Crane NXT Q3 2026 Earnings Call Transcript

Crane NXT (NYSE:CXT) reported third-quarter financial results on Thursday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Crane NXT reported Q3 2026 sales of $497 million, a 12% year-over-year increase, with organic sales up 1%. Adjusted EBITDA was $127 million, and adjusted EPS was $1.28, flat year-over-year due to higher interest expenses.

The company secured multiple long-term contracts, including renewals with the U.S. government for currency paper and micro-optics and a new agreement with the Bank of Canada for its $20 banknote.

Crane NXT raised the midpoint of its full-year adjusted EPS guidance to $4.32-$4.42, citing strong operational performance and strategic wins, despite anticipated market softness in certain sectors.

The Antares Vision integration is progressing as expected, with realized synergies contributing to a 60 basis point adjusted margin expansion in SAT, driven by volume leverage and productivity initiatives.

Strong free cash flow of $98 million was generated, supporting the company’s year-end net leverage target of approximately 2.3 times, with no fixed-rate debt maturities until 2036.

Full Transcript

OPERATOR

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 (Vice President of Investor Relations)

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 2. 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 (Chief Executive Officer)

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 3 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, and 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 in 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 and DTT. The Antares Vision integration continues to progress as expected. We’re 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’re 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’d now like to turn the call over to Christina to review our financial performance in more detail.

Christina Cristiano (Senior Vice President)

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 4, 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% to 110%. Turning to SAT on slide 5, 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 6, 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 7, we ended the third quarter with net leverage of approximately two and a half times 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’ll 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 8, we are raising the midpoint of our adjusted EPS guidance and narrowing the range to $4.32 to $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 to $80 million, reflecting lower borrowing costs.

I’ll 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’ll now turn the call back to Aaron to provide closing remarks.

Aaron Saak (Chief Executive Officer)

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, and 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’re 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 Somerville of D.A. Davidson.

Your line is now open.

Matt Somerville (Analyst at D.A. Davidson)

Thanks. 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? And then maybe can you frame up a little bit more on the Antares sort of funnel and backlog? And then I have a follow-up.

Aaron Saak (Chief Executive Officer)

Hey, good morning again, Matt. Thanks for the question. Why don’t I start on Antares? I’ll take that question in general and then I’ll hand it over to Christina for authentication. You know, Matt, on Antares, we’re seven months post-close to the acquisition. As I said in the prepared remarks, the integration is 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 these pharma customers, they have to stop production in their lines to install our equipment and they’re operating now at very high capacity, and so they don’t want to stop their lines here in Q4. That’s what’s really driving the delivery and the push-out of those installs into the first of next year.

So again we feel good about where we’re at in the market, the relationship with those customers, and our backlog. 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. So we feel very good about that. Christina, I’m going to hand it to you for authentication.

Christina Cristiano (Senior Vice President)

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. 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— I think you mentioned one year out, but even for the full year—we’ll expect that to continue. So 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 Somerville (Analyst at D.A. Davidson)

Got it. And then 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 (Chief Executive Officer)

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. You see that again in the step of closing Antares Vision now seven months ago. As the company is 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.

So 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’d just point out the results here of the third quarter, Matt, are another proof point of our ability to generate very strong free cash flow. That puts us in a great position for capital allocation, which I would boil down to 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. And 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 Somerville (Analyst at D.A. Davidson)

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 (Analyst at CJS Securities)

Good morning. Thanks for taking our questions. Yeah, so obviously we’re super excited— we’d hopefully find out relatively soon about the new upgraded $10 bill in 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? And can you remind us where you stand on micro-optics capacity expansion and the timing to fulfill this demand?

Aaron Saak (Chief Executive Officer)

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 in our currency business and just another strong quarter in our international currency business that 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’re now looking at orders into 2028, and that’s coming from emerging markets that I would say are in the middle of their continued redesign cycles. We’re seeing demand and potential demand from larger developed markets, and 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’s terrific. That’s why we’re investing, as Christina mentioned, and we’re staying ahead of this demand so we’re ready to serve our customers as that comes online. And we expect the backlog in this business to remain at these sustained high levels for the foreseeable future.

Bob Labick (Analyst at CJS Securities)

Okay, great. And then just sticking with currency, obviously 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 (Chief Executive Officer)

Yeah, happy to take that, Bob. To the point you just raised, we’re very pleased with the 2027 print order from the Fed. It’s an increase in double digits in volume. It’s a nice skew of the mix over to the $100 bill, which of course uses our micro-optic technology. So 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’ll start realizing that early in 2027 as they execute their annual plan.

So again, feels very good. For several quarters we’ve been discussing the new $10 bill program as continuing to move along. We expect that to come here in 2027, as we’ve been discussing. And our work on the $50 bill is progressing, so we’re really ready to go. And as you mentioned, for SAT, 3Q performance speaks for itself. Backlog is high. We have incredibly high visibility, not just to Q4 but to 2027, and that’s giving us a lot of confidence in the business and why I’m very bullish about the SAT segment.

I’m going to leave it at that. Bob, I think any more details on specifics in 2027 we’ll leave to the Q4 call and our updated guidance.

Bob Labick (Analyst at CJS Securities)

Super. That’s great. Thanks very much.

Aaron Saak (Chief Executive Officer)

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 (Analyst at Northland Capital Markets)

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

Aaron Saak (Chief Executive Officer)

Bobby, good morning.

Bobby Brooks (Analyst at Northland Capital Markets)

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 (Senior Vice President)

Hey, Bobby, I’ll start on that one and maybe if Aaron wants to chime in at the end. As you know, our backlog is very robust and we’re taking orders into 2028, and we’ve 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 2029, that’s why we’re adding more capacity to drive further growth in the future from 2028 and beyond.

And as you know, we’re investing in new micro-optics production lines that will provide that capacity for the years after 2028.

Aaron Saak (Chief Executive Officer)

Yeah. Hey, Bobby, I’d just reiterate what Christina said. Our confidence in this business and being able to deliver 2027 is incredibly high. If you look at the U.S. print order—which is, again, very positive—and then the contract renewals that go out 10 years for us, we’ve secured now 160 years of being the sole provider of this technology to the U.S. government. It feels very, very good—again, why we’re so bullish on the business.

Bobby Brooks (Analyst at Northland Capital Markets)

Got it. And then just a clarification on—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 (Senior Vice President)

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’ll start to see our CapEx pick up in the fourth quarter in the currency business. In total, our CapEx for the whole company will still be between 4% and 5% of sales, but it will be allocated more toward currency as we really want to move those growth investments forward. So we’re actively working on those investments.

In addition, we’re hiring and training people to work in manufacturing facilities on the new production equipment. That’s what I meant by accelerating investments. We’ll have more to say about our expectations for CapEx in the February earnings call.

Aaron Saak (Chief Executive Officer)

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

Bobby Brooks (Analyst at Northland Capital Markets)

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

Aaron Saak (Chief Executive Officer)

Yeah, Bobby, I’ll start. I’ll let Christina chime in here as well. You know, we think about CPI, and as we’ve been talking about it, as three businesses. First is services, and that’s growing, and we’re really seeing very nice growth in multi-vendor services. That’s where we’re going out attaching services to non‑CPI equipment, and that’s performing just as we expected. The second business is vending. That’s 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.

And then really where we’re seeing the most headwind is inside the hardware business, and a lot of that is coming from retail, where we’ve 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 guidance for the rest of Q4.

Bobby Brooks (Analyst at Northland Capital Markets)

Appreciate the color. Congrats on strong — thanks.

OPERATOR

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

Isaac Sozen (Analyst at Oppenheimer)

Hey, good morning, this is Isaac Sozen on for Ian. Appreciate you taking the questions.

Aaron Saak (Chief Executive Officer)

Morning, Isaac.

Christina Cristiano (Senior Vice President)

Hey, good morning.

Isaac Sozen (Analyst at Oppenheimer)

Just on the EBITDA margin guidance that was unchanged despite the lower kind of revenue outlook. Maybe you could 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 (Senior Vice President)

Yes, so thanks for that, Isaac. So we’re holding our full‑year EBITDA estimate in the mid‑20s percent, and really based on 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 currency business, which is also reading through. And so 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 Sozen (Analyst at Oppenheimer)

Okay, understood. And then 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 (Chief Executive Officer)

Yeah, Isaac. So certainly as it relates to the U.S. government wins — 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. And in Authentication, the example there is an existing customer but where we’ve expanded with a contract and continued new technology into their portfolio. So really a combination of both. And I think that’s what continues to give us confidence in the technology leadership that we have. That’s very sustainable.

Isaac Sozen (Analyst at Oppenheimer)

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.

Trent (Analyst at Baird)

Hi, good morning, guys.

Aaron Saak (Chief Executive Officer)

Hey, good morning, Trent. How are you doing, by the way?

Trent (Analyst at Baird)

Good, good. So 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 (Chief Executive Officer)

Yeah, and just to be clear, Trent, you’re talking about, as we talk about Authentication, brand, government, and identity. Is that what you’re — Exactly. 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 the market. It’s a book‑and‑ship type business.

Government tends to have bigger contracts. That’s like our 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 in 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. And then 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. And 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.

Trent (Analyst at Baird)

Thanks. And 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 in the quarter for us to note. Thanks.

Christina Cristiano (Senior Vice President)

Yeah, I’ll take that one, Trent. And as you said, very strong EBITDA margin at 29%, up 60 basis points year over year. And what you’re seeing there is the read‑through of the volume in currency as well as favorable mix, but also Authentication synergies. And so as you look ahead, we do expect that to continue. Right. So we expect to continue to see strength in currency, as Aaron spoke about earlier. And we’ll continue to drive CVs to drive continuous improvement in the business to meet that EBITDA margin expansion that we originally targeted.

And you saw that read‑through. That’s a good part of the driver of the 60 bps improvement in Q3.

Trent (Analyst at Baird)

Thanks, guys. I’ll leave it there.

OPERATOR

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

Matt Somerville (Analyst at D.A. Davidson)

Yeah, 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 (Chief Executive Officer)

Yes, Matt, happy to. 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 will really be a catalyst for the customer to make those changes. I think when you think about CPI in general, then we’re at a place now for a few quarters where we have a stable backlog. You know, if you look year over year, our backlog is 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 ’27.

Matt Somerville (Analyst at D.A. Davidson)

Got it. Thank you. That’s it. Thanks.

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 (Chief Executive Officer)

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’ve raised the midpoint of our EPS guidance. It takes a team to do this, and I’d again like to express my thanks to everyone around the world on the NXT team for making these results possible.

And 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.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.