Brink's Q2 Earnings Call Highlights

Key Points

• Brink’s delivered strong Q2 results, with 4% organic revenue growth, 11% adjusted EBITDA growth to $257 million, and record operating and EBITDA margins. The company also generated $468 million in trailing 12-month free cash flow.
• AMS/DRS revenue increased 14%, supported by major retail, banking and ATM outsourcing wins. Management expects second-half AMS/DRS growth toward the top end of its mid-to-high-teens full-year outlook.
• Brink’s raised its full-year profit outlook while maintaining its revenue-growth framework, and now expects the NCR Atleos acquisition to close in early Q1, subject to remaining approvals. Leverage is expected to temporarily exceed 3x following the deal, with debt repayment prioritized in 2026.

Brink's NYSE: BCO reported second-quarter results marked by 4% organic revenue growth, a 14% increase in ATM Managed Services and Digital Retail Solutions revenue, and record second-quarter operating and EBITDA margins, while raising its full-year profit expectations.

Chief Executive Officer Mark Eubanks said the company’s AMS/DRS businesses have now delivered mid-teens or better organic revenue growth for 14 consecutive quarters. Revenue from those offerings has more than doubled over that period to exceed $1.5 billion, he said.

“We delivered a strong second quarter with organic growth of 4% and ATM Managed Services and Digital Retail Solutions, or AMS/DRS, growing 14%,” Eubanks said. He added that customer wins and scheduled deployments provide visibility into continued growth in the second half of the year.

Margins, Cash Flow and Second-Quarter Results

Revenue rose 7% from a year earlier, including 4% constant-currency growth and a 3% foreign-exchange benefit, according to CFO Kurt McMaken. Adjusted EBITDA increased 11% to $257 million, while EBITDA margin expanded 70 basis points to 18.5%.

Operating profit climbed $25 million, or 15%, to $190 million, producing a 13.6% operating margin. Brink’s reported income from continuing operations of $88 million, or $2.13 per diluted share, based on 41.5 million diluted shares. McMaken said earnings-per-share growth of 18% exceeded the company’s revenue growth rate.

The company generated $468 million of trailing 12-month free cash flow, equal to 46% conversion from EBITDA. Management said it remains on track for full-year free-cash-flow conversion of 40% to 45%, citing the expected timing of tax payments, working capital and capital expenditures during the rest of the year.

Brink’s said favorable revenue mix, pricing discipline and productivity initiatives supported margin expansion across all operating segments. Eubanks said the company’s Cash and Valuables Management business posted slightly positive organic growth, as growth in Global Services and pricing offset conversions into AMS/DRS offerings.

AMS/DRS Wins and Growth Outlook

AMS/DRS generated $50 million of organic revenue growth during the quarter. Some major installations and customer deployments shifted from the second quarter into the second half because of customer-driven timing decisions, management said.

Brink’s recently signed an enterprise agreement with a large U.S. retail chain to provide a full DRS solution at more than 5,000 retail locations. Eubanks said the agreement will nearly double Brink’s share of wallet with that customer and could create productivity benefits by increasing route density across the company’s existing footprint.

The company also cited an ATM outsourcing agreement for a European bank consortium, expected to come online during the second half, and an AMS contract with Mandiri Bank in Indonesia. Brink’s will service more than one-third of Mandiri’s ATM estate. Mandiri operates more than 13,000 ATMs, according to Eubanks.

Management said AMS/DRS growth in the second half is expected to trend toward the top end of its full-year mid-to-high-teens framework. McMaken said AMS/DRS growth is predominantly volume-driven, reflecting new locations, deployments, new customers and expanded customer relationships rather than pricing.

In North America, Brink’s reported a trailing 12-month EBITDA margin of 19.8% at the end of the second quarter, approaching management’s intermediate 20% target. Eubanks said that threshold is “not a destination,” citing potential for continued margin improvement through network density, productivity and expansion of recurring-service offerings.

NCR Atleos Transaction Progress

Brink’s said it now expects its pending acquisition of NCR Atleos to close early in the first quarter, subject to remaining regulatory approvals and customary closing conditions.

Eubanks said shareholders of both companies approved the transaction with more than 99% of votes cast in favor. The company also received early termination from U.S. antitrust regulators and antitrust clearances in Brazil, India, Turkey and Colombia. Foreign-direct-investment approvals have been received across much of the company’s Eurozone footprint, including France, Germany, Spain, Italy and the United Kingdom.

Brink’s has also received clearance in more than 80% of the jurisdictions needed for U.S. money transmitter licensing requirements, Eubanks said.

Management said the companies will continue operating independently until the transaction closes while integration teams prepare to capture strategic benefits. Eubanks pointed to NCR Atleos’ Allpoint ATM network as a potential source of routing efficiencies and service-level improvements when combined with Brink’s retail network.

Following the acquisition, Brink’s expects leverage to temporarily exceed three times net debt to adjusted EBITDA. The company plans to prioritize debt repayment during 2026 and targets net leverage below three times by the end of 2027. Brink’s reported standalone leverage of 2.7 times at the end of the second quarter and said it expects to reduce that figure to about 2.3 times before the transaction.

Guidance

Brink’s maintained its full-year revenue-growth framework while raising its full-year organic profit outlook after second-quarter EBITDA exceeded the midpoint of its previous guidance.

• Full-year organic revenue growth is expected to be in the mid-single digits.
• AMS/DRS organic growth is expected to be in the mid-to-high teens.
• EBITDA margin is expected to expand by 30 to 50 basis points.
• Foreign exchange is expected to provide a 1.5% to 2.5% full-year benefit, based on recent exchange rates.
• Free-cash-flow conversion is expected to be 40% to 45%.

For the third quarter, Brink’s forecast revenue of $1.365 billion to $1.415 billion, adjusted EBITDA of $263 million to $283 million, and diluted EPS of $2.23 to $2.63. At the midpoint, the company expects EBITDA margin of approximately 19.6%, representing about 60 basis points of year-over-year expansion.

About Brink's (NYSE:BCO)

The Brink's Company NYSE: BCO is a global leader in secure logistics and cash management solutions. The company provides a comprehensive suite of services that span armored transportation, cash-in-transit (CIT), ATM services, smart safe solutions, and valuables storage. Through its network of service centers and armored vehicles, Brink's ensures the safe and efficient movement of currency, precious metals, and other high-value assets for banks, retailers, mints, and government agencies.

Brink's armored transport operations are complemented by technology-driven cash management offerings, including deposit automation and secure vaulting.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.

Continue following MarketBeat

Add MarketBeat as your preferred source on Google to see our latest stories in your feed.

Add As Preferred Source