Brink's first quarter results were met with a negative market reaction, despite the company surpassing Wall Street’s revenue and non-GAAP profit expectations. Management pointed to continued momentum in its higher-margin, recurring revenue businesses—ATM Managed Services (AMS) and Digital Retail Solutions (DRS)—as core drivers of performance, each achieving over 20% growth for the fourth consecutive quarter. CEO Mark Eubanks acknowledged that elevated activity in the Global Services segment, stemming from increased precious metals movement, also contributed to topline stability. However, the company noted that flat year-on-year sales and margin pressures from foreign exchange and lower interest income in Argentina weighed on the overall result.
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Brink's (BCO) Q1 CY2025 Highlights:
- Revenue: $1.25 billion vs analyst estimates of $1.21 billion (flat year on year, 2.8% beat)
- Adjusted EPS: $1.62 vs analyst estimates of $1.17 (38.1% beat)
- Adjusted EBITDA: $215 million vs analyst estimates of $198.8 million (17.2% margin, 8.1% beat)
- Revenue Guidance for Q2 CY2025 is $1.28 billion at the midpoint, above analyst estimates of $1.24 billion
- Adjusted EPS guidance for Q2 CY2025 is $1.45 at the midpoint, below analyst estimates of $1.62
- EBITDA guidance for Q2 CY2025 is $215 million at the midpoint, below analyst estimates of $221.8 million
- Operating Margin: 9.7%, in line with the same quarter last year
- Market Capitalization: $3.74 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Brink's’s Q1 Earnings Call
- George Tong (Goldman Sachs) asked about Brink’s tariff exposure and how much hardware is imported. CEO Mark Eubanks replied that the company has minimal direct tariff exposure since most costs and revenues are local, and only precious metals shipments were affected in the quarter.
- George Tong (Goldman Sachs) also inquired about pricing trends in Latin America and the ability to offset currency devaluations. Eubanks explained that pricing is adjusted in high-inflation markets, and FX headwinds from Mexico and Brazil should moderate later in the year.
- Timothy Mulrooney (William Blair) questioned the drivers behind margin guidance for the first half versus the full year. CFO Kurt McMaken cited FX, Argentina interest income, and restructuring as first-half headwinds, with margin expansion expected as these pressures ease.
- Timothy Mulrooney (William Blair) followed up on the impact of lower Argentina interest income on EBITDA. McMaken estimated a quarterly headwind of $4 million to $5 million, emphasizing it is already reflected in guidance.
- Tyler Barishaw (Truist, for Tobey Sommer) requested details on AMS/DRS initiatives in Latin America and Rest of World. Eubanks described investments in new solutions for high-cash and small-retailer environments, aiming to broaden market penetration in those regions.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace at which Brink's expands AMS and DRS penetration in North America, Europe, and emerging markets; (2) how effectively restructuring and productivity initiatives drive margin improvement as foreign exchange headwinds moderate; and (3) the onboarding and integration progress of major new customer contracts, such as the Sainsbury’s ATM estate and new North American banking partnerships. Additional focus will be on the sustainability of Global Services volume and recurring revenue growth.
Brink's currently trades at $89.10, down from $94.34 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).
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