DBD - NYSE

Hello. Good day, and welcome to Diebold Nixdorf, Incorporated’s Fourth Quarter and Full Year 2025 Earnings Call. My name is Ellie, and I will be coordinating today's call. Following our speakers’ remarks, there will be a question-and-answer session. In order to ask a question, please press star followed by one on your telephone keypad. Thank you. I would now like to turn the call over to our host, Maynard Um, Vice President of Investor Relations. Maynard, please go ahead.

Hello, and welcome to our fourth quarter and full year 2025 earnings call. To accompany our prepared remarks, we posted our slide presentation to the Investor Relations section of our website. Before we start, I will remind all participants that you will hear forward-looking statements during this call. These statements reflect the expectations and beliefs of our management team at the time of the call, but they are subject to risks that could cause actual results to differ materially from these statements. You can find additional information on these factors in the company’s periodic and annual filings with the SEC. Participants should be mindful that subsequent events may render this information to be out of date. We will also discuss certain non-GAAP financial measures on today’s call. As noted on Slide 3, a reconciliation between GAAP and non-GAAP financial can be found in the supplemental schedules of the presentation. With that, I will turn the call over to Octavio, who will begin on Slide 4. Good morning, and thank you for joining us. 2025 marked the defining year for Diebold Nixdorf, Incorporated. We strengthened our foundation, delivered on our commitments, and most importantly, demonstrated that we are now operating a sustainable free cash flow generator with a significantly more stable and predictable financial profile. We grew revenue, expanded adjusted EBITDA to $485,000,000, and more than doubled free cash flow to a record $239,000,000. These results reflect the disciplined execution, the strength of our lean operating model, and a portfolio increasingly aligned to long-term automation trends in banking and retail. Today, the conversation will center on the durability of our operating model, our ability to generate strong and consistent cash flow, and the opportunities we have to deploy that capital in ways that drive long-term shareholder value. What matters most to us and what our results clearly demonstrate is that we are delivering on what we said we would do, quarter after quarter. This consistency is increasing predictability in our model and strengthening confidence in our long-term outlook. Our core businesses remain strong, and our growth initiatives are gaining traction. In banking, we are expanding our role beyond the ATM to orchestrate the broader branch and transaction ecosystem through expanded service offerings, software-enabled automation, cash management solutions, and innovative hardware. Helping financial institutions operate more efficiently while improving the consumer experience. In retail, momentum continues to build, with three consecutive quarters of revenue growth as we expand in North America, win new logos, and scale AI-driven solutions that help customers reduce shrink, increase throughput at checkout, and operate more intelligently. We also delivered a record fifth consecutive quarter of positive free cash flow. Importantly, we also received two credit rating upgrades this year, independent validation that our operating model and financial model continues to improve. With net leverage around one times, and free cash flow growing, returning capital to shareholders will remain a core part of our value creation framework. Today, we are a stronger and more predictable company, with multiple ways to win and create value. We are entering the year with momentum, a fortress balance sheet, and a clear focus on delivering another year of profitable growth and cash generation. With that, let me walk you through our key takeaways for the year. Please move to Slide 5. Slide 5 reflects the consistent execution and financial progress we delivered throughout 2025, reinforcing the strength of our operating model. We delivered strong year-over-year improvement across our key financial metrics, meeting and in several areas, exceeding the commitments we established at the beginning of the year. Order entry grew 17% year over year, supported by healthy demand across both banking and retail, and demonstrating the continued relevance of our solutions as customers prioritize automation, efficiency, and innovation. Revenue performance reflects disciplined execution across the portfolio. In banking, the core ATM business remains stable, while our strategic growth initiatives gained traction. In retail, the core businesses in Europe recovered and strengthened as the year progressed, with accelerating momentum in the U.S. behind our SmartVision AI solution. We recently completed a pilot with one of the world’s largest retailers in the U.S., and are now transitioning into multiple live store implementations, an important step towards scaling the opportunities. Adjusted EBITDA grew to $485,000,000, reaching the higher end of our guidance, with margins expanding 60 basis points. This improvement reflects the structural benefits of our lean operating model, continued cost discipline, and operating leverage as we simplify the business and scale more efficiently. Free cash flow was a standout in 2025. We generated a record $239,000,000, more than doubling prior year’s cash flow and representing approximately 49% conversion, well above our original outlook and approaching our 2026 target of greater than 50%. We expect this momentum to continue. Stronger working capital, lower interest expense, and higher profitability demonstrate the growing cash generating capability of our models, and enhance the financial flexibility to invest in growth while returning capital to shareholders. Adjusted earnings per share reached $5.59 for fiscal year 2025. We more than doubled EPS year over year even excluding certain noncash, nonoperational favorable tax benefits. One year into our three-year plan, the financial algorithm we outlined is taking hold, and we are executing as committed. That consistency is strengthening confidence in our outlook and reflects an operating model with multiple ways to win and create value. Slide 6 highlights the growth engines that are strengthening the durability of our revenue and expanding our long-term opportunity across banking, retail, and service. We are gaining traction in the areas that matter the most: automation, software and service recurring revenue, all of which support higher quality growth over time. In banking, our role continues to expand beyond the ATM as financial institutions modernize their branches and optimize cash and transaction ecosystem. By automating manual processes, reducing cash-in-transit visits, improving staffing efficiency, our solutions deliver measurable operational value for our customers while positioning us to capture a larger share of their technology spend. During the year, our branch automation solutions built momentum with large multiyear wins in Europe and a key new multimillion dollar win in North America, reinforcing the relevance of our strategy across major markets. We also expanded the DN Series portfolio with the introduction of the DN Series 300 and 350. Combined with our VCP 7 software that enables interoperability across devices, are helping customers increase availability, lower operating costs, and simplify branch operation. Fit for purpose continues to gain traction across both high capacity and our smaller energy efficient configuration. Notably, we received certification from one of the largest public banks in India, positioning us to compete in all public bank tenders and opening the door to one of the fastest growing ATM markets globally.

In retail,

we are encouraged by the momentum we are seeing, particularly in North America where we secured nine new logos, including a win with one of our top targeted grocery accounts. The strategy that established our leadership position in Europe centered around openness and modularity is now gaining traction in North America and significantly expanding our addressable market. Our SmartVision AI solution continues to differentiate our portfolio and generate strong customer interest. At the NRF show, we engaged with more than 800 customers, partners, prospects, reinforcing the growing relevance of AI-driven capabilities and smarter store operation, as retailers focus on shrink reduction, checkout throughput. In services, our focus remains on being the most trusted service provider in the industry. We continue to optimize our service and repair centers globally, improving turnaround times, driving greater consistency and quality, which led to higher uptime for our customers. This, coupled with the completed North America rollout of our enhanced field service technician software, resulted in our best SLA performance of the year. With this, we are strengthening customer loyalty, supporting product pull-through, increasing the lifetime value of our installed base, further enhancing the recurring nature of our revenue. In operations, teams have fully embraced Lean, bringing in new ideas to reshape legacy paradigms of our how and where work gets done. Our local-for-local sourcing and manufacturing strategies are strategic advantages for our company and have allowed us to navigate market challenges like tariffs in 2025 and provide a strong foundation as we enter the new year. By leveraging common platforms and components across our ATM and branch automation portfolio, we are driving greater efficiency, scale, and simplified operations for our customers. Across the company, working capital improvements drove great results. Days inventory outstanding and days sales outstanding again improved year over year. Tom will share details on the significant improvements in a moment. While we remain disciplined in our expectations, the traction we are seeing across the growth engines increases our confidence in the power of our model as we move into 2026. All these advancements position the company to deliver more predictable performance while expanding our long-term growth runway. Now let us turn to Slide 7. Slide 7 highlights how Lean is becoming a structural advantage for us as we systematically lower our cost base, improve working capital, and continue to expand margins. What began as a manufacturing initiative has now scaled across supply chain, services, and business operation, embedding continuous improvement into how we operate and creating a more robust and scalable enterprise. Across global manufacturing, the implementation of our dynamic Kanban system spanning more than 400 high-use items has driven an approximately 30% sustained reduction in inventory while eliminating expedite and improving part availability. These actions are releasing working capital, strengthening cash conversion, and enhancing operational predictability. In our shared business services organization, cross-functional teams from 11 countries standardized order processing and accelerating invoice cycles, reducing processing time by 17% and improving collection efficiency. Just as importantly, these improvements are repeatable and are now being scaled across additional geographies. This is how we approach Lean: identifying structural efficiencies, institutionalizing them, and then extending those benefits across the enterprise. Our progress has also been recognized externally including being named by Newsweek as one of America’s Most Responsible Companies, reflecting the strength of our supply chain, ethical standards, and community engagement. It proves that operational excellence and responsible business practices can advance together. As Lean continues to expand across the organization, we see meaningful opportunity to unlock further efficiencies, strengthen margins, and improve cash flow. Importantly, many of the financial improvements Tom will discuss next are being enabled by these structural efficiencies. Lean is not a onetime initiative. It is a core capability that is reshaping how we operate. With that, I will turn it over to Tom to walk through our financial results. Thank you, Octavio. 2025 was an exceptionally strong year of performance for us. We grew revenue, expanded margins, and more than doubled free cash flow and adjusted EPS. These results reinforce that we have multiple ways to win and demonstrate our strong operational execution across the enterprise. Q4 revenue was $1,100,000,000, up 12% year over year and 17% sequentially, driven by growth in both product and service. In banking, high-capacity fit-for-purpose ATMs and strong performance in Europe drove results. In retail, strong point-of-sale and self-checkout performance globally drove revenue increases. Total gross margin expanded to 27.1%, up 320 basis points year over year and 90 basis points sequentially, reflecting favorable product and geographic mix. Product margins were 28.2%, up 80 basis points sequentially. Service margins increased to 26.2%, up 80 basis points sequentially. For the full year 2025, total company gross margin was 26.4%, up 110 basis points year over year. Margin expansion was driven by products, where gross margin increased to 27.4%, up 300 basis points year over year. Strength in product margins allowed us to accelerate investments in our service infrastructure, consolidating our repair and service centers, the deployment of our field service software, and additional field technicians. As a result of these investments, service margins finished the year at 25.6%. We delivered strong Q4 operating profit of $129,000,000, up 81% year over year and 48% sequentially, driven by higher revenues and continued margin benefits from our mix and our lean operating model. Operating margin expanded 440 basis points year over year to 11.6% in the quarter. Operating expense was relatively flat year over year on higher revenues. We continue executing against our plans to reduce SG&A, and we have made solid progress on the over 200 action items that are part of our cost reduction program. For the full year 2025, operating expense was up 3.7% driven by higher labor and benefit expenses partially offset by our savings initiatives. Exiting 2026, we expect annualized run rate operating expense savings of up to $50,000,000, of which we expect to realize up to half of these savings in 2026, resulting in a reduction of approximately 1% to 2% of operating expense. Lean methodology and disciplined execution are driving our strong improvements in our results. Continuing on to Slide 9. We delivered record Q4 adjusted EBITDA, record full year adjusted EPS, and generated record full year free cash flow. Q4 adjusted EBITDA reached $164,000,000, up 46% year over year with 350 basis points of margin expansion. Sequentially, we delivered 35% growth and drove an additional 200 basis points of margin improvement, bringing EBITDA margins to 14.9%. Adjusted EPS for Q4 was $3.02 and for the full year 2025 was $5.59. This includes $1.08 of noncash nonoperational favorable items, including a tax valuation allowance release in the amount of $0.57 in Q4, and as we previously disclosed, a benefit of $0.51 recognized in Q3 due to lowering of the statutory rate in Germany. Excluding these items, 2025 EPS was $4.51. In 2025, we returned $128,000,000 to shareholders through repurchases representing 2,300,000 shares, or approximately 6% of the company, at an average share price of $55.47, representing a discount of more than 25% versus where our shares trade. Free cash flow in Q4 was $196,000,000, up 5% year over year, or approximately $10,000,000. For the full year 2025, we generated $239,000,000 of free cash flow, more than doubling 2024’s result of $109,000,000 and setting a new annual company record. Strong Q4 performance year over year was driven by lower interest expense following our late 2024 refinancing, continued progress in streamlining service contract collections, and additional working capital initiatives. Year over year, days inventory outstanding improved by nine days, and days sales outstanding improved by four days, and we continue to see further opportunities ahead in both. As I have shared with our teams internally, there is no finish line in our continuous improvement journey, only more opportunity. Moving to Slide 10. Banking delivered strong product and service revenue growth, with revenue up 11% year over year in Q4 and up 1.2% for the full year. Banking product revenue in Q4 grew 20% year over year, driven by strong ATM recycler adoption across our major markets. Banking services revenue grew 5% year over year in Q4, primarily driven by higher revenue contributions from Europe. Banking gross margin expanded 410 basis points year over year in Q4 and 160 basis points for the full year driven by strong product margins, allowing us to strategically accelerate the investment in services. As a result of these investments, service margins ended the year at around 25%. We are encouraged by customer feedback on these service investments, including engagements with large financial institutions, record net promoter scores, and our strongest SLA performance of the year. Together, these indicators reinforce our confidence in improving banking service margins this year and over the long term. Turning to Slide 11. We had a strong end to the year in retail, achieving our third consecutive quarter of sequential revenue growth. Q4 retail revenue increased 12% year over year to over $300,000,000, and retail revenue for the full year grew 2.1%. Retail product revenue grew 16% year over year in Q4, supported by strength across point of sale and self-checkout in major markets. For the full year, retail product revenue increased 5.4% driven by strong global point of sale unit growth and higher self-checkout shipments in North America. In retail service, revenue increased 8% year over year in Q4 driven by core service and higher installation work. For the full year, retail services revenue was comparable to prior year, due in part to certain large customers that experienced external cyber-related disruptions that reduced our ability to provide service to them. We have now resumed full service for those customers. Turning to profitability, strong demand and higher volumes drove overall retail gross margin expansion of 80 basis points year over year in Q4. For the full year, overall retail gross margins declined 20 basis points. This decrease is tied to the service disruptions I just mentioned. Looking ahead, retail is entering 2026 with strength. We are securing high-quality new business wins including multiple new logos in the U.S. grocery and QSR segments, in addition to growing our core European business. Overall, retail is positioned to continue growing revenue and gross profit dollars on a year-over-year basis. This will be driven by the acceleration of our growth initiatives in North America, continued new logo wins, sustained momentum in Europe, and the scaling of our differentiated AI-driven solutions. Turning to Slide 12. Our 2026 guidance reflects our increasing confidence in our operating model and the momentum we are carrying into the year. We are establishing our 2026 guidance for revenue, adjusted EBITDA, and free cash flow, all of which are higher than the original targets we shared at our 2025 Investor Day. For revenue, we are establishing a range of $3.86 to $3.94 billion. We expect the quarterly cadence for revenue to be consistent with 2025 based on each quarter’s share of the full year revenue. This outlook is supported by our $733,000,000 of product backlog and the significant reduction in product delivery lead times. Additionally, our January order entry is very strong, which gives us clear line of sight to our first half revenue. We expect total gross margin in 2026 to increase by another 25 to 50 basis points year over year.

As we ramp up hiring in the U.S., in anticipation of converting strong service pipeline and further improving our SLAs. From Q2 onward, we expect sequential year-over-year improvement as scale increases and these investments begin to deliver returns. For adjusted EBITDA, we project a range of $510,000,000 to $535,000,000, representing growth of approximately 8% at the midpoint. Turning to free cash flow. We forecast free cash flow in the range of $255,000,000 to $270,000,000, representing roughly 10% growth at the midpoint, supported by continued working capital improvements and disciplined capital allocation. Once again, we expect to generate positive free cash flow in every quarter of the year. Starting this year, we are introducing guidance for adjusted earnings per share. For 2026, expect adjusted EPS to be in the range of $5.25 to $5.75, assuming an effective tax rate in the range of 35% to 40%. At the midpoint, this guidance reflects approximately 22% year-over-year growth on a comparable basis when excluding certain noncash, nonoperational tax benefits in 2025 that we previously mentioned. I would also like to point out that our free cash flow per share is significantly higher than our EPS as a result of stronger cash generation than earnings alone suggest. Overall, our 2026 outlook reflects the strong foundation built in 2025, the durability of our operating model that we have put in place, and the strength we are carrying forward. Turning to Slide 13. We ended 2025 in an exceptionally strong financial position with more than $700,000,000 of liquidity, including $416,000,000 in cash and short-term investments and an undrawn $310,000,000 revolver, with a net debt leverage ratio at 1.1 times. Our balance sheet strength is a reflection of disciplined execution throughout the year. 2025 was also a standout year for capital returns. We completed our initial $100,000,000 share repurchase program in just over eight months and announced a new $200,000,000 authorization in the fourth quarter. Through year end, we repurchased $128,000,000 of our common shares, representing approximately 6% of the company’s total shares outstanding at an average share price that is 25% below where our shares are trading, which we believe is an excellent return on our investment. We are targeting the completion of the $200,000,000 program in a similar time frame. Our balance sheet strength and consistent free cash flow generation were recognized externally as well. In Q4, Moody’s upgraded our credit rating to B1 from B2, our second credit rating upgrade of 2025, underscoring the meaningful progress we have made. Looking ahead, our capital allocation strategy remains consistent and firmly aligned with shareholder value creation. Since the beginning of 2025, we have delivered substantial shareholder value through strong execution and consistent capital returns, with our stock appreciating more than 65%. Given our performance and outlook, we believe that repurchasing our shares at today’s valuation still represents one of the most compelling opportunities to continue to drive long-term shareholder value. We continue to believe that our stock is undervalued and our ability to generate free cash flow is underappreciated. In 2025, we returned over 50% of our free cash flow to shareholders, despite having only begun our repurchase program in March 2025. Going forward, we expect to increase our returns to shareholders as a percent of free cash flow, supported by our balance sheet strength and our target of $800,000,000 of cumulative free cash flow from 2025 through 2027. We are committed to prioritizing returns to shareholders through share repurchases while also maintaining the flexibility to pursue small strategic tuck-in acquisitions that strengthen our long-term growth profile. With that, I will turn it back to Octavio for closing remarks. Thank you, Tom. As we look to 2026, what is increasingly clear is the continued strengthening of our operating and financial foundation. We have built a strong, strategically aligned portfolio that balances strong core businesses in banking and retail with scalable growth platforms, positioning us to deliver sustained performance and long-term value. We are a company with a high-quality business model, fueled by a culture of continuous improvement, delivering consistent performance, generating substantial free cash flow, and embedding structural efficiency across the enterprise. I want to recognize our employees, customers, and partners whose execution and trust made these results possible. The progress we are reporting today reflects the strength of our teams and the depth and support of our partnerships around the globe. We are entering 2026 with momentum and confidence in our ability to continue strengthening the business. And with that, operator, please open the call for questions. Thank you. We will now open the floor for question-and-answer session.

If you would like to ask a question, please press star followed by one on your telephone keypad. That is star followed by one on your telephone keypad. Our first question comes from the line of Matt J. Summerville of D.A. Davidson. Your line is now open.

Hi. Thanks. So maybe just start with the kind of the first half, second half cadence a little bit. But more importantly, maybe if you can dig into some of the pluses and minuses we need to be thinking about with respect to Q1 in particular and maybe kind of frame up, realize you might not want to give specific quarterly guidance, but kind of frame up how we should be thinking about the first quarter. Look, so we are starting the year with $730,000,000 in product backlog. Plus the month of January was a very strong order entry month for us as well. So we have really strong visibility into the first half revenues. We have guided our revenue cadence to be approximately 45% in the first half and 55% in the second half, very similar to 2025. So on a quarterly basis, we expect our revenues to flow very similar to 2025, with Q1 being approximately 22% of our total revenue for the year. For adjusted EBITDA, we guided to an approximate split of 40% first half and 61%, second half, which, again, is very similar to 2025. And in Q1 specifically, which I think addressed your question here, we expect adjusted EBITDA margins to be very comparable to 2025, albeit on higher revenue. And is that reflective of the incremental sort of step up in services investments? And is there any way you can maybe quantify the level of organic investment you made in the net service organization in 2025 and what is on tap for 2026? And then I have one more follow-up. Yeah. Sure. So as we talked about last quarter, our investments in service is really comprised of the field service software rollout in North America. That is primarily behind us right now, and now we are on to the rest of the world. So, you know, the cost of doing North America versus the rest will be slightly down. Then we are also in the process of hiring additional field technicians to continue improving our Net Promoter Scores and SLAs. And as we mentioned on a call, you know, we have seen traction in that space. So we are very hopeful that that will lead to new wins. And most of the consolidation of our spares and service facilities is behind us as well. You know? Having said that, however, in Q1, that investment will continue. So what you will see in service margins is a slight decrease into Q1 as we wrap up those investments. And then starting in Q2, we expect sequential year-over-year improvement, you know, as the scale increases and these improvements begin to deliver returns. So stepping back for service margins, where we ended the year and looking forward to next year, we are expecting to grow them up to 50 basis points. And from a product margin, you know, perspective as well, coming off a really good year being able to grow those, you know, 300 basis points, we expect to be able to maintain that. And look, obviously, we live by the lean culture, you know, and seeing another 25 basis points of improvement there would not be unexpected either. Thank you. And then maybe just another quick one. Can you contextualize the retail logo wins in the U.S. a bit? You know, was that POS driven, software driven, SCO driven? And, you know, how we should be thinking about, realizing this off a low base, but how we should be thinking about kind of the go-forward CAGR for U.S. retail? And when does that become a more consequential piece of the portfolio for you? Yeah. Hi, Matt. So we had, you know, nine new logos. I would split them between, you know, two very important ones in the grocery space, you know, a very important one that I would say in the pharmacy space, and then multiple wins in the QSR space where our products continue to really define the standard on what, you know, quick-serve restaurants are looking for. So I would say that we have a very solid pipeline, you know, some of these wins, if you recall, at the beginning of the year, we said we were targeting 40 very specific accounts. On the grocery side, you know, one our largest win came from one of those targeted accounts, and it came, you know, and we are now rolling out our AI software across still a limited number of their stores. But this is just to prove the case now in the real world. As I have explained before, these rollouts start with a POC, then some DART stores, and then rolling it out into real stores. So we are at that stage. So we are excited about that. So AI has played a very important role. I think what has been surprising in the U.S. is that many accounts outside our 40 targeted accounts have come to us. So some of the wins that we had this year, also in the grocery space, came out of point of sale, which, again, proves that the idea of modularity and having a better product does help. And, again, during the NRF show, we had over 800 client meetings and prospect meetings. So we feel very good about the pipeline. We see our retail business, again, you know, remember, a $1,000,000,000 business, the majority of it is still in Europe. But we see the U.S. business growing double digits, you know, for the foreseeable future, and we are very excited about that. I think importantly, Matt, the retail business in Europe also significantly, as you can see from the numbers from Q1 to Q2 to Q3 to Q4. And, again, that is important to us as that trend we will continue with important wins in self checkout, yeah, and the AI-driven platforms.

Thanks, Octavio. Next question comes from the line of Justin Ian Ages of CJS Securities. Your line is now open.

Hi. Morning all. Hi, Justin. Nice improvement, obviously, in free cash flow. And you mentioned, you know, days sales, days inventory, you know, nine days and four days of improvement. Just wondering if you could give us a little insight into how much improvement do you see left in those. Eventually, you know, you are going to, there is going to be a lower limit. So I just wanted to try to triangulate that. Yeah. So, look, this year, DSO, as you mentioned, down four days. You know, DSO for us ended the year at 50. And, you know, if you keep in mind that each day of DSO represents about, you know, $10 or so million-ish of free cash flow, we think that there is an opportunity for additional days there. You know, we are thinking four to five is kind of what our thought process is as we enter next year. You know? And being able to deliver DSO like we did in Q4 was a result of a lot of hard work. You know, we really ran multiple Kaizens throughout the year to improve our service collections, the down payments relating to our service collections in Q4. So that really helped and manifested itself, you know, in our results. So very proud of the team for being able to execute that kind of delivery. And then DIO, right, the way we calculate it is based on a blend of our product and services. So down, you know, seven seven days year over year thereabouts. You know, each day represents about seven. And we think that there is multiple opportunities and days there as we continue to roll Lean out. And our lead times have decreased pretty significantly as well, so we are turning faster. Think about where we were just, you know, a year or two ago at 120 plus. Now we are more somewhere in the range of 70 to 80 days pretty consistently. And really, really benefiting from our local-to-local manufacturing strategy and helping deploy that. So you think about Germany and Paderborn and Canton in the U.S., and Manaus in Brazil, and then our partner in India. You know, that strategy has really worked well in terms of delivering and unlocking value for us. Very helpful. Thank you. And then switching to capital allocation. I know you mentioned it in your notes. Just wondering, you know, as we try to balance share repurchases and tuck-ins and then the $950,000,000 note. Do you think you will look at that note in the fourth quarter if it makes sense to take that out? And when you mentioned tuck-ins, is there a list of companies that you, you know, have your eye on that you are following that you are not ready to make an investment there yet because you see more value in repurchasing shares? Just trying to, you know, weigh the different capital allocation priorities you have. Yeah. Look. We are remaining very consistent to the capital framework that we rolled out a little bit over a year ago. Share repurchases, you know, like I said on the call just now, we still view that as the best return on investment at where our stock is. We believe it is undervalued, and, you know, the ability to generate free cash flow at this company, we feel still remains underappreciated. So the stock buyback will be the priority for us. This year, we returned, I think, just about 53% of our free cash flow to shareholders, and keep in mind, we did not really begin our share repurchase program until March. And we were able to wrap that up pretty quickly. And then as you know, we doubled the size of it. So we are going to continue on a similar, albeit maybe slightly accelerated, time frame with the $200,000,000 program, but maintaining that flexibility to be able to do some tuck-ins. And, yes, we have developed a pipeline across multiple categories. But right now, I would say we are primarily focused on some service opportunities, as we see the ability to continue to consolidate in that space. And that obviously is one of our core strengths. And, you know, we define M&A acquisition as something that has got to be almost immediately accretive and a relatively low multiple for us. And we think that there is ample opportunities there to strengthen our growth portfolio. Very helpful. Thank you for taking the question.

Yeah. Thank you, Justin. And if you would like to ask a question, please press star followed by one on your telephone keypad. That is star followed by one on your telephone keypad. Your next question comes from the line of Matt J. Summerville of D.A. Davidson. Your line is now open. Yeah.

Just to follow up, Octavio, I typically ask you to do this. Can you maybe do a regional kind of walk around the world in terms of what you are seeing from a demand standpoint on the ATM side of the business? And then if you can speak in maybe a little bit more detail, it was called out several times, about the strength in particular you saw in order activity thus far in 2026?

Sure, Matt. So I will talk a little bit about ATM. So North America continues to, you know, to be very strong for us. So very positive momentum. Our initial branch automation wins are very significant. So this idea of a closed-end cash ecosystem, the ATM, the teller cash recycler, the automation software controlling both devices, really, really gaining traction and interest from customers. So we see that as a very, very positive catalyst. You know, add to that that every bank has now firmly decided that recycling is the way to go. So we continue to see that traction and those investments that we have made in continuing to improve our recycling capabilities will continue to pay dividends in the future. So North America, we feel very, very, very good about it. In the prior comment around, you know, the tuck-in acquisitions, think about also in North America as we expand our service footprint into the branch. That is an area that we are really looking into it. How do we create a stronger service experience, not just for ATMs, but for the branch. That is our main focus in North America and Europe. How do we move beyond the ATM into the branch ecosystem? So this resonates very well with customers. I would say staying in the Americas, Latin America, you know, which traditionally had been one of the highest growth markets in the world, had a, I would say, a slower year in 2025, as you know, there is a little bit of lumpiness. That is where some big projects that

get delayed or move forward. But, you know, after Q1, we see very very positive momentum in Latin America, and that will be also a catalyst for growth next

year.

Europe, I would say, throughout the year, very positive momentum. We had very strong wins in Germany, particularly in the savings and credit union space, that have now re, you know, are still in the process of refreshing technology. And as you know, those thousands of small customers, yet not one of them is very big, but excited about that. Ten, five ATMs in each, but now fully in refresh cycle. So we are very. Same in France, big market where a lot of consolidation is happening in ATM networks, but we have been fortunate enough to capture the majority of those wins. So we are very excited about Europe. We have a strong team there that is looking for, you know, how do we accelerate and how do they keep moving into the branch ecosystem. And lastly, I would say Asia Pacific, Middle East, you know, probably one of the things I am the most excited right now. You know? Great performance from the team last year. So very, very proud of them. Significant wins across the Middle East, significant wins in different markets in Asia. I think the fit-for-purpose strategy where we have the high-capacity recyclers that are really proved to be a great year for them and, you know, some key markets for us, continues to gain traction. And in India, very importantly, we are now certified to participate in all government and all public government bids. As you know, these are thousands of devices in each bid, which we were not really allowed to participate as we needed to have a certain amount of fit-for-purpose devices in the market, which we have since achieved. I am very excited about ATMs for next year. I think we see steady demand. And more importantly, in our core markets, the U.S. and Europe, we do see the strategy of expanding beyond the ATM and into the branch really proving to be a key differentiator for us.

You. That is helpful. And then, Tom, just so I kind of have it straight, when do you anticipate completing the remaining $172,000,000 of share repo?

I would say in a similar time frame when we completed the $100,000,000, and then we would expect to be able to go back to the Board, get another program authorized and, you know, potentially larger as well.

Understood. Thank you.

Sure.

We will take our final from the line of Antoine Legault of Wedbush Securities. Your line is now open.

Good morning, and thank you for the questions. Up on the banking front, I mean, clearly, a higher mix of recyclers is having a meaningful impact on your banking margins. Could you give us a sense of kind of the opportunity remaining ahead in terms of continuing to grow that mix of recyclers? Like, how underpenetrated are those products or those machines, you know, especially as customers refresh and upgrade their ATM? And then I have a follow-up. Yeah. So, Anton, I would encourage you

to think of this as a continuous cycle. So we have been shipping, you know, roughly 60 to 70,000 machines every year for the past couple years. We do not expect that to materially change anytime soon. I think that the penetration is still, you know, every year, we get a little bit better. So, you know, I think that that will continue to improve. Keep in mind, though, that we are also now ramping up our fit for purpose in other parts in Asia, which tend to have a little bit lower margin profile. But, you know, as Tom said, we expect that even with that small change in margins in Asia, that we will be more than able to offset that and keep the margins at the high level that we have them right now. And to Lean, continue looking for those opportunities to continue expanding margins

you know, every year.

Thank you. And

and then my last one is, assuming we look at your EPS guidance range for 2026, can you provide some puts and takes as to what might drive your results towards

either the upper or lower end of that range? You know, overall, what are some of the factors

or parameters that went into your guidance this year? And how should we think about

Yeah. So if you think about, you know, when we talk to where we ended the year at about $5.59, and we had those two noncash, nonoperational items, right? So if you were to back those out, you get to a number that is probably closer to $4.51. I think one of the drivers next year will be our continuation of our share buyback program. And then obviously sort of the post-tax operating profit will drive that as well. So it is really a combination of both of those items. Right? And when you look at the EBITDA guide, you know, being up from the midpoint 8%, you know, we are continuing to leverage our operating model and grow EBITDA twice the rate of revenues. And free cash flow

very successful

fourth quarter and overall year, and we expect to be able to sort of continue that same trend into next year.

At this time, we do not have further questions. I would now like to turn the call back to Maynard for his closing remark.

Thanks, everyone, for joining today’s call and your interest in Diebold Nixdorf, Incorporated. If you have any follow-up questions post the call, please feel free to reach out to the Investor Relations team. Thanks again, and have a great day.