Crane NXT (CXT) Q2 2024 earnings summary

Executive summary

• Q2 2024 sales increased 5.2% year-over-year to $371 million, driven by the OpSec acquisition and core growth at CPI, despite some unfavorable currency translation.

• Integration of OpSec is progressing well, with positive customer feedback and clear visibility to targeted synergies.

• Record-high international currency backlog led to an increase in full-year core sales growth guidance to 3%-5%.

• CPI segment returned to core sales growth as gaming backlog normalized and new orders resumed.

• Leadership transition in CPI with Michael Mahan joining as President and Kurt Gallo set to retire in early 2025.

Financial highlights

• Adjusted segment operating margin was 27%, reflecting dilution from OpSec and unfavorable product mix.

• Adjusted EPS for Q2 was $1.06, in line with full-year guidance.

• Q2 2024 net income attributable to shareholders was $41.6 million, down 3.7% year-over-year.

• Adjusted free cash flow for Q2 2024 was $53.9 million, impacted by higher CapEx for the U.S. Banknote Redesign Program.

• Security and authentication technologies sales grew 16% year-over-year, mainly from OpSec acquisition.

Outlook and guidance

• Adjusted EPS guidance for 2024 narrowed to $4.20–$4.35.

• Currency core sales growth guidance raised to 3%-5% for the full year.

• CPI revenue expected to be slightly more weighted toward Q4.

• The company expects to recognize approximately 76% of its $501.9 million in remaining performance obligations as revenue in 2024.

• Restructuring actions in CPI are expected to be substantially completed in 2025.