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Crane NXT (CXT) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Industrials· Aug 6, 2026

Source: earnings call transcript

Executive summary

Crane NXT Q2 FY26 — Strong Execution and Raised EPS Guidance

Crane NXT delivered a solid second quarter, marked by strong execution, successful integration of Antares Vision, and robust organic margin expansion. The company raised its full-year adjusted EPS guidance, reflecting confidence in continued momentum and operational excellence, despite some softness in the CPI hardware segment. Management emphasized disciplined capital allocation and ongoing portfolio optimization to drive long-term shareholder value.

Highlights

5

  • Total sales increased approximately 22% year-over-year to $493 million, driven by strong SAT performance and Antares Vision contribution.

  • Organic sales grew by approximately 3%, primarily from continued strong performance in the SAT segment.

  • Adjusted EPS increased 13% year-over-year to $1.10, ahead of prior expectations.

  • Adjusted free cash flow was $79 million, resulting in a conversion ratio of approximately 124%.

  • Full-year adjusted EPS guidance raised to a range of $4.22 to $4.42 per share.

Concerns

3

  • Softer hardware demand in CPI led to a mid-single-digit decline in hardware sales for the full year outlook.

  • Q3 SAT sales are expected to be flat to slightly down year-over-year due to a very strong comparison to Q3 2025.

  • CPI sales are expected to decline in the low single digits year-over-year in Q3.

Guidance & targets

CategoryTargetConfidence
Full-year Adjusted EPS
$4.22 to $4.42 per share
high materiality
High
Full-year Total Sales Growth
15% to 17%
high materiality
High
Full-year Adjusted EBITDA Margin
approximately 24%
high materiality
High
Full-year Free Cash Flow Conversion
90% to 110%
medium materiality
High
Full-year SAT Sales Growth
high single-digit to low double-digit
medium materiality
High
Full-year DTT Sales Growth
low 20s percent range
medium materiality
High
Full-year Antares Vision Contribution to DTT Sales
$200 million to $210 million
medium materiality
High
Full-year CPI Sales
slightly down
medium materiality
Medium
Full-year Nonoperating Expense
approximately $80 million
medium materiality
High
Q3 Sales Growth
low double-digit
medium materiality
High
Q3 SAT Sales
flat to slightly down year-over-year
medium materiality
High
Q3 DTT Sales Growth
mid-20s percent range
medium materiality
High
Q3 Antares Vision Contribution to DTT Sales
$55 million to $60 million
medium materiality
High
Q3 CPI Sales
decline in the low single digits year-over-year
medium materiality
High
Net Leverage
approximately 2.3x
medium materiality
High
International Currency Business Growth
high mid-single-digit growth
medium materiality
High
Authentication EBITDA Margin
mid-teens
medium materiality
High
Antares Vision Adjusted EBITDA Margin
low 20s
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Security and Authentication Technologies (SAT)
Sales increase includes 1 month of inorganic contribution from De La Rue Authentication acquisition. Organic growth driven by sustained demand in international currency. Margin increase reflects productivity programs and authentication synergies. Backlog reached a new record high.
Organic sales growth: 10%Adjusted EBITDA: $59 millionOrganic adjusted EBITDA margin increase: 200 basis pointsBacklog: $500 million
$227 million17%—26%
Detection & Traceability Technologies (DTT)
Sales increase reflects a full quarter contribution from Antares Vision. Margin expansion achieved through pricing discipline and productivity actions despite softer hardware demand in CPI. Antares Vision backlog expected to deliver over the next 12 months. CPI backlog growth driven by order timing.
Organic EBITDA margin expansion: 240 basis pointsSegment backlog: $257 millionAntares Vision backlog: $125 millionCPI backlog: $132 millionCPI sequential backlog growth: 10%CPI book-to-bill ratio: 1.1x
$267 million26%——

Orderbook & backlog

SAT Backlog $500 million Q2 FY26

record high

Provides meaningful visibility into customer demand and supports updated SAT sales outlook.

DTT Segment Backlog $257 million Q2 FY26
Antares Vision Backlog $125 million Q2 FY26

Expected to deliver over the next 12 months.

CPI Backlog $132 million Q2 FY26

approximately 10% sequential growth

Driven by order timing.

Product announcements

ProductTypeDetails
New U.S. Currencymilestone

Deals & partnerships

Antares Vision Full quarter contribution from acquisition

Integration progressing well, implementing Crane Business System to drive productivity and growth. Opens new markets in pharmaceutical track and trace, and food and beverage inspection.

De La Rue Authentication Inorganic contribution to SAT segment

Acquisition closed in May 2025. Synergies in authentication are being executed as planned, driving margin expansion.

U.S. Government Publishing Office Renewal of U.S. Passport paper contract 10 years

Extended relationship for the U.S. Passport for another 10 years, continuing a more than 75-year partnership.

Capital programs

Micro-optics facilities build-out underway

Benefit:doubling micro-optics capabilities

Build-out occurring in the United States and Europe to support sustained high mid-single-digit growth in the international currency business.

Risks & headwinds

Softer hardware demand in CPI FY26

mid-single-digit decline in hardware sales for FY26

Mitigation:Driving organic margin expansion through pricing discipline and productivity actions; sequential backlog growth and book-to-bill above 1 indicate potential Q4 inflection.

Tough prior-year comparison for SAT sales Q3 FY26

Q3 SAT sales expected to be flat to slightly down year-over-year

Mitigation:Authentication expected to perform as a mid-single-digit revenue grower in Q3; strong international currency backlog and demand provide underlying strength.

What to watch in Q3 FY26

CPI Sales Growth Inflection

Q4 FY26
Current low single-digit decline in Q3
Target low single-digit growth in Q4

Why it matters

Indicates recovery in the CPI segment, particularly in hardware and vending, which has been a drag.

So you'll see kind of a low single-digit decline in Q3 and then building and accelerating to a low single-digit growth in the Q4 period.

Find out whether CXT delivers this. Inve re-checks your case every morning.

Q&A highlights

How much capacity is being added for security substrate and printing in the currency business, and what does the 2028 booking imply for visibility?

Management is bullish on the currency business, adding capacity through partnerships and micro-optics facilities in the US and Europe. This supports sustained high mid-single-digit growth in international currency for the next few years, aiming to double micro-optics capabilities, providing visibility into 2027, 2028, and beyond.

“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.”

asked by Matt Summerville · answered by Aaron Saak

2 min read 5 chapters

Detailed narrative

Antares Vision Integration and Crane Business System (CBS)

The integration of Antares Vision is progressing ahead of expectations, with the Crane Business System (CBS) being rapidly implemented. Management highlighted successful early efforts in driving CBS to achieve synergies, including Kaizen events to improve productivity and drive growth. The team is confident in achieving full-year estimates for Antares, and the cultural embrace of continuous improvement by the Antares team has been a key factor in the successful integration, leading to anticipated margin expansion.

SAT Segment Strength and Currency Business Outlook

The Security and Authentication Technologies (SAT) segment demonstrated strong performance with 10% organic sales growth, driven by sustained demand in international currency. The currency business achieved a record-high backlog of $500 million, providing significant visibility into future demand. Crane NXT is actively adding capacity, particularly for micro-optics facilities in the US and Europe, to support sustained high mid-single-digit growth in international currency over the next few years, aiming to double micro-optics capabilities.

DTT Segment Performance and CPI Dynamics

The Detection & Traceability Technologies (DTT) segment saw a 26% year-over-year sales increase, largely due to Antares Vision's contribution. Within DTT, the CPI business experienced softer hardware demand, particularly in retail, leading to a projected slight decline in full-year sales. However, CPI achieved over 200 basis points of organic EBITDA margin expansion through pricing discipline and productivity actions, and its backlog showed sequential growth with a book-to-bill ratio of approximately 1.1x, indicating an expected inflection to low single-digit growth in Q4.

Operational Excellence and Margin Expansion

Crane NXT emphasized operational excellence as a key value creation priority, evidenced by significant organic margin expansion across segments. SAT's adjusted EBITDA margin increased by 200 basis points organically, driven by productivity programs and authentication synergies. DTT expanded organic EBITDA margin by 240 basis points, with further accretion expected. The implementation of CBS in acquired businesses like authentication and Antares Vision is directly contributing to these margin improvements and is seen as a tangible driver of financial outcomes.

Capital Allocation and Strategic Portfolio

The company maintains a disciplined capital allocation framework, prioritizing debt reduction with a target net leverage of approximately 2.3x by year-end 2026. Management reiterated its strategy of building a market leader in authentication and traceability technologies within large, growing total addressable markets (TAMs). They continuously assess the portfolio for optimization and are cultivating a list of M&A targets for potential future transactions, likely in 2027 and beyond, to extend vertical capabilities.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.