Brink(US:BCO)2025-11-05 15:00Financial Data and Key Metrics Changes - The company reported revenue of over $1,300,000,000, an increase of 6% year-over-year, with 5% organic growth and a 1% tailwind from foreign currency [21][22] - Adjusted EBITDA rose 17% to $253,000,000, with operating profit up 24% [21][22] - EBITDA margins reached 19%, up 180 basis points from the prior year [6][21] Business Line Data and Key Metrics Changes - The ATM Managed Services and Digital Retail Solutions (AMS DRS) segment saw organic growth accelerate from 16% in Q2 to 19% in Q3, contributing to 28% of total revenue [6][14] - The Cash and Valuables Management (CVM) business remained consistent, with growth driven by pricing discipline and customer conversions to AMS DRS [14][22] Market Data and Key Metrics Changes - The company is experiencing healthy organic growth across all geographic segments, with particular strength in North America and Latin America [36][70] - The penetration rate for ATM outsourcing remains low, indicating significant market expansion opportunities [16][36] Company Strategy and Development Direction - The company is focused on delivering organic growth primarily from higher-margin subscription-based services of AMS and DRS, with expectations to increase the revenue mix to 27-28% by year-end [12][13] - The strategy includes enhancing productivity, improving capital efficiency, and maximizing shareholder value through disciplined capital allocation [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth potential of AMS DRS, citing a robust pipeline and strong customer traction [32][36] - The company anticipates continued margin improvement and cash generation, with a target of at least 20% EBITDA margin in North America over the midterm [19][57] Other Important Information - The company has repurchased approximately 1,700,000 shares year-to-date at an average price of $89 per share, with plans to return at least 50% of free cash flow to shareholders [11][26] - The net debt to EBITDA leverage ratio was reduced to 2.9 times, within the targeted range [12][26] Q&A Session Summary Question: Can you elaborate on the client traction you're seeing in both AMS and DRS? - Management noted good visibility into Q4 and the first half of next year, with strong growth in both AMS and DRS, particularly from conversions of traditional customers [32][34] Question: What trends are you seeing in the CVM business? - The CVM business growth was impacted by conversions to AMS DRS, accounting for a 2-3 point headwind, while Global Services performed in line with expectations [37] Question: What internal strategies are driving growth in AMS DRS? - The company has expanded its incentive compensation plans to align more employees with AMS DRS growth, and is evolving to work with channel partners to enhance sales [46][51] Question: How should investors think about the margin potential in North America? - Management indicated that incremental margins are expected to be between 20% to 30%, with no artificial ceiling, and a target of at least 20% EBITDA margins in the midterm [56][57] Question: What are your thoughts on midterm goals for free cash conversion from EBITDA? - The company aims for a free cash flow conversion of 40% to 45%, driven by a favorable mix of subscription-based business models and improved collection efforts [63][66] Question: How do you view bank consolidation and its implications for your business? - Management sees bank consolidation as an opportunity for AMS solutions, providing unique offerings that can create cost synergies for consolidating banks [75][80]