Diebold Nixdorf (NYSE:DBD) reported fourth-quarter and full-year 2025 results that management said marked a “defining year,” highlighted by higher revenue, margin expansion, and a record increase in free cash flow. Executives emphasized that the company’s lean operating model and working-capital improvements have helped deliver a more stable and predictable financial profile, while also providing flexibility to return capital to shareholders and invest in growth initiatives across banking, retail, and services.
Full-year 2025 performance: Record free cash flow and higher profitability
For fiscal 2025, the company expanded adjusted EBITDA to $485 million and generated record free cash flow of $239 million, more than double the prior year’s $109 million. Management said free cash flow conversion was approximately 49%, ahead of its original outlook and approaching a 2026 target of greater than 50%.
Order entry grew 17% year over year, which management attributed to demand across both banking and retail solutions tied to automation and efficiency priorities.
Fourth-quarter results: Revenue up 12% and operating leverage
In the fourth quarter, Diebold Nixdorf reported revenue of $1.1 billion, up 12% year over year and 17% sequentially, driven by growth in both product and service. Timko said total gross margin expanded to 27.1%, up 320 basis points year over year, reflecting favorable product and geographic mix.
The company posted Q4 operating profit of $129 million, up 81% year over year, with operating margin expanding to 11.6%. Adjusted EBITDA reached $164 million, up 46% year over year, with EBITDA margin of 14.9%.
Management said operating expense was “relatively flat” year over year in the quarter despite higher revenue, and reiterated progress on more than 200 cost-reduction action items. For the full year, operating expense increased 3.7%, driven by higher labor and benefit costs partially offset by savings initiatives. The company said it expects annualized operating expense run-rate savings of up to $50 million exiting 2026, with up to half realized in 2026.
Segment commentary: Banking recycler momentum and retail growth in North America
Banking revenue rose 11% year over year in Q4 and increased 1.2% for the full year. Banking product revenue grew 20% year over year in the quarter, which management attributed to strong ATM recycler adoption across major markets. Banking services revenue increased 5% year over year in Q4, primarily from Europe. The company also cited customer feedback on service investments, including record Net Promoter Scores and its strongest SLA performance of the year.
Retail delivered what executives described as a strong finish, with a third consecutive quarter of sequential revenue growth. Q4 retail revenue increased 12% year over year to over $300 million, and full-year retail revenue grew 2.1%. Retail product revenue rose 16% year over year in Q4, supported by point-of-sale and self-checkout strength. Retail services revenue increased 8% year over year in the quarter, driven by core service and higher installation work.
For the full year, retail services revenue was comparable to the prior year, which management attributed in part to “external cyber-related disruptions” at certain large customers that reduced the company’s ability to provide service; the company said it has now resumed full service for those customers. Full-year retail gross margins declined 20 basis points, which the company tied to those service disruptions.
On growth initiatives, CEO Octavio Marquez highlighted momentum in North America retail, saying the company secured nine new logos, including wins in grocery, pharmacy, and quick-service restaurants. He said the company’s Smart Vision AI solution is helping drive interest, and noted engagement with more than 800 customers, partners, and prospects at the NRF show. Marquez also said the U.S. retail business is expected to grow at double-digit rates “for the foreseeable future,” while Europe recovered significantly through the year.
Lean, working capital, and cash generation
Executives repeatedly pointed to Lean practices as a structural advantage. Marquez cited a dynamic Kanban system covering more than 400 high-use items that drove an approximately 30% sustained reduction in inventory. He also said shared business services teams standardized order processing and accelerated invoice cycles, reducing processing time by 17%.
Timko said working-capital initiatives contributed meaningfully to cash flow, with days inventory outstanding improving by 9 days and days sales outstanding improving by 4 days year over year. In the Q&A, management said DSO ended the year at 50 and estimated each day of DSO improvement represents about $10 million of free cash flow, adding it sees an additional 4–5 days of opportunity. Management also discussed inventory improvements and shorter lead times, saying the company has moved from prior levels of 120+ days to a more consistent 70–80 day range.
2026 outlook, capital returns, and balance sheet
For 2026, the company guided to revenue of $3.86 billion to $3.94 billion, adjusted EBITDA of $510 million to $535 million, and free cash flow of $255 million to $270 million. Diebold Nixdorf also introduced adjusted EPS guidance of $5.25 to $5.75, assuming an effective tax rate of 35% to 40%.
Management said it expects revenue cadence similar to 2025, with about 45% in the first half and 55% in the second half, and indicated Q1 revenue should be roughly 22% of the full-year total. For adjusted EBITDA, management outlined an approximate split of 40% in the first half and 61% in the second half, and said Q1 adjusted EBITDA margins should be comparable to Q1 2025 despite higher revenue, reflecting continued services investment early in the year.
On capital allocation, the company said it returned $128 million to shareholders through share repurchases in 2025, buying back 2.3 million shares, or about 6% of the company, at an average price of $55.47. It completed an initial $100 million buyback program and announced a new $200 million authorization in the fourth quarter, with management targeting completion on a “similar timeframe” to the prior program. The company also said it is maintaining flexibility for small tuck-in acquisitions, with management indicating a focus on service opportunities that would be “almost immediately accretive” and at a relatively low multiple.
Diebold Nixdorf ended 2025 with more than $700 million of liquidity, including $416 million in cash and short-term investments and an undrawn $310 million revolver, with net debt leverage at 1.1x. Management also noted a second credit rating upgrade in 2025, with Moody’s upgrading the company to B1 from B2 in the fourth quarter.
About Diebold Nixdorf (NYSE:DBD)
Diebold Nixdorf, Inc (NYSE: DBD) is a leading global provider of connected commerce solutions, specializing in automated teller machines (ATMs), point-of-sale (POS) systems and related software and services for the banking and retail industries. The company’s core offerings include hardware platforms, software applications for transaction management and advanced analytics tools that enable financial institutions and retailers to enhance customer engagement, streamline operations and improve security at the point of transaction.
