Crane NXT (CXT) Q3 2026 Earnings Call Transcript

DATE

Nov. 5, 2026

CALL PARTICIPANTS

• Vice President of Investor Relations - John Walsh
• President and Chief Executive Officer - Aaron Saak
• Senior Vice President and Chief Financial Officer - Christina Cristiano

TAKEAWAYS

• Net Sales -- $497.1 million, representing 11.7% growth driven primarily by the acquisition of Antares Vision.
• Organic Sales Growth -- 1.1%, reflecting continued demand in the Security and Authentication Technologies segment.
• Adjusted EPS -- $1.28, which remained flat year over year as higher operating profit was offset by increased interest expense.
• Adjusted EBITDA -- $127.2 million, growing 3.9% compared to the prior year.
• Adjusted EBITDA Margin -- 25.6%, a 190 basis point decline due to the expected dilution from recent acquisitions.
• Adjusted Free Cash Flow -- $98 million, increasing 15% year over year with a strong conversion rate of 132%.
• Security and Authentication Technologies (SAT) Sales -- $243.5 million, up 6.4% driven by growth in both currency and authentication products.
• SAT Organic Sales Growth -- 7.2%, reflecting volume leverage and favorable product mix.
• SAT Adjusted EBITDA Margin -- 29.2%, expanding 60 basis points due to synergy realization and operational execution.
• SAT Backlog -- $481.6 million, an 8% increase to near record levels with orders booked into the second half of 2028.
• Detection and Traceability Technologies (DTT) Sales -- $253.6 million, increasing 17.2% due to acquisition contributions.
• DTT Organic Sales Growth -- negative 5.3%, reflecting continued softness in the vending and hardware markets.
• DTT Adjusted EBITDA Margin -- 28.0%, a 430 basis point decline primarily from acquisition-related dilution.
• Total Backlog -- $715.5 million, which includes approximately $125 million from the Antares Vision business.
• Net Leverage Ratio -- 2.5 times at quarter-end, with management targeting approximately 2.3 times by the end of the year.
• Full-Year Adjusted EPS Guidance -- $4.32 to $4.42, with the midpoint raised to $4.37 from the previous $4.32.
• Full-Year Sales Growth Guidance -- approximately 14%, a narrowing of the previous range of 15% to 17%.
• Full-Year SAT Sales Growth Guidance -- approximately 11%, updated from the previous high single-digit to low double-digit range.
• Full-Year DTT Sales Growth Guidance -- high-teens, revised downward from the low 20% range due to market headwinds.
• Full-Year Adjusted EBITDA Margin Guidance -- approximately 24%, supported by pricing and productivity initiatives.
• Non-Operating Expense Guidance -- $75 million to $80 million, reflecting lower borrowing costs than previously anticipated.
• Capital Expenditures -- 4% to 5% of sales, with increased investment in micro-optics production lines in the U.S. and Malta.

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RISKS

• Cristiano stated, "This updated outlook reflects continued market softness in CPI vending and hardware and slower life sciences project conversion in Antares Vision," which resulted in a lowered full-year sales outlook.
• Saak noted that certain retail segments experienced headwinds due to pushouts by "several big box retailers of their previously announced upgrade and refresh programs," impacting hardware volumes.

SUMMARY

Crane NXT, Co. (NYSE:CXT) reported third-quarter results characterized by revenue growth driven by acquisitions and organic strength in the security segment, offset by softening demand in specific industrial hardware markets. Management reported multiple long-term contract renewals, including a 10-year agreement with the U.S. government for micro-optics and currency paper. The company raised its full-year earnings per share guidance midpoint while lowering its total sales growth outlook to approximately 14% to account for project delays in life sciences and retail hardware. Capital allocation remains focused on debt reduction and organic investments, specifically in micro-optics capacity expansion in the U.S. and Malta.

• Saak noted, "The Bank of Canada also announced that its new $20 banknote will feature our micro-optics security technology," marking a new global central bank customer.
• The Antares Vision integration reached its seven-month mark, with the company deploying the Crane Business System to reduce lead times and optimize the operational footprint.
• SAT segment visibility extends into the second half of 2028, with 65% of the current backlog scheduled for delivery in 2027.
• Management reported that the 2027 U.S. Federal Reserve print order reflects a double-digit increase in volume with a favorable mix toward high-denomination notes.
• The company is expanding multivendor service offerings for third-party equipment, including kiosks, smart safes, and self-checkout systems.
• The company declared a quarterly dividend of $0.18 per share, payable on Dec. 9, 2026.

INDUSTRY GLOSSARY

• SAT: Security and Authentication Technologies, a segment providing security features for banknotes and physical products.
• DTT: Detection and Traceability Technologies, a segment focused on automated payment systems and supply chain traceability.
• Micro-optics: Specialized security technology used in banknotes to create visual effects that prevent counterfeiting.
• CPI: Crane Payment Innovations, a business within the DTT segment providing payment hardware and software.
• Crane Business System: The company's proprietary operational framework focused on continuous improvement and productivity.
• Kaizen: A business philosophy of continuous improvement through small, incremental changes.

Full Conference Call Transcript

Operator: Good day, and thank you for standing by. Welcome to the Crane NXT Q3 2026 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, John Walsh, Vice President of Investor Relations. Please go ahead.

John Walsh: Thank you, operator, and good morning, everyone. Welcome to the Crane NXT third quarter 2026 earnings conference call. Before we begin, I'd like to remind you that the presentation slides we will reference today are available in the Investor Relations section of our website at cranenxt.com. A replay of today's call will also be available on our website following the conclusion of our remarks. Before we begin, please review the forward-looking statements disclaimer and non-GAAP disclosures on slide two. Our comments today are subject to the risks, uncertainties, and other important factors described in our earnings release, Form 10-K, and subsequent SEC filings.

Reconciliations of the non-GAAP measures discussed today to their most directly comparable GAAP measures are available in the earnings release and presentation on our Investor Relations website. Joining me today are Aaron Saak, President and Chief Executive Officer, and Christina Cristiano, Senior Vice President and Chief Financial Officer. We will review our third quarter highlights, financial and operational performance, and updated 2026 outlook before taking your questions. After our prepared remarks, we will open the call for questions. With that, I'll turn the call over to Aaron.

Aaron Saak: Thank you, John, and good morning. I want to begin by thanking our Crane NXT associates around the world for their continued focus on our customers and strong execution during the quarter. The key takeaway from the third quarter is that we continue to execute against our value creation priorities. We strengthened future revenue visibility through long-term commercial wins, delivered another quarter of strong operational performance, generated robust free cash flow, continued to advance the Antares Vision integration, and we're raising our full-year adjusted EPS guidance midpoint. Slide three highlights the progress we made during the quarter. First, we secured multiple long-term awards across the portfolio.

At Crane Currency, we signed multi-year renewals with the U.S. government for micro-optics and currency paper, and this adds to the U.S. passport paper win from the second quarter. The Bank of Canada also announced that its new $20 banknote will feature our micro-optics security technology, an important new customer win that expands our position with a leading global central bank. Within Crane Authentication, we renewed a multi-year agreement to provide enhanced security features for a global transaction card customer. In DTT, a large multinational food brand selected Antares Vision for a turnkey traceability and serialization solution, reflecting the team's domain expertise and track record on complex, large-scale deployments.

We also continue to expand CPI's multi-vendor service offerings into kiosks, smart safes, and self-checkout systems. Together, these awards strengthen our visibility into revenue growth for 2027 and beyond. We also delivered another quarter of strong operational performance, led by organic sales growth of 7% and 60 basis points of adjusted margin expansion in SAT, driven by volume leverage, execution of productivity initiatives, and acquisition synergies within Crane Authentication. In DTT, the Antares Vision integration continues to progress as expected. We are deploying the Crane Business System and have completed multiple Kaizen events focused on productivity and growth. These actions are reducing lead times, optimizing our footprint, and creating cross-selling opportunities across the portfolio.

Additionally, we continue to invest in innovation at Antares Vision, including new AI-enabled inspection technologies that combine advanced vision systems with our broader serialization and traceability capabilities, as highlighted at the recent PACK EXPO in Chicago. During the quarter, we also generated strong free cash flow, giving us confidence in achieving our year-end net leverage target of approximately 2.3 times. Based on our performance in Q3 and the visibility we have to the rest of the year, we are raising the midpoint of our full-year adjusted EPS guidance while narrowing the range, as our focus on execution and operational productivity will offset anticipated market softness in DTT markets.

I would now like to turn the call over to Christina to review our financial performance in more detail.

Christina Cristiano: Thank you, Aaron, and good morning, everyone. I also want to thank our associates around the world for their hard work and strong execution in the third quarter. Turning to slide four, third-quarter sales were $497 million, up 12% year over year. Organic sales increased 1%, driven by continued strength in SAT. Adjusted EBITDA increased 4% to $127 million, and adjusted EBITDA margin was 25.6%, down 190 basis points year over year, reflecting the expected dilution from the recent Antares Vision acquisition. We continue to expect full-year total company adjusted EBITDA margin of approximately 24%. Adjusted EPS was $1.28, which was flat year over year, as higher adjusted operating profit was offset by higher interest expense from the acquisition.

Adjusted free cash flow was $98 million, up 15% year over year, with very strong free cash flow conversion of approximately 132%. We remain on track to achieve our full-year conversion guidance of approximately 90%-110%. Turning to SAT on slide five, third-quarter sales were $244 million, up approximately 6% year-over-year. Organic sales increased 7%, with similar growth in Crane Currency and Crane Authentication. Adjusted EBITDA increased 9% to $71 million, and adjusted EBITDA margin expanded 60 basis points to 29.2%. This increase was driven by Crane Authentication synergies, volume leverage, and favorable mix. SAT backlog increased 8% to approximately $482 million and remains at near record high levels.

We are booking orders into the second half of 2028 with meaningful visibility into continued customer demand. To meet growing international demand, we are accelerating initiatives to increase capacity, including investing in additional micro-optics production lines in the U.S. and Malta, as previously discussed. Turning to DTT on slide six, third-quarter sales were $254 million, up 17% year-over-year. Organic sales declined 5% as growth in CPI service was more than offset by continued softness in the vending and hardware markets. Antares Vision sales were impacted in the third quarter by project timing in the life sciences end market. However, our backlog and opportunity funnel remain healthy.

Adjusted EBITDA increased 2% to $71 million, with strong pricing and productivity offsetting lower organic volume flow-through. Adjusted EBITDA margin declined 430 basis points, reflecting the expected dilution from Antares Vision. We are actively deploying the Crane Business System and beginning to realize operating synergies as identified in the acquisition business case. This puts Antares Vision on track to achieve its targeted adjusted EBITDA contribution for 2026. Lastly, DTT backlog was approximately $234 million, including approximately $125 million from Antares Vision. CPI backlog remains stable. Turning to slide seven, we ended the third quarter with net leverage of approximately 2.5x and expect to meet our year-end target of approximately 2.3x, driven by our robust cash generation.

We have a strong balance sheet with no fixed-rate debt maturities until 2036, and we will continue to allocate capital through a disciplined framework focused on the highest return uses of cash and long-term shareholder value creation. Turning to slide eight, we are raising the midpoint of our adjusted EPS guidance and narrowing the range to $4.32-$4.42. For the full year, we now expect total sales growth of approximately 14%, with DTT lower and SAT modestly better than our previous midpoint guidance. In SAT, we expect total sales growth of approximately 11%, supported by strong international currency backlog and continued demand across the segment. In DTT, we expect total sales growth in the high teens.

This updated outlook reflects continued market softness in CPI vending and hardware and slower life sciences project conversion in Antares Vision. We continue to expect adjusted EBITDA margin of approximately 24%, supported by pricing, productivity initiatives, and realization of acquisition synergies at Crane Authentication and Antares Vision. We now expect non-operating expenses of approximately $75 million-$80 million, reflecting lower borrowing costs. I will close with a few directional comments on 2027 and note that we will provide our complete 2027 guidance framework on the fourth quarter earnings call. In SAT, we expect continued broad-based growth, supported by sustained high demand and strong backlog conversion.

We expect to see margin accretion in SAT from higher revenue and realization of operating synergies at Crane Authentication. Within DTT, we expect continued growth in Antares Vision and in CPI service, where we are expanding our service offering to third-party equipment. We anticipate CPI hardware markets will remain soft. We will continue to mitigate the impact of lower volume with productivity initiatives, and we remain confident in our ability to drive operational improvements that will enable us to achieve EBITDA margin accretion and continued strong free cash flow generation in CPI. I will now turn the call back to Aaron to provide closing remarks.

Aaron Saak: Thanks, Christina. To wrap up, we delivered a solid third quarter. SAT continued to generate growth and margin expansion. In DTT, we continue to execute on the Antares Vision integration, and disciplined execution and productivity helped offset softness in the CPI vending and hardware markets. Over the last three years, we have repositioned Crane NXT around attractive markets supported by durable secular tailwinds, including the rise of industrialized counterfeiting and digitization of supply chains. As we continue forward, our focus is on extending our leadership in the markets we serve while continuing to optimize the portfolio to enhance growth and returns. Our proprietary technologies, strong customer relationships, and commercial wins reinforce our confidence in this strategy.

The Crane Business System remains at the core of how we will drive continuous improvement, margin expansion, and free cash flow, providing financial flexibility to deploy capital towards the highest return opportunities and create long-term shareholder value. Thank you again for joining us this morning, and again, thanks to our Crane NXT associates around the world for their continued commitment to our customers. With that, operator, we are ready to take our first question.

Operator: Thank you. At this time, we will conduct the question-and-answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. We kindly request that you limit to one question and one follow-up question. Please stand by while we compile the Q&A roster. Our first question comes from the line of Matt Summerville of D.A. Davidson. Your line is now open.

Matt Summerville: Thanks. Morning.

Christina Cristiano: Morning.

Matt Summerville: Morning. Maybe starting with Authentication and Antares, where are you in terms of EBITDA profitability run rates in those businesses relative to what you expected at the onset of the three acquisitions that you've done so far? Where can that get to in a year? Then maybe can you talk about, frame up a little bit more on the Antares funnel and backlog? Then I have a follow-up.

Aaron Saak: Hey, good morning again, Matt. Thanks for the question. Why don't I start on Antares? I'll take that question in general, then I'll hand it over to Christina for Authentication. Matt, on Antares, hey, we're seven months in post-close to the acquisition. As I said in the prepared remarks, the integration's going well, and we feel confident in the long-term growth of not only the markets, but the business and the technology that we have. So a little bit to your last part of your question as it relates to Q4, we have orders in-house, and we're building those for several important pharma customers, and they've asked for delivery in Q1.

To give you context for that, for these pharma customers, they have to stop production in their lines to install our equipment, and they're operating now at very high capacity, so they don't want to stop their lines here in Q4. So that's what's really driving the delivery and the push-out of those installs into the first of next year. Again, we feel good about where we're at in the market, the relationship with those customers, and our backlog.

So, to get to the first part of your question, with the efforts that we have underway, driving synergies and productivity, doing the Kaizens, like I mentioned with CBS, we're going to end this year on target for EBITDA in the business exactly as we expected, and we're on track for the EBITDA expansion over the coming years as we announced at the time of the close of Antares. We feel very good about that. Christina, I'm going to hand it to you for authentication.

Christina Cristiano: Great. Thanks, Aaron. In terms of authentication, performance in the third quarter was very strong, and we saw a mid-teens EBITDA margin, which is in line with our expectations, and that's really the strong operating performance of the business and also realization of the planned synergies starting to read through. As we look ahead to the, I think you mentioned one year out, but even for the full year, we'll expect that to continue. Generally, a mid-teens EBITDA margin, and if you look ahead as we go forward, the group will continue to recognize operating synergies, so we'll expect to see further accretion in the EBITDA margin as we move forward.

Matt Summerville: Got it. As a follow-up, Aaron, maybe talk a little bit about if your thinking has evolved over the last six months with respect to portfolio optimization, and in that context, how you're thinking about M&A looking ahead versus maybe other capital uses like share buybacks.

Aaron Saak: Sure. Happy to take that, Matt. I think you should expect that we are always assessing how best to optimize our portfolio, and that's to drive shareholder value. That's our goal. As we've been discussing now for some time, we're continuing to build on our capabilities as the leader in authentication and traceability technologies, and you see that again in the step of closing Antares Vision now seven months ago. As the company's getting bigger and it's growing, it's always good practice to focus on markets that are growing and areas we can play and win. In that context, we are actively assessing how best to optimize the portfolio for the long term.

As that relates more broadly to capital allocation, I just point out, the results here of third quarter matter, another proof point of our ability to generate very strong free cash flow, and that puts us in a great position for capital allocation, which I would boil down to really four priorities that have been consistent in our disciplined framework for the past several years. Number one, we're going to continue to invest in high-return organic growth investments, and you see that in SAT. Number two, we're going to continue to pay down the debt. As Christina mentioned, we're going to be in the low twos by the end of the year.

Third, we're going to continue to pay our dividend. We raised it this year. You can see by our free cash flow, we're in a very good position to do that in 2027. Then we'll look to a combination of share buybacks or M&A. Our focus right now in M&A is the integration of Antares Vision, and that's really our priority for the next several months.

Matt Summerville: Got it. Thank you, guys.

Operator: Our next question comes from the line of Bob Labick of CJS Securities. Your line is now open.

Bob Labick: Good morning. Thanks for taking our questions.

Aaron Saak: Morning.

Bob Labick: Yeah. Obviously, we are super excited, and hopefully find out relatively soon about the new upgrade $10 bill and the U.S. upgrade cycle, and congratulations on the Canadian $20 bill, which seems to have an awful lot of your content on it. My question is, we know about the U.S. upgrade cycle. This is a little harder, but where generally are we in terms of an upgrade replacement cycle internationally? Can you remind us where you stand on micro-optics capacity expansion and the timing to fulfill this demand?

Aaron Saak: Hey, thanks, Bob, for that question, and good morning to you too. Overall, if I go back to SAT, just a strong quarter in performance by that team, high single-digit growth, high single-digit growth in our currency business, and just another strong quarter in our international currency business, just continues to perform well. To your question, we see sustained demand in international currency driven by our technology, not only in 2027, but beyond. As we mentioned, we are now looking at orders into 2028. That is coming from emerging markets that I would say are in the middle of their continued redesign cycles. We are seeing demand and potential demand from larger developed markets.

The best example, as you just mentioned, is the Canadian 20, a terrific marquee customer for us that really sets the precedent for the use of micro-optics in more emerging and developed markets, and it is terrific. That is why we are investing, as Christina mentioned, and we are staying ahead of this demand, so we are ready to serve our customers as that comes online. We expect the backlog in this business to remain at these sustained high levels all the way for the foreseeable future.

Bob Labick: Okay, great. Sticking with currency, the U.S. currency print order was very strong that came out in this quarter. Can you just remind us how that flows through for timing for you guys and impact on the mix of the order and how that flows through on margins in terms of looking forward in U.S. currency and SAT?

Aaron Saak: Yeah. Happy to take that, Bob. To the point you just raised, we are very pleased with the 2027 print order from the Fed. It is an increase in double digits in volume. It is a nice skew of the mix over to the $100 bill, which of course uses our micro-optic technology. This is good for the currency business. We typically operate about three or four months ahead of the print requirement for the BEP. So we will start realizing that early in 2027 as they execute their annual plan. Again, feels very good. For several quarters, we have been discussing the new $10 bill program is continuing to move along.

We expect that to come here in 2027, as we have been discussing. Our work is on the $50 bill, which is progressing. So we are really ready to go. As you mentioned for SAT, Q3 performance speaks for itself. Backlog is high. We have incredibly high visibility, not just to Q4, but to 2027, and that is giving us a lot of confidence in the business and why I am very bullish about the SAT segment. So I am going to leave it at that, Bob. I think any more details on specifics in 2027, we will leave to the Q4 call and our updated guidance.

Bob Labick: Super. That is great. Thanks very much.

Aaron Saak: Thanks, Bob.

Operator: Thank you. Our next question comes from the line of Bobby Brooks of Northland Capital Markets. Your line is now open.

Bobby Brooks: Hey, good morning, team, and thank you for taking my question.

Aaron Saak: Morning, Bobby.

Bobby Brooks: Good morning. Looking at the 2027 currency capacity, is that kind of all accounted for at this point, or is there still ability for you guys to take on additional orders?

Christina Cristiano: Hey, Bobby. I will start on that one, and maybe if Aaron wants to chime in at the end. We, as you know, our backlog is very robust, and we are taking orders into 2028. We have got the capacity to fulfill all the orders in 2027. About 65% of our backlog will be delivered in 2027, in the backlog that sits today. As we look out past that, as we start to take orders into 2028, that is why we are adding more capacity to drive further growth in the future from 2028 and beyond. As you know, we are investing in new micro-optics production lines that will provide that capacity for the years after 2028.

Aaron Saak: Yeah. Hey, Bobby, I just reiterate what Christina said. Our confidence in this business and being able to deliver 2027 is incredibly high. You look at these U.S. prints order, which is, again, very positive, and the contract renewals that go out 10 years for us. We have secured now 160 years of being the sole provider of this technology to the U.S. government, and it feels very, very good, again, why we are so bullish on the business.

Bobby Brooks: Got it. Just a clarification, because I think in the prepared remarks, you talked about accelerating those investments in the new micro-optic production lines. What does that mean in reality?

Christina Cristiano: Yeah, thanks for that follow-up. We are actively pursuing initiatives to move forward projects so we can get that capacity online sooner, and you will start to see our CapEx pick up in the fourth quarter in the Crane Currency business. In total, our CapEx for the whole company will still be between 4% and 5% of sales, but it will be allocating more toward Crane Currency as we really want to move those growth investments forward. We are actively working on those investments. In addition, we are hiring and training people to work in the manufacturing facilities on the new production equipment.

That is what I meant by the accelerating investments, and we will have more to say about our expectations for CapEx in the February earnings call.

Aaron Saak: Yeah, I would just add, Bobby, to what Christina said. Where we have the opportunity and we are pushing here to move faster, we are going to go faster because of the high confidence we have in orders coming in, the book of business not only we have today, but what we see coming. Those are just excellent returns for our business. So where we can move faster, we are going to move. We have got the team in place, we have certainly got the balance sheet in place, and now it is just getting in and building out these sites to meet customer demand.

Bobby Brooks: Definitely. Just last one for me, wanted to hear a little bit more specific drivers of the change in the DTT organic growth outlook. I think, Christina, you mentioned CPI and CPI vending and hardware as the driver, but were not those already expected to be weak? Maybe I am off base, and correct me if I am wrong, but if not, just what occurred the last few months that weakened those verticals?

Aaron Saak: Yeah, Bobby, I will start, and I will let Christina chime in here as well. We think about CPI, and as we have been talking about it, as three businesses. First is services, and that is growing, and we are really seeing very nice growth in multi-vendor services. That is where we are going out attaching services to non-CPI equipment, and that is performing just as we expected. The second business is vending. That is coming in maybe just a little bit softer to kind of flattish growth for the year, not so different than what we talked about last quarter.

Then really where we are seeing the most headwind is inside the hardware business, and a lot of that is coming from retail, where we have seen pushouts by several big box retailers of their previously announced upgrade and refresh programs. And so we have visibility to that now as we get into Q4, and that's where we've just been prudent to adjust the guide for the rest of Q4.

Bobby Brooks: Appreciate the color. Congrats on strong quarter.

Aaron Saak: Thanks, Bobby.

Operator: Thank you. Our next question comes from the line of Ian Zaffino of Oppenheimer. Your line is now open.

Isaac Sellhausen: Hey, good morning. This is Isaac Sellhausen on for Ian. Appreciate you taking the questions. First

Aaron Saak: Morning, Isaac.

Isaac Sellhausen: Hey, good morning. Just on the EBITDA margin guidance, that was unchanged despite the lower kind of revenue outlook. Maybe if you could touch on, excuse me, touch on some of the offsets to that, like lower volume leverage, and then maybe how much comes from SAT mix or any other incremental productivity gains. Thanks.

Christina Cristiano: Yeah. Thanks for that, Isaac. So we're holding our full year EBITDA estimate in the mid-20s percent, and really based on a very strong operating performance in the businesses, and specifically in CPI, where we're mitigating the lower volumes. So you're seeing that read through. We've also got favorable mix in our Crane Currency business, which is also reading through. When you put those things together, that's how we're able to maintain that margin for the full year. In the quarter, you saw very strong margin performance, and we expect that to continue.

Isaac Sellhausen: Okay, understood. Just as a follow-up, you talked a little bit about multiple long-term commercial wins across segments. I think specific to SAT, maybe you could frame whether those represent new customers or renewals, and then kind of maybe initial ramp or timing of any of those wins. Thanks.

Aaron Saak: Yeah, Isaac. Certainly as it relates to the U.S. government wins, or call those contract renewals, that's an existing customer, but it just reinforces the moats around this business and how durable and sustainable it is. Again, these are contract renewals that go out, in some cases, for 10 years, which is just fantastic for the stability of the business. Inside the rest of SAT, it's a combination of expansion through new customers and share of wallet or redesigns with existing customers. In authentication, the example there is an existing customer, but where we've expanded with a contract and continued new technology into their portfolio.

It's really a combination of both, and I think that's what continues to give us confidence in the leadership, technology leadership that we have that's very sustainable.

Isaac Sellhausen: Okay, great. Thank you very much.

Operator: Thank you. Our next question comes from the line of Mike Halloran of Baird. Your line is now open.

Mike Halloran: Hi. Good morning, guys.

Aaron Saak: Hey, good morning, Trent. How you doing?

Mike Halloran: Congratulations on the buy, by the way. Good. A couple questions here. Let's just start with authentication. Can you just go through each of the three verticals and kind of evaluate the health of the end market, the visibility we have in the near term, and then what you think that can provide for you guys exiting this year and into kind of next as we look at authentication specifically?

Aaron Saak: Yeah, and just to be clear, Trent, you're talking about, as we talk about authentication, brand, government, and identity?

Mike Halloran: Exactly

Aaron Saak: What you're Yeah. So, overall, I would say these markets are growing mid-single digits, and we feel good about our position there. Brand particularly is, I just think, at mid-single digits, and there we have a very diverse set of customers, from major sports leagues to apparel. So, a very diverse mix of clients. It tends to move kind of in general with kind of a market. It's a book-and-ship type business. Government tends to have bigger contracts. That's like our Crane Currency business, where we're selling tax stamps or other government revenue solutions.

There we have the opportunity for not only general kind of continued flow at mid-single digits, but as we win new accounts, those tend to add kind of project wins that could be a nice catalyst for us. Finally, identification security, or IDs, here again, kind of a mid-single-digit grower. What we're seeing in that business, though, is the need for new and upgraded IDs is continuing due to the rise of counterfeiting. Again, that's just back to the macro trends playing out in this business. So, across all three of these kind of end markets and verticals, how we think about authentication, we see sustained mid-single-digit growth.

Mike Halloran: Thanks. Then, as you saw the good SAT margin performance in the third quarter, maybe it would be helpful to bucket some of the reasons for that. I know you talked to them more generally, but just trying to understand what within that 29% EBITDA margin is sustainable from a run rate perspective, or if there are any benefits or one-offs on the quarter for us to note. Thanks.

Christina Cristiano: Yeah, I'll take that one, Saak. As you said, very strong EBITDA margin at 29%, up 60 basis points year-over-year. What you're seeing there is the read-through of the volume in Crane Currency as well as favorable mix, but also authentication synergies. As you look ahead, we do expect that to continue, right? So, we expect to continue to see strength in Crane Currency, as Aaron spoke about earlier, and we'll continue to drive CBS, to drive continuous improvement in the business to meet that EBITDA margin expansion that we originally targeted. You saw that read-through. That's a good part of the driver of the 60 basis points improvement in Q3.

Mike Halloran: Thanks, guys. I'll leave it there.

Operator: Thank you. Our next question comes from the line of Matt Summerville of D.A. Davidson. Your line is now open.

Matt Summerville: Just a quick follow-up on CPI. At what point do we start to see that inbound sort of orders and volume associated with the fielded devices that you know are going to have to go through rip-and-replace sort of upgrades to be able to recognize, we'll call it, the features on some of the next-gen bills here in the U.S.? That was something you'd highlighted at your analyst day. Can you kind of just revisit that?

Aaron Saak: Yeah, Matt, happy to, and it's a good question. It really is dependent and timed with the launch of the new U.S. currency. So, we need to see that come through first before there'll really be a catalyst for the customer to make those changes. I think when you think about CPI in general, we're at a place now for a few quarters where we have a stable backlog. If you look year-over-year, our backlog's pretty much at the same level it's been the last several quarters on a year-over-year basis with normal seasonality. So, stable backlog. I think we're into a stable run rate business, and that's how I would think about it going forward into 2027.

Matt Summerville: Got it. Thank you. That is it.

Aaron Saak: Thanks, Matt.

Operator: Thank you. This concludes the question-and-answer session. I would now like to turn it back to Aaron Saak for closing remarks.

Aaron Saak: All right. Thank you, operator, and again, thanks to everyone for their questions this morning. Well, Q3 was another important proof point for Crane NXT, as we saw strong growth and margin expansion in SAT, which secured multiple customer wins that give us confidence for 2027 and beyond. We generated best-in-class free cash flow, and we have raised the midpoint of our EPS guidance. It takes a team to do this, and I would again like to express my thanks to everyone around the world on the NXT team for making these results possible. So with that, thanks again for joining us this morning, and I hope everyone has a great day.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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