CXT - Earnings call transcript Q4 2024

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Operator

Good day, and thank you for standing by. Welcome to the Crane NXT Fourth Quarter and Full Year 2024 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Matt Roache, Vice President of Investor Relations. ahead. go Please

Matt Roache

and you operator, year everyone. want I earnings Thank to good the welcome NXT. all for full fourth to call you, Crane morning, quarter XXXX and

that on we of will the this Before today's can via our call section accessed our also Investor be me and website let remind at presentation slides will cranenxt.com, website. reference begin, we during Relations of available the be you a replay

to the review results, X, our we non-GAAP participants on risks encourage Before financial legal I Slide the all which of discuss notice forward-looking use measures. the explains statements and of

statements. refer you we our the and language at in bottom forward-looking of Form XX-K Additionally, filings the earnings subsequent release to our and cautionary to pertaining

we slide non-GAAP reconciled using which call, both the section. the numbers, numbers the be accompanying also the are to on in of website tables will and presentation, Relations are end release in at Investor at GAAP cranenxt.com comparable our the of available press which our During

me discuss and our analysts our financial our Chief questions. open this Christina guidance we'll outlook. for to Officer; and prepared Officer. our highlights, Vice President our and Chief call Saak, today Senior are Executive Cristiano, On President call our After remarks, morning, and operational and With performance financial the XXXX Aaron Financial will and XXXX we

With that, Aaron. the to turn I'll over call

Aaron Saak

the quarter for appreciate I outlook as joining and as results morning. call XXXX our morning year well good and XXXX. everyone Matt, you, full to this Thank discuss fourth our

their hard our associates thanking the work to for start world like by I'd during QX. around

of outstanding in accomplished an together we team, what We and I'm proud have XXXX.

financial results. our with Starting

line was approximately performance for growth the and year, and was in expectations. and in margin XX% full both approximately with QX Sales Our adjusted X% the fourth XX% quarter periods. year our full approximately EBITDA was in

XXX% approximately free year. with generate the of flow and approximately XX% quarter free for cash cash conversion in to strong the flow, continue full adjusted fourth We

fourth Finally, quarter we delivered the full the for in $X.XX year. and adjusted EPS of $X.XX

We long-term taking on success QX, in continue a leader. steps company build for the our to execute to position technology our position as strategy and meaningful

win Currency and security leading business, we a we ended winning in our specifying continue XX total new to our share XXXX with Specifically, technology, micro-optics. denominations, of

international Additionally, gives our confidence strong backlog XXXX. high our currency for outlook in sales in us

the to QX, provide company agreement we this in perfumed brand. selling increase through our luxury with micro-optic OpSec Also won labels engagement contract channel. will first customers' with solution micro-optics digital a authentication along with the containing the technology, Through

We will step also a provide the services acquisition, online with from our online driving marketplaces. is commercial first that'll revenue. our also increases to and allow portfolio recurring customer products counterfeit in OpSec synergies This brand expanded product protection this through remove great

completing the upgrades the These investments it March. upgrades 'XX, enter We're We support notes critical and final XXXX. of bank growth schedule of for also will this on the cycle of opportunity successfully currency, second that new is will the and are NXT. to be decade-long U.S. by what production to of provide which at the first launch continue equipment the to completed QX cycle, U.S. began the in finished to Crane milestones be excited end and on track prepare new I in

providing field for option new first on-site with customers And our repairs, cost-effective we a opened service in offerings. complementing center, CPI, service our

acquisitions we're diversify to Business integration to anticipated, synergies. As of Tru Last grow we executing operating System on Crane going completed Tag we've utilizing acquisitions our and our as The Smart also strategy very is you the and been and busy drive of both portfolio. year, know, OpSec the Packaging.

in the the of product value Solutions close to the customer this and expect offerings expanding our year, Additionally, authentication we second of chain. brand base across Rue quarter Authentication and acquisition La product De

have And robust a and we continue very M&A active to funnel.

balance grow and XXXX. the strong in flow Our sheet diversify and to to ample continue free portfolio us generation cash gives capacity

we in a value long-term executing you XXXX. associates I are very the as focus to and for dedication shareholder believe XXXX, good exited we for their 'XX So in all again Thank position in creation. on

our turn financial review to to With and performance that, well year in as the Christina Christina? let me detail full fourth quarter outline now over XXXX our guidance. as call

Christina Cristiano

and our work. you Thank hard Thank appreciation everything everyone. to to morning, do. I express you, for would also you world around good their Aaron, associates for like the

with X. XX% that cash an core approximately year-over-year, performance in approximately and prior OpSec mix. quarter We Starting free driven sales the with in of strong excludes XX% generated reflects XXX%, We on and which flow delivered our of achieved results Adjusted of fourth international growth, nearly sales increase year approximately at very X%, core was segment lower currency. by of by adjusted line segment conversion $X.XX. Slide businesses, operating expectations. strong million, Adjusted we were is operating due to driven strength in CPI, slightly of margin than EPS $XXX

to Moving X. Slide

by growth year-over-year, For the segment by XXX mix operating free approximately of shipments, reflecting the to of cash collection was and decreased with timing approximately and points year Adjusted $X.X skewed the the segment flow international nearly were basis conversion which OpSec. and full impacted approximately billion, end XXXX. year, QX core year-over-year was shifted we X% sales certain XX%, of margin towards from currency X%. increased to sales Adjusted dilution

with of EPS Finally, we expectations. our delivered line adjusted in $X.XX,

and QX conditions. continued our resilience market and end challenging full amidst operating discipline some Overall, reflect results year

softness Slide adjusted XX%, gaming. from segments to fourth were to mix initiatives quarter across X. with Sales XXXX, continued mid-single-digit gaming. compared and by offset end of in the We starting reflecting growth margin disciplined the flat CPI Moving our maintained with operating on of approximately markets, offset with headwinds productivity most

a by a gaming of impacted was in XXXX, the increase during with levels COVID. a significant ended return reflecting versus year more orders CPI which $XXX normalized million, backlog to

the million quarter. book-to-bill X the Importantly, for from $XX the approximately increased QX, ratio backlog over and was

full Slide year, on approximately their offset in CPI by gaming shown softness markets. growth was the driven in X, sales decreased by inventories, new through mid-single-digit work X%, and end other As customers by partially orders as core for

Our teams despite and continuous a pricing. did programs Crane great job XX% lower drive leveraging by year-over-year adjusted the the to maintaining operationally, margin disciplined improvement approximately executing at volumes business system operating

the Technologies the Authentication win discipline Slide continue pricing driven with and up driven partially dilution XX increased by the by In the to productivity volume, Operating expected core over from fourth where leverage sales Security and technology. leading from X%, prior margin X. year, to we increased points Moving international our and programs, currency, by over were basis quarter, on OpSec. by offset differentiated

unfavorable decreased points, upgrades business. the in scheduled driven are bank to sales for to to Technologies delivered core Turning X. Slide by more dilution had X%, year. strength for $XX and XXX notes, basis which the U.S. operating we full offset Adjusted of new of ongoing making stoppages launch mix including and the Security which margin by driven bill, We the year related XXXX. U.S. production impact segment than the the upside performance currency, in by is the Authentication in We approximately excellent in growth the new international

backlog to the We in us strength, with a XXXX. confidence giving mid-single-digit in million, high of SAT sales segment position of deliver growth $XXX year are ending in

X.Xx which, Authentication loan This Moving the the De be XX. used to we approximately transaction and commitment, second solutions. on approximately net ended close fund secured will to Rue year on Slide will of close. track term leverage acquisition the quarter, to we the sheet net be on fourth is our a La X.Xx. cash hand, of balance estimate quarter, along the after We leverage with In in with

revolving future in our loan repaid and M&A. our facility of expanded term also We credit existing anticipation

with have rates on outstanding fixed balance sheet, long-term debt We liquidity. significant and an attractive

cash strong focus and executing in on to growth, generation grow dividend. to and a Our to organic allows competitive the free investing diversify paying M&A portfolio flow us continue

continuing to acquisitions annual meet financial yesterday, a commitment capital strategy capital dividend position, of ample strategic strong X%, criteria. deploy balanced this increase an that and to allocation we our maintaining and to announced capacity our towards our Given disciplined

XXXX XX. does Slide De QX just not any impact or And the potential the reminder a transaction this close Moving guidance anticipated that now of on tariffs. of include guidance new La in to Rue Authentication

digits, overall with to expect in This gaming growth quarter, sales X% single returning FX the growth X offset to market. year, including We of headwinds for X sales X% the headwinds retail low by of the end reflects third in growth CPI to points. of

is will as earnings Bureau sales full Engraving during discussed growing of launch our approximately new funnel pro in international currency, fueled Reserve of year decline our offset forma by the and on be we from the U.S. mid-single OpSec, by contribution This which expect and and a currency growth XX% the government growth on U.S. SAT, backlog digits sales, we strength partially to call series. a Federal Printing basis. and strong QX being for of the the actions a taken In mid-single-digit prepare based at in of by

year expect adjusted $X we the to range $X.XX. deliver full EPS to Finally, in of

in offsetting XX%, through the pricing guiding of the the U.S. Crane to execution to productivity margins disciplined segment of are continued volumes. from largely and System, currency XX% We decline approximately reflecting Business impacts

the that of revenue not operating and be out I want in will phasing to XXXX point profit linear.

our ongoing We U.S. softness of grow than the related also sales first QX of by last diluted adjusted XX%. the in the segment in the margin and making will operating continued as in low with the series. rest compared some note margins. of in paper by single year, NXT impact market new shutdown gaming in Overall, equipment bank be expect to our digits CPI of we margin quarter revenue QX for OpSec the and of to upgrades the end lower XXXX, on and an to impacted the performance approximately driven year expect

to Corporate expenses year expense. we with of Continuing nonoperating full $XX and expenses million, are expect approximately of primarily $XX consisting million, be expected interest guidance. approximately

XX% adjusted conversion vary conversion generally shipments free be international to be to the between Finally, of timing currency while XXX%, can and recognizing quarter-by-quarter. expect approximately expect we cash we that flow XXX%,

we are call me and Now to to on details taking provide our to the portfolio. insights the back actions Aaron XXXX on our diversify outlook additional further turn let

Aaron Saak

Thanks, Christina. some to 'XX key want And to Slide of drivers XX, impacting the outlook. our moving highlight I

year. we low the single expect in to the digits CPI, with Starting for grow

position Looking business across drink our leading end and revenue, approximately and represents our have cold a in snack CPI equipment. we markets, vending XX% of

growth following We at digits in this 'XX. grow strong mid-single-digit XXXX, single low business expect in to

business we opened continue faster, Financial we we business investments paying the revenue. CPI and outside where services offer for new expand to our to customers our traditional recurring Cummins XX, Allison to expand repair a represents portfolio, more mid-single in dividends, of solution focus service our approximately investments market-leading expect cost-effective make grow equipment. and our this and at on a offerings service In grow of to center are These XX% digits XXXX. our

market unique leading as In gaming, we the casinos underlying to of equipment globally. is and leadership supplier position a a payment healthy, have

during XXXX, work our and to continue second we earnings of in will result of QX. in first discussed QX As call, expect normal revenue inventories through of through half declines continued half the sales to returning customers in return year. in new the levels gaming growth orders to their This with the our

weighted low see on to full year the to burn For expect single-digit the down revenue dynamic. second inventory the growth, based half we this with of year,

our Finally, softness see to in end continue retail market, we in orders.

than self-checkout expect other solutions XXXX continue trend from retailers throughout as We offerings OEMs. traditional consider to this

offset to sales Based in volume partially decline be self-checkout we OEM custom see solutions. the high decline We this, year-over-year. in growth the expect by single-digit to in expect increased on retail

in at digits grow we XXXX. total, will CPI In expect low single

execute this we accordingly, cost throughout taken adjust to already outlook, and XXXX. actions to have and deploy Given CBS we'll continue structure pricing our to actions productivity

of to XX XX expect range basis points As margins to year-over-year. CPI a in improve the we result,

we've few This extend and year's notes. our as paper for quarters, in currency one to the it to upgrades of track, equipment bank as but the On late than and will QX. take making we is discussed longer expected, U.S. the needed stopped U.S. last final complete on in for our the new Slide facilities of Moving end through upgrades, production series of will QX XXXX business. past XX, upgrade

a be as mix the in will the is orders resources the XX% our Reserve's discussed last capacity Federal and the will the and they to be demand Additionally, currency. of notes. the that that being XXXX suggest as for print the prepare lower bank Reserve denomination redesigned we lower result earnings midpoint Federal and skewed toward This actions launch of taken down volume year-over-year call, approximately allocate by at BEP

to expect X XX% these we approximately factors, Given XXXX. U.S. in be currency sales down

we Looking position relationship a as U.S. paper, very currency remain since confident ahead, our XXXX. of the government's in we've supplier sole held

remain in notes. very confident currency benchmark incorporating new advanced in the to be features the world for will also We bank continue U.S. program that the security

a only As bill contains technology. reminder, XXX today, USD micro-optics our the proprietary

be So we to as our series U.S. with other excited notes. And by in long-standing see use continue partner. the micro-optics relationship meaningful this very a currency the trusted to increase opportunity of and bank new we a continuing BEP

actions to executing grow we Crane strategy. our in we've detect what company, XX. solutions Moving want and in technology NXT of and I the to legacy of of launched plan on we it authenticate to relates to to diversify take building April XXXX, together bring moment most technology laid providing a the that to our When capabilities and customers. as trusted XXXX our taken a Slide all matters out secure,

anticipated we and took will De position and Tru executing the authentication a this Rue protecting OpSec QX, the strategy meaningful we closing with have Solutions In market Tag along Authentication in assets, of Smart XXXX, in of on security acquisition acquisitions the La Packaging of focused in leading products. the steps with

a announcements premier fully have will in technology funnel, to position industrial as a expect M&A further company. continue NXT and We that XXXX robust additional I

NXT our Through the of a on company reduce By focused And XX, the De we related diversified as end to our M&A approximately portfolio with you and XX%. business cash-centric from more and moved to company. XX% markets. can through services the our will significant La end taken on Slide Rue portfolio, are disciplined building have the in intentionally resilient of Authentication approximately products the and of 'XX exposure see process, we've steps in actions to cash QX

secular percentage revenue just QX. making strategy in to NXT Additionally, as ways the a of the to very exit to I'm execution confident actions to reoccurring XX% coming approximately of meaningful is These the resilient through we our very more continue our company acquisitions, from are increased we've X visible continue XXXX. aligned will contracts take recurring tailwinds. of evolution and we this

slide. 'XX year Moving for Crane to a our final significant NXT. was

in invest We our also continue to while diversify on the our strategy executing and businesses, to grow portfolio.

the Looking market long-term ahead navigating transitory to 'XX, I believe we for have company positioned success, headwinds. some while

sales banknote As U.S. low the launch on international new currency 'XX. to discussed, final 'XX, preparation in the and technology currency of in leadership, and businesses. our with expect the in completing performance track of We're we single-digit growth for designs continued OpSec in business strong upgrades

look finally, team as operating and De will generate Authentication cash Business to we to forward core We strong acquisitions levels will expected, OpSec. businesses in debt Crane System flow, our as to NXT family the productivity And to the continue M&A are leverage in our maintain And continue diversify in and the portfolio. as drive well Rue to to and QX. we the cultivate low grow free La welcoming

shareholder closing, confident to drive I'm executing strategy and long-term we In the that have and continue creation. our right priorities value meaningful team

like also all their to communities our for our your again our would around to So stakeholders. of the world associates and again thank this I and our for time customers, morning, you thank commitment

we're And take first our now ready question. to operator,

Operator

Davidson. of Matt from come [Operator question from will Instructions] D.A. the Summerville Our first line

Matt Summerville

to you about setup we So play heard similar out out if think the it playing 'XX I articulating with how in how you're would thought 'XX. gaming, in this as as extremely right, sounds you

I -- you sustained inflection? levels strong gives gives that a market you very confidence what have But funded will that in So are realizing gaming, that. second see then I And realize what follow-up. half indeed

Aaron Saak

very end a market, healthy. I'd think in unchanged. comment a that market the position this this have is unique you is leadership share and Matt, Yes. start made. do Again, we position, And we with

the really, of we going backlog lower They inventory isn't So down at from that levels. longer. our Matt, is OEMs changed to were of see our the here, did taking burn where QX, message the inventory

have times lead improved. Our

and there's So as QX. from And months -- any ago, with we think a month-to-month expect naturally to we OEM, just OEMs we that, in change products I are don't through as depending the the particular orders what what inflection SKUs. us. occur in our said QX. fundamentally green some That's working few And shoots the said just telling see in we on they're

last taken out health have like dynamics. encouraged we think high X of said by quarter. to And playing market. confidence just that end has those due a we're Unfortunately, I again, the we So it again, longer it's the

Matt Summerville

as pieces then currency on level the I In imply the first playing And OP here the Crane order or decline that to segment a margin, particularly How set get should overall? the triangulate ahead quarter, us in magnitude Currency to get with that to material in thinking organic be how expecting, that? And of you would or a we if moving performance some in follow-up, It the modeling. should a XX% of of on to kind side be there's field. retrenchment has want double-digit business. help of just be quarter. segment the can in we the great SAT we the about margin And

Aaron Saak

think lead our government U.S. we're side of I'll business just Matt. for QX. to -- and about QX. high currency important now, our for business, of way, all in It's currency right shutdown, of of QX go to in large middle pass the I U.S. declines in Maybe And which will which in thinking the double-digit part I'll it to most right start going the over you're it started But I Yes. Christina. that the reemphasize a

us. So that I that right is think very thinking you're way, the to and material about in

over fill Christina of the segment. in the to rest hand I'll maybe it So details on to the

Christina Cristiano

Yes.

And speaking will it profit, half. XX% SAT, in up, that quarter, level be to in segment And so we'll the will and will that just then specifically a CPI QX be lowest and approximately the expect in QX. off phasing step-up second includes operating a revenue and the

return of So for percent the the to margins the rest see high you'll the year. XXs

regard decline you international. in In double-digit to terms with high will the of the Matt, by on, be which U.S. are positivity offset a quarter, first right currency, in

Operator

from will from question Mike come line the next Halloran Our of Baird.

Michael Halloran

of and So think hand to a opportunity how levels I'll to the exiting the And in the closed, leverage can be De the then here. sized relative the couple of go internal related I middle relative or year? for integration perspective? and -- get once pipeline hand higher questions, expectation bandwidth would What then you acquisition just La Rue to from management bandwidth you willing you is team what looks that and a debt like after something to -- talk

Aaron Saak

Yes. I'll Thanks, take Mike. that one.

want at we And as as XX Xx leverage. the QX, at may back beginning within net up flex we about the La De above closing to company, long leverage. we've net that of it Rue we can expect be Xx. as bit X.Xx little ended the year With months. stay X.Xx So really get below we in We from to a below said

think how and we're changed. about in we very That's balance the hopefully, nothing message that consistent So sheet. using has

unchanged again, core terms In We're and consistent continue when we to business. invest much from to the very and company. priorities the funnel, started that, of in the going the just

upgrades, asset continue acquired the the Tru and approach technology the we similar to the few us continue which scale in tailwind increase the And year-over-year. with the a Rue that We're we've dividend like investments De for that disciplined later a announced of like with to and dividend. a size, La deals bolt-ons currency term. group is that competitive U.S. And we X% Yesterday, an pay Tag see very then probably to of the You OpSec fantastic 'XX. Smart announced. long in in execute part a we'll M&A, just the going little

We're The X. range, generate double-digit can to $XXX perspective, $XXX by a from sure near make revenue. going million strategy to million a still adjacencies. year we And ROIC in they're

and see I of encouraged is So healthy, XXXX. and the have to in we're going I'm very where deal more that, Mike, a confidence by that's flow high degree funnel

variety in As at X subject see of you but we 'XX. will of more confident know, timing that I'm deals is or conditions, X a least to

Michael Halloran

And couple then you on the of SAT maybe could help with margins, a here. things

the then through acquisitions margins? 'XX. dilution starting But of the has much been talk don't of reversal into I whether normalizes on points how you the First, to could forward? care we what reversing and that Is then come margins? just an the today, the -- 'XX importantly, point, been headwind think versus on And that impact I 'XX, it's I some the the refreshes currency like? mix conversation mean what the more looks should think assuming mix for talk really about

Christina Cristiano

Yes. start one. with Mike, I'll that

It's to about and in XXXX, in SAT that XXXX. expect segment. dilutive we the OpSec thinking the same basis Just about about XXX been be in points,

XXs a as So them to a CBS we lower are expected. -- both commercial. the as percent comes which reminder, a we're and into those result implementing now of as operational the get business which portfolio low to actively margin, and over just margins at to And expect synergies, time up, the the drive in was OpSec

currency when so drivers, that year. and U.S. unfavorable think being you OpSec is impacted about earlier, Aaron XXXX it's spoke a program by which transition main the X It's about specifically, And dilution. from the mix

X so specifically factors in those our XXXX. margin, And are impacting

implement CBS I'll into margin. just continue say to bring up OpSec, M&A back bring to we as we'll and the them again. strategy, then dilutive lastly, are assets our portfolio And similar that we'll to execute

to expect you'll pattern that So continue.

Aaron Saak

to launch those impact going margins with going in business and kind volume of move shutdowns. look to on be been fact, we you would high again, technology the the U.S. back Mike, to we're the the confidence way component if in currency see new it. this then expect here once the the I year total going at see, you of for go currency preparations I you start where a new 'XX it ex that that, should the to think the we we forward add, launch fully we just currency, And And see Yes. have framed done are of currency, have to from the they've higher as that's to the to and accretive

Operator

Our next line question come from from will the Capital Brooks Markets. Bobby of Northland

Robert Brooks

an thought exciting to it's So remarks, luxury could discuss you bit you just OpSec announcement it really little gave the guys the really more perfume it was -- prepared -- channel. doing I in on wins customer the as the through bottle great. was micro-optics know was color, on well. was a I But the putting line any curious, Or sales just tracing color I the And would it new? on process and time of this OpSec already just kind this had? completely and some that of digital existing be

Aaron Saak

it technology, I encouraged just and It's And a first very a excellent that, the example the it's more proof bringing just our through of OpSec is this it's win, by I'm micro-optics strategy our for of with that. an And Yes. new in think selling Thanks Bobby. for customer together us. label. OpSec than channel. point

in brand that some As authentication said, digital adding online of remarks. services mentioned I it's protection the prepared you services in the the and

a buy of And solutions. unique proposition core combining together. validating companies it's of the That's our belief to is full customers authentication with us suite to value the are our this how looking

are closed in many again, from as we many, when to expect them, forward. you here particularly takes with funnel. more the services, sales sticky going tell effectively and these in But months, that's So come typical nature OpSec, very reoccurring we see is to process the what the beauty we can from contracts

So to I very going encouraged more first that by we're win. one think this of this is see and

Robert Brooks

any this the finish bit That's was dig sense, was factors your then just drove pieces some that able a the full of physical -- there maybe win." little think, what what -- too. what X provide across helped And kind of both anything to customer authentication, line? that was to a it really -- more being and you'd that is from Obviously, like or factors like of a you -- were just point engagement digital, maybe this to what the deal you "Oh, X us piece probably mentioned But great. suite other

Aaron Saak

those it, on I when the Bobby. is micro-optics are what They're quite business you The even leadership. modes really technology think that's wider add had. wide And now. built technology in OpSec to

Going add to De new segments. Rue and a even La whole they when capabilities get new that wider in we of in particularly bring, set

we're I to and this the So customers at point, from places very few that this we it think of technology. are simple, that this there suite is think of go get And level can -- full positioned proof solutions uniquely this now is in market.

Robert Brooks

it Any is that? for color this Got -- it. particular catalog? perfume their kind on one And or is here, entire for like one perfume then and just clarifying like a of

Aaron Saak

different start, few to a Yes, products. around

is opportunity there going expansion. the of So share wallet forward for

Robert Brooks

like going the walk can that of like better online And Like pretty if But example me Got so to fake mentioned those like sold prepared those maybe How versus fakes? would a And Chinese website? actually fakes. go would removing the remarks helpful. an the I a about guess, in how get work? to websites maybe that could fake. maybe sense I just there's protection broader it. wanted like will you see I just you're on being that's, be maybe like removing just -- actually get -- giving -- you monitoring perfume to fake would like would a eBay how through be then be, just you -- like there's you really if an example brand of you how

Aaron Saak

protection I'll brand case high effectively, every because world. to of level is in doing around the certain direction And fairly customer in-online different we our bit of scraping keep in Those Those could -- a counterfeit software a Yes. the get little marketplaces is products then it lot relationship different. But the to the the comes websites the think a customer at use customer, where we examples bring of down being we at It the validated us, may case or in mainly software. there seller. action escalated it the be get as where and take sold. identify either a have with to will to to through are be

marketplace, is It's as and from about But AI-enabled. think hear each and you'll are works. the is excited you highly really us. imagine. doing, And through as again, algorithms effectively, software can we website team process that enabled different, that's year, that our a the little how And we're by more the about by I go the each work

Operator

Our next Securities. Bob from from will of come Labick line question the CJS

Bob Labick

dig I a day, of was the about to kind So maybe a retail self-checkout has the wanted And just us since back have Analyst for and into through trends. OEMs or there little little self-checkout. forward, has a stronger. And pre-spin end of custom how CPI. penetration the but going then, back market market us how changed story retail through, at weaker, you Day retail overall been walk been view Walk kind the

Aaron Saak

I for at it now the we say years. almost end very a start I that's general, And is And still point. that's automation the self-checkout labor there. retail for we don't think that scarcity the fair would has in changed need X think as agree in think I and Bob, I If back market need I know and changed. look

of exploring shift the They're lane, form a at traditional clerk a the options new is the -- have box we all of in a over a months XX last at to the end well and I different different self-checkout. factor of beyond for solutions. think replacing retailers kinds seen what real

spend. capital some diverted that's so And

slowed retailers there's which wrong the to been to some around investment. shrinkage right think on also, been macro CapEx to self-checkout, I some And just has fear retail related due there's more deploy a a reluctance CapEx. also or environment

those All of have for sale traditional changed. need headwinds been of the overall even hasn't automation though the some self-checkout, to

business publicly OEMs, different I on that and think to also very increased an some moving services focus software models and place. taken see with the you have

retailers QX, in the and you've it's that's orders or what's in been as middle about starting continued. talked to and said, furniture, design it growing, for the they're this softness really custom checkout software the us out services OEM market last their year, we purchases trying do. lanes, terminal, custom for payment the is part offset are really -- and in by we of make But where saw the mentioned, So between that's that disaggregating of what the really self-checkout it's -- to played the the

we see more see We out. experimentation continuing dynamic different play to self-checkout So offerings. on that

could be we softness so monitoring balance think, again, improvement But continued OEMs to be XXXX. believe first the here where to year just And the to going to we prudent a want that's of And second orders. in a see this appropriately risk-adjusted keep for the the the trajectory. half guidance I some taken, approach fully on half. lead continuing we've placing There that weaker we and are again, very of

Bob Labick

we outperforming to Got very the conversely, from That's back years at just have or then well, expectations -- seems be or Okay. X as ago exceeding it. helpful. been seems back drivers of Analyst Is set same vending to seen? And kind the Is this we've it little should sustainably offerings? forward strength about key market What broader higher? level think the that Or going how given a Day. the are there?

Aaron Saak

this We low And very Bob, is had grew last for in mentioned, too. market on year digits. a that in we QX, digits XXXX about based mid-single right. year, growing in and market vending expect the strong grow Christina you're single low analysis, and single We with to think as we just digits. our at talked thanks it year the in

It's on to this still you for macro scarce. is almost question need have your offset automation retail an labor and convenience to retail, -- sales where really prior the where

the market. that's driving naturally So vending

actually case in it's of controlled have, have to hard vending, a the very That's also from where us. shrinkage environment sales. occurring You the benefiting

And automated in of machines And process. high-quality then vending with in products business coffee see rise airports category. automated we coffee, the as hospitality includes in been to very more coffee that particular and business, locations a offers for and vending the that's you've that seen a all our other travel us and for probably an strong us,

that's well. been part of business so nice And the a as

tailwinds that's a growing. to market steadily vending I all think I and those for effectively that going change So are those in just are of don't working think are

Operator

Our next the Damian is question UBS. of from from Karas line

Damian Karas

first guys bit. for X% X% you raised little authentication. ask on the the core the quarter, to and that sales to up missing wanted to year about Last I guidance security you a you growth, had ended

We or to perhaps the currency So U.S. you talk and the of international kind more could you appreciate you year? in the side could any of side on end production that color business? what happened, the share. saw what shutdowns of Was the the

Christina Cristiano

also And Damian. was lower Yes, with really in we currently, line in one, than right, volume just our related come little mix, a the QX QX. did with of to I'll and series. expectations. But which related both with out Overall, you're shipments U.S., expected start that in the what's it's international new which then to and happening softness pushed the timing in was

hand the we XXXX, in about have we've on we're we this for And so guidance funnel, and plays in appropriately our headwinds. confident based currency in think when U.S. international the on how out risk-adjusted orders our sales

So we total about SAT feel good in forward, XXXX. in looking currency

Damian Karas

just I exposure Okay. China, in speak have there. that? guidance how but in is not relative playbook helpful. slides, tariffs Could what missed tariff implications And on you impacts Mexico, earlier your That's the if this potential in does mentions thinking to maybe that Canada I of and it very you're discussion, of any XXXX potential and about apologize your kind

Aaron Saak

Damian. Thanks, Yes.

it for she is impact remarks, guidance said that didn't Christina's in correct, include 'XX. of any tariffs, the You're

to from proactive add to world. point all from And sourcing products continuing supply at bottom would active the perspective, any on actions don't really our is manufacture material on say we're utilizing already manufacturing very companies, footprint The optionality line the I global in chain, procure into and we've Like both the monitor tariffs. really our for some and a taken this horizon where we this impact we the us around situation. of see

more through about. a talked you go precision, the little regions To

the bit aggressively we little get have and multinational in in looking in some very and particular, most alternative have commercial cases, looking we some China, business supplies that For of where -- or that's us. but were if that material news really little not offset from impact a steel this the for needed pricing No week. on country. in the We to of tariffs, pass most Canada line do we're always to to subcomponents tariffs or aluminum like the secure sight

given to And administrations. lot do in between production, with impact here to At in the Mexico, put some a the have actions the in time, proactive taken very we've progression the last X already can we're and that same talks us. any we what's few weeks of in just place place occurred of where optimistic are material be mitigate

team think thanks I feel I'd our a and we good in again, we're here, position my the working clock. just around this on pretty So to Damian, give like who's

Operator

Ian will Next question come the from from Oppenheimer. Zaffino line of

Isaac Sellhausen

Sellhausen for on currency Isaac I is on just This one the Ian. business. had

You've the growth this year. laid expectations out for international

be you're If or provide on between additional new is if details helpful. any growth that additional where on would could some content or pricing able, you from color coming wins volumes,

Aaron Saak

combination existing with getting. new from directional. new of very a of little that continues core both, we some That's contracts some a bit get to kind of sticky then of traditionally continued in. be wins are I say of growth Yes. it's that would again, and It renewed, very XX-XX coming wins customers, Isaac,

earlier, based customers. the -- already in orders discussions in of on with and And hand we're new high having as confidence Christina in funnel this we have on said business of contracts international order currency QX

to we as I for continue 'XX. a be of it So exit strength NXT point will think

Operator

next Instructions] of from line Summerville will be from a [Operator Our Matt question D.A. Davidson. follow-up the

Matt Summerville

want I kind I this I just have make sure -- of right. to

a second guys for be first we what quarter like by level revenue you putting a the X. everything sort be and should dynamic, earnings having sounds that If pretty lower would based on earnings X what I'm second Given just bottom weight materially -- second half, helpful. of and really half half in you half, understanding followed first top first QX, said, cadence QX, line

Christina Cristiano

Yes. Sure, Matt.

year, So slightly the about the will second revenue. when heavily think the more half you weighted toward terms in be of phasing

in more year. half bit the So half a second the little than of

stronger In operating little profit, of than that. terms will be it a

currency in the profit operating of year. QX. that's the and driven second half in business the that's stoppage shift more really So And by the production U.S. happening

phasing should the the of towards half. weighted heavily OP second more be So

Matt Summerville

of annual any to XX you then in time talked or And could on this be level, least about you've out Okay. called what the kind any sort a change should opportunities. from wins sort talked Any pretty 'XX those? design Aaron, time, XX of about objective, -- we thinking And of XX at announced update international at you chunky high some be with that? of about to

Aaron Saak

first with part, Let start the me Matt.

where operated, remains I range, currency, the to that we did terms is -- again, think what working it think, very It's, this international mentioned on team to is the I the still and today. forward in very already the where QX, very on the that's on, year. guide XX to here right where only funnel in XX. historically already in we've reasonable orders and going And of revenue And good not are, about and that the we strong. wins 'XX sit in feel we orders backlog hand based some is going

and to tens That's in nature million see just is can few central the the feel and that really banks. of RFPs this expect from with chunky terms order pattern central million, continue, sitting few business, I $XX or excess orders million we're course the we've and of Matt, year. were to where year over re-ups coming million call-offs of orders because of big projects of that's just of wins, new orders $XX that a at time. In already in in the confident of And that it the wins very again, above be bank's funnel. that's We'll won, could of the a a all a of as this the X. order. range a And

Operator

We're back over questions to not for remarks. the turn any Saak in further like showing call any to I'd Aaron queue. the closing

Aaron Saak

for was for attention All a It and XXXX the we've laid you busy long I'd I to here the in NXT all show And the feel questions today, in for I QX much our quarter all strong for out just confident, to members accomplished. thanking the XXXX. your busy and we right. this as Thank by end investing very think very across morning. I've world our And of again in continues executing it we're their the efforts and business, a strategy like how year. path on said term. team

great questions thank again, our your for today, all So look a to you day. QX earnings. and our on Have call forward next again. Thanks I

Operator

Thank participation the conference. today's conclude for you your program. in does This

day. great You may have a Everyone, disconnect. now

Crane NXT (CXT) 13 Feb 252024 Q4 Earnings call transcript