	$	(124)	$	69	$	(96)	$	76
Amounts attributable to NCR common stockholders:
Income (loss) from continuing operations	$	(124)	$	69	$	(95)	$	71
Series A convertible preferred stock dividends	(4)		(4)		(12)		(12)
Income (loss) from continuing operations attributable to NCR common stockholders	(128)		65		(107)		59
Income (loss) from discontinued operations, net of tax	—		—		(1)		5
Net income (loss) attributable to NCR common stockholders	$	(128)	$	65	$	(108)	$	64
Income (loss) per share attributable to NCR common stockholders:
Income (loss) per common share from continuing operations
Basic	$	(0.91)	$	0.47	$	(0.76)	$	0.43
Diluted	$	(0.91)	$	0.46	$	(0.76)	$	0.42
Net income (loss) per common share
Basic	$	(0.91)	$	0.47	$	(0.77)	$	0.47
Diluted	$	(0.91)	$	0.46	$	(0.77)	$	0.45
Weighted average common shares outstanding
Basic	140.9		137.0		140.3		136.4
Diluted	140.9		140.3		140.3		140.9

See Notes to Condensed Consolidated Financial Statements.

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NCR Voyix Corporation

Condensed Consolidated Statements of Comprehensive Income (Unaudited)


In millions	Three months ended September 30				Nine months ended September 30
	2023		2022		2023		2022
Net income (loss)	$	(123)	$	69	$	(95)	$	77
Other comprehensive income (loss):
Currency translation adjustments
Currency translation gains (loss)	3		(75)		11		(154)
Derivatives
Unrealized gains (loss) on derivatives	—		77		24		155
Loss (gains) on derivatives recognized during the period	(122)		(9)		(165)		(3)
Less income tax	30		(16)		32		(35)
Employee benefit plans
Amortization of prior service cost (benefit)	—		—		(1)		(1)
Net (loss) gain arising during the period	(2)		—		(2)		—
Amortization of actuarial loss (gains)	(1)		—		(3)		—
Less income tax	1		—		2		—
Other comprehensive income (loss)	(91)		(23)		(102)		(38)
Total comprehensive income (loss)	(214)		46		(197)		39
Less comprehensive income (loss) attributable to noncontrolling interests:
Net income (loss)	1		—		1		1
Currency translation gains (losses)	—		(2)		—		(3)
Amounts attributable to noncontrolling interests	1		(2)		1		(2)
Comprehensive income (loss) attributable to NCR	$	(213)	$	48	$	(196)	$	41

See Notes to Condensed Consolidated Financial Statements.

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NCR Voyix Corporation

Condensed Consolidated Balance Sheets (Unaudited)


In millions, except per share amounts	September 30, 2023		December 31, 2022
Assets
Current assets
Cash and cash equivalents	$	675	$	505
Accounts receivable, net of allowances of $42 and $34 as of September 30, 2023 and December 31, 2022, respectively	950		1,083
Inventories	725		772
Restricted cash, current	270		228
Prepaid and other current assets	473		494
Total current assets	3,093		3,082
Property, plant and equipment, net	692		663
Goodwill	4,537		4,540
Intangibles, net	1,010		1,145
Operating lease assets	337		371
Prepaid pension cost	225		212
Deferred income taxes	430		598
Restricted cash, non-current	2,068		7
Other assets	831		889
Total assets	$	13,223	$	11,507
Liabilities and stockholders’ equity
Current liabilities
Short-term borrowings	$	113	$	104
Accounts payable	820		942
Payroll and benefits liabilities	318		207
Contract liabilities	536		537
Settlement liabilities	233		250
Other current liabilities	660		673
Total current liabilities	2,680		2,713
Long-term debt	7,416		5,561
Pension and indemnity plan liabilities	641		614
Postretirement and postemployment benefits liabilities	108		91
Income tax accruals	100		97
Operating lease liabilities	324		353
Other liabilities	307		324
Total liabilities	11,576		9,753
Commitments and Contingencies (Note 10)

Series A convertible preferred stock: par value $0.01 per share, 3.0 shares authorized, 0.3 shares issued and outstanding as of September 30, 2023 and December 31, 2022; redemption amount and liquidation preference of $276 as of September 30, 2023 and December 31, 2022	275		275
Stockholders’ equity
NCR stockholders’ equity
Preferred stock: par value $0.01 per share, 100.0 shares authorized, no shares issued and outstanding as of September 30, 2023 and December 31, 2022	—		—
Common stock: par value $0.01 per share, 500.0 shares authorized, 140.9 and 138.0 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively	1		1
Paid-in capital	806		704
Retained earnings	967		1,075
Accumulated other comprehensive loss	(402)		(300)
Total NCR stockholders’ equity	1,372		1,480
Noncontrolling interests in subsidiaries	—		(1)
Total stockholders’ equity	1,372		1,479
Total liabilities and stockholders’ equity	$	13,223	$	11,507

See Notes to Condensed Consolidated Financial Statements.

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NCR Voyix Corporation

Condensed Consolidated Statements of Cash Flows (Unaudited)


In millions	Nine months ended September 30
	2023		2022
Operating activities
Net income (loss)	$	(95)	$	77
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Loss (income) from discontinued operations	1		(5)

Depreciation and amortization	461		451
Stock-based compensation expense	98		97
Deferred income taxes	204		24
Gain on terminated interest rate derivative agreements	(103)		—
Impairment of other assets	7		—
Loss (gain) on disposal of property, plant and equipment and other assets	(2)		4
(Gain) loss on divestiture	(10)		—
Changes in assets and liabilities, net of effects of business acquired:
Receivables	122		(274)
Inventories	(12)		(220)
Current payables and accrued expenses	16		113
Contract liabilities	(6)		(24)
Employee benefit plans	(10)		(3)
Other assets and liabilities	57		5
Net cash provided by operating activities	$	728	$	245
Investing activities
Expenditures for property, plant and equipment	$	(112)	$	(72)
Proceeds from sale of property, plant and equipment and other assets	8		8
Additions to capitalized software	(194)		(217)
Business acquisitions, net of cash acquired	(7)		(12)
Proceeds from divestiture	10		—
Purchases of investments	(10)		—

Other investing activities, net	—		(5)
Net cash used in investing activities	$	(305)	$	(298)
Financing activities

Payments on term credit facilities	$	(77)	$	(31)
Payments on revolving credit facilities	(2,044)		(846)

Borrowings on term credit facilities	726		—
Borrowings on revolving credit facilities	1,959		1,021
Proceeds from issuance of senior unsecured notes	1,333		—


Payments on other financing arrangements	(2)		—
Cash dividend paid for Series A preferred shares dividends	(11)		(11)

Proceeds from employee stock plans	23		19
Tax withholding payments on behalf of employees	(16)		(38)
Net change in client funds obligations	—		(6)
Principal payments for finance lease obligations	(12)		(12)
Other financing activities	—		(3)
Net cash provided by (used in) financing activities	$	1,879	$	93
Cash flows from discontinued operations
Net cash provided by (used in) operating activities of discontinued operations	$	(1)	$	(1)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(28)		(43)
Increase (decrease) in cash, cash equivalents, and restricted cash	2,273		(4)
Cash, cash equivalents and restricted cash at beginning of period	740		749
Cash, cash equivalents and restricted cash at end of period	$	3,013	$	745

Supplemental disclosures of noncash investing and financing activities During the nine months ended September 30, 2022, we issued shares of the Company's common stock and assumed unvested outstanding option awards in the acquisition of Moon Inc., dba LibertyX, for total non-cash consideration of $68 million. In connection with the acquisition, we also assumed debt of $2 million. Refer to Note 2, “Business Combinations”,

for additional information on the LibertyX acquisition. Additionally, total discounts and deferred financing fees related to the Atleos borrowings were $79 million, with $38 million included in Other current liabilities as of September 30, 2023 and reflected above as a non-cash item. Refer to Note 5, “Debt Obligations” for additional information.

See Notes to Condensed Consolidated Financial Statements.

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NCR Voyix Corporation

Condensed Consolidated Statements of Changes in Stockholder’s Equity (Unaudited)


	NCR Stockholders
	Common Stock							Accumulated Other Comprehensive (Loss) Income		Non-Redeemable Noncontrolling Interests in Subsidiaries
In millions	Shares	Amount		Paid-in Capital		Retained Earnings						Total







December 31, 2022	138	$	1	$	704	$	1,075	$	(300)	$	(1)	$	1,479
Comprehensive income:
Net income (loss)	—	—		—		9		—		1		10
Other comprehensive income (loss)	—	—		—		—		(19)		(1)		(20)
Total comprehensive income (loss)	—	—		—		9		(19)		—		(10)
Employee stock purchase and stock compensation plans	2	—		23		—		—		—		23

Series A convertible preferred stock dividends	—	—		—		(4)		—		—		(4)
March 31, 2023	140	$	1	$	727	$	1,080	$	(319)	$	(1)	$	1,488
Comprehensive income:
Net income (loss)	—	—		—		19		—		(1)		18
Other comprehensive income (loss)	—	—		—		—		8		1		9
Total comprehensive income (loss)	—	—		—		19		8		—		27
Employee stock purchase and stock compensation plans	—	—		43		—		—		—		43

Series A convertible preferred stock dividends	—	—		—		(4)		—		—		(4)
June 30, 2023	140	$	1	$	770	$	1,095	$	(311)	$	(1)	$	1,554
Comprehensive income:
Net income (loss)	—	—		—		(124)		—		1		(123)
Other comprehensive income (loss)	—	—		—		—		(91)		—		(91)
Total comprehensive income (loss)	—	—		—		(124)		(91)		1		(214)
Employee stock purchase and stock compensation plans	1	—		36		—		—		—		36

Series A convertible preferred stock dividends	—	—		—		(4)		—		—		(4)
September 30, 2023	141	$	1	$	806	$	967	$	(402)	$	—	$	1,372

See Notes to Condensed Consolidated Financial Statements.

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NCR Voyix Corporation

Condensed Consolidated Statements of Changes in Stockholder’s Equity (Unaudited) - (Continued)


	NCR Stockholders
	Common Stock							Accumulated Other Comprehensive (Loss) Income		Non-Redeemable Noncontrolling Interests in Subsidiaries
In millions	Shares	Amount		Paid-in Capital		Retained Earnings						Total
December 31, 2021	132	$	1	$	515	$	1,031	$	(291)	$	3	$	1,259
Comprehensive income:
Net income (loss)	—	—		—		(34)		—		(1)		(35)
Other comprehensive income (loss)	—	—		—		—		18		—		18
Total comprehensive income (loss)	—	—		—		(34)		18		(1)		(17)
Employee stock purchase and stock compensation plans	3	—		19		—		—		—		19
Stock issued in acquisition of LibertyX	1	—		68		—		—		—		68
Series A convertible preferred stock dividends	—	—		—		(4)		—		—		(4)
March 31, 2022	136	$	1	$	602	$	993	$	(273)	$	2	$	1,325
Comprehensive income:
Net income (loss)	—	—		—		41		—		2		43
Other comprehensive income (loss)	—	—		—		—		(32)		(1)		(33)
Total comprehensive income (loss)	—	—		—		41		(32)		1		10
Employee stock purchase and stock compensation plans	1	—		42		—		—		—		42
Series A convertible preferred stock dividends	—	—		—		(4)		—		—		(4)
June 30, 2022	137	$	1	$	644	$	1,030	$	(305)	$	3	$	1,373
Comprehensive income:
Net income (loss)	—	—		—		69		—		—		69
Other comprehensive income (loss)	—	—		—		—		(21)		(2)		(23)
Total comprehensive income (loss)	—	—		—		69		(21)		(2)		46
Employee stock purchase and stock compensation plans	—	—		31		—		—		—		31
Series A convertible preferred stock dividends	—	—		—		(4)		—		—		(4)
September 30, 2022	137	$	1	$	675	$	1,095	$	(326)	$	1	$	1,446

See Notes to Condensed Consolidated Financial Statements.

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NCR Voyix Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

Index to Financial Statements and Supplemental Data



Note 1. Basis of Presentation and Summary of Significant Accounting Policies
Note 2. Business Combinations
Note 3. Goodwill and Purchased Intangible Assets
Note 4. Segment Information and Concentrations
Note 5. Debt Obligations
Note 6. Trade Receivables Facility
Note 7. Income Taxes
Note 8. Stock Compensation Plans
Note 9. Employee Benefit Plans
Note 10. Commitments and Contingencies

Note 11. Series A Convertible Preferred Stock
Note 12. Earnings Per Share
Note 13. Derivatives and Hedging Instruments
Note 14. Fair Value of Assets and Liabilities
Note 15. Accumulated Other Comprehensive Income (Loss) (AOCI)
Note 16. Supplemental Financial Information

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NCR Voyix Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Spin-Off of NCR Atleos On September 15, 2022, NCR Voyix Corporation (“Voyix”, “NCR”, the “Company”, “we” or “us”), which, prior to its name change effective October 13, 2023 was known as NCR Corporation, announced a plan to separate into two independent, publicly traded companies – one focused on digital commerce, the other on ATMs. On October 16, 2023, the Company completed its separation of its ATM-focused business, including its self-service banking, payments & network and telecommunications and technology businesses, through the spin-off of its wholly owned subsidiary, NCR Atleos Corporation (“Atleos”), (the “Spin-Off”). The Spin-Off was effected through a pro rata distribution of all outstanding shares of Atleos common stock to holders of Voyix common stock as of the close of business on October 2, 2023 (the “record date”). The Company distributed one share of Atleos common stock for every two common shares of Voyix outstanding as of the record date. Shareholders received cash in lieu of fractional shares of Atleos common stock. The Spin-Off is expected to qualify as a tax-free distribution for U.S. federal income tax purposes. Atleos is an independent, publicly traded company focused on providing self-directed banking solutions to a global customer base, including financial institutions, retailers and consumers, and Voyix retains no ownership interest. Atleos’s common stock is listed on the New York Stock Exchange under the ticker symbol “NATL”. The historical financial results of Atleos are included in these condensed consolidated financial statements. Subsequent to the Spin-Off, and in future filings, the historical results of Atleos will be reflected as discontinued operations in the Company’s consolidated financial statements. Disclosures pertaining to Atleos’s issuance of debt in connection with the Spin-Off are provided in Note 5, “Debt Obligations”. Refer to Note 6, “Trade Receivables Facility”, Note 7, “Income Taxes”, Note 8, “Stock Compensation Plans”, Note 9, “Employee Benefit Plans”, Note 10, “Commitments and Contingencies”, Note 11, “Series A Convertible Preferred Stock” and Note 13, “Derivatives and Hedging Instruments” for additional disclosures related to the Spin-Off.

In connection with the Spin-Off, the Company and Atleos entered into various agreements to effect the Spin-Off and provide a framework for the relationship between the Company and Atleos after the Spin-Off. Such agreements include the separation and distribution agreement, as well as the following ongoing agreements: a transition services agreement, tax matters agreement, employee matters agreement, patent and technology cross-license agreement, trademark license and use agreement, master services agreement and various other transaction agreements. Under these agreements, the Company will continue to provide certain products and services to Atleos following the Spin-Off.

Additionally, outstanding restricted stock units and stock options will be adjusted to maintain the economic value of those awards before and after the Spin-Off. Generally, continuing Voyix employees will retain the number of outstanding restricted stock units held by them as of the Spin-Off and will receive additional Voyix restricted stock units to reflect the Spin-Off, while continuing Atleos employees will have their outstanding restricted stock units held by them as of the Spin-Off converted solely into equivalent restricted stock units of Atleos, and any outstanding restricted stock units held by them as of the Spin-Off will be cancelled. Outstanding stock options at the time of the Spin-Off, regardless of the holder, will be converted into stock options of both Voyix and Atleos. In addition, outstanding restricted stock units held by certain key equity holders as of the Spin-Off (including directors and certain former employees) will be converted into restricted stock units of both Voyix and Atleos.

The accompanying Condensed Consolidated Financial Statements have been prepared by the Company without audit pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) and, in the opinion of management, include all adjustments (consisting of normal, recurring adjustments, unless otherwise disclosed) necessary for a fair statement of the condensed consolidated results of operations, financial position, and cash flows for each period presented. The consolidated results for the interim periods are not necessarily indicative of results to be expected for the full year. The 2022 year-end Condensed Consolidated Balance Sheet was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States (GAAP). These financial statements should be read in conjunction with the Company’s Form 10-K for the year ended December 31, 2022.

Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and revenue and expenses during the period reported.

Although our estimates contemplate current and expected future conditions, as applicable, it is reasonably possible that actual conditions could differ from our expectations, which could materially affect our results of operations and financial position. In particular, a number of estimates have been and will continue to be affected by the ongoing variants of the coronavirus (COVID-19) pandemic, macroeconomic pressures and geopolitical challenges. The ultimate impact on our overall financial

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NCR Voyix Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

condition and operating results will depend on the duration and severity of the pandemic, supply chain challenges and cost escalations including materials, interest, labor and freight, and any additional governmental and public actions taken in response. As a result, our accounting estimates and assumptions may change over time as a consequence of the effects of these external factors. Such changes could result in future impairments of goodwill, intangible assets, long-lived assets, incremental credit losses on accounts receivable and decreases in the carrying amount of our tax assets.

Evaluation of Subsequent Events The Company evaluated subsequent events through the date that our Condensed Consolidated Financial Statements were issued. Other than transactions associated with the Spin-Off and items discussed below and within the Notes to Condensed Consolidated Financial Statements, no matters were identified that required adjustment to the Condensed Consolidated Financial Statements or additional disclosure.

Divestiture On October 19, 2023, the Company divested of a portion of the assets that were deemed non-strategic to its payments business, consisting primarily of merchant contracts, our front end authorization platform and certain relevant intellectual property for cash proceeds of $82 million. For the nine months ended September 30, 2023, total revenue for our payments business sold was $33 million.

Reclassifications Certain prior-period amounts have been reclassified in the accompanying Condensed Consolidated Financial Statements and Notes thereto in order to conform to the current period presentation. Reclassifications had no effect on prior year net income or stockholders’ equity.

Cyber ransomware incident On April 13, 2023, the Company determined that a single data center outage impacting certain of its commerce customers was caused by a cyber ransomware incident. Upon such determination, the Company immediately started contacting customers, enacted its cybersecurity protocol and engaged outside experts to contain the incident and begin the recovery process. We concluded that this incident impacted operations for some customers only with respect to specific Aloha cloud-based services and Counterpoint. Our investigation also concluded no financial reporting systems were impacted.

During the nine months ended September 30, 2023, we recognized $23 million related to this matter in Cost of services and Selling, general and administrative expenses. We may incur additional costs relating to this incident in the future, including expenses to respond to and remediate this matter, payment of damages or other costs to customers or others. While the Company’s response to this incident is ongoing, at this time we do not believe additional costs we may incur as a result of the incident will ultimately have a material adverse effect on our business, results of operations or financial condition; however, we remain subject to risks and uncertainties as a result of the incident. We will continue to assess the impact of the security event and cannot definitively determine, at this time, the full extent of the impact from such event on our business, results of operations or financial condition.

Other In the first quarter of 2023, the Company recorded a $10 million out-of-period adjustment to increase operating expenses and an employee-related liability in order to correct for an understatement of such same balances during the fourth quarter of 2022. The Company evaluated the impact of the error and out-of-period adjustment and concluded it was not material to any previously issued interim or annual consolidated financial statements and the adjustment is not expected to be material to the year ending December 31, 2023.

Cash, Cash Equivalents, and Restricted Cash The reconciliation of cash, cash equivalents and restricted cash in the Condensed Consolidated Statements of Cash Flows is as follows:


In millions		September 30
	Balance Sheet Location	2023		2022
Cash and cash equivalents	Cash and cash equivalents	$	675	$	434
Short term restricted cash	Restricted cash, current	30		7
Long term restricted cash	Restricted cash, non-current	2,068		9
Funds held for client	Restricted cash, current	—		42
Cash included in settlement processing assets	Restricted cash, current	240		253
Total cash, cash equivalents and restricted cash		$	3,013	$	745

As of September 30, 2023, the net proceeds of certain debt balances were held in escrow pending consummation of the Spin-Off, and such proceeds were included in Restricted cash, non-current on the Condensed Consolidated Balance Sheets. Refer to Note 5, “Debt Obligations” for additional information.

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NCR Voyix Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

Contract Assets and Liabilities The following table presents the net contract liability balances as of September 30, 2023 and December 31, 2022.


In millions	Location in the Condensed Consolidated Balance Sheet	September 30, 2023		December 31, 2022
Current portion of contract liabilities	Contract liabilities	$	536	$	537
Non-current portion of contract liabilities	Other liabilities	$	44	$	49

During the nine months ended September 30, 2023, the Company recognized $437 million in revenue that was included in contract liabilities as of December 31, 2022. During the nine months ended September 30, 2022, the Company recognized $365 million in revenue that was included in contract liabilities as of December 31, 2021.

Remaining Performance Obligations Remaining performance obligations represent the transaction price of orders for which products have not been delivered or services have not been performed. As of September 30, 2023, the aggregate amount of the transaction price allocated to remaining performance obligations was approximately $3.6 billion. The Company expects to recognize revenue on approximately three-quarters of the remaining performance obligations over the next 12 months, with the remainder recognized thereafter. The majority of our professional services are expected to be recognized over the next 12 months but this is contingent upon a number of factors, including customers’ needs and schedules.

The Company has made three elections that affect the value of remaining performance obligations described above. We do not disclose remaining performance obligations for contracts where variable consideration is directly allocated based on usage or when the original expected duration is one year or less. Additionally, we do not disclose remaining performance obligations for contracts where we recognize revenue from the satisfaction of the performance obligation in accordance with the 'right to invoice’ practical expedient.

Capitalized Software Capitalized development costs for internal-use software and software that will be sold, leased or otherwise marketed were $572 million and $554 million as of September 30, 2023 and December 31, 2022, respectively, presented within Other assets on the Condensed Consolidated Balance Sheets.

Recent Accounting Pronouncements

Adoption of New Accounting Pronouncements

In October 2021, the FASB issued accounting standards update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, with new guidance for contract assets and contract liabilities acquired in a business combination. The new guidance requires contract assets and contract liabilities, such as deferred revenue, acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. Prior to the issuance of this guidance, contract assets and contract liabilities were recognized by the acquirer at fair value on the acquisition date. The accounting standards update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2022, with early adoption permitted and should be applied prospectively to acquisitions occurring on or after the effective date. The adoption of this accounting standards update did not have a material effect on the Company’s net income, cash flows, earnings per share or financial condition.

Although there are other new accounting pronouncements issued by the FASB and adopted by or effective for the Company, the Company does not believe any of these accounting pronouncements had a material impact on its condensed consolidated financial statements.

Accounting Pronouncements Issued But Not Yet Adopted

Although there are new accounting pronouncements issued by the FASB and not yet adopted by or effective for the Company, the Company does not believe any of these accounting pronouncements will have a material impact on its condensed consolidated financial statements.

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NCR Voyix Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

2. BUSINESS COMBINATIONS

Acquisition of LibertyX (2022)

On January 5, 2022, the Company completed its acquisition of Moon Inc., dba LibertyX, a leading cryptocurrency software provider, with the goal of enabling the Company to provide digital currency solutions, including the ability to buy and sell Bitcoin, and conduct cross-border remittance. The Company purchased all outstanding shares of LibertyX for $1 million cash consideration and approximately 1.4 million shares of the Company’s common stock at a price of $42.13 per share. The Company also converted approximately 0.2 million outstanding unvested LibertyX option awards into the Company’s awards pursuant to an exchange ratio as defined in the acquisition agreement. LibertyX stock option awards were converted into the Company’s stock option awards with an exercise price per share for option awards equal to the exercise price per share of such stock option award immediately prior to the completion of the acquisition divided by the exchange ratio, and vested immediately. The value of the option awards was deemed attributable to services already rendered and was included as a portion of the purchase price. Total purchase consideration for the LibertyX acquisition was approximately $69 million. As a result of the acquisition, LibertyX became a wholly-owned subsidiary of the Company.

The fair value of consideration transferred to acquire LibertyX was allocated to the identifiable assets and acquired liabilities assumed based upon their estimated fair values as of the date of acquisition. The allocation of purchase price was finalized as of December 31, 2022.

3. GOODWILL AND PURCHASED INTANGIBLE ASSETS

Goodwill by Segment The carrying amounts of goodwill by segment as of September 30, 2023 and December 31, 2022 are included in the table below. Foreign currency fluctuations are included within other adjustments.


	December 31, 2022												September 30, 2023
In millions	Goodwill		Accumulated Impairment		Total		Additions		Impairment		Other		Goodwill		Accumulated Impairment		Total

Retail	$	995	$	(34)	$	961	$	—	$	—	$	(2)	$	993	$	(34)	$	959
Hospitality	288		(23)		265		—		—		(1)		287		(23)		264
Digital Banking	594		—		594		—		—		—		594		—		594
Payments & Network	1,036		—		1,036		—		—		—		1,036		—		1,036
Self-Service Banking	1,633		(101)		1,532		—		—		—		1,633		(101)		1,532
Other(1)	163		(11)		152		—		—		—		163		(11)		152
Total goodwill	$	4,709	$	(169)	$	4,540	$	—	$	—	$	(3)	$	4,706	$	(169)	$	4,537

(1) Other segment includes the goodwill associated with our Telecommunications & Technology reporting unit.

Identifiable Intangible Assets The Company’s purchased intangible assets, reported in Intangibles, net in the Condensed Consolidated Balance Sheets, were specifically identified when acquired, and are deemed to have finite lives. The gross carrying amount and accumulated amortization for the Company’s identifiable intangible assets were as set forth in the table below.


	Amortization Period (in Years)	September 30, 2023				December 31, 2022
In millions		Gross Carrying Amount		Accumulated Amortization		Gross Carrying Amount		Accumulated Amortization
Identifiable intangible assets
Reseller & customer relationships	1 - 20	$	1,102	$	(519)	$	1,103	$	(463)
Intellectual property	2 - 8	1,023		(619)		1,030		(558)
Customer contracts	8	89		(89)		89		(89)
Tradenames	1 - 10	129		(106)		128		(95)
Total identifiable intangible assets		$	2,343	$	(1,333)	$	2,350	$	(1,205)

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NCR Voyix Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

Amortization expense related to identifiable intangible assets for the following periods is:


	Three months ended September 30				Nine months ended September 30
In millions	2023		2022		2023		2022
Amortization expense	$	43	$	44	$	128	$	130

The estimated aggregate amortization expense for identifiable intangible assets for the following periods is:


			For the years ended December 31
In millions	Remainder of 2023		2024		2025		2026		2027		2028
Amortization expense	$	44	$	161	$	150	$	139	$	124	$	106

4. SEGMENT INFORMATION AND CONCENTRATIONS

Prior to the October 16, 2023 Spin-Off, and during the quarter ended September 30, 2023, the Company managed and reported its operations in the following segments:

•Retail - We offer software-led solutions to customers in the retail industry, leading with digital to connect retail operations end to end to integrate all aspects of a customer’s operations in indoor and outdoor settings from point-of-sale (“POS”), to payments, inventory management, fraud and loss prevention applications, loyalty and consumer engagement. These solutions include retail-oriented technologies such as comprehensive API-point of sale retail software platforms and applications, hardware terminals, self-service kiosks including self-checkout (“SCO”), payment processing and merchant acquiring solutions, and bar-code scanners.

•Hospitality - We offer technology solutions to customers in the hospitality industry, including table-service, quick-service and fast casual restaurants of all sizes, that are designed to improve operational efficiency, increase customer satisfaction, streamline order and transaction processing and reduce operating costs. Our solutions include POS hardware and software solutions, payment processing and merchant acquiring services, installation, maintenance, as well as managed and professional services.

•Digital Banking - Digital Banking helps financial institutions implement their digital-first platform strategy by providing solutions for account opening, account management, transaction processing, imaging, and branch services to enable financial institutions to offer a compelling customer experience.

•Payments & Network - We provide a cost-effective way for financial institutions, fintechs, and neobanks to reach and serve their customers through our network of automated teller machines (“ATMs”) and multi-functioning financial services kiosks. We offer credit unions, banks, digital banks, fintechs, stored-value debit card issuers, and other consumer financial services providers access to our Allpoint retail-based ATM network, providing convenient and fee-free cash withdrawal and deposit access to their customers and cardholders as well as the ability to convert a digital value to cash, or vice versa, via NCRPay360. We also provide ATM branding solutions to financial institutions, ATM management and services to retailers and other businesses, as well as payment processing and merchant acquiring services in the retail, hospitality and other industries.

•Self-Service Banking - We offer solutions to enable customers in the financial services industry to reduce costs, generate new revenue streams and enhance customer loyalty. These solutions include a comprehensive line of ATM hardware and software, and related installation, maintenance, and managed and professional services. We also offer solutions to manage and run the ATM channel end-to-end for financial institutions that includes back office, cash management, software management and ATM deployment, among others.

Corporate and Other includes income and expenses related to corporate functions that are not specifically attributable to an individual reportable segment along with any immaterial operating segment(s).

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NCR Voyix Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

Eliminations include revenues from contracts with customers and the related costs that are reported in the Payments & Network segment as well as in the Retail or Hospitality segments, including merchant acquiring services that are monetized via payments.

These segments represent components of the Company for which separate financial information is available that is utilized on a regular basis by the chief operating decision maker in assessing segment performance and in allocating the Company’s resources. Management evaluates the performance of the segments based on revenue and Adjusted EBITDA. Adjusted EBITDA is defined as GAAP net income (loss) from continuing operations attributable to the Company plus interest expense, net; plus income tax expense (benefit); plus depreciation and amortization; plus stock-based compensation expense; plus other income (expense); plus pension mark-to-market adjustments and other special items, including amortization of acquisition-related intangibles, separation-related costs, cyber ransomware incident recovery costs, and transformation and restructuring charges (which includes integration, severance and other exit and disposal costs), among others. The special items are considered non-operational or non-recurring in nature, so are excluded from the Adjusted EBITDA metric utilized by our chief operating decision maker in evaluating segment performance and are separately delineated to reconcile back to total reported GAAP net income (loss) from continuing operations attributable to NCR.

Special Item Related to Russia The war in Eastern Europe and related sanctions imposed on Russia and related actors by the United States and other jurisdictions required us to commence the orderly wind down of our operations in Russia in the first quarter of 2022. We have ceased operations in Russia and are in the process of dissolving our only subsidiary in Russia. As a result, for the three and nine months ended September 30, 2022, our presentation of segment revenue and Adjusted EBITDA excludes the immaterial impact of our operating results in Russia, as well as the impact of impairments taken to write down the carrying value of assets and liabilities, severance charges, and the assessment of collectability on revenue recognition. We recognized a pre-tax net loss of $22 million for the nine months ended September 30, 2022 related to these actions, recognized primarily in Cost of products, Cost of services and Selling, general and administrative expenses on the Condensed Consolidated Statement of Operations. No charges have been recognized for the nine months ended September 30, 2023. We consider this to be a non-recurring special item and management has reviewed the results of its business segments excluding these impacts.

Assets are not allocated to segments, and thus are not included in the assessment of segment performance. Consequently, we do not disclose total assets by reportable segment. The accounting policies used to determine the results of the operating segments are the same as those utilized for the condensed consolidated financial statements as a whole. Intersegment sales and transfers are not material.

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NCR Voyix Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

The following table presents revenue and Adjusted EBITDA by segment:


In millions	Three months ended September 30				Nine months ended September 30
	2023		2022		2023		2022
Revenue by segment
Retail	$	568	$	575	$	1,696	$	1,683
Hospitality	238		238		696		687
Digital Banking	147		137		423		404
Payments & Network	357		336		1,013		967
Self-Service Banking	666		640		1,940		1,930
Total segment revenue	$	1,976	$	1,926	$	5,768	$	5,671
Other (1)	53		58		161		187
Eliminations	(12)		(12)		(35)		(32)
Other adjustment (2)	—		—		—		9
Consolidated revenue	$	2,017	$	1,972	$	5,894	$	5,835

Adjusted EBITDA by segment
Retail	$	132	$	128	$	352	$	299
Hospitality	59		51		172		138
Digital Banking	58		60		160		172
Payments & Network	120		114		302		309
Self-Service Banking	169		150		476		404
Segment Adjusted EBITDA	$	538	$	503	$	1,462	$	1,322

(1) Other immaterial business operations that do not represent a reportable segment.

(2) Other adjustment reflects the revenue attributable to the Company’s operations in Russia for the nine months ended September 30, 2022 that were excluded from management’s measure of revenue due to our previous announcement to suspend sales to Russia and orderly wind down of our operations in Russia beginning in the first quarter of 2022.

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NCR Voyix Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)—(Continued)

The following table reconciles Segment Adjusted EBITDA to Net income (loss) from continuing operations attributable to NCR:


In millions	Three months ended September 30				Nine months ended September 30
	2023		2022		2023		2022
Segment Adjusted EBITDA	$	538	$	503	$	1,462	$	1,322
Less unallocated amounts:
Pension mark-to-market	19		—		19		—
Corporate and other income and expenses not allocated to reportable segments	125		112		341		307
Eliminations	9		11		26		25
Transformation and restructuring costs (1)	8		17		7		93