Badger Meter Declares Regular Quarterly Dividend and Expands Share Repurchase Authorization Share MILWAUKEE--(BUSINESS WIRE)--Badger Meter, Inc. (NYSE: BMI), a global leader in smart water management solutions, today announced that its Board of Directors ("the Board†) declared a regular quarterly cash dividend of $0.40 per share, payable on December 5, 2025, to shareholders of record on November 21, 2025. In addition, the Board approved a new share repurchase authorization for up to $75 million of the Com ...

Core Insights - October was a challenging month for stock selection, with the 15 selected stocks experiencing an average decline of 0.41% in value [1]. Group 1 - The SPDR S&P 500 Trust ETF was referenced, indicating a broader market context for the stock performance [1]. - The analyst has over 10 years of experience in the investment field, starting as an analyst and advancing to a management role [1]. - Dividend investing is highlighted as a personal interest of the analyst, suggesting a focus on income-generating investments [1].

Core Insights - Badger Meter, Inc. (NYSE:BMI) is recognized as a high-quality company with strong operational performance and potential for profit margin expansion in an attractive industry [2][3] - The company has demonstrated consistent growth, with sales and free cash flow increasing by 15% and 16% respectively over the past five years, while dividends have been raised by 14% [2] - Badger Meter's BlueEdge solution aims to modernize outdated mechanical systems used by US water and sewer utilities, positioning the company to benefit from long-term industry trends [3] Dividend Performance - On August 11, Badger Meter raised its quarterly dividend by 17.6% to $0.40 per share, marking 33 consecutive years of dividend growth [4] - As of October 28, the stock offers a dividend yield of 0.87%, making it appealing for income-focused investors [4] Strategic Acquisitions - The company has a strong history of strategic acquisitions, having acquired 14 companies since 2010, which has further strengthened its market position [3]

Core Insights - Zacks Premium offers various tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1] - The Zacks Style Scores are designed to help investors select stocks with the highest potential to outperform the market in the short term [2] Zacks Style Scores Overview - The Style Scores categorize stocks based on value, growth, and momentum characteristics, assigning ratings from A to F, with A indicating the highest potential for outperformance [3] - Value Score focuses on identifying undervalued stocks using financial ratios like P/E and Price/Cash Flow [3] - Growth Score evaluates stocks based on projected earnings and sales growth, targeting companies with strong financial health [4] - Momentum Score assesses stocks based on price trends and earnings estimate changes, helping investors capitalize on upward or downward movements [5] - VGM Score combines all three Style Scores, providing a comprehensive indicator for investors seeking attractive value, growth, and momentum [6] Zacks Rank and Style Scores Interaction - The Zacks Rank utilizes earnings estimate revisions to guide investors in building successful portfolios, with 1 (Strong Buy) stocks historically yielding an average annual return of +23.93% since 1988 [7] - There are over 800 stocks rated as 1 or 2, making it essential for investors to use Style Scores to narrow down their choices [8] - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [9] - The direction of earnings estimate revisions is crucial; stocks with lower ranks and declining forecasts pose higher risks despite good Style Scores [10] Company Spotlight: Badger Meter - Badger Meter, established in 1905 and based in Milwaukee, WI, specializes in water solutions, including flow measurement and quality monitoring [11] - The company holds a Zacks Rank of 2 (Buy) and has a VGM Score of B, indicating strong growth potential [12] - Badger Meter is projected to achieve year-over-year earnings growth of 13.5% for the current fiscal year, with recent upward revisions in earnings estimates [12] - With a solid Zacks Rank and favorable Style Scores, Badger Meter is recommended for investors seeking growth opportunities [13]

Core Viewpoint - Badger Meter Inc (NYSE:BMI) is highlighted as a promising small-cap stock, benefiting from the growth in water utility infrastructure and technological advancements in flow measurement solutions [1][2] Company Overview - Badger Meter Inc specializes in flow measurement, quality, and control solutions, primarily for water utilities [1] - The company has a strong balance sheet with $295 million in cash and no debt, indicating financial stability [2] Growth Metrics - Badger Meter has achieved a compound annual growth rate (CAGR) of 14% in revenue over the last five years, significantly outpacing the industry average growth of single digits [2] - The company generated $827 million in revenue in 2024 and operates in a total addressable market estimated to be around $20 billion [2] Technological Advancements - The company enhances traditional monitoring systems by integrating advanced technology, improving the accuracy and capabilities of its meters [2] - Badger Meter's technology includes optimized data transmission from meters, sensors for monitoring water pressure, leak detection, and in-line water quality testing [2] Market Position - Badger Meter is well-positioned in the market due to the ongoing replacement of aging conventional meters in water system infrastructure [2]

Core Viewpoint - Badger Meter (NYSE: BMI) is recommended as a buy due to its transformation from a traditional metering company with cyclical earnings to one with a predictable recurring revenue stream [1] Group 1: Business Evolution - The company has evolved to focus on long-term investments while also incorporating short-term strategies to identify alpha opportunities [1] - The investment approach emphasizes bottom-up analysis, assessing the fundamental strengths and weaknesses of individual companies [1] Group 2: Investment Strategy - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Viewpoint - Badger Meter (NYSE: BMI) is recommended as a buy due to its transformation from a traditional metering company with cyclical earnings to one with a predictable recurring revenue stream [1] Group 1: Business Evolution - The company has evolved to focus on long-term investments while also incorporating short-term strategies to uncover alpha opportunities [1] - The investment approach emphasizes bottom-up analysis, assessing the fundamental strengths and weaknesses of individual companies [1] Group 2: Investment Strategy - The investment duration is medium to long-term, aiming to identify companies with solid fundamentals, sustainable competitive advantages, and growth potential [1]

Core Thesis - Badger Meter, Inc. (BMI) is positioned as a stable, growth-oriented investment with a strong dividend history and operational efficiency, making it attractive for long-term investors [2][5]. Financial Performance - BMI's revenue for 2024 is projected to be flat at $826.6 million, while net income is expected to rise by 31%, driven by operational efficiency and margin expansion [3]. - The company has a trailing P/E of 39.16 and a forward P/E of 34.13, indicating a premium valuation relative to earnings [1]. Dividend Growth - BMI has increased its dividend for 33 consecutive years, with recent hikes of 18% in August 2025, 26% in 2024, and 18% in 2023, reflecting a commitment to returning value to shareholders [2]. - The current dividend yield is approximately 0.9%, supported by a conservative payout ratio of 31% [2]. Business Model and Market Position - BMI's business model is characterized by essential, recurring revenue, with 85% of sales derived from mandatory replacements in water measurement [4]. - The company has a growing SaaS segment that has expanded by 28% annually since 2019, contributing about 7% of total sales [4]. Market Opportunities - The U.S. smart water market, along with regulatory mandates and strategic acquisitions like SmartCover, is expected to support high single-digit sales growth and margin expansion [5]. - The global water technology market exceeds $100 billion, providing significant growth potential for BMI [5]. Investor Confidence - Institutional ownership stands at approximately 89%, indicating strong confidence from major investors such as BlackRock, Vanguard, and State Street [3]. - Analysts generally rate BMI as a Buy to Strong Buy, with a 12-month price target of $237, suggesting an upside of around 33% from current levels [5].

[Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) Unaudited consolidated financial statements and management's discussion and analysis for the period ended September 30, 2025 [Item 1. Financial Statements (unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited consolidated condensed financial statements of Badger Meter, Inc. for the period ended September 30, 2025, including balance sheets, statements of operations, comprehensive income, cash flows, and shareholders' equity, along with accompanying notes detailing accounting policies, acquisitions, contingencies, and revenue recognition [Consolidated Condensed Balance Sheets](index=4&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Presents the company's financial position, highlighting assets, liabilities, and equity as of September 30, 2025 | Metric (In thousands of USD) | Sep 30, 2025 | Dec 31, 2024 | Change | % Change | | :--------------------------- | :----------- | :----------- | :----- | :------- | | Total Assets | $978,270 | $816,413 | $161,857 | 19.8% | | Total Current Assets | $494,586 | $540,116 | $(45,530) | -8.4% | | Goodwill | $236,654 | $111,770 | $124,884 | 111.7% | | Total Liabilities | $276,270 | $210,179 | $66,091 | 31.4% | | Total Shareholders' Equity | $702,510 | $606,232 | $96,278 | 15.9% | - Goodwill significantly increased by **$124.9 million**, primarily due to the acquisition of SmartCover® Systems[12](index=12&type=chunk)[34](index=34&type=chunk)[77](index=77&type=chunk) [Consolidated Condensed Statements of Operations](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) Details the company's revenues, expenses, and net earnings for the three and nine months ended September 30, 2025 | Metric (In thousands of USD, except per share) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | YoY Change | % YoY Change | | :------------------------------------------- | :-------------------------- | :-------------------------- | :--------- | :----------- | | Net sales | $235,651 | $208,438 | $27,213 | 13.1% | | Gross margin | $95,836 | $83,878 | $11,958 | 14.3% | | Operating earnings | $46,084 | $40,623 | $5,461 | 13.4% | | Net earnings | $35,077 | $32,038 | $3,039 | 9.5% | | Diluted EPS | $1.19 | $1.08 | $0.11 | 10.2% | | Dividends declared per common share | $0.40 | $0.34 | $0.06 | 17.6% | | Metric (In thousands of USD, except per share) | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | YoY Change | % YoY Change | | :------------------------------------------- | :-------------------------- | :-------------------------- | :--------- | :----------- | | Net sales | $695,957 | $621,376 | $74,581 | 12.0% | | Gross margin | $289,083 | $246,424 | $42,659 | 17.3% | | Operating earnings | $140,372 | $118,713 | $21,659 | 18.2% | | Net earnings | $108,059 | $94,225 | $13,834 | 14.7% | | Diluted EPS | $3.65 | $3.19 | $0.46 | 14.4% | | Dividends declared per common share | $1.08 | $0.88 | $0.20 | 22.7% | [Consolidated Condensed Statements of Comprehensive Income](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Comprehensive%20Income) Presents net earnings and other comprehensive income components for the three and nine months ended September 30, 2025 | Metric (In thousands of USD) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | YoY Change | % YoY Change | | :--------------------------- | :-------------------------- | :-------------------------- | :--------- | :----------- | | Net earnings | $35,077 | $32,038 | $3,039 | 9.5% | | Foreign currency translation adjustments | $(366) | $4,726 | $(5,092) | -107.7% | | Comprehensive income | $34,663 | $36,731 | $(2,068) | -5.6% | | Metric (In thousands of USD) | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | YoY Change | % YoY Change | | :--------------------------- | :-------------------------- | :-------------------------- | :--------- | :----------- | | Net earnings | $108,059 | $94,225 | $13,834 | 14.7% | | Foreign currency translation adjustments | $13,166 | $1,092 | $12,074 | 1105.7% | | Comprehensive income | $121,080 | $95,221 | $25,859 | 27.2% | [Consolidated Condensed Statements of Cash Flows](index=7&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Outlines cash inflows and outflows from operating, investing, and financing activities for the nine months ended September 30, 2025 | Metric (In thousands of USD) | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | YoY Change | % YoY Change | | :--------------------------- | :-------------------------- | :-------------------------- | :--------- | :----------- | | Net cash provided by operations | $128,897 | $102,967 | $25,930 | 25.2% | | Net cash used for investing activities | $(194,017) | $(11,149) | $(182,868) | 1640.3% | | Net cash used for financing activities | $(31,237) | $(25,111) | $(6,126) | 24.4% | | (Decrease) increase in cash and cash equivalents | $(93,612) | $67,173 | $(160,785) | -239.3% | | Cash and cash equivalents – end of period | $201,693 | $258,955 | $(57,262) | -22.1% | - The significant increase in cash used for investing activities is primarily due to the **$184.0 million** acquisition of SmartCover® Systems in 2025[19](index=19&type=chunk)[34](index=34&type=chunk)[77](index=77&type=chunk) [Consolidated Condensed Statements of Shareholders' Equity](index=8&type=section&id=Consolidated%20Condensed%20Statements%20of%20Shareholders'%20Equity) Details changes in shareholders' equity, including reinvested earnings and comprehensive income, as of September 30, 2025 | Metric (In thousands of USD) | Sep 30, 2025 | Dec 31, 2024 | Change | % Change | | :--------------------------- | :----------- | :----------- | :----- | :------- | | Total Shareholders' Equity | $702,510 | $606,232 | $96,278 | 15.9% | | Reinvested earnings | $624,054 | $547,796 | $76,258 | 13.9% | | Accumulated other comprehensive income (loss) | $5,115 | $(7,906) | $13,021 | 164.7% | - Accumulated other comprehensive income shifted from a loss of **$7.9 million** at December 31, 2024, to an income of **$5.1 million** at September 30, 2025, largely driven by foreign currency translation adjustments[12](index=12&type=chunk)[22](index=22&type=chunk)[31](index=31&type=chunk) [Notes to Unaudited Consolidated Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Condensed%20Financial%20Statements) Provides detailed explanations and disclosures supporting the unaudited consolidated condensed financial statements [Note 1. Basis of Presentation](index=9&type=section&id=Note%201.%20Basis%20of%20Presentation) Describes the accounting principles and assumptions used in preparing the interim financial statements - The unaudited consolidated condensed financial statements include all necessary adjustments for fair presentation, with interim results not necessarily indicative of full-year performance[26](index=26&type=chunk) [Note 2. Additional Financial Information Disclosures](index=9&type=section&id=Note%202.%20Additional%20Financial%20Information%20Disclosures) Provides further details on cash equivalents and warranty and after-sale costs - Cash equivalents are highly liquid investments with original maturities of ninety days or less[29](index=29&type=chunk) | Warranty and After-Sale Costs (In thousands of USD) | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | YoY Change | % YoY Change | | :-------------------------------------------------- | :-------------------------- | :-------------------------- | :--------- | :----------- | | Balance at beginning of period | $16,693 | $11,102 | $5,591 | 50.4% | | Net additions charged to earnings | $10,898 | $9,908 | $990 | 10.0% | | Costs incurred | $(5,832) | $(5,350) | $(482) | 9.0% | | Balance at end of period | $21,759 | $15,660 | $6,099 | 38.9% | [Note 3. Accumulated Other Comprehensive Income (Loss)](index=9&type=section&id=Note%203.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) Details the components of accumulated other comprehensive income and their changes | Component (In thousands of USD) | Balance at Dec 31, 2024 | Net Current Period OCI (Loss) | Balance at Sep 30, 2025 | | :------------------------------ | :---------------------- | :---------------------------- | :---------------------- | | Unrecognized pension and postretirement benefits | $1,146 | $(145) | $1,001 | | Foreign currency translation | $(9,052) | $13,166 | $4,114 | | Total | $(7,906) | $13,021 | $5,115 | - Foreign currency translation adjustments significantly contributed to the positive shift in accumulated other comprehensive income in 2025[31](index=31&type=chunk) [Note 4. Acquisitions](index=10&type=section&id=Note%204.%20Acquisitions) Outlines the details of significant business acquisitions made by the company - On January 30, 2025, Badger Meter acquired SmartCover® Systems for **$184.0 million**, a provider of sewer line and lift station monitoring solutions. This acquisition added **$27.8 million** in revenue for the eight months ended September 30, 2025, and resulted in **$85.6 million** in intangible assets and **$119.8 million** in goodwill[33](index=33&type=chunk)[34](index=34&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk) - On January 1, 2024, the Company acquired Telog® product line and Unity Remote Monitoring software for **$3.0 million** in cash[35](index=35&type=chunk)[78](index=78&type=chunk) [Note 5. Contingencies, Litigation and Commitments](index=10&type=section&id=Note%205.%20Contingencies,%20Litigation%20and%20Commitments) Addresses potential legal, environmental, and supply chain risks and commitments - The Company is not currently involved in any material legal proceedings[36](index=36&type=chunk) - Environmental compliance expenditures were not material in 2024 and the first nine months of 2025[37](index=37&type=chunk)[96](index=96&type=chunk) - The Company relies on single suppliers for certain brass castings, resin, and electronic subassemblies, mitigating risks through close supplier relationships, alternative suppliers, and business interruption insurance[38](index=38&type=chunk) [Note 6. Income Taxes](index=12&type=section&id=Note%206.%20Income%20Taxes) Provides information on the company's income tax provision and effective tax rates | Metric (In thousands of USD) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :--------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Earnings before income taxes | $47,442 | $42,911 | $144,015 | $124,365 | | Provision for income taxes | $12,365 | $10,873 | $35,956 | $30,140 | | Effective income tax rate | 26.1% | 25.3% | 25.0% | 24.2% | [Note 7. Fair Value Measurements of Financial Instruments](index=12&type=section&id=Note%207.%20Fair%20Value%20Measurements%20of%20Financial%20Instruments) Discusses the fair value of financial instruments and their measurement - The carrying amounts of cash and cash equivalents, receivables, and payables approximate their fair values due to their short-term nature[42](index=42&type=chunk) [Note 8. Subsequent Events](index=12&type=section&id=Note%208.%20Subsequent%20Events) Discloses any significant events occurring after the reporting period - No material subsequent events were identified through the date of filing[43](index=43&type=chunk) [Note 9. Industry Segment and Geographic Areas](index=12&type=section&id=Note%209.%20Industry%20Segment%20and%20Geographic%20Areas) Describes the company's operating segments and geographical revenue distribution - Badger Meter operates as a single reportable segment, focusing on water and wastewater management solutions, due to similarities in products, processes, customers, and distribution methods[44](index=44&type=chunk) [Note 10. Revenue Recognition](index=13&type=section&id=Note%2010.%20Revenue%20Recognition) Details the company's revenue recognition policies, including geographic and timing breakdowns | Revenue by Geographic Area (In thousands of USD) | 3 Months Ended Sep 30, 2025 | 3 Months Ended Sep 30, 2024 | 9 Months Ended Sep 30, 2025 | 9 Months Ended Sep 30, 2024 | | :----------------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | United States | $210,714 | $188,130 | $627,039 | $559,283 | | Foreign | $24,387 | $20,331 | $66,318 | $53,693 | | Total | $235,651 | $208,438 | $695,957 | $621,376 | | Revenue by Timing (In thousands of USD) | 3 Months Ended Sep 30, 2025 | % | 3 Months Ended Sep 30, 2024 | % | 9 Months Ended Sep 30, 2025 | % | 9 Months Ended Sep 30, 2024 | % | | :-------------------------------------- | :-------------------------- | :- | :-------------------------- | :- | :-------------------------- | :- | :-------------------------- | :- | | Recognized over time | $24,187 | 10.3% | $15,846 | 7.6% | $67,559 | 9.7% | $42,924 | 6.9% | | Recognized at a point in time | $211,464 | 89.7% | $192,592 | 92.4% | $628,398 | 90.3% | $578,452 | 93.1% | | Total | $235,651 | 100.0% | $208,438 | 100.0% | $695,957 | 100.0% | $621,376 | 100.0% | - Revenue recognized over time, primarily from BEACON® SaaS and SmartCover® revenue, increased significantly, reflecting a shift towards subscription-based services[47](index=47&type=chunk)[52](index=52&type=chunk) | Contract Balances (In thousands of USD) | Sep 30, 2025 | Dec 31, 2024 | | :-------------------------------------- | :----------- | :----------- | | Receivables | $115,056 | $84,325 | | Contract liabilities | $94,710 | $78,274 | - As of September 30, 2025, **$94.7 million** of transaction price was allocated to unsatisfied performance obligations, with estimated revenue recognition extending through 2030 and beyond[53](index=53&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=15&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of Badger Meter's business, financial performance for the three and nine months ended September 30, 2025, and an analysis of its financial condition, liquidity, and capital resources. It highlights growth drivers, strategic acquisitions, and market trends [Business Description and Overview](index=15&type=section&id=BUSINESS%20DESCRIPTION%20AND%20OVERVIEW) Provides an overview of Badger Meter's core business, product lines, and market focus - Badger Meter is a global provider of water management solutions, with approximately **95%** of net sales from water-related applications, offering hardware, communication, software, and support services under its BlueEdge™ brand[55](index=55&type=chunk) - The Company's solutions are categorized into two product lines: Utility Water (**88%** of 2024 Net Sales) and Flow Instrumentation (**12%** of 2024 Net Sales)[59](index=59&type=chunk)[60](index=60&type=chunk)[69](index=69&type=chunk) - Utility Water solutions include smart metering (AMR/AMI), water quality monitoring, leak detection, and remote sewer monitoring, with a focus on North America[60](index=60&type=chunk)[61](index=61&type=chunk)[62](index=62&type=chunk)[63](index=63&type=chunk)[64](index=64&type=chunk)[65](index=65&type=chunk)[67](index=67&type=chunk) - Flow Instrumentation serves industrial markets, including water/wastewater, HVAC, and corporate sustainability, with products measuring and controlling various fluids[69](index=69&type=chunk)[70](index=70&type=chunk) [Long-Term Business Trends](index=19&type=section&id=Long-Term%20Business%20Trends) Discusses key market drivers and evolving trends impacting the company's long-term growth strategy - Key drivers for the business include significant infrastructure investment needs, an aging workforce, increasing regulations, and a focus on climate change and sustainability, all driving demand for better water management[71](index=71&type=chunk) - The utility water market is seeing a continuing conversion to Advanced Metering Infrastructure (AMI) systems, with an estimated **40%** of US water meters already converted, and a shift from mechanical to static (ultrasonic) meters for improved accuracy[66](index=66&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) - Customers increasingly seek frequent and diverse data for holistic water network management, which Badger Meter addresses with its smart water solutions, including water quality, pressure management, and sewer line monitoring[74](index=74&type=chunk)[75](index=75&type=chunk) [Acquisitions](index=19&type=section&id=Acquisitions) Details recent strategic acquisitions and their impact on the company's product offerings - On January 30, 2025, Badger Meter acquired SmartCover® Systems for **$184.0 million**, enhancing its sewer line and lift station monitoring solutions within the utility water product line[76](index=76&type=chunk)[77](index=77&type=chunk) - On January 1, 2024, the Company acquired the Telog® product line and Unity Remote Monitoring software for **$3.0 million**, expanding its remote water monitoring capabilities[78](index=78&type=chunk) [Revenue and Product Mix](index=19&type=section&id=Revenue%20and%20Product%20Mix) Analyzes revenue composition, including growth in SaaS and international market expansion efforts - Revenue from Software as a Service (SaaS), including ORION Cellular and BEACON digital solutions, has significantly increased and is margin accretive[80](index=80&type=chunk) - The Company is pursuing additional revenue enhancement through expansion into select international markets (e.g., Middle East, UK) and strategic mergers and acquisitions[81](index=81&type=chunk) [Current Business Trends – Tariffs](index=21&type=section&id=Current%20Business%20Trends%20%E2%80%93%20Tariffs) Addresses the impact of import tariffs on input costs and the company's mitigation strategies - Increased import tariffs in 2025 have the potential to raise input costs, which the Company is managing through selective supply chain and pricing actions[82](index=82&type=chunk) [Results of Operations - Three Months Ended September 30, 2025](index=21&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20September%2030,%202025) Analyzes the financial performance for the third quarter, including sales, margins, and earnings | Metric (In millions of USD) | Q3 2025 | Q3 2024 | YoY Change | % YoY Change | | :-------------------------- | :------ | :------ | :--------- | :----------- | | Net Sales | $235.7 | $208.4 | $27.3 | 13.1% | | Utility Water Sales | $209.2 | $183.0 | $26.2 | 14.3% | | Flow Instrumentation Sales | $26.5 | $25.4 | $1.1 | 4.3% | | Operating Earnings | $46.1 | $40.6 | $5.5 | 13.4% | | Operating Margin | 19.6% | 19.5% | 0.1 pp | | | Gross Margin % | 40.7% | 40.2% | 0.5 pp | | | Net Earnings | $35.1 | $32.0 | $3.1 | 9.7% | | Diluted EPS | $1.19 | $1.08 | $0.11 | 10.2% | - Utility water sales growth was driven by increased ultrasonic meter, water quality solution, BEACON® SaaS revenues, and **$11.1 million** from the SmartCover acquisition[83](index=83&type=chunk) - Gross margin improvement was due to a positive sales mix, including higher SaaS revenues, despite tariff and input cost pressures[84](index=84&type=chunk) - Selling, engineering and administration (SEA) expenses increased due to the inclusion of SmartCover (including intangible asset amortization), higher incentive compensation, and personnel-related expenses[84](index=84&type=chunk) [Results of Operations - Nine Months Ended September 30, 2025](index=22&type=section&id=Results%20of%20Operations%20-%20Nine%20Months%20Ended%20September%2030,%202025) Analyzes the financial performance for the nine-month period, including sales, margins, and earnings | Metric (In millions of USD) | 9M 2025 | 9M 2024 | YoY Change | % YoY Change | | :-------------------------- | :------ | :------ | :--------- | :----------- | | Net Sales | $696.0 | $621.4 | $74.6 | 12.0% | | Utility Water Sales | $618.7 | $543.7 | $75.0 | 13.8% | | Flow Instrumentation Sales | $77.3 | $77.7 | $(0.4) | -0.6% | | Operating Earnings | $140.4 | $118.7 | $21.7 | 18.3% | | Operating Margin | 20.2% | 19.1% | 1.1 pp | | | Gross Margin % | 41.5% | 39.7% | 1.8 pp | | | Net Earnings | $108.1 | $94.2 | $13.9 | 14.8% | | Diluted EPS | $3.65 | $3.19 | $0.46 | 14.4% | - Utility water net sales grew due to increased metering, water quality solutions, BEACON® SaaS revenues, and **$27.8 million** from the SmartCover acquisition[87](index=87&type=chunk) - Gross margin improvement was driven by increased sales volume and favorable product mix, partially offset by tariff and input cost pressures[88](index=88&type=chunk) - SEA expenses increased year-over-year due to the inclusion of SmartCover (including intangible asset amortization) and higher personnel costs[88](index=88&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) Assesses the company's cash flow, working capital, and available credit for operations and investments - Primary sources of liquidity are cash from operations and borrowing capacity, with potential access to capital markets[91](index=91&type=chunk) | Primary Working Capital (In thousands of USD) | Sep 30, 2025 | PWC% | Dec 31, 2024 | PWC% | | :------------------------------------------ | :----------- | :--- | :----------- | :--- | | Receivables | $115,056 | 12.8% | $84,325 | 10.2% | | Inventories | $152,627 | 16.9% | $143,408 | 17.3% | | Payables | $(69,786) | -7.7% | $(55,659) | -6.7% | | Primary Working Capital | $197,897 | 22.0% | $172,074 | 20.8% | - Primary Working Capital increased by **$25.8 million**, driven by higher receivables and inventories due to increased sales activity, partially offset by higher payables[92](index=92&type=chunk) - Cash provided by operations increased to **$128.9 million** (9M 2025) from **$103.0 million** (9M 2024), supported by higher net earnings and favorable working capital trends[93](index=93&type=chunk) - Cash and cash equivalents decreased to **$201.7 million** from **$295.3 million** at December 31, 2024, primarily due to the **$184.0 million** SmartCover acquisition and dividend payments, partially offset by operating cash flow[94](index=94&type=chunk) - The Company has a **$150.0 million** multi-currency line of credit and **$154.7 million** of unused credit lines available, ensuring adequate resources for operations and future investments[95](index=95&type=chunk) [Other Matters](index=23&type=section&id=Other%20Matters) Covers miscellaneous financial matters, including environmental compliance expenditures - Environmental compliance expenditures were not material in 2024 and the first three quarters of 2025[96](index=96&type=chunk) [Contractual Obligations](index=23&type=section&id=Contractual%20Obligations) Confirms the status of the company's contractual obligations - Contractual obligations have not materially changed since the 2024 Annual Report on Form 10-K, unless otherwise indicated[98](index=98&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there have been no material changes to the Company's quantitative and qualitative disclosures about market risk since its Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to market risk disclosures since the 2024 Annual Report on Form 10-K[99](index=99&type=chunk) [Item 4. Controls and Procedures](index=23&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of the Company's disclosure controls and procedures and reports on any changes in internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=23&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) Reports on the effectiveness of the company's disclosure controls and procedures - Management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures were effective as of September 30, 2025[100](index=100&type=chunk) [Changes in Internal Control Over Financial Reporting](index=23&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) Addresses any material changes in internal control over financial reporting - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2025[101](index=101&type=chunk) [Part II. Other Information](index=24&type=section&id=Part%20II.%20Other%20Information) Contains additional information not covered in the financial statements, including risk factors and equity matters [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) This section confirms that there have been no material changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to risk factors since the 2024 Annual Report on Form 10-K[103](index=103&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=24&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section provides information on the Company's share repurchase program, indicating no shares were repurchased during the quarter ended September 30, 2025 | Period | Total shares purchased | Average price paid per share | Total shares purchased as part of a publicly announced program | Maximum number of shares that may yet be purchased under the program | | :----- | :--------------------- | :--------------------------- | :----------------------------------------------------------- | :----------------------------------------------------------------- | | July 1, 2025 - July 31, 2025 | - | $ - | - | 200,000 | | August 1, 2025 - August 31, 2025 | - | $ - | - | 200,000 | | September 1, 2025 - September 30, 2025 | - | $ - | - | 200,000 | | Total as of September 30, 2025 | - | | - | 200,000 | - No shares were repurchased under the authorized program during the quarter ended September 30, 2025, leaving **200,000** shares available for repurchase[104](index=104&type=chunk)[105](index=105&type=chunk) [Item 5. Other Information](index=24&type=section&id=Item%205.%20Other%20Information) This section confirms that no Rule 10b5-1 or non-Rule 10b-1 trading arrangements were adopted or terminated by directors or executive officers during the third quarter of 2025 - No Rule 10b5-1 or non-Rule 10b-1 trading arrangements were adopted or terminated by directors or executive officers during Q3 2025[106](index=106&type=chunk) [Item 6. Exhibits](index=24&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications by the CEO and CFO, and iXBRL formatted financial statements - Exhibits include certifications (**31.1**, **31.2**, **32**) and iXBRL formatted financial statements (**101**, **104**)[108](index=108&type=chunk) [Signatures](index=25&type=section&id=Signatures) Provides the official signatures of the company's executive officers, certifying the report's accuracy - The report was signed by Kenneth C. Bockhorst (Chairman, President and CEO), Robert A. Wrocklage (Senior Vice President – CFO), and Daniel R. Weltzien (Vice President – Controller and Treasurer) on October 22, 2025[110](index=110&type=chunk)[112](index=112&type=chunk)

Core Insights - Badger Meter, Inc. (BMI) reported Q3 2025 EPS of $1.19, exceeding the Zacks Consensus Estimate by 7.2% and up from $1.08 in the same quarter last year [1][7] - Quarterly net sales reached $235.7 million, a 13.1% increase from $208.4 million year-over-year, driven by higher utility water sales [1][7] - The company maintains a positive outlook on long-term growth, supported by strong demand for its smart water management solutions and a robust opportunity pipeline [2][11] Financial Performance - Gross profit for the quarter was $95.8 million, up from $83.9 million year-over-year, with a gross margin of 40.7%, an increase of 50 basis points [5][7] - Operating earnings increased by 13% year-over-year to $46.1 million, while operating margin slightly declined to 19.6% [8] - Selling, engineering, and administration (SEA) expenses rose 11.8% year-over-year to $49.8 million, primarily due to the addition of SmartCover [9] Segmental Performance - Utility water sales grew by 14% year-over-year, with an 8% increase even when excluding SmartCover, driven by higher ultrasonic meter volumes and increased BEACON Software-as-a-Service sales [4] - Flow instrumentation sales increased by 4% year-over-year, supported by strength in water-related markets [4] Cash Flow & Liquidity - In Q3 2025, Badger Meter generated $51.3 million in net cash from operating activities, compared to $45.1 million a year ago [10] - As of September 30, 2025, the company had $201.7 million in cash and cash equivalents, up from $165.2 million as of June 30, 2025 [10] Strategic Outlook - The company expects to achieve an average high single-digit top-line growth rate over the next five years, driven by technology adoption and strategic pricing initiatives [11] - With a raised normalized gross margin range of 39%–42%, the company is well-positioned to invest in innovation and pursue value-creating acquisitions [12]