Brink’s Earnings Call: Growth Amid Challenges

Brink’s ((BCO)) has held its Q1 earnings call. Read on for the main highlights of the call.

Brink’s Company recently held its earnings call, revealing a mixed sentiment characterized by strong growth in its high-margin AMS and DRS segments and expanded shareholder returns. The company also secured significant new partnerships, which are positive indicators for future performance. However, Brink’s faced challenges such as currency headwinds in Latin America, a decline in interest income from Argentina, and margin pressures due to restructuring and FX impacts.

Record Q1 Operating Profits and Organic Growth

Brink’s reported a remarkable total organic growth of 6% in the first quarter of 2025, reaching the top end of its guidance. The company’s operating profits increased by 40 basis points, driven by a strategic focus on higher-margin recurring revenue businesses.

Strong Performance in AMS and DRS

The AMS and DRS segments continued their impressive trajectory, growing over 20% for the fourth consecutive quarter. These segments now account for 25% of Brink’s business, underscoring their role in supporting consistent performance and margin expansion.

Increased Shareholder Returns

Brink’s demonstrated its commitment to shareholder value by repurchasing 1.3 million shares, about 3% of outstanding shares at year-end 2024. The company also announced its third consecutive annual increase to the quarterly dividend.

New Partnerships and Expansion

The company secured a new partnership with a leading financial institution in North America and announced new awards in Southeast Asia. These developments indicate a robust pipeline and market expansion opportunities for Brink’s.

Currency Headwinds in Latin America

Despite achieving 7% organic growth in Latin America, Brink’s faced a 16% year-over-year currency devaluation, primarily affecting the Mexican peso and Argentine peso, which offset these gains.

Interest Income Decline

Interest income from Argentina decreased by $5 million year-over-year, attributed to moderating inflation, which impacted Brink’s overall margins.

Margin Pressure from Restructuring and FX

Brink’s experienced a 50 basis point decline in Q1 adjusted EBITDA margins due to currency mix impacts and higher restructuring costs, presenting a challenge to its profitability.

Forward-Looking Guidance

Brink’s reaffirmed its full-year guidance, projecting mid-single-digit organic growth and 30 to 50 basis points of EBITDA margin expansion. The company expects free cash flow conversion between 40% and 45%. For the second quarter, Brink’s anticipates EBITDA between $205 million and $225 million, with earnings per share ranging from $1.25 to $1.65, maintaining its outlook despite currency headwinds and restructuring costs.

In conclusion, Brink’s earnings call highlighted a strong performance in its high-margin segments and an ongoing commitment to shareholder returns. While the company faces challenges from currency fluctuations and restructuring costs, its strategic initiatives and new partnerships position it well for future growth.