Diebold Nixdorf Cuts 2026 Outlook Despite Q3 Revenue Growth

Diebold Nixdorf reported higher third-quarter revenue and adjusted EBITDA, supported by another quarter of double-digit Retail growth, but reduced its full-year 2026 outlook for adjusted EBITDA, free cash flow and adjusted earnings per share. The company also narrowed its revenue forecast and authorized a new $250 million share repurchase program.

The banking and retail technology provider reported non-GAAP revenue of $991 million for the third quarter, up 5% year over year. Adjusted EBITDA increased 5% to $127.8 million, while the adjusted EBITDA margin was unchanged at 12.9%. Adjusted earnings per share declined 4% to $1.34.

GAAP net income was $7.1 million. On a non-GAAP basis, operating expenses fell to $157.8 million from $161.2 million a year earlier, reducing operating expenses as a share of revenue to 15.9% from 17.1%. Diebold Nixdorf expects full-year operating expenses to decline by at least 2% year over year.

Free cash flow excluding discrete tax payments was negative $45.9 million, compared with positive $24.5 million in the prior-year quarter. The company said the timing of a value-added tax refund and strategic working-capital investments affected quarterly cash flow. It separately excluded $14.4 million of discrete tax payments from the measure.

Retail Growth Outpaces Banking

Retail revenue rose 16.1% to $296.1 million, marking the segment’s fourth consecutive quarter of double-digit growth. Product revenue increased 30.9%, driven by point-of-sale and self-checkout systems, while service revenue grew 4.4%.

The growth came with lower profitability. Retail gross profit fell 3% to $61.2 million, and gross margin contracted to 20.7% from 24.7% as the sales mix shifted toward point-of-sale products. Diebold Nixdorf said point-of-sale revenue doubled across Europe and North America from a year earlier.

The company highlighted a 6,000-unit self-checkout refresh for a large European grocer, a services contract worth more than $25 million with a U.K.-based grocer and retailer, and a North American order covering about 1,200 checkout lanes at 200 stores. Its Smart Vision artificial-intelligence platform remains on track to exceed 1,000 deployments by the end of 2026.

Banking revenue increased 0.7% to $694.8 million, with growth in Europe, Latin America and North America. Product revenue declined 2.6%, while service revenue rose 3%. Banking gross profit increased 2% to $189.2 million, lifting the segment’s gross margin by 40 basis points to 27.2%, primarily on stronger service profitability.

Banking orders included 520 cash recyclers for a major North American bank, 360 in-branch recyclers with a long-term maintenance contract for a large Latin American financial institution, and 1,450 ATMs in a large Asian market. The company also secured a long-term agreement to service a Spanish financial institution’s regional network of about 6,000 ATMs. Management expects stronger sequential Banking growth in the fourth quarter.

Across the company, service revenue rose to $563 million from $544 million, while product revenue increased to $428 million from $401 million. Total gross profit grew slightly, though the overall gross margin eased to 25.3% from 25.4% because of geographic and product mix. The year-to-date book-to-bill ratio was 1.0.

2026 Outlook Reduced

Diebold Nixdorf now expects 2026 non-GAAP revenue of $3.86 billion to $3.90 billion, compared with its previous forecast of $3.86 billion to $3.94 billion. The updated measure excludes approximately $10 million of year-to-date revenue from its non-core Turkey operation.

The company lowered its adjusted EBITDA forecast to $490 million to $510 million from $510 million to $535 million. Expected free cash flow, excluding discrete tax payments, was reduced to $190 million to $210 million from $255 million to $270 million, while adjusted EPS guidance fell to $4.50 to $4.85 from $5.25 to $5.75.

Management expects adjusted EBITDA, adjusted EPS and free cash flow to increase sequentially in the fourth quarter. Diebold Nixdorf is targeting 2026 free cash flow conversion of 40% to 45%.

The company ended the quarter with $184.9 million of cash, cash equivalents and restricted cash, no outstanding revolving-credit borrowings and net leverage of about 1.5 times trailing 12-month adjusted EBITDA. Net debt was $791.5 million at Sept. 30.

The new $250 million share repurchase authorization follows a $200 million program announced in the fourth quarter of 2025 that was nearly complete at the end of the latest reporting period.

Diebold Nixdorf also announced its intention to form a global strategic collaboration with Euronet Worldwide in ATM outsourcing. The proposed arrangement remains subject to definitive agreements and is intended to combine Diebold Nixdorf’s ATM technology and field-services capabilities with Euronet’s transaction-processing platform and independent ATM network.

The company identified competitive pricing, changing trade policies and tariffs, geopolitical instability, higher input and labor costs, cybersecurity threats, supplier dependence and the continued expansion of non-cash payment options among the factors that could affect future performance. Execution of its cost-saving initiatives, product strategy and potential Euronet collaboration also remains subject to uncertainty.