CXT — Crane NXT, Co.

Summary of Crane NXT, Co. Q4 2025 Earnings Call

1. Key Financial Results and Metrics:

• Q4 Sales: $477 million, up 20% year-over-year.
• Full Year Sales: Approximately $1.7 billion, an 11% increase.
• Adjusted EBITDA Margin: 25% in Q4 and 24% for the full year.
• Adjusted EPS: $1.27 in Q4 and $4.06 for the full year.
• Free Cash Flow Conversion: 135% in Q4 and 94% for the full year.
• Net Leverage: Approximately 2.3 times at year-end.

2. Strategic Updates and Business Highlights:

• Achieved 20 new currency denomination wins in 2025, exceeding the target of 10-15, including five for Fiji.
• Completed equipment upgrades for the new U.S. currency series, with the $10 bill launch expected in mid-2026.
• Secured multiyear contracts with major sports leagues (NFL and MLB) for authentication services, enhancing recurring revenue streams.
• Integrated OPSX Security and De La Rue Authentication into Crane Authentication to drive synergies and margin improvements.
• Initiated a $500 million term loan to fund the equity investment in Antares Vision, with plans to take the company private by mid-2026.

3. Forward Guidance and Outlook:

• 2026 Sales Growth: Expected to be 4% to 6%.
• Adjusted EPS Guidance: Projected between $4.10 and $4.40.
• Anticipated adjusted EBITDA margin of approximately 28%, flat year-over-year.
• Expecting high single-digit growth in Security and Authentication Technologies (SAT) and flat sales in CPI.
• Free Cash Flow Conversion: Expected to be between 90% and 110%.

4. Bad News, Challenges, or Points of Concern:

• CPI Segment: Expected to remain flat due to ongoing softness in hardware and vending markets, impacted by tariffs.
• Operating Margin Decline: Adjusted segment operating margins decreased year-over-year due to increased costs and unfavorable foreign exchange impacts.
• Cost Pressures: Additional costs incurred to meet demand in international currency and investments in staffing and production capacity.
• Tough Comparisons: Anticipated challenges in the second half of 2026 due to strong performance in Q4 2025 creating high year-over-year comparisons.

5. Notable Q&A Insights:

• Management emphasized the importance of backlog visibility, indicating that most contracts were secured before execution, limiting immediate pricing flexibility.
• Q1 2026 is expected to be the lowest quarter for profit due to incremental costs, with profitability improving as the year progresses.
• The $10 bill production ramp-up is contingent on the U.S. Treasury's announcement, expected in Q4 2026.
• Management remains confident in the sustainability of growth in the international currency business, driven by increased counterfeiting, growth in emerging markets, and faster redesign cycles.
• The integration of the De La Rue acquisition is progressing as planned, contributing positively to margins and overall performance.

This summary encapsulates the key points from the earnings call, providing a balanced view of Crane NXT's performance, strategic direction, and outlook for the future.