CXT Q2 2026 - Post-Call Earnings Update

Event: Quartr Q2 2026 event Retrieved: 2026-08-11T10:48:00Z Comparison mode: maximal Scorecard contract: v1

Consensus scorecard

• Consensus scorecard, bulleted equivalent (carried forward unchanged from the preliminary report for this event):
  • Revenue / total net sales: Quartr actual $493.2m against API Ninjas consensus $475.617m - Beat +$17.583m, +3.7%.
  • EPS / adjusted diluted: Quartr actual $1.10 against API Ninjas consensus $1.04 - Beat +$0.06, +5.8%.

Management and Q&A

• THE MARGIN PICTURE INVERTS ON AN ORGANIC BASIS, WHICH THE RELEASE DID NOT SHOW. The release reported consolidated adjusted EBITDA margin DOWN 80 basis points to 23.4% and DTT segment adjusted EBITDA margin DOWN 170 basis points to 26.4%. On the call the CFO stated consolidated organic margin expansion of approximately 150 basis points, DTT organic EBITDA margin expansion of approximately 240 basis points "despite softer hardware demand in CPI," and SAT organic adjusted EBITDA margin expansion of approximately 200 basis points against a reported +30 basis points. The CEO separately put Crane Authentication's organic margin expansion at over 300 basis points in the quarter. The reported margin compression is therefore acquisition mix, not deteriorating underlying performance - the preliminary flagged the reported compression as a bearish item and could not test it.
• CPI SOFTNESS WAS LOCATED AND SIZED IN SHAPE. Asked repeatedly about it, the CEO placed the weakness in vending and in hardware, and within hardware specifically in RETAIL, where larger custom projects are taking longer. He described CPI as three components: vending, a flat-to-low-single-digit grower running a little below the fleet average on EBITDA margin; hardware, supplying components into gaming, financial services and retail, carrying very high margin particularly in gaming where he said Crane NXT is "by far the number one player in the world in a very small market of competitors"; and services, growing mid-single digits with investment to service third-party components and software upgrades. The preliminary noted the release named a CPI volume decline without quantifying it.
• CPI IS GUIDED TO INFLECT IN THE FOURTH QUARTER. Asked by Bobby Brooks (Northland Capital Markets) about visibility on a return to growth, the CEO said CPI declines low single digits in the third quarter then builds to low-single-digit GROWTH in the fourth, supported by sequential backlog growth and a book-to-bill above one. Pressed on how far the backlog sees, he was explicit that visibility is "short" - CPI is more of a book-and-bill business with backlog at a normal level, sequentially higher. CPI backlog was approximately $132m at quarter end, up roughly 10% sequentially on a book-to-bill of approximately 1.1 times.
• THE CURRENCY BUSINESS IS BOOKING INTO 2028 AND CAPACITY IS BEING DOUBLED. Asked by Matt Summerville (D.A. Davidson) about capacity additions and what to read into booking out to 2028, the CEO said capacity is being added through partnerships this year and through the build-out of micro-optics facilities in both the U.S. and Europe, that the build-out continues "for the next several years," and that it will ultimately DOUBLE the size of the micro-optics capability. He said the company is positioned to sustain "high, mid-single-digit growth in the international currency business for the next few years."
• TWO GOVERNMENT RELATIONSHIP DATA POINTS WERE DISCLOSED ON THE CALL AND NOT IN THE RELEASE. Crane Currency marked its 225th anniversary and has been the sole-source provider of secure currency paper to the U.S. federal government since 1879; the Director of the Bureau of Engraving and Printing spoke at the event about the partnership on the next generation of U.S. currency micro-optics security technology. Separately, the U.S. passport paper contract with the U.S. Government Publishing Office was RENEWED IN THE SECOND QUARTER for another ten years, extending a relationship of more than 75 years.
• NET LEVERAGE WAS DISCLOSED AND A YEAR-END TARGET GIVEN. The CFO stated net leverage of approximately 2.7 times at the end of the second quarter and said free cash flow will be deployed toward debt reduction with an expectation of ending 2026 at approximately 2.3 times. The release carried the debt balances but no leverage measure; the preliminary flagged the $314.4m six-month increase in total borrowings without a leverage figure.
• THE GUIDANCE RAISE WAS BRIDGED. The CFO attributed the update to two things only: increased SAT sales, on the strength of international currency backlog and continued demand, and an improvement in non-operating expense to approximately $80m from $85m reflecting expected debt paydown and lower borrowing costs. The preliminary asked exactly this question - whether the adjusted EPS raise was operational or the $5m non-operating reduction - and the answer is both, with the segment sales raise confined to SAT.
• ANTARES VISION IS TRACKING AND ITS MARGIN PATH WAS CORRECTED ON THE CALL. Asked by Zach Walljasper (UBS) whether Antares EBITDA margins were running low-double to mid-teens, the CEO corrected the framing: he expects Antares in "kind of the teens adjusted EBITDA for the year," growing into the LOW 20s over the next several years, which he said "was always the investment case." Antares is 150 days post-close, contributes approximately $200m-$210m of full-year sales with the fourth quarter the largest contribution in line with its historic seasonality, and carries approximately $125m of the $257m DTT backlog, expected to deliver over the next twelve months.
• CROSS-SELL IS REAL BUT DATED TO 2027. Asked by Bobby Brooks about unexpected early benefits, the CEO said the operational synergy capture through the Crane Business System has gone "as well as we could have ever expected, and in parts, the best I've seen," and that revenue synergies are being worked in two directions: importing Authentication technology into pharmaceutical end markets, and using Currency's emerging-market government relationships to open access for pharmaceutical track-and-trace where Crane NXT already supplies those governments with currency. He said those "take longer to play out" and are "dividends that are going to play out in 2027 and beyond."
• THE CRANE BUSINESS SYSTEM WAS DESCRIBED IN MECHANICAL DETAIL. Asked by Bob Labick (CJS Securities) to elaborate on CBS actions in OpSec and De La Rue, the CEO credited authentication's 300-plus basis points of organic margin expansion to 80/20 product-line work - reducing lower-margin lines and moving up to higher gross margins - plus footprint consolidation, daily management boards and a Kaizen cadence, and said the U.S. facility will run about one Kaizen a month for the next several months. He said the same process is under way at Antares Vision, which he and the CFO visited two weeks before the call.
• AUTHENTICATION MARGIN EXIT RATE GIVEN. Asked by Bob Labick where authentication margins started and finish this year, the CFO said the business is on track, that the first-half 80/20 initiatives drive margin expansion to year end, that authentication ends the year at a MID-TEENS EBITDA margin on mid-single-digit revenue growth in the second half, and that the full-year SAT segment shows 100 basis points of margin expansion driven by authentication synergies.
• PORTFOLIO QUESTION ASKED AND NOT ANSWERED WITH A COMMITMENT. Asked by Ian Zaffino (Oppenheimer) how legacy CPI fits the portfolio given the direction of recent acquisitions, the CEO restated the strategy of building the market leader in authentication and traceability technologies, said "we're always assessing what's in our portfolio and how to best optimize that to drive shareholder value creation," that this is "very topical and something we're always thinking about," and that the focus for the next several quarters is execution while cultivating an M&A target list, with the next transaction "most likely" looking into 2027 to extend existing verticals. No divestiture, process or timeline was announced or implied, and none should be inferred.

Guidance and KPI clarification

• Guidance and KPIs, bulleted equivalent: full-year total sales growth remains 15% to 17%, described on the call as mid-teen, with SAT raised to high-single-digit through low-double-digit growth and DTT unchanged in the low 20s percent. Inside those, full-year SAT organic sales growth is guided to approximately 3% to 4% at an approximately 25% adjusted EBITDA margin with 100 basis points of segment margin expansion, DTT is on track to end the year at approximately 27% adjusted EBITDA margin, CPI sales are expected to be slightly down with mid-single-digit services growth, low-single-digit vending growth and a mid-single-digit hardware decline, and Antares Vision contributes approximately $200m to $210m of sales at a teens adjusted EBITDA margin for the year, growing into the low 20s over several years, with the fourth quarter its largest. Consolidated adjusted EBITDA margin guidance is unchanged at approximately 24% and now carries a stated 100 basis points of organic expansion. Adjusted EPS is raised to $4.22-$4.42 from $4.10-$4.40 on the SAT sales increase and a reduction in guided non-operating expense to approximately $80m from $85m, itself attributed to expected debt paydown and lower borrowing costs. Free cash flow conversion guidance is unchanged at 90% to 110%. For the third quarter, total sales growth is guided to low double digit at a mid-20 percent EBITDA margin, with SAT flat to slightly down on a low-single-digit decline against a strong prior-year currency comparison, Authentication a mid-single-digit grower, DTT up mid-20s percent including $55m to $60m from Antares Vision, and CPI down low single digits before returning to low-single-digit growth in the fourth quarter; second-half phasing is skewed toward the fourth quarter in line with normal seasonality. Net leverage was approximately 2.7 times at 30 June with approximately 2.3 times expected at year end as free cash flow is directed to debt reduction.
• Organic margin figures stated on the call and not in the release: consolidated organic adjusted EBITDA margin expansion of approximately 150 basis points in the quarter; SAT organic adjusted EBITDA margin expansion of approximately 200 basis points; DTT organic adjusted EBITDA margin expansion of approximately 240 basis points; Crane Authentication organic margin expansion of over 300 basis points.
• Backlog detail stated on the call: SAT backlog approximately $500m, a record high; DTT backlog $257m including approximately $125m of Antares Vision backlog expected to deliver over the next twelve months; CPI backlog approximately $132m, up approximately 10% sequentially on a book-to-bill of approximately 1.1 times.

Updated neutral analysis

• What the call resolved from the preliminary: the composition and location of the CPI decline; the driver of the reported margin compression, which is acquisition mix rather than underlying deterioration; the bridge of the adjusted EPS raise between SAT sales and the $5m non-operating expense reduction; the CPI backlog conversion horizon and the quarter in which CPI is expected to inflect; the Antares Vision full-year revenue contribution, margin path and backlog delivery period; net leverage and its year-end target; and the authentication margin exit rate.
• What the call did NOT resolve: the 94.1% six-month collapse in investment in equity affiliates and joint ventures to $8.2m against a $460.5m increase in goodwill and intangibles, and the six-month equity investment income of $4.8m that appears to contain a first-quarter one-time item; the nature of the $(6.3)m tax adjustment inside adjusted net income; the split of the 81.8% six-month increase in contract liabilities between acquired balance sheet and organic advance payments; the total remaining expected restructuring and acquisition-related charges; and the 40.7% six-month inventory build. None of these were asked about.
• A tension in the segment margin guidance is worth recording. The release's full-year guidance table carries "adjusted segment EBITDA margin approximately 27%," while on the call the CFO guided SAT to approximately 25% and DTT to approximately 27% at year end. Those two segment figures do not obviously blend to 27%. Neither the release nor the call reconciles the two presentations, and no reconciliation is attempted here.
• The organic disclosure changes how the quarter reads without changing a single reported number. On reported figures the quarter shows 22% sales growth carrying an 80 basis point consolidated margin decline and a 170 basis point DTT margin decline. On the company's organic basis it shows 3% growth carrying 150 basis points of consolidated expansion and 240 basis points in DTT. Both are true; they measure different things. The scorecard, which is built on reported net sales and reported adjusted EPS, is unaffected.
• The growth mix question the preliminary raised remains live. Full-year SAT organic growth is now guided to approximately 3%-4% against 9.6% organic delivered in the second quarter, and the CFO attributed the step-down to the prior-year comparison rather than to demand. DTT organic sales fell 3.4% in the quarter and CPI is guided slightly down for the full year. The company's mid-teen headline growth therefore continues to rest on the Antares Vision contribution, with organic growth in the low single digits across the portfolio.
• The second half is back-end loaded by the company's own account, in two ways at once. Revenue phasing is skewed to the fourth quarter for the group, Antares Vision's largest quarter is the fourth, and CPI's return to growth is a fourth-quarter event. That concentrates the delivery risk of the raised adjusted EPS range in a single quarter.
• The currency capacity commentary is the most consequential forward statement on the call and carries no numbers attached to it in the release. Booking into 2028, a record SAT backlog of approximately $500m, a doubling of micro-optics capacity over several years, and a stated ability to sustain high-mid-single-digit international currency growth are all management statements without a disclosed capital cost, timeline or contract value. The ten-year U.S. passport paper renewal is similarly disclosed without a contract value.
• The scorecard is unchanged. Both rows carry forward from the preliminary. Nothing on the call restated, corrected or contradicted total net sales of $493.2m or adjusted EPS of $1.10.

Market context and limitations

• SCOPE OF TRANSCRIPT READ: the Quartr transcript for event 662364 is complete and not live. All 80 paragraphs were read - the full prepared remarks and the entire Q&A. The Q&A ran to six analyst lines: Matt Summerville (D.A. Davidson), an analyst introduced as "Trent" appearing for Michael Halloran (Baird), Bob Labick (CJS Securities), Bobby Brooks (Northland Capital Markets), Ian Zaffino (Oppenheimer) and Zach Walljasper (UBS). The stand-in analyst's paragraphs carried no speaker name on the transcript records and are attributed here from the operator's introduction and his own self-identification.
• Management referenced slides two through eight throughout the prepared remarks (Quartr document 3969461). The slide deck itself was NOT read. Any figure that appears only on a slide and was not spoken is absent from this update.
• Management's spoken figures are rounded relative to the release - sales "$493 million" against $493.2m, adjusted EBITDA "$115 million" against $115.5m, SAT sales "$227 million" against $226.7m, SAT adjusted EBITDA "$59 million" against $58.8m, DTT sales "$267 million" against $266.5m, backlog "approximately $500 million" against $498.1m and "$257 million" against $257.4m. Where a release figure exists it is used; spoken-only figures are reported as spoken.
• Adjusted free cash flow of $79m and the approximately 124% conversion ratio are spoken figures. The preliminary omitted the quarter's individual cash flow lines because the release's text extraction was degraded, so these are not cross-checked against the release here.
• The transcript records the operator handing back to "Andrew Saak" for closing remarks; the Chief Executive Officer is Aaron Saak, who is named correctly everywhere else in the transcript. This is treated as a transcription error, not a second speaker.
• API Ninjas price snapshot for CXT returned $51.49 on NYSE with volume of 494,251, retrieved 2026-08-11T10:47:22Z. That is a pre-market quote three trading days after the call, taken before the US equity session opened, against the $52.37 post-close quote recorded in the preliminary on 2026-08-05. It is not a measured reaction to the call and no reaction is characterized here.
• Every figure in the consensus scorecard is carried forward from the preliminary report for this event and was not recalculated. The preliminary's disclosed limitation stands in full: the release's text layer systematically separates the digit "6" and the letter "x", every release figure was placed by arithmetic footing, and figures that could not be resolved that way were omitted rather than estimated.
• Organic sales, organic margin expansion, adjusted EBITDA, adjusted EPS, adjusted free cash flow, conversion ratio and net leverage are non-GAAP or company-defined measures. The company did not define net leverage on the call and the release does not present it.
• This report is factual only. It contains no ranking, no recommendation, and no view on the security.