XML 24 R12.htm IDEA: XBRL DOCUMENT v3.22.2.2
Segment Information and Concentrations
 9 Months Ended
Sep. 30, 2022
Segment Reporting [Abstract]  
SEGMENT INFORMATION AND CONCENTRATIONS 4. SEGMENT INFORMATION AND CONCENTRATIONS
As described in Note 1, “Basis of Presentation and Summary of Significant Accounting Policies”, effective January 1, 2022, the Company realigned its reportable segments to correspond with changes to its operating model, management structure and organizational responsibilities. We have reclassified prior period segment disclosures to conform to the current period presentation. As a result of the change, the Company manages and reports 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 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 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, installation, maintenance, managed and professional services as well as payment processing solutions.

•Digital Banking - NCR 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, management and services to financial institutions and businesses.
•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.

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).

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 NCR 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, pension settlements, pension curtailments and pension special termination benefits and other special items, including amortization of acquisition-related intangibles, restructuring charges, among others. The special items are considered non-operational 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 beginning in the first quarter of 2022. As of September 30, 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 ending September 30, 2022, our presentation of segment revenue and Adjusted EBITDA exclude 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 consider this to be a non-recurring special item and management has reviewed the results of its business segments excluding these impacts. We have not adjusted the presentation of the prior year period due to the immaterial impact of Russia to revenue and income from continuing operations for the three and nine months ended September 30, 2021.

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.
The following table presents revenue and Adjusted EBITDA by segment:
In millionsThree months ended September 30Nine months ended September 30
2022202120222021
Revenue by segment
Retail$575 $541 $1,683 $1,623
Hospitality238 224 687 618
Digital Banking137 128 404 380
Payments & Network336 304 967 380
Self-Service Banking640 637 1,930 1,910
Other58 75 187 229
Eliminations(12)(8)(32)(18)
Total segment revenue$1,972 $1,901 $5,826 $5,122 
Other adjustment (1)
— — 9 — 
Consolidated revenue$1,972 $1,901 $5,835 $5,122 
Adjusted EBITDA by segment
Retail$128 $104 $299 $323 
Hospitality51 44 138 119 
Digital Banking60 52 172 161 
Payments & Network114 111 309 133 
Self-Service Banking150 155 404 432 
Corporate and Other(112)(109)(307)(265)
Eliminations(11)(5)(25)(12)
Total Adjusted EBITDA$380 $352 $990 $891 
(1) Other adjustment reflects the revenue attributable to the Company's operations in Russia for the three and nine months ending September 30, 2022 that were excluded from management's measure of revenue due to our previous announcement to suspend sales to Russia and anticipated orderly wind down of our operations in Russia. The revenue attributable to the Russian operations for the three and nine months ended September 30, 2021 of $14 million and $33 million, respectively, is included in the respective segments.
For the three and nine months ended September 30, 2022, the operations of Cardtronics are included in the Payments & Network and Self-Service Banking segments. For the three and nine months ended September 30, 2021, the operations of Cardtronics have been included in the Payments & Network and Self-Service Banking segments from the close date, June 21, 2021.
The following table reconciles net income (loss) from continuing operations to Adjusted EBITDA:
In millionsThree months ended September 30Nine months ended September 30
2022202120222021
Net income (loss) from continuing operations attributable to NCR$69 $12 $71 $33 
Transformation and restructuring costs17 5 93 20 
Acquisition-related amortization of intangibles44 45 130 88 
Acquisition-related costs1 9 9 92 
Loss on debt extinguishment— 42 — 42 
Interest expense74 68 204 174 
Interest income(3)— (6)(4)
Depreciation and amortization (excluding acquisition-related amortization of intangibles)107 104 314 250 
Income tax expense (benefit)43 29 56 77 
Stock-based compensation expense28 38 97 119 
Russia— — 22 — 
Total Adjusted EBITDA$380 $352 $990 $891 

The following table presents revenue by geography for NCR:
In millionsThree months ended September 30Nine months ended September 30
2022202120222021
Americas$1,320 $1,185 $3,777 $3,121 
Europe, Middle East and Africa (EMEA)403 494 1,367 1,358 
Asia Pacific (APJ)249 222 691 643 
Total revenue$1,972 $1,901 $5,835 $5,122 

The following table presents the recurring revenue for NCR:
In millionsThree months ended September 30Nine months ended September 30
2022202120222021
Recurring revenue (1)
$1,222 $1,181 $3,618 $2,984 
All other products and services750 720 2,217 2,138 
Total revenue$1,972 $1,901 $5,835 $5,122 

(1) Recurring revenue includes all revenue streams from contracts where there is a predictable revenue pattern that will occur at regular intervals with a relatively high degree of certainty. This includes hardware and software maintenance revenue, cloud revenue, payment processing revenue, interchange and network revenue, cryptocurrency-related revenue, and certain professional services arrangements, as well as term-based software license arrangements that include customer termination rights.