Revenue Growth
Total non-GAAP revenue grew 6% year-over-year to $888 million in Q1 2026, supported by strength in retail, currency and services, with sequential backlog up to ~$790 million.
Diebold Nixdorf Inc
· DBD
April 30th, 2026
Summary
- Earnings Call Date:
- 2026-04-30
- Change Since:
- +8.53%
- Next Earnings Date:
- 2026-08-12
Earnings Call Sentiment
PositiveThe call conveyed broad operational and financial momentum: revenue growth, strong adjusted EBITDA expansion, substantial EPS improvement, improved working capital and continued free cash flow generation alongside strategic account wins across banking and retail. Management acknowledged short-term margin pressure in services from planned investments and retail product margin compression from mix and memory cost headwinds, but provided clear mitigation actions (repricing, supply coverage) and confident guidance for 2026 including FCF and EBITDA targets. Overall, positives (multiple growth and cash-generation metrics, strategic customer wins, balance sheet strength) materially outweigh the limited near-term challenges.
Company Guidance
Management guided 2026 revenue of $3.86–$3.94 billion (supported by a ~$790 million product backlog), total gross margin improvement of 25–50 basis points year‑over‑year, service gross margin improvement up to 50 bps, and product margins expected to remain comparable to 2025 (after a +300 bps gain in 2025). Adjusted EBITDA is guided to $510–$535 million (≈+8% at the midpoint) with the first half expected to contribute just above 40% of annual EBITDA, Q2 revenue ~24% of the full year and Q2 EBITDA modestly above prior year (with Q2 margins near ~13%). Adjusted EPS is $5.25–$5.75 (assuming a 35–40% full‑year tax rate). Free cash flow is guided to $255–$270 million (~+10% at the midpoint) with free cash flow per share ≈ mid‑$7, a target of 50%+ FCF conversion, positive FCF each quarter, and a cumulative FCF target of $800 million for 2025–2027. Balance sheet liquidity was ~ $680 million (cash $374M + undrawn $310M RCF) with net debt leverage ~1.2x; Q1 buybacks were ~747k shares at $73.66 (≈$55M returned; $117M remaining on the $200M program).
Adjusted EBITDA and Margin Expansion
Adjusted EBITDA increased 14% year-over-year to $99 million, with adjusted EBITDA margin expanding 80 basis points to 11.2%, reflecting operational execution and higher volume.
Earnings Per Share Improvement
Non-GAAP diluted EPS rose roughly 81% year-over-year to $0.67 in Q1, driven by stronger operating profit and margin expansion.
Free Cash Flow Strength and Conversion
Free cash flow more than tripled year-over-year to approximately $21 million in Q1 (sixth consecutive quarter of positive free cash flow). Full-year FCF guidance of $255M–$270M (roughly +10% at midpoint) and target 50%+ FCF conversion for 2026; company targets $800M cumulative FCF for 2025–2027.
Balance Sheet and Liquidity
Fortress balance sheet with ~$680 million of liquidity at quarter end ($374M cash and equivalents and a fully undrawn $310M revolver) and a net debt leverage ratio of 1.2x; Fitch initiated BB- with stable outlook.
Share Repurchases and Capital Return
Returned $55 million to shareholders in Q1 via repurchase of ~747,000 shares at an average price of $73.66; $117 million remaining under a $200 million repurchase program and commitment to return the majority of FCF to shareholders.
Retail Momentum and Large Wins
Retail revenue grew 26% year-over-year; North America retail up nearly 70% (off a small base). Key wins include a top-10 fuel & convenience retailer for thousands of POS units, initial self-checkout deployment with a large pharmacy chain, and a regional grocer EPOS win. Smart Vision AI deployments with a global retailer to reduce shrink and improve checkout were highlighted.
Banking Product Momentum and Strategic Wins
Core ATM and branch automation traction with wins including a >200 DN Series cash recycler deployment with a major credit union, 100% teller cash recycler install-win with a large U.S. financial institution, FOREX ATM network outsourcing, and a major engagement to modernize transaction processing across thousands of branches.
Manufacturing and Operational Improvements
Lean and continuous improvement produced tangible results: product gross margin expanded (product margin up 60 bps to 26.3% overall; banking product margin 31.4%, +370 bps YoY). Manufacturing footprint reductions: North Canton subassembly footprint down ~40% and Brazil process redesign reduced footprint ~50%, increasing capacity.
Working Capital Improvements
Working capital trends improved with days inventory outstanding reduced by 6 days and days sales outstanding improved by 4 days in Q1, supporting cash flow performance.
Operator
Hello. Good day, and welcome to Diebold Nixdorf's First Quarter 2026 Earnings Call. My name is Carly, and I will be coordinating today's call. [Operator Instructions] I'd now like to turn the call over to our host, Maynard Um, Vice President of Investor Relations. Maynard, please go ahead.
Maynard Um
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 3, 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 4.
Octavio Marquez
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 revenues 6% year-over-year to $888 million and adjusted EBITDA increased 14% to $99 million. ...
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