DBD 10-K & 10-Q changes, risk factors and insider trading

(dollars and euros in millions, except for per share values) The following are certain risk factors that could affect the Company’s business, financial condition, operating results and cash flows. These risk factors should be considered in connection with evaluating the forward-looking statements contained in this annual report on Form 10-K because they could cause actual results to differ materially from those expressed in any forward-looking statement. The risk factors highlighted below are not the only ones the Company faces. Although the risks are organized by headings, and each risk is discussed separately, many are interrelated. Readers should not interpret the disclosure of any risk factor to imply that the risk has not already materialized. If any of these events actually occur, the Company's business, financial condition, operating results or cash flows could be negatively affected.

StrategicRisks Related to our Strategy and Operational Risks.Competition.

New service and product developments may be unsuccessful. The Company is constantly looking to develop new services and products that complement or leverage its core competencies and expand its business potential. For example, the Company launchedhas rolled out Branch Automation Solutions and continues to innovate its DN Series banking solutionsATM portfolio inwith 2019,the its DN Series EASY familyintroduction of retailDN600 checkoutTeller solutionsCash inRecycler, 2020,DN500 itsDual EVCash charging stations services in 2021Recycler, and itsmost DNrecently, Series™our EASYnext ONEgeneration checkoutcash platformdispenser, in 2023.DN300. The Company makes significant investments in service and product technologies and anticipates expending significant resources for new cloud software, digitally enabled services and product development over the next several years. Most recently, we've developed our self-service software, VCP7, and Vynamic Smart Vision. There can be no assurance that the Company’s service and product development efforts will be successful, that the roll out of any new services and products will be timely, that the customer certification process for any new products will be completed on the anticipated timeline, that it will be able to successfully market these services and products, or that margins generated from sales of these services and products will recover costs of development efforts.

The Company may not be able to generate sufficient cash flows to fund its operations andoperations, make adequate capital investments.investments and return capital to stockholders. The Company’s cash flows from operations depend primarily on sales and service margins. To develop new service and product technologies, support future growth, achieve operating efficiencies and maintain service and product quality, the Company has made and must continue to make significant capital investments in lean manufacturing technology, facilities and capital equipment, R&D, and service and product technology. In addition to cash provided from operations, the Company has from time to time utilized external sources of financing. Depending upon general market conditions or other factors, the Company may not be able to generate sufficient cash flows to fund its operations and make adequate capital investments, either in whole or in part.investments. In addition, any tightening of the credit markets may limit the Company's ability to obtain alternative sources of cash to fund its operations.operations, or return capital to stockholders, including through discretionary share repurchases.

The benefits of the Company’s continuous improvement programs and other cost savings plans may not be fully realized or sustainable. The Company’s operations strategy includes continuous improvement programs and implementation of lean manufacturing tools across all facilities to achieve cost savings and increased performance. Further, the Company has and may continue to initiate restructuring actions designed to improve future profitability and competitiveness. The cost savings that the Company anticipates from these initiatives may not be achieved on schedule or at the level anticipated. If the Company is unable to realize these anticipated savings, its operating results and financial condition may be adversely affected. While theThe Company achievedanticipates significant savings from its DNlatest Nowtransformation initiativesprogram that concludedis infocused 2021,on: as1) wellstructural asalignment; from2) thestandardizing, incrementaloptimizing, $150.0and plusautomating costprocesses; 3) adopting new tools and technology to streamline operations; and 4) footprint optimization. There is no guarantee that such savings planwill whichbe commencedachieved inor 2022whether and concluded in the fourth quarter of 2023, theseany savings maythat notoccur will be sustainable, which may adversely affect its operating results and cash flow. The Company’s initiatives consisted of a number of work streams designed to improve operational efficiency and sustainably increase profits and cash flows. Although the Company achieved a substantial amount of annual cost savings through 2023, it may be unable to sustain the annual cost savings from the work streams that it has previously implemented, and its results of operations and cash flows may be adversely affected.sustainable.

Because the Company's operations are conducted worldwide, they are affected by risks of doing business abroad. The Company generates a significant percentage of revenue from operations conducted outside the United States. In 2024,2025, revenue from international operations amounted to approximately 75% percent76% of total revenue.

It remains unclear what the United States or foreign governments will or will not do with respect to sanctions, tariffs, international trade agreements and policies on a short-term or long-term basis. The implementation of more restrictive trade policies, including the imposition of further tariffs in connection with the Trump administration in the United States, and retaliatory tariffs in response thereto,tariffs, or the renegotiation of existing trade agreements with the United States orin countries where we sell our products and services, procure materials incorporated into our products, manufacture products or recruit and employ employees, could have a material adverse effect on our business, results of operations and financial condition.

UnitedThe States,proliferation Europeof payment options other than cash could result in a reduced need for cash in the marketplace and other developed markets have seen a shiftresulting decline in consumerthe usage of ATMs. Consumer transition towards non-cash payment trendsalternatives sincehas theaccelerated latein 1990's,recent withyears, moredriving an increase in digital, mobile and contactless payment methods. More customers are now opting for electronic forms of payment, such as credit cards, debit cards, store-valued cards and debitcontactless cards,and mobile payment options, for their in-store purchases over traditional paper-based forms of payment, such as cash and checks. The COVID-19 pandemic accelerated consumer transition towards non-cash payment alternatives driving an increase in digital, mobile and contactless payment methods. Additionally, some merchants offer free cash back at the POS for customers that utilize debit cards for their purchases, thus providing an additional incentive for consumers to use these cards. The continued growth in electronic payment methods and digital currencies could result in a reduced need for cash in the marketplace and ultimately, a decline in the usage of ATMs. NewCard only self-service order and payment technologyterminals andmay adoptionalso further reduce the need for cash in the marketplace. The increased use of mobile payment technology, digital currencies such as Bitcoin, or otherthese new payment method preferences by consumerstechnologies could further reduce the general population's need or demand for cash and negatively impact sales of ATMs and selected products, services and software.

The Company's business may be affected by general economic conditions, cyclicality and uncertainty and could be adversely affected during economic downturns. Demand for the Company's services and products is affected by general economic conditions and the business conditions of the industries in which it sells its services and products. The business of most of the Company's customers, particularly its financial institution and retail customers, is, to varying degrees, cyclical and has historically experienced periodic downturns. Under difficult economic conditions, customers may seek to reduce discretionary spending by forgoing purchases of the Company's services and products. This risk is magnified for capital goods purchases such as ATMs, retail systems and physical security products. In addition, downturns in the Company's customers’ industries, even during periods of strong general economic conditions, could adversely affect the demand for the Company's services and products, and its sales and operating results.

Increased energy, raw material and labor costs could reduce the Company's operating results. Energy prices, particularly petroleum prices, and raw materials (e.g., steel) are cost drivers for the Company's business. In recent years, theThe price of petroleum hascan beenbe highly volatile, particularly due to the unstable political conditions in the Middle East and increasing international demand from emerging markets. Price increases in fuel and electricity costs, such as those increases that may occur from climate change legislation or other environmental mandates, may continue to increase cost of operations and affect the Company’s ability to operate in specific markets. Any increase in the costs of energy would also increase the Company's transportation costs.

The primary raw materials in the Company's services, softwareservices and systems solutions are steel, plastics, and electronic parts and components. The majority of raw materials are purchased from various local, regional and global suppliers pursuant to supply contracts. These suppliers, particularly those of electric components serve many large customers across several industries. The price of these materials can fluctuate under the supply contracts in tandem with the pricing of raw materials, which are increasing due to inflationary pressures.pressures and as a result of tariffs. Current price increases in steelcertain andraw resinmaterials are being mitigated by long-term contracts and joint work with suppliers on general productivity improvement and supply chain optimization. Most supplier agreements include long-term productivity improvements that serve as the basis for absorbing the potential raw materials increases.

The Company cannot assure that its labor costs going forward will remain competitive or will not increase, including as a result of the current high inflation environment and the competitive environment for labor. In the future, the Company's labor agreements may be amended, or become amendable, and new agreements could have terms with higher labor costs. In addition, laborLabor costs may also increase in connection with the Company's growth. The Company may also become subject to collective bargaining agreements in the future in the event that non-unionized workers may unionize.future.

Cybersecurity incidents or vulnerabilities could disrupt the Company's internalour operations or services provided to customers, which could adversely affect revenue, increase costs, and harm itsour reputation, customer relationships, and stock price. To reduce these risks, theThe Company has programsprograms, measures and measurestechnology protections in place designed to detect and help safeguard against cybersecurity attacks. Although we have implemented cybersecurity measures designed to detect and limit the risk of unauthorized access to our systems and acquisition of, loss, modification of, use, access to,attacks or disclosureincidents, ofalthough ourthere data,can threatbe no assurance that these efforts will be successful. Threat actors are using evolving, sophisticated,sophisticated and ever-changingevolving techniques to obtain unauthorized access to systems and data. The types and motivations of threat actors that may attempt to access our systemsare also are evolving and expanding,evolving, and include sophisticated nation-state sponsored and organized cyber-criminals, who are targetingtarget the financial services and manufacturing industries. Our position as a product and solution providersupplier to the financial services industry may cause an attacker to attempt to infiltrate our systems in order to carry out supply chain attacks against the industry. As a result, the risk of cyberattack is increasing. An attack, disruption, intrusion, denial of service, theftdisruption or other data or cybersecurity incident (such as phishing attack, virus, ransomware, or other malware installation),incident, or an inadvertent act by an employee or contractor, could result in unauthorized access to, acquisition of, loss, disclosure, or modification of, our systems, products, and data (or that of our third-party service provider’s systems, products, and dataproviders), which may result in operational disruption, loss of business, claims (including by customers, financial institutions, cardholders, and consumers),claims, costs and reputational harm that could negatively affect our operating results. The Company could incur significant expenses in investigating and addressing cybersecurity incidents, including the expenses of deploying additional personnel, enhancing or implementing additional protection measures, training employees or hiring consultants, and such incidents could divert the attention of our management and key personnel from our business operations. Further, remedial measures may later prove inadequate to prevent or reduce the impact of new or emerging threats. The Company may face regulatory investigations or litigation relating to cybersecurity incidents, which may be costly to defend and which, if successful,which may require the Company to pay damages and fines, incur expenses to comply with consent orders or injunctions,, and/or change its business practices. The Company also is subject to risks associated with cyberattacks involving our own supply chain. We may also detect, or may receive notice from third parties (including governmental agencies and those in our supply chain) of potential vulnerabilities in our information technology systems, our products, or third-party products used in conjunction with our products. Even if these potential vulnerabilities do not affect our products, services, data, or systems, their existence or claimed existence could adversely affect customer confidence and our reputation in the marketplace, causing us to lose existing or potential customers. To the extent such vulnerabilities require remediation, such remedial measures could require significant resources, may not be implemented before such vulnerabilities are exploited, and may not prevent or reduce the risk. As the cybersecurity landscape evolves, we may also find it necessary to make significant further investments to protect data and infrastructure. We maintain cybersecurity insurance intended to cover some of these risks, but this insurance may not be sufficient to cover all of our losses from future cybersecurity incidents the Company may experience.

Portions of theThe Company's IT infrastructure also may experience interruptions, delaysinterruptions or cessations of service or produce errors in connection with systems integration or migration work that takes place from time to time.work. The Company may not be successful in implementing new systems, and transitioning data and other aspects of the process could be expensive, time consuming, disruptive and resource-intensive. Such disruptions could adversely impact the ability to fulfill orders, service customers and interrupt other processes and, in addition, could adversely impact the Company’s ability to maintain effective internal control over financial reporting. Delayed sales, lower margins, lost customers or diminished investor confidence resulting from these disruptions could adversely affect the Company's financial results, stock price and reputation.

In addition to our legal obligations, ourOur contractual obligations relating to privacy, data protection and information security have become increasingly prevalent and stringent due to changes in laws and regulations, requirements in the financial services industry. Certain Data Protection Laws, such as the GDPR and the CCPA,Laws require our customers to impose specific contractual restrictions on their service providers. If we are unable to comply with our contractual obligations, this could impact our reputation and may result in liabilities and loss of business.

We may use AI in our business,business and in solutions offered to our customers, and challenges with properly managing its use could result in reputational harm, competitive harm, legal liability, or adversely affect our results of operations. We may incorporate AI solutions into some of our platforms, offerings, services, and features, and these applications may become more important in our operations over time. OurSome competitorsof orthese othersolutions may be provided by third parties mayand incorporatewhile we require them to follow all applicable AI intoregulations and data privacy regulations we may not have full control over their products more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our resultsuse of operations.AI. Additionally, if our AI applications are based on data, algorithms or other inputs that are flawed, or if they assist in producing content, analyses or recommendations that are or are alleged to be deficient, inaccurate or biased, our business, financial condition and results of operations may be adversely affected. The use of AI applications may in the futurecould result in cybersecurity and/or data privacy incidents. Any such cybersecurity incidents related to our use of AI applications could adversely affect our reputation and results of operations. AI also presents emerging ethical issues, and if our use of AI becomes controversial we may experience brand, reputational or competitive harm, or legal liability. The rapid evolution of AI, including the potential regulation of AI by government or other regulatory agencies, may require the Companyus to incur significant resources to develop, test, and maintain our platforms, offerings, services, and features in order to implement AI ethically and minimize any unintended, harmful impacts. Further, our competitors or other third parties may incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively and adversely affect our results of operations.

The Company’s ability to deliver products that satisfy customer requirements is dependent on the performance of its subcontractors and suppliers, as well as on the availability of raw materials and other components. The Company relies on other companies, including subcontractors and suppliers, to provide and produce raw materials, integrated components and sub-assemblies and production commodities included in, or used in the production of, its products. If one or more of the Company's subcontractors or suppliers experiences delivery delays or other performance problems, itwe may be unable to meet commitments to its customers or incur additional costs. In some instances, the Company depends upon a single source of supply. Any service disruption from one of these suppliers, either due to circumstances beyond the supplier’s control, such as geo-political developments or public health concerns, or as a result of performance problems or financial difficulties,suppliers could have a material adverse effect on the Company's ability to meet commitments to its customers or increase its operating costs.

TheWe Company manufacturesmanufacture a substantial amount of itsour products in North Canton, Ohio, Paderborn, Germany, and Manaus, Brazil. In addition, certain of our products are manufactured in China and India. Any damage suffered by these critical locations and manufacturing plants could negatively impact our business and results of operations. While the Company maintains insurance policies that provide coverage up to certain limits for some of the potential risks and liabilities associated with its business, it does not maintain insurance policies for all risks and liabilities.

OVERVIEW. Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with the consolidated financial statements and accompanying notes that appear within this annual report on Form 10-K.

Selling and administrative expensesexpense indecreased all$11.1 periodsor presented1.7% weredue drivento bylower spending related to restructuring activities and transformationallower transformation costs related to continuous improvement initiatives. Research and development costs reflect the Company's ongoing investment in hardware and software innovations and enhancements in service offerings. Other operating expenses related primarily to impairment of assets.

Changes in net (loss) income were a result of the fluctuations outlined in the previous sectionssections. andThe change in net income is also impacted by a decrease in income tax expense. The effective tax rate foris thesignificantly yearlower endedin December 31, 2024 was driven2025 primarily bydue geographicto mix(i) release of earnings,$21.4 non-deductibleof expenses,valuation U.S.allowances in Canada and Mexico, (ii) net changes of $13.6 to unrecognized tax onbenefits foreignin income,2025 and withholding(iii) taxes.$18.7 write-down of deferred tax liabilities due to German tax rate reduction, all in 2025. Refer to Note 65 ofto the consolidated financial statements for additional information regarding tax expense.

LIQUIDITY AND CAPITAL RESOURCESRESOURCES.

Revolving Credit Facility. On December 18, 2024, the Company entered into a new credit agreement (the New Credit Agreement), with certain financial institutions as lenders and Goldman Sachs Bank USA as administrative agent and collateral agent, providing for, among other things, a new $310.0 revolving credit facility maturing on December 18, 2029 (the New Revolving Credit Facility).

LoansBorrowings under the New Revolving Credit Facility bear interest at an adjusted secured overnight financing rate plus a margin of 2.75% to 3.50% per annum or an adjusted base rate plus a margin of 1.75% to 2.50% per annum, in each case based on the consolidated first lien debt ratio of the Company and its restricted subsidiaries. The Company may repay the loans under the Revolving Credit Facility at any time. Amounts borrowed and repaid under the Revolving Credit Facility may be reborrowed. Refer to Note 11 to the consolidated financial statements for further details regarding the Revolving Credit Facility.