NCR Atleos Corporation

11/04/2026 | Press release | Distributed by Public on 11/04/2026 06:36

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements and notes thereto included under Item 1. Financial Statements of this Form 10-Q, our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2026, including the risk factors set forth therein, and our Consolidated Financial Statements and notes thereto and related Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "2025 Form 10-K"). This quarterly report contains forward-looking statements. See the sections of the Form 10-Q titled "Cautionary Statement about Forward-Looking Statements" and "Risk Factors" for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements that could cause future results to differ materially from those reflected in this section.
OVERVIEW
We are an industry-leading financial technology company providing self-directed banking solutions to a global customer base including financial institutions, merchants, manufacturers, retailers and consumers. We operate through three reportable segments: Self-Service Banking, Network, and Telecommunications and Technology ("T&T").
During the third quarter of 2026, we continued to pursue our focus on customer service, leveraging AI-powered diagnostics, intelligent dispatch systems and fleet-level performance management to improve ATM availability. Within Self-Service Banking, continued revenue growth quarter over quarter in our ATM as a Service ("ATMaaS") business and subscription-based software offerings was offset by a reduction in revenue from hardware sales. Revenue in our Network segment decreased slightly, primarily due to lower demand for crypto transactions. Total gross margin increased quarter over quarter, due to favorable shifts in product mix in software and services, productivity initiatives, tariffs and lower cash vault costs. These benefits were partially offset by increases in the costs of fuel and memory chips. We anticipate that these costs could remain elevated for the remainder of the year, impacting gross margin in future quarters.
On a year-to-date basis, consolidated revenue increased due to increases in ATMaaS, subscription-based software offerings, and hardware sales during the first quarter. Year-to-date gross margin increased as a result of shifts in product mix, productivity initiatives, and tariff refunds offset by increase costs in fuel and memory chips.
We are exposed to macroeconomic factors such as interest rates, foreign currency fluctuations, geopolitical tensions and shifts in global trade policies. We anticipate that further conflict with Iran and other geopolitical conflicts could negatively impact our ability to deliver products and services in certain markets, and continue to result in increases in fuel costs.
On February 20, 2026, the U.S. Supreme Court ruled that certain tariffs imposed under the International Emergency Economic Powers Act ("IEEPA") were not valid, and on March 4, 2026, the Court of International Trade ruled that U.S. Customs and Border Protection ("CBP") was required, subject to applicable procedures, to refund the IEEPA tariffs it had collected. On April 20, 2026, CBP began accepting submissions for certain IEEPA tariff refunds, and on June 29, 2026, it further expanded eligible refund submissions. As of September 30, 2026, the majority of our refund claims had been accepted and refunded. We are carrying a net receivable for the outstanding, unpaid claims within Other receivables in our Condensed Consolidated Balance Sheet.
On February 26, 2026, we entered into an Agreement and Plan of Merger (the "Merger Agreement"), by and among Atleos, The Brink's Company, a Virginia corporation ("Brink's"), Novus Merger Sub, Inc., a Maryland corporation and wholly owned subsidiary of Brink's ("Merger Sub I") and Novus Merger Sub II, LLC, a Maryland limited liability company and wholly owned subsidiary of Brink's ("Merger Sub II"). Pursuant to the Merger Agreement, (i) Merger Sub I will merge with and into Atleos (the "First Merger"), with Atleos surviving the First Merger as a direct wholly owned subsidiary of Brink's, and (ii) immediately following the First Merger, Atleos will merge with and into Merger Sub II (the "Second Merger" and, together with the First Merger, the "Mergers"), with Merger Sub II surviving the Second Merger as a wholly owned subsidiary of Brink's. Pursuant to the Merger Agreement, Brink's will acquire each outstanding share of Atleos stock for $30.00 in cash, without interest, and 0.1574 shares of validly issued, fully paid and nonassessable shares of Brink's common stock. On June 30, 2026, the stockholders of both companies approved the Mergers. The Mergers are currently expected to close early in the first quarter of 2027, subject to customary closing conditions, including regulatory approvals. In connection with the Mergers, on March 11, 2026, we received the requisite consents from holders of our 9.500% Senior Secured Notes due 2029 (the "Notes") and entered into a supplemental indenture to amend the defined term "Change of Control" to provide that the Mergers will not constitute a Change of Control and to add or amend certain other defined terms related to the Change of Control put provisions contained in the indenture governing the Notes (collectively, the "CoC Put Waiver"). As a result of the CoC Put Waiver, we are not required to repurchase any portion of the Notes as a
result of the consummation of the Mergers. The supplemental indenture became effective immediately upon execution, but the CoC Put Waiver will not become operative until immediately prior to the effective time of the First Merger and will cease to be operative if the First Merger is not consummated or we do not pay the consent fee to the paying agent on behalf of the holders.
RESULTS OF OPERATIONS
Highlights of our consolidated results, which are discussed in more detail below, include:
Three months ended September 30, Change Nine months ended September 30, Change
In millions 2026 2025 % 2026 2025 %
Product revenue $ 243 $ 274 (11) % $ 712 $ 728 (2) %
Service revenue 856 847 1 % 2,533 2,474 2 %
Total revenue 1,099 1,121 (2) % 3,245 3,202 1 %
Product gross margin 56 55 2 % 156 132 18 %
Service gross margin 227 216 5 % 670 623 8 %
Total gross margin 283 271 4 % 826 755 9 %
Selling, general and administrative expenses 82 143 (43) % 345 381 (9) %
Research and development expenses 18 18 - % 58 52 12 %
Income from operations 183 110 66 % 423 322 31 %
Interest expense (61) (68) (10) % (186) (204) (9) %
Other income (expense), net 7 (9) (178) % 15 (6) (350) %
Income before income taxes 129 33 291 % 252 112 125 %
Income tax expense 32 7 357 % 68 35 94 %
Net income attributable to Atleos $ 97 $ 26 273 % $ 184 $ 79 133 %
•Total revenue of $1.10 billion for the three months ended September 30, 2026 decreased 2% year over year. Recurring revenue was $782 million compared to $783 million in the prior year period. For the nine months ended September 30, 2026, total revenue increased 1% to $3.25 billion, including $2.31 billion of recurring revenue, compared to $3.20 billion and $2.30 billion, respectively, in the prior year period. Revenue growth for the three and nine months ended September 30, 2026 was driven by software and services revenues, including ATMaaS. Revenue was offset by decreases in hardware and in the network business due to lower demand for crypto transactions. Other revenues declined due to an unexpected reduction in commercial agreements and commerce related contracts with Voyix.
•For the three months ended September 30, 2026, gross margin increased 160 basis points to 25.8% and adjusted gross margin increased 120 basis points to 27.7%. For the nine months ended September 30, 2026, gross margin increased 190 basis points to 25.5% and adjusted gross margin increased 170 basis points to 27.5%. These increases were driven by favorable product mix in software and services, productivity initiatives, and net tariff refunds offset by increases in other costs including fuel and memory chips.
•Income from operations increased 66% and 31% for the three and nine months ended September 30, 2026, respectively, driven by the factors above, as well as a favorable legal settlement in the third quarter.
•Income before income taxes increased to $129 million and $252 million for the three and nine months ended September 30, 2026, respectively, compared to $33 million and $112 million in the prior year periods. The increases were driven by the factors discussed above, as well as lower interest costs on our debt and higher expected asset returns within our defined benefit plans.
Key Financial and Performance Metrics
We use the following metrics in evaluating the performance of our business:
Recurring revenue is 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, 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.
Annualized Recurring Revenue ("ARR") is recurring revenue, excluding software licenses sold as a subscription, for the last three months multiplied by four, plus the rolling four quarters for term-based software license arrangements that include customer termination rights. We believe this metric may be useful to investors in evaluating achievement of our strategic goals related to the conversion of the self-service banking business to recurring revenue streams over time. ARR does not necessarily reflect the pattern of revenue recognition in accordance with GAAP and should not be considered a substitute for GAAP revenue.
Last twelve months average revenue per unit ("LTM ARPU") is an operating metric for the Network segment, defined as total Network segment revenue for the previous twelve months divided by the average Network Managed Units for the previous twelve months. We believe this metric may be useful to investors in evaluating achievement of our strategic goals related to the improved monetization of our ATM fleet over a specified period, excluding the impact of seasonality. LTM ARPU does not represent revenue generated solely by our Network Managed Units, as total Network segment revenue includes revenue generated from other sources.
Network Managed Units are all transacting ATMs as of period end, whether Company-owned or Merchant-owned, other than those for which we only provide third-party processing services and those under legacy managed services arrangements.
The following tables show our key financial and performance metrics for the three and nine months ended September 30, the relative percentage that those amounts represent to total revenue, and the change in those amounts year over year.
Recurring revenue as a percentage of total revenue
Three months ended September 30, Percentage of Total Revenue Change
In millions 2026 2025 2026 2025 2026 vs 2025
Recurring revenue (1)
$ 782 $ 783 71.2 % 69.8 % - %
All other products and services 317 338 28.8 % 30.2 % (6) %
Total Revenue $ 1,099 $ 1,121 100.0 % 100.0 % (2) %
Nine months ended September 30, Percentage of Total Revenue Change
In millions 2026 2025 2026 2025 2026 vs 2025
Recurring revenue (1)
$ 2,312 $ 2,296 71.2 % 71.7 % 1 %
All other products and services 933 906 28.8 % 28.3 % 3 %
Total Revenue $ 3,245 $ 3,202 100.0 % 100.0 % 1 %
(1) Refer to our definition of Recurring revenue in the section entitled "Key Financial and Performance Metrics."
Net income attributable to Atleos and Adjusted EBITDA(1) as a percentage of total revenue
Three months ended September 30, Percentage of Total Revenue Change
In millions 2026 2025 2026 2025 2026 vs 2025
Net income attributable to Atleos $ 97 $ 26 8.8 % 2.3 % 273 %
Adjusted EBITDA(1)
$ 241 $ 219 21.9 % 19.5 % 10 %
Nine months ended September 30, Percentage of Total Revenue Change
In millions 2026 2025 2026 2025 2026 vs 2025
Net income attributable to Atleos $ 184 $ 79 5.7 % 2.5 % 133 %
Adjusted EBITDA(1)
$ 667 $ 594 20.6 % 18.6 % 12 %
(1) Refer to our definition of Adjusted EBITDA in the section entitled "Supplemental Information - Items Affecting Comparability."
Other performance metrics
Three months ended September 30,
In millions, unless otherwise noted 2026 2025
Self-Service Banking
Annualized recurring revenue $ 1,742 $ 1,712
Recurring revenue as a % of SSB revenue 59 % 57 %
Revenue from ATMaaS arrangements $ 83 $ 67
Network
LTM ARPU (in thousands)
$ 16.1 $ 16.2
Network Managed Units (in thousands)
77.0 80.9
Supplemental Information - Items Affecting Comparability
We supplement the reporting of our financial information determined under generally accepted accounting principles in the United States ("GAAP") with certain non-GAAP adjusted financial measures. Non-GAAP adjusted financial measures should be considered in addition to, and not as an alternative for, our reported results prepared in accordance with GAAP. Our non-GAAP adjusted financial measures do not represent a comprehensive basis of accounting and therefore may not be comparable to similarly titled measures reported by other companies. We believe these measures are useful for investors because they provide a more complete understanding of our underlying operational performance, as well as consistency and comparability with past reports of financial results.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (Adjusted EBITDA) (non-GAAP) and Adjusted EBITDA margin (non-GAAP) are calculated as GAAP Net income (loss) attributable to Atleos plus interest expense; plus income tax expense (benefit); plus depreciation and amortization; plus acquisition-related costs, including costs related to the Brink's transaction; plus pension mark-to-market adjustments and other one-time pension-related costs; plus separation-related costs; plus transformation and restructuring charges, which include integration, severance, divestiture and other exit and disposal costs; plus stock-based compensation expense; plus Voyix legal and environmental indemnification expense; plus or minus other legal settlements; plus other amounts included in Other income (expense), net. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by total revenue, and Adjusted EBITDA margin by segment is calculated based on segment Adjusted EBITDA divided by the related segment revenue. We use these non-GAAP measures to evaluate performance consistently from period to period.
Adjusted gross margin as a percentage of revenue (non-GAAP) and Adjusted selling, general and administrative expenses as a percentage of revenue (non-GAAP) are calculated utilizing GAAP gross margin and selling, general and administrative expenses, respectively, and excluding, as applicable, acquisition-related costs, including costs related to the Brink's transaction; one-time pension-related costs; separation-related costs; amortization of acquisition-related intangibles; stock-based compensation expense; transformation and restructuring charges (which includes integration, severance, divestiture and other exit and disposal costs); Voyix legal indemnification expense; other legal settlements and other non-recurring or unusual items. We use these non-GAAP measures to evaluate performance consistently from period to period.
Reconciliation of Net income (loss) attributable to Atleos (GAAP) to Adjusted EBITDA (Non-GAAP)
Three months ended September 30, Nine months ended September 30,
In millions 2026 2025 2026 2025
Net income attributable to Atleos (GAAP) $ 97 $ 26 $ 184 $ 79
Interest expense 61 68 186 204
Interest income (2) (2) (6) (4)
Income tax expense 32 7 68 35
Depreciation and amortization expense 48 43 137 129
Amortization of acquisition-related intangibles 20 24 68 71
Stock-based compensation expense 9 8 26 25
Separation costs - 1 - 9
Acquisition-related costs 6 3 16 4
Transformation and restructuring 6 11 11 1
Voyix indemnification expense (9) 22 (3) 27
Legal settlements (31) - (31) -
Other (income) expense items(1)
4 8 11 14
Adjusted EBITDA (non-GAAP) $ 241 $ 219 $ 667 $ 594
(1) Includes certain items reported within Other income (expense), net on the Condensed Consolidated Statements of Operations, such as bank fees, the components of pension, postemployment and postretirement expense other than service cost, and the impact of foreign currency exchange rate fluctuations. Certain other amounts reported in Other income (expense), net are separately captured in this reconciliation. As a result, Other (income) expense items as presented does not agree to total Other income (expense), net on the Condensed Consolidated Statements of Operations.
Reconciliation of Gross Margin Rate (Gross Margin as a Percentage of Revenue) (GAAP) to Adjusted Gross Margin Rate (Adjusted Gross Margin as a Percentage of Revenue) (Non-GAAP)
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 2025
Gross Margin Rate (GAAP) 25.8 % 24.2 % 25.5 % 23.6 %
Plus:
Amortization of acquisition-related intangibles 1.7 % 1.8 % 1.8 % 1.9 %
Stock-based compensation expense 0.1 % 0.1 % 0.1 % 0.1 %
Separation costs - % 0.1 % - % - %
Transformation and restructuring 0.1 % 0.3 % 0.1 % 0.2 %
Adjusted Gross Margin Rate (Non-GAAP) 27.7 % 26.5 % 27.5 % 25.8 %
Reconciliation of Selling, General and Administrative Expenses ("SG&A") as a Percentage of Revenue (GAAP) to Adjusted SG&A as a Percentage of Revenue (Non-GAAP)
Three months ended September 30, Nine months ended September 30,
2026 2025 2026 2025
SG&A as a percentage of revenue (GAAP) 7.5 % 12.8 % 10.6 % 11.9 %
Plus:
Amortization of acquisition-related intangibles (0.1) % (0.4) % (0.3) % (0.3) %
Stock-based compensation expense (0.8) % (0.6) % (0.6) % (0.6) %
Separation costs - % - % - % (0.2) %
Acquisition-related costs (0.5) % (0.2) % (0.5) % (0.1) %
Transformation and restructuring (0.5) % (0.4) % (0.6) % (0.2) %
Legal settlements 2.9 % - % 1.0 % - %
Voyix indemnification expense 0.1 % (2.0) % (0.1) % (0.8) %
Adjusted SG&A as a percentage of revenue (Non-GAAP) 8.6 % 9.2 % 9.5 % 9.7 %
Consolidated Results
Revenue
Three months ended September 30, Change Nine months ended September 30, Change
In millions 2026 2025 2026 v 2025 2026 2025 2026 v 2025
Revenue
Self-Service Banking $ 731 $ 744 (2) % $ 2,169 $ 2,099 3 %
Network 322 328 (2) % 939 946 (1) %
T&T 41 40 2 % 122 124 (2) %
Total segment revenue 1,094 1,112 (2) % 3,230 3,169 2 %
Other(1)
5 9 (44) % 15 33 (55) %
Consolidated revenue $ 1,099 $ 1,121 (2) % $ 3,245 $ 3,202 1 %
(1) Contains certain immaterial business operations that do not represent a reportable segment, including commerce related operations in countries that Voyix exited that are aligned to Atleos. Other also includes revenues from commercial agreements with Voyix.
Consolidated revenue for the three months ended September 30, 2026 decreased 2% compared to the three months ended September 30, 2025, due to a decrease in hardware sales offset by increases in software and services, including ATMaaS. Revenue growth for the nine months ended September 30, 2026 was driven by software and services revenues, including ATMaaS. This growth was offset by decreases in hardware and in the network business due to lower demand for crypto
transactions. Other revenues declined due to an expected reduction in commercial agreements and commerce related contracts with Voyix.
Gross Margin
Three months ended September 30, Percentage of Revenue Change
In millions 2026 2025 2026 2025 2026 v 2025
Total gross margin $ 283 $ 271 25.8 % 24.2 % 4 %
Nine months ended September 30, Percentage of Revenue Change
In millions 2026 2025 2026 2025 2026 v 2025
Total gross margin $ 826 $ 755 25.5 % 23.6 % 9 %
Gross margin increased to 25.8% and 25.5% for the three and nine months ended September 30, 2026, respectively, compared with 24.2% and 23.6%, respectively, for the corresponding prior year periods. Adjusted gross margin for the three and nine months ended September 30, 2026 increased from 26.5% and 25.8% to 27.7% and 27.5%, respectively. These increases were driven by favorable product mix in software and services, productivity initiatives, and net tariff refunds offset by increases in other costs including fuel and memory chips.
Selling, General and Administrative Expenses
Three months ended September 30, Percentage of Total Revenue Change
In millions 2026 2025 2026 2025 2026 v 2025
Selling, general and administrative expenses $ 82 $ 143 7.5 % 12.8 % (43) %
Nine months ended September 30, Percentage of Total Revenue Change
In millions 2026 2025 2026 2025 2026 vs 2025
Selling, general and administrative expenses $ 345 $ 381 10.6 % 11.9 % (9) %
Selling, general, and administrative expenses decreased $61 million and $36 million for the three and nine months ended September 30, 2026, respectively, compared to the prior year periods. The decrease in the three months ended September 30, 2026 was primarily due to the favorable settlement of a legal matter in the current period and the impact of a prior year litigation matter shared with Voyix that did not repeat. For the nine months ended September 30, 2026, these impacts were partially offset by year-over-year changes in severance costs and professional fees incurred in connection with our workforce optimization and other strategic initiatives. On an adjusted basis, selling, general and administrative expenses as a percentage of revenue decreased from 9.2% to 8.6% for the three months ended September 30, 2026, and from 9.7% to 9.5% for the nine months ended September 30, 2026.
Research and Development Expenses
Three months ended September 30, Percentage of Total Revenue Change
In millions 2026 2025 2026 2025 2026 v 2025
Research and development expenses $ 18 $ 18 1.6 % 1.6 % - %
Nine months ended September 30, Percentage of Total Revenue Change
In millions 2026 2025 2026 2025 2026 v 2025
Research and development expenses $ 58 $ 52 1.8 % 1.6 % 12 %
Research and development expenses for the three months ended September 30, 2026 remained flat year over year, and increased $6 million for the nine months ended September 30, 2026 compared to the prior year period due to increases in employee-related costs.
Interest Expense
Three months ended September 30, Change Nine months ended September 30, Change
In millions 2026 2025 2026 v 2025 2026 2025 2026 v 2025
Interest expense $ 61 $ 68 (10) % $ 186 $ 204 (9) %
Interest expense decreased $7 million and $18 million for the three and nine months ended September 30, 2026, respectively, compared to the prior year periods due to lower interest rates on certain debt obligations during the first half of the year, as well as a reduction in the outstanding balance on our term loan and revolving credit facility.
Other Income (Expense), net
Three months ended September 30, Nine months ended September 30,
In millions 2026 2025 2026 2025
Other income (expense), net
Interest income $ 2 $ 2 $ 6 $ 4
Foreign currency fluctuations and foreign exchange contracts (9) (6) (24) (19)
Employee benefit plans 10 4 29 10
Bank-related fees (3) (5) (11) (12)
Voyix environmental indemnification expense 8 - 5 (5)
Other, net (1) (4) 10 16
Total other income (expense), net $ 7 $ (9) $ 15 $ (6)
We recorded income of $7 million and $15 million for the three and nine months ended September 30, 2026, respectively, compared to expense of $9 million and $6 million, respectively, in the prior year periods. The year-over-year changes were attributable to an increase in income related to our company-sponsored defined benefit plans resulting from contributions and favorable prior year asset performance, and the amortization of actuarial gains associated with certain postemployment plans, as well as a reduction in our environmental indemnification obligation to Voyix.
Income Taxes
Three months ended September 30, Nine months ended September 30,
In millions 2026 2025 2026 2025
Income tax expense $ 32 $ 7 $ 68 $ 35
Income tax expense was $32 million and $68 million for the three and nine months ended September 30, 2026, respectively, compared to $7 million and $35 million in the prior year periods. The increases were primarily driven by higher income before taxes, partially offset by a lower annual effective tax rate. We recognized discrete tax expenses of $4 million and $7 million in the three and nine months ended September 30, 2026, respectively. We did not recognize any material discrete tax expenses or benefits in the three months ended September 30, 2025. For the nine months ended September 30, 2025, we recognized a $6 million expense related to a change in our estimated deferred tax provision, offset by a $4 million benefit related to the release of reserves for uncertain tax positions.
While we are subject to numerous federal, state and foreign tax audits, we believe that appropriate reserves exist for issues that might arise from these audits. Should these audits be settled, the resulting tax effect could impact the tax provision and cash flow in future periods. During 2026, we may resolve certain tax matters in foreign jurisdictions that could have an impact on our effective tax rate.
Segment Financial Results
Our Chief Operating Decision Maker evaluates segment performance using revenue and Adjusted EBITDA. Refer to the section entitled "Supplemental Information - Items Affecting Comparability" for our definition of Adjusted EBITDA and the reconciliation of Net income (loss) attributable to Atleos (GAAP) to Adjusted EBITDA.
Services revenues include hardware maintenance revenue, transaction services revenue and ATMaaS revenue. Software revenues include cloud revenue, software license and maintenance revenues, as well as professional services revenues. Transactional revenues include payments processing revenue, interchange and network revenue and Bitcoin-related revenue. Hardware revenue is primarily comprised of sales of ATM hardware.
Self-Service Banking Revenue and Adjusted EBITDA
Three months ended September 30, Change Nine months ended September 30, Change
In millions 2026 2025 2026 v 2025 2026 2025 2026 v 2025
Revenue
Services $ 386 $ 376 3 % $ 1,154 $ 1,096 5 %
Software 157 133 18 % 448 395 13 %
Hardware 188 235 (20) % 567 608 (7) %
Total Self-Service Banking revenue $ 731 $ 744 (2) % $ 2,169 $ 2,099 3 %
Total Adjusted EBITDA $ 209 $ 196 7 % $ 580 $ 536 8 %
Revenue for the three and nine months ended September 30, 2026 decreased 2% and increased 3%, respectively, compared to the prior year periods. Software and services revenues increased for the three and nine months ended September 30, 2026, primarily due to the continued shift toward recurring ATMaaS arrangements and subscription-based software offerings. The revenue increase was offset by a decline in hardware sales and installations.
Adjusted EBITDA for the three and nine months ended September 30, 2026 increased 7% and 8%, respectively, compared to the prior year periods due to favorable product mix, productivity initiatives and, for the nine months ended September 30, 2026, the impact of net tariff refunds. These factors were partially offset by increases in the costs of fuel and memory chips.
Network Revenue and Adjusted EBITDA
Three months ended September 30, Change Nine months ended September 30, Change
In millions 2026 2025 2026 v 2025 2026 2025 2026 v 2025
Revenue
Services $ 1 $ - - % $ 1 $ - - %
Software $ 10 $ 9 11 % $ 27 $ 23 17 %
Transactional 311 319 (3) % 911 923 (1) %
Total Network revenue $ 322 $ 328 (2) % $ 939 $ 946 (1) %
Total Adjusted EBITDA $ 91 $ 93 (2) % $ 281 $ 265 6 %
Revenue decreased 2% and 1% for the three and nine months ended September 30, 2026 compared to the prior year periods due to lower demand for crypto transactions.
Adjusted EBITDA decreased 2% for the three months ended September 30, 2026 compared to prior year period due to the overall decrease in revenue. Adjusted EBITDA increased 6% for the nine months ended September 30, 2026 compared to the prior year period due to positive settlement processing and lower vault cash costs in the first half of the year.
T&T Revenue and Adjusted EBITDA
Three months ended September 30, Change Nine months ended September 30, Change
In millions 2026 2025 2026 v 2025 2026 2025 2026 v 2025
Revenue
Services $ 38 $ 39 (3) % $ 115 $ 119 (3) %
Software - 1 (100) % 2 2 - %
Hardware 3 - - % 5 3 67 %
Total T&T revenue $ 41 $ 40 2 % $ 122 $ 124 (2) %
Total Adjusted EBITDA $ 10 $ 8 25 % $ 24 $ 25 (4) %
Revenue for the three months ended September 30, 2026 was flat year over year, while for the nine months ended September 30, 2026 revenue decreased 2% due to a decline in customer projects.
Adjusted EBITDA for the three months ended September 30, 2026 increased 25% compared to the prior year period, primarily due to a reduction in labor-related costs. Adjusted EBITDA for the nine months ended September 30, 2026 decreased 4% due to the decline in revenue.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Our primary liquidity needs in the ordinary course of business are to: (i) fund normal operating expenses; (ii) meet the interest and principal requirements of our outstanding indebtedness, including finance leases; (iii) fund capital expenditures and operating lease payments; (iv) fund indemnification payments related to legal and environmental matters; (v) make expected pension, postretirement and postemployment plan contributions; and (vi) fund transformation and restructuring initiatives. Our principal sources of cash are generated from operations, borrowings under our revolving credit facility and issuances of debt. We continually evaluate our liquidity requirements based on our operating needs, growth initiatives and capital resources.
Summarized cash flow information for the nine months ended September 30 is as follows:
Nine months ended September 30,
In millions 2026 2025
Net cash provided by operating activities $ 219 $ 125
Net cash (used in) investing activities $ (102) $ (88)
Net cash (used in) financing activities $ (267) $ (102)
Net cash provided by operating activities for the nine months ended September 30, 2026 increased $94 million relative to the prior year period, driven by higher net income.
Net cash used in investing activities increased $14 million for the nine months ended September 30, 2026 relative to the prior year period, primarily due an increase in capital expenditures.
Net cash used in financing activities for the nine months ended September 30, 2026 increased $165 million year over year, driven by payments on our revolving credit facility of $125 million, cash paid for share repurchases of $16 million and an increase in principal payments on our finance leases offset by a decrease of $7 million in proceeds from employee stock options exercises.
Long Term Borrowings As of September 30, 2026, we had $1,350 million of outstanding 9.500% senior secured notes due in 2029 and $1,224 million outstanding under our term loan facilities. We had no outstanding balance under our revolving credit facility and $29 million of letters of credit issued.
Employee Benefit Plans In 2026, we expect to make contributions of $4 million to our international pension plans, $44 million to our U.S. pension plan and $17 million to our postemployment plans.
Cash and Cash Equivalents Held by Foreign Subsidiaries Cash and cash equivalents held by our foreign subsidiaries at September 30, 2026 and December 31, 2025 was $245 million and $299 million, respectively. Under current tax laws and
regulations, if cash, cash equivalents and short-term investments held outside the U.S. are distributed to the U.S. in the form of dividends or otherwise, we may be subject to additional U.S. income taxes and foreign withholding taxes, which could be significant.
Share Repurchase Program During the nine months ended September 30, 2026, we repurchased approximately 0.4 million shares under our stock repurchase program for an aggregate purchase price of $15 million, including commissions and fees. The repurchases were funded primarily through cash generated from operations and available liquidity. In connection with the Mergers, we have suspended our share repurchase program.
Liquidity As of September 30, 2026, our cash and cash equivalents totaled $311 million, our debt totaled $2,575 million and our borrowing capacity under our Revolving Credit Facility was $571 million.
Our ability to generate positive cash flows from operations is dependent on general economic conditions and the competitive environment in our industry and is subject to the business and other risk factors described in Item 1A of Part I of our 2025 Annual Report on Form 10-K and Item 1A of Part II of our Quarterly Report on Form 10-Q filed on May 7, 2026. If we are unable to generate sufficient cash from operations, or otherwise comply with the terms of our credit facilities, we may be required to seek additional financing alternatives. However, there can be no assurance that we will be able to obtain additional debt or equity financing on acceptable terms in the future.
We believe that our cash balances and funds provided by operating activities, along with our borrowing capacity under the senior secured credit facility and access to capital markets, taken as a whole, provide (i) adequate liquidity to meet all of our current and long-term (i.e., beyond September 30, 2027) material cash requirements when due, including third-party debt, (ii) adequate liquidity to fund capital expenditures and (iii) flexibility to pursue investment opportunities that may arise. We expect to utilize our cash flows to continue to invest in our business, people and the communities we operate in, as well as to repay our indebtedness over time.
Material Cash Requirements from Contractual and Other Obligations
There have been no material changes to our contractual commitments and other commercial obligations described in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.
Critical Accounting Policies and Estimates
Our most critical accounting estimates pertain to revenue recognition, inventory valuation, goodwill, pension, postretirement and postemployment benefits, and income taxes. These are described in Part II, Item 7 of our 2025 Annual Report on Form 10-K for the year ended December 31, 2025.
Recently Issued Accounting Pronouncements
See Note 1, "Basis of Presentation and Summary of Significant Accounting Policies", to the Condensed Consolidated Financial Statements for a discussion of recently issued accounting pronouncements.
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