Crane NXT, Co. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains information about Crane NXT, Co., some of which includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical information or statements about our current con dition. Investors can identify forward-looking statements by the use of terms such as “believes,” “contemplates,” “expects,” “may,” “could,” “should,” “would,” or “anticipates,” other similar phrases, or the negatives of these terms. References herein to “Crane NXT,” “we,” “us” and “our” refer to Crane NXT, Co. and its subsidiaries, including when Crane NXT, Co. was named “Crane Holdings, Co.” unless the context implies otherwise. References herein to “Holdings” refer to Crane Holdings, Co. and its subsidiaries prior to the consummation of the Separation unless the context implies otherwise. On April 3, 2023, Holdings was separated (the “Separation”) into two independent, publicly-traded companies, Crane NXT, Co. and Crane Company (“SpinCo”) through a pro-rata distribution (the “Distribution”) of all the issued and outstanding common stock of SpinCo to the stockholders of Holdings. References to "core sales” exclude currency effects and, where applicable, the first-year impacts of acquisitions and divestitures. Amounts in the following discussion are presented in millions, except employee, share and per share data, or unless otherwise stated. Management believes that non-GAAP financial measures that exclude these items provide investors with an alternative metric that can assist in identifying underlying growth trends in our business and facilitate comparison of our sales performance, for example, with prior and future periods that are complementary to GAAP metrics. We have based the forward-looking statements relating to our operations on our current expectations, estimates and projections about us and the markets we serve. We caution investors that these statements are not guarantees of future performance and involve risks and uncertainties. In addition, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. There are a number of other factors that could cause actual results or outcomes to differ materially from those expressed or implied in the forward-looking statements. Such factors also include, among others: the impact of tariffs and other trade measures; changes in global economic conditions (including inflationary pressures) and geopolitical risks, including macroeconomic fluctuations; demand for its products, which is variable and subject to factors beyond its control; risks associated with conducting a substantial portion of its business outside the U.S.; information systems and technology networks failures, breaches in data security, theft of personally identifiable and other information, and non-compliance with its contractual or other legal obligations regarding such information; being unable to identify or complete acquisitions, or to successfully integrate the businesses the Company acquires; fluctuation in the prices of, or disruption in its ability to source, components and raw materials, and delays in the distribution of its products; loss of personnel or being able to hire and retain additional personnel needed to sustain and grow its business as planned; being unable to successfully develop and introduce new products, which would limit its ability to grow and maintain its competitive position; governmental regulations and failure to comply with those regulations; the ability to protect its intellectual property; risks from litigation, claims and investigations, including those related to product liability and warranties, and employee, commercial, intellectual property and environmental matters; risks related to its ability to improve productivity, reduce costs and align manufacturing capacity with customer demand; significant competition in the Company's markets; additional tax expenses or exposures; adverse impacts from intangible asset impairment charges; inadequate or ineffective internal controls; and risks related to the Separation, including not obtaining the intended tax treatment of the Separation transaction, failure of Crane Company to perform under the various transaction agreements and actual or potential conflicts of interest with Crane Company; and other risks noted in reports that we file with the Securities and Exchange Commiss ion, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, and subsequent reports and other documents filed with the Se curities and Exchange Commission. We do not undertake any obligation to update or revise any forward-looking statements to reflect any future events or circumstances. 25 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Recent Transactions Credit Facilities On March 17, 2023, we became party to a senior secured credit agreement (the “Credit Agreement”) which provides for a $500 million, five-year revolving credit facility (the “Revolving Facility”) and we entered into a $350 million, 3-year term loan facility (the “Term Facility”). Funding for both facilities became available in connection with the Separation. On December 9, 2024, we entered into an amendment to the Credit Agreement which increased the Revolving Facility by $200 million to an aggregate $700 million and provided a delayed draw term loan (the “Term Loan”) of £300 million. On the same day, proceeds from the Revolving Facility were used to repay the outstanding Term Facility. In the six months ended June 30, 2025, we drew down $348.0 million and repaid $342.0 million on our Revolving Facility to fund working capital requirements. We also drew down £300.0 million, or $400.4 million, on the Term Loan to fund the DLR acquisition and repaid $36.8 million. Acquisition On May 3, 2024, we acquired OpSec Security for a base purchase price of $270 million. We utilized $210.0 million from our Revolving Facility and cash on hand to fund the acquisition. OpSec provides authentication solutions, brand and digital content protection serving various commercial brands, government agencies and financial institutions. On May 1, 2025, we acquired De La Rue Authentication Solutions (“DLR”) for a base purchase price of £300 million . We utilized our Term Loan to fund the acquisition. DLR is a leading global provider of digital and physical security and authentication technologies to governments and brands, and expands our portfolio of authentication solutions. DLR was combined with OpSec as “Crane Authentication” within the Security and Authentication Technologies segment upon close. Restructuring In the second quarter of 2025 we initiated restructuring actions as follows: • We recorded $6.1 million of restructuring expense in the SAT segment, predominantly related to severance charges, associated with the integration of the DLR and OpSec businesses. We expect to substantially complete the restructuring program in 2025, with total costs expected to be in the range of $10 million to $15 million. • We recorded $1.2 million of restructuring expense in the CPI segment, predominantly related to severance charges. We will continue to evaluate and align CPI’s cost structure with existing economic conditions which could result in additional actions. Trade Policies and Regulations We continue to monitor developments in global trade policies and tariff regulations. As of August 6, 2025, we expect to mitigate the impact of tariffs on operating profit with pricing and productivity initiatives. See Item 1A, “Risk Factors” for more details. Basis of Presentation See Note 1, “Organization and Basis of Presentation” for more details on financial statement presentation basis. 26 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results from Operations – Three Month Periods Ended June 30, The following information should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements and related notes. All comparisons below refer to the second quarter 2025 versus the second quarter 2024 , unless otherwise specified. Three Months Ended June 30, Favorable/(Unfavorable) Change (in millions) 2025 2024 $ % Net sales $ 404.4 $ 370.6 $ 33.8 9.1 % Cost of sales $ 235.6 $ 209.7 $ (25.9) (12.4) % as a percentage of sales 58.3 % 56.6 % Selling, general and administrative $ 113.6 $ 93.3 $ (20.3) (21.8) % as a percentage of sales 28.1 % 25.2 % Restructuring charges 7.3 — (7.3) NM Operating profit $ 47.9 $ 67.6 $ (19.7) (29.1) % Operating margin 11.8 % 18.2 % Other income (expense): Interest income 0.2 0.4 (0.2) (50.0) % Interest expense (16.4) (12.4) (4.0) (32.3) % Miscellaneous income (expense), net 1.1 (0.2) 1.3 NM Total other expense, net (15.1) (12.2) (2.9) (23.8) % Income before income taxes 32.8 55.4 (22.6) (40.8) % Provision for income taxes 7.8 13.8 6.0 43.5 % Net income before allocation to noncontrolling interest 25.0 41.6 (16.6) (39.9) % Less: Noncontrolling interest in subsidiaries’ earnings 0.1 — 0.1 NM Net income attributable to common shareholders $ 24.9 $ 41.6 $ (16.7) (40.1) % Sales increased by $33.8 million, or 9.1%, to $404.4 million in 2025. The change in sales included: • sales benefit from the DLR and OpSec acquisitions of $26.7 million, or 7.2%, • favorable foreign currency translation of $10.1 million, or 2.7% driven primarily by the strengthening of the euro, Swedish krona, British pound and Japanese yen against the U.S. dollar, and • core sales decline of $3.0 million, or 0.8%, driven primarily by lower volumes in CPI, partially offset by higher core sales in SAT. Cost of sales increased by $25.9 million, or 12.4%, to $235.6 million in 2025. The increase was driven primarily by the impact of acquisitions in SAT, higher material and other manufacturing costs, and unfavorable foreign currency translation, partially offset by productivity gains and the impact of lower volumes in CPI. Selling, general and administrative expenses increased by $20.3 million, or 21.8%, to $113.6 million in 2025. The increase was driven primarily by the impact of acquisitions in SAT and higher transaction related expenses. Operating profit decreased by $19.7 million, or 29.1%, to $47.9 million in 2025. The decrease was driven primarily by the impact of lower volumes in CPI and the dilutive impact of acquisitions and restructuring charges, partially offset by higher volumes in SAT. Productivity gains across both segments were largely offset by higher manufacturing and administrative costs, net of favorable pricing. Included in operating profit is $12.4 million of transaction related expenses compared to $6.5 million in the prior-year comparable period. Our effective tax rate for the three months ended June 30, 2025 was lower than the prior year’s comparable period primarily due to the mix of non-U.S. earnings. 27 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Segment Results of Operations - Three Month Periods Ended June 30, Crane Payment Innovations (“CPI”) Three Months Ended June 30, Favorable/(Unfavorable) Change (in millions) 2025 2024 $ % Net sales by product line: Payment Acceptance and Dispensing Products $ 177.1 $ 190.6 $ (13.5) (7.1) % Services 34.3 33.8 0.5 1.5 % Total net sales $ 211.4 $ 224.4 $ (13.0) (5.8) % Cost of sales $ 111.7 $ 114.6 $ 2.9 2.5 % as a percentage of sales 52.8 % 51.1 % Selling, general and administrative $ 49.5 $ 48.4 $ (1.1) (2.3) % as a percentage of sales 23.4 % 21.6 % Restructuring charges $ 1.2 $ — $ (1.2) NM Operating profit $ 49.0 $ 61.4 $ (12.4) (20.2) % Operating margin 23.2 % 27.4 % Sales decreased by $13.0 million, or 5.8%, to $211.4 million in 2025, driven by lower core sales of $16.3 million, or 7.3%, partially offset by favorable foreign currency translation of $3.3 million, or 1.5%. • Sales of Payment Acceptance and Dispensing Products decreased by $13.5 million, or 7.1%, to $177.1 million in 2025. The decrease was driven by core sales decline of $16.8 million, or 8.8%, as favorable pricing was more than offset by anticipated lower volumes primarily in retail and gaming, partially offset by favorable foreign currency translation of $3.3 million, or 1.7%, primarily reflecting the strengthening of the British pound and Japanese yen against the U.S. dollar. • Service revenue increased by $0.5 million, or 1.5%, to $34.3 million in 2025, primarily driven by favorable pricing. Cost of sales decreased by $2.9 million, or 2.5%, to $111.7 million in 2025, primarily driven by the impact of lower sales volumes and productivity gains, partially offset by unfavorable mix, unfavorable foreign currency translation and higher material and other manufacturing costs. Selling, general and administrative expense increased by $1.1 million, or 2.3%, to $49.5 million in 2025, driven primarily by unfavorable foreign currency translation. Higher administrative and selling costs were largely offset by cost saving actions. Operating profit decreased by $12.4 million, or 20.2%, to $49.0 million in 2025. The decrease primarily reflected the impact of lower volumes of $12.1 million, or 19.7%, and unfavorable mix of $3.7 million, or 6.0%, partially offset by productivity gains and the net impact of cost saving actions of $3.6 million, or 5.9%. 28 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Security and Authentication Technologies (“SAT”) Three Months Ended June 30, Favorable/(Unfavorable) Change (in millions) 2025 2024 $ % Net sales by product line: Banknotes and Security Products $ 143.5 $ 124.1 $ 19.4 15.6 % Authentication Products and Solutions 49.5 22.1 27.4 NM Total net sales $ 193.0 $ 146.2 $ 46.8 32.0 % Cost of sales $ 123.9 $ 95.1 $ (28.8) (30.3) % as a percentage of sales 64.2 % 65.0 % Selling, general and administrative $ 45.0 $ 27.1 $ (17.9) (66.1) % as a percentage of sales 23.3 % 18.5 % Restructuring charges $ 6.1 $ — $ (6.1) NM Operating profit $ 18.0 $ 24.0 $ (6.0) (25.0) % Operating margin 9.3 % 16.4 % Sales increased by $46.8 million, or 32.0%, to $193.0 million in 2025, primarily driven by the sales benefit from the DLR and OpSec acquisitions of $26.7 million, or 18.3%, core sales growth of $13.4 million, or 9.1%, and favorable foreign currency translation of $6.7 million or 4.6%. • Banknote and security product sales increased by $19.4 million, or 15.6%, to $143.5 million in 2025. The increase was driven by core sales growth of $13.9 million, or 11.2%, primarily due to higher sales in international markets. Included in the sales increase was favorable foreign currency translation of $5.5 million, or 4.4%, primarily reflecting the strengthening of the euro and Swedish krona against the U.S. dollar. • Authentication products and solutions sales increased by $27.4 million to $49.5 million in 2025, primarily driven by the sales benefit from acquisitions. Cost of sales increased by $28.8 million, or 30.3%, to $123.9 million in 2025, primarily due to the impact of the DLR and OpSec acquisitions of $18.2 million, or 19.1%, acquisition related amortization and fair value step-up of $7.3 million, or 7.7%, and unfavorable foreign currency translation. Selling, general and administrative expense increased by $17.9 million, or 66.1%, to $45.0 million in 2025, primarily due to the impact from acquisitions and higher transaction related expenses. Operating profit decreased by $6.0 million, or 25.0%, to $18.0 million in 2025, reflecting the dilutive impact of the DLR and OpSec acquisition related amortization, fair value step-up and transaction costs of $10.4 million, or 43.3%, higher material and other manufacturing costs net of favorable pricing of $6.8 million, or 28.3%, and higher restructuring charges of $6.1 million, or 25.4%, partially offset by the impact of higher volumes of $7.3 million, or 30.4%, productivity gains of $5.0 million, or 20.8%, and favorable mix of $2.0 million, or 8.3%. 29 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results from Operations – Six Month Periods Ended June 30, The following information should be read in conjunction with our Unaudited Condensed Consolidated Financial Statements and related notes. All comparisons below refer to the first six months of 2025 versus the first six months of 2024, unless otherwise specified. Six Months Ended June 30, Favorable/(Unfavorable) Change (in millions) 2025 2024 $ % Net sales $ 734.7 $ 684.2 $ 50.5 7.4 % Cost of sales $ 425.7 $ 370.9 $ (54.8) (14.8) % as a percentage of sales 57.9 % 54.2 % Selling, general and administrative $ 216.5 $ 187.6 $ (28.9) (15.4) % as a percentage of sales 29.5 % 27.4 % Restructuring charges $ 7.3 $ 2.7 $ (4.6) NM Operating profit $ 85.2 $ 123.0 $ (37.8) (30.7) % Operating margin 11.6 % 18.0 % Other income (expense): Interest income 0.4 1.0 (0.6) (60.0) % Interest expense (27.9) (22.3) (5.6) (25.1) % Miscellaneous income, net 3.2 0.4 2.8 NM Total other expense, net (24.3) (20.9) (3.4) (16.3) % Income before income taxes 60.9 102.1 (41.2) (40.4) % Provision for income taxes 14.2 22.7 8.5 37.4 % Net income before allocation to noncontrolling interest 46.7 79.4 (32.7) (41.2) % Less: Noncontrolling interest in subsidiaries’ earnings 0.1 — 0.1 NM Net income attributable to common shareholders $ 46.6 $ 79.4 $ (32.8) (41.3) % Sales increased by $50.5 million, or 7.4%, to $734.7 million in 2025. The change in sales included: • sales benefit from the OpSec and DLR acquisitions of $59.8 million, or 8.7%, • core sales decline of $15.9 million, or 2.3%, driven by lower volumes in CPI, and • favorable foreign currency translation of $6.6 million, or 1.0%, driven primarily by the strengthening of the euro and British pound against the U.S. dollar. Cost of sales increased by $54.8 million, or 14.8%, to $425.7 million in 2025. The increase was driven primarily by the impact of acquisitions in SAT, under absorption of manufacturing overhead in the Currency business, unfavorable mix in CPI and unfavorable foreign currency translation, partially offset by the impact of lower volumes in CPI and productivity gains across both segments. Selling, general and administrative expenses increased by $28.9 million, or 15.4%, to $216.5 million in 2025. The increase was driven primarily by the impact of acquisitions in SAT. Operating profit decreased by $37.8 million, or 30.7%, to $85.2 million in 2025. The decrease was primarily driven by the impact of lower volumes in the CPI segment, the dilutive impact of acquisitions, under absorption of manufacturing overhead net of favorable pricing in SAT and unfavorable mix in CPI, partially offset by productivity gains across both segments. Our effective tax rate for the six months ended June 30, 2025 was higher than the prior year’s comparable period primarily due to the mix of non-U.S earnings. 30 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Segment Results of Operations - Six Month Periods Ended June 30, Crane Payment Innovations Six Months Ended June 30, Favorable/(Unfavorable) Change (in millions) 2025 2024 $ % Net sales by product line: Payment Acceptance and Dispensing Products $ 347.0 $ 367.0 $ (20.0) (5.4) % Services 67.3 66.4 0.9 1.4 % Total net sales $ 414.3 $ 433.4 $ (19.1) (4.4) % Cost of sales $ 215.5 $ 219.4 $ 3.9 1.8 % as a percentage of sales 52.0 % 50.6 % Selling, general and administrative $ 98.9 $ 97.2 $ (1.7) (1.7) % as a percentage of sales 23.9 % 22.4 % Restructuring charges $ 1.2 $ 2.7 $ 1.5 55.6 % Operating profit $ 98.7 $ 114.1 $ (15.4) (13.5) % Operating margin 23.8 % 26.3 % Sales decreased by $19.1 million, or 4.4%, to $414.3 million in 2025, driven by lower core sales of $21.0 million, or 4.8%, partially offset by favorable foreign currency translation of $1.9 million, or 0.4%. • Sales of Payment Acceptance and Dispensing Products decreased $20.0 million, or 5.4%, to $347.0 million in 2025. The decrease reflected lower core sales of $21.9 million, or 6.0%, as favorable pricing was more than offset by anticipated lower volumes primarily in gaming, partially offset by favorable foreign currency translation of $1.9 million, or 0.5%, primarily reflecting the strengthening of the British pound against the U.S. dollar. • Service revenue increased by $0.9 million, or 1.4%, to $67.3 million in 2025, primarily driven by favorable pricing. Cost of sales decreased by $3.9 million, or 1.8%, to $215.5 million in 2025, primarily driven by the impact of lower sales volumes and productivity gains, partially offset by unfavorable mix, higher material and other manufacturing costs and unfavorable foreign currency translation. Selling, general and administrative expense increased by $1.7 million, or 1.7%, to $98.9 million in 2025, as the impact of cost saving actions was more than offset by increased administrative costs. Operating profit decreased by $15.4 million, or 13.5%, to $98.7 million in 2025. The decrease primarily reflected the impact of lower volumes of $15.9 million, or 13.9%. Unfavorable mix of $10.3 million, or 9.0%, was largely offset by productivity gains of $6.3 million, or 5.5% and the net impact of cost saving actions of $6.2 million, or 5.4%. 31 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Security and Authentication Technologies Six Months Ended June 30, Favorable/(Unfavorable) Change (in millions) 2025 2024 $ % Net sales by product line: Banknotes and Security Products $ 236.9 $ 227.5 $ 9.4 4.1 % Authentication Products and Solutions 83.5 23.3 60.2 NM Net sales $ 320.4 $ 250.8 $ 69.6 27.8 % Cost of sales $ 210.2 $ 151.5 $ (58.7) (38.7) % as a percentage of sales 65.6 % 60.4 % Selling, general and administrative $ 83.7 $ 55.1 $ (28.6) (51.9) % as a percentage of sales 26.1 % 22.0 % Restructuring charges $ 6.1 $ — $ (6.1) NM Operating profit $ 20.4 $ 44.2 $ (23.8) (53.8) % Operating margin 6.4 % 17.7 % Sales increased by $69.6 million, or 27.8%, to $320.4 million in 2025, primarily reflecting the sales benefit from the OpSec and DLR acquisitions of $59.8 million, or 23.8%, and higher core sales of $5.1 million, or 2.0%, and favorable foreign currency translation of $4.7 million, or 1.9%. • Banknote and security product sales increased by $9.4 million, or 4.1%, to $236.9 million in 2025, reflecting higher core sales primarily due to higher sales in international markets, and favorable foreign currency translation, primarily reflecting the strengthening of the euro against the U.S. dollar. • Authentication products and solutions sales increased by $60.2 million to $83.5 million in 2025, primarily driven by the sales benefit from acquisitions. Cost of sales increased by $58.7 million, or 38.7%, to $210.2 million in 2025, primarily due to the impact of the OpSec and DLR acquisitions of $38.5 million, or 25.4%, the acquisition related amortization and fair value step-up of $11.1 million, or 7.3%, and under absorption of manufacturing overhead related to the planned equipment shutdown in the first quarter of 2025, partially offset by productivity gains. Selling, general and administrative expense increased by $28.6 million, or 51.9%, to $83.7 million in 2025, primarily due to the impact of acquisitions and higher transaction related expenses. Operating profit decreased by $23.8 million, or 53.8%, to $20.4 million in 2025, reflecting the dilutive impact of the OpSec and DLR acquisition related amortization, fair value step-up and transaction costs of $14.2 million, or 32.1%, and higher manufacturing costs primarily due to the under absorption of manufacturing overhead, net of favorable pricing of $13.2 million, or 29.9%. Higher restructuring charges of $6.1 million, or 13.8%, were more than offset by productivity gains of $8.2 million, or 18.6%. 32 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Liquidity and Capital Resources Six Months Ended June 30, (in millions) 2025 2024 Net cash provided by (used for): Operating activities $ 43.7 $ 66.3 Investing activities (412.6) (291.1) Financing activities 344.8 190.2 Effect of exchange rates on cash, cash equivalents and restricted cash 15.2 (9.5) Decrease in cash, cash equivalents and restricted cash $ (8.9) $ (44.1) Our operating philosophy is to deploy cash provided from operating activities, when appropriate, to provide value to stockholders by reinvesting in existing businesses, by making acquisitions that will strengthen and complement our portfolio; by divesting businesses that are no longer strategic or aligned with our portfolio and where such divestitures can generate capacity for strategic investments and initiatives that further optimize our portfolio; by paying dividends and repaying prepayable debt. At any given time, and from time to time, we may be evaluating one or more of these opportunities, although we cannot assure you if or when we will consummate any such transactions. Our current cash balance, together with cash we expect to generate from future operations along with borrowings available under the Credit Agreement, is expected to be sufficient to finance our short- and long-term capital requirements. In the six months ended June 30, 2025, we drew down $348.0 million and repaid $342.0 million on our Revolving Facility to fund working capital requirements. We also drew down £300.0 million, or $400.4 million, on the Term Loan to fund the DLR acquisition and repaid $36.8 million . Operating Activities Cash provided by operating activities was $43.7 million in the first six months of 2025, compared with $66.3 million in the comparable period last year. The decrease in cash provided by operating activities was primarily driven by lower net income, partially offset by lower working capital requirements. Investing Activities Cash used for investing activities primarily consists of cash used for capital expenditures and acquisitions. Capital expenditures are made primarily for increasing capacity, replacing equipment, supporting new product development, and improving information systems. Cash used for investing activities was $412.6 million in the first six months of 2025, compared with $291.1 million in the comparable period last year. The increase in cash used for investing activities was primarily driven by the payment for the acquisition of DLR. Financing Activities Cash provided by financing activities consists primarily of dividend payments to shareholders, repayments of indebtedness, and proceeds from our credit facilities. Cash provided by financing activities was $344.8 million during the first six months of 2025, compared with $190.2 million in the comparable period last year. The increase in cash provided by financing activities was primarily driven by higher net proceeds from the Term Loan used to fund the acquisition of DLR, partially offset by lower net proceeds from the Revolving Facility. Recent Accounting Pronouncements Information regarding new accounting pronouncements is included in Note 1 to our Unaudited Condensed Consolidated Financial Statements. 33 Item 3. Quantitative and Qualitative Disclosures About Market Risk There have been no material changes in the information called for by this item since the disclosure in our Annual Report on Form 10-K for the year ended December 31, 2024.