Cash management services provider Brink's (NYSE:BCO) announced better-than-expected revenue in Q1 CY2025, but sales were flat year on year at $1.25 billion. Guidance for next quarter’s revenue was optimistic at $1.28 billion at the midpoint, 3% above analysts’ estimates. Its non-GAAP profit of $1.62 per share was 38.1% above analysts’ consensus estimates.

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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 $224.4 million Operating Margin: 9.5%, in line with the same quarter last year Free Cash Flow was -$119.1 million, down from $11.7 million in the same quarter last year Market Capitalization: $4.00 billion

Mark Eubanks, president and CEO, said: “We delivered strong performance in the first quarter with EBITDA and EPS exceeding the top end of our guidance range. Organic revenue growth of 6% included 20% growth in AMS and DRS. On a trailing-twelve month basis, these higher margin recurring revenue offerings now represent over 25% of revenue as we continue to penetrate large addressable markets and convert existing customers. Growth in our cash and valuables business was supported by a year-over-year acceleration in our global services business primarily due to increased movement of precious metals. Operating profit was up 40 basis-points reflecting productivity, especially in North America, and revenue mix benefits partially offset by year-over-year currency headwinds, primarily in the Latin America segment. We remain focused on executing against our capital allocation framework, accelerating share repurchases to over $110 million year to date."

Company Overview

Known for its iconic armored trucks that have been a fixture in American cities since 1859, Brink's (NYSE:BCO) provides secure transportation and management of cash and valuables for banks, retailers, and other businesses worldwide.

Sales Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.

Story Continues

With $5.02 billion in revenue over the past 12 months, Brink's is one of the larger companies in the business services industry and benefits from a well-known brand that influences purchasing decisions.

As you can see below, Brink's grew its sales at a decent 6.6% compounded annual growth rate over the last five years. This shows its offerings generated slightly more demand than the average business services company, a useful starting point for our analysis.Brink's Quarterly Revenue

We at StockStory place the most emphasis on long-term growth, but within business services, a half-decade historical view may miss recent innovations or disruptive industry trends. Brink’s recent performance shows its demand has slowed as its annualized revenue growth of 4% over the last two years was below its five-year trend.Brink's Year-On-Year Revenue Growth

This quarter, Brink’s $1.25 billion of revenue was flat year on year but beat Wall Street’s estimates by 2.8%. Company management is currently guiding for a 1.7% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and implies its products and services will face some demand challenges.

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Operating Margin

Brink's was profitable over the last five years but held back by its large cost base. Its average operating margin of 8.6% was weak for a business services business.

On the plus side, Brink’s operating margin rose by 5.1 percentage points over the last five years, as its sales growth gave it immense operating leverage.Brink's Trailing 12-Month Operating Margin (GAAP)

This quarter, Brink's generated an operating profit margin of 9.5%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Brink’s EPS grew at a spectacular 14.6% compounded annual growth rate over the last five years, higher than its 6.6% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.Brink's Trailing 12-Month EPS (Non-GAAP)

We can take a deeper look into Brink’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Brink’s operating margin was flat this quarter but expanded by 5.1 percentage points over the last five years. On top of that, its share count shrank by 16.8%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.Brink's Diluted Shares Outstanding

In Q1, Brink's reported EPS at $1.62, down from $1.65 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Brink’s full-year EPS of $7.15 to grow 4.4%.

Key Takeaways from Brink’s Q1 Results

We were impressed by how significantly Brink's blew past analysts’ revenue, EPS, and EBITDA expectations this quarter. We were also glad its revenue guidance for next quarter trumped Wall Street’s estimates. On the other hand, its quarterly EPS and EBITDA guidance missed. Overall, we think this was a decent quarter with some key metrics above expectations. Investors were likely hoping for more, and shares traded down 1.4% to $93 immediately after reporting.

Big picture, is Brink's a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.

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