Diebold Nixdorf (DBD)

Banking and retail technology provider Diebold Nixdorf (NYSE:DBD) announced better-than-expected revenue in Q3 CY2025, with sales up 2% year on year to $945.2 million. Its GAAP profit of $1.11 per share was 11% above analysts’ consensus estimates.

Company Overview

With roots dating back to 1859 and a presence in over 100 countries, Diebold Nixdorf (NYSE:DBD) provides automated self-service technology, software, and services that help banks and retailers digitize their customer transactions.

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Diebold Nixdorf's main competitors in the banking technology space include NCR Voyix, while in retail it competes with NCR Voyix, Toshiba, and Fujitsu. In the software segment, it faces competition from specialized players like KAL, Fiserv, GK Software, Oracle, and Aptos.

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.

With $3.69 billion in revenue over the past 12 months, Diebold Nixdorf is a mid-sized business services company, which sometimes brings disadvantages compared to larger competitors benefiting from better economies of scale.

As you can see below, Diebold Nixdorf’s revenue declined by 1.3% per year over the last five years, a tough starting point for our analysis.

Long-term growth is the most important, but within business services, a half-decade historical view may miss new innovations or demand cycles. Diebold Nixdorf’s revenue over the last two years was flat, sugggesting its demand was weak but stabilized after its initial drop.

This quarter, Diebold Nixdorf reported modest year-on-year revenue growth of 2% but beat Wall Street’s estimates by 1.7%.

Looking ahead, sell-side analysts expect revenue to grow 6.4% over the next 12 months, an improvement versus the last two years. This projection is above the sector average and indicates its newer products and services will spur better top-line performance.

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Diebold Nixdorf was profitable over the last five years but held back by its large cost base. Its average operating margin of 2% was weak for a business services business.

On the plus side, Diebold Nixdorf’s operating margin rose by 3.1 percentage points over the last five years.

This quarter, Diebold Nixdorf generated an operating margin profit margin of 7.8%, up 2.8 percentage points year on year. This increase was a welcome development and shows it was more efficient.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Diebold Nixdorf’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Diebold Nixdorf, its two-year annual EPS growth of 45.7% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q3, Diebold Nixdorf reported EPS of $1.11, up from negative $0.60 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Diebold Nixdorf’s full-year EPS of $1.37 to grow 153%.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

While Diebold Nixdorf posted positive free cash flow this quarter, the broader story hasn’t been so clean. Diebold Nixdorf’s demanding reinvestments have drained its resources over the last five years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 1.5%, meaning it lit $1.49 of cash on fire for every $100 in revenue.

Taking a step back, an encouraging sign is that Diebold Nixdorf’s margin expanded by 9.3 percentage points during that time. Despite its improvement and recent free cash flow generation, we’d like to see more quarters of positive cash flow before recommending the stock.

Diebold Nixdorf’s free cash flow clocked in at $24.5 million in Q3, equivalent to a 2.6% margin. Its cash flow turned positive after being negative in the same quarter last year, marking a potential inflection point.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Diebold Nixdorf’s five-year average ROIC was negative 1.1%, meaning management lost money while trying to expand the business. Its returns were among the worst in the business services sector.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Diebold Nixdorf’s ROIC has increased significantly over the last few years. This is a good sign, and we hope the company can continue improving.

Diebold Nixdorf reported $280 million of cash and $934 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $432.9 million of EBITDA over the last 12 months, we view Diebold Nixdorf’s 1.5× net-debt-to-EBITDA ratio as safe. We also see its $52.1 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was good to see Diebold Nixdorf beat analysts’ EPS expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Zooming out, we think this was a good print with some key areas of upside. The stock traded up 3% to $58 immediately after reporting.

Updated: December 4, 2025 at 11:06 PM EST

The latest quarterly earnings matters, sure, but we actually think longer-term fundamentals and valuation matter more. Investors should consider all these pieces before deciding whether or not to invest in Diebold Nixdorf.

Diebold Nixdorf isn’t a terrible business, but it doesn’t pass our quality test. First off, its revenue has declined over the last five years. And while its rising cash profitability gives it more optionality, the downside is its relatively low ROIC suggests management has struggled to find compelling investment opportunities. On top of that, its cash burn raises the question of whether it can sustainably maintain growth.

Diebold Nixdorf’s P/E ratio based on the next 12 months is 13.8x. This valuation is reasonable, but the company’s shakier fundamentals present too much downside risk. We're pretty confident there are superior stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $79 on the company (compared to the current share price of $64.66).

Although the price target is bullish, readers should exercise caution because analysts tend to be overly optimistic. The firms they work for, often big banks, have relationships with companies that extend into fundraising, M&A advisory, and other rewarding business lines. As a result, they typically hesitate to say bad things for fear they will lose out. We at StockStory do not suffer from such conflicts of interest, so we’ll always tell it like it is.