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Segment Information and Concentrations
 9 Months Ended
Sep. 30, 2023
Segment Reporting [Abstract]  
SEGMENT INFORMATION AND CONCENTRATIONS 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).
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.
The following table presents revenue and Adjusted EBITDA by segment:
In millionsThree months ended September 30Nine months ended September 30
2023202220232022
Revenue by segment
Retail$568 $575 $1,696 $1,683 
Hospitality238 238 696 687 
Digital Banking147 137 423 404 
Payments & Network357 336 1,013 967 
Self-Service Banking666 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 
Hospitality59 51 172 138 
Digital Banking58 60 160 172 
Payments & Network120 114 302 309 
Self-Service Banking169 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.
The following table reconciles Segment Adjusted EBITDA to Net income (loss) from continuing operations attributable to NCR:
In millionsThree months ended September 30Nine months ended September 30
2023202220232022
Segment Adjusted EBITDA$538 $503 $1,462 $1,322 
Less unallocated amounts:
Pension mark-to-market19 — 19 — 
Corporate and other income and expenses not allocated to reportable segments125 112 341 307 
Eliminations9 11 26 25 
Transformation and restructuring costs (1)
8 17 7 93 
Acquisition-related amortization of intangibles43 44 128 130 
Acquisition-related costs (2)
— 1 1 9 
Gain on terminated interest rate derivative agreements (3)
(85)— (85)— 
Interest expense (3)
85 74 259 204 
Interest income(5)(3)(11)(6)
Depreciation and amortization (excluding acquisition-related amortization of intangibles)109 107 324 314 
Income tax expense (benefit)236 43 280 56 
Stock-based compensation expense30 28 98 97 
Separation costs (4)
76 — 147 — 
Cyber ransomware incident recovery costs (5)
12 — 23 — 
Russia— — — 22 
Net income (loss) from continuing operations attributable to NCR$(124)$69 $(95)$71 
(1) Represents integration, severance, and other exit and disposal costs, which are considered non-operational in nature.
(2) Represents professional fees, retention bonuses, and other costs incurred related to acquisitions, which are considered non-operational in nature.
(3) During the three months ended September 30, 2023, it was determined that the transactions underlying the unrealized gains on terminated interest rate swap and cap agreements reported in Accumulated other comprehensive income were probable of not occurring under ASC 815, Derivatives and Hedging. As such, $85 million of unrealized gains were recognized in Cost of services and $18 million of unrealized gains were recognized in Interest expense. Refer to Note 13, “Derivatives and Hedging Instruments”.
(4) Represents primarily professional fees specific to separation preparation including separation management, organizational design, and legal fees.
(5) Represents expenses to respond to, remediate and investigate the April 13, 2023 cyber ransomware incident, which is considered a non-recurring special item. Additional details regarding this cyber ransomware incident are discussed in Note 1, “Basis of Presentation and Summary of Significant Accounting Policies”.

The following table presents revenue by geography for the Company:
In millionsThree months ended September 30Nine months ended September 30
2023202220232022
United States$1,179 $1,127 $3,393 $3,200 
Americas (excluding United States)194 193 575 577 
Europe, Middle East and Africa444 403 1,302 1,367 
Asia Pacific200 249 624 691 
Total revenue$2,017 $1,972 $5,894 $5,835 
The following table presents the recurring revenue for the Company:
In millionsThree months ended September 30Nine months ended September 30
2023202220232022
Recurring revenue (1)
$1,305 $1,222 $3,796 $3,618 
All other products and services712 750 2,098 2,217 
Total revenue$2,017 $1,972 $5,894 $5,835 

(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, Bitcoin-related revenue, and certain professional services arrangements, as well as term-based software license arrangements that include customer termination rights.

Concurrently with the Spin-Off on October 16, 2023, the Company made a number of changes to its organizational structure and management system, including the Company’s reportable segments. Following the Spin-Off, the Company will manage its reports and operations using three reportable segments - Retail, Restaurant (formerly reported as Hospitality) and Digital Banking. These changes will impact the Company’s reportable segments beginning in the fourth quarter of 2023.