Financial Data and Key Metrics Changes - Total sales for Q4 2025 reached $221 million, an 8% year-over-year increase, with base sales growth of 2% [7] - Operating profit margins increased by 40 basis points to 19.5%, while base operating profit margins expanded by 140 basis points to 20.5% [9] - Consolidated EPS rose to $1.14, a 10% increase from $1.04 in the prior year quarter [12] - Record quarterly free cash flow of $50.8 million, up approximately $3.4 million year-over-year [12] Business Line Data and Key Metrics Changes - Utility water product line sales increased by 9% year-over-year, or 2% excluding SmartCover [7] - Flow instrumentation product line sales remained flat year-over-year, with modest growth in water-focused end markets [9] - SmartCover generated $40 million in sales for 2025, representing a 25% annualized growth [22] Market Data and Key Metrics Changes - The company reported a 17% compounded annual growth rate over the past five years, with software revenue exceeding $74 million, accounting for 8% of total sales [19] - The U.S. market for meters is approximately 6 million units per year, with Badger Meter holding about 30% market share [35][38] Company Strategy and Development Direction - The company aims to leverage its cellular AMI technology as a foundation for real-time insights and analytics, expanding through the Blue Edge suite of smart water management solutions [15] - The PRASA AMI project is expected to be one of the largest deployments globally, with a focus on enhancing market leadership in cellular AMI technology [15][16] - The company emphasizes long-term growth driven by ongoing demand for smart water management solutions and the integration of SmartCover into its operations [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high single-digit sales growth over the next five years, despite potential project pacing dynamics in the near term [24] - The company does not foresee significant impacts from federal funding constraints on its growth trajectory [24] - Management acknowledged the fluid nature of global tariff and trade conditions but indicated that they have reached price-cost parity on tariff-related impacts [10][11] Other Important Information - The company has a clean balance sheet with over $225 million in cash, providing financial flexibility for reinvestment [20] - The company has increased its dividend for 33 consecutive years and repurchased $15 million in shares in Q4 2025 [21] Q&A Session Summary Question: Did the company see the full impact of project conclusions in Q4? - Management noted that project pacing can vary, and the second half of the year experienced lower growth than the first half due to fewer operating days and project timing [27][29] Question: How does the company view the U.S. market size and its share? - Management confirmed that the U.S. market is approximately 6 million meters per year, with Badger Meter's share around 30% [35][38] Question: What is the expected impact of the PRASA project on revenue? - Management stated that while the PRASA project is significant, it will not add to the long-term growth outlook, which remains focused on high single-digit growth [17][24] Question: How does the company plan to manage gross margins in 2026? - Management indicated that while there are headwinds from commodity prices and project mix, they expect structural mix to positively impact margins [42][44] Question: How is the PRASA project funded? - The project is partially funded by FEMA dollars in response to Hurricane Maria, which also drives the Buy American requirement for manufacturing [70]

Financial Data and Key Metrics Changes - Total sales for Q4 2025 reached $221 million, an 8% year-over-year increase, with base sales growth of 2% [6] - Operating earnings grew by 10% year-over-year, with operating profit margins increasing by 40 basis points to 19.5% [9] - Consolidated EPS was $1.14, a 10% increase from $1.04 in the prior year quarter [12] - Record quarterly free cash flow of $50.8 million, up approximately $3.4 million year-over-year [12] Business Line Data and Key Metrics Changes - Utility water product line sales increased by 9% year-over-year, or 2% excluding SmartCover [6] - Flow instrumentation product line sales were flat year-over-year, with modest growth in water-focused end markets [9] - SmartCover generated $40 million in sales for 2025, representing a 25% annualized growth [21] Market Data and Key Metrics Changes - The U.S. market for meters is approximately 6 million units per year, with Badger Meter holding about 30% market share [35] - 85% of the U.S. market is replacement-driven, indicating a stable demand for Badger Meter's products [63] Company Strategy and Development Direction - The company aims to leverage its cellular AMI technology as a foundation for real-time insights and analytics, expanding through the Blue Edge suite of smart water management solutions [14] - The PRASA AMI project is expected to be one of the largest deployments globally, with a focus on E-Series ultrasonic meters and ORION cellular AMI radios [15] - The company is committed to maintaining a clean balance sheet with over $225 million in cash, allowing for organic and inorganic growth investments [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high single-digit sales growth over the next five years, despite potential project pacing dynamics in 2026 [24] - The company does not foresee significant impacts from federal funding constraints on its growth trajectory [23] - Management highlighted the importance of long-term trends in the water industry, which support demand for smart water management solutions [22] Other Important Information - The company successfully integrated SmartCover into its operations, with expectations for earnings accretion in 2026 [21] - SG&A expenses in Q4 were $49.9 million, with a year-over-year increase primarily due to the SmartCover acquisition [11] Q&A Session Summary Question: Did the company see the full impact of project conclusions in Q4? - Management noted that project pacing can vary, and the second half of the year was expected to show lower growth due to fewer working days and project completions [27][28] Question: What is the expected growth rate for 2026? - Management anticipates a lower growth rate in the first half of 2026, with a higher growth rate expected in the second half due to awarded projects [30][31] Question: How does the company view the U.S. market size and its share? - Management confirmed that the U.S. market size is around 6 million meters per year, with Badger Meter's share remaining approximately 30% [35][38] Question: What is the expected impact of the PRASA project on revenue? - Management refrained from sizing the revenue impact of the PRASA project, emphasizing the variability in project deployment timelines [18][19] Question: How does the company manage pricing in relation to tariffs? - Management indicated that pricing adjustments have primarily been through list price increases, without temporary tariff add-ons, maintaining a clean pricing strategy [56][57]

Shares of leading water management and advanced metering infrastructure (AMI) provider Badger Meter (NYSE: BMI) are down 10% as of 11 a.m. ET on Wednesday following the company's fourth-quarter earnings release. For the full year, revenue, earnings per share (EPS), and free cash flow (FCF) grew by 11%, 13%, and 19%, respectively. However, Badger Meter's sales only rose by 8% in Q4 -- and just 2% on an organic basis -- and it fell short of Wall Street's guidance, prompting today's decline. The stock is now ...

Badger Meter Fourth Quarter & Full Year 2025 Financial Results January 28, 2026 1 Forward Looking Statements 2 Durable Demand For Smart Water Solutions in 2025 Drove Profitable Growth and Robust Cash Generation FY 13% 10% 5% 8% 2% 3% 5% 5% 6% 0% 2% 4% 6% 8% 10% 12% 14% Q4 2024 Q1 2025 Q2 2025 Q3 2025 Q4 2025 Base SmartCover 13% 13% 10% 8% 19.1% 20.0% 21.1% As Reported OP Margin FY 2024 As Reported OP Margin FY 2025 Base Operating Profit Margin FY 2025 19.1% 19.5% 20.5% As Reported OP Margin Q4 2024 As Repor ...

Badger Meter (BMI) came out with quarterly earnings of $1.14 per share, missing the Zacks Consensus Estimate of $1.15 per share. This compares to earnings of $1.04 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -0.78%. A quarter ago, it was expected that this manufacturer of products that measure gas and water flow would post earnings of $1.11 per share when it actually produced earnings of $1.19, delivering a surprise of +7. ...

Core Insights - Badger Meter, Inc. reported record sales, profitability, and cash flow for the full year 2025, driven by sustained demand for smart water management solutions [2][11] - The acquisition of SmartCover in early 2025 expanded Badger Meter's capabilities in sewer monitoring and stormwater management, positioning the company for long-term growth [3][11] Fourth Quarter 2025 Highlights - Utility water sales increased by 9% year-over-year, or 2% excluding SmartCover, with growth driven by customer adoption of digital smart water solutions [5][9] - Operating earnings rose by 10% year-over-year to $43.0 million, with operating profit margins expanding to 19.5% [7][9] - Total sales reached $220.7 million, an 8% increase from $205.2 million in the prior year [9][10] Full Year 2025 Highlights - Record sales of $916.7 million, up 11% from $826.6 million in 2024, with base sales increasing by 6% year-over-year [9][11] - Operating earnings for the year increased by 16% to $183.4 million, with operating profit margins at 20.0% [9][11] - Diluted earnings per share (EPS) increased by 13% to $4.79, compared to $4.23 in 2024 [9][11] Strategic Initiatives - The company emphasized the importance of its BlueEdge suite of smart water management solutions, which addresses various challenges across the water cycle [12][13] - Badger Meter's selection for the Puerto Rico Aqueduct and Sewer Authority's AMI project highlights its capabilities in enhancing water system resiliency [14] Financial Performance - Gross margin improved to 42.1%, benefiting from a favorable sales mix and lower pass-through revenue [7][9] - Cash provided by operations reached $54.8 million in Q4 2025 and $183.7 million for the full year [9][11] Outlook - The company anticipates high single-digit sales growth and operating profit margin expansion over the next five years, driven by the adoption of cellular AMI solutions and international expansion opportunities [15][16]

Core Viewpoint - Badger Meter, Inc. is a key player in the flow measurement and control solutions industry, focusing on smart water technology and aiming to dominate the market by 2026 [1][4]. Price Target Trends - The consensus price target for Badger Meter has decreased from $215.92 to $157 over the past year, indicating a more conservative outlook from analysts [2][6]. - Analyst Kristina Ruggeri from Argus Research has set a bullish price target of $218, reflecting confidence in the company's growth potential [3][6]. Strategic Focus - Badger Meter is concentrating on transitioning its existing client base to innovative smart water technology products, which are designed to generate recurring revenue [3][4][6]. - The company is making strong initial efforts to encourage clients to adopt new offerings, although a significant portion has yet to make the switch [4][6]. Upcoming Earnings Report - Badger Meter's fourth quarter and full year 2025 earnings report is scheduled for release on January 28, 2026, which will provide insights into its performance and future prospects [5].

Group 1 - Gabelli Funds, LLC will host the 36th Annual Pump, Valve, & Water Systems Symposium on February 26, 2026, in New York, NY [1] - The symposium will focus on discussions related to critical infrastructure, aerospace and defense, machine tools, and the oil and gas industry [2] - Attendees will have opportunities for one-on-one meetings with management from participating companies [2] Group 2 - Participating companies include AMETEK, Graco, Badger Meter, ITT, Crane, Landis+Gyr, Enpro, Mueller Water Products, Flowserve, Oil States International, Franklin Electric, and Watts Water Technologies [2] - A lunch presentation will be given by Robert Powelson, President & CEO of the National Association of Water Companies [3]

Core Viewpoint - Badger Meter, Inc. is recognized as a solid company in the smart-water technology market, but faces challenges due to its premium valuation and expected growth slowdown as the market matures [2][3]. Group 1: Company Overview - Badger Meter, Inc. (NYSE:BMI) is a manufacturer and marketer of flow measurement, water quality, and control solutions, serving customers globally [4]. - The company is an early leader in North America's smart-water tech market, with approximately 40% of its connection points migrated to its Advanced Metering Infrastructure (AMI) platform [3]. Group 2: Growth Opportunities - Badger Meter anticipates increased adoption of its AMI platform as customers replace outdated equipment and new features, such as real-time water quality and pressure monitoring, enhance the value of upgrades [3]. - The company is targeting growth through flow instrumentation opportunities in industrial and smart-building applications, as well as expanding into international markets like Europe and the Middle East [3]. Group 3: Acquisitions - Acquisitions are a key growth driver for Badger Meter, exemplified by its $185 million acquisition of SmartCover in early 2025, which enhances its wastewater monitoring capabilities and creates cross-selling opportunities [4].

Core Viewpoint - The article presents a bearish perspective on Badger Meter (BMI), suggesting that the stock is "priced to perfection" and may not offer value at current levels [1]. Company Analysis - Badger Meter has been under scrutiny for its stock valuation, with the author expressing concerns about its pricing relative to performance metrics [1]. Market Context - The author emphasizes the importance of understanding equity markets and their performance, indicating a broader analytical approach to investment [1].