Diebold Nixdorf (NYSE:DBD) held its first-quarter earnings conference call on Thursday. Below is the complete transcript from the call.
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Access the full call at https://events.q4inc.com/attendee/130415367
Summary
Diebold Nixdorf reported strong financial performance for Q1 2026 with a 6% increase in revenue to $888 million and a 14% rise in adjusted EBITDA to $99 million.
The company saw significant growth in its retail segment, especially in North America with a 70% increase and strategic wins in electronic point of sale and self-checkout deployments.
Free cash flow more than tripled year over year to $21 million, marking the sixth consecutive quarter of positive cash flow, with expectations to maintain this trend.
Strategic initiatives in banking focused on expanding ATM and branch automation solutions, with notable wins in teller cash recyclers and branch network upgrades.
Management highlighted ongoing operational improvements, including a lean approach to cost reduction and enhancements in service operations, contributing to margin expansion.
Future guidance remains positive with projected revenue between $3.86 billion and $3.94 billion for 2026, and continued commitment to shareholder returns through a $200 million share repurchase program.
Full Transcript
OPERATOR
Hello, good day and welcome to Diebold Nixdorf’s first quarter 2026 earnings call. My name is Carli and I will be coordinating today’s call and our speaker’s remarks. There will be a question and answer session. In order to ask a question, please press STAR followed by the number one on your telephone keypad. I’d now like to turn the call over to our host, Maynard, Vice President of Investor Relations. Maynard, please go ahead.
Maynard (Vice President of Investor Relations)
Hello and welcome to our first quarter 2026 earnings call. To accompany our prepared remarks, we posted our slide presentation to the Investor Relations section of our website. Before we start, I’ll 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 three, reconciliations between GAAP and non GAAP financial measures can be found in the supplemental schedules of the presentation. With that, I’ll turn the call over to Octavio who will begin on slide four. Thank you, Maynard.
Octavio
Good morning everyone and thank you for joining us. The first quarter was a strong start to the year and another quarter of delivering on our commitments. Continuing the operating momentum we have built. We grew revenue 6% year over year to 888 million and adjusted. EBITDA increased 14% to 99 million. At the same time, backlog grew sequentially to approximately 790 million, reinforcing the underlying demand we’re seeing across both banking and retail. In banking we continue to build on the strength of our core ATM franchise while expanding our role inside the branch. We are seeing good momentum in Teller, cash recyclers and broader branch automation which are increasing our relevance with customers and expanding our opportunity set. In retail, we’re seeing growth accelerate as we expected with revenue up double digits. In North America we’re gaining critical mass with a large and growing pipeline of deals and had important wins in electronic point of sale and in the fuel and convenience space and with a regional grocer and in self checkout we delivered initial deployments with a large pharmacy chain. In Europe, we had a large number of electronic point of sale wins that drove growth. Free cash flow continues to be a clear point of strength. We generated 21 million in Q1 more than tripling year over year. This marks our sixth consecutive quarter of positive free cash flow and and we expect to remain consistently positive each quarter going forward. We maintained our fortress balance sheet, ending the first quarter with a net debt leverage ratio of 1.2 times while remaining fully committed to returning the majority of our free cash flow generation to shareholders through our $200 million share repurchase program. We had a strong quarter, we did what we said we would do and importantly, this performance reflects the continued compounding of the strategic and operational improvements we have implemented. Let’s now turn to Slide 5 to review our banking strategy. In banking, we continue to see supportive secular tailwinds. Financial institutions are investing in their branch networks to improve efficiency and enhance the customer experience, while at the same time referring to remaining under pressure to lower the cost to serve. Importantly, in the US we’re seeing a shift from prior years with leading financial institutions actively expanding their branch footprints. That is creating a clear need for solutions that both improve the customer experience and structurally reduce the operating cost. Our strategy is built for that environment. We go beyond the ATM to help banks automate and run the entire branch ecosystem, combining hardware, software and services to improve customer experience, employee efficiency and overall branch economics. The objective is straightforward take costs out while improving service levels. Our integrated ecosystem optimizes how cash moves through the branch, reducing the need for cash in transit activity and the expense that comes with it. Because the best cost is no cost, this is a key differentiator in how we approach the market. We use technology to eliminate costs and improve the customer experience, not just to manage or reallocate it. We’re seeing that the strategy translates into results across three areas. First, in our core self service business, recycling ATMs continue to gain momentum across customer segments and geographies. In the US we won a full network upgrade with a major credit union based in the Southeast with more than 1 million members, deploying over 200 EM Series cash recyclers across their footprint. This is a strong proof point that recyclers are gaining traction across a broad range of institutions. Second, inside the branch, we’re expanding our footprint with telecast recyclers and branch automation solutions. During the quarter we secured a significant competitive displacement with one of the largest financial institutions in the US winning 100% of their teller cash recycler installed there. In addition, we were selected by Forex as the single trusted partner to manage and optimize their ATM network end to end, reinforcing our ability to deliver both operational efficiency and service performance at scale. At the same time, we’ve grown our pipeline and backlog in India for our fit for purpose devices and we have plans to expand this product family into additional markets across Asia. We also plan to extend our teller cash recycler footprint into international markets, further broadening our addressable opportunity. Third, we are increasingly orchestrating how transactions are processed and routed across multiple customer touchpoints. During the quarter, we won a major engagement with a leading US Financial institution to modernize transaction processing across thousands of branches. Our platform supports transactions not only at the atm, but also at the teller and across digital channels, enabling banks to manage and optimize transaction flow across both physical and digital environments. And importantly, these are not standalone wins. They are part of a broader strategy to increase our integration and wallet share within the branch and transaction ecosystem. When customers deploy across ATMs, seller cash recyclers and software, it creates a natural path to broader branch automation, spinning our relationships and expanding our role over time. Stepping back, we’re executing well. We’re strengthening our core, expanding inside the branch and using technology to structurally improve cost and performance for our customers while also extending our reach into new geographies. Now moving to slide 6 turning to retail, we delivered a very strong Q1 with revenue growth north of 25% year over year and we continue to see strong momentum building across the business as we move through the year. In North America, the traction we’re building continues to strengthen. About a year ago we identified our top 40 target accounts and today we have active projects with the vast majority of them. Our pipeline has grown approximately threefold over that period and that momentum is converting into wins. During the quarter we secured a major deployment with the top 10 fuel and convenience retailer for thousands of point of sale units. In addition, we won an initial self checkout deployment with a leading pharmacy chain and scored an electronic point of sale win with a regional grocer in the U.S. both of those opportunities create pathways for much larger rollouts over time. We’re encouraged by the quality of the opportunities in front of us and increasingly confident in our ability to convert that pipeline into meaningful growth. As the year progressed in Europe, we continue to see strong execution with solid point of sale performance and wins across multiple markets. Now turning to Smart Vision AI, we are positioning Smart Vision as a platform that supports multiple use cases across the store. It delivers strong ROI by reducing, shrink, improving operational efficiency and enhancing the checkout experience. What started at the self checkout has now expanded across additional parts of the store from the aisle to demand checkout, demonstrating the flexibility and scalability of the platform, we are already seeing early adoption. One of the largest retailers globally has deployed Smart Vision in several stores to address shrink across both the aisle and the point of sale. And strategically, this platform is opening doors. It allows us to engage earlier with customers, often starting with a targeted use case and then expanding into broader discussions around self checkout, point of sale and software. That creates a natural path to larger, more strategic programs over time. This also aligns well with where the market is going. Retailers, particularly in North America, are increasingly prioritizing open modular solutions. That’s the model we’ve already proven in Europe. We’re pleased with the strong momentum we’re seeing across retail. Our focused account strategy is working, our pipeline is building and our platform approach is positioning us to continue expanding share turning to slide 7 in services, we’re making solid progress as we previously indicated. Margins are modestly down year over year as we continue to invest in the business to strengthen execution and service quality. However, these investments are progressing as planned and positioning us for sequential margin expansion. As we move through the year, these investments are delivering results. We are now achieving some of the highest service levels in our history in North America with meaningful improvements in SLA and overall availability. That level of performance is critical as it drives customer satisfaction, supports product growth and increases service attach rate over time. At the same time, as we expand our installed base across banking and retail, we’re increasing service density which drives incremental, highly recurring revenue without the proportional increase in cost. We’re also entering the next phase of our efficiency journey with the rollout of our field technician software. We now have much more granular visibility into operation, allowing us to optimize dispatch routing and parts management. For example, in Chicago, a cross functional team used these tools to redesign service zones, improving first time fixed rates, reducing drive time and lowering dispatcher requirements. We’re now scaling those learnings across additional markets so overall we’re seeing the right progression, stronger execution, a growing install base and increasing opportunities to drive efficiency and margin expansion. Now let’s turn to slide 8. Our approach to continuous improvement is now a core part of how we operate the business and has become a meaningful competitive advantage in how we execute. This is not just a set of initiatives, it is an operating rhythm and cultural shift across the organization. Were focused on identifying incremental improvements, scaling them across the enterprise and compounding those gains over time to drive margin expansion and reduce complexity. We are seeing that translate into tangible results. During the quarter we held Kaizen events across Our Asia Pacific Service and logistics operations focused on improving repair cycles, dispatch efficiency and billing capture. These efforts are generating both cost savings and incremental revenue and more importantly, they are repeatable and scalable across our network. In manufacturing, we’re also driving meaningful improvements. In North Kansas we reduced our sub assembly footprint by about 40%, freeing up space for additional future production capacity. Similarly, in Brazil we redesigned our manufacturing process, reducing footprint by approximately 50% while increasing capacity and reinforcing our local for local strategy. These are good examples on how we’re simplifying the business, improving productivity and structurally strengthening margins. To put that in context, remember when I first took over as CEO and prior to launching lean product banking margins were in the low teens. This quarter they were above 30%. Lean has been a key driver of the margin profile you’re seeing today. During the quarter we received multiple global banking and finance awards recognizing innovation and the strength of our end to end banking solutions and we were added to the S and P small cap 600 index earlier this month. That inclusion reflects the consistency of our execution, the discipline we’ve built into the …
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