Core Viewpoint - Badger Meter, Inc. has shown strong financial performance in Q3 2025, leading to an upgrade in stock rating from Hold to Buy by Stifel Nicolaus, with a price target of $215 indicating a potential upside of 21.23% from the current price of $177.35 [1][6]. Financial Performance - Total sales for Q3 2025 reached $235.7 million, marking a 13% increase from $208.4 million in the previous year [2]. - Base sales grew by 8% year-over-year, totaling $224.5 million, reflecting strong demand for the company's products and services [2]. - Operating earnings increased by 13% to $46.1 million, with operating profit margins slightly improving to 19.6% from 19.5% year-over-year [3]. - Base operating earnings rose by 15%, reaching $46.6 million, further supporting the positive outlook [3]. Stock Performance - Despite the positive financial results, Badger Meter's stock price decreased by 5.37%, or $10.06, to $177.35, indicating some market volatility [4][6]. - The stock has fluctuated between a low of $176.04 and a high of $204 during the trading day, with a yearly high of $256.08 and a low of $162.17 [4]. Market Activity - Badger Meter's market capitalization is approximately $5.23 billion, with a trading volume of 1,209,410 shares on the NYSE, suggesting active investor interest in the company's performance and growth potential [5].

Financial Data and Key Metrics Changes - Total sales for Q3 2025 reached $236 million, reflecting a 13% year-over-year increase, with Base sales growth at 8% [5][6] - Operating earnings increased by 13% year-over-year to $46.1 million, with operating margins slightly up to 19.6% from 19.5% [6][8] - Consolidated EPS rose to $1.19, a 10% increase compared to $1.08 in the prior year quarter [8][9] - Record free cash flow of $48.2 million increased by approximately $6 million year-over-year, primarily due to lower cash taxes [9] Business Line Data and Key Metrics Changes - Utility water product line sales increased by 14% year-over-year, or 8% excluding SmartCover, driven by higher ultrasonic meter unit volumes and increased BEACON SaaS sales [5][6] - Flow instrumentation product line sales grew by 4% year-over-year, supported by strength in water-related markets [6] Market Data and Key Metrics Changes - The company noted a steady demand for its cellular AMI solution and BlueEdge suite, supported by macroeconomic drivers encouraging technology adoption across the water cycle [3][10] - The trade environment remains fluid, but the company has effectively managed tariff and trade-related cost pressures [3][7] Company Strategy and Development Direction - The company is focused on long-term growth through its BlueEdge solutions, which are modular and allow customers to adopt technologies at their own pace [10][11] - The company is well-positioned to capitalize on long-term trends in the water industry, with a strong cash flow generation capability and a net cash position of approximately $200 million [14] - The company continues to prioritize organic growth, increasing dividends for the 33rd consecutive year, and pursuing strategic acquisitions [14][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite macroeconomic uncertainties, highlighting ongoing customer enthusiasm for technology adoption [12][13] - The company anticipates a solid close to the year, despite typical seasonal impacts in Q4 due to fewer operating days [12][22] - Management expects to achieve high single-digit average top-line growth over the next five years [12][49] Other Important Information - The company has successfully transitioned certain manufacturing operations to its facility in Racine, Wisconsin, as part of the SmartCover acquisition integration [14] - The company is optimistic about the growth potential of SmartCover, which has shown 25% growth in the quarter [29][30] Q&A Session Summary Question: Insights on gross profit margin expectations - Management indicated that the lack of new tariff news and continued strong performance has led to confidence in raising the gross margin range to 39%-42% [17][19] Question: Project timing and customer decision-making - Management clarified that while Q3 may not show sequential growth over Q2, it does not indicate a decline in business, and customers are still moving forward with projects [20][22] Question: SmartCover growth and profitability - Management remains excited about SmartCover's growth potential, expecting it to become EPS accretive in year two post-acquisition [29][33] Question: Pricing strategies amid tariff impacts - Management noted targeted product-specific price increases to mitigate tariff-related costs, with expectations for price realization to catch up to costs [37][39] Question: Water quality performance and customer needs - Management expressed strong traction in water quality offerings and confidence in their current parameters, with no immediate gaps identified [41][42] Question: 2026 growth outlook and capital allocation - Management refrained from providing specific guidance for 2026 but expressed confidence in achieving high single-digit growth over the cycle [46][49] Question: Federal stimulus impact on metering - Management indicated that very little federal stimulus money has been directed toward metering, with macro drivers remaining the primary focus for utilities [53][55]

Financial Data and Key Metrics Changes - Total sales for Q3 2025 reached $236 million, marking a 13% year-over-year increase, with BASE sales growth at 8% [5][6] - Operating earnings rose 13% year-over-year to $46.1 million, with operating margins slightly up to 19.6% from 19.5% [6][8] - Consolidated EPS increased to $1.19 from $1.08 in the prior year, representing a 10% year-over-year growth [8][9] - Record free cash flow of $48.2 million, up approximately $6 million year-over-year, primarily due to lower cash taxes [9] Business Line Data and Key Metrics Changes - Utility water product line sales increased by 14% year-over-year, or 8% excluding SmartCover, driven by higher ultrasonic meter volumes and increased Beacon SaaS sales [5][6] - Flow instrumentation product line sales grew by 4% year-over-year, supported by strength in water-related markets [6] Market Data and Key Metrics Changes - The company noted a steady demand for its cellular AMI solution and BlueEdge suite, supported by macroeconomic drivers encouraging technology adoption across the water cycle [3][10] - The trade environment remains fluid, but the company has effectively managed tariff and trade-related cost pressures [3][7] Company Strategy and Development Direction - The company is focused on long-term growth through its BlueEdge solutions, which are modular and allow customers to adopt technologies at their own pace [10][11] - The company is well-positioned to capitalize on long-term trends in the water industry, with a strong cash flow generation capability and a net cash position of approximately $200 million [14] - The company plans to continue investing in both organic growth and potential acquisitions, while also returning cash to shareholders through increased dividends [14][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business despite macroeconomic uncertainties, citing ongoing demand for critical utility water infrastructure [12][13] - The company anticipates a high single-digit average top-line growth rate over the next five years, despite the inherent unevenness in project timing [12][48] Other Important Information - The company has successfully transitioned certain manufacturing operations to its facility in Racine, Wisconsin, as part of the SmartCover acquisition integration [14] - The company has raised its gross margin range from 39% to 42% on a normalized basis, reflecting ongoing structural mix improvements [7][62] Q&A Session Summary Question: Insights on gross profit margin expectations - Management indicated that the lack of new tariff news and continued strong performance gave them confidence to raise the gross margin range [18][19] Question: Project timing and customer decision-making - Management clarified that they do not expect a decline in business but noted the typical seasonal impacts in Q4 due to fewer operating days [22][24] Question: Growth expectations for SmartCover - Management remains excited about SmartCover's integration and growth potential, with expectations of continued strong performance [29][30] Question: Pricing and tariff impacts - Management discussed targeted price increases to mitigate tariff impacts, with expectations of reaching parity between price and cost moving forward [38][39] Question: Water quality performance and customer needs - Management expressed strong traction in water quality offerings and confidence in their current parameters, with no immediate gaps identified [41][42] Question: 2026 growth outlook - Management refrained from providing specific guidance for 2026 but expressed confidence in achieving high single-digit growth over the cycle [47][49] Question: Federal funding impact on metering - Management noted that very little federal funding has gone toward metering, with macro drivers remaining the primary focus for utilities [53][54]

Financial Data and Key Metrics Changes - Total sales reached $236 million in Q3 2025, representing a 13% year-over-year increase or 8% base sales growth, with a sequential decline from Q2 [6][11] - Operating earnings increased by 13% year-over-year to $46.1 million, with operating margins slightly up to 19.6% from 19.5% [7] - Consolidated EPS was $1.19, a 10% increase from $1.08 in the prior year quarter [10] - Record free cash flow of $48.2 million increased by approximately $6 million year-over-year [11] Business Line Data and Key Metrics Changes - Utility water product line sales increased by 14% year-over-year, or 8% excluding SmartCover [6] - Flow instrumentation product line sales increased by 4% year-over-year, driven by strength in water-related markets [7] - Base operating earnings, excluding SmartCover, increased by 15% year-over-year to $46.6 million [7] Market Data and Key Metrics Changes - Gross margins expanded to 40.7% from 40.2% in the prior year quarter, benefiting from structural mix improvement and price increases [8] - The company increased its gross margin range from a historical 38%-40% to a new normalized range of 39%-42% [8] Company Strategy and Development Direction - The company is focused on the long-term growth of its BlueEdge suite of modular smart water management solutions, which is expected to drive future growth [12][14] - The company plans to continue investing in both organic and inorganic growth, with a net cash position of approximately $200 million [16] - The company remains committed to returning cash to shareholders, having increased its dividend for the thirty-third consecutive year [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the business amidst macroeconomic and trade uncertainties, citing strong demand for their products [15] - The company anticipates healthy levels of activity across its opportunity pipeline and expects an average top-line growth rate of high single digits over the next five years [14] - Management noted that federal funding noise has not significantly impacted customer decision-making, as utilities continue to prioritize technology adoption [26] Other Important Information - The company is successfully integrating SmartCover into its operations, with reported growth of approximately 25% in the quarter [31] - The company is optimistic about the growth potential of SmartCover, which is expected to become EPS accretive in year two post-acquisition [35] Q&A Session Summary Question: Increase in expected gross profit margin - Management indicated that the increase in gross profit margin was due to a lack of new tariff news and confidence in structural mix benefits [20][21] Question: Project timing and customer decision-making - Management clarified that they did not signal a decline in business but noted the inherent unevenness in project timing [23][24] Question: Smart Cover growth expectations - Management remains excited about Smart Cover's growth potential, which is expected to continue at an outsized level [31] Question: Pricing and tariff impacts - Management discussed targeted product-specific price increases to mitigate tariff impacts, with expectations for price realization to catch up to cost effects [39][40] Question: Water quality performance - Management expressed strong traction in water quality offerings and confidence in their parameter capabilities [42][44] Question: Outlook for 2026 - Management refrained from providing specific guidance for 2026 but expressed confidence in achieving high single-digit growth over the cycle [49][51] Question: Capital allocation and buybacks - Management reiterated their capital allocation priorities, emphasizing organic growth and dividends, while not ruling out buybacks [52][53] Question: Federal stimulus impact - Management noted that very little federal stimulus money has gone toward metering, with macro drivers remaining the same [56] Question: Comparison to 2011 period - Management highlighted significant technological advancements since 2011, making past comparisons less relevant [59]

Financial Data and Key Metrics Changes - Total sales for Q3 2025 reached $236 million, marking a 13% year-over-year increase, with BASE sales growth at 8% [5][6] - Operating earnings rose 13% year-over-year to $46.1 million, with operating margins slightly up to 19.6% from 19.5% [6][8] - Consolidated EPS increased to $1.19 from $1.08 in the prior year, representing a 10% year-over-year growth [7] Business Line Data and Key Metrics Changes - Utility water product line sales increased by 14% year-over-year, or 8% excluding SmartCover, driven by higher ultrasonic meter volumes and increased Beacon SaaS sales [5][6] - Flow instrumentation product line sales grew by 4% year-over-year, supported by strength in water-related markets [5] Market Data and Key Metrics Changes - Primary working capital as a percentage of sales was 22%, showing a 150 basis point improvement year-over-year [8] - Record free cash flow of $48.2 million increased by approximately $6 million year-over-year, largely due to lower cash taxes [8] Company Strategy and Development Direction - The company is focused on expanding its BlueEdge suite of modular smart water management solutions, which is seen as a long-term growth driver [9][10] - The company is well-positioned to enable customers to adopt new technologies for efficiency and resiliency, despite macroeconomic uncertainties [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving high single-digit average top-line growth over the next five years, despite potential unevenness in project timing [11][40] - The company remains optimistic about the long-term trends driving change in the water industry, which will encourage customer evolution [12] Other Important Information - The company has increased its gross margin range from 39% to 42% on a normalized basis, reflecting ongoing structural mix improvements [6][53] - The company returned cash to shareholders by increasing its dividend for the 33rd consecutive year [12] Q&A Session Summary Question: Inquiry about gross profit margin expectations - Management indicated that the lack of new tariff news and continued strong performance gave them confidence to raise the gross margin range [16][17] Question: Project timing and customer decision-making - Management clarified that they do not expect a decline in business but noted the inherent unevenness in project timing [19][20] Question: Growth expectations for SmartCover - Management remains excited about SmartCover's integration and growth potential, with expectations of continued outsized growth [24][25] Question: Pricing strategies in response to tariff impacts - Management discussed targeted product-specific price increases to mitigate tariff-related costs, with expectations of reaching price-cost parity [30][32] Question: Water quality performance and customer needs - Management expressed strong traction in water quality offerings and confidence in their parameter capabilities [34][35] Question: Outlook for 2026 and growth targets - Management refrained from providing specific guidance for 2026 but expressed confidence in achieving high single-digit growth over the cycle [39][40] Question: Capital allocation and potential for buybacks - Management reiterated their focus on organic growth, dividends, and M&A, while not ruling out buybacks in the future [43][44] Question: Federal stimulus impact on metering - Management noted that very little federal stimulus money has gone toward metering, with macro drivers remaining the primary focus for utilities [45][46]

Core Insights - The company reported a 13% year-over-year increase in operating earnings to $46.1 million, with operating margins slightly improving to 19.6% from 19.5% [1] - Excluding the Smart Cover acquisition, base operating earnings rose 15% year-over-year to $46.6 million, and base operating margins expanded by 120 basis points [1] - Total sales for 2025 reached $236 million, reflecting a 13% year-over-year increase, with base sales growth of 8% [2] - The company is increasing its gross margin range from a historical 38%-40% to a new normalized range of 39%-42% due to ongoing structural mix improvements and price increases [1][4] Financial Performance - Gross margins improved by 50 basis points to 40.7% from 40.2% in the prior year quarter, benefiting from structural mix improvements and price increases [1] - Record free cash flow of $48.2 million increased by approximately $6 million year-over-year, largely due to lower cash taxes [7] - Consolidated EPS rose to $1.19, a 10% increase from $1.08 in the prior year quarter [6] Sales and Market Trends - Utility water product line sales increased by 14% year-over-year, or 8% excluding SmartCover, driven by higher ultrasonic meter volumes and increased BEACON Software as a Service sales [2] - The company continues to see healthy activity levels across its pipeline, with expectations of high single-digit average top-line growth over the next five years [12] Strategic Initiatives - The integration of Smart Cover is progressing well, with the company expecting to deliver anticipated cost and sales synergies [14] - The company remains focused on investing in organic growth and maintaining its R&D leadership in the industry [43] Customer Engagement and Market Outlook - Customer feedback from recent trade shows indicates strong interest in the company's BlueEdge suite of solutions, which are seen as critical for utility water infrastructure [8][11] - Despite macroeconomic uncertainties, utility customers are planning for long-term technology adoption to enhance efficiency and resiliency [11][13]

Core Viewpoint - Badger Meter, Inc. is a prominent player in the flow measurement and control solutions sector, with a diverse product range and a focus on both domestic and international markets [1] Price Target and Analyst Sentiment - The consensus price target for Badger Meter has fluctuated, decreasing from a high of $225.00 to $206.50, indicating a potential shift in analyst sentiment [2][6] - Despite a 10% increase in sales, the company's earnings per share (EPS) fell short of expectations, resulting in a 2.3% decline in stock price [2][6] Market Conditions and Company Performance - Broader market conditions, such as interest rates and economic outlook, significantly influence analyst expectations [3] - Badger Meter has demonstrated strong revenue growth and expanding profit margins, with a recent 17.6% increase in dividends reflecting confidence in its financial health [3][6] Future Outlook and Management Expectations - The management anticipates continued year-over-year growth, supported by synergies from SmartCover [4] - Analyst Kristina Ruggeri from Argus Research has set a price target of $218 for Badger Meter, suggesting potential growth from its current position [4] Upcoming Earnings Report - Badger Meter is scheduled to release its third-quarter 2025 earnings report on October 21, 2025, which will provide further insights into its performance and future outlook [5]

Forward Looking Statements Certain statements contained in this presentation as well as other information provided from time to time by Badger Meter, Inc. (the "Company") or its employees, may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those statements. The words "anticipate," "believe," "estimate," "expect," "think," "should," "could" and "objective" or similar expressions are intended to identify forward looking stateme ...

Badger Meter (BMI) came out with quarterly earnings of $1.19 per share, beating the Zacks Consensus Estimate of $1.11 per share. This compares to earnings of $1.08 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +7.21%. A quarter ago, it was expected that this manufacturer of products that measure gas and water flow would post earnings of $1.21 per share when it actually produced earnings of $1.17, delivering a surprise of -3. ...

[FORM 8-K Filing Information](index=1&type=section&id=FORM%208-K%20Filing%20Information) This section details the administrative and identification information for the Form 8-K filing, including registrant specifics and securities status [Registrant Details](index=1&type=section&id=Registrant%20Details) This section provides core identification details for Badger Meter, Inc. as the registrant, including address, contact, and report date - Registrant: **Badger Meter, Inc.**[1](index=1&type=chunk) - Date of Report: **October 21, 2025**[1](index=1&type=chunk) - Address: **4545 W. Brown Deer Rd., Milwaukee, Wisconsin 53223**[1](index=1&type=chunk) - Telephone: **(414) 355-0400**[1](index=1&type=chunk) [Securities and Emerging Growth Company Status](index=1&type=section&id=Securities%20and%20Emerging%20Company%20Status) This section outlines the registrant's listed securities and confirms its status regarding emerging growth company provisions Listed Securities | Title of each class | Trading Symbol(s) | Name of each exchange on which registered | |---|---|---| | Common Stock | BMI | New York Stock Exchange | - Badger Meter, Inc. is **not an emerging growth company**[3](index=3&type=chunk) [Items Reported](index=3&type=section&id=Items%20Reported) This section details the specific items reported in the Form 8-K, including financial results and accompanying exhibits [Item 2.02 Results of Operations and Financial Condition](index=3&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) Badger Meter, Inc. reported its financial results for the third quarter ended September 30, 2025, through a press release issued on October 21, 2025 - Badger Meter, Inc. issued a press release on **October 21, 2025**, announcing financial results for the **third quarter ended September 30, 2025**[4](index=4&type=chunk)[5](index=5&type=chunk) [Item 9.01 Financial Statements and Exhibits](index=3&type=section&id=Item%209.01%20Financial%20Statements%20and%20Exhibits) This section details the exhibits furnished with the Form 8-K, specifically identifying the press release containing the third-quarter financial results Furnished Exhibits | Exhibit No. | Description | |---|---| | (99.1) | Badger Meter, Inc. Press Release, dated October 21, 2025 | [SIGNATURES](index=3&type=section&id=SIGNATURES) This section confirms the official signing and authorization of the Form 8-K filing by the registrant's authorized officer [Signature Details](index=3&type=section&id=Signature%20Details) The report was duly signed on behalf of Badger Meter, Inc. by its Senior Vice President – Chief Financial Officer, confirming its authorization - Report signed by **Robert A. Wrocklage**, Senior Vice President – Chief Financial Officer[12](index=12&type=chunk) - Date of signature: **October 21, 2025**[12](index=12&type=chunk)