As the payment and ATM company Diebold Nixdorf prepares to exit bankruptcy, it is looking for opportunities for both its traditional services and emerging payments technology.
On Wednesday, Diebold Nixdorf said it anticipates emerging from Chapter 11 and Chapter 15 bankruptcy on Friday, with trading on the New York Stock Exchange resuming Monday, Aug. 14 under the symbol DBD.
Moving ahead, the company plans to compete with traditional rivals such as Ingenico and NCR, as well as payment-oriented fintechs, by focusing on financial inclusion and enabling cash access in relatively underserved markets, while expanding digital payments as well.
"There is still a need for all sorts of payment instruments out there," said Mike Jacobsen, senior director of corporate communications for Diebold Nixdorf. "Cash is very resilient, as we have seen over the years."
This week, Diebold Nixdorf also announced earnings growth during the quarter that ended June 30. The company reported total revenue of $922 million, an increase of more than 8% from the prior year's $850 million. Non-GAAP gross profit of $228 million was up about 8.6% from from the prior year's $211 million. The company has scheduled an earnings call on Monday before the market opens in New York.
Revenue growth for the most recent quarter was primarily driven by continued demand for its DN Series ATMs and integrated cash recycling systems; the company shipped 14,700 ATMs during the quarter. Diebold Nixdorf, which touted its ability to maintain partner relationships during this summer's restructuring, also won a service and support agreement valued at more than $8 million with one of the largest private banks in Turkey, and it entered a service renewal agreement for nearly $7 million with one of the largest banks in Thailand.
The company additionally reported agreements to place its checkout technology with a "major" supermarket chain in the U.K. and signed another deal with a 1,500-location retail chain in Spain.
"All of these are good numbers, which means they are using the restructuring to pivot the business around services," said Richard Crone, a payments consultant. "They can sell not just an upgrade but a soup-to-nuts ATM-as-a-service update."
Diebold Nixdorf
A pressing challenge is maintaining the talent it needs to ensure ongoing success, Crone said, adding that corporate restructures often reshape the company's ethos and skill set. "Incentives like restricted stock units and stock appreciation rights are vital to retain essential management and talent during post-restructuring phases," Crone said.
Diebold Nixdorf's bankruptcy came amid broader trends — such as the migration toward digital transactions and a deemphasis on traditional points of sale and ATMs — that were challenging traditional payment hardware makers. ATMs in the U.S. have declined from about 470,000 in 2019 to 451,000 in 2022, according to Euromonitor International.
But there are still new ATM deployments. This week Diebold Nixdorf rival
"We're looking at areas where there's still growth for ATMs," Jacobsen said, noting that in July Diebold Nixdorf entered a partnership with the ATM operator Red Link to migrate 90% of its ATMs in Argentina to Diebold Nixdorf. Brazil and Asia are also growth markets for ATMs, he said.
"Cash usage, while diminishing, is not going to go away and ATMs will continue to give customers access to their cash for the foreseeable future," said Thad Peterson, a strategic advisor for Datos Insights.
Before declaring bankruptcy, Diebold Nixdorf underwent a strategic restructuring in 2022 as the business emerged from the pandemic. That restructuring resulted in a reduction in headcount from about 22,000 employees to about 21,000 — a level that stayed steady throughout the past two months, Jacobsen said, adding that the company did not discontinue any major line of business or product during its time in bankruptcy.
Diebold Nixdorf's digital diversification included the 2022 introduction of a cloud-based retail payments and management service called
"We're building around that core," Jacobsen said. "There's an opportunity to offer a flexibility to merchants to play in all different types of payments."
Diebold Nixdorf and other firms that traditionally supplied payment hardware and ATMs have faced competition in recent years from Stripe, Block, PayPal and other newer companies that offer software to support payments and financial services for merchants.
"Hardware will have a long tail," said Eric Grover, a principal at Intrepid Ventures. "I don't see it going away in our lifetimes. Second, the so-called legacy payment hardware providers such as Diebold and NCR have domain expertise and relationships with banks and retailers worldwide. And they already provide some software."
The world continues to migrate to digital, and while that trend will increase online and mobile transaction volume, retail stores still dominate commerce and payments, Peterson said.
"What can be done with [point-of-sale] devices and how they integrate with the digital world will drive demand going forward," Peterson said.
There is an opportunity in this sector for firms that can use technology to streamline older processes, according to Peterson.
"Finding and keeping employees is a challenge for a lot of retailers, and self-checkout and shopping/payment kiosks can lessen their dependence on in-store employees," Peterson said. "This applies to the retail banking space as well, where ATMs with more functionality can reduce the need for in-branch staff."
