Financial Data and Key Metrics Changes - Total sales reached $238 million in Q2 2025, representing a 10% year-over-year increase or 5% growth excluding $10 million from Smart Cover [6][11] - Operating earnings increased by 8% year-over-year to $44.9 million, with operating margins slightly down to 18.8% from 19.2% [7][11] - Gross margins expanded by 170 basis points to 41.1% from 39.4% in the prior year quarter, despite a sequential decline from 42.9% in Q1 2025 [8][10] - Free cash flow increased by 19% year-over-year to $40.6 million, largely due to higher earnings and improved working capital [11] Business Line Data and Key Metrics Changes - Utility water product line sales increased by 11% year-over-year or 6% excluding Smart Cover [6] - Sales for flow instrumentation product line were flat year-over-year, with lower demand in certain market applications offsetting modest growth in water-related end markets [7] Market Data and Key Metrics Changes - The company continues to see a robust demand for its products, with increasing numbers of RFPs requesting solutions beyond the meter [14] - The competitive landscape remains level, with ongoing trade uncertainties impacting pricing and costs [10] Company Strategy and Development Direction - The launch of BlueEdge aims to unify a comprehensive suite of products for managing water and wastewater systems beyond the meter, enhancing customer value [12][13] - The company is focused on long-term growth, expecting high single-digit revenue growth driven by favorable industry fundamentals and customer demand trends [17] - The integration of Smart Cover is progressing well, with expectations for sales and cost synergies to be realized [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating macroeconomic uncertainties while supporting long-term customer goals [5] - Despite expected sequential sales decline in Q3 2025, year-over-year growth is still anticipated, excluding Smart Cover [16] - The company remains optimistic about the long-term demand for its core products, which are critical to utility operations [17] Other Important Information - The company has raised its sustainability targets and published a 2024 sustainability report, highlighting its commitment to greenhouse gas reduction [18] Q&A Session Summary Question: Inquiry about SG&A expense increase - Management acknowledged the increase in SG&A expenses due to the full quarter of Smart Cover and a unique deferred compensation expense, indicating ongoing investments to support growth [20][22] Question: Clarification on SG&A expense levels - Management confirmed that the $1.6 million intangible amortization is expected to continue, and the $52 million SG&A level may be a new baseline moving forward [24][25] Question: Impact of tariff costs on pricing - Management indicated that pricing actions implemented in mid-April may not fully mitigate tariff cost pressures, leading to uncertainty in future gross margins [39][40] Question: Status of AMI projects and market demand - Management clarified that while some AMI projects have rolled off, the overall project funnel remains robust, and customer demand for new projects is unchanged [44][45] Question: Smart Cover sales performance - Management expressed excitement about Smart Cover's integration and sales performance, indicating that the growth is driven by market positioning rather than seasonality [52][55] Question: Potential impact of EPA budget cuts - Management reassured that utilities have multiple funding avenues for projects, and the demand for metering remains a high priority regardless of potential budget cuts [70][71]

Financial Data and Key Metrics Changes - Total sales for Q2 2025 reached $238 million, representing a 10% year-over-year increase or 5% growth excluding Smart Cover sales of over $10 million [6][11] - Operating earnings increased by 8% year-over-year to $44.9 million, with operating margins slightly down to 18.8% from 19.2% in the prior year [7][11] - Gross margins expanded by 170 basis points to 41.1% from 39.4% in the prior year quarter, although this was a sequential decline from 42.9% in Q1 2025 [8][10] - Free cash flow increased by 19% year-over-year to $40.6 million, driven by higher earnings and improved working capital [11] Business Line Data and Key Metrics Changes - Utility water product line sales increased by 11% year-over-year or 6% excluding Smart Cover [6] - Sales for flow instrumentation product line remained flat year-over-year due to lower demand in certain market applications [7] Market Data and Key Metrics Changes - The competitive landscape is viewed as level, with ongoing trade uncertainties impacting tariff-related costs [10] - The company continues to see strong customer demand and momentum in technology adoption trends within the water industry [5][16] Company Strategy and Development Direction - The launch of BlueEdge aims to unify a comprehensive suite of products for managing water and wastewater systems beyond the meter, with positive reception at industry events [12][13] - The company is focused on long-term growth, expecting high single-digit revenue growth driven by favorable industry fundamentals and customer demand trends [16][17] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about navigating macroeconomic uncertainties while supporting long-term customer goals [5] - Despite expected sequential sales decline in Q3 2025, year-over-year growth is still anticipated excluding Smart Cover [15] - The company emphasizes the importance of the meter as a critical investment for utilities, reinforcing confidence in sustained demand [16] Other Important Information - The company is on track to deliver anticipated sales and cost synergies from the Smart Cover acquisition, with a focus on leveraging existing resources [17][68] - The recently published sustainability report highlights achievements in greenhouse gas reduction and financial performance [18] Q&A Session Summary Question: Inquiry about SG&A expense increase - Management acknowledged the increase in SG&A expenses due to the full quarter of Smart Cover and a unique deferred compensation expense, indicating ongoing investments to support growth [21][22][23] Question: Clarification on deferred compensation impact - Management clarified that while the deferred compensation expense was unique to the quarter, some impact would remain due to stock price fluctuations [32][33] Question: Comments on AMI project timing and municipal activity - Management noted that project timing can be uneven, but the demand for new projects remains strong, with no long-term concerns about growth [44][45] Question: Impact of potential EPA budget cuts - Management expressed confidence that utilities will continue to prioritize investments in metering regardless of potential funding cuts, citing various funding mechanisms available [70][71]

Financial Performance - Sales reached $238 million, a 10% increase year-over-year, although 5% excluding SmartCover[7] - Operating margin decreased by 40 bps to 18.8%[7] - EPS grew by 4% year-over-year to $1.17 per share[7] - Free cash flow increased by 19% year-over-year to $41 million[7] - Gross margin improved by 170 bps to 41.1%[8] Business Segments - Utility water sales increased by 11% (6% excluding SmartCover)[8] - Flow instrumentation sales were essentially flat[8] Sustainability - The company reduced GHG emissions intensity by 55% since 2020[15] - The company reduced internal water usage intensity by 30%[15] - The company aims to reduce future GHG intensity by 30% using 2024 as the next baseline[15] Outlook - The company anticipates long-term shareholder value creation with favorable demand and industry dynamics[16]

Core Viewpoint - Badger Meter reported quarterly earnings of $1.17 per share, missing the Zacks Consensus Estimate of $1.21 per share, but showing an increase from $1.12 per share a year ago [1][2] Financial Performance - The company posted revenues of $238.1 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.61% and increasing from $216.66 million year-over-year [3] - Badger Meter has surpassed consensus revenue estimates three times over the last four quarters [3] Stock Performance - Badger Meter shares have increased approximately 15.6% since the beginning of the year, compared to a 7.2% gain in the S&P 500 [4] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [7] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $1.22 on revenues of $234.97 million, and for the current fiscal year, it is $4.93 on revenues of $924.92 million [8] - The estimate revisions trend for Badger Meter was mixed ahead of the earnings release, which may change following the recent report [7] Industry Context - The Instruments - Control industry, to which Badger Meter belongs, is currently in the top 11% of over 250 Zacks industries, indicating a favorable outlook [9]

[FORM 8-K Filing Details](index=1&type=section&id=FORM%208-K%20Filing%20Details) This section provides essential details regarding the Form 8-K filing, including registrant identification and securities registration information [Registrant Information](index=1&type=section&id=Registrant%20Information) This section identifies Badger Meter, Inc. as the registrant for this Form 8-K filing, detailing its incorporation state, commission file number, IRS employer identification number, and principal executive offices - Registrant: **Badger Meter, Inc.**[1](index=1&type=chunk) - Date of Report (earliest event reported): **July 22, 2025**[1](index=1&type=chunk) - Jurisdiction of incorporation: **Wisconsin**[1](index=1&type=chunk) [Securities Registration](index=1&type=section&id=Securities%20Registration) The company's Common Stock is registered on the New York Stock Exchange under the symbol BMI, and the registrant is not an emerging growth company Securities Registration Details | 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) [Item 2.02 Results of Operations and Financial Condition](index=3&type=section&id=Item%202.02%20Results%20of%20Operations%20and%20Financial%20Condition) This section details the announcement of the company's financial results for the second quarter of 2025 [Second Quarter 2025 Financial Results Announcement](index=3&type=section&id=Second%20Quarter%202025%20Financial%20Results%20Announcement) Badger Meter, Inc. announced its financial results for the second quarter ended June 30, 2025, through a press release issued on July 22, 2025, which is furnished as Exhibit 99.1 - Badger Meter, Inc. issued a press release on **July 22, 2025**, announcing financial results for the **second quarter ended June 30, 2025**[4](index=4&type=chunk) - The press release is furnished as **Exhibit 99.1**[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 provides an index of the financial statements and exhibits included in the filing [Exhibit Index](index=3&type=section&id=Exhibit%20Index) This section lists the exhibits accompanying the Form 8-K filing, specifically identifying the press release dated July 22, 2025, as Exhibit 99.1 Exhibits Included | Exhibit No. | Description | | :---------- | :-------------------------------- | | (99.1) | Badger Meter, Inc. Press Release, dated July 22, 2025. | [SIGNATURES](index=3&type=section&id=SIGNATURES) This section confirms the official authorization and signing of the Form 8-K report [Report Authorization](index=3&type=section&id=Report%20Authorization) The report was duly signed on behalf of Badger Meter, Inc. by Robert A. Wrocklage, Senior Vice President – Chief Financial Officer, on July 22, 2025 - The report was signed by **Robert A. Wrocklage**, **Senior Vice President – Chief Financial Officer**[12](index=12&type=chunk) - Date of signing: **July 22, 2025**[12](index=12&type=chunk)

Core Insights - Badger Meter, Inc. (BMI) is positioned favorably for an upcoming earnings report, with positive trends indicating a potential earnings beat [1][5] Earnings Estimates - Recent earnings estimate revisions for BMI have been favorable, suggesting analysts are optimistic about the company's performance [2] - The Most Accurate Estimate for the upcoming quarter is $1.28 per share, compared to the broader Zacks Consensus Estimate of $1.21 per share, indicating a recent upward revision by analysts [3] Earnings ESP - BMI has a Zacks Earnings ESP of +5.61%, which is a positive indicator heading into earnings season [3] - A positive Zacks Earnings ESP has historically led to positive surprises and outperformance in the market, with a nearly 70% success rate in producing positive surprises [4] Investment Consideration - With a Zacks Rank of 3 (Hold) and a positive Earnings ESP, BMI may be a stock worth considering for investors ahead of the earnings report [5]

Core Insights - Badger Meter, Inc. (BMI) is expected to report second-quarter 2025 earnings on July 22, with revenue estimates at $234.33 million, reflecting an 8.2% year-over-year growth, and earnings per share estimated at $1.21, indicating an 8.04% increase from the previous year [1][2] Financial Performance - The company has consistently exceeded the Zacks Consensus Estimate in the last four quarters, with an average surprise of 10.88% [2] - Utility water sales are projected to rise to $210 million from $173 million year-over-year, driven by strong demand for mechanical and E-Series Ultrasonic meters, ORION Cellular endpoints, and BEACON SaaS solutions [4][10] Growth Drivers - Badger Meter is benefiting from steady customer demand for smart water solutions and disciplined operational execution, particularly in cellular AMI solutions [2] - The introduction of the BlueEdge framework in May 2024 aims to enhance the company's water solutions portfolio, allowing for customization across the entire water cycle [3] - The acquisition of SmartCover on January 30, 2025, adds advanced sewer and lift-station monitoring capabilities to Badger's offerings, with positive customer feedback reinforcing its strategic value [3] Margin and Cost Management - Gross margin is expected to be supported by higher volumes, a favorable sales mix, and effective price/cost management, with long-term expectations of 38-40% [5] - However, elevated expenses from growth investments may offset some of the gross margin benefits [10] Market Outlook - Despite facing a challenging year-over-year comparison in the second quarter, the company remains optimistic about long-term growth, anticipating continued high single-digit revenue growth driven by industry trends in water infrastructure and smart technologies [7] - The flow instrumentation segment is experiencing a decline, with sales expected to dip 5% year-over-year, reflecting challenges in certain de-emphasized markets [6]

Group 1: Stock Performance - Badger Meter (BMI) closed at $240.91, with a +1.36% increase from the previous day, outperforming the S&P 500's gain of 0.32% [1] - Prior to the recent trading session, shares had declined by 2.01%, lagging behind the Computer and Technology sector's gain of 7.22% and the S&P 500's gain of 4.51% [1] Group 2: Earnings Performance - Badger Meter is set to release earnings on July 22, 2025, with projected EPS of $1.21, indicating an 8.04% increase year-over-year [2] - The Zacks Consensus Estimate for revenue is $234.33 million, reflecting an 8.16% increase from the same period last year [2] Group 3: Full-Year Estimates - Full-year Zacks Consensus Estimates predict earnings of $4.93 per share and revenue of $924.92 million, representing year-over-year changes of +16.55% and +11.9%, respectively [3] Group 4: Analyst Estimates and Stock Performance - Recent changes in analyst estimates for Badger Meter indicate positive sentiment regarding the company's business and profitability [3] - Empirical research shows that revisions in estimates correlate with stock price performance, which is utilized in the Zacks Rank model [4] Group 5: Zacks Rank and Valuation - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has a strong track record, with 1 stocks averaging a +25% annual return since 1988 [5] - Badger Meter currently holds a Zacks Rank of 3 (Hold) [5] - The company has a Forward P/E ratio of 48.2, indicating a premium compared to the industry average Forward P/E of 26.31 [6] Group 6: Industry Metrics - Badger Meter has a PEG ratio of 3.39, aligning with the industry average [7] - The Instruments - Control industry, part of the Computer and Technology sector, has a Zacks Industry Rank of 229, placing it in the bottom 8% of over 250 industries [7][8]

Core Insights - Rhythm Pharmaceuticals announced positive topline results from its Phase 2 trial of bivamelagon, showing significant BMI reductions in patients with acquired hypothalamic obesity [2][3] - The company plans to engage with regulatory authorities for a Phase 3 trial design and has requested an End-of-Phase 2 meeting with the U.S. FDA [7] Group 1: Trial Results - Bivamelagon achieved BMI reductions of -9.3% in the 600mg cohort and -7.7% in the 400mg cohort at 14 weeks [1][4] - A post-hoc analysis indicated that the BMI reductions from bivamelagon were consistent with those achieved by setmelanotide in similar patient populations [3][5] - Patients reported a mean reduction of -2.8 points in hunger scores in both the 600mg and 400mg cohorts [1][3] Group 2: Safety and Tolerability - The trial demonstrated safety and tolerability consistent with MC4R agonism, with limited instances of localized hyperpigmentation observed [4][6] - The most common adverse events included mild diarrhea and nausea, with one serious adverse event reported [6] Group 3: Next Steps and Regulatory Plans - Rhythm plans to seek input from U.S. and EU regulatory authorities regarding the Phase 3 trial design for bivamelagon [7] - The company is refining the formulation of bivamelagon to potentially improve tolerability before initiating the Phase 3 trial [7] Group 4: Company Background - Rhythm Pharmaceuticals is focused on transforming the lives of patients with rare neuroendocrine diseases and has in-licensed bivamelagon from LG Chem, Ltd [2][13] - The company’s lead asset, setmelanotide, is already approved for treating certain types of obesity [13][14]

Company Performance - Badger Meter (BMI) ended the recent trading session at $239.51, demonstrating a -1.28% change from the preceding day's closing price, trailing the S&P 500 which registered a daily loss of 0.79% [1] - Over the past month, shares of Badger Meter had lost 1.73%, lagging behind the Computer and Technology sector's gain of 7.88% and the S&P 500's gain of 5.22% [2] Earnings Projections - The company is scheduled to release its earnings on July 22, 2025, with projected earnings per share (EPS) of $1.19, reflecting a 6.25% increase from the same quarter last year, and expected revenue of $234.33 million, showing an 8.16% escalation compared to the year-ago quarter [3] - For the full year, Zacks Consensus Estimates project earnings of $4.91 per share and revenue of $924.92 million, representing changes of +16.08% and +11.9%, respectively, from the prior year [4] Analyst Estimates and Valuation - Recent changes to analyst estimates for Badger Meter reflect the latest short-term business trends, with upbeat changes indicating a favorable outlook on business health and profitability [5] - Badger Meter is currently trading at a Forward P/E ratio of 49.41, which is a premium compared to the industry average Forward P/E of 27.52 [8] Industry Context - The Instruments - Control industry, which includes Badger Meter, is part of the Computer and Technology sector and currently carries a Zacks Industry Rank of 201, placing it within the bottom 19% of over 250 industries [10]