Crane NXT Co

Crane NXT (CXT) was a bottom contributor in the Small Cap strategy during the first quarter despite reporting fourth quarter 2025 results that beat revenue expectations meaningfully. The company posted sales of $476.9 million, up approximately 20% year-over-year, surpassing analyst estimates, with an adjusted EBITDA margin of approximately 25% and free cash flow conversion of approximately 135% in the quarter. Core sales growth of 4.8% reflected continued strong performance in Crane Currency, and management noted that the company secured 20 new currency denomination wins in 2025, underscoring its competitive position in the global authentication market.

Crane NXT (CXT) was a bottom contributor in the SMID Cap strategy during the quarter despite delivering solid operating performance in its most recent earnings release. The company reported sales of $445 million (+10% YoY) with a core sales increase of 1%, adjusted operating margin of 24.7%, and adjusted EPS of $1.28, while also raising full-year sales growth guidance. However, management also highlighted macroeconomic uncertainty impacting demand in the Payment Innovations segment, which we believe weighed on sentiment even as the Security & Authentication Technologies segment continued to show momentum and free cash flow conversion remained strong. Crane NXT also announced and completed the first phase of its strategic acquisition of an Italian technology firm - Antares Vision S.p.A.

Crane NXT (CXT) was a bottom contributor despite delivering solid operating performance in its most recent earnings release. The company reported sales of $445 million (+10% YoY) with a core sales increase of 1%, adjusted operating margin of 24.7%, and adjusted EPS of $1.28, while also raising full-year sales growth guidance. However, management also highlighted macroeconomic uncertainty impacting demand in the Payment Innovations segment, which we believe weighed on sentiment even as the Security & Authentication Technologies segment continued to show momentum and free cash flow conversion remained strong. Crane NXT also announced and completed the first phase of its strategic acquisition of an Italian technology firm - Antares Vision S.p.A.

We initiated a new position in Crane NXT (CXT) in the SMID Cap strategy during the quarter. CXT was spun off from Crane Corporation in 2023. This is a nichey business; CXT has a strong foundation in security and authentication technologies and automated payment systems. The company has more than 200 years of heritage supplying secure currency, and through micro-optics, holography, secure digital solutions, and product traceability, CXT now provides end-to-end brand and identity protection. We believe that their differentiated technology provides the benefit of pricing power and higher margins relative to more commoditized industrial peers.