DIEBOLD NIXDORF, Inc (DBD)

Management's Discussion and Analysis of Financial Condition and Results of Operations

Overview. Management’s discussion and analysis of financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and accompanying notes that appear within this Quarterly Report on Form 10-Q. Unless otherwise stated, U.S. dollar amounts within this Quarterly Report on Form 10-Q are listed in millions.

Introduction. Diebold Nixdorf, Incorporated (collectively with its subsidiaries, the Company) automates, digitizes and transforms the way people bank and shop. As a leading global technology and services partner to many of the world’s top financial institutions and retailers, our integrated solutions connect digital and physical channels for consumers conveniently, securely and efficiently. The Company has a presence in more than 100 countries with approximately 20,000 employees worldwide.

Strategy. The Company seeks to continually enhance the consumer's journey at bank and retail locations while simultaneously streamlining cost structures and business processes through the smart integration of hardware, software and services. The Company partners with other leading technology companies and regularly refines its research and development (R&D) spend to continually improve and tailor needed solutions that support a better transaction experience for consumers.

Business Drivers. The Company's operating model is based upon product sales and its service contract base. Business drivers of the Company's future performance include, but are not limited to: demand for self-service and automation from Banking and Retail customers driven by the evolution of consumer behavior; demand for cost efficiencies and better usage of real estate for bank branches and retail stores as they transform their businesses to meet the needs of their customers while facing macro-economic challenges; demand for services on assets such as ATMs, POS and SCO, including managed services and professional services; timing of product upgrades for ATMs, POS and SCO; demand for software products and professional services; demand for security products and services for the financial, retail and commercial sectors; and demand for innovative technology in connection with the Company's strategy.

Results of Operations. The following discussion of the Company’s financial condition and results of operations provides information that will assist in understanding the financial statements and the changes in certain key items in those financial statements.

The Company calculates constant currency by translating the prior-year period results at the current year exchange rate.

Three months ended June 30, 2026 compared with three months ended June 30, 2025. Net sales increased by $15.6, driven by a net favorable currency impact of 2.3% and stronger electronic point of sale business, partially offset by lower Banking product volumes. Banking net sales decreased by $41.1, primarily due lower volume in Middle East, Africa and Europe, partially offset by a net favorable currency impact of 2.3% and higher pricing. Banking net sales represented 68.6% and 74.2% of total net sales for the three months ended June 30, 2026 and 2025, respectively. Retail net sales increased by $56.7, primarily due to increased products net sales driven by stronger electronic point of sale business and a net favorable currency impact of 2.1%. Retail net sales represented 31.4% and 25.8% of total net sales for the three months ended June 30, 2026 and 2025, respectively.

Six months ended June 30, 2026 compared with six months ended June 30, 2025. Net sales increased by $66.2, driven by a net favorable currency impact of 4.2% and stronger electronic point of sale business, partially offset by lower Banking product volumes. Banking net sales decreased by $46.3, primarily due to lower volume in North America and Europe, partially offset by a net favorable currency impact of 3.7% and higher pricing. Banking net sales represented 69.3% and 74.5% of total net sales for the six months ended June 30, 2026 and 2025, respectively. Retail net sales increased by $112.5, primarily due to increased products net sales driven by stronger electronic point of sale business and a net favorable currency impact of 5.7%. Retail net sales represented 30.7% and 25.5% of total net sales for the six months ended June 30, 2026 and 2025, respectively.

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Services gross margin decreased 50 and 60 basis points in the three and six months ended June 30, 2026, respectively, primarily due to continued investments in our technician capabilities and coverage, as well as fleet and fuel costs in key strategic markets, partially offset by tariff recoveries of $3.0. Product gross margin increased 110 and 80 basis points in the three and six months ended June 30, 2026, respectively, primarily due to favorable geographic mix of ATM machines sold in the period, tariff recoveries of $10.0 and improved pricing, partially offset by higher memory cost and stronger EPOS mix.

Selling and administrative expense increased $8.1, or 5.3%, in the three months ended June 30, 2026 and increased $13.5, or 4.4%, in the six months ended June 30, 2026, compared to the corresponding periods in 2025 primarily due to transformation costs related to continuous improvement initiatives. Transformation costs were $14.5 and $26.5 for the three and six months ended June 30, 2026, respectively and $6.3 and $13.1 for the three and six months ended June 30, 2025, respectively. Refer to Note 11 to our condensed consolidated financial statements for additional information. Research and development costs reflect the Company's ongoing investment in hardware and software innovations and enhancements in service offerings.

Foreign exchange, net includes realized gains and losses, primarily related to volatility in foreign currency exchange rates, particularly the Euro and Brazilian Real against the U.S. dollar, mitigated by the Company's derivative instruments during the six months ended June 30, 2026. Refer to Note 12 to our condensed consolidated financial statements for additional information regarding derivative instruments not designated as hedges.

Changes in net income were a result of the fluctuations outlined above. The changes in net income were also impacted by an increase in income tax expense for the three and six months ended June 30, 2026 compared with the prior year periods. The effective tax rate was higher

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in 2026 primarily due to decreased interest expense deductibility in 2026. Refer to Note 8 to our condensed consolidated financial statements for additional information regarding tax expense.

Liquidity and Capital Resources.

Liquidity Policy. We maintain a strong focus on liquidity and define our liquidity risk tolerance based on sources and uses to maintain a sufficient liquidity position to meet our business needs and financial obligations under both normal and stressed conditions. We believe that our consolidated liquidity and availability under the Revolving Credit Facility (as defined below) will be sufficient to meet our liquidity needs. The Company is committed to maintaining and over time improving our credit ratings through a disciplined capital allocation strategy. We intend to return a portion of our free cash flow to stockholders through share repurchases. We expect that any acquisition or other i

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

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.

Business Drivers. The Company's operating model is based upon product sales and service contract base. Business drivers of the Company's future performance include, but are not limited to: demand for self-service and automation from Banking and Retail customers driven by the evolution of consumer behavior; demand for cost efficiencies and better usage of real estate for bank branches and retail stores as they transform their businesses to meet the needs of their customers while facing macro-economic challenges; demand for services on distributed IT assets such as ATMs, POS and SCO, including managed services and professional services; timing of product upgrades and/or replacement cycles for ATMs, POS and SCO; demand for software products and professional services; demand for security products and services for the financial, retail and commercial sectors; and demand for innovative technology in connection with the Company's strategy.

RESULTS OF OPERATIONS. This Results of Operations focuses on discussion of 2025 and 2024 results.

Banking net sales increased $34.2 or 1.2%, driven by a net favorable currency impact, favorable cash recycler product mix and increased pricing. Banking net sales represented 73.5% and 73.7% of total net sales for the years ended December 31, 2025 and 2024, respectively. Retail net sales increased $20.4 or 2.1%, driven by a net favorable currency impact and higher product volumes associated with second half demand turnaround, offset by temporary IT‑related disruptions at certain large customers, which reduced service activity and delayed scheduled work during the year. Retail net sales represented 26.5% and 26.3% of total net sales for the years ended December 31, 2025 and 2024, respectively.

Service gross margin decreased 80 basis points primarily due to operational cost pressures and other investments associated with business expansion, including an enhanced service tool platform for technicians and a centralized state of the art repair center. Product margin increased 280 basis points primarily due to favorable geographic and product mix, as well as improved pricing.

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Selling and administrative expense decreased $11.1 or 1.7% due to lower spending related to restructuring activities and lower 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.

Interest expense decreased $69.6, or 44.8% due to the refinancing of the Company's debt completed on December 18, 2024. Foreign exchange gain (loss), net includes realized and unrealized gains and losses, primarily related to the unfavorable impact of a strengthening Brazilian real and Euro against the U.S. dollar and a broader weakening of the U.S. dollar, partially mitigated by the Company's derivative program initiated in July 2025. Refer to Note 15 to the consolidated financial statements for additional information regarding derivative instruments not designated as hedges.

Changes in net income were a result of the fluctuations outlined in the previous sections. The change in net income is also impacted by a decrease in income tax expense. The effective tax rate is significantly lower in 2025 primarily due to (i) release of $21.4 of valuation allowances in Canada and Mexico, (ii) net changes of $13.6 to unrecognized tax benefits in 2025 and (iii) $18.7 write-down of deferred tax liabilities due to German tax rate reduction, all in 2025. Refer to Note 5 to the consolidated financial statements for additional information regarding tax expense.

For discussion of 2024 Successor results and 2023 Successor and Predecessor results, see Management’s Discussion and Analysis of Financial Condition and Results of Operations within our annual report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 25, 2025. See “— Critical Accounting Policies and Estimates – Fresh Start Accounting” for a discussion of “Successor” and “Predecessor” results.

LIQUIDITY AND CAPITAL RESOURCES.

Liquidity Policy. We maintain a strong focus on liquidity and define our liquidity risk tolerance based on sources and uses to maintain a sufficient liquidity position to meet our business needs and financial obligations under both normal and stressed conditions. We believe that our consolidated liquidity and availability under our revolving credit facilities will be sufficient to meet our liquidity needs.

The Company is committed to maintaining and over time improving our credit ratings through a disciplined capital allocation strategy. We intend to return a portion of our free cash flow to stockholders through share repurchases. Merger and acquisition investments will be pursued in a disciplined way and focused on those that offer strategic, operational and financial synergies.

Revolving Credit Facility. On December 18, 2024, the Company entered into a credit agreement (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 (Revolving Credit Facility).

Borrowings under the 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

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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.

Credit Ratings and Conditions. The cost and availability of debt financing is influenced by our credit ratings. Moody's Investors Service (Moody's) and Standard and Poor's Global Ratings (S&P) currently issue ratings on our short- and long-term debt. On September 18, 2025, S&P raised our issuer rating to "B+" from "B" and assigned a stable outlook. On December 16, 2025, Moody's revised our rating from "B2" to "B1" with a stable outlook. Our ratings may be subject to a revision or withdrawal at any time by the assigning rating organization, and each rating should be evaluated independently of any other rating.

On December 18, 2024, the Company issued $950.0 aggregate principal amount of 7.75% Senior Secured Notes due 2030 (Notes). The Company used the net proceeds of the Notes, together with borrowings under the Revolving Credit Facility and cash on hand, to (i) repurchase all of the term loans outstanding under senior secured term loan facility that we entered into in connection with our emergence from bankruptcy on August 12, 2023 (Exit Facility), (ii) repay all of the borrowings outstanding under prior revolving credit facility, and (iii) pay off all related premiums, fees and expenses. Refer to Note 11 to the consolidated financial statements for further details regarding the Notes.

We believe that cash from operations plus available borrowing capacity under our Revolving Credit Facility, our current cash balance, and short-term investments are adequate to support operating requirements, capital expenditures and any share repurchases for at least the next 12 months and the foreseeable future thereafter. As of December 31, 2025 and 2024, we had no borrowings outstanding under the $310.0 Revolving Credit Facility, $24.3 and $21.9, respectively, of outstanding letters of credit and available borrowing capacity of $285.7 and $288.1, respectively.

Operating Activities. Cash

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