NCR Atleos Corp. 10-Q Summary: Q2 2026
Business Context and Reporting Period
This filing covers the quarterly period ended June 30, 2026. NCR Atleos Corp. is a global financial technology company providing self-directed banking solutions through three segments: Self-Service Banking, Network, and Telecommunications & Technology (T&T). The company is currently in the process of a merger with The Brink's Company, approved by stockholders on June 30, 2026, with closing expected in early Q1 2027.
Key Financial Metrics
| Metric (in millions) | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Total Revenue | $1,103 | $1,102 | $2,146 | $2,081 |
| Net Income (Atleos) | $65 | $39 | $87 | $53 |
| Diluted EPS | $0.86 | $0.52 | $1.15 | $0.71 |
| Operating Income | $156 | $119 | $240 | $212 |
| Adjusted EBITDA | $254 | $203 | $426 | $375 |
| Operating Cash Flow (YTD) | $21 | $98 | $21 | $98 |
| Total Debt | $2,829 | N/A | $2,829 | N/A |
| Cash & Equivalents | $429 | N/A | $429 | N/A |
Note: Debt includes $1,350M in senior secured notes and $1,243M in term loans. Cash excludes restricted cash of $164M.
Material Changes vs. Prior Period
- Profitability Surge: Net income attributable to Atleos increased 67% year-over-year in Q2 ($65M vs. $39M) and 64% year-to-date. This was driven by a 23% increase in gross margin (to 28.0%) and a 31% increase in operating income.
- Revenue Composition: Total revenue was flat QoQ but up 3% YTD. Growth was driven by software and services (specifically ATMaaS), offset by a decline in hardware sales and lower crypto transaction demand in the Network segment.
- Tariff Refunds: Significant margin expansion was aided by the accrual and receipt of refunds for IEEPA tariffs following a U.S. Supreme Court ruling in February 2026.
- Cash Flow Volatility: Operating cash flow decreased significantly to $21M YTD from $98M in the prior year, primarily due to the timing of cash settlements with merchant partners and working capital changes.
- Financial Statement Revisions: The company revised prior period financial statements (Q2 and Q3 2025) to correct immaterial misstatements related to revenue recognition and tax remeasurement. Comparative figures in this filing reflect these revisions.
Outlook, Risks, and Management Commentary
- Merger with Brink's: The transaction is expected to close in Q1 2027. The company has suspended its share repurchase program in connection with the merger. A "Change of Control" put waiver was secured for the 9.5% senior secured notes.
- Cost Pressures: Management anticipates elevated costs for fuel and memory chips for the remainder of the year, which may impact future gross margins.
- Geopolitical Risks: Ongoing conflicts (e.g., with Iran) pose risks to product delivery and fuel costs in certain markets.
- Legal & Environmental: The company shares liability with Voyix for environmental remediation (e.g., Kalamazoo River) and legal matters. A $24M accrual for a pension plan settlement indemnification was deemed adequate and paid in July 2026.
- Liquidity: The company maintains $335M in remaining borrowing capacity under its revolving credit facility and believes current cash and operating cash flows are sufficient to meet obligations.
Investor Verification Checklist
- Merger Closing Conditions: Verify the status of regulatory approvals required for the Brink's merger to close in Q1 2027.
- Tariff Refund Realization: Confirm the actual cash receipt of accrued IEEPA tariff refunds and the sustainability of the margin benefit.
- Operating Cash Flow Trends: Monitor the recovery of operating cash flow, which was significantly depressed by settlement timing in the first half of 2026.
- Environmental Liability Exposure: Review updates on the Kalamazoo River remediation costs and the potential for liabilities to exceed current reserves shared with Voyix.
- Hardware Sales Cycle: Assess the timing of hardware deliveries, as Q2 revenue was negatively impacted by delivery timing compared to the prior year.