The Brink's Company Q1 FY2026 earnings call

• Mark Eubanks mentioned being pleased with strong quarter growth and operational execution, with results at the upper end of first quarter guidance ranges. Highlighted 15% organic growth in AMS DRS, onboarding of Pandora in DRS, good momentum in AMS especially in rest of the world. - Discussed value creation strategy with expectation of organic growth in mid-single digits in 2026 driven by AMS and DRS, and acquisition of NCR Atlios to accelerate capture of AMS and DRS customers and lower cost base. - Commented on performance by line of business: CBM had 1% organic growth; AMS DRS revenue grew organically ~$50 million at 15% for 13th consecutive quarter of at least 15% organic growth. - Highlighted win with Paradis in DRS, a bespoke solution designed for them. - Spoke about methodical progress towards 20% EBITDA margins in North America, with EBITDA margins expanding 170 basis points in Q1. - Provided update on NCR-Atlios transaction, including refinancing of bridge loan, filing registration statement, progress on regulatory front, and NCR Atlios first quarter results in line with business case modeling. - Kurt McMacken discussed Q1 financials: revenue increased 10% with 5% constant currency growth and 6% FX tailwind; adjusted EBITDA up 10% to $238 million; operating profit up $18 million; interest expense, tax expense, etc. details.

First quarter revenue growth of 10% included 4.5% organic growth, driven mostly by 15% organic growth in ATM managed services and digital retail solutions (AMS DRS). At the segment level, rest of the world delivered 7% organic growth on strong precious metals activity in the global services line of business. Organic growth, favorable revenue mix, and good underlying productivity drove margin expansion of 10 basis points with over 100 basis points of expansion in both North America and rest of the world and 240 basis points of expansion in Europe. Q1 EBITDA was $238 million with a margin of 17.3%. Trailing 12-month EBITDA was $1 billion for the first time. Cash generation improved with an increase of $66 million year-over-year in Q1, and trailing 12-month free cash flow exceeded half a billion dollars for the first time with conversion from EBITDA of 50%.

• Framework for 2026 remains unchanged: expect mid-single-digit total organic growth, mid- to high-teens organic growth for AMS DRS; EBITDA margins to expand between 30 and 50 basis points; conversion of EBITDA to free cash flow between 40 and 45 percent. - Q2 guidance: revenue between $1.37 and $1.43 billion, organic growth in mid-single digits; FX expected to be year-on-year tailwind of just below 3% at midpoint; adjusted EBITDA between $245 and $265 million, margin expansion of approximately 40 basis points at midpoint; EPS between $1.85 and $2.25.

Q: In DRS, can you perhaps quantify how much of the growth came from conversion of traditional cash and transit customers versus greenfield wins?

A: Again, a good quarter for us in Q1 kind of everywhere in DRS, but particularly as you think about conversions. We stay on track with about a third of the installs really coming from conversions of existing customers, which gives a little bit of headwind in CVM but benefits from better margin and recurring revenue. The two-thirds are new customers that are either unvended or were previously vended by some other solution.

Q: You expect AMS DRS growth to accelerate sequentially given the strong backlog. What are your latest thoughts on what sustainable medium term AMS DRS growth can be?

A: We think this mid to high teens organic growth will continue this year. Going into 2027 and with the NCR deal closed, we can do more to accelerate that. Our backlog coming out of Q4 and Q1 is strong, and we're excited about what's lined up for the second half of the year.

Q: How would you describe the geographical differences you're seeing in customer uptake and demand and then What do you think it takes to light a fire under financial institutions in North America for this to take off?

A: We're seeing more broad AMSDRS growth around the world. In Latin America, we're seeing good progress in Mexico, Argentina, Brazil, etc. In Europe, it's our most highly penetrated AMS DRS market with good progress. In North America, DRS trajectory continues to go higher. For North America banks, the Atleos acquisition will help get to a full vertical solution where customer outcomes can be better controlled and create more confidence with those customers about full outsourcing.

Q: Have you finding this service is more valuable or less valuable to customers based on their business models as sort of like, a standalone big box as opposed to an area like in an airport where retail is clustered or a mall?

A: It's more about disclosure and customers being willing to talk about it. We're seeing strong value propositions from SMB, mom-and-pop coffee shops all the way up to big box guys. The complexity is helpful as we can solve problems with more technology and an integrated service model. On the low end, we're able to lower cost to serve to provide better value proposition. There's a network effect that can be created as we build up density.

Q: With respect to cash conversion from EBITDA, What does the combination with NCR Atlios do to the opportunity to increase that conversion over time?

A: From profitability perspective, synergies will help on flow through. Below the OP line and EBITDA line, there are opportunities in capital efficiency from CapEx and working capital perspective. Also, getting better payment terms as operating as one large enterprise versus 52 countries. The combined firm will have opportunities in cash interest and cash taxes.

Q: How are you thinking about the growth rate and margins for Land America business this year as moving past Argentine inflation impacts and how might the competitor's acquisition in Peru impact competition in the region?

A: Argentina is not a headwind from FX perspective in the back half of the year. LATAM margins are improving and will get better sequentially. We're not in Peru, exited the country years ago, and strategic focus is on moving up stack around DRS and AMS, not expanding geography. Don't see competitive pressure from the Peru acquisition as market is isolated from our perspective.

Q: Curious if fuel prices impact margins and if captured the full impact and impact for remainder of year?

A: We've been good at ensuring fuel doesn't adversely impact over long term. Fuel prices in Q1 didn't impact performance which was way above midpoint of guide. Likely to be a blip, and our guide and framework contemplates that we'll continue to cover it.