Q: Can you provide more granularity on the expected Q3 and Q4 revenue and earnings cadence across the two reportable segments? A: Bettina Cristiano (CFO) explained that Q3 will see low double-digit sales growth overall with a mid-20% EBITDA margin. SAT will see a low single-digit decline due to tough 2025 comparisons, while DTT will see mid-20% growth with Antares contributing $55-60 million. CPI will be down low single-digits. Revenue phasing in the back half will be more skewed toward Q4, aligning with normal seasonality. For the full year, they expect mid-teens sales growth with an adjusted EBITDA margin of about 24%, representing 100 basis points of organic margin expansion.

Q: What gives you confidence in the Antares Vision integration, and what did you see to raise expectations for the year? A: Aaron Saak (President and CEO) expressed very high confidence in the execution of the Antares integration, now 150 days post-close. Early success in implementing the Crane Business System (CBS) to drive synergies is going well. The acquisition opens up exciting new markets in pharmaceutical track-and-trace technology and food and beverage inspection, making him more confident than ever in the long-term value creation and the second-half outlook.

Q: What is the state of the core CPI hardware and vending business, and what gives you confidence in the outlook based on backlog? A: Aaron Saak (President and CEO) acknowledged softer top-line in CPI driven by vending and retail hardware project delays. However, he highlighted key positives: sequential backlog growth, a book-to-bill ratio well above 1, and excellent execution driving over 200 basis points of organic margin expansion. CPI continues to generate great free cash flow and high margins, with services growing mid single-digits, supporting the adjusted forecast and overall raised guidance.

Q: Can you elaborate on the CBS actions taken in OpSec and De La Rue, and your intentions for Antares Vision? A: Aaron Saak (President and CEO) detailed that CBS is driving tangible outcomes, including over 300 basis points of organic margin expansion in authentication. This is achieved through 80/20 product line rationalization, footprint consolidation, and daily management with Kaizen events. The same transformation is already visible at Antares Vision, with talent inserted to drive synergies early, giving high confidence in margin expansion through 2026 and beyond.

Q: Where did authentication margins start the year, and where do you expect them to finish? A: Bettina Cristiano (CFO) confirmed they are on track and executing as planned. The 80/20 initiatives in the first half will drive margin expansion, with authentication expected to end the year at a mid-teens EBITDA margin. This supports the full-year SAT segment margin expansion of 100 basis points, driven by realized synergies.

Q: What is your level of visibility for CPI hardware and vending to inflect back to positive growth? A: Aaron Saak (President and CEO) stated that CPI will see a low single-digit decline in Q3, building to low single-digit growth in Q4. Confidence comes from sequential backlog growth, book-to-bill above 1, and line of sight to projects that typically take a quarter or two to deliver. The team's execution on margin expansion and strong free cash flow provides high confidence in the second half.

Q: Are there any early signs of unexpected benefits from the Antares Vision acquisition, such as cross-selling opportunities? A: Aaron Saak (President and CEO) noted that operational synergies via CBS have gone as well as expected, with the Antares team embracing continuous improvement. Beyond that, they are seeing opportunities to import authentication technology into pharmaceutical markets and leverage currency business contacts in emerging markets for government track-and-trace solutions. These cross-selling dividends are expected to play out in 2027 and beyond.

Q: How should we think about the different margin profiles of the legacy CPI business components (vending, hardware, services)? A: Aaron Saak (President and CEO) broke down CPI into three components: vending (flat to low single-digit grower, slightly below fleet average EBITDA margins), hardware (serving gaming, financial services, and retail, with high margins particularly in gaming where they are the number one player), and services (growing mid single-digits with investments in third-party servicing). Continued margin expansion is expected in DTT, driven by both CPI and Antares.

Q: How are you thinking about the legacy CPI business and its fit in the portfolio going forward? A: Aaron Saak (President and CEO) reiterated the strategy of building a market leader in authentication and traceability technologies. While always assessing the portfolio to optimize shareholder value, the current focus is on execution. They are cultivating a healthy list of M&A targets, with the next transaction likely in 2027 to extend verticals, but no immediate changes to the portfolio composition were signaled.

Q: Can you discuss the strength in SAT despite tough comps, and what are the margin expectations for Antares Vision by year-end? A: Bettina Cristiano (CFO) noted another strong quarter in SAT with 10% organic sales growth and approximately 200 basis points of organic margin expansion. Full-year organic sales growth is expected to be 3-4% with an EBITDA margin of about 25%. Aaron Saak (President and CEO) added that Antares Vision is executing as expected, with adjusted EBITDA in the mid-teens for the year, growing into the low 20s over the next several years, which was always the investment case.

For the complete transcript of the earnings call, please refer to the full earnings call transcript .