The Brink's Company (BCO) Q1 2026 Earnings Report, Transcript and Summary

Good day, and welcome to the Brink's Company First Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded. I would like to turn the conference over to Jesse Jenkins, Vice President, Investor Relations. Please go ahead.

Thanks, and good morning. Here with me today are CEO, Mark Eubanks; and CFO, Kurt McMaken. This morning, Brink's reported first quarter results on a GAAP, non-GAAP and constant currency basis. Most of our commentary today will be focused on our non-GAAP results. These non-GAAP financial measures are intended to provide investors with a supplemental comparison of our operating results and trends for the periods presented. We believe these measures allow investors to better compare performance over time and to evaluate our performance using the same metrics as management. Reconciliation of non-GAAP results to their most comparable GAAP results are provided in the SEC filings, which can be found on our website. We will also have commentary on the status of our pending acquisition of NCR Atleos. As a reminder, this transaction is subject to the completion of customary closing conditions, including regulatory approvals and approval by Brink's and NCR Atleos shareholders. Additional details, including risk factors related to the transaction can be found in the pertinent SEC filings. I will now turn the call over to Brink's CEO, Mark Eubanks.

Thanks, Jesse, and good morning, everyone. Starting on Slide 3. We're pleased with another strong quarter of growth and operational execution as we continue to transform Brink's into a more predictable and profitable enterprise. I want to thank all of our team members, especially those in the Middle East region, for their focus in this dynamic global economic backdrop. I could not be more proud of our teams for staying focused and delivering on our Q1 commitments. Our results were at the upper end of our first quarter guidance ranges, and we're off to a strong start to the year. First quarter revenue growth of 10% included 4.5% organic growth, driven mostly by 15% organic growth in ATM Managed Services and Digital Retail Solutions or AMS/DRS. The growth in the quarter was highlighted by the onboarding of Pandora in DRS and good momentum in AMS, especially in the Rest of World segment. At the segment level, Rest of World delivered 7% organic growth on strong precious metals activity in the global services line of business. Overall, organic growth, favorable revenue mix and good underlying productivity drove margin expansion of 10 basis points with over 100 basis points of expansion in both North America and Rest of World and 240 basis points of expansion in Europe. In total, Q1 EBITDA was $238 million with a margin of 17.3%, trailing 12-month EBITDA was $1 billion for the first time in our history this quarter, reflecting a more than $200 million increase since the end of 2022 as we continue to deliver profitable growth across our business. We also continue to improve cash generation with an increase of $66 million year-over-year in the first quarter. On a trailing 12-month basis, free cash flow exceeded $0.5 billion for the first time in our company's history with conversion from EBITDA of 50%. Operationally, we saw improvement in both days of sales outstanding and days payable outstanding. Coupled with EBITDA growth I mentioned earlier, total free cash flow has more than doubled since year-end 2022, with free cash flow now exceeding $12 per share. As I review the quarter, we delivered on our commitments with results at the top end of our guidance range. As I mentioned, I'm proud of our consistent execution during volatile market conditions and our team's focus on the heels of the announcement of our transformational acquisition of NCR Atleos. Supported by this strong first quarter, I remain confident in our ability to continue our trajectory and deliver our full framework for 2026. Turning to Slide 4. You can see the components of our value creation strategy, which remain unchanged for 2026 and are well aligned with the strategic rationale of the NCR Atleos acquisition. We expect organic growth in 2026 to remain consistent in the mid-single digits, driven primarily by new and converted customer growth in recurring AMS and DRS revenue, which is expected to approach 1/3 of our total company revenue by year-end. The acquisition of NCR Atleos is expected to accelerate our ability to capture these AMS and DRS customers by delivering a more vertically integrated AMS offering and lowering our cost base through increased network density on the retail side of our business. On a stand-alone basis for 2026, we expect EBITDA margins to expand by 30 to 50 basis points as we shift revenue to these higher-margin services and drive cost productivity across our operations. This mix shift is expected to continue after completion of the acquisition and cost efficiencies are expected to accelerate behind the $200 million of cost synergies that we previously identified as we eliminate duplicative SG&A and public company costs, optimize our service delivery network and finally, drive global procurement savings. Both companies have delivered meaningful improvement in cash generation over the last few years, and we expect that will compound as we combine our 2 businesses. In addition to working capital improvements, we've already completed a secured financing arrangement that will allow us to absorb the $1.6 billion of NCR Atleos bank debt at a rate that is more than 1 full percentage point better than their current level. While we're focused on the near term on reducing leverage, we expect to produce a combined $1 billion of free cash flow from the 2 companies, providing flexibility to maximize value creation through strategic investments and shareholder returns. Shifting back to the quarter on Slide 5, I'll provide some commentary on performance by line of business. Starting with Cash and Valuables Management, or CVM. Organic growth was 1% in the quarter with good pricing discipline offsetting a couple of percentage points of AMS/DRS conversions. Our Global Service business was also strong again this quarter despite lapping a robust first quarter of 2025. Precious metals movement remain volatile and trends can change rapidly, but we factored in the current favorable trends into our second quarter guidance. AMS/DRS revenue grew organically approximately $50 million in the quarter for a rate of 15%. This was the 13th consecutive quarter of at least 15% organic growth in AMS/DRS as we continue to build momentum in these important businesses. It's important to note that in the fourth quarter of last year, we saw strong growth related to onetime equipment sales, primarily in North America that impacts the sequential comparisons. Factoring in this dynamic, growth in the quarter was in line with our expectations and positions us well to deliver our guidance for the full year. In DRS, we continue to see positive momentum with large enterprise customers in North America, including the onboarding of Pandora during the late fourth and early first quarters. In AMS, we're lapping some large wins in the prior year like Sainsbury's, while we stage for other large deployments, including some in the Rest of World segment. We continue to see positive AMS trends with banking customers, including in Southeast Asia, where we recently won the largest national bank in Indonesia with about 5,000 ATMs. Looking to the balance of the year, we expect AMS and DRS to accelerate sequentially, supported by our strong pipelines and DRS backlogs, including Paradies that will lead us directly into the next slide. On Slide 6, I'd like to highlight an example of the type of wins we're delivering with DRS. Paradies is a leading travel retailer and restaurateur, operating over 700 stores in airports across North America. They offer major brands like Chick-fil-A, Tumi, Starbucks today and Jimmy John's just to name a few. Paradies came to us to help solve common dilemmas they see across large global retail and quick-serve organizations. I've often discussed DRS as a true win-win for both Brink's and retailers, and that's clearly the case here with Paradies. We designed a bespoke solution incorporating both front office recyclers and smart safes that integrate directly with Paradies POS software. Our solutions are expected to help them with several pain points across their global footprint. Among other things, we're able to reduce cash handling time for managers and employees, unlocking productivity and efficiency within their stores. Our solution digitizes cash quickly and tracks transactions down to the teller level, reducing operational shrink across the business. We are also able to simplify service delivery for customers as we shift our key quality service deliverable from arriving within a certain appointment window to providing overnight electronic deposits for faster access to working capital. This shift creates flexible routing and scheduling options for Brink's, allowing us to arrive when needed or when easily added to an existing scheduled trip into the area. We completed a successful trial phase with Paradies and are planning for the full rollout across their entire footprint over the balance of the year. While the solution we designed for Paradies is unique to their specific needs, the problems we're solving for customers are universal. Our DRS offerings have a clear and demonstrated value proposition for retailers of all sizes. As we close more of these deals, I remain confident that we're in the early stages still of our efforts to expand our DRS business across the retail landscape in all geographies that we serve. On Slide 7, you can see our methodical progress towards 20% EBITDA margins in North America. In Q1, EBITDA margins in this segment expanded by 170 basis points year-over-year, driving trailing 12-month margins to 19.5%. Revenue mix has been a big contributor to this progression. It was another great quarter of AMS/DRS growth in North America as we continue to convert customers and install new DRS units, including the Pandora win that we mentioned last quarter. Global Services revenue growth was also strong this quarter despite an elevated prior year period comparable. Our shift to higher-margin flexible service recurring revenue is unlocking operational productivity across the business. Over the years, we've improved and standardized our service delivery network to enable profitable growth. This improvement is clear in the numbers as we continue to deliver improvements in revenue per vehicle and labor as a percentage of revenue. This is setting the stage for continued momentum post closing of our NCR Atleos acquisition as we layer on additional volume to our more efficient network. I'm confident increased scale will position us to drive further expanded margins well beyond our preliminary 20% targets. Turning to Slide 8. I'd like to provide a brief update on the NCR Atleos transaction. While we've been publicly engaged with shareholders over the last 8 to 10 weeks, we've been working hard diligently behind the scenes to progress this transformational acquisition forward. At the end of March, we successfully completed a refinancing of the secured portion of the bridge loan, increasing our capacity while unlocking attractive rates and improving certain conditions in our credit agreement. Just last week, we filed our registration statement and are progressing towards a shareholder vote over the next few months. We're making good progress on the regulatory front as well with filings submitted in many jurisdictions and reviews progressing as expected. NCR Atleos first quarter results will be filed after the market closed today, and we understand them to be in line with our business case modeling and on track with our full year projections. Though NCR Atleos will continue to operate independently until closing, we expect our integration management team to work closely with NCR Atleos to plan and prepare for the execution of the potential cost synergies. Importantly, we've created a dedicated integration management team within Brink's that is isolated from the day-to-day operations of our business and will be responsible for driving program execution of cost synergies after closing. While we're still in the early process in many ways, we're making good progress and continue to expect closing will occur by the end of the first quarter of 2027. The more we interact with our internal teams, our customers and the NCR Atleos management teams, the more encouraged I am by the potential of this combination. Supported by strong momentum in AMS and DRS and ATM as-a-Service, it remains clear that this is the right strategic direction at the right time to accelerate our growth and bolster our business for the future. Before I hand it over to Kurt to walk through the financials, I want to thank our team for embracing the power of our strategy. We've lifted our performance by consistently delivering on our external commitments while improving our service levels to our customers, even redefining the definition of what service quality means. Our team is focused on continuing our efforts to move the business forward behind AMS/DRS customer offerings that deliver clear win-wins for both the customers and for Brink's. I'm encouraged by the strong results we delivered, the strong momentum supporting us and I'm even more optimistic about the future potential as we combine with NCR Atleos and position ourselves to accelerate growth, profitability and value creation. And with that, I'll hand it over to Kurt to discuss the financials, and I'll come back for Q&A. Kurt?

Thanks, Mark. I'll begin on Slide 10 with a look at Q1. Revenue increased 10% with 5% constant currency growth and a 6% tailwind from foreign currency. Adjusted EBITDA was up 10% to $238 million with operating profit up 12%. Both operating profit and EBITDA accelerated 10 basis points year-over-year on favorable revenue mix, pricing discipline and productivity in both labor and fleet. Earnings per share was $1.80, up 11%. In the quarter, we completed approximately $30 million of share repurchases prior to the NCR Atleos acquisition announcement, reducing outstanding shares by 5%. As Mark mentioned earlier, trailing 12-month free cash flow was $502 million at the end of the quarter, representing conversion of 50%. I would like to call out that we have enhanced our cash flow disclosures to highlight cash flows related to the NCR Atleos acquisition, which were $2 million in the quarter and are expected to be between $50 million to $60 million for the full year. We believe it is important to isolate these cash flows for investors so they can get a better picture of the true underlying cash generation of the business. These cash flows are included in our expectations to get to approximately 2.3x by the end of 2026. Similar to timing from the prior year, we are currently ahead of our full year cash conversion guidance after Q1. We expect the timing of certain cash tax payments and cash investments over the balance of the year to return us to our target level of 40% to 45% by the end of the year. On Slide 11, total organic growth was $56 million or more than 85% of the growth came from higher-margin subscription-based AMS and DRS. The $8 million of CVM growth was in line with expectations and represents volume growth in Global Services and strong pricing execution, partially offset by the conversion of customers to AMS and DRS. FX contributed $71 million of growth in the quarter with favorable year-over-year rates primarily in the euro and Mexican peso. Shifting to the right side of the slide, growth of $128 million generated $23 million of EBITDA, expanding margins by 10 basis points. As you will see from our guidance for Q2, we expect expansion to accelerate into the second quarter as we continue growth into AMS and DRS. Moving to Slide 12. Starting on the left. Operating profit was up $18 million to $168 million with a margin of 12.2% on strong productivity, pricing and line of business revenue mix. Interest expense was $64 million in the quarter, up about $6 million year-over-year and in line sequentially with the fourth quarter. For the full year, interest expense is expected to be just over $250 million using current interest rate expectations. Tax expense was $29 million in the quarter, representing an effective tax rate of 27.6%, in line with the prior year rate. Interest income and other was down $6 million year-over-year, primarily due to lower interest income related to the prior year repatriation of cash from Argentina. Income from continuing operations was $75 million. Depreciation and amortization was $64 million, primarily reflecting increased depreciation from growth in AMS and DRS equipment. In total, first quarter adjusted EBITDA was $238 million, up $23 million year-over-year with margins expanding 10 basis points. Let's move to Slide 13 to discuss our capital allocation framework. Our capital allocation framework has remained consistent during Mark and my tenure, including through our transformational investment in NCR Atleos. Our leverage at the end of the first quarter was 2.7x net debt to adjusted EBITDA. During 2026, we expect net debt leverage reduction to be the primary focus of our capital allocation as we position our balance sheet for the NCR Atleos acquisition. Over the year, we expect to reduce our stand-alone leverage to approximately 2.3x. While we expect leverage to be approximately 3.4x, assuming Q1 2027 closing, we are currently expecting to be below 3x by the end of 2027. We continue to believe that 2 to 3x is the right leverage to balance capital efficiency and appeal to existing and potential equity investors. Our capital allocation framework has generated meaningful shareholder value over the last several years. The growth acceleration potential into high-margin recurring revenue AMS and DRS is expected to continue to drive margin expansion and compound cash generation for years to come. With clear line of sight to a combined free cash flow of $1 billion, we expect to have the flexibility to make strategic investments and return capital to shareholders in the future. Moving to guidance on Slide 14. Our framework for 2026 remains unchanged. We expect to deliver mid-single-digit total organic growth, supported by mid- to high teens organic growth for AMS/DRS. Using rates as of yesterday, we are currently expecting to see an FX tailwind for the full year of between 2% and 3%. EBITDA margins are expected to expand between 30 and 50 basis points with conversion of EBITDA to free cash flow of between 40% and 45%. In the second quarter, we expect revenue between $1.37 billion and $1.43 billion, reflecting organic growth in the mid-single digits. Using yesterday's spot rates, FX is expected to be a year-on-year tailwind of just below 3% at the midpoint. Adjusted EBITDA is expected to be between $245 million and $265 million, reflecting 10% growth and margin expansion of approximately 40 basis points at the midpoint. EPS is expected to be between $1.85 and $2.25. And with that, we are happy to now take your questions. Operator, please open the line.

[Operator Instructions] The first question comes from George Tong with Goldman Sachs.

In DRS, can you perhaps quantify how much of the growth came from conversion of traditional cash-in-transit customers versus greenfield wins?

Yes, sure. We have -- again, George, a good quarter for us in Q1 kind of everywhere in DRS. But particularly as you think about convergence, again, we stay on track what we've seen in prior quarters. So about 1/3 of the installs really coming from conversions of existing customers, which, as we've talked about previously, gives us a little bit of headwind in CVM, but of course, get the benefits of the better margin and certainly recurring revenue. The 2/3, though, really, we continue to be excited about because these are new customers that are either unvended or were previously vended by some other solution. You can see -- we talked about the Pandora deal a little bit in the call. We had it in our presentation last quarter, where we were able to really provide an enterprise solution for a customer that we were able to identify, negotiate and deploy fairly rapidly to collapse our time to revenue. We didn't get a chance to talk about it much last quarter, as you know, given the deal announcement. But if you look at, again, this quarter, another really nice deal here with Paradies, that's one of the airport operators for food and quick serve and retail. And again, just the opportunity to work with customers like that to provide a unique solution, whether that's leveraging hardware, software, POS integration and even some of our cash forecasting and balancing software really allows us to tailor a solution to almost any retail environment as we look to streamline and optimize the total cash ecosystem inside these retail stores. And this is something we'll continue to see going forward.

Very helpful. And then you expect AMS/DRS growth to accelerate sequentially given the strong backlog. What are your latest thoughts on what sustainable medium-term AMS/DRS growth can be?

Sure. I think -- we think this mid- to high teens organic growth will continue, George, here, certainly this year. And I don't know what your medium term is, but we've got a view as we go into '27 and get this deal closed, we can do -- continue to accelerate that more. So we're excited about it. And I think if you look at our backlog coming out of Q4 into Q1, team is excited about what we've got lined up for the second half of this year as we're installing those in Q1 as well as Q2. But you can see the organic growth rates are continuing. Although we were a little bit higher in Q4, about 22%, as we mentioned previously, we had a pretty significant amount of equipment sales, particularly in North America. But even that was still in the high teens from an organic perspective, and that continued into Q1. Q1 is typically a little bit lighter just given the fact that we don't do a whole lot of installations during Q4 retail season because most of our retailers are -- it's a busy season, particularly North America and Europe, where they don't want us in their stores installing. So we tend to carry a good backlog into Q1 and Q2.

The next question comes from Tobey Sommer with Truist.

I'd like to double-click on AMS and DRS again. How would you describe the geographical differences you're seeing in customer uptake and demand? And then what do you think it takes to light a fire under financial institutions in North America for this to take off?

Yes. Good question, Tobey, because we're really starting to to see more broad AMS/DRS growth around the world. And you can see, particularly in Latin America in the quarter, we're seeing Mexico continue to have a good run here in DRS that is allowing us to not only convert customers, but continue to improve margins and build out an installed base. We're seeing that in Argentina as well. And then, of course, in Brazil, we've been having success, and that continues. We're seeing more AMS and DRS, but particularly, I called out AMS in the Rest of World segment, which is really good because these are big cash markets that are kind of much earlier cycle when it comes to AMS/DRS conversion. But last quarter, we talked about AMS Security Bank down in the Philippines that we're currently deploying. We also then talked this quarter about Indonesia, although we've had some success in Indonesia previously. This is a pretty big deployment there. So we feel good about that. We're seeing banks in Rest of World as well as Latin America continue to either make decisions or continue to look at better ways to serve their continued ATM needs. If we move to the Northern Hemisphere, Europe and North America, of course, Europe is our most highly penetrated AMS/DRS market. And again, a good -- continue to have good progress there and a good outlook as we think about Q2 and Q3. But North America, certainly, our DRS trajectory continues to go higher. And you see it in our margins, and I called it out in the North American deep dive there, we continue to see the good mix benefits from DRS, particularly as we see going forward. The last part of your question was around North America banks, particularly U.S. banks. And that's something that we're continuing to have lots of discussions. And as we think about the services across the entire continuum for ATMs and ATM managed services, we're starting to get up those opportunities. And whether that's some of the off-branch bank at work ATMs or whether that's specific services and/or managed services on the on-branch, the full outsourcing continues to be a little slower than -- certainly a lot slower than the Rest of the World. I think this is one of the things that we think about with the Atleos acquisition, Tobey, and getting to a full vertical solution where customer outcomes can be better controlled and I think create more confidence with those customers about a full outsourcing. And so this is something that we're keenly aware of and thinking about and certainly part of our long-term thesis on the business to support both growth and being a catalyst for those banks to do outsourcing as well as increasing our density and participation in our retail footprint.

If I could ask a specific question on DRS. Is this -- are you finding this service is more valuable or less valuable to customers based on their business models as sort of like, I don't know, a stand-alone big box as opposed to an area like in an airport where retail is clustered or a mall because you've had a couple of marquee customers that you can talk about that sort of fit that latter bucket.

Yes. I'd say it's more about the idea around disclosure, Tobey, and customers being willing to talk about it, to be honest, because we are seeing DRS, we don't get to highlight all of our DRS wins as we've talked about previously in retail. But we're seeing strong value propositions, everything from the SMB mom-and-pop coffee shops all the way up to the big box guys. And many of those solutions can look similar maybe in the middle of that bulge. But when you get to the smaller or you get to the larger, they're certainly more sophisticated and can be more complex. We think the complexity is helpful for us because we can solve some of those problems with more technology and an integrated service model. And then on the low end, on the smaller customers, we're able to, frankly, lower our cost to serve to allow us to provide a better value proposition as we build more density. And as I think about one of the other big opportunities, and we talked about that last earnings call about the Atleos integration is building out more density across our network that again is going to lower our cost to serve and ultimately be able to provide better value propositions to customers, both small and large, but ultimately provide a much more compelling solution than they're able to either self-perform today or even than what we can deliver today from a cost perspective. So again, those benefits continue to accrue, and we think there's a definite network effect that we can create as we build out that density.

If I can ask one last one, and I'll get back in the queue. With respect to cash, conversion from EBITDA. You had some numbers in your recent filing that gave us a look at what your expectations are for a number of years for stand-alone Brink's. But maybe you could touch on the opportunity or what the combination with NCR Atleos does to the opportunity to increase that conversion over time.

Yes. Tobey, it's Kurt. Maybe I'll jump in here. I would say, first of all, just from a profitability perspective, certainly an opportunity there. The synergies will help on flow-through for sure. Then you go below the OP line and below the EBITDA line, we definitely see opportunities in terms of capital efficiency from both the CapEx and working capital perspective, and we talked a little bit about it. I mean we have to obviously develop that further together, but certainly see opportunities there to drive increased conversion on that.

I think the other area, Tobey, is that we think about, and frankly, we're seeing benefit now in our business as we really ramped up our efforts in and around global supply chain and procurement is getting better payment terms as we operate as one large enterprise versus 52 countries. And we've talked about that transformation that's been going on in the business for some time. We're really starting to see some of those benefits. And we think that putting together 2 companies of similar size and scale and purchasing power would only help that in the future as we think about managing payment terms, managing our balance sheet, managing our receivables in the same way as we think about common customers. So the working capital benefits that we're achieving -- sorry, improvements we're achieving now. By the way, Atleos is doing a pretty good job of that, too. We think only together can we really drive not only kind of in contract changes, but also just efficiencies in our systems and better follow-up and operational execution on credit and collections and payment terms.

And maybe I just might add that's a good point, Mark, one other thing. If you look at cash interest and cash taxes, there'll be opportunities there as well with the combined firm. And so that's another final area.

The next question comes from Tim Mulrooney with William Blair.

This is Sam on for Tim. Maybe I'll pivot away from some of the AMS/DRS questions, some good ones were already asked and ask more about your Latin America business actually. So this year, you'll be moving past some of the Argentina inflation impacts for the first time in a while. So how are you thinking about the growth rate and margins for this business? And then I noticed a competitor of yours just made a pretty sizable acquisition in Peru. Curious how this might impact the level of competition you face in this region.

Yes. Thanks. Good to hear from you. First of all, I'll address the Peru acquisition. We're not in Peru. Actually, we were in Peru years ago and actually exited the business -- exited the country. But for us, we're -- we're very comfortable with the geography we have today. And as we've talked about previously, our strategic focus is really about moving further up the stack around DRS and AMS more around technology and service efficiency versus really expanded geography. Now we will have some expanded geography or we expect to have some expanded geography post the NCR acquisition that will allow us to kind of reassess what resources we have in which markets and how best to optimize cost and the supply chain there. But for us, again, this wasn't much of a strategic lever for us. We didn't have any cost synergies there because we don't have any businesses there to combine. And really, the market is pretty isolated from our perspective. So we don't see that competitive pressure, let's say, in the region from this acquisition, particularly. More generally, we love Latin America from a fundamental perspective, high cash usage in these markets, good margins. We have good businesses, good leadership teams. And as you point out, Argentina is a place as you look at the kind of FX trends here in the last 6 months as we get to the back half of the year at current rates. Argentina is not a headwind at all. And so from an FX perspective. So that's really interesting because it's a good business for us. We have a good position down there, and it's good margins. And so as we think about going forward, it's going to be less noise and effectively will be something that investors will be able to get a better look at on an apples-to-apples basis without as much noise. The other thing that we think about also down there is the AMS market. It's a huge ATM market, and we're in the biggest markets down there in Brazil, Argentina and Mexico, Colombia, Chile. And certainly, there's activity already going on down there. We've talked about it, but there's a lot left to go. And the banks down there are pretty sophisticated operators. They are relatively consolidated. And so the discussions are progressing well, we have several active networks down there as well as active pilots with existing banks that we're working to convert here in '27 and '28 -- I'm sorry, '26 and '27.

Sam, just I'd add too. I mean, you should expect the margins to get better sequentially, and that's what we're seeing.

Yes. I think it's -- and Sam, just of note, as you look at our Q1 performance and Q2 guide, this $10 million to $11 million of EBITDA that's above -- was above the midpoint of our guide of our framework should flow through to the balance of the year. And that's -- part of it is this LatAm margin improvements. And as you can see, the EBITDA margins are benefiting in Q1 kind of over our midpoint at the high end of our guide for a couple of reasons. One is the continued AMS/DRS mix benefits, but also we had a strong quarter in BGS. And our Global Services business, I mentioned on the call, given the -- all the volatility in the Middle East that we've seen, there's been a lot of movement of precious metals around the world. And in and out of all of the big financial centers around the world, that likely -- in our guide, we assume that's going to continue into Q2. And as we look out to second half, these markets are volatile. Hopefully, we'll have peace by then and things will settle down. And we're not assuming the kind of that same performance in the back half that we've seen in Q1.

So if you think about progression, Sam, it's very typical to look at kind of a 45% of our EBITDA in the first half, 55% in the second half is very typical for us. We're a little bit ahead of it this year. And as Mark said, we see that flowing through for the year. So I think good start.

Got it. Super, very helpful. And I was going to ask about BGS next, but you already beat me to it there. So maybe I can leverage this next question and maybe address fuel prices. I think I know that your contracts generally have fuel surcharges that are rent into them. But I guess I'd be curious if that's actually captured the full impact that you're seeing right now. And if there's any impact to margins that you might expect for the remainder of the year from this?

Yes. So we've been -- you know it well. We've been pretty good at ensuring that fuel doesn't necessarily impact us over the long term adversely. Of course, those indexes and changes, some are monthly, some are quarterly, some are biannually, whatever that we recapture that. But if anything, maybe it could be delayed a quarter. But those -- the fuel prices were in -- we had them in Q1, and you can see our performance, again, was way above our midpoint and at the high end of the guide. So we think that our teams have been pretty good at covering that and ensuring that our pricing discipline maintains those margins. If we go forward we see that likely to be a blip. Some of the things we -- some of the stuff we've seen around the world, we heard about some of these interruptions and fuel and so forth. We haven't experienced that. We haven't experienced it in anything other than episodically, let's say, okay, airports were closed in Dubai for a bit. But other than that, we really haven't had any real kind of structural supply impact and aren't expecting that going forward.

Yes. So in our guide and our framework contemplates that, Sam. So we've been good about covering it and still feel good about continuing to cover it.

Well, thanks. Listen, we appreciate everyone's time. I appreciate your support and interest in the company and look forward to speaking with you either next few days or when we're on the road at conferences coming up here in May and June. Have a great day.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.