NATL earnings analysis
What we found in NATL's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
NCR Atleos delivered flat Q2 revenue of $1.103 billion but substantially improved profitability, with gross margin up 510 basis points to 28.0%, operating income up 31% to $156 million, and GAAP diluted EPS of $0.86. Growth in ATMaaS, software, and recurring revenue offset weaker hardware sales and softer crypto-related Network demand. The principal offset is cash conversion: six-month operating cash flow fell to $21 million from $98 million, while debt remained $2.829 billion. Management provided no financial outlook because of the pending Brink's merger, expected to close early in Q1 2027.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Profit rose despite flat year-over-year revenue
- Q2 revenue was $1.103 billion, essentially flat versus $1.102 billion a year earlier, but up from $1.04 billion in Q1 2026. GAAP diluted EPS was $0.86, versus $0.60 in Q2 2025 and $0.29 in Q1 2026.
- Material gross and operating-margin expansion
- Gross margin increased 510 basis points year over year to 28.0%, while operating income rose 31% to $156 million, implying a 14.1% operating margin versus 10.8% a year ago. Management cited tariff refunds, software/services mix, productivity, and favorable Network settlement processing.
- Recurring SSB offerings offset hardware decline
- Self-Service Banking revenue increased 1% to $741 million and adjusted EBITDA increased 13% to $212 million. Services revenue rose 5% to $389 million and software revenue rose 15% to $156 million, with ATMaaS revenue up to $77 million from $62 million.
- Network profitability outpaced revenue
- Network adjusted EBITDA increased 23% to $106 million despite segment revenue declining 1% to $316 million. Positive settlement processing and lower vault-cash costs supported earnings, while managed units held at 77.0 thousand.
- Recurring revenue base continued to expand
- Recurring revenue rose to $776 million from $772 million and represented 70.4% of revenue, versus 70.1% a year ago. Self-Service Banking ARR increased to $1.721 billion from $1.679 billion.
- Lower interest expense aided earnings growth
- Interest expense fell $7 million year over year to $62 million, helping net income attributable to Atleos increase 67% to $65 million. Adjusted EBITDA rose 25% to $254 million, or 23.0% of revenue.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Working capital sharply reduced operating cash flow
- Cash conversion weakened: six-month operating cash flow fell to $21 million from $98 million, and adjusted free cash flow-unrestricted was only $3 million versus negative $10 million. Management attributed the $77 million operating-cash-flow decline to merchant settlement timing, contract liabilities, and other working-capital requirements.
- Hardware, crypto demand and T&T remain weak
- Hardware revenue in Self-Service Banking declined 13% to $196 million, Network revenue declined 1% to $316 million amid lower crypto-transaction demand and mix pressure, and T&T adjusted EBITDA fell 22% to $7 million.
- Input-cost and leveraged-balance-sheet exposure
- Management anticipates fuel and memory-chip costs could remain elevated for the rest of 2026 and pressure future gross margin. Liquidity is constrained by $2.829 billion of total debt, including $1.350 billion of 9.500% secured notes due 2029 and $1.243 billion of term loans; Item 1A reports no material changes to previously disclosed risk factors.
- Merger execution limits outlook and capital returns
- The pending Brink's deal is expected to close early in Q1 2027, but remains subject to regulatory and customary conditions. Consideration is $30.00 cash plus 0.1574 Brink's shares per Atleos share, and the company has suspended its repurchase program after spending $15 million on roughly 0.4 million shares during the first half.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.86
- Gross margin
- 28.0%
- Operating margin
- 14.1%
- Segment
- Self-Service Banking revenue: $741 million (+1% year over year); adjusted EBITDA: $212 million (+13%)
- Segment
- Network revenue: $316 million (-1% year over year); adjusted EBITDA: $106 million (+23%)
- Segment
- Telecommunications & Technology revenue: $41 million (flat year over year); adjusted EBITDA: $7 million (-22%)
What they said about what is next.
The company did not provide a financial outlook because of the pending Brink's transaction. Management expects the merger to close early in the first quarter of 2027, subject to regulatory approvals and other customary closing conditions.
The filing reads about the same as the one before it.
What came before.
- 10-Q · May 7, 2026
- NCR Atleos Corporation reported Q1 2026 earnings with a revenue of $1.04 billion, marking a 7% increase year-over-year, though it fell short of estimates. The diluted EPS was $0.65, missing the expected $0.88, and…
- 10-K · February 27, 2026
- NCR Atleos Corporation reports a 1% increase in total revenue to $4.35 billion for the year ended December 31, 2025, compared to 2024, driven mainly by a 7% increase in the Self-Service Banking segment. The company…
- 10-Q · November 6, 2025
- NCR Atleos Corporation reported stronger than expected financial performance for Q3 2025, achieving a revenue of $1.12 billion, surpassing estimates. Their EPS also exceeded consensus forecasts at $1.09, reflecting a…
- 10-Q · August 7, 2025
- NCR Atleos Corporation reported strong Q2 2025 results with revenues at $1.104 billion and EPS at $0.93, beating estimates by 2.1% and 19.2% respectively. The company experienced a notable growth in its Self-Service…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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