Crane NXT (CXT) Q3 2024 earnings summary

Executive summary

• Q3 2024 sales grew 14.3% year-over-year to $403.5 million, driven by the OpSec acquisition and core growth in Security and Authentication Technologies (SAT); Adjusted EPS was $1.16.

• Announced and/or completed acquisitions of De La Rue Authentication Solutions and TruTag smart packaging technology, expanding authentication and security capabilities.

• Integration of OpSec progressing as planned, driving operational improvements and positive customer engagement.

• Published first ESG report, highlighting commitments to sustainability and governance.

• Welcomed new leadership with Aleta Richards as President of Crane Currency.

Financial highlights

• Q3 2024 sales reached $403.5 million, up 14.3% year-over-year, with adjusted segment operating margin at 27% and adjusted EPS of $1.16.

• Adjusted free cash flow conversion was about 89%, impacted by shipment timing and increased working capital.

• Repayment of $65 million in debt, ending with net leverage of 1.7x.

• Adjusted EBITDA margin for Q3 was 26.6%, down from 29.3% in Q3 2023.

• GAAP operating profit was $75.0 million (18.6% margin), down 5.9% year-over-year.

Outlook and guidance

• 2024 sales growth guidance narrowed to 6%–8%, with adjusted EPS guidance at $4.22–$4.30.

• Adjusted free cash flow conversion guidance updated to ~70% for 2024 due to shipment timing.

• De La Rue Authentication Solutions acquisition expected to close in H1 2025 and be combined with OpSec in SAT.

• For 2025, total company revenue expected to be approximately flat, with U.S. currency volumes down double digits and international backlog strong.

• Segment-adjusted operating margins expected to remain in the 26–28% range for 2025.