Full Transcript: Crane NXT Q2 2026 Earnings Call

Crane NXT (NYSE: CXT ) reported second-quarter financial results on Thursday. The transcript from the company's second-quarter earnings call has been provided below. This content is powered APIs. For comprehensive financial data and transcripts, visit View the webcast at Summary Crane NXT reported a 22% year-over-year increase in total sales, with organic sales growing by 3%, driven by strong performance in the SAT segment and contributions from Antares Vision in the DTT segment.

42, citing strong first-half performance and ongoing momentum. Adjusted EBITDA reached $115 million, with an EBITDA margin of approximately 23%, reflecting a 150 basis point expansion. The integration of Antares Vision is progressing well, with the Crane Business System being implemented to drive productivity and growth. SAT segment saw a 17% increase in second-quarter sales, boosted by the De La Rue Authentication acquisition, while DTT segment sales increased 26%, supported by a full-quarter contribution from Antares Vision.

3x by the end of 2026. S. Government Publishing Office for passport paper production for another 10 years. Management expressed strong confidence in achieving synergies and margin expansion through the Crane Business System, particularly in the Authentication and Antares segments.

Full Transcript OPERATOR Good day and thank you for standing by. Welcome to the Crane NXT second quarter 2026 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session.

To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference call is being recorded.

I would now like to hand the conference over to your speaker today, Matt Roach, Vice President, Investor Relations. Please go ahead. Matt Roach, Vice President, Investor Relations Thank you, operator, and good morning, everyone. Welcome to Crane NXT's second quarter 2026 earnings conference call.

com. A replay of today's call will also be available on our website following the conclusion of our remarks. Before we discuss our results, I encourage all participants to review the legal notice on slide 2 regarding forward-looking statements, which are subject to risks, uncertainties, and other important factors that may cause actual results to differ materially. Additionally, please see the note on slide 2 on the use of non-GAAP financial measures.

We also refer you to the cautionary language included in our earnings release, our Form 10-K, and subsequent SEC filings. During today's call, we will discuss certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures can be found in the tables accompanying our earnings release and slide presentation, both of which are available in the Investor Relations section of our website. Joining me today are Aaron W.

Saak, our President and Chief Executive Officer, and Christina Cristiano, our Senior Vice President and Chief Financial Officer. During the call, we will review our second quarter highlights, discuss our financial and operational performance, and provide an update on our 2026 financial guidance. After our prepared remarks, we'll open the call for questions. With that, I'll turn the call over to Aaron.

Aaron W. Saak, President and CEO Thank you, Matt. And good morning to everyone joining us today to discuss our second quarter results. I'd like to begin by thanking our Crane NXT team members around the world for their strong operating performance throughout the quarter.

The key message I want to reinforce today is that we are executing against our value-creation priorities: delivering growth, building on our leadership positions, and driving operational excellence through organic margin expansion and strong free cash flow. And you can see that progress reflected in our second quarter results on slide 3. Organic sales grew by approximately 3%, and total sales increased approximately 22% year over year, reflecting both continued strong performance in our SAT segment and the contribution from Antares Vision in our DTT segment. I'm very pleased with the progress we've made in Q2.

With the integration of Antares, we're quickly implementing the Crane Business System, including training and holding Kaizen events to improve productivity and drive growth. We're off to a strong start in our first 100 days and remain confident in our ability to achieve our full-year estimates. 42. So with that, let me now hand the call over to Christina to review our second quarter performance in more detail and our updated guidance.

Christina Cristiano, Senior Vice President and Chief Financial Officer Thank you, Aaron, and good morning, everyone. I'd also like to express my appreciation to our associates around the world for their hard work in the second quarter. Turning to slide 4, sales were 493 million, an increase of 22% year over year. Organic sales grew 3%, driven by continued strong performance in SAT.

Adjusted EBITDA was 115 million, with adjusted EBITDA margin of approximately 23%, representing 150 basis points of organic margin expansion. For the full year, we continue to expect adjusted EBITDA margin of approximately 24%. 10, an increase of 13% year over year and ahead of our prior expectations. Finally, adjusted free cash flow was 79 million, resulting in a conversion ratio of approximately 124%.

We continue to expect full-year free cash flow conversion of 90% to 110%, supported by our robust backlog and operating discipline. Moving to our segments and starting with Security and Authentication Technologies on slide 5, second-quarter sales were 227 million, an increase of approximately 17% year over year, including one month of inorganic contribution from the De La Rue Authentication acquisition, which closed in May 2025. Organic sales increased approximately 10%, driven by sustained demand in international currency. S.

federal government since 1879. S. currency utilizing the next generation of micro-optic security technology. S.

S. passport paper. S. passport for another 10 years.

S. government on these important programs. Returning to our results, adjusted EBITDA was 59 million in the second quarter, with adjusted EBITDA margin of 26%, an increase of 30 basis points over the prior year. On an organic basis, adjusted EBITDA margin increased approximately 200 basis points year over year, reflecting the positive impact of productivity programs in the currency business and the execution of synergies in Authentication as planned.

Finally, SAT backlog of approximately 500 million reflects a new record high. This backlog provides meaningful visibility into customer demand and supports our confidence in the updated SAT sales outlook. We have a healthy pipeline of opportunities and are investing in future growth. Turning to Detection and Traceability Technologies on slide 6, second-quarter sales were 267 million, an increase of 26% year over year, reflecting a full-quarter contribution from Antares Vision.

Despite softer hardware demand in CPI, DTT expanded organic EBITDA margin by approximately 240 basis points through pricing discipline and productivity actions. We expect to see further margin accretion in DTT as the year progresses and are on track to end the year with adjusted EBITDA margin of approximately 27%. Segment backlog was 257 million, including 125 million of Antares Vision backlog, which we expect to deliver over the next 12 months. As we integrate Antares, we are focused on converting this backlog, deploying CBS, and realizing the margin expansion opportunities that supported the strategic rationale for the transaction.

1x. 7x. 3x. As we further strengthen our balance sheet, we will continue to evaluate capital allocation through a disciplined framework focused on the highest-return uses of cash and long-term shareholder value creation.

Moving now to slide 8, we are updating our 2026 guidance to reflect increased SAT sales and an improvement in non-operating expense for the full year. We continue to expect total sales growth of 15% to 17% in SAT. We now expect high-single-digit to low-double-digit sales growth, based on the strength of international currency backlog and continued strong demand. In DTT, we continue to expect sales growth in the low-20s percent range, with Antares Vision contributing approximately 200 to 210 million and with the fourth quarter representing the largest contribution of the year.

In line with the historic seasonality in CPI, we expect sales to be slightly down for the full year, reflecting mid-single-digit growth in services, low-single-digit growth in vending, and a mid-single-digit decline in hardware. We are also updating our forecast for non-operating expense to approximately 80 million from 85 million, reflecting the favorable impact of expected debt paydown and lower borrowing costs. 42 per share. Looking ahead to the third quarter, we expect low-double-digit sales growth.

In SAT, we expect sales to be flat to slightly down year over year, given the very strong comparison to Q3 2025. In DTT, we expect sales growth in the mid-20s percent range, with Antares Vision contributing approximately 55 to 60 million of sales, while CPI sales are expected to decline in the low single digits year over year. Now I'll turn it back to Aaron to provide closing remarks. Aaron W.

Saak, President and CEO Thank you, Christina. To wrap up, we delivered a solid second quarter and continue to execute against our key value-creation priorities of accelerating organic growth, building on our leadership positions, and driving operational excellence. Based on our continued momentum, I'm pleased that we're in a position to raise our full-year adjusted EPS guidance. We're confident in our ability to deliver against the commitments we've laid out, strengthening the portfolio and converting our competitive advantages into sustainable growth, margin expansion, and strong free cash flow.

Thank you again for your time this morning, and I'd also like to again thank our Crane NXT team members around the world for their commitment to our customers, our communities, and all of our stakeholders. And with that, operator, we'll take our first question. OPERATOR Thank you. At this time we will conduct the question-and-answer session.

As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please note that speakers will accept one question and one follow-up question on today's call. Please stand by while we compile the Q&A roster.

Our first question comes from the line of Matt Somerville of DA Davidson. Your line is now open. Matt Somerville, Analyst at DA Davidson Thanks. Morning.

Aaron W. Saak, President and CEO Hey, good morning, Matt. Matt Somerville, Analyst at DA Davidson Hey Aaron. Couple quick questions.

How much capacity is being added, either organically through your own footprint or through partners, for security substrate and printing as it pertains to the currency business? And can you give a little bit more granularity as to what we should read through the fact that you're now booking out into 2028? And then I have a follow-up. Aaron W.

Saak, President and CEO Yeah, hey, thanks for that, Matt. And, you know, we just feel incredibly bullish about this currency business both domestically and internationally. And you see that in the backlog again reaching another all-time high this quarter. We're adding capacity very quickly, both as you alluded to and we've mentioned in the past, through some partnerships here this year and that's going very well, as well as the buildout particularly of our micro optics facilities both here in the United States and in Europe.

And that's already going on and is going to continue for the next several years as we see the volume both coming into our backlog and what we see getting tendered that we feel we have a very high probability of winning. So that being said, we're in a place to sustain high mid single-digit growth in the international currency business for the next few years that will ultimately lead to doubling over the next several years the size particularly of our micro optics capabilities. So I think that puts us in a very good position both for obviously the rest of 26, but into 27, 28 and beyond. And that's what we're investing for.

Matt Somerville, Analyst at DA Davidson Thank you. Maybe just as a follow-up, can you give a little bit more granularity and detail around how we should expect third- and fourth-quarter revenue and earnings cadence to look across the two reportable business segments? Obviously there's a little bit of volatility in demand impacting CPI. Christina Cristiano, Senior Vice President and Chief Financial Officer Yeah, I'll start there, Matt.

And, you know, I think it's just worth noting that we had a strong first half of the year and that gives us the confidence to raise our full-year guidance. So, you know, in the third quarter we'll see a low double-digit sales growth overall with a mid-20s percent EBITDA margin. Now in SAT we'll see a low single-digit decline and that's largely driven by the comparative to 2025 in currency. As you know, we had a very strong end of the year last year.

Authentication will perform as expected in Q3, which is a mid single-digit revenue grower. In DTT we'll see a mid-20s percent growth. Antares will contribute 55 to 60 million of sales and then in CPI we'll be down in the low single digits, which is continued softness in our hardware end markets. I do just want to point out the phasing of the revenue in the back half of the year will be a little more skewed toward Q4, which is aligned with our normal seasonality.

But so overall if you look ahead to the full year, we're expecting a mid-teens sales growth with an adjusted EBITDA margin of about 24% and that's 100 basis points of organic margin expansion year over year. Matt Somerville, Analyst at DA Davidson Understood. Thank you. OPERATOR Thank you.

One moment for our next question. Thank you. Our next question comes from the line of Michael Holloran of Baird. Your line is now open.

Trent (for Michael Holloran), Analyst at Baird Hey guys, good morning. This is Trent on from Mike. Aaron W. Saak, President and CEO Morning, Trent.

Trent (for Michael Holloran), Analyst at Baird Hey, so quick question on the first one here. Just good to see Antares moving higher right out of the gates. Just any color on the confidence there and what you saw to raise expectations into this year. Aaron W.

Saak, President and CEO Yeah, hey, thanks for that, Trent. Bottom line is my confidence is very high in how we're executing Antares. It is 150 days in now post the close of the acquisition. As I mentioned in the prepared remarks, we've really had a lot of good early success in implementing and driving CBS to get after our synergies and that's going very well.

And as you know, it opens up for us here at Crane NXT, these new exciting markets in pharmaceutical track-and-trace technology and food and beverage inspection and detection that I'm more confident than ever that's going to play out for us very well over the long term. So couldn't be more pleased with how the team is integrating into the company, how we're executing and again gives us really high confidence as we look at the second half of the year. Trent (for Michael Holloran), Analyst at Baird That's great.

And then as a follow-up, kind of on the flip side of DTT here, it's not terribly surprising to see some pressure as it relates to the core CPI hardware and vending business. Just any thoughts of the state of the union where we are by end market and what gives you kind of confidence in the outlook there based on the backlog or anything else you're seeing? I know book-to-bill was kind of flattening out and you're starting to see sequential backlog growth.