Brink's Reports Q2 2026 Results: Full Earnings Call Transcript

Brink's (NYSE: BCO ) reported second-quarter financial results on Wednesday. The transcript from the company's second-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

The full earnings call is available at Summary The Brink's Company reported strong Q2 2026 results with 4% organic growth overall and a 14% increase in ATM Managed Services and Digital Retail Solutions (AMS DRS), marking the 14th consecutive quarter of mid-teens or better growth in this segment. 5%, up 70 basis points year-over-year, and total free cash flow over the past four quarters totaling $468 million. Brink's raised its full-year profit expectations, anticipating mid-single-digit organic revenue growth and EBITDA margin expansion of 30 to 50 basis points. S.

antitrust regulators. S. retail chain, expanding Brink's presence and operational efficiency. Future growth is expected to accelerate in the second half of the year, particularly in AMS DRS, supported by recent customer wins and a strong pipeline.

The company is nearing its intermediate target of 20% EBITDA margins in North America and sees further opportunities for margin expansion through increased network density and synergies with NCR. Management is optimistic about continued growth opportunities in underpenetrated markets and plans to maintain its strategic focus on high-margin, recurring-revenue services. Full Transcript OPERATOR Good day and welcome to The Brink's Company's second quarter 2026 conference call. All participants will be in listen-only mode.

Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation there will be an opportunity to ask questions. To ask a question you may press star then one on a touch-tone phone. To withdraw your question, please press star then two.

And please note this event is being recorded. This call and the Q&A session will contain forward-looking statements. Actual results could differ materially from projected or estimated results. Information regarding factors that could cause such differences are available in today's press release and presentation and in the Company's SEC filings.

The information presented and discussed on this call is representative of today only. Brink's assumes no obligation to update any forward-looking statements. The call is copyrighted and may not be used without written permission from Brink's. I will now turn it over to your host, Jesse Jenkins, Senior Vice President of Financial Planning and Analysis.

Mr. Jenkins, you may begin. Jesse Jenkins, SVP Global FP&A Thanks and good morning. Joining me are CEO Mark Eubanks and CFO Kurt McMaken.

Today Brink's reported second quarter results on a GAAP, non-GAAP and constant currency basis. Most of our commentary today will be focused on our non-GAAP results. These non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. We believe these measures allow investors to better compare performance over time and to evaluate our performance using the same metrics as management.

Reconciliations of non-GAAP results to their most comparable GAAP results are provided in SEC filings which can be found on our website. We will also have commentary on the status of our pending acquisition of NCR Atleos. As a reminder, this transaction remains subject to the completion of customary closing conditions and additional regulatory approvals. Other details including risk factors related to the transaction can be found in the pertinent SEC filings.

I will now turn the call over to Brink's CEO Mark Eubanks. Mark Eubanks, CEO Thanks, Jesse. Good morning, everyone. Starting on slide 3, we delivered a strong second quarter with organic growth of 4% in ATM Managed Services and Digital Retail Solutions, or AMS DRS, growing 14%.

5 billion. We continue to focus our strategic efforts on growing these valuable lines of business and have good line of sight into continued growth in the second half, supported by some recent customer wins, which I'll talk about later. Cash and Valuables Management, or CVM, performance was highlighted by continued strong growth in our Global Services business as we drive incremental revenue in the volatile precious metals markets. Supported by favorable revenue mix and widespread productivity initiatives, we delivered record second quarter operating and EBITDA margins.

5% in the quarter, up 70 basis points year over year with expansion across each of our operating segments. Cash flow continues to grow with year-to-date and trailing 12-month free cash flow of $32 million over the prior periods. Total free cash flow generated over the last four quarters was $468 million with conversion from EBITDA of 46%, above our full-year framework. Year to date, our results are slightly ahead of our original expectations.

With EBITDA above the midpoint of our prior guidance, we're raising our full-year profit expectations. As you'll see from our Q3 guidance in a few minutes, I'm confident in this team's ability to continue to improve the business, accelerate organic growth and drive higher margins and free cash flow over the balance of the year. We remain well positioned to deliver against our full-year 2026 framework of mid-single-digit organic revenue growth with EBITDA margin expansion of 30 to 50 basis points. Now turning to slide 4, I'd like to provide an update on the NCR Atleos acquisition.

Over the last few months, we've made considerable progress on many fronts and have moved our estimated closing timeline forward to early in the first quarter. Since our last public comments, we received overwhelming support from both NCR Atleos and Brink's shareholders, with more than 99% of the votes cast in favor of the transaction. That endorsement reflects the confidence in the strategic merits of the combined companies. We also have satisfied several outstanding regulatory requirements during the quarter.

S. antitrust regulators. S. representing the largest concentration of combined company pro forma revenue of almost 40%.

Other recent antitrust clearances include Brazil, India, Turkey, Colombia, and we continue to work constructively with the remaining other jurisdictions. We're also making meaningful progress with foreign direct investment regulators, having received clearance across the majority of the Eurozone footprint, including France, Germany, Spain, Italy and the UK. S. regulators are also moving forward with urgency.

We've achieved clearance in more than 80% of the necessary jurisdictions and remain well on track in the remaining markets. Over the next several months, until closing, we will stay focused on the standalone commitments of both companies while accelerating integration planning. Although we'll continue to operate independently until closing, our dedicated integration teams will work closely to ensure that we capture the strategic benefits of the combined businesses. As I continue to engage with the NCR Atleos team, I'm increasingly encouraged by the potential of the combination.

With deep expertise and strong performance across both organizations, I'm confident we'll be able to deliver the solutions to our customers' most important challenges. I look forward to closing the acquisition and moving forward as one team as quickly as possible. Now shifting back to the quarter on slide 5, I'll provide some commentary on performance by line of business starting with CVM. Organic growth was slightly positive in the quarter with strong Global Services volume and good pricing discipline offset by AMS DRS conversions.

As we discussed last quarter, our Global Services business remained strong through the first half of the year. Moving to AMS DRS, revenue grew organically $50 million in the quarter at a rate of 14%. Late in the quarter we saw several large installations and customer wins moving to the second half, primarily reflecting customer-driven timing decisions in the AMS business. We were recently awarded a full ATM outsourcing agreement for a network consortium of banks in Europe that will come online over the second half of the year.

In DRS, we continue to deploy our solution across the Paradis footprint that we discussed last quarter and I'll talk more about another key win in North America on the next slide. AMS DRS remains compelling outside of the more penetrated North America and Europe segments with strong growth in both Latin America and Rest of the World. These recent wins and solid deployment schedules in the second half give us confidence in our ability to deliver organic growth towards the top end of our full-year framework of mid to high teens for the balance of the year.

As we said last quarter, the visibility into our pipeline and backlog continues to support accelerated growth in the second half of the year. Stepping back and looking at total revenue trends for the quarter, we delivered a second quarter in line with our organic revenue expectations and customer engagement with our solutions remains very high. As you'll see in our Q3 guidance, we expect a slight acceleration in organic growth in the second half and remain on track to deliver against our organic growth framework for the full year. Moving on to slide 6, you can see a few details on a new DRS win in North America.

We recently signed an enterprise agreement with a large retail chain to provide a full DRS solution. S. footprint. This customer will enjoy the security and reliability of Brink's solutions, the integration of physical to digital payments, working capital transparency, and simplified cash handling.

This in-store process simplification will unlock management time for more value-add activities across the entire retail environment like employee training, customer assistance, and other in-store operational efficiency measures. While the customer benefits of DRS are clear, Brink's will also see meaningful productivity opportunities from this win as we increase density by adding a network that complements our existing footprint while optimizing the routes that already exist in most of our geographic locations.

As I've said before, DRS is a true win-win in the marketplace, and we continue to have meaningful conversations with customers of all sizes and in all of our markets. As we continue to improve our go-to-market approach in highly underpenetrated verticals, we expect to continue to deliver these kinds of wins that will set the foundation for future growth and margin accretion for years to come. S. ATM network, Allpoint, which has ATMs in all of these locations.

This is an example of the opportunities that will create significant routing synergies and improve service levels, and as we increase network density, this optimization creates significant benefits for our DRS value proposition while also reducing service costs for an owned ATM network in the combined company. As we look at the next several years post acquisition, we see meaningful additional opportunities to drive operating efficiencies, enhance service levels, and create value through the expanded network of the combined company. Now on to slide 7, you can see detail on a recent AMS win in a key Southeast Asia financial institution market.

We recently won an AMS deal with Mandiri Bank in Indonesia, servicing more than a third of their entire estate. Mandiri is the largest national bank in Indonesia, operating over 13,000 total ATMs. Southeast Asia remains an attractive market for AMS as we add Mandiri to the previously discussed wins in Indonesia and, more recently, the Security Bank win in the Philippines. These end markets have favorable cash usage trends and remain attractive for outsourcing as banks look to optimize costs and better serve their customers.

S. market. With the ATM managed services market still underpenetrated, we are having meaningful customer discussions across the globe. We continue to believe that outsourcing the operations and upkeep of these increasingly complex machines is the next logical step for financial institutions looking for ways to optimize their costs while continuing to improve customer experience at the intersection of physical and digital payments.

After the completion of the NCR Atleos acquisition, we expect to have a best-in-class set of ATM managed services capabilities, positioning us to better serve financial institutions as they evaluate outsourcing opportunities in markets around the world. Moving on to slide 8, before I hand over to Kurt for more detail on the financials, I wanted to briefly update progress on North America margins. 8% on a trailing 12-month basis at the end of the second quarter, with a solid revenue mix outlook over the second half of the year supported by recent customer wins at Paradis, Pandora, and the large enterprise deal I spoke about a few slides ago.

We expect to continue to march towards this level as an intermediate milestone in our continuous improvement journey. Our operations continue to improve, and with a good pipeline of productivity initiatives, we expect to continue to drive asset efficiency and labor productivity as we move forward. Over the past five years we've improved our service, strengthened our safety culture, improved our AMS/DRS selling capabilities, and eliminated waste from our operating model.

The North America business is well positioned operationally to absorb additional capacity as we integrate the NCR Atleos business into our daily activities, with meaningful cost synergies contemplated in the North American markets. I remain confident that 20% margins is just the next milestone in our journey as a company, and I look forward to pressing beyond these levels in future years. And with that I'll turn it over to Kurt to walk through the financials and Q3 guidance before I return with some closing comments in Q and Kurt McMaken, Chief Financial Officer Thanks, Mark. I'll begin on slide 10 with a look at the quarter.

Revenue increased by 7% with 4% constant currency growth and a 3% tailwind from foreign currency. Adjusted EBITDA was up 11% to 257 million, with constant currency EBITDA growth rates more than double constant currency revenue growth rates. Operating profit was up $25 million year over year, or 15%. EBITDA margins were up 70 basis points and operating profit margins were up 100 basis points, slightly ahead of our second quarter guidance expectations.

EPS growth of 18% was more than double revenue growth as we continue to compound profits faster than our top line. Trailing 12-month free cash flow was 468 million with conversion of 46% solid year to date. Cash performance was driven by EBITDA growth and continued capital efficiency as we shift to less capital-intensive customer offerings as we expected and experienced last year. We are currently ahead of our full-year cash conversion guidance.

Given the timing of cash tax payments, working capital, and capex over the balance of the year, we continue to target 40% to 45% conversion for the full year. On slide 11, total organic revenue growth was 54 million, with the majority of the growth coming from our higher-margin subscription-based strategic focus areas of AMS and DRS. FX contributed 37 million, or 3% of growth in the quarter, with favorable year-over-year rates in the euro, Mexican peso, and Brazilian real, partially offset by the Argentine peso. 5%.

6% on strong productivity, pricing, and revenue mix. Interest expense was 63 million in the quarter, flat sequentially, and is expected to remain roughly the same in future periods using current interest rate expectations. 3%, slightly better than the prior year. 13.

Depreciation and amortization was 64 million in the quarter and is expected to be roughly 250 million for the full year. Let's move to slide 13 to discuss our capital allocation framework. Our capital allocation framework remains unchanged despite the pending NCR Atleos acquisition. 7 times net debt to adjusted EBITDA.