0000025445-25-000095
SEC filingCrane NXT grew Q3 revenue 10.3% to $445.1M, fueled by acquisitions and core SAT growth, but net income rose only 7.2% as restructuring and acquisition costs weighed.
Crane NXT reported strong top-line growth in the third quarter of 2025, with net sales increasing 10.3% year-over-year to $445.1 million. The growth was largely driven by the May 2025 acquisition of De La Rue Authentication Solutions (DLR) and favorable foreign currency translation. On a core basis (excluding currency and first-year acquisition impacts), sales grew 1.4%, reflecting solid performance in the Security and Authentication Technologies (SAT) segment that offset weakness in Crane Payment Innovations (CPI).
Gross profit rose 12.4% to $192.6 million, outpacing revenue growth as gross margin expanded 80 basis points to 43.3%. The improvement was primarily due to favorable pricing and productivity gains, partially offset by acquisition-related amortization and fair value step-up costs.
Operating income increased 9.2% to $81.9 million, but operating margin declined 20 basis points to 18.4% as restructuring charges of $3.5 million and elevated acquisition-related costs ($6.1 million) pressured profitability. Excluding these items, adjusted operating margin would have been higher.
Net income attributable to common shareholders grew 7.2% to $50.5 million, resulting in diluted earnings per share of $0.87, up from $0.81 in the prior-year quarter. The effective tax rate decreased to 23.6% from 25.5%, providing a modest tailwind.
As of September 30, 2025, Crane NXT had cash and cash equivalents of $182.4 million, up from $165.8 million at December 31, 2024. Total assets increased to $2.918 billion, driven by the DLR acquisition which added $451.8 million of assets including $182.4 million of goodwill and $184.4 million of intangible assets.
Total debt stood at $1.082 billion ($247.6 million short-term and $834.3 million long-term), compared to $750.6 million at year-end 2024. The increase reflects the draw on the term loan to fund the DLR acquisition. The company maintains access to a $700 million revolving credit facility, with $181.0 million drawn at quarter-end. Additionally, a $602 million bridge facility was arranged to fund the pending Antares Vision acquisition.
Total shareholders' equity rose to $1.214 billion from $1.065 billion, supported by net income and favorable currency translation adjustments, partially offset by dividends and share repurchases (none in the quarter).
For the nine months ended September 30, 2025, cash provided by operating activities was $135.7 million, slightly above the $133.0 million in the prior-year period. The increase was primarily due to lower working capital requirements, as the prior year included larger cash outflows for accrued liabilities.
Capital expenditures totaled $33.4 million, or 2.8% of revenue, consistent with the prior year. Free cash flow (CFO minus capex) was $102.3 million, compared to $98.4 million in the first nine months of 2024.
The company used $391.1 million net cash for the DLR acquisition and $33.4 million for capex, leading to $422.7 million of investing outflows. Financing activities provided $293.3 million, including proceeds from the term loan and revolver borrowings, partially offset by debt repayments and dividend payments of $29.2 million. Dividends per share increased to $0.17 quarterly ($0.51 YTD) from $0.16 ($0.48 YTD) last year.
Management attributed the revenue growth to the DLR acquisition and core growth in SAT, while CPI faced continued headwinds from lower vending and gaming equipment demand. The company expects to mitigate the majority of tariff impacts through pricing and productivity actions, but acknowledged macroeconomic uncertainty persists.
Restructuring actions initiated in 2025, including $8.5 million in SAT and $2.3 million in CPI, are expected to total $10-$15 million and be substantially completed in 2025. The cost savings from these actions are anticipated to benefit future results.
The pending Antares Vision acquisition (expected to close in Q4 2025 with final phase in H1 2026) will expand the company's portfolio into inspection and detection systems for Life Sciences and Food & Beverage end markets, with an enterprise value of approximately €445 million.
No specific revenue or earnings guidance was provided for the remainder of fiscal 2025.
Segment Performance
| Segment | Revenue (Q3) | YoY Change | Operating Income | Margin |
|---|---|---|---|---|
| Crane Payment Innovations | $216.3M | -3.8% | $60.7M | 28.1% |
| Security & Authentication Technologies | $228.8M | +28.1% | $39.3M | 17.2% |
| Corporate/Eliminations | — | — | ($18.1M) | — |
| Total | $445.1M | +10.3% | $81.9M | 18.4% |
CPI revenue declined due to lower volumes in payment acceptance products (down 5.0%), partially offset by services growth. SAT benefited from $28.3M from DLR and core growth of 8.8% in banknotes.
Acquisition Impact DLR contributed $28.3M of net sales and an operating loss of $3.1M in Q3, driven by $7.1M of acquisition-related amortization and fair value step-up. OpSec, acquired in May 2024, contributed to the SAT segment's growth as well.
Restructuring Total restructuring charges were $3.5M in Q3 and $10.8M YTD, primarily for severance. The liability balance at quarter-end was $4.0M.
Goodwill and Intangibles Goodwill increased to $1.161 billion from $956.6 million at year-end, primarily from the DLR acquisition. Intangible assets net increased to $572.9 million. Future amortization expense is expected to be $17.1M in the remainder of 2025, $63.7M in 2026, and $60.8M in 2027.
Pension and Postretirement Total net periodic benefit cost for pensions was $0.2M (expense) in Q3, compared to a $1.3M benefit in the prior year, primarily due to differences in settlement gains. Expected 2025 contributions are $1.4M for pensions and $1.3M for postretirement.
Income Taxes The effective tax rate was 23.6% in Q3, down from 25.5% in the prior year, driven by the mix of non-U.S. earnings. The company adopted OECD Pillar 2 in 2024 and expects an impact of approximately $2.4 million in 2025.