Core Insights - Crane NXT, Co. will participate in a fireside chat at the 24th Annual D.A. Davidson Diversified Industrials & Services Conference on September 18, 2025 [1] - The event will be held virtually, with a live webcast available on the company's investor relations website, and a replay will be accessible for one year post-conference [2] Company Overview - Crane NXT is an industrial technology company that offers technology solutions for securing, detecting, and authenticating important assets for customers [3] - The company operates through two main business segments: Security & Authentication Technologies and Crane Payment Innovations, providing advanced technologies for securing high-value products and protecting brand identity [3] - Crane NXT employs approximately 5,000 individuals dedicated to ensuring secure transactions and protecting customer assets globally [3]

Group 1 - Crane NXT, Co. (CXT) is considered one of the most interesting businesses, engaging in the payments space and offering significant growth potential [1] - The company operates under Crude Value Insights, which focuses on cash flow and companies in the oil and natural gas sector, highlighting value and growth prospects [1] - The service provides subscribers with access to a 50+ stock model account, in-depth cash flow analyses of exploration and production (E&P) firms, and live chat discussions about the sector [2] Group 2 - The offering includes a two-week free trial for new subscribers, promoting engagement in the oil and gas investment community [3]

Crane NXT (CXT) FY Conference Summary Company Overview - Crane NXT is a premier industrial technology company that separated from Crane Company in April 2023, focusing on technologies that secure, detect, and authenticate important assets for customers [4][5][6] - The company has projected sales of approximately $1.6 billion for the current year, with about 50% of revenue being recurring [5][6] Financial Performance - The company reported segment operating profit margins in the mid-20% range and high free cash flow, maintaining a leverage ratio of approximately 2.6 times [5][12] - Q2 results showed a 9% sales growth, aligning with expectations for the full year [12] Business Segments - Crane NXT operates in two reportable segments: Security and Authentication Technologies (SAT) and Crane Payment Innovations (CPI) [6][7] - SAT accounts for about 45% of revenue, while CPI contributes approximately 55% [7] - The SAT segment includes Crane Currency and Crane Authentication, formed through recent acquisitions of OPSEC and De La Rue [9][11] Market Position and Growth Strategy - Crane NXT holds leadership positions in most markets it operates in, with a strong focus on brand protection, government solutions, and identification security [9][10] - The company anticipates mid-single-digit growth across its authentication business, driven by customer adoption of technology [20][22] Acquisitions and Integration - The recent acquisition of De La Rue has been integrated into Crane Authentication, enhancing the company's capabilities in brand protection and government solutions [9][11] - The integration process is focused on operational excellence and continuous improvement through the Crane Business System [11][29] International Opportunities - The company sees significant growth potential in emerging markets, particularly in the Middle East, Africa, and Southeast Asia, where governments are increasingly adopting authentication technologies [21][39] - Crane NXT estimates a 15-20% market share in the international currency market, indicating room for growth [39] Currency Business Insights - The U.S. currency program is expected to see flat low single-digit volume growth, but with increased technology features leading to revenue and margin growth [32][34] - The company anticipates a gradual replacement of old notes with new designs, avoiding any abrupt changes in volume [35] Capital Allocation and M&A Strategy - Crane NXT plans to maintain a competitive dividend yield of approximately 1% while focusing on organic growth and potential M&A opportunities [62][66] - The company is actively pursuing M&A deals that align with its core business and can generate value, with a target to keep net debt below three times EBITDA [68][69] Challenges and Market Dynamics - The CPI segment has faced challenges due to tariffs, particularly affecting the vending business, but the company is mitigating impacts through pricing and productivity measures [58][46] - The gaming sector is showing signs of recovery, with expectations for double-digit sales growth in the second half of the year [45][62] Conclusion - Crane NXT is positioned for growth with a strong focus on technology leadership, operational excellence, and strategic acquisitions, while navigating challenges in the market [12][66]

Financial Data and Key Metrics Changes - The company reported a sales growth of approximately 9% year over year and an adjusted EPS of $0.97 for the second quarter [5][12] - Free cash flow conversion was 120% in the quarter, reflecting strong operating discipline [5][13] - Adjusted segment operating profit margin was approximately 24%, down about 350 basis points year over year due to lower CPI volume and acquisition dilution [13] Business Line Data and Key Metrics Changes - CPI core sales declined approximately 7% year over year, but gaming orders were up approximately 10% sequentially and 30% year over year [14][15] - Security and authentication technologies saw sales grow approximately 32% year over year, with core sales increasing about 9% driven by higher international currency volume [15][16] - The U.S. currency business resumed production after technology upgrades, with a record high backlog of approximately $400 million in the international currency business [16] Market Data and Key Metrics Changes - The backlog for CPI ended the quarter at approximately $144 million, with expectations for strong double-digit growth in gaming for the third quarter [14] - The company expects mid-single-digit growth for the full year in the international currency segment despite tough comparisons to a strong 2024 [16] Company Strategy and Development Direction - The company aims to build a leading industrial technology firm focused on solutions that secure, detect, and authenticate [8][9] - Integration of De La Rue authentication and OPSEC has created a leading position in the authentication market, with a focus on operational improvements through the Crane Business System [9][10] - The company is confident in its M&A pipeline, expecting to announce another transaction within the next year [7][20] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook, reaffirming full-year EPS guidance in the range of $4 to $4.30 [8][18] - The company is navigating tariff and macro uncertainties through pricing and supply chain actions [8] - Management highlighted the importance of technology leadership and product launches in driving future growth [20] Other Important Information - The company anticipates operating profit margins of approximately 20% in the authentication business by the end of 2026, ahead of original expectations [11] - The company is focused on operational synergies and cost structure simplification following the De La Rue acquisition [78] Q&A Session Summary Question: Can you provide an analysis of the other main CPI verticals and the outlook for CPI? - Management expressed confidence in the gaming sector, expecting strong double-digit growth in the second half of the year, while noting headwinds in vending due to China tariffs [25][26] Question: How should we think about the revenue and earnings cadence between Q3 and Q4? - Management indicated that revenue and operating profit will be slightly more weighted to Q4, with confidence in full-year guidance [31][32] Question: Can you elaborate on the Fortress product and its applications? - Fortress is a new materials technology for product authentication, allowing users to trace products back to their point of origin using a smartphone app [45][46] Question: What are the core drivers for the authentication business going forward? - The authentication business is segmented into brand authentication, government solutions, and government ID, each expected to grow consistently due to market demand and synergies with existing operations [65][67] Question: What is the outlook for U.S. currency volumes in 2026? - Management expects volumes to be in the same range as the current year, with a focus on the mix of denominations being a key driver [71][72] Question: What actions have been taken to enhance margins in the authentication segment? - The company is executing operational synergies through cost structure simplification, rooftop consolidation, and product rationalization to enhance margins [78]

Financial Data and Key Metrics Changes - Crane NXT reported a sales growth of approximately 9% year over year in Q2 2025, with adjusted EPS of $0.97 and a free cash flow conversion of 120% [5][14][20] - The adjusted segment operating profit margin was approximately 24%, down about 350 basis points year over year due to lower CPI volume and acquisition dilution [14][19] Business Line Data and Key Metrics Changes - CPI core sales declined approximately 7% year over year, but gaming orders increased by approximately 10% sequentially and 30% year over year, indicating a strong recovery in that segment [15][17] - Security and authentication technologies saw sales growth of approximately 32% year over year, with core sales increasing by 9% driven by higher international currency volume [16][18] Market Data and Key Metrics Changes - The international currency business achieved a record high backlog of approximately $400 million in Q2 2025, with expectations of mid-single-digit growth for the full year despite tough comparisons to a strong 2024 [17][19] - The U.S. currency business resumed production in Q2 after technology upgrades, with a significant milestone achieved in preparation for a new currency series expected to launch in 2026 [17][75] Company Strategy and Development Direction - The company aims to build a leading industrial technology firm focused on solutions that secure, detect, and authenticate, with a strong emphasis on operational improvements through the Crane Business System (CBS) [8][10] - The integration of De La Rue authentication and OPSEC has created a leading position in the authentication market, with anticipated operating profit margins of approximately 20% by the end of 2026 [12][81] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the outlook, reaffirming full-year EPS guidance in the range of $4 to $4.30, while navigating tariff and macro uncertainties through pricing and supply chain actions [8][19] - The company is optimistic about the M&A pipeline, expecting to announce another transaction within the next year, supported by a strong balance sheet and free cash flow generation [7][60] Other Important Information - The company has launched new products, including Fortress for authentication and Jetscan Ultra for currency scanning, enhancing its technology leadership position [6][21] - The anticipated realization of operating synergies from the De La Rue acquisition is expected to accelerate, contributing to margin improvements [12][81] Q&A Session Summary Question: Analysis of CPI verticals and long-term outlook - Management expressed confidence in the gaming segment, expecting strong double-digit growth in the second half of the year, while other verticals are performing as expected with some headwinds from tariffs [24][25][29] Question: Revenue and earnings cadence in the back half of the year - Management indicated a slight step up in core revenue in Q3, with expectations for a more weighted performance in Q4, maintaining full-year guidance [30][32][34] Question: SAT guidance and sales growth expectations - Management clarified that the unchanged SAT guidance reflects timing of customer orders and project-focused business dynamics, with no change to the overall outlook [41][43] Question: Details on Fortress product - Fortress is a new materials technology for product authentication, allowing users to trace products back to their origin using a smartphone app, with a strong pipeline for various applications [45][47][49] Question: Margin phasing in the back half - Management expects margin accretion in CPI due to improved product mix and productivity initiatives, with SAT margins anticipated to be in the low 20s percent for the full year [52][54] Question: M&A opportunities and funnel health - Management expressed optimism about the M&A funnel, indicating a healthy pipeline and confidence in closing a deal within the next year [58][60] Question: Core drivers for Crane authentication business - The authentication business is segmented into brand authentication, government solutions, and government ID, with each segment expected to grow consistently due to market demand and technology leadership [66][68][70]

Q2 2025 Financial Performance - Sales grew by approximately 9%[6, 15], driven by acquisitions[16] - Adjusted EPS was $0.97[6, 16], aligning with expectations[16] - Adjusted Free Cash Flow conversion was approximately 120%[6, 16] - Core growth was (0.8%) [15] - FX Translation was 2.7%[15] - Acquisitions was 7.2%[15] Segment Results - Crane Payment Innovations (CPI) sales decreased by 5.8% to $211 million[17] - Security and Authentication Technologies (SAT) sales increased by 32% to $193 million[19] Guidance and Outlook - Full-year Adjusted EPS guidance is reaffirmed at $4.00 to $4.30[7] - Crane NXT sales growth is projected at +6% to +8%[24] - CPI segment sales growth is projected at -2% to 0%[24] - SAT segment sales growth is projected at +19% to +21%[24]

Core Insights - Crane Nxt reported fiscal Q2 2025 earnings with GAAP revenue of $404.4 million, a 9.1% increase year-over-year, exceeding analyst expectations of $383.16 million [1][2] - Non-GAAP EPS was $0.97, surpassing the consensus of $0.95 but down from $1.06 in the previous year, indicating operational pressures despite revenue growth [1][2] - The company maintained its full-year outlook, emphasizing confidence in improving profitability and integration benefits [1] Financial Performance - GAAP revenue increased by $33.8 million year-over-year, with $26.7 million attributed to acquisitions and $10.1 million from favorable foreign currency translation [5] - Organic core sales decreased by $3.0 million, reflecting a 1% decline, indicating underlying demand weakness [5] - GAAP operating profit margin fell to 11.8%, down 6.4 percentage points from the previous year, while adjusted operating profit margin decreased by 2.9 percentage points to 21.2% [2][8] Business Segments - The Payment Innovations segment experienced a 5.8% decline in sales year-over-year, with core sales down 7.3%, primarily due to lower volumes in the vending market [6] - The Security and Authentication Technologies segment saw a revenue increase of 32.0%, driven by both acquisitions and organic growth, with core sales up 9.1% [7] - The segment recorded a backlog of $447.2 million, supported by strong demand for micro-optics and digital authentication services [13] Acquisitions and Strategic Focus - Recent acquisitions, including OpSec Security and De La Rue Authentication Solutions, are aimed at expanding the company's authentication and security solutions [4] - Management highlighted the importance of effective integration of acquisitions and capturing operational synergies as key priorities for the second half of the year [15] - The company is addressing margin pressures and managing rising debt levels due to acquisition financing, with total debt increasing to $1.13 billion [9] Future Guidance - Management expects sales growth of 6% to 8% for fiscal 2025, with adjusted EPS projected between $4.00 and $4.30 [14] - The outlook for Payment Innovations indicates flat to slightly negative sales, while Security and Authentication Technologies is forecasted to achieve 19% to 21% annual sales growth [14] - Adjusted free cash flow conversion guidance is set at approximately 90% to 110% for the full year, excluding one-time items [14]

Core Insights - Crane NXT reported revenue of $404.4 million for the quarter ended June 2025, marking a year-over-year increase of 9.1% [1] - The earnings per share (EPS) for the same period was $0.97, down from $1.06 a year ago [1] - The reported revenue exceeded the Zacks Consensus Estimate of $376.41 million by 7.44%, while the EPS also surpassed the consensus estimate of $0.92 by 5.43% [1] Revenue Breakdown - Net Sales from Security and Authentication Technologies reached $193 million, exceeding the average estimate of $173.02 million by two analysts [4] - Net Sales from Crane Payment Innovations totaled $211.4 million, slightly above the average estimate of $203.42 million, but represented a year-over-year decline of 5.8% [4] Profitability Metrics - Operating profit from Security and Authentication Technologies was reported at $18 million, significantly lower than the average estimate of $31.59 million [4] - Operating profit from Crane Payment Innovations was $49 million, compared to the average estimate of $53.42 million [4] Stock Performance - Crane NXT shares have returned +1% over the past month, outperforming the Zacks S&P 500 composite's +0.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Insights - Crane NXT reported quarterly earnings of $0.97 per share, exceeding the Zacks Consensus Estimate of $0.92 per share, but down from $1.06 per share a year ago, representing an earnings surprise of +5.43% [1] - The company achieved revenues of $404.4 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 7.44% and up from $370.6 million year-over-year [2] - Crane NXT has outperformed consensus EPS estimates three times in the last four quarters and has also topped revenue estimates three times during the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.30 on revenues of $433.5 million, while the estimate for the current fiscal year is $4.09 on revenues of $1.59 billion [7] - The trend of estimate revisions for Crane NXT was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Technology Services industry, to which Crane NXT belongs, is currently ranked in the top 41% of over 250 Zacks industries, suggesting that companies in the top half tend to outperform those in the bottom half by more than 2 to 1 [8] - Another company in the same industry, Allot Communications, is expected to report break-even quarterly earnings per share, reflecting a year-over-year change of +100%, with revenues anticipated to be $22.9 million, up 3.3% from the previous year [9][10]

Core Insights - Crane NXT reported a sales growth of approximately 9% for the second quarter of 2025, with net sales reaching $404.4 million compared to $370.6 million in the same period of 2024 [4][5][7] - The company maintained its full-year earnings per share (EPS) guidance in the range of $4.00 to $4.30 [7][13] Financial Performance - The adjusted operating profit margin for the second quarter was approximately 21.2%, down from 24.1% in the previous year [6][10] - Operating profit decreased to $47.9 million, a decline of 29.1% from $67.6 million in the second quarter of 2024 [6][7] - The company experienced a core sales decline of 0.8%, primarily due to lower volumes in CPI [5][7] Segment Performance - Crane Payment Innovations segment reported net sales of $211.4 million, a decrease of 5.8% year-over-year, primarily driven by lower volumes [9] - Security and Authentication Technologies segment saw a significant increase in net sales to $193.0 million, up 32.0% year-over-year, largely due to acquisitions and core sales growth in international markets [10] Cash Flow and Financial Metrics - Cash provided by operating activities was $62.8 million, an increase from $56.8 million in the prior year [11] - The company held cash and cash equivalents of $152.5 million as of June 30, 2025, down from $165.8 million at the end of 2024 [12] Order Backlog - The total order backlog as of June 30, 2025, was $591.6 million, an increase from $547.8 million in the previous quarter [35]