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    CXT
    Earnings call· Jun 2026(Q2 FY26)

    Crane NXT Q2 FY26 earnings call CXT

    Aug 6, 2026 Source

    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

    18
    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

    2
    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%——

    Operational metrics

    14
    Adjusted EBITDA
    $115 million
    Q2 FY26
    Adjusted EBITDA Margin
    23%
    Q2 FY26
    Adjusted EPS
    $1.1013% year-over-year increase
    Q2 FY26

    Ahead of prior expectations.

    Free Cash Flow Conversion Ratio
    124%
    Q2 FY26
    Net Leverage
    2.7x
    Q2 FY26
    Total Sales Growth
    22%year-over-year
    Q2 FY26

    Reflecting strong SAT performance and Antares Vision contribution.

    Organic Sales Growth
    3%
    Q2 FY26

    Driven by continued strong performance in SAT.

    Authentication Organic Margin Expansion
    over 300 basis points
    Q2 FY26

    Driven by 80/20 product line optimization and footprint consolidation through CBS.

    CPI Services Growth
    mid-single digits
    FY26

    Expected for the full year.

    CPI Vending Growth
    low single-digit
    FY26

    Expected for the full year.

    CPI Hardware Decline
    mid-single-digit
    FY26

    Expected for the full year.

    SAT Full-year Organic Sales Growth
    3% to 4%
    FY26

    Expected for the full year.

    SAT Full-year EBITDA Margin
    25%
    FY26

    Expected for the full year.

    Antares Vision Adjusted EBITDA Margin
    teens
    FY26

    Expected for the full year.

    Industry KPIs

    9
    MetricValueDetails
    M a contribution$200 million to $210 millionUSD
    Orders book to bill1.1xx
    Long term agreements—
    Segment revenue growth$227 millionUSD
    Design wins product cycle ramps—
    Order visibility backlog policy$500 millionUSD
    Capacity expansion internal sourcing—
    End market revenue mix organic growthmid-single-digit growth in services, low single-digit growth in vending, mid-single-digit decline in hardware%
    Operating margin incremental leverage26%%

    Orderbook & backlog

    4
    SAT Backlog$500 millionQ2 FY26

    record high

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

    DTT Segment Backlog$257 millionQ2 FY26
    Antares Vision Backlog$125 millionQ2 FY26

    Expected to deliver over the next 12 months.

    CPI Backlog$132 millionQ2 FY26

    approximately 10% sequential growth

    Driven by order timing.

    Product announcements

    1
    ProductTypeDetails
    New U.S. Currencymilestone

    Deals & partnerships

    3
    Antares VisionFull 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 AuthenticationInorganic contribution to SAT segment

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

    U.S. Government Publishing OfficeRenewal of U.S. Passport paper contract10 years

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

    Capital programs

    1
    Micro-optics facilities build-outunderway

    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

    2
    Softer hardware demand in CPIFY26

    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 salesQ3 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

    5

    CPI Sales Growth Inflection

    Q4 FY26
    Currentlow single-digit decline in Q3
    Targetlow 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.

    Q&A highlights

    6

    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 read5 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    AI-generated summary of the company’s earnings call. Not investment advice.