Itron, Inc. Stock price
Compare with Peer Group
📊 Peer Group
📈 What is it?
The peer group consists of the companies with the most similar business model. They serve as a benchmark for putting a stock into context.
🧮 How is it selected?
Based on similarity of business model, meaning companies from the same industry with comparable products and a similar customer base. That's the only way to compare apples to apples.
🏛️ Why does it matter?
Whether a stock is cheap or expensive is best judged by comparison. A P/E of 18 or an EV/FCF of 20 can look cheap or expensive depending on the yardstick. The peer group gives you the most accurate one: companies with a similar business model that operate under the same conditions.
🎯 What does it mean for investors?
When a metric sits below the peer average, the stock is valued more cheaply relative to its competitors, and above the average more expensively. A discount to the peer group can be an opportunity, but it can also have a reason (for example lower growth). The comparison is a starting point, not a verdict.
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👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
👉 Clear answers to your questions
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👉 More detailed insights
👉 Exclusive perspectives on opportunities & risks
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Key metrics
📘 Market Capitalization
📈 What is it?
Market capitalization shows how much a company is currently worth on the stock market.
🧮 How is it calculated?
🏛️ Why is it important?
It helps classify companies by size (Large, Mid, Small Cap) and indicates their market presence and relative stability.
🧮 Calculation
🎯 What does this mean for investors?
- Large-cap companies tend to be more stable, often pay dividends, but may grow more slowly.
- Smaller firms may offer higher growth potential but come with more volatility.
- Market capitalization is a useful indicator of company size — but not a measure of whether a stock is undervalued or overvalued.
📘 Enterprise Value (EV)
📈 What is it?
Enterprise Value represents the total cost to acquire a company — including its debt and excluding its cash reserves.
🧮 How is it calculated?
(= Market Cap + Net Debt)
🏛️ Why is it important?
EV gives a more complete picture of a company's value than market cap alone and is used in key valuation ratios like EV/FCF or EV/Sales.
🧮 Calculation
🎯 What does this mean for investors?
- Enterprise Value shows the true cost of buying a company, including all financial obligations.
- It is more accurate than just looking at market cap, especially when comparing companies with different levels of debt or cash.
- Professional investors prefer EV-based multiples because they better reflect the company’s full financial footprint.
📘 Net Debt
📈 What is it?
Net Debt shows how much debt remains after subtracting a company’s available cash reserves.
🧮 How is it calculated?
🏛️ Why is it important?
It indicates how dependent a company is on borrowed money and how easily it can service its debt in the short term.
🧮 Calculation
🎯 What does this mean for investors?
- Low or negative net debt signals financial strength and flexibility.
- Companies with strong cash positions are better positioned in crises.
- High net debt increases financial risk — especially in environments with rising interest rates or economic downturns.
📘 Cash
📈 What is it?
Cash represents all liquid assets a company can access immediately — including cash, bank deposits, and short-term investments.
🧮 How is it calculated?
🏛️ Why is it important?
It reflects a company’s financial flexibility and resilience — enabling investments, buybacks, or buffer in downturns.
🧮 Calculation
🎯 What does this mean for investors?
- A strong cash position means greater room for maneuver and crisis resistance.
- Cash-rich companies can invest, pay down debt, or repurchase shares.
- But excess idle cash might indicate a lack of growth opportunities.
📘 Shares Outstanding
📈 What is it?
Shares outstanding represent the total number of a company’s shares currently held by investors — excluding treasury stock.
🧮 How is it calculated?
🏛️ Why is it important?
It’s the basis for key metrics like Earnings Per Share (EPS), Market Capitalization, or the Price/Earnings ratio (P/E).
🧮 Calculation
🎯 What does this mean for investors?
- Fewer shares in circulation typically increase earnings per share — making each share more valuable.
- Share buybacks reduce the number of shares and boost per-share metrics.
- Issuing new shares does the opposite — diluting shareholder value and lowering per-share figures.
📘 Price-to-Earnings Ratio (P/E)
📈 What is it?
The P/E ratio shows how many times a company's earnings per share are reflected in its current share price — in other words, how "expensive" the stock appears relative to its profits.
🧮 How is it calculated?
🏛️ Why is it important?
The P/E ratio is one of the most widely used valuation metrics. It helps investors assess whether a stock appears cheap or expensive compared to its earnings power.
🧮 Calculation
📊 P/E (TTM) = Based on earnings from the last 12 months (Trailing Twelve Months):🎯 What does this mean for investors?
- A low P/E may indicate undervaluation — or signal underlying issues.
- A high P/E may reflect strong growth expectations — or an overvalued stock.
📘 Price-to-Sales Ratio (P/S)
📈 What is it?
The P/S ratio shows how much investors are paying for $1 of the company’s revenue – regardless of profitability.
🧮 How is it calculated?
🏛️ Why is it important?
P/S is especially useful for evaluating growth companies or businesses not yet profitable. It reflects how the market values the company’s sales.
🧮 Calculation
Market Cap = $3.93b | Revenue (TTM) = $2.30b
Market Cap = $3.93b | Estimated Revenue = $2.44b
🎯 What does this mean for investors?
- A low P/S may indicate undervaluation — or low profitability.
- A high P/S can reflect strong growth expectations — or excessive optimism.
- Especially helpful when evaluating companies where profits are low, volatile, or negative.
📘 Enterprise Value to Sales (EV/Sales)
📈 What is it?
EV/Sales shows how much investors are paying for $1 of revenue — considering not just equity, but also debt and cash. It’s the capital structure–adjusted version of the P/S ratio.
🧮 How is it calculated?
🏛️ Why is it important?
It’s ideal for comparing companies with different levels of debt. It reflects a company's true cost relative to its revenue.
🧮 Calculation
Enterprise Value = $4.76b | Revenue (TTM) = $2.30b
Enterprise Value = $4.76b | Forward Revenue = $2.44b
🎯 What does this mean for investors?
- EV/Sales allows for capital structure–neutral company comparisons.
- A lower ratio may indicate undervaluation; a higher one may signal strong growth expectations or overvaluation.
- Especially helpful when evaluating high-growth companies with low or negative earnings.
📘 Enterprise Value to Free Cash Flow (EV/FCF)
📈 What is it?
EV/FCF shows how many years it would take for a company to "pay back" its enterprise value using its free cash flow.
🧮 How is it calculated?
🏛️ Why is it important?
It focuses on real cash generation, ignoring accounting noise — ideal for assessing profitability and value based on liquidity, not earnings.
🧮 Calculation
🎯 What does this mean for investors?
- A low EV/FCF may signal undervaluation and strong cash generation.
- A high EV/FCF might reflect weak recent cash flow or aggressive growth expectations.
- Best suited for stable, mature businesses with predictable free cash flows.
📘 Price-to-Book Ratio (P/B)
📈 What is it?
The P/B ratio compares a company’s market value to its book value — showing how much investors are paying for each dollar of net assets.
🧮 How is it calculated?
🏛️ Why is it important?
P/B is commonly used for asset-heavy industries like banks or industrials. It helps assess whether a stock is trading above or below its net asset value.
🧮 Calculation
🎯 What does this mean for investors?
- A P/B below 1 may signal undervaluation — or weak profitability.
- A P/B above 1 implies the market expects future value creation (e.g., brand, IP, growth).
- Best used for companies with tangible assets and strong balance sheets.
📘 Equity Ratio
📈 What is it?
The equity ratio indicates what portion of a company’s total assets is financed by shareholders’ equity – in other words, how much it relies on its own capital.
🧮 How is it calculated?
🏛️ Why is it important?
A high equity ratio reflects financial strength and stability, especially during downturns. It’s a key indicator of a company’s solvency and long-term risk profile.
🧮 Calculation
🎯 What does this mean for investors?
- Companies with high equity ratios are generally more resilient and less dependent on external debt.
- Low equity ratios can signal higher risk or aggressive financial strategies.
- Important: Always assess the equity ratio in combination with the return on equity (ROE). This shows not just how stable the company is – but also how efficiently it uses shareholder capital.
📘 Return on Equity (ROE)
📈 What is it?
Return on equity (ROE) shows how efficiently a company uses its shareholders’ equity to generate profit. In other words: how much net income is earned per dollar of equity.
🧮 How is it calculated?
🏛️ Why is it important?
ROE is a core profitability metric. It helps investors understand whether a company delivers attractive returns on the capital provided by its shareholders.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROE indicates that the company is using its capital efficiently and profitably.
- It’s especially meaningful for capital-intensive businesses or firms with high equity bases.
- Important: A very high ROE can also result from high debt levels – always interpret it alongside the equity ratio to assess financial health.
📘 Return on Capital Employed (ROCE)
📈 What is it?
ROCE measures how efficiently a company generates profits from its total capital – including both equity and interest-bearing debt.
🧮 How is it calculated?
It evaluates the return on all capital employed, regardless of how it’s financed.
🏛️ Why is it important?
ROCE is ideal for comparing companies with different financing structures. It shows how well management uses capital to create value for both shareholders and creditors.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROCE means the company uses its capital efficiently – regardless of whether it's funded by debt or equity.
- The higher the ROCE compared to peers, the more value the company creates with its invested capital.
- Especially relevant for capital-intensive sectors like industrials, energy, or infrastructure.
📘 Return on Invested Capital (ROIC)
📈 What is it?
ROIC measures how efficiently a company generates returns from the capital invested in its core operations – regardless of whether the capital comes from equity or debt.
🧮 How is it calculated?
- NOPAT = Net Operating Profit After Taxes
- Invested Capital = Operating assets minus non-interest-bearing liabilities
🏛️ Why is it important?
ROIC is one of the most accurate indicators of capital efficiency. Unlike return on equity, it is not distorted by leverage and shows how much value is created for all capital providers.
🧮 Calculation
🎯 What does this mean for investors?
- A high ROIC shows how effectively a company uses the capital that is truly invested in its core operations.
- Unlike ROCE, ROIC focuses only on the capital that is actively used to run the business – and that requires a return (i.e. interest-bearing).
- Especially useful when comparing companies with large amounts of excess cash or non-interest-bearing liabilities – giving a more realistic picture of capital efficiency.
📘 Leverage Ratio (Debt-to-Equity)
📈 What is it?
The leverage ratio indicates how much a company relies on interest-bearing debt (such as loans and bonds) relative to its shareholders’ equity.
🧮 How is it calculated?
🏛️ Why is it important?
This ratio helps assess a company’s financial structure and risk profile. High leverage can enhance returns – but also increases exposure to interest rate changes and financial stress.
🧮 Calculation
🎯 What does this mean for investors?
- A low leverage ratio signals financial strength and independence.
- A higher ratio can improve returns in good times but increases risk during downturns or rising interest rate periods.
- 👉 Always interpret in the context of industry, capital intensity, and interest rate environment.
📘 Revenue
📈 What is it?
Revenue shows how much a company earns in total from selling its products and services – the gross income before any costs are deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Revenue is one of the key figures to assess a company’s size, market position, and growth potential.
🧮 Calculation
🎯 What does this mean for investors?
- Growing revenue indicates rising demand and can be an early signal of future earnings growth.
- Comparing actual and expected revenue reveals trends in the market environment and analyst sentiment.
- Note: Strong revenue alone isn’t enough – margins and profitability matter just as much.
📘 EBITDA
📈 What is it?
EBITDA stands for “Earnings Before Interest, Taxes, Depreciation, and Amortization.” It reflects a company’s operating profit before the effects of financing, taxes, and accounting depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
EBITDA is widely used to evaluate a company’s operating performance – especially across capital-intensive sectors or international comparisons.
🧮 Calculation
🎯 What does this mean for investors?
- A high or growing EBITDA indicates strong operational profitability – independent of taxes, interest, or accounting methods.
- It’s especially useful for comparing companies across sectors or geographies.
- Important: EBITDA is not a net income figure – it excludes key costs like depreciation and interest.
📘 EBIT
📈 What is it?
EBIT stands for “Earnings Before Interest and Taxes.” It reflects a company’s operating profit after depreciation, but before interest and tax expenses.
🧮 How is it calculated?
🏛️ Why is it important?
EBIT is a core profitability metric that shows how well the company performs in its main business operations – independent of capital structure and tax environment.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT indicates strong profitability from the company’s core business – before financial and tax effects.
- It allows better comparison between companies with different debt levels or tax structures.
- Compared to EBITDA, EBIT already accounts for depreciation and reflects capital intensity more clearly.
📘 Net Income
📈 What is it?
Net income is the company’s total profit – the amount left after all expenses, taxes, interest, and depreciation have been deducted.
🧮 How is it calculated?
🏛️ Why is it important?
Net income is the most comprehensive measure of a company’s profitability – showing how much actual profit remains after all business and financing costs.
🧮 Calculation
🎯 What does this mean for investors?
- Growing net income indicates that the company is managing all of its costs efficiently.
- It directly influences valuation metrics like P/E ratio and the company’s dividend capacity.
- Over time, net income trends reveal how resilient and profitable the business model really is.
📘 Free Cash Flow (FCF)
📈 What is it?
Free Cash Flow shows how much actual cash remains after a company covers its operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
FCF reflects a company’s real financial strength – regardless of accounting profits. It shows how much flexibility a company has for dividends, share buybacks, or debt reduction.
🧮 Calculation
🎯 What does this mean for investors?
- High free cash flow means the company generates real, usable cash – independent of reported net income.
- It’s often the most reliable base for sustainable dividends and buybacks.
- Declining FCF can be an early warning sign – even when profits appear stable.
📘 Revenue Growth
📈 What is it?
Revenue growth shows how much a company’s sales have changed compared to the previous year – both on a trailing basis (TTM) and based on forward projections.
🧮 How is it calculated?
Forward = (Expected revenue ÷ Revenue in prior year − 1) × 100
Forward growth is based on analyst estimates for the current fiscal year.
🏛️ Why is it important?
Rising revenue signals growing demand, business expansion, and market share gains – especially important for growth-oriented companies.
🧮 Calculation
🎯 What does this mean for investors?
- Growth is the engine of long-term value creation – especially in tech and growth sectors.
- What matters is not just current growth, but its sustainability.
- Forward projections reflect whether analysts expect continued momentum – or a slowdown.
📘 EBITDA Growth
📈 What is it?
EBITDA growth shows how much a company’s operating profit (before interest, taxes, depreciation, and amortization) has increased or decreased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBITDA ÷ EBITDA from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
Growing EBITDA indicates improving operational profitability – regardless of financing or accounting effects.
🧮 Calculation
🎯 What does this mean for investors?
- Strong EBITDA growth signals operational efficiency and scalability – especially during growth phases.
- EBITDA growth can be an early indicator of margin and earnings expansion – but should be assessed alongside revenue and EBIT.
📘 EBIT Growth
📈 What is it?
EBIT growth shows how much a company’s operating profit (after depreciation, but before interest and taxes) has increased compared to the previous year.
🧮 How is it calculated?
Forward = (Expected EBIT ÷ EBIT from prior year − 1) × 100
The forward estimate is based on analyst projections for the current fiscal year.
🏛️ Why is it important?
EBIT growth is a direct indicator of a company’s business performance – taking into account capital intensity through depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- Rising EBIT signals improving operating profitability – even after accounting for depreciation.
- It’s especially important for evaluating companies with significant capital expenditures.
- Combined with revenue and EBITDA growth, EBIT growth provides a well-rounded view of operational progress.
📘 Net Income Growth
📈 What is it?
Net income growth shows how much a company’s bottom-line profit has increased or decreased compared to the previous year – both on a trailing basis (TTM) and based on analyst projections.
🧮 How is it calculated?
Forward = (Expected net income ÷ Net income from prior year − 1) × 100
The forward estimate reflects analysts’ expectations for the current fiscal year.
🏛️ Why is it important?
Net income is the ultimate measure of profitability. Growing net income signals stronger efficiency, cost control, and sustainable earnings power.
🧮 Calculation
🎯 What does this mean for investors?
- Stronger net income boosts valuation, dividend potential, and investor confidence.
- If profits stall while revenue grows, it may signal margin pressure.
📘 Free Cash Flow Growth
📈 What is it?
Free cash flow (FCF) growth shows how a company’s available cash – after covering operating expenses and capital expenditures – has changed compared to the previous year.
🧮 How is it calculated?
🏛️ Why is it important?
Free cash flow reflects real financial strength. Growing FCF indicates more flexibility for dividends, share buybacks, and reinvestment.
🧮 Calculation
🎯 What does this mean for investors?
- Declining FCF may point to rising investments, increasing costs, or weaker operating performance.
- Especially for dividend investors, FCF growth is critical – since dividends are paid from actual available cash.
- A negative trend isn't always bad, but it deserves closer attention.
📘 Gross Margin
📈 What is it?
Gross margin shows how much of a company’s revenue remains after deducting the direct costs of goods sold (like materials and production). It represents the company’s “raw profit” before fixed costs, taxes, and interest.
🧮 How is it calculated?
Or simply: Gross Margin = Gross Profit ÷ Revenue × 100
🏛️ Why is it important?
Gross margin indicates how efficiently a company can produce or procure what it sells. It is a key measure of product-level profitability and pricing power.
🧮 Calculation
🎯 What does this mean for investors?
- A high gross margin suggests strong pricing power and efficient production.
- Falling margins may signal rising input costs or competitive pressure.
- Compared to peers, gross margin offers insights into the quality of a business model.
📘 EBITDA Margin
📈 What is it?
The EBITDA margin shows how much of a company’s revenue remains as operating profit before interest, taxes, depreciation, and amortization.It reflects operating efficiency without being distorted by financing or accounting factors.
🧮 How is it calculated?
🏛️ Why is it important?
The EBITDA margin reveals how much operating income a company generates per dollar of revenue – independent of capital structure and tax effects.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBITDA margin reflects strong core profitability – before accounting distortions.
- It allows for effective comparisons across companies and sectors.
- A stable or growing margin signals efficient cost control and business scalability.
📘 EBIT Margin
📈 What is it?
The EBIT margin shows what percentage of revenue remains as operating profit after depreciation but before interest and taxes.
🧮 How is it calculated?
🏛️ Why is it important?
The EBIT margin reflects a company’s core profitability while accounting for capital intensity (e.g. machinery, infrastructure). It’s especially useful for comparing businesses with different levels of depreciation.
🧮 Calculation
🎯 What does this mean for investors?
- A high EBIT margin shows that the company remains efficient even after factoring in depreciation.
- It’s especially relevant for capital-intensive industries.
- Stable or rising EBIT margins over time are a strong indicator of pricing power and business quality.
📘 Net margin
📈 What is it?
Net margin shows how much of a company’s revenue remains as bottom-line profit after deducting all costs, interest, taxes, and depreciation.
🧮 How is it calculated?
🏛️ Why is it important?
Net margin reflects a company’s overall efficiency – across operations, financing, and taxation. It shows how much actual profit is generated from each dollar of revenue.
🧮 Calculation
🎯 What does this mean for investors?
- A high net margin means the company is not only strong operationally but also manages financing and taxes efficiently.
- Peer comparisons reveal business quality and competitiveness.
- Declining margins despite revenue growth can be a red flag for rising costs or inefficiencies.
📘 Free cash flow margin
📈 What is it?
The free cash flow (FCF) margin shows how much of a company’s revenue remains as actual free cash after covering all operating expenses and capital expenditures.
🧮 How is it calculated?
🏛️ Why is it important?
This margin reflects the true liquidity generated by the business – independent of accounting rules or depreciation. It’s especially relevant for dividends, buybacks, and reinvestment decisions.
🧮 Calculation
🎯 What does this mean for investors?
- A high FCF margin means a company consistently generates strong cash flow.
- It’s a positive signal for financial stability and shareholder returns.
- The long-term trend is key – a declining margin may indicate rising investments or weakening operating efficiency.
📘 Earnings per share (EPS)
📈 What is it?
Earnings per Share (EPS) shows how much profit is attributable to a single share – and is one of the most important metrics for evaluating a company's performance.
🧮 How is it calculated?
The diluted share count reflects potential new shares that could be issued through options, convertible bonds, or other rights.
🏛️ Why is it important?
EPS is the basis for many key valuation metrics like P/E ratio, PEG ratio, or payout ratio. It enables comparisons of profitability across companies, regardless of their size.
🧮 Calculation
🎯 What does this mean for investors?
- EPS captures per-share profitability and is especially useful for comparisons over time or with analyst estimates.
- Rising EPS may signal consistent growth or share buybacks.
- Important: Always use diluted EPS for more realistic valuations – especially in companies with stock-based compensation.
📘 Free cash flow per share (FCF per share)
📈 What is it?
Free Cash Flow per Share shows how much free cash flow a company generates per outstanding share – after investments, but before dividends or debt repayments.
🧮 How is it calculated?
Free cash flow is calculated as operating cash flow minus capital expenditures (CapEx).
🏛️ Why is it important?
FCF per Share reveals how much real cash is available per share – useful for dividends, buybacks, or reducing debt. Unlike net income, free cash flow is harder to manipulate and often seen as a more reliable metric.
🧮 Calculation
🎯 What does this mean for investors?
- High FCF per share signals strong financial flexibility.
- It shows how much capital the company can effectively reinvest or return to shareholders.
- Particularly relevant for dividend payers and capital-efficient businesses.
📘 Short interest
📈 What is it?
Short interest indicates how many shares of a company are currently sold short – that is, borrowed and sold by investors who expect the price to decline.
🧮 How is it calculated?
It reflects the percentage of a company’s shares that are being shorted relative to the total shares available.
🏛️ Why is it important?
Short interest serves as a sentiment indicator: A high value may signal skepticism or bearish expectations – but also increases the potential for a short squeeze if prices rise unexpectedly.
🧮 Calculation
🎯 What does this mean for investors?
- Low short interest usually indicates market confidence in the company.
- High short interest can be a warning sign – or an opportunity if sentiment shifts.
- Especially relevant in volatile markets or ahead of key earnings releases.
📘 Employees
📈 What is it?
The employee count shows how many people a company employs worldwide – offering insights into its size, structure, and business model.
🧮 How is it calculated?
🏛️ Why is it important?
It helps assess operational scale, labor intensity, and cost structure. Combined with revenue and profit, it enables key metrics like revenue per employee or productivity.
🧮 Calculation
🎯 What does this mean for investors?
- A high headcount can signal operational complexity – but also significant growth capacity.
- Revenue per employee is a key indicator of efficiency.
- Especially useful for comparing tech, industrial, or service-heavy companies.
📘 Turnover per employee
📈 What is it?
Revenue per employee indicates how much revenue a company generates on average per employee – a key measure of efficiency and productivity.
🧮 How is it calculated?
The employee count is typically taken from the most recent annual report.
🏛️ Why is it important?
This metric helps compare business models – especially between labor-intensive and technology-driven companies. A high value suggests automation, operational efficiency, or strong value creation per head.
🧮 Calculation
🎯 What does this mean for investors?
- A high revenue per employee indicates a scalable and margin-strong business model.
- A low figure may reflect labor-intensive operations or lower value-add.
- Especially helpful when comparing tech companies to industrial or service sectors.
Itron, Inc. Stock Analysis
Analyst Opinions
20 Analysts have issued a Itron, Inc. forecast:
Analyst Opinions
20 Analysts have issued a Itron, Inc. forecast:
Itron, Inc. Events
Past Events
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JUL
28
Q2 2026 Earnings Call
about 2 months ago
|
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APR
28
Q1 2026 Earnings Call
5 months ago
|
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FEB
17
Q4 2025 Earnings Call
7 months ago
|
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OCT
30
Q3 2025 Earnings Call
11 months ago
|
StocksGuide Free
Itron, Inc. — Q2 2026 Earnings Call
1. Management Discussion
Good day, and thank you for standing by. Welcome to Itron's Second Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's conference is being recorded.
I will now hand the conference over to your speaker host, Paul Vincent, Vice President of Investor Relations. Please go ahead.
Good morning, and welcome to Itron's Second Quarter 2026 Earnings Conference Call. Tom Deitrich, Itron's President and Chief Executive Officer; and Joan Hooper, Senior Vice President and Chief Financial Officer, will review Itron's second quarter results and provide a general business update and outlook. Earlier today, the company issued a press release announcing its results. This release also includes details related to the conference call and webcast replay information. Accompanying today's call is a presentation that is available through the webcast and on our corporate website under the Investor Relations tab. Following prepared remarks, the call will open for questions using the process the operator described. Before Tom begins a reminder that our earnings release and financial presentation include non-GAAP financial information that we believe enhances the overall understanding of our current and future performance.
Reconciliations of differences between GAAP and non-GAAP financial measures are available in our earnings release and on our Investor Relations website. We will be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from these expectations because of factors that were presented in today's earnings release and comments made during this conference call as well as those presented in the Risk Factors section of our Form 10-K and other reports and filings with the Securities and Exchange Commission. All company comments, estimates or forward-looking statements are made in a good faith attempt to provide appropriate insight to our current and future operating and financial environment.
Materials discussed today, July 28, 2026 may materially change, and we do not undertake any duty to update any of our forward-looking statements. Now please turn to Page 4 of our presentation as our CEO, Tom Deitrich, begins his remarks.
Good morning, everyone, and thank you for joining us today. Itron delivered a high-quality second quarter, record gross margin, strong free cash flow and earnings well ahead of our expectations on in-line revenue. That combination is a story of the quarter. The operating model we have built now delivers structurally better earnings power.
Turning to Slide 4 for the highlights. Revenue of $563 million annual recurring revenue of $417 million, adjusted EBITDA of $97 million, non-GAAP earnings per share of $1.59 and free cash flow of $81 million.
Turning to Slide 5. I want to put the quarter in the context of the market environment. Itron is a different company today than in prior cycles. Thank you for joining us today. A meaningful portion of our business is built around large multiyear utility programs -- so deployment timing -- good morning, everyone. What has changed is our ability through strong, we delivered low rectory gross margin on lower revenue, driven by better mix strong execution and the operational efficiency measures our team has embedded across the business. Not every quarter will set a record, but the improvements behind this 1 are structural, and we believe here to stay. The long-term infrastructure build-out across electricity, gas and water systems is durable and in our view, inevitable.
Utilities are managing systems on a real strain, affordability pressures rising reliability and resiliency requirements and new demand patterns, including industrial load growth and AI-driven power demand. Later on distributed energy resources and weather volatility and the operating challenge compounds. These pressures are not temporary. They are durable, and they are pushing utilities towards solutions that provide better visibility, more automation, and more intelligence at the edge of the network.
In electricity, we continue to see strong demand for non-wires alternatives time to power solutions and resiliency applications. The common thread customers want to do more with the infrastructure they already have, unlocking the capacity embedded in their distribution systems, reducing waste and deferring or optimizing capital inside upgrades. These are the exact problems our solutions are built to solve. The gas opportunity remains well above historical norms with customer focused on safety, system modernization and operational efficiency.
In water, particularly in Europe, demand remains positive for solutions that address scarcity and improve network performance. The regulatory environment remains multifaceted, mirroring our customers' reality, but it is constructive affordability, reliability and resiliency are front and center for regulators, just as they are for utilities, and that alignment reinforces the demand for exactly the solution Itron provides. Regulatory calendars shape when programs move forward rarely whether they move at all.
Turning to Slide 6. Second quarter bookings were $550 million, in line with our expectations, and the total backlog stood at $4.4 billion at quarter end. Large individual customer decisions are generally tied to regulatory processes. So project-based bookings will always be uneven quarter-to-quarter. What matters is the pipeline behind them. it continues to grow with rich opportunity set heading into the back half of this year into 2027 and beyond. Noteworthy wins in the quarter illustrate that demand. We are pleased to support 1789 Lux partners and several municipalities as they deploy our Platform as a Service offering to improve operational performance and reduce the total cost of delivering electricity gas and water services. These programs demonstrate that our technology is expanding its reach and gaining market share within the mid-market utility segment.
Los Angeles Department of Water and Power, LADWP is expanding its use of Itron's platform and services, deploying our operations management solution to increase the pace and scale of its deployment. Additionally, Sacramento Municipal Utility District for SMUD, will expand its deployment of our Riva solution, increasing the capability of the platform and the reach of distributed intelligence.
The pattern is clear, investor-owned utilities and more recently, municipalities and public power customers are selecting our platform, both where Itron is the incumbent and in head-to-head competition. Our wins also reflect an evolution in how utilities modernize, prior generations of technology were rolled out almost entirely as big bang replacements.
Today, utilities choose between that full-scale approach and continuous focused programs that address affordability, build capability and reduce risk. Both paths lead to Itron. And the continuous model adds a steady extension of the installed base and recurring revenue in parallel with larger program awards. Customers choose Itron because our platform solves multiple challenges -- we deliver networks, software, analytics and applications, an intelligence layer that creates operational visibility and enables better decisions across electricity, gas and water systems. That platform approach matters. It lets customers start with a defined need and expand value over time, and it strengthens Itron's business model by deepening customer relationships, growing our base and increasing the contribution from software, services and recurring revenue.
You can see the model working across our second quarter results. Outcomes again delivered strong year-over-year growth and annual recurring revenue grew by approximately 21% year-over-year clear evidence of the continued adoption of Itron's higher-value offerings and the durability we are building into the revenue base.
Turning to operations. The environment rewards discipline. Our supply chain is steady across labor and materials. We are proactively managing pockets of tightness, memory pricing, in particular, and importantly, we are not seeing broad labor or material constraints that would change our view of deployment activity. Integration of Resiliency Solutions segment is tracking to plan, these acquisitions expand our ability to solve mission-critical problems for utilities and deepen the intelligence we bring to the increasingly complex networks.
Overall, the second quarter reflects the operating model we have been building more resilient with greater earnings leverage -- on the outlook, we are narrowing our full year range while raising the earnings outlook on the strength of our operating execution.
With that, I turn the call over to Joan to walk through the second quarter financials and the outlook in more detail.
Thank you, Tom. Please turn to Slide 7 for a summary of consolidated GAAP results. Second quarter revenue of $563 million was within the range of the outlook we provided on our last call. As expected, revenue was down from last year due to the timing of project deployments in Network Solutions, but was partially offset by continued growth in outcomes. Gross margin of 41% was 410 basis points higher than last year due to favorable mix, operational efficiencies and continued cost discipline. GAAP net income of $53 million or $1.19 per diluted share compared to $68 million or $1.47 in the prior year. The decrease was due to lower interest income and a higher effective tax rate this year.
Moving to non-GAAP metrics on Slide 8. Adjusted gross margin of 41.4% increased 460 basis points year-over-year and is a new quarterly record for. Non-GAAP operating income of $89 million and adjusted EBITDA of $97 million both increased 8% year-over-year. Non-GAAP net income for the quarter was $71 million or $1.59 per diluted share versus $1.62 a year ago. The year-over-year decline was due to lower interest income and a higher tax rate, partially offset by higher non-GAAP operating income. Free cash flow was $81 million in Q2 versus $91 million a year ago. The decrease was primarily due to higher tax payments and lower interest income, partially offset by the timing of working capital.
Year-over-year revenue growth by business segment is on Slide 9. Device Solutions revenue decreased 3% on a constant currency basis due to lower electricity product sales. Network Solutions revenue decreased by 17% due to project deployment timing. Outcomes revenue increased 13%, driven by higher services revenue. Our new segment, resiliency solutions, which includes the Urbint and Locusview acquisitions contributed approximately $16 million of revenue in the second quarter.
Moving to the non-GAAP year-over-year EPS bridge on Slide 10. Our Q2 non-GAAP earnings per share of $1.59 per diluted share decreased $0.03 year-over-year. Operating income contributed an increase of $0.15 per share, but this was offset by lower interest income of $0.13 per share and a higher tax expense of $0.12 per share. Share count and other had a positive impact of $0.07 per share.
Turning to Slides 11 through 14, I'll review the Q2 segment results compared with the prior year. Device Solutions revenue was $111 million with adjusted gross margin of 34.8% and operating margin of 28.3%. Adjusted gross margin increased 500 basis points year-over-year, and operating margin was up 570 basis points due to favorable mix and operational efficiencies. Network Solutions revenue was $339 million, with adjusted gross margin of 42.8% and operating margin of 33%. Adjusted gross margin increased 430 basis points year-over-year due to favorable mix and operational efficiencies and operating margin was up 340 basis points.
Outcomes revenue was $96 million with adjusted gross margin of 38.8% and operating margin of 21.3%. Adjusted gross margin increased 30 basis points year-over-year due to a higher margin revenue mix and operating margin increased 290 basis points due to higher operating leverage. Resiliency Solutions had revenue of $16 million, adjusted gross margin of 75% and operating margin of 28%.
Turning to Slide 15, I'll review debt and liquidity at the end of the second quarter. Total debt was $1.6 billion, and our net leverage was 2.3x. Our liquidity position was $1.5 billion at the end of Q2, comprised of cash and equivalents of $745 million and $707 million available for borrowing under our revolving line of credit. During the quarter, we purchased $52 million or 644,000 Itron shares on the open market under our share repurchase authorization.
Now please turn to Slide 16 for our third quarter outlook. We anticipate Q3 revenue to be within a range of $590 million to $600 million, which at the midpoint is up 2% versus last year and 6% sequentially. We anticipate third quarter non-GAAP earnings per share to be within a range of $1.50 to $1.60 per diluted share, up 1% year-over-year at the midpoint.
Finally, please turn to Slide 17 for our updated full year outlook. The full year revenue outlook is similar to what we provided back in February, but we are now able to narrow the range to $2.37 billion to $2.41 billion, which at the midpoint is up 1% versus 2025. Importantly, the implied second half year-over-year and the sequential growth is close to 8%. As we previously discussed, we expected 2026 revenue to be more back-end loaded than prior years. The expected full year non-GAAP earnings per share has been revised upwards to a range of $6.30 to $6.50 per share. At the midpoint, this represents a 7% increase from the February 2026 full year outlook. While the full year EPS is projected to be below 2025 on an as-reported basis, if you normalize for the tax rate and the level of interest income, the midpoint of the new EPS range is approximately 7% higher than 2025.
We are proud of the structural changes we have made to the business to improve our resiliency as evidenced by expanding margins and profitability despite a recent slowdown in revenue growth.
Now I'll turn the call back to Tom.
Thank you, Joan. Before we open the line for questions, let me come back to the larger point. Our strategic position has improved, and the environment continues to move towards us. Utilities are being asked to manage more complexity, higher reliability expectations, greater affordability pressure and rising demand variability, all at the same time. Meeting that challenge requires more intelligence more automation and better operational visibility across the network. Itron is the intelligence layer of the distribution grid, helping customers unlock capacity, improve reliability, enhance safety, reduce waste and get more out of the infrastructure they already have. That value proposition is becoming more important, not less.
Quarterly timing may move the underlying need will not. What this quarter demonstrated is that Itron performs through that movement, earnings well ahead, record gross margin, strong free cash flow and continued growth in outcomes and recurring revenue. Our priorities are clear execute for our customers, grow recurring revenue, protect backlog quality and deliver durable earnings and cash flow over time.
Thank you for joining us today. Operator, please open the line for questions.
[Operator Instructions] First question coming from the line of Noah Oppenheimer.
2. Question Answer
Maybe if we could just start asking to take us through some of the moving pieces of the second half. As you mentioned, Joe, there's a sequential step-up in revenue. Where are we going to see that within the business? What drives that sequential step up? And then what are the implications of mix for margin trends in the back half?
Yes. I would say it's the story we've now had for the last several quarters. It's really dependent on network solutions increased deployment. So we've been really lucky and fortunate and have a lot of outcomes growth for the last couple of years year-over-year. We expect that to continue. But the real driver going to be an uptick in Network Solutions from the first half to the second half.
Margins for the year, I think we'll still be close to 40%, but we were a tad above that in second quarter and in the first quarter. So maybe it ticks down a little bit, and it's really just a function of mix. But in total, very close to, call it, 40% for the year.
Okay. And that inflection in revenues in networks, can you just maybe give us some color on what drives that? I know timing of customer deliveries can be very variable. But just at a high level, what is sort of driving the sequential improvement?
Yes. From the underlying need is really 3 things that drive most of it. It's grid expansion and whether that is electricity or gas. Its investment in resiliency and its investment in grid efficiency. So things like time to power, non-wires alternatives, virtual power plants things of that sort really are driving the growth. And that applies to tactically revenue-wise, but also long term in terms of the pipeline growth, that's what we see in that portion of the future as well.
Yes. Maybe just 1 quick follow-up, Tom. I mean I think you made the point well and the results reflect that this quarter that there's been structural improvements in the business looking at earnings and cash flow generation in the cycle. But I do want to ask you about some of the elements of demand that seem to be inflecting positively here. We don't always talk about kind of big game hunting for some of these larger awards. But when we look at some of the developments in California and Illinois and some other states, there's certainly some very encouraging demand signals we look at. So I'm just curious to follow up on your comments in the prepared remarks, how you kind of see the RFP and potential bookings environment out over the next coming few quarters, say?
Yes. Let me start with what you saw in the second quarter results, and then I'll fast forward the movie from there. But in the second quarter, you saw a number of things. You see the idea of grid edge intelligence moving into the bid market. So some of the named wins that I talked about in the quarter really are in that mid-market space. So it's no longer the early adopters only or the big IOUs that are going down the path of improving the efficiency of improving the agility of the assets that they have. So that was a positive development. We knew it would come, but really starting to move into that mid-market for the actual win rates cooking over and not in concept any longer.
If you look forward, the pipeline just absolutely continues to grow. It is continuing at record levels. We saw that really start to grow over the last 18 months. We finished last year at a record high, and it's only grown from there. It is the same basic elements, grid expansion, electricity and in gas, it's resiliency, it's efficiency that really is part of what is fueling that pipeline growth. What I just need to make sure we're clear on is the bookings timing. We are very disciplined about it. We won't put it into backlog until we have regulatory approval, that can cause a little bit of jitter but ultimately, it very much what happens at the end of the day. These things that are utilities are up against really our durable macro trends, and it shows a good amount of growth capability for us in the years ahead.
Our next question in the queue coming from the line of Ben Kallo with Park.
I think there's been a narrative that the utilities can have their hands full for right wrong and maybe you can tell us if it's wrong -- have their handful of generation and data center load growth. And so I think the products and technology that Itron provides gets the back burner and there's not really room for them in the stack. Could you just maybe talk -- address that a bit -- and then just talking in the past, there's been some regional differences, whether it's because of structure funding or others in what you're seeing as far as demand. Could you just talk to if that's changed or if that's still something that you're seeing in the marketplace?
Sure. I would say that the observation that generation and transmission investment is at a historic levels, clearly is valid. The country is going through a renaissance a rapid amount of demand growth. So utilities have to keep up with that. But where I think that narrative really falls apart the extension to say distribution capital is being crowded out of that investment is empirically untrue. Distribution CapEx levels continue to grow. That was even acknowledged at the NAREIT conference just a couple of weeks ago. The regulators are talking about it. You got to remember that 2/3 of utilities are distribution only. So it's not even a rational trade to consider for 2/3 of the market overall.
And all of that generation and transmission just provides loads that eventually lands on top of distribution systems that were never meant to handle it. So investment in the distribution grid needs to happen as well. The other narrative that I've heard just unpack it 1 step further is all of the behind the generation behind the meter rather generation that's being built and being planned right now if you really look under the covers there, a reasonable portion of that meaningful portion actually is planned to move back in front of the meters over years, it's sort of a transitionary period. So all roads kind of leads to the fact that distribution spend will continue to be healthy and continue to be positive in a capital-constrained affordability pressure environment, the cheapest capacity is really that electron that they already have and making that distribution grid more effective is where we specialize and where a lot of the investments we've made over the last couple of years really shines through.
That's what underpins that pipeline growth. We're not seeing any cancellation and I remain firm in the fact that the environment continues to move in our direction.
Relative to your second question then on what does the market look like? I see good opportunities pipeline-wise across the U.S. from the large IOUs on the West Coast through the southern rim of the United States and into the Southeast where there is just a tremendous amount of demand growth the need for efficiency improvements in the Mid-Atlantic and the PGM territory is well documented, and that continues to be strong as well as in the Midwest. Gas is outshining at the moment in terms of opportunity there is there is an enormous amount of refresh based on aging assets and the emergence of new technology and the new dynamic, which I highlighted in an earlier question, but also in prepared remarks of the mid-market starting to move.
And that's all what you see combined so I don't know that I would call out any particular region or vertical or a section of the market that is necessarily weak in the U.S. probably water is the weakest of the vertical a smaller piece of our business. But certainly, the water market in Europe continues to be alive and well and very constructive for us. So I'll pause there. I know I said a lot, but hopefully, that unpacks the situation for you.
Maybe if I can just jump in, please, just on the gas refresh. Could you just talk to us because I think it's important and it doesn't get talked about a lot, but just kind of cadence and then the sizing of that, please?
Certainly, the amount of gas distribution refresh that is on the market for bid now is well above historic norms. No matter how you look at it, it's multiples above what has traditionally been the case. Why that is that is that it's a combination of aging assets and new technology that really jump starts what you can do from a safety perspective, integrated shutoff integrated and automated methane sensing really are things that are very critical from a safety perspective and garner a lot of interest.
I would suspect those bookings probably play through in the next year or 2. But I do believe that you'll see an outsized gas growth in the 3- to 5-year time horizon given our large market share there, I think it's a good signal for us a pocket of opportunity in the years ahead.
Our next question coming from the line Chip Moore with ROTH Capital Partners.
Tom, maybe I wanted to follow up on your commentary around distribution CapEx. Just -- are you seeing examples out there where utilities are using Grid Edge in lieu of larger infrastructure? And is there a way to help frame out how that cost compares versus new generation or other alternatives? And then what are the trends you're seeing in rate cases? Is this a case where some of the pushback on electricity prices could accelerate some of that?
Sure. I'll give you a couple of examples that I think are particularly interesting on how you can use Green Edge intelligence to improve performance in the near term, maybe defer some CapEx an example from a large IOU on the West Coast, I think $4 million, $5 million endpoint kind of customer, but the idea of being able to manage EV charging in a coordinated way so that you can live within the circuit budget for the utility or the 10.5 panel budget for the customer, you're talking about more than $1 billion of transformer upsizing that you can defer or avoid completely. That's a very clear example of how you can bring grid edge intelligence to bear.
Another from, call it, 1 million endpoint customer in the southeastern part of the United States, but through deploying distributed intelligence. They reduced their frequency and duration of outages. Duration was down 12% to 15%. The frequency was down 3% to 5% for outages and you start to think about what the cost of outages in the United States on an annualized basis, the 7-year total of $67 billion per year. If you can save double-digit percentage of that, there's real value added there for communities as well as any utility, which is most of them, where you've got some sort of performance-based rates based on your outage performance. So those are some pretty clear examples of how CapEx is being deferred or avoided completely, but also cases where you just get much better utilization out of the assets that you do have.
On the second part of your question then when it comes to rate cases, I see that the market is constructive. Rate cases are absolutely being approved. The rate of return in those rate cases continues to be in the upper 9% if not 10% range on individual cases. Oftentimes, there is a discussion that happens in an appropriate way between the utility and their commission to really make sure that all avenues are being explored. But when the benefits are well constructed and clearly articulated rate cases are absolutely going through. It is just that normal push and pull that happens in the industry. And for all of us as consumers, that's much appreciated and absolutely part of the process that we count on.
Excellent. And maybe for my follow-up, maybe more for Joan. Just the record profitability this quarter and close to 40% I think you said for the year, just when you look at structurally improved earnings, is -- and it sounds like you're not worried about some of the supply chain stuff or inflationary headwinds out there. Just how should we think about that earnings profile longer-term as we get some volume leverage?
Yes. I mean if you look at the original 2027 gross margin targets we had out there, we're essentially above that at the company level. Outcomes has a little bit further to grow in terms of the segment level, but networks is their devices as well in excess. So from the 2027 targets, we've added resiliency solutions, which is a software business at call it 70% to 75% margin. So structurally, we're in a good spot with a growing share of our revenue coming from higher margin parts of our business.
We have done the work necessary to shrink the factory footprint and get better operating leverage on the capital side. So I feel pretty good about where we are. Of course, we are looking at commodity prices and those kinds of things, and we normally do strap buys if we need to kind of hedge it. But I think our supply chain organization has done a great job being very resilient in the face of a little bit of a chaotic market.
Understood. Understood. Yes, we'll wait probably for an Investor Day. I think for an update on new goals.
Our next question coming from the line of Jeff Osborne with Civica.
I was wondering, Jon, you made reference to the 27 targets. Clearly, margins and cash flow have been very impressive. I was just curious, are you still comfortable with the revenue targets that you folks had put out there back in 2024, excluding the resiliency segment?
Yes. At this point, we're so close to 27%. What we plan to do is obviously provide guidance on the February call for and then shortly thereafter sometime next year, we'll give the longer-range target framework by segment. We're still in the midst of integrating resiliency solutions. So we didn't want to rush to put targets out with that kind of framework into a little further along with the integration. So at this point, stay tuned for '27 guidance in February.
Makes sense. And then maybe for Tom, a 2-part question. One is now that you have more Viva deployments under your belt, do you still feel comfortable with the sort of 9- to 12-month lag for starting shipments after regulatory approval, you seem constructive on sort of late this year and early next year, getting things across the finish line in the geographies you mentioned, but I just wasn't sure in terms of the revenue inflection from those regulatory approvals when that would happen.
Yes. I start with the back half revenue. Substantial majority of our second half revenue is underpinned by deployments that are already under contract, so that this is not something that's a new booking required to get there. As Joan mentioned, we don't anticipate any sort of labor or supply constraints that really going to limit the deployment. You've got our third quarter outlook, and that's a return to growth year-over-year. So things move in moving well for us, and that's what we'll continue to work on in the months ahead.
When it comes to the bookings pace, okay, bookings are always going to be a little bit lumpy and that's the nature of the business. But we feel good about the pipeline growth. Our win rates remain strong, the ability to start to move into that mid-market starting to happen. Those are all positive developments time from booking until you start to see revenue, yet mileage can vary customer to customer, but that sort of 9-month kind of number still makes sense. And I don't see any differences in the market that are starting to change that for the large deployments.
Good to hear very quickly, just a gas comments. Does that include network infrastructure upgrades as well or the access points? Or is just this clearly devices using legacy AMI 1.0 access point.
No, no. Yes, it's both. It's both. But what customers are buying today is largely something that's, I'll call it future proof, even if they are using it in a limited capacity today, the ability to turn on higher levels of functionality is built in. So think of it as end points as well as NETGEAR starting to happen depending on the topology that the customer selects.
Our next question coming from Martin Malloy with Johnson Rice.
I wanted to ask about recent acquisitions, Urbint and Locusview that you have a few more months with them. If you can provide us with any update anecdotal evidence on early cross-selling to customers across Itron's platform integration, how that's going, confidence in the outlook and if tight field labor markets are having any sort of impact on the pipeline for growth there?
Yes, I can start. So back in the February call with our initial guidance, we did give some color on the new resiliency solutions segment. We talked about revenue in the $65 million to $70 million with gross margin approximately 70%. Those numbers are still good. That is still what we're tracking to. The integration is going as planned. Locusview is a little bit more larger company and a little bit more complicated in terms of the plumbing and the ERP system, et cetera, but that's planned to be all done by the end of the year. So I think we'll be fully integrated by early January. Maybe I'll ask Tom to address any kind of cross-selling.
Yes, I would say that the cross-selling activity has begun. No particular wins at this moment that I would call your attention to. That's not a anything unusual or strange -- it's ongoing now. Some of the new functionality, specifically on the digital construction management side that I think shows great promise is really the ability to integrate AI into the process where you can automatically pull in a lot of the compliance data that you need for various pieces of infrastructure as you're building out and really automating not only the construction process, but the compliance and necessary activities you need to really close out the project.
So a lot of new functionality and growth, which is well appreciated from our customers. So I would very much agree with Joan's assessment, very much on track for what we set out for the year, even in the early days with cross-selling, just starting to get underway and are happy with the progress of the teams.
Our next question coming from the line of Sean Milligan with Needham & Company.
Curious if you can talk about 4 12-month backlog next-month and then I think like previously, you've commented that maybe book-to-ship type or like, yes, book-to-ship has been creeping up within your business, like maybe kind of view of that over the next 12 months, how much we think that is of total shipments.
Sure. The 12-month backlog is up quarter-over-quarter, Joan can comment on the exact number. I don't know that I would focus in on the precise number too much as deployments will ebb and flow through the natural cycle within the quarter itself. But the trend being positive quarter-over-quarter as we continue to really see what's happening in the marketplace and customers are gaining confidence in their speed of deployment.
When it comes to the book and ship business, I said for a couple of quarters now, we're starting to see more of that type of business. Certainly, it's always been a significant part of the devices business, but a higher percentage in networks today. And that really goes to 1 of the points that I was making during the prepared remarks, which is customers can really start to add capability and buy additional services, additional capabilities within a particular portion of their territory depending on how their needs change overall. So if you have a ZIP code within your territory, which has high EV penetration and you want to deploy EV detection and charging management capability, you can do that without a massive amount of forklift upgrade throughout the network. You can target where you need it. And that's what accounts for a bit more book and ship even in the networking space.
So running at a higher percentage than what we normally would have seen. If you go back 3, 4 years, we go into the quarter with somewhere, call it, 80%, 85% of the shipments that are planned for the quarter in backlog, and the rest come through terms during the 12, 13 weeks to come.
Our next question is coming from the line of Scott Crum with Seaport Research Partners.
I wanted to -- this is the kind of the time of year, Tom, where you get a little bold and you give us maybe what the book-to-bill will be for the full year this year. Is that something that you're prepared to do?
We don't guide to book-to-bill. It's not something that's strictly within our hands, the regulatory cycle is what really is the last piece in the puzzle. And that's something that is really outside of our purview to talk about. But what I can tell you, it certainly is the infrastructure build-out that we're talking about is structural. The backlog is healthy at $4.4 billion. The bookings process being very disciplined. That backlog converts. It doesn't get canceled. Overall, the margin improvement you saw is structural. Pipelines are at a record level. Win rates are strong. So all of the setup is really good for what we have been looking for and we feel great about our market position.
Okay. On the bookings themselves, this is the first increase in, I think, 4 quarters and the quarter before, that 2Q of last year was up only 2%. So would you say that maybe the bookings sort of -- I know that there's no run rate per se, but that your bookings are now kind of more in tune with what you're doing as a company from a focusing on lower CapEx items not necessarily focusing on the large projects, which are all there and you book them, but they don't necessarily book today. So would you say you're kind of like over the hump on bookings and that the bookings going forward should be sort of more reflective of what sort of, I'll call it, like the -- the new Itron and your focus on away from the larger deployments? Is that a fair way to frame what bookings should look like going forward?
No, I really don't think it is. You're trying to draw a pattern where there just isn't 1 pay attention to backlog and not necessarily bookings quarter-to-quarter. Certainly, the large opportunities are out there. We certainly will continue to work very hard to get our fair -- more than our fair share of those pieces of the puzzle. We are heartened to see some of the mid-market starting to move towards the technology that we've invested hard to bring to market the idea of Platform as a Service really has unlocked that mid-market portion for us, and we're excited about what that will do. So both sides of the equation are contributing to what the business will be over the long term.
Our next question in queue coming from the line of Bobby Soper with Raymond James.
Could you bridge your gross margins in Network Solutions relative to a year ago?
I think it's -- well, it's a combination of lots of things, as I think we alluded to on the call, it could be customer mix. So we had some roll-off late last year of some customers who had a lower margin profile. It could be the product mix that is sold, but it's really a combination of both. And then factory utilization. I mentioned as well. The factory has done a really nice job of lowering overhead costs and improving the fall-through on direct margin to gross margin, but it's really all 3.
Okay. And what's your expectation for the monetization per application and outcomes?
Yes. I'm not sure I exactly follow the question. The -- certainly, we would expect the outcomes portion of the business continued to grow nicely. It's been double-digit year-over-year growth for the last, I don't know, 3 years probably on a quarter-by-quarter basis, we would look for that to continue -- the number of apps that we've licensed is getting close to $28 million to this point. That's up a little more than 15% year-over-year.
ARR continues to grow. So 17 at the end of the quarter, that's up 21% year-over-year. So all in all, we feel good about the continued growth in that portion of our market -- it really is an area that we focused on for a number of years and really starting to bear fruit for us.
There are got no more questions in the queue. I will now turn the call back over to Mr. Tom Deitrich for any closing comments.
Very good. Thank you all for joining us today. We truly do appreciate it. The need that we serve is durable and our market is performing through the timing. So we look forward to updating you again next quarter.
This concludes today's conference call. Thank you for your participation, and you may now disconnect.
Itron, Inc. — Q2 2026 Earnings Call
Itron, Inc. — Q2 2026 Earnings Call
Itron reported Q2 2026: in-line revenue, record gross margins, ARR growth and raised full-year EPS guidance while narrowing revenue range.
📊 Quarter at a Glance
- Revenue: $563 million, in-line with prior outlook; down versus prior year due to project deployment timing in Network Solutions.
- Annual Recurring Revenue: $417 million, up ~21% year-over-year (ARR = recurring software/services revenue).
- Gross margin: Adjusted gross margin 41.4%, a quarterly record and +460 basis points YoY.
- Profit & cash: Adjusted EBITDA $97 million (EBITDA = earnings before interest, taxes, depreciation, amortization), non-GAAP EPS $1.59, free cash flow $81 million.
- Backlog & bookings: Bookings $550 million; backlog $4.4 billion at quarter end.
🎯 What Management Says
- Structural change: Management credits mix shift to higher-margin software/services, operational efficiencies and tighter factory footprint for durable earnings improvement.
- Platform adoption: Platform-as-a-Service and outcomes offerings are expanding into mid-market utilities, deepening recurring revenue and cross-sell opportunity.
- Market durability: Persistent drivers—grid reliability, resiliency, electrification and gas safety/refresh—support multi-year demand across electricity, gas and water.
🔭 Outlook & Guidance
- Q3 outlook: Revenue $590–600 million; non-GAAP EPS $1.50–1.60.
- Full year: Revenue narrowed to $2.37–2.41 billion (midpoint ≈ +1% vs 2025); non-GAAP EPS raised to $6.30–6.50 (midpoint up vs prior February view; ~+7% normalized vs 2025).
- Risks: Guidance remains sensitive to regulatory timing (bookings/backlog conversion), pockets of supply tightness (memory pricing) and tax/interest income volatility.
❓ Analyst Q&A
- Second-half drivers: Management expects sequential revenue lift from increased Network Solutions deployments (project timing), with Outcomes growth continuing.
- Demand dynamics: Analysts pressed on whether generation/load growth crowds out distribution spend; management argued distribution investment remains healthy and grid-edge solutions can defer larger CapEx.
- Booking cadence: Management declined to guide book-to-bill, emphasizing disciplined booking (regulatory approvals required), growing pipeline and a healthy $4.4B backlog.
⚡ Bottom Line
Itron is showing clearer earnings leverage: record adjusted margins, ARR growth and stronger EPS guidance offset revenue timing risk. For shareholders this signals improving structural profitability, but near-term upside depends on lumpy regulatory-driven bookings and execution of network deployments.
Itron, Inc. — Q1 2026 Earnings Call
1. Management Discussion
Good day, and thank you for standing by. Welcome to Itron's First Quarter 2026 Earnings Conference Call. [Operator Instructions] Today's call is being recorded.
I will now hand the conference over to your speaker host, Paul Vincent, Vice President of Investor Relations. Please go ahead.
Good morning, and welcome to Itron's First Quarter 2026 Earnings Conference Call. Tom Deitrich, Itron's President and Chief Executive Officer; and Joan Hooper, Senior Vice President and Chief Financial Officer, will review Itron's first quarter results and provide a general business update and outlook. Earlier today, the company issued a press release announcing its results. This release also includes details related to the conference call and webcast replay information. Accompanying today's call is a presentation that is available through the webcast and on our corporate website under the Investor Relations tab. Following prepared remarks, the call will open for questions using the process the operator described.
Before Tom begins, a reminder that our earnings release and financial presentation include non-GAAP financial information that we believe enhances the overall understanding of our current and future performance. Reconciliations of differences between GAAP and non-GAAP financial measures are available in our earnings release and on our Investor Relations website.
We will be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from these expectations because of factors that were presented in today's earnings release and comments made during this conference call as well as those presented in the Risk Factors section of our Form 10-K and other reports and filings with the Securities and Exchange Commission. All company comments, estimates or forward-looking statements are made in a good faith attempt to provide appropriate insight to our current and future operating and financial environment.
The materials discussed today, April 28, 2026, may materially change, and we do not undertake any duty to update any of our forward-looking statements.
Now please turn to Page 4 of our presentation as our CEO, Tom Deitrich, begins his remarks.
Thank you, Paul. Good morning, everyone, and thank you for joining our call today. Itron had a solid start to the year. Our first quarter results were ahead of expectations due to strong execution from our teams and some first half projects progressing ahead of schedule.
Turning to Slide 4 for the highlights. Revenue of $587 million, adjusted EBITDA of $92 million, non-GAAP earnings per share of $1.49 and free cash flow of $79 million.
Turning to Slide 5. While project timing provided a modest tailwind in Q1 revenue, we anticipate the first half to be consistent with our initial guidance. Overall, the pace of ongoing field deployment of Grid Edge technology is well aligned to our expectations with no material constraints for labor or materials.
The adoption of flexible and intelligent solutions is accelerating, and that is translating into durable compounding growth over time. Our Outcomes segment grew 22% year-over-year. Total company annual recurring revenue at quarter end was $414 million, up 28% due to strong organic growth plus our recently acquired Resiliency Solutions segment. More broadly, the size and scope of the opportunity funnel remains outsized from historical levels, driven by the age out of existing infrastructure and new requirements. Grid modernization is inevitable, and we are confident in the multiyear structural investment to add intelligence to the grid, but also understand the market we serve.
Our customers continue to work in a complex environment, balancing global uncertainty, affordability concerns, resiliency imperatives and growing demand variability. We are confident our product portfolio addresses these disparate needs across electricity, gas and water systems with flexible implementation models that are well aligned to the specific needs of our utility customers.
Turning to Slide 6. Our first quarter bookings were $476 million, bringing the total backlog to $4.4 billion at quarter end, in line with our expectations. The quarter included several notable wins. We advanced a strategic grid visibility program with Duquesne Light Company. This engagement reflects the growing demand for distributed intelligence and Grid Edge Computing as utilities modernize their networks to improve reliability, resilience and operational efficiency. Importantly, this program highlights Itron's abilities to deliver an integrated first-of-its-kind solution that brings together smart devices, software and communication to support next-generation grid operations.
Additionally, an existing customer that is deploying a safety-enhanced meter program has expanded their development of Intelis static gas endpoints. Intelis technology offers numerous safety enhancements, which include automatic and remote shut-off capabilities as well as reliability and efficiency features that benefit the utility and the consumers they serve. More broadly, this activity is a perfect example of the unique value that Itron's multi-commodity platform creates for customers and benefits our shareholders through diversification across electricity, gas and water verticals.
The integration of Resiliency Solutions segment is on track, and the team is already contributing meaningfully. In worker safety, we established a new contract with a major U.S. electricity utility. The customer required a best-in-class system to protect thousands of field workers at the job site, leveraging intelligent workflows and real-time hazard recognition. The digital construction management team extended a contract with a large natural gas pipeline customer, a strong signal of the customer value of deploying our platform. These are only a few examples of the kind of mission-critical problems that Itron is uniquely positioned to solve.
As a result, our backlog profile continues to evolve in quantity and quality. Outcomes and Resiliency Solutions combined now represent 25% of total backlog and that share is growing. The reason we are winning is straightforward. We help customers make one investment dollar do more. Our solutions are designed to create multiple opportunities for value across the useful life, deepening relationships, expanding our installed base and generating durable recurring revenue streams.
With that, I'll turn it over to Joan to walk through the first quarter financials in detail.
Thank you, Tom. Please turn to Slide 7 for a summary of consolidated GAAP results. First quarter revenue of $587 million was above our outlook range due to an acceleration of certain first half project deployments. As expected, revenue was down versus last year, primarily due to the timing of large networks projects. Gross margin was 450 basis points higher than last year due to favorable mix and operational efficiencies. GAAP net income of $53 million or $1.18 per diluted share compares to $65 million or $1.42 in the prior year. The decrease was due to higher GAAP operating expenses related to the two recently completed acquisitions as well as lower interest income.
Regarding non-GAAP metrics on Slide 8, adjusted gross margin of 40.7% increased 490 basis points versus Q1 of 2025. Non-GAAP operating income of $84 million and adjusted EBITDA of $92 million, both increased 5% year-over-year. Non-GAAP net income for the quarter was $68 million or $1.49 per diluted share versus $1.52 a year ago. The year-over-year decline was due to lower interest income, partially offset by higher operating income. Free cash flow was $79 million in Q1 versus $67 million a year ago. The increase was primarily due to lower tax payments.
Year-over-year revenue growth by business segment is on Slide 9. Device Solutions revenue decreased 9% on a constant currency basis due to the expected decline in legacy electricity products in EMEA and the timing of projects in North America. Network Solutions revenue decreased 14% on a constant currency basis due to the timing of large deployments. Outcomes revenue increased 20% on a constant currency basis, driven by higher recurring and services revenue. Our new segment, Resiliency Solutions, which includes the Urbint and Locusview acquisitions contributed $16 million of revenue in Q1.
Moving to the non-GAAP year-over-year EPS bridge on Slide 10. Our Q1 non-GAAP EPS of $1.49 per diluted share decreased $0.03 year-over-year. Operating income contributed an increase of $0.05 per share, but this was more than offset by the negative impact of lower interest income at $0.13 per share. Lower tax expense had a positive year-over-year impact of $0.01 per share, and FX, share count and other items had a positive impact of $0.04 per share.
Turning to Slides 11 through 14, I'll review Q1 segment results compared with the prior year. Device Solutions revenue was $124 million with adjusted gross margin of 35.4% and operating margin of 29.7%. Both margin results are segment-level quarterly records. Adjusted gross margin increased 540 basis points year-over-year, and operating margin was up 550 basis points due to favorable mix and operational efficiencies. Network Solutions revenue was $351 million with adjusted gross margin of 40.8% and operating margin of 31.4%. Adjusted gross margin increased 390 basis points year-over-year due to favorable mix and operational efficiencies and operating margin was up 260 basis points. Outcomes revenue was $96 million with adjusted gross margin of 41.7% and operating margin of 23.3%. Adjusted gross margin increased 250 basis points year-over-year due to a higher margin revenue mix and operating margin increased 510 basis points due to higher operating leverage. Resiliency Solutions had revenue of $16 million, adjusted gross margin of 73% and operating margin of 27%.
Turning to Slide 15, and I'll review liquidity and debt at the end of Q1. Total debt was $1.61 billion, and cash and equivalents were $713 million. Our cash balance declined approximately $300 million versus year-end 2025 due to the net impact of the January acquisition of Locusview, the February issuance of $805 million of 0 interest convertible senior notes, the March $460 million repayment of the company's 2021 convertible senior notes, the February share repurchase of $100 million and free cash flow generation of $79 million during the first quarter. As of March 31, net leverage was 2.4x.
Now please turn to Slide 16 for our second quarter outlook. We anticipate Q2 revenue to be within a range of $560 million to $570 million, which at the midpoint is down 7% versus last year. As previously mentioned, Q1 benefited from an acceleration of first half projects. Our current view of the first half of 2026 is consistent with our thinking when we set the annual outlook back in February. We anticipate second quarter non-GAAP EPS to be within the range of $1.25 to $1.35 per diluted share, which at the midpoint is down approximately 8% year-over-year after normalizing for the tax rate and the level of interest income.
Now I'll turn the call back to Tom.
Thank you, Joan. Utilities today are managing energy and water systems under increasing strain. Those systems were not designed for the complexity created by distributed energy resources, increasing industrial and AI-driven demand, resource scarcity and escalating weather volatility. At the local level, electricity distribution networks are often significantly underutilized and our customers draw an important conclusion while investment in new generation and transmission is essential, the fastest electron available to them is the one they already have.
Itron solutions unlock time to power using the existing capacity by working with the right data and the ability to act on it. Itron serves as the intelligence layer for our customers, delivering multipurpose networks, analytics and applications that give grid operators the visibility to optimize their distribution infrastructure. Industry data suggests utility distribution spending will continue to grow at least through the end of the decade. We believe this represents a durable structural trend and that modernization will benefit consumers while reducing waste across the system.
I am encouraged by our team's strong execution this quarter. The operating environment remains volatile domestically and globally, and that volatility creates risks. We have built a more resilient business and are delivering consistent results through these cross wins. Our focus is unchanged, backlog quality, recurring revenue growth, margin discipline, cash generation and above all, ensuring our customers are successful with every engagement. Itron is well positioned for a multiyear grid build-out that has already begun and is expected to continue for years to come.
Thank you for joining us today. Operator, please open the line for some questions.
[Operator Instructions] The first question coming from the line of Noah Kaye with Oppenheimer.
2. Question Answer
First, just hoping to get a little bit more color on what kind of drove the acceleration of project timing in 1Q? And then you were very helpful in noting the first half as a whole is kind of consistent with what you'd assumed in February. What -- the guidance had implied in February was a pickup in the back half. So can you just sort of help us kind of think through what might be impacting the step-down in run rate in 2Q? And then what might account for a pickup in the back half of the year?
Yes. Let me start, and then Tom if you want to comment. So yes, we did mention in our prepared remarks that Q1 was better than we had guided to because of an acceleration of projects from the first half of the year. It was primarily in the network business, but also a little bit in devices. And so if you take the combination of our Q1 actuals with the, call it, the midpoint of our Q2 guidance, it's actually slightly higher than what we would have expected back in February, slightly higher on revenue and actually higher on gross margin, EBITDA and EPS. So the first half is shaping up as expected.
So obviously, the question in terms of -- it's more back-end loaded, yes, we knew that when we entered the year, we talked about it on last quarter's call, what would drive an uptick in the second half of the year is project deployments primarily in networks. Certainly, outcomes continues to grow. We would expect that same thing for Resiliency Solutions. Devices is roughly flat. So that growth is going to have to happen from networks deployments.
Tom, I don't know if you want to add anything.
I would add just a bit on the operational side of things. What we saw in Q1 was no constraints when it comes to supply chain. So material was fine, labor was fine, customer deployments were ticking along quite nicely, and that led to some of the overage that you saw in the network space primarily. Turns were at the level that we expected we pointed in. And I think I even commented on this in our previous call that turns what we're expected to be a little bit higher and indeed, they were. So all in all, the market was well aligned to our expectations within the normal push and pull, where some of the network deployments were moving a little bit faster.
Very helpful. And then Tom, you mentioned the outsized funnel. I wondered if you could give us a little bit more commentary on the behavior patterns you're seeing now among customers. And I think in particular one question, no -- DOE recently provided a list of Congress of grid projects that seem to be reinstated under the SPARK program. Maybe just talk a little bit about the potential impact from that as you look at the bookings trajectory over the course of the year.
Sure. So maybe a broad brush view on the market specifically and then jump into the specifics on the SPARK program. I would say that if I look at it on a vertical basis, water in Europe continues to be strong, above the historical levels. I think it's fairly well documented. Water in the U.S. is a little bit slower. That's the smaller segment for us overall. So where our strength is in water continues to perform well. And you see that primarily in the Devices segment, which is, I would say, punching a little bit above its weight, more pushing 120s rather than the 100 to the 110 level where we had sort of anchored expectations.
On the gas side of things, gas in North America is particularly strong. There's more than buybacks the number of endpoints that are in flight at the moment on the gas side. That is much, much higher than what historical levels are. So that absolutely is a very bright spot overall. Electricity strong in Asia Pacific, in line with expectations in North America, a lot of activities that you can see in the press with some of the early movers in the electricity space really coming back out into the marketplace for the activities in, let's call it, back half of '26 to '27, '28 kind of time frame.
Across the board, though, strength in outcomes and resiliency solutions. So Outcomes up 22% year-over-year. ARR up 28% year-over-year. Felt really good about that part of the strategy playing through and working out nicely for us.
Our portfolio really sings to the way the market is operating these days. We have the ability to work with our customers depending on what sort of pressures they may have in the marketplace, whether it's regulatory oriented or whether it is particular resiliency needs. We've got the tools in the toolbox to be able to help them.
On the government funding side of things, you are correct, some time ago, some of those grip, G-R-I-P projects where were put on hold or "canceled". There are still some state attorney channels that are suing over that -- those "cancellations". But by and large, most of the activities are kind of being replaced now with this new DOE program called SPARK which clearly is part of that electricity market view that I talked about just a second ago.
In general, we have not seen any cancellations even because of some of the things or projects that were put on hold. Customers need to do these things. They weren't discretionary. It was only a question of how they would work through all of the things that were going on in the marketplace. So I feel very good about the inevitability of intelligence in the grid, and we're very, very well positioned to benefit over the years to come.
Our next question coming from the line of Ben Kallo with Baird.
Just adding on to Noah's question there. Just as you think about the activity, Tom, I know it's hard to predict, but just -- can you kind of give us like your thoughts about next year and just the original targets that you had laid out at the Analyst Day and just anything that's changed plus or minus since the last time you updated us? And then I have a follow-up.
Absolutely, yes. I would say that no change from how we commented on things at the -- in our prior earnings call. Still, we are very much ahead of those '27 targets when it comes to things like gross margin, EBITDA, cash flow, EPS revenue probably towards the low end of that range is what we commented before. Nothing has changed in the market that would pull us away from that view. The large opportunities that were part of my color commentary to Noah's question really gives us the view as to what the market looks like. This -- the build-out of the grid itself and infrastructure in general is absolutely structural. It's inevitable. It really will happen over the years ahead, and we're in a position to benefit from it.
And following -- zeroing on that 25% of backlog for Outcomes and Resiliency, could you talk maybe how much of that is recurring revenue? Because if I add that up with your current recurring revenue, you got to a big number depending on what you assume, but just what percentage of that 25% is actually recurring revenue versus some of the services part of it?
Yes. So our Outcomes segment generally runs somewhere between 2/3 to 3.75 recurring revenue that percentage probably drips northward over the years ahead, Resiliency solutions. The vast majority of it is recurring revenue overall. So that gives you a sense of what it looks like. The only caution I would give you is that backlog number that we quote is a multiyear backlog. So it usually plays out over, call it, a 3- to 4-year kind of time frame depending on the mix of projects that are inside of there. But all in all, again, our portion of business, which is recurring revenue continues to grow $414 million at the end of the quarter, up 28% year-over-year, still very much on track for that growth to continue in the quarters ahead.
And just one comment, Ben, you may just to clarify, recurring revenue can include services revenue as well. It's not just software.
Right. Okay. Got it. And last thing, just on the acquisition front, just because of multiple -- especially software-type companies changing, going down. How do you guys think about your capital allocation and then just being acquisitive here?
Yes. I would say our first priority in '26 is the successful integration of Urbint and Locusview. Things are on track, but we certainly have some additional to integrate systems and things of that nature. That would be our first priority. We will opportunistically look at other things that come our way. But we're not actively going to seek something to buy in '26. We do feel good about our balance sheet and our ability to act on something if it comes along.
Next question coming from the line of Martin Malloy with Johnson Rice & Company.
First question was on the recent acquisitions, Urbint and Locusview. And if you could maybe give us some perspective on progress in terms of revenue synergies with your wide customer platform being able to sell through some of those services, any anecdotal evidence about how that's going would be helpful.
Yes. I would say that the results to date have not really been any synergies per se. So what you're seeing in our resiliency solutions is the businesses we bought from Urbint and Locusview. Certainly, over time, we would expect the ability to do that. But we're really trying to ensure in these early days that we're not getting in the way of them running their business. And so we haven't spent a lot of time trying to build synergies. We want to get all the integration and the plumbing in place before we start doing that. So everything you saw in Resiliency solutions is kind of the businesses we bought with no contribution from Itron.
Okay. And then just with your commentary about pipeline and confidence in the customer need for your solutions. Could you talk about book-to-bill and when that might trend back over one?
Yes. The pipeline is at or very near all-time records. That buildup of pipeline we saw over let's say, the last year, 18 months and no signs that anything is coming off the boil there. I feel very good about the pipeline, the opportunities in the portfolio in terms of where we are well positioned. Bookings in the networking space are inherently a bit lumpy. They do move around quarter-to-quarter depending on size of individual projects. Remember that when you do a large project, it's generally a 3- to 4-year kind of thing. So it does yield a certain lumpiness to it. The Outcomes resiliency solution, that's a bit more normalized, the same with devices itself. So still feel great about where we are portfolio-wise, and we'll look to capitalize on the inevitable growth in the marketplace in the quarters ahead.
Our next question coming from the line of Scott Graham with Seaport Research Partners.
I wanted to talk about -- I know you don't update your full year guide until the second quarter. But I guess, obviously, we have the timing issue with respect to how things just work in your business. T&D spending is expected to be up double digit this year and your organic guidance is sort of like minus 4% to flat, which implies an increase and uptick in the second half of the year. How are you feeling about that uptick right now, Tom? I know your pipeline of opportunities is increasing, but that doesn't necessarily translate to the second half of this year. I'm just wondering how you feel about the second half? Is it possible that, that could -- second half sales could be down given the book -- the TTM book-to-bill being below 0.9. Maybe any color on that would be helpful.
Yes. I would say that we expected the year to be back half loaded. That was part of the initial guidance. First half, as Joan commented earlier, in line, I guess, slightly better than where we set the view as to what we had. So nothing has changed in the marketplace at all. Second half guidance definitely implies an uptick in the rate of network deployments. You saw even in the first quarter how that can happen pretty quickly, and we're well positioned to be able to continue to do that. We think we've got supply chain flexibility and labor flexibility to be able to go make that happen. So we will support our customers overall. But I think first half ahead of expectations is already a pretty good place for us to anchor our view for the year.
Okay. That makes sense. The second -- staying on the second half, I just want to make sure I understand what is going on with sort of the backlog and how purchase orders being written against that backlog are sort of shaping the second half? In other words, last couple of quarters, you talked about how you would have a booking in the backlog and you would only be writing a smaller purchase order because the utility was focused on high bang for the buck. I don't need to focus on something 5 years from now, this sort of thing. What type of risk is inherent in that in your thinking that the second half sales will be up? What is the risk to that relative to that chopping up of the purchase orders?
Sure. If I'm understanding and following your question, I would say that there's multiple things to think about there. We commented earlier that we expect the turns business to be higher, and that's what we we'll continue to expect. But really, the needle number is network deployment for the second half of the year. In general, there's backlog there. It just needs to be converted, and that is based on the timing of deployments and that very much is something that we work with our customers on an ongoing basis.
So same answer as sort of what I commented on earlier. You can see how these things tend to move through the pipe quicker. You saw that already in our first quarter results when projects start to go well that everyone gains confidence and you can accelerate the deployments overall. So the table is set for it to happen. We'll work with our customers to make sure we continue to support our portion of the program.
Our next question coming from the line of, Bobby Zolper with Raymond James.
I was wondering if you talk about the definitional differences between RPO and backlog?
Sure. So RPO is a portion of our revenue footnotes in our 10-Qs and 10-Ks. It starts with the total backlog that we report, and it backs off contracts that have termination for convenience clause. So often, the termination for convenience is governed by regulatory bodies, meaning the contract has to be structured that way. So it's a function of the structure of the contract and therefore, at any given quarter, the mix of the contracts in backlog will dictate how much is backed out to get what we call a net 606 backlog, which I think you referred to as the remaining performance obligations. Importantly, we do not use that to forecast revenue. We do use our full backlog because those contracts while technically, some may be cancelable, nobody ever canceled. So if you looked at our historical backlog, you haven't seen big adjustments to the backlog for cancellation. So it really is a function of the 606 literature on revenue, and it affects our 606 revenue models, et cetera, but does not impact how we look at revenue flowing into the P&L. So we use the gross backlog, which is also in that footnote.
Okay. Understood. I appreciate it. And then on the gross margin front, is there a good way to handicap? What I think you've been calling out customer mix benefits for a couple of quarters, like what the customer mix benefit is in gross margins versus what the, I guess, ongoing recurring gross margin of the business would be?
Sure. So what you saw was the last of some of that pre-inflation run-up backlog rolling out of our total backlog. Recall a couple of years ago, inflation spiked and we had some contracts that were priced pre-inflation with limited flexibility on pricing. That stuff has now fully played through, and that certainly has helped that the margin profile as we knew it would. All of the self-help that we've done over the years with factory consolidation and portfolio pruning, obviously, showing through and really proud of how the team has handled the demand levels that we've seen in terms of managing cost structure and making sure that we had material in place to fulfill things. So really good operational efficiencies there.
So what you saw in gross margin in Q1 was obviously a bit ahead of expectations based on some really good execution. I think that where we anchored our gross margin targets from our '27 targets, the devices business will be materially have, the networks business maybe towards the upper end of that range and outcomes. It will depend on the mix as we scale up that business. Resiliency Solutions. Clearly, it's a strong gross margin. And as that business scales, it will pull the entire company average upward.
I appreciate it. If I could just ask a clarifying question on one of the comments you just made on the devices' gross margin. When you say it's ahead, does that just mean it's better than your original expectations? Or should the assumption be that goes back to what the previous kind of long-term target was?
Good clarification. I'd make sure I'm clear. It is ahead of those '27 targets, and we believe it stays at roughly the level that it is at now. So I think that number that you saw the last couple of quarters is more the level that, that business can operate. There can be quarter-to-quarter variation, but I think you're in the right ZIP code.
A question just came in coming from the line of Joseph Osha with Guggenheim Partners.
Just to follow up a bit on the previous question as you just pointed out, Tom, Resiliency is gross margin accretive. It's a high-growth business, it's kind of growing into that operating cost footprint. I assume there's a lot of R&D there. Can you give us maybe some sense as to when resiliency might be getting closer to the corporate average at the operating margin level?
Yes, I can try to answer that, not specific on numbers, but if you go back and look at what I commented on the February call, we indicated that Resiliency Solutions was immediately accretive to Itron's revenue growth, gross margins and EBITDA dilutive to 2026 EPS due to less interest income. But on an operational basis, accretive in '26. And by the time we're into '27 completely accretive on an EPS level. So don't have a specific answer on operating income, but they're progressing nicely. What drags them down operationally today is just a higher OpEx structure, which they'll grow into. So we're really looking to encourage them to continue spending R&D and building out their platforms.
But would it be fair to say stipulating that obviously, everything you're saying is reasonable that simply at the percentage level, it's going to take them a while to kind of grow into that high R&D budget, even though it is accretive as you point out?
Yes. Again, I think over time, we'll look for synergies in R&D across all the segments. And so it's hard to give us precise answer in terms of when does our R&D budget go down, and therefore, their operating income percent go up. But certainly, we expect them to scale, and we believe it was two attractive acquisitions that we'll execute on according.
And I'm showing no further questions. I will now turn the call back over to Mr. Tom Deitrich for any closing remarks.
Thank you, Olivia. Thank you, everyone, for joining our call today. We look forward to updating you again next quarter.
This concludes today's conference call. Thank you for your participation, and you may now disconnect.
Itron, Inc. — Q1 2026 Earnings Call
Itron, Inc. — Q1 2026 Earnings Call
Itron reports solid Q1 performance with strong backlog and resilient grid-edge growth.
📊 Quarter at a Glance
- Revenue: $587M
- Adjusted EBITDA: $92M
- EPS: $1.49 (non-GAAP)
- Free cash flow: $79M
- Backlog & ARR: Backlog $4.4B; ARR $414M (+28% YoY)
🎯 What Management Says
- Execution & demand: Q1 ahead of expectations due to strong execution and accelerated first-half deployments; Grid Edge adoption is accelerating; recurring revenue growth remains durable.
- Backlog quality: Outcomes and Resiliency Solutions now represent about 25% of total backlog, underpinned by a multi-commodity platform across electricity, gas and water.
- Integrations & posture: Urbint and Locusview integration is on track; focus remains on integration, margin discipline, and cash generation, with opportunistic acquisitions only if attractive.
🔭 Outlook & Guidance
- Q2 outlook: Revenue guidance $560M–$570M; non-GAAP EPS $1.25–$1.35; 1H guidance consistent with February plan; second-half ramp expected from increased network deployments.
- Full-year context: Backlog quality and recurring revenue trajectory supportive; no material supply constraints observed in Q1; ongoing focus on margin discipline and cash generation.
❓ Analyst Q&A
- Q1 timing & 2H ramp: Questions about Q1 acceleration and whether 2H would accelerate; management said back-half ramp is expected as deployments accelerate and is supported by pipeline.
- SPARK program: SPARK program replacing earlier GRIP cancellations; pipeline at all-time highs; no cancellations observed; government funding should support grid intelligence adoption.
- Recurring revenue mix: Recurring revenue mix for Outcomes and Resiliency; Resiliency is accretive to revenue and EBITDA but EPS dilutive in 2026; long-term margin expansion expected as scale grows.
⚡ Bottom Line
Bottom line: Q1 shows solid execution in a multiyear grid modernization cycle. Backlog and recurring revenue trends are encouraging, with a back-half ramp expected as deployments accelerate. Urbint and Locusview integration remains on track, and the balance sheet supports opportunistic growth.
Itron, Inc. — Q4 2025 Earnings Call
1. Management Discussion
Good day, and thank you for standing by. Welcome to Itron's Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note that today's conference is being recorded.
I will now hand the conference over to your speaker host for today, Paul Vincent, Vice President of Investor Relations. Please go ahead.
Good morning, and welcome to Itron's Fourth Quarter 2025 Earnings Conference Call. Tom Deitrich, Itron's President and Chief Executive Officer; and Joan Hooper, Senior Vice President and Chief Financial Officer, will review Itron's fourth quarter results and provide a general business update and outlook.
Earlier today, the company issued a press release announcing its results. This release also includes details related to the conference call and webcast replay information. Accompanying today's call is a presentation that is available through the webcast and on our corporate website under the Investor Relations tab. Following prepared remarks, the call will open for questions using the process the operator described.
Before Tom begins, a reminder that our earnings release and financial presentation include non-GAAP financial information that we believe enhances the overall understanding of our current and future performance. Reconciliations of differences between GAAP and non-GAAP financial measures are available in our earnings release and on our Investor Relations website.
We will be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from these expectations because of factors that were presented in today's earnings release and comments made during this conference call as well as those presented in the Risk Factors section of our Form 10-K and other reports and filings with the Securities and Exchange Commission.
All company comments, estimates or forward-looking statements are made in a good faith attempt to provide appropriate insight to our current and future operating and financial environment. Materials discussed today, February 17, 2026, may materially change, and we do not undertake any duty to update any of our forward-looking statements.
Now please turn to Page 4 of our presentation as our CEO, Tom Deitrich, begins his remarks.
Thank you, Paul. Good morning, and thank you for joining our call. Itron delivered another quarter of record earnings and profitability, underscoring the durability of our model and accelerating demand for Grid Edge Intelligence. Highlights on Slide 4 include revenue of $572 million, adjusted EBITDA of $99 million, non-GAAP earnings per share of $2.46 and free cash flow of $112 million. These financial results reflect strong execution as our customers modernize the grid and relying more heavily on Itron solutions.
Modern civilization depends on energy and water systems that cannot fail and, increasingly, those systems depend on intelligence. Itron is the provider of intelligent infrastructure that underpins reliability, resilience and safety. Our value has grown significantly as demonstrated by increased adoption of Grid Edge Intelligence, Outcomes growth, record financial results, surging annual recurring revenue and the expansion of our offerings through strategic acquisitions.
Turning to Slide 6. Our fourth quarter bookings were $737 million, with a total backlog at quarter end of $4.5 billion. Continued momentum in Grid Edge Intelligence demand resulted in a record backlog for our Outcomes segment. Our fourth quarter bookings were driven by numerous Grid Edge solutions supporting grid modernization and reliability of infrastructure. These include the expansion of a long-standing relationship with Exelon through a new multiyear, multi-application agreement. This extension underscores the business benefits, technical flexibility and proven value of our solutions, including security, consumer privacy and operations optimization.
Another meaningful fourth quarter win involves collaboration with a large early adopter AMI customer to responsibly address operational continuity, business risk and affordability. Aging legacy systems and readiness for next-generation technologies are often misaligned, and our customers turn to us to help them bridge this gap. Itron's Utility IQ solution reinforces our commitment to open ecosystems and customer flexibility is designed around interoperability across technologies. Our product and service offerings provide a clear path forward to simultaneously maintain an aging system while smoothly transitioning to more capable and consumer-oriented services.
Additionally, we are expanding our partnership with a large Canadian utility by providing additional Grid Edge capabilities focused on distributed intelligence, enabling real-time grid visibility, analytics and control. As an expansion to our commitment to utility resiliency, we announced during the quarter the acquisition of Urbint, a provider of AI-enhanced solutions for emergency preparedness and response damage prevention and worker safety. We also announced the acquisition of Locusview, a provider of solutions for digital construction management, which automates the process from planning to close out deploying field-based capture of as-built infrastructure to enhance the speed and integrity of grid build-out.
With both acquisitions now closed, we are introducing a new reporting segment named Resiliency Solutions. We are thrilled to welcome these teams to Itron. Resiliency Solutions expands our reach, allowing Itron to support our customers through every step of the asset life cycle, from planning to build-out, to operations, to maintenance and protection. Itron is a long-standing industry anchor in the operation space, providing Grid Edge technology. Additionally, our leading energy forecasting products are used by 90% of the independent system operators and over 70% of the electricity operators in North America. Over the past years, we have added power flow analysis and planning software solutions to support detailed grid planning and interconnect analysis.
The addition of Urbint's emergency preparedness and response, worker safety and damage prevention solution augments our planning, maintenance and protection offerings. Most recently, Locusview provides leading digital construction management solutions. In total, Itron supports our customers through the asset life cycle.
Proactive resiliency is a top priority for our customers, which aligns well with our strategic investments and drives higher margins and recurring revenue growth in 2026 and beyond.
I will now pass over to Joan to cover the financial results for the company.
Thank you, Tom. I'll review Itron's fourth quarter and full year 2025 results, before discussing our financial outlook for 2026. Financial performance was strong in the fourth quarter and set company records for gross margin, non-GAAP earnings per share, EBITDA and free cash flow as a percentage of revenue. Please turn to Slide 8 for a summary of consolidated GAAP results.
Fourth quarter revenue of $572 million was higher than the range we expected and lower than the prior year due to planned portfolio changes and the timing of large project deployments. Gross margin was 560 basis points higher than last year due to favorable customer and product mix. GAAP net income of $102 million or $2.21 per diluted share compared to $58 million or $1.26 in the prior year. The improvement was driven by higher operating income and lower tax expense.
Regarding non-GAAP metrics on Slide 9, adjusted gross margin of 40.7% was a record and increased 580 basis points versus Q4 2024. Non-GAAP operating income of $91 million increased 28% year-over-year. Adjusted EBITDA of $99 million increased 21% and both the dollar amount and the percentage of revenue at 17% were new records.
Non-GAAP net income for the quarter was $113 million or $2.46 per diluted share versus $1.35 a year ago. This is a new quarterly record for the company.
Free cash flow was $112 million in Q4 versus $70 million a year ago. The increase reflects year-over-year earnings growth and improved working capital.
Year-over-year revenue growth by business segment is on Slide 10. Device Solutions revenue decreased 7% on a constant currency basis due to the expected decline in legacy electricity products in EMEA and the timing of project deployments in North America. Network Solutions revenue decreased 15% year-over-year, primarily due to the timing of project deployments. Outcomes revenue increased 22% on a constant currency basis due to an increase in delivery services and the continued growth of recurring revenue. Our new segment, Resiliency Solutions, which includes revenue from November 3 when our acquisition of Urbint closed, contributed $3 million of revenue. Beginning with the Q1 reporting, the combined Locusview and Urbint results will be reported in this segment.
Moving to the non-GAAP year-over-year EPS bridge on Slide 11, our Q4 non-GAAP EPS of $2.46 per diluted share increased $1.11 year-over-year. Pretax operating performance contributed a $0.45 per share increase driven by the fall-through of higher gross profit. Lower tax expense had a positive year-over-year impact of $0.69 per share.
Turning to Slides 12 through 15, I'll review Q4 segment results compared with the prior year. Device Solutions revenue was $105 million, adjusted gross margin was 34.4% and operating margin was 26.6%. Both margin results are segment quarterly records. Adjusted gross margin increased 780 basis points year-over-year due to favorable customer and product mix, and operating margin was up 670 basis points.
Network Solutions revenue was $352 million, with adjusted gross margin of 42% and operating margin of 32.2%. Adjusted gross margin increased 690 basis points year-over-year due to favorable customer and product mix, and operating margin was up 620 basis points.
Outcomes revenue was a record $112 million, with adjusted gross margin of 41.7% and operating margin of 27%. Adjusted gross margin decreased 230 basis points year-over-year due to lower software license mix, but operating margin increased 420 basis points due to higher operating leverage.
Resiliency Solutions with revenue of $3 million and adjusted gross margin of 76% and a negative operating margin of 3.6%.
For a recap of full year 2025 results, please turn to Slide 16. Revenue of $2.37 billion was down 3% year-over-year. Recall 2024 results included a catch-up of previously constrained revenue that did not occur in 2025.
As our business continues to evolve, we are introducing a new metric of annual recurring revenue, or ARR. For 2025, we ended the year with approximately $368 million of ARR.
Profitability and cash generation performance were very strong in 2025, and we set several new annual records. They were gross margin of 37.7%, adjusted EBITDA of $374 million or 15.8% of revenue, non-GAAP earnings per share of $7.13 per share and free cash flow of $383 million or 16.2% of revenue.
Turning to Slide 17, I'll review liquidity and debt at the end of the fourth quarter. Total debt was $1.265 billion and cash and equivalents were $1.02 billion. Our cash balance was down $312 million versus last quarter due to the acquisition of Urbint for $325 million and $100 million of stock buyback, partially offset by Q4 free cash flow of $112 million. The previously announced $525 million acquisition of Locusview closed during the first quarter of 2026 and, therefore, is not reflected in this balance. As of December 31, net leverage was 0.7x.
Please turn to Slide 18 for our full year 2026 financial outlook. We anticipate 2026 revenue to be within a range of $2.35 billion to $2.45 billion. The midpoint of this range represents 1% growth versus 2025. We currently anticipate 2026 non-GAAP earnings per share to fall within a range of $5.75 to $6.25 per diluted share. The EPS outlook assumes an effective tax rate of 22% for the full year. Quarterly rates could fluctuate based on jurisdictional mix and the timing of tax settlements. At the midpoint of this EPS range, and after normalizing the tax rate to 22% for both years, we expect 2026 year-over-year earnings to be down by approximately $0.32, which is driven by our 2 recent acquisitions.
Although we do not issue forward outlook by segment, we are providing some information on the size of our 2 recent acquisitions which will make up our new Resiliency Solutions segment. In the full year 2026 range I just provided, we included a revenue contribution of approximately $65 million to $70 million, with gross margins of approximately 70% for this new segment. Resiliency Solutions is expected to be immediately accretive to Itron's revenue growth, gross margins and EBITDA, but will be dilutive to 2026 earnings per share due to less interest income given the $850 million we spent for the 2 companies. In the full year outlook I just provided, the dilutive impact to earnings per share from the 2 acquisitions is approximately $0.38 per share. We expect the 2 acquisitions will be earnings per share accretive by the end of 2027.
Now please turn to Slide 19 for our first quarter outlook. We anticipate Q1 revenue to be within a range of $565 million to $575 million, down 6% versus Q1 of last year. We anticipate first quarter non-GAAP earnings per share to be within a range of $1.20 to $1.30 per diluted share, which at the midpoint is down approximately $0.27 versus last year. Lower interest income driven by the 2 acquisitions is reducing Q1 2026 earnings per share by approximately $0.13 per share.
As Tom noted, the environment our customers operate in is evolving rapidly, which creates new opportunities, but also new challenges and complexity. Our teams are working collaboratively with our customers to keep up with the pace of change, and we are executing our strategy. Although our business will never move in a straight line in the short term, the future looks very bright and we are confident in the course we are on.
Now I'll turn the call back to Tom.
Thank you, Joan. Utilities today are no longer simply asset operators. They are real-time system managers balancing electrification, decentralization, affordability and resilience. Great transformation is structural, not cyclical, and it requires trusted data secure networks and operational intelligence embedded directly into the grid. This is where Itron competes and Itron wins.
Our heritage is rooted in hardware and networks, and our future combines high-growth, durable annual recurring revenue driven by data, AI, software and services. Intelligence only matters when it is built on trusted data that is tightly integrated into operations. Itron provides that foundation, helping customers move from reaction to visibility, automation and prediction.
We remain focused on backlog quality, revenue growth, margin expansion and cash generation. Our strategy delivers durable earnings growth and compound shareholder value through customer trust and solution relevance.
Grid scaling and transformation is structurally unavoidable and cannot happen without greater intelligence. Itron is the intelligent infrastructure provider of modern energy and water systems. We provide real-time intelligence our customers require to operate efficiently.
With more than $1 billion of durable Outcomes backlog, rapidly growing annual recurring revenue and expanding solutions for critical customer problems, Itron is well positioned for the multiyear grid build-out in the years ahead.
Thank you for joining our call today. Operator, please open the line for some questions.
[Operator Instructions] First question is coming from the line of Noah Kaye with Oppenheimer.
2. Question Answer
Thanks for taking the questions. I have a lot to get to, but I'll keep it to 2 in consideration of others. I think the key question here in terms of the market environment and the behavior you're seeing, Tom, is maybe to get an update on how utility demand and behavior are kind of trending now. You talked in past quarters about some shifting dynamics in terms of how utilities go to market. I guess, to what extent are you seeing some of that stabilize or inflect here? Can you kind of give us an update on the pipeline, and what KPIs you're really paying attention to, to understand the shape of the demand environment from here?
Thanks, Noah. The fourth quarter bookings were strong as we had expected, $737 million. And that's composed of several hundred unique wins. So the market is very constructive and moving forward.
Second point, I guess, I would make is around some of the slips or the delays that we saw back in the middle of last year. We have not seen any further movement. Those things did move out of the year as we expected. But the externalities that really caused that, some of the froth around data center siting and government programs slipping out or funding being uncertain, that stuff has not continued on. It's still there on those individual projects, but it hasn't caused additional slips. So what we see today is bookings moving at a much more normalized pace. It's lumpy, but it's always bumpy, so call it normal. There's always some customer-specific phasing types of things inside of there.
Relative to the metrics or the KPIs that you asked about there, I would say pipeline growth is certainly a key metric. That was up 27% from the end of '24 to the end of '25. We continued to see that pace thus far into 2026. We looked at Outcomes backlog growth, which was up 58% year-over-year and now over $1 billion. And certainly, we're really focused in on the stability of revenue and revenue growth for the future with ARR as the metric and the way to think about that. So $368 million of ARR at the end of Q4, that's up 20% year-over-year from the end of 2024.
So there's a lot of really good stuff happening underneath all of that. And I would say the environment continues to be really constructive for us through fourth quarter and into 2026 and beyond.
That is a segue into the second question, just on this ARR metric. So just so we all understood, this is an ARR run rate that you were at, at the end of 4Q, the $368 million?
Yes. So $368 million at the end of the quarter.
Right. And as we think about what the 2026 guide implies, where do you think that could kind of be at the midpoint as we get into kind of the end of this year?
You mean specifically, what does it mean for ARR?
Yes.
Yes. I would expect we would still see kind of mid-teens to maybe up to 20% growth. And again, that would be calculated from year-end '25 to year-end '26. So that was a fourth quarter annualized number. Yes.
And that's organic, not including the acquisitions, right?
Well, now it does include -- for '24, it did have a little bit of Locus -- sorry, of Urbint. But the '26 expectations have both acquisitions in there.
Our next question coming from Mark Strouse with JPMorgan.
Sorry. Can you hear me now?
Yes, we can hear.
Yes. Okay. I'm sorry about that. I wanted to ask, we've seen some investor concerns lately about AI disrupting kind of traditional software companies. I'm just curious, when you look at your resiliency solutions business and your outcomes business, can you just talk about kind of the barriers to entry, and kind of at a high level, what you see as your right to win within those markets? Then I have a quick follow-up.
Both of the components inside of Resiliency Solutions, digital construction management as well as the protection solutions that we have, both of those components really rely on field service tools and the usage of those tools. So when you have thousands and thousands of workers in the field using the tool to capture data, you've got a really, really sticky solution overall.
So I'll give you an example. The big winter storm that went across the United States, Winter Storm Fern, what was this, 2 weeks or so ago, really put ice and snow from Texas to Maine, all the way across the U.S. What we saw was 3.5 million hours of restoration usage of the solution that we have for emergency preparedness and response. That data capture, that field service use, those tools are incredibly, incredibly sticky.
And when you look at it from the value that the customer gets, there's a really interesting clip of the CEO of Southern Company talking about the use of AI models to predict where to position crews and understand what weather patterns mean for their business. A really good example of how that tool, because of field use and the stickiness associated with it in terms of data capture, generates real value in terms of reduced restoration times and improved performance for communities and for our customers. So there's a perfect example as to why the tools that we have and why, when we apply AI, it really comes down to how the data is captured, how it's processed and making sure that the results are trusted, which our customers clearly do.
Great. And then a quick follow-up, Joan. I appreciate the color with the Resiliency Solutions' contribution in 2026 guide. Just given it's a new segment, can you talk about kind of seasonality that we should expect in revenue and margins, if you don't mind?
Yes, I don't see it as a seasonal business. I think it will be pretty steady. And obviously, as they sign new contracts that have subscription-based revenue, you'll see it grow over time. But I don't see a big swing in 1 quarter versus another.
Our next question coming from the line of Davis Sunderland with Baird.
Lots of questions recently from investors just about utility ordering patterns. And if it's a structural disruption versus just, I guess, lots of wood to chop in the near term. And wondering specifically if you could talk about what you're seeing in the book and ship business trends, maybe how much is assumed for this year or how we think about the bookings needed throughout this year to set up and underpin your 2027 targets? And then I have one brief follow-up.
Yes. I would say that the trends in terms of ordering patterns have really started to normalize. Some of the delays that we saw in the middle of last year, which were exogenous events, those have [indiscernible] through. We haven't seen any cancellations because of those types of things, maybe some project time lines stretching out, but I would consider it much more normalized today.
On the book and ship business, we definitely continue to see good book and ship business as customers are coping with some of the environment that they operate in. Book and ship oftentimes tends to be a go-to tool that customers have to cope with uncertainty in their business model if they don't have the right things in place from a regulatory standpoint, for example. The ability that we have to bridge our customers through a transition in terms of technology is as really important. I referenced that in some of the prepared remarks of working with customers to smooth transitions of technology, so they don't have to do a rip-and-replace, but more find ways to grow the capability over time. So certainly, in the electricity space, I would say, book and ship alive and well.
Water in the U.S. probably has slowed down a little bit. You've seen that in probably some of the competitive landscape that's out there, but that's probably a less important trend for us. Book and ship in Europe continues to operate on a normalized level. So again, overall market, very constructive in terms of what to expect in the year ahead.
That's super helpful. Maybe just a follow-up. I appreciate the commentary you gave qualitatively just about do you distribute intelligence, some of the new offerings, the commentary from Southern, kind of what you're seeing there from customers out there in the market. But wondering if you could give any more color just on penetration of these and maybe attach rates, which I know isn't a formal metric. But just thinking about core customers and adopting some of these new things, maybe the endpoints that you could see converted over -- I guess, I don't know the time frame. But just thinking about how this may trend in the near to longer term and the rate of adoption specifically.
Yes. The trend for DI adoption continues to be very good and very strong. So endpoints up 25% year-over-year. The number of apps up 70% year-over-year. So it continues absolutely at the pace we would have expected. We still have $10 million in backlog ready to move out the door approximately. So things are continuing to be normalized in that area. And if you happened to be at DISTRIBUTECH, a large show, you certainly would have seen the notion of Grid Edge Intelligence everywhere as the industry. So this isn't an if. It's inevitable, it's absolutely happening. It's the way our customers need to cope with the world around them and the complexity of the environment that they operate in.
We've seen particular growth in things like distributed energy resource management. So we're over 3 million devices, things like thermostats and load control switches and that sort of thing that are connected up. We're dispatching about 70 gigawatt hours a year, and in terms of activity, things like VPPs and other programs to manage it. We've seen tremendous growth in analytics as to how to make sense of all of the data. Those are the things that really do underpin the growth. And I think the right way to think about it from a financial perspective is ARR. There's lots of different models that our customers use to procure these types of solutions, and that's why we think ARR is a meaningful metric for the business and something to watch.
Our next question coming from the line of Jeff Osborne with TD Cowen.
Just a couple of quick ones on my side, Tom. Can you share what -- when you typically start the year, what level of the forward guidance is usually in backlog? And then maybe how that changed this year as you approach giving guidance?
It will always be a bit varied. So it depends on the time line that you're looking at. We would go into the quarter with probably something on the order of 80% in backlog. And I would say that we're not so far off of that in terms of what's happening.
It clearly has a tail to it. So it's lower the further you go out in time, but that's sort of the normal flow. So as I mentioned in one of the questions earlier, certainly, the environment is leading to customers to have probably a slightly higher percentage of book and ship, and that is really what we're thinking about as we set guidance for the year.
Got it. And my last question is just I think you mentioned the pipeline that you're pursuing is up 27%. I was wondering a metric that you don't give, but just to give us a sense of are you gaining share or not, is can you articulate the -- relative to the backlog, which has regulatory approval, the sort of awarded technically contracts to Itron, but not through the regulatory process, is that funnel or pool of awards, so to speak, larger-than-anticipated or past trends? Or like what's the general trend on sort of share gains and then you being technically awarded something and then still working its way through that sort of regulatory process?
I think it's hard to judge that in any one moment of time. If you look at the trend over the last several years, yes, I definitely think you see our share trending up in the core markets that we are driving to participate in and the level of content that we have. If you focus in on the U.S. specifically and in the electricity space, I think that it's very fair to say the big are getting bigger and the smaller are definitely getting squeezed, and we being the largest are clearly a beneficiary there.
Our next question coming from the line of Chip Moore with ROTH Capital Partners.
Wanted to ask another on sort of the normalization you're seeing on project activity. Just maybe understanding it's inherently lumpy, but is there a way to help us think about, if you didn't see those slips last year, how we might be thinking about organic growth here in 2026, if sort of mid to high single digits still the right way to think about that?
Yes, I would take a step back and focus on the bigger picture. The business structure is fundamentally different now than what it used to be. We clearly still have a significant portion of our business which is large project deployments and networking overall. And that absolutely has some level of lumpiness to it in terms of the bookings. How that flows through is generally over the next 3 to 4 years in terms of how it expresses itself for the revenue itself.
But the piece of the business which clearly is growing nicely for us, we continue to see good pace of growth, 20% year-over-year in Outcomes, for example, in Q4, and the notion of annual recurring revenue that is most of Resiliency Solutions, a good portion of Outcomes and a sliver of the Networks business falls into that category. That really is a significant structural difference in our business overall. So that's how I would focus on it and think about the business itself.
We will continue to be beneficiaries of a market that is structurally inevitably going to grow when it comes to grid deployment. There's just no way modern society will fulfill anything close to where the money is going in terms of data centers and reshoring and manufacturing and electrification of everything unless distribution spend continues at pace.
Very helpful, Tom. And I think you called out certainly ARR, right, in the prepared remarks. Just help us think about where that could be going as we've had -- as we get more normalization, and perhaps changes in rate-making dynamics, just where could Outcomes, how much of that been held back and where could that go?
Well, yes, we certainly -- what we saw some of the network slowdown, I'm going back a couple of years now when we had component constraints, Network -- the Outcomes business will still grow in, call it, 10% year-over-year. As those components became available and we did fulfill, that networking revenue, you saw Outcomes growth rates pick up. And certainly the 20% plus year-over-year in Q4 is good evidence of that. We're confident Outcomes can continue to grow. And now we have a new leg in the stool with Resiliency Solutions adding another tool in the toolbox to help our customers cope with some of the real challenges that are out there. If we are going to see grid deployment, you're going to have to figure out how to build this stuff faster. And that's where digital construction management helps. If you are going to have more floods and fires and storms, you're going to have to respond to disasters. And again, that's where Resiliency Solution really helps. We can move it to a much more proactive environment and that is absolutely going to benefit what our business can and will be in the future.
Maybe just one last follow-up to that, Tom, just on those new capabilities. Is there a way to help us think competitively that's helping you to land new proposals? Obviously, there's more TAM there. And then competitively, right, some of your competitors, I think, are backing back on -- backing down on some of the more complex deployments. Just a broader update.
Sure. Maybe take a perspective on the customer concentration specifically. Itron has 8,000 customers worldwide. Urbint and Locusview, think of it as tens of customers each. So we clearly have the ability with the sales reach that we have to move those solutions into a broader landscape and really help our customers solve a different set of problems globally. The notion of how we're better together, one of the slides in the investor deck, showed that circle diagram. But think about the ability to help your customer all the way through the asset life cycle, from when you're doing the planning to -- through the build process and into the operational piece. Itron has traditionally known for a long period of time what's "inside of pipes and wires." Now we know where pipes and wires are, so we can help with solutions for restoration and improve the overall offering.
So those are the types of things that I think will continue to drive growth for our business and how we benefit compared to perhaps some of the other offerings that are out there. I feel really good about our competitive position and expect to be able to support our customers using it.
Our next question in queue coming from the line Scott Graham with Seaport Research Partners.
Tom, I was wondering where you now believe the -- where you land in the next couple of years in terms of revenues. And I think last time I asked you if maybe the $2.6 million to $2.8 million in 2027 as a revenue goal, that maybe the lower half of that made more sense. Your response, if I recall, was kind of maybe. Are you thinking more maybe? That maybe the lower end of that range because of some of these scope reductions, the complexity -- deployment complexity reductions and what happened in 2025? Is maybe as the lower end of the '27 goal more appropriate?
Thanks, Scott. I would say that it's really important to point out that gross margin, EBITDA, free cash flow for the '27 targets, we already achieved them in 2025. So we feel really good about that, and we're sure we can continue forward on those types of metrics.
On the revenue side of things, the 2027 revenue number, we still see that target as standing. Yes, perhaps, to your point, it will depend on the pace of network deployments as to where we land in the range, probably towards the lower end. But it's just because we have achieved most of that '27 model by the time we got to the end of 2025, we think it's appropriate to reset long-term targets with an Investor Day. We haven't really picked a date yet, but I would suspect sometime in the next year or so, we will set up that and set out some new longer-term targets.
That's fair. I appreciate that. My follow-up question is really kind of around the bookings. I know you said that bookings were strong. They were down on a year-over-year basis. Obviously, you had the crazy fourth quarter a year ago comp. But on a full year basis, they were still down versus the 2024 level, by about 4%. So I was just sort of wondering when we can start to see bookings really inflect upward? And is it that it's another quarter or 2 away? Are you seeing things move through a pipeline like you did a year ago? If you could help us on that, that would be great.
Sure. I think I covered a lot of the points that are really important on this topic earlier on. So forgive me if I get a little bit repetitive. But pipeline growth being up dramatically, we think is a good signal of where things are really trending. The business is absolutely structurally changing with Outcomes backlog now being above $1 billion and continuing to outpace the growth on some of the other businesses exactly as we had planned.
Bookings will always be a little bit lumpy on the networking side of things just because of the nature of the business itself. But the environment we find ourselves in now is, I will say, normal lumpy, rather than some of the exogenous things really starting to delay the overall profile. So we still feel really good about the trajectory of the business and how we will continue to support our customers. We have the solutions they need and we are a trusted partner. So future continues to be bright.
Our next question coming from the line of Joseph Osha with Guggenheim Partners.
I only have one. Tom, you've talked about lead times for the business kind of marching out a bit. Historically, when you did disclose it more precisely, your 12-month backlog has been around kind of 35% or so of the total backlog. I'm wondering if you can give us some color on that currently.
The 12-month backlog is right around $1.6 billion right now. That will be in the K when it is published. That's up meaningfully over where it was at the end of Q3. So I think it's roughly $150 million or so higher from the prior quarter. As I commented earlier, the business is structurally different now. We do expect book and ship is a bit higher during the interim period overall. So what I would say is it's very difficult to try to come up with a historical compare that's meaningful just because there's been so much noise in how things have flowed through from the COVID days to the post-COVID supply constraints to where we are today. Our guidance absolutely reflects the best view that we have for the year and we feel really good about the trajectory of the business.
Thank you. And I'm showing up for the questions in queue at this time. I will now turn the call back over to Mr. Tom Deitrich for any closing remarks.
Thank you, Olivia. Thank you, everyone, for joining, and we look forward to updating you on the next call.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.
Itron, Inc. — Q4 2025 Earnings Call
Itron, Inc. — Q3 2025 Earnings Call
1. Management Discussion
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2. Question Answer
" Oppenheimer & Co.
" TD Cowen
" ROTH Capital Partners
" Seaport Research Partners
Good day, and thank you for standing by. Welcome to Itron's Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note that today's conference is being recorded. I will now hand the conference over to your speaker host, Paul Vincent, Vice President of Investor Relations. Please go ahead.
Good morning, and welcome to Itron's Third Quarter 2025 Earnings Conference Call. Tom Deitrich, Itron's President and Chief Executive Officer; and Joan Hooper, Senior Vice President and Chief Financial Officer, will review Itron's third quarter results and provide a general business update and outlook.
Earlier today, the company issued a press release announcing its results. This release also includes details related to the conference call and webcast replay information. Accompanying today's call is a presentation that is available through the webcast and on our corporate website under the Investor Relations tab. Following prepared remarks, the call will open for questions using the process the operator described.
Before Tom begins, a reminder that our earnings release and financial presentation include non-GAAP financial information that we believe enhances the overall understanding of our current and future performance. Reconciliations of differences between GAAP and non-GAAP financial measures are available in our earnings release and on our Investor Relations website. We will be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from these expectations because of factors that were presented in today's earnings release and comments made during this conference call as well as those presented in the Risk Factors section of our Form 10-K and other reports and filings with the Securities and Exchange Commission.
All company comments, estimates or forward-looking statements are made in a good faith attempt to provide appropriate insight to our current and future operating and financial environment. Materials discussed today, October 30, 2025, may materially change, and we do not undertake any duty to update any of our forward-looking statements.
Now please turn to Page 4 of our presentation as our CEO, Tom Deitrich, begins his remarks.
Thank you, Paul. Good morning, and thank you for joining our call. During the third quarter, Itron set new records for margins, profit and free cash flow on revenue in line with expectations. Financial highlights on Slide 4 include revenue of $582 million, adjusted EBITDA of $97 million, non-GAAP earnings per share of $1.54 and free cash flow of $113 million. On Slide 5, our third quarter bookings were $380 million with a total backlog at the end of the quarter of $4.3 billion.
Turning to Slide 6. Utilities are operating in an increasingly complex environment marked by accelerating load growth, rising costs, heightened regulatory scrutiny and greater technical demands. Customers are adapting to this landscape by sequencing initiatives and in some cases, extending project deployment schedules. While regulators generally share utility strategic objectives, growing sensitivity to consumer costs is leading to more rigorous evaluation of project investments. Despite a slower pace on some projects, our customers remain focused on enhancing grid performance and reliability through the adoption of grid edge technology that delivers greater visibility and control at the edge. This is reflected in the ongoing expansion of distributed intelligence-enabled endpoints, which topped 16 million deployed by the end of the third quarter with more than 10 million additional units in backlog.
Licensed DI applications grew 119% year-over-year to $20 million at quarter end. Grid Edge Intelligence defines the future of agile, data-driven distribution infrastructure and continues to expand opportunities for our Outcomes segment, which grew 11% year-over-year, led by higher recurring revenue.
With respect to recent federal funding actions, Itron has seen no project cancellations, stoppages or decline in customer interest. However, these deployments introduce greater near-term market uncertainty and add to the complex challenges our customers face. Lower-than-expected Q3 bookings and heightened uncertainty have tempered our year-end booking expectations. While achieving a 1:1 book-to-bill ratio for 2025 remains possible, we anticipate current dynamics to persist this quarter, resulting in bookings below that target. Although project conversion to backlog is taking longer, lumpy bookings are a familiar pattern and do not alter our long-term business trajectory. Importantly, these changes are not due to competitive dynamics nor fundamental changes in the market. Our opportunity pipeline has expanded by over 25% since the start of the year. Moreover, outcomes-related bookings continue to lead relative backlog growth across our 3 segments.
Lastly, we recently announced the acquisition of Urbint with the transaction expected to close during the fourth quarter of 2025. The Urbint business aligns well with our M&A priorities. Its software-oriented scalable platform complements our current portfolio and addresses the needs of critical infrastructure providers. Urbint's SaaS business model delivers solutions for emergency preparedness and response, damage prevention and worker safety. We are excited to welcome the Urbint team on board soon. We will share more details about Urbint and the expanded Itron portfolio on our next quarterly call.
Now Joan will provide details about our third quarter and our outlook for the fourth quarter.
Thank you, Tom. Please turn to Slide 7 for a summary of consolidated GAAP results. Third quarter revenue of $582 million was near the top end of the range we provided and lower than the prior year due to planned portfolio changes and the timing of large project deployments. Gross margin of 37.7% set a company record for the second consecutive quarter and was 360 basis points higher than last year due to favorable customer and product mix. GAAP net income of $66 million or $1.41 per diluted share compared to $78 million or $1.70 per diluted share in the prior year. The decrease was due to higher tax expense with the prior year benefiting from favorable resolution of a foreign tax audit. This was partially offset by higher GAAP operating income.
Regarding non-GAAP metrics on Slide 8, non-GAAP operating income of $89 million or 15.3% of revenue was an all-time quarterly record and increased 13% year-over-year. Adjusted EBITDA of $97 million or 16.7% of revenue were both all-time records and EBITDA dollars increased 10% year-over-year. Non-GAAP net income for the quarter was $72 million or $1.54 per diluted share versus $1.84 a year ago. Higher income tax expense more than offset higher non-GAAP operating income. Q3 free cash flow of $113 million or 19.5% of revenue is a new company record and compares to $59 million a year ago. This increase reflects improved working capital, lower tax payments and higher operational earnings growth.
Year-over-year revenue growth by business segment is on Slide 9. Device solutions revenue decreased 19% on a constant currency basis due to the expected decline in legacy electricity products in EMEA and lower water volumes in North America. Network solutions revenue decreased 6% year-over-year, primarily due to the timing of project deployments. Outcomes revenue increased 10% on a constant currency basis due to the continued growth of recurring revenue.
Moving to the non-GAAP year-over-year EPS bridge on Slide 10. Our Q3 non-GAAP earnings per share decreased $0.30 year-over-year to $1.54 per diluted share. Higher tax is the driver of the year-over-year EPS decline, contributing negative $0.51 per share. Prior year tax expense was unusually low due to a favorable resolution of a foreign tax audit. Pretax operating performance contributed a positive $0.22 per share improvement, driven by the fall-through of higher gross profit.
Turning to Slides 11 through 13, I'll review Q3 segment results compared with the prior year. Device solutions revenue was $104 million with a record gross margin of 30.9% and operating margin of 24%. This segment continues to deliver strong profitability improvement. Gross margin increased 370 basis points year-over-year and operating margin was up 240 basis points due to the favorable change in customer and product mix. Network solutions revenue was $394 million with gross margin of 39.3% and operating margin of 31%. Gross margin increased 340 basis points year-on-year and operating margin was up 330 basis points due to improved customer and product mix. Outcomes revenue was $84 million with gross margin of 38.9% and operating margin of 19.9%. Gross margin increased 390 basis points year-over-year, and operating margin was up 520 basis points due to a higher margin revenue mix and operating leverage.
Turning to Slide 14, I'll review liquidity and debt at the end of the third quarter. Total debt was $1.265 billion, and cash and equivalents were $1.332 billion. Please note that our recently announced $325 million all-cash acquisition of Urbint is expected to close during the fourth quarter. During the third quarter, we amended and increased our revolving line of credit to $750 million, which now matures in 2030.
Now please turn to Slide 15 for our fourth quarter outlook. We anticipate fourth quarter revenue to be between $555 million to $565 million. The midpoint of this range represents a decline of 9% year-over-year. For non-GAAP earnings per share, we expect a range of $2.15 to $2.25 per diluted share, which assumes a negative effective tax rate of approximately 19%. This negative tax rate is driven by the favorable conclusion of an uncertain tax position, which will be recorded in Q4. At the midpoint, this EPS implies an increase of $0.85 versus Q4 of last year. Normalized for the tax rate, the midpoint EPS estimate is up approximately 7% versus last year. Please note, our fourth quarter outlook does not include any impact from the Urbint acquisition.
Now please turn to Slide 16 for an update to our annual 2025 outlook. We now anticipate 2025 full year revenue to be within a range of $2.35 billion to $2.36 billion. At the midpoint, this is down 3% versus 2024, which had approximately $125 million of catch-up revenue. Normalizing for the 2024 catch-up revenue, the midpoint of the updated guidance is approximately 2% year-over-year growth. Our non-GAAP earnings per share full year outlook range is increasing versus prior estimates due to the favorable tax item I just mentioned. Our current expectation for full year 2025 non-GAAP earnings per share is a range of $6.84 to $6.94 per diluted share with an expected annual effective tax rate of approximately 12%. At the midpoint, the updated non-GAAP EPS estimate is up 23% versus 2024 or 16% when normalized for the tax rate.
While our revenue growth has been challenged with lower-than-expected bookings and the pushout of ongoing project deployments, we are proud of our progress to improve the margin profile of the business, which has allowed us to drive higher profitability on lower revenue.
And now I'll turn the call back to Tom.
Thank you, Joan. The market we serve is unique. And although recent volatility has increased, the industry's long-term growth trajectory remains unchanged. Our record financial results despite industry headwinds, reflect our multiyear strategic efforts to optimize the product portfolio and global supply chain. The team is performing well, and our grid edge intelligence solution leadership is undeniable. The opportunity pipeline continues to grow and is at record levels. Together, these factors reinforce our confidence that we remain on track to achieve our 2027 targets.
Finally, Urbint adds a new dimension centered on operational resilience solutions with strong growth potential. As we build out this solution set, including cross-pollination of data streams to create new offerings, significant opportunity lies ahead. Leveraging the strength of our balance sheet, we remain actively engaged in pursuing inorganic growth opportunities. We are in the early stages of the digital transformation in energy and water systems. Itron is well-positioned to expand its business alongside these global infrastructure shifts and ongoing growth in the years ahead.
Thank you for joining our call today. Operator, please open the line for some questions.
[Operator Instructions] Our first question coming from the line of Noah Kaye with Oppenheimer.
First, I just want to get the modeling right. Joan, thanks for giving us the color on the tax rate for 4Q. Can you just give us an understanding on the delta for revenues versus the prior implied guide? Is lower rev primarily in networks? Or is it elsewhere? And then how to think about kind of gross margins. If we back out the tax impact, it would seem like gross margins might go down sequentially, but just want to make sure we're thinking about it directionally right.
Yes. I would say the biggest weakness is in networks, and it's the commentary we made about deployments they're just pushing to the right. They're going a little slower than we would have expected. From a standpoint of gross margin, I would expect Q4 to look pretty close to what Q3 is. The impact of the taxes, it's a $39 million discrete benefit. So, it had a statute limitations that expired on October 15. That is worth about $0.84 a share.
And then just to dovetail off of that, Tom, I want to segregate a little bit between the impact of project delays on revenues and the overall demand environment and bookings. So, to take the second part of that first, I mean, the metric you provided on the 25% pipeline growth from the start of the year is helpful. Can you give us some color on what's impacting some of the conversion delays from pipeline into bookings? And how you see this trending over the next couple of quarters?
Sure. So, I think it's undeniable the demand is coming. That record pipeline and being up 25% since the start of the year is pretty clearly a strong signal of where the market is going. If I look at it through the lens of win rates, our win rates are at or above historical rates. So, the competitiveness of the portfolio remains very strong and good. If you dig one level deeper, the rate at which recurring revenue bookings are happening, meaning software and service types of things. We passed our goal for the year in Q3. That's very strong. So, outcomes backlog is up 36% year-over-year. It's well over 20% of the total backlog. We're very pleased with our progress there.
Where we have seen some delays in decisions, so they're just sort of getting pushed out is on the more hardware-oriented projects. So that's really due to some of the complex operating environment that I talked about earlier. I definitely see increased interest in the part of the customers on trying to find good ways to move forward and live within the regulatory constraints or perhaps some of the operational constraints that they have. So, I would think about it as moving much more towards buying a Jeep a piece at a time rather than buying the whole Jeep. And that really plays to the platform that we have with forward-backward compatibility and really is good for the customer as they get to manage that cost, but it also is good for the incumbent as the way that business tends to roll through. So again, I still see the environment as very robust. Our '27 targets are clearly on track. A couple of places we're already achieving it or ahead. Lumpiness in the bookings, okay? We've seen this before, and it doesn't really give us pause on the strength and the outlook of the business.
I appreciate you reiterating the '27 targets, components.
Our next question coming from the line of Ben Kallo with Baird. I'll go to the next person in queue. Coming from the line of Jeff Osborne with TD Cowen.
Just a couple of quick ones on my side. Tom, on the 6% decline in networks and the rationale you gave, could you just be more descriptive? Is that new customers that were commencing new rollouts for DI? Or are these people that were underway maybe on a 3- or 4-year cadence and have just elongated that to sort of look more disciplined in front of the regulator on their existing CapEx budgets that might be a bit overextended because of tariffs or whatever reasons?
Right. On the revenue side for booked projects specifically is what I think you're asking about. Again, I think it's software and services growing nicely, double-digit growth year-over-year. What we saw from, let's say, first half, second half is the catch-up of the constrained revenue from prior years when you lap it year-over-year. We also had an end of -- a completion of a major deployment in the networks business that rolled off. And we have seen customers in some occasions spreading projects what used to be a 3-year project over 4 years or something like that. So, I don't think it causes any loss of backlog or loss of revenue. It certainly does spread things out on some of those projects. And that's what you see rolling through the P&L.
Are they giving you more clarity as to when they -- if you thought things were going to be at run rate when things will resume? Or like what visibility are they giving you as it relates to their plans as we head into the spring of next year?
I guess I'm trying to read through the lines of what you're asking. I mean we know what their deployment rates are and those get reprofiled on a regular basis. So, it's not every project. It's a few that tend to spread over a longer period of time, and we know what that looks like. No projects have stopped. So, it's not like there's a complete stop on anything that was intended to be ongoing on the revenue side at all. I do think that higher costs and capital budgets within the year clearly have something to do with it in cases where some of the government funding may have disappeared. The customers have to make decisions on how they handle that, whether they go back and make appeals to the government. I would suggest even the projects that are listed as canceled may or may not be canceled. But in all cases, customers absolutely intend and are continuing to work through that process. It just creates a little bit of churn in the near term. I suspect that this levels out in the quarters ahead. So again, it's not something that gives us any pause on what '27 targets will really look like and remain tremendous confidence in where the business is going.
And just 2 rapid fire ones. I know you're not giving guidance for '26, but could just Joan comment on what tax rate we should be assuming given all the moving parts you've had this year? And then I also just wanted to confirm, if I heard you right, I think you said that outcomes is 20% of the $4.3 billion backlog and up 36% year-on-year, that would be a number greater than $800 million. Is that over 7 to 10 years? Or what's the duration of that $800 million, if I heard you right?
Yes. So again, it's well over 20%, and it is up 36% year-over-year. So, you're kind of in the right ZIP code there. The backlog is generally 3, 4 years in length overall. So even though we might have longer-term deals, we generally stick to our traditional way of thinking about what is counted in backlog as those outcomes, long-term recurring revenue contracts tend to be, in many cases, nearly evergreen as there are provisions to allow extensions in the contracts themselves. So, think of it as a 3-, 4-year visibility.
Yes. And on '26, as you say, it's really too early to tell. I mean we end up building up the tax rate based on jurisdictional mix of revenue, everything we know at the time. I think the top end would be like the 25%, which we typically use as a placeholder.
[Operator Instructions] And our next question coming from the line of Chip Moore with ROTH Capital Partners.
Tom, I want to follow up on your commentary on bookings. It sounds like it's possible, right, you could put up $1 billion, but less likely you get to 1:1 for the year. Just with your comments on '27 being intact, any -- it's too early for guidance, obviously, but any way to help us think about growth trajectory next year just with some of these moving pieces? Would we expect growth? Or how should we think about that?
Yes. Again, I think it's way too early to think about where we will land on 2026. We'll get to that when we officially set guidance early next year. I think there will be growth. It's just a question of what level it would be, and that's what we're working through with our customers and the team right now.
And if I could ask one more, just on Urbint. I know it hasn't closed, so you're limited on what you can say. But just maybe speak to how the deal came about and any customer overlap and potential synergies there and anything else you can provide?
Sure. So Urbint, just a quick background on what it is. It's a SaaS-based business. Their customers are essentially utilities, tremendous overlap between the customers that they have and that we have. What do they do? They really help the customer with things like emergency preparedness and response. So, if a storm is going to roll through a particular territory, how can you use the power of AI to predict the storm path so you can preposition crews. How you recruit those crews, how do you make sure that you manage workflows and right down to things like making sure you're getting the crew paid and they've got a place to sleep to make sure that you've got a closed-loop process there. When you're in the heat of battle, how do you keep good records as to what you're actually doing, how do you keep the workers safe is another module, whether it's in a normal field deployment kind of activity or whether it's in the heat of battle in a restoration kind of environment. And there's a damage prevention module as part of it as well.
So tremendous potential there as we combine operational data that generally comes out of our systems to make those algorithms and services much more robust. And you can think about the cross-pollination the other direction, which is our restoration services and vegetation management services. You can apply some of the same analytics and thought process around how that works. So, we're excited about where this business will go and be able to expand share of wallet with existing customers and certainly be able to take those capabilities from Urbint to our 8,000 customers around the globe as well. So again, I think there's great potential here. We'll talk about more as to what it means and how it looks after we get through the close during this quarter.
Our next question coming from the line of Scott Graham with Seaport Research Partners.
A question about -- your backlog was up year-over-year, and I think that the hope here was that a strong third quarter bookings number would mean that you have a better organic in '26. And then if you didn't get that, the organic could be fairly muted once again in 2026. I'm going to assume that, that still holds unless, of course, you have some extraordinary fourth quarter of bookings. But even then, I think that that's more of a '27 event. So, my question is, is it possible, Tom, in 6 months' time that we could be revisiting the '27 targets and perhaps leaning more into margin than sales?
No, I don't anticipate that we're going to be revisiting the 2027 targets. Okay. What you potentially could see is maybe you're on the lower end of those '27 numbers on the revenue line, maybe on the high end on some of the other numbers that were in that overall model, whether you're talking about free cash flow or gross margin kinds of numbers, but well within the range is really what we are thinking and seeing overall.
Recall, we had this conversation probably 2 years ago where there was a fair amount of skepticism whether the gross margin numbers were realistic or not. I think we've probably more than erased those doubts given where we're operating today and what the future looks like. I would say that lumpy bookings are kind of normal in our business. It's just the way things work. We're obviously doing a much better job of growing that nice stable recurring revenue on the software side. So, some of that lumpiness does even out in the years ahead. But again, I wouldn't get too worried about lumpiness in the bookings in the short run.
I appreciate that. If I could just maybe, follow up sort of a corollary question to that. And as you look at your backlog and the delivery times that are in those orders, let's call it, in the first half of the year, are you now seeing those delivery times changed by, let's say, pushed out by 2 quarters, 4 quarters? How much of the backlog has had delivery times pushed out? Just give us a little bit of a better feel for that.
Yes. I would say that think about it in a more holistic sense than that. If you had a project that you were planning on doing the deployment over 3 years, maybe you're now profiling it over 4 years in some particular cases. That's kind of what it would look like. So, you're really kind of taking the same area under the curve and perhaps spreading it a little bit for some of those projects. So, it's less discrete than perhaps the way I'm interpreting your question. And again, this is not every project. This is a few larger projects, which slowed down the revenue on the hardware side of things. Meanwhile, the software portion and services portion of the business continues to grow nicely and continue to do exactly what we wanted to do inside of the business. So, I think you got to look at it through both lenses and think about how that expresses itself through the P&L as well as how we can help our customers with the types of things they need to get done.
I'm showing there are no further questions in the queue at this time. I will now turn the call back over to Mr. Tom Deitrich for any closing remarks.
Very good. Thank you all for joining the call today. We look forward to updating you again at the end of the year. Thanks.
This concludes today's conference call. Thank you for your participation, and you may now disconnect.
Itron, Inc. — Q3 2025 Earnings Call
Financial data from Itron, Inc.
Revenue
Revenue is the sum of all sales generated by a company, e.g. for its products or services.
Revenue (TTM) metric explainedDirect Costs
Direct costs are the costs incurred directly in connection with the manufacture of the product or service.
Gross Profit
Gross Profit indicates how much of the revenue remains in the company after deducting direct production costs. If the percentage share of sales is calculated, this is referred to as the gross margin.
Gross Profit metric explainedSelling and Administrative Expenses
Selling, general and administrative expenses (SG&A) include all expenses for marketing and sales as well as the general administration of the company.
Research and Development Expense
Research and development costs (R&D) provide information on how much the company invests in the research and development of its products. The costs are particularly interesting as a percentage of revenue and in comparison to direct competitors.
EBITDA
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is the company's earnings before interest, taxes, depreciation and amortization. The EBITDA margin is calculated as a percentage of sales.
Depreciation and Amortization
Depreciation represents reductions in the value of the company's assets (e.g. due to wear and tear on machinery).
EBIT (Operating Income)
EBIT (Earnings Before Interest and Taxes) is the company's profit before interest and taxes, also known as the operating income. The EBIT Margin is calculated as a percentage of sales at
.
Net Profit
Net Profit represents the profit or loss after deduction of all costs.
Net Profit metric explainedStocksGuide Premium
| Jun '26 |
+/-
%
|
||
| Revenue | 2,303 2,303 |
6%
6%
100%
|
|
| - Direct Costs | 1,385 1,385 |
12%
12%
60%
|
|
| Gross Profit | 918 918 |
6%
6%
40%
|
|
| - Selling and Administrative Expenses | 374 374 |
10%
10%
16%
|
|
| - Research and Development Expense | 214 214 |
0%
0%
9%
|
|
| EBITDA | 330 330 |
6%
6%
14%
|
|
| - Depreciation and Amortization | 26 26 |
40%
40%
1%
|
|
| EBIT (Operating Income) EBIT | 305 305 |
4%
4%
13%
|
|
| Net Profit | 274 274 |
2%
2%
12%
|
|
In millions USD.
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Itron, Inc. Stock News
Company Profile
Itron, Inc. is a technology and services company, which engages in the provision of solutions that measure, manage, and analyze energy and water use. It operates through the following segments: Device Solutions, Networked Solutions, and Outcomes. The Device Solutions segment includes hardware products used for measurement, control, or sensing that do not have communications capability embedded for use with its broader Itron systems. The Networked Solutions segment offers a combination of communicating devices, network infrastructure, and associated application software designed and sold as a complete solution for acquiring and transporting robust application-specific data. The Outcomes segment consist of the firm's value-added, enhanced software and services operating segment in which it manage, organize, analyze, and interpret data to improve decision making, maximize operational profitability, drive resource efficiency, and deliver results for consumers, utilities, and smart cities. The company was founded in 1977 and is headquartered in Liberty Lake, WA.
StocksGuide Premium
| Head office | United States |
| CEO | Mr. Deitrich |
| Employees | 4,987 |
| Founded | 1977 |
| Website | na.itron.com |


