CXT

Overall Financial Performance

• Total Q2 2026 sales hit $493 million, a 22% year-over-year increase, with 3% organic sales growth.
• Adjusted EBITDA was $115 million, for an adjusted EBITDA margin of ~23% (150 basis points of organic margin expansion year-over-year).
• Adjusted EPS came in at $1.10, a 13% year-over-year increase and ahead of prior expectations.
• Adjusted free cash flow was $79 million, for a free cash flow conversion ratio of ~124%.
• Ended Q2 with a net leverage ratio of 2.7x.

Strategic and Operational Updates

• Integration of Antares Vision is proceeding faster than expected 150 days post-acquisition, with early successful implementation of the Crane Business System (CBS) via training and Kaizen productivity events.
• SAT achieved a 10-year renewal of its U.S. passport paper contract with the U.S. government, and continues to see sustained strong demand for international currency products.
• CBS continuous improvement initiatives are driving tangible margin improvements across newly acquired assets, including 300+ basis points of organic margin expansion in the De La Rue authentication business in Q2.
• CPI (legacy DTT business) delivered over 200 basis points of organic margin expansion in Q2 despite softer top-line hardware demand, with 100%+ free cash flow conversion.

Capital Allocation

• Management will deploy generated free cash flow first toward debt reduction, targeting a 2.3x net leverage ratio by the end of 2026.
• All future capital allocation follows a disciplined framework focused on high-return investments and long-term shareholder value creation, with an active pipeline of potential M&A targets focused on extending core verticals, most likely for a 2027 transaction.

• Full year 2026 total sales growth is maintained at 15-17% year-over-year.
• Full year adjusted EBITDA margin guidance is maintained at ~24%, which represents 100 basis points of organic margin expansion year-over-year. Full year free cash flow conversion guidance is maintained at 90-110%.
• SAT full year sales growth guidance is upgraded to high single-digit to low double-digit, up from prior estimates, driven by strong international currency backlog and demand. SAT full year adjusted EBITDA margin is expected to be ~25%.
• DTT full year sales growth guidance is maintained at the low 20% range, with Antares Vision expected to contribute $200-$210 million in full year sales (largest contribution coming in Q4 aligned with historic seasonality). Legacy CPI sales are expected to be slightly down full year, with mid-single-digit growth in services, low single-digit growth in vending, and a mid-single-digit decline in hardware.
• Full year non-operating expense guidance is lowered to $80 million from the prior $85 million, driven by expected debt paydown and lower borrowing costs.
• Full year adjusted EPS guidance is raised upward to a range of $4.22 to $4.42 per share.
• Q3 2026 overall sales are expected to grow low double-digit year-over-year. SAT sales are expected to be flat to slightly down (due to very strong Q3 2025 comparisons), DTT sales are expected to grow mid-20s percent, and CPI sales are expected to decline low single-digits year-over-year. Q3 adjusted EBITDA margin is expected to be ~25%.
• Full year 2026 EBITDA margin for the authentication business within SAT is expected to reach mid-teens, and Antares Vision EBITDA margin is expected to reach teens in 2026, growing to low 20% over the next several years.

1. Security and Authentication Technologies (SAT): Q2 2026 sales were $227 million, a 17% year-over-year increase (includes 1 month of inorganic contribution from the 2025 De La Rue authentication acquisition), with organic sales growing 10%. Adjusted EBITDA was $59 million, with an adjusted EBITDA margin of 26% (a 30 basis point year-over-year increase, and 200 basis points organic margin expansion). SAT accounts for ~46% of total company Q2 revenue, and segment backlog reached a new record high of $500 million.

2. Detection and Traceability Technologies (DTT): Q2 2026 sales were $267 million, a 26% year-over-year increase, reflecting a full quarter contribution from Antares Vision. DTT accounts for ~54% of total company Q2 revenue. The segment achieved ~240 basis points of organic EBITDA margin expansion via pricing discipline and productivity actions despite softer CPI hardware demand. Segment backlog is $257 million, including $125 million of Antares Vision backlog (expected to be delivered over 12 months) and $132 million of CPI backlog (10% sequential growth, 1.1 book-to-bill ratio). Management expects DTT adjusted EBITDA margin to reach ~27% by the end of 2026.

• Soft demand for legacy CPI hardware, particularly in the retail segment where large custom projects have been delayed, leading to an expected full year slight decline in CPI sales.
• Revenue and earnings cadence can be volatile due to project timing and seasonality, with full year 2026 backloaded to Q4.
• Integration of large acquired assets (Antares Vision, De La Rue) carries execution risk, despite early positive progress.

Q: How much new capacity is being added for the currency business, and what does backlog extending into 2028 signal about growth expectations? / A: Management is very bullish on domestic and international currency demand, reflected in SAT's record high backlog. Capacity expansion is ongoing via both existing footprint buildout and third-party partnerships, specifically for the company's high-demand micro-optic security technology at facilities in the U.S. and Europe. The expansion is expected to double micro-optic capacity over the next several years, supporting sustained high mid-single-digit growth in international currency through 2028 and beyond. (238 words)

Q: Can you elaborate on how the Crane Business System (CBS) is driving results at acquired businesses like De La Rue and Antares Vision? / A: CBS focuses on tangible operational outcomes including improved quality, delivery, cost reduction and productivity, which is already visible in the De La Rue authentication business, which delivered over 300 basis points of organic margin expansion in Q2. Key initiatives include 80-20 product portfolio rationalization to prioritize higher margin products, facility footprint consolidation, and regular Kaizen productivity events. The exact same CBS rollout is already underway at Antares Vision, with early operational transformation visible, giving management high confidence in planned future margin expansion. (221 words)

Q: When will legacy CPI hardware return to positive growth, and what visibility do you have into this inflection? / A: Management expects CPI hardware to see a low single-digit year-over-year decline in Q3 2026, then accelerate to low single-digit growth in Q4 2026. Confidence in this inflection comes from sequential backlog growth, a book-to-bill ratio consistently above 1, and clear line of sight to delayed large projects that are scheduled to deliver in the second half of the year. CPI's strong margin expansion and free cash flow generation despite soft top-line growth also supports confidence in the segment's outlook. (174 words)

Q: How does the legacy CPI business fit into Crane NXT's long-term portfolio strategy? / A: The company's core strategy is to build a leading player in authentication and traceability technologies, with top 2 market positions in large, growing end markets, and M&A has expanded the company's total addressable market. Management continuously assesses the full portfolio to optimize long-term shareholder value. The near-term focus remains on executing current integration plans and cultivating a pipeline of M&A targets, with the next transaction most likely expected to occur in 2027 to extend core verticals. (143 words)