NCR Voyix delivered a clean headline beat in the third quarter, but the more important story is a widening gap between future bookings and current revenue. Earnings Whispers puts adjusted earnings at $0.26 per share, 23.8% above the $0.21 consensus, on revenue of $539.0 million, 0.9% above expectations. On Earnings Whispers' normalized basis, earnings still fell 18.8% from a year ago and revenue fell 21.2%. The company's own non-GAAP EPS was $0.32, up from $0.30. That figure uses a different share count tied to as-if conversion of its preferred stock, so it does not line up with the normalized comparison. Either way, this was a quarter in which the backlog grew sharply while the revenue line weakened. That is the central tension.
The quality of the profit improvement deserves scrutiny. The reported revenue decline mostly reflects the move of hardware to an outsourced manufacturing model, which also explains much of the jump in gross margin to 32.8% from 24.2% and the rise in adjusted EBITDA margin to 22.3% from 18.2%. On GAAP, NCR Voyix swung to $14 million of continuing-operations income, or $0.08 per share, from an $18 million loss. That swing was helped by much lower restructuring charges ($19 million versus $47 million) and the absence of last year's $22 million litigation charge. Non-GAAP net income also benefited from $8 million of discrete tax benefits. Dollar adjusted EBITDA actually slipped 2% to $120 million, breaking a streak of 5% gains in the first two quarters.
The call confirmed that the underlying growth engine is stalling, at least for now. Organic revenue excluding hardware fell 3%, compared with growth of 1% in the second quarter and roughly flat results in the first. Recurring revenue growth slowed to 1% from 3%, and recurring software decelerated to 3% from 6%. Retail ex-hardware revenue went flat after growing 4% the prior quarter, while retail recurring software growth roughly halved to 8%. Restaurants remain the weak spot: ex-hardware revenue fell 5% and payment sites slipped 1% to 8,400. Management also pushed stabilization of the small-business restaurant base into 2027.
The counterweight is a genuine inflection in platform demand. Remaining contract value on Voyix Commerce Platform contracts jumped to about $440 million, up 151% year over year and 54% sequentially, after essentially stalling between the first and second quarters. Platform customers rose to 35 from 25. New and expanded deals included Ahold Delhaize USA, A.S. Watson, Rutter's, Cencosud, First Watch, Sbarro and Bruster's. Aloha Next went live at its first restaurant site, and management cited deployment speed of roughly 50 stores per week, up from about one per month a year ago. Management called the quarter an inflection point. Margins also showed real operating leverage: Retail adjusted EBITDA margin reached 28.4%, and restaurant ex-hardware margin improved 180 basis points after falling 380 basis points in the second quarter. Leadership was consolidated under Darren Wilson as President, and the company closed a $32 million Japan banking sale.
Guidance is where the "reaffirmed" label needs context. Adjusted EBITDA, non-GAAP EPS and free-cash-flow targets were maintained. Revenue, however, is now expected at the low end of the $2.188 billion to $2.303 billion range, which management attributed to customers delaying hardware refreshes amid memory-chip cost inflation and caution among restaurant operators. Cash flow is improving but carries caveats. Adjusted free cash flow before restructuring was $62 million, up from $56 million in the second quarter, and $189 million year to date, already at the floor of the full-year outlook. Still, operating cash flow was only $17 million in the quarter, and collections on receivables tied to the hardware transition contributed $28 million.
Investors arrived skeptical. Earnings Whispers sentiment stayed negative and was essentially unchanged, edging to -0.499 from -0.486. The stock's path since the last report was volatile even though the net result was flat. Shares sat at $9.43 heading into the release, almost exactly where they opened after the August report. In between, the stock fell from a $10.14 high on that first day to a $6.53 low in early October, then rebounded about 44%. Shares now trade nearly 21% above the 200-day moving average and about 7% below the inter-earnings high. That means the stock had already recovered much of its fall before this report.
The bottom line is that NCR Voyix beat on earnings and showed its strongest bookings momentum yet, but the bookings have not yet reached the revenue line. Bulls can point to a backlog that grew by half in one quarter, faster deployments and a contract structure that no longer ties revenue to rollout pace. Bears have legitimate ammunition: negative organic growth, slowing recurring revenue, a weaker restaurant business and a revenue outlook pinned to the bottom of its range. The next few quarters need to show that $440 million in contract value can convert into reaccelerating recurring software revenue.