Core Viewpoint - Itron, Inc. has introduced the Solar Battery Access Point, a solar-powered device aimed at providing cost-effective and flexible networking solutions for water and gas utilities, addressing the challenges of traditional infrastructure [1][2]. Group 1: Product Features and Benefits - The Solar Battery AP eliminates the need for expensive tower-based or utility pole-mounted infrastructure, allowing utilities to utilize their own assets for mounting [2][6]. - It features a rechargeable power management system with an integrated solar panel, which generates the necessary power, thus avoiding costs associated with power drops and monthly bills [6]. - The device is designed for long-lasting performance, with an operational lifespan of up to 20 years in the field [6]. - It enhances connectivity by delivering a low-latency, battery-powered mesh network, which expands the network capabilities for gas and water utilities [6]. Group 2: Market Position and Future Outlook - The Solar Battery AP is set to be available in North America in the second half of 2025 and will be showcased at the American Gas Association Operations Conference [1]. - The introduction of this technology is expected to help utilities and municipalities improve the safety and reliability of critical services while creating new engagement opportunities with customers [3].

Core Insights - Itron Inc. reported non-GAAP EPS of $1.52 for Q1 2025, exceeding the Zacks Consensus Estimate by 16.9% and up from $1.24 in the prior-year quarter [1][3] - Revenues increased by 1% year over year to $607 million, but fell short of the Zacks Consensus Estimate of $614.3 million and management's guidance of $610-$620 million [1][2] - The company experienced mixed performance across its segments, with steady customer demand driven by grid modernization and automation [2][3] Revenue Breakdown - Product revenues were $523.1 million, accounting for 86.2% of total revenues, down 0.9% year over year, while service revenues rose 11.1% to $84 million [2] - Device Solutions segment generated $125.9 million, down 1% year over year, while Networked Solutions revenues decreased by 1% to $402.7 million [4][5] - Outcomes segment saw a 14% increase in revenues to $78.5 million, driven by higher recurring revenues and increased software license sales [5] Operating Performance - Gross margin improved to 35.8%, up 180 basis points year over year, attributed to a favorable product mix and operational efficiencies [6] - Non-GAAP operating income rose to $80.3 million from $67.3 million in the previous year, reflecting improved gross profit and reduced operating costs [6] Financial Position - As of March 31, 2025, cash and cash equivalents were $1.123 billion, up from $1.05 billion at the end of 2024, with net long-term debt reduced to $786.1 million [8] - Free cash flow reached $67 million, doubling from $34 million in the prior-year quarter, due to stronger earnings and better working capital management [9] Future Guidance - For Q2 2025, Itron expects revenues between $605 million and $615 million, with non-GAAP EPS anticipated in the range of $1.30-$1.40, indicating about 12% growth at the midpoint compared to the previous year [10]

Financial Performance - Total revenues for Q1 2025 were $607,151,000, a slight increase of 0.12% compared to $603,442,000 in Q1 2024[9] - Net income for Q1 2025 was $65,350,000, representing a 26.2% increase from $51,787,000 in Q1 2024[9] - Gross profit increased to $217,219,000 in Q1 2025, up from $205,379,000 in Q1 2024, reflecting a gross margin improvement[9] - Operating income rose to $76,213,000 in Q1 2025, compared to $62,800,000 in Q1 2024, marking a 21.4% increase[9] - The company reported a comprehensive income of $78,898,000 for Q1 2025, significantly higher than $40,879,000 in Q1 2024[11] - Operating cash flow for Q1 2025 was $72,117,000, compared to $41,308,000 in Q1 2024, indicating improved cash generation[19] - Net income available to common shareholders for the three months ended March 31, 2025, was $65.474 million, compared to $51.721 million for the same period in 2024, representing a year-over-year increase of 26.5%[30] - Basic earnings per share (EPS) increased to $1.44 for Q1 2025 from $1.13 in Q1 2024, reflecting a growth of 27.5%[30] - Non-GAAP net income attributable to Itron, Inc. was $70.1 million in Q1 2025, compared to $57.3 million in Q1 2024[137] - Adjusted EBITDA for Q1 2025 was $87.9 million, compared to $76.5 million in Q1 2024[137] Assets and Liabilities - Cash and cash equivalents at the end of Q1 2025 were $1,123,267,000, up from $1,051,237,000 at the end of 2024[13] - Total assets increased to $3,503,142,000 as of March 31, 2025, compared to $3,407,623,000 at the end of 2024[13] - Itron's total liabilities decreased to $1,994,063,000 as of March 31, 2025, down from $1,996,195,000 at the end of 2024[13] - Total debt as of March 31, 2025, stands at $1,265,000,000, with a current portion of $457,747,000 and long-term debt of $786,137,000[43] - The company remains in compliance with debt covenants under the 2018 credit facility as of March 31, 2025[45] Revenue Segments - Product revenues in the Device Solutions segment were $125,387,000 for Q1 2025, compared to $125,908,000 in Q1 2024, indicating a decrease of 0.41%[113] - The Networked Solutions segment generated revenues of $402,732,000 in Q1 2025, up from $381,305,000 in Q1 2024, reflecting an increase of 5.8%[113] - The Outcomes segment reported revenues of $78,548,000 in Q1 2025, compared to $69,174,000 in Q1 2024, representing a growth of 13.6%[113] Expenses - Research and development expenses for the consolidated company in Q1 2025 were $42,224,000, compared to $43,600,000 in Q1 2024, a decrease of 3.16%[113] - Total stock-based compensation expense for the three months ended March 31, 2025, was $17,257,000, up from $12,878,000 in 2024, representing a year-over-year increase of approximately 33.5%[68] - Operating expenses decreased by $1.6 million, or 1%, compared to Q1 2024[137] Cash Flow and Backlog - Free cash flow for Q1 2025 was $67.478 million, a 97.6% increase from $34.163 million in Q1 2024, driven by higher operating cash flow and reduced capital expenditures[173] - Total backlog reached $4.7 billion as of March 31, 2025, compared to $4.3 billion a year earlier[137] - Twelve-month backlog was $1.6 billion at March 31, 2025, down from $1.9 billion at March 31, 2024[137] Tax and Compliance - The company’s tax rate for the three months ended March 31, 2025, was 21%, consistent with the federal statutory rate of 21%[73] - The income tax provision for the three months ended March 31, 2025, was $16.929 million, compared to $13.429 million in 2024, maintaining a tax rate of 21%[151] Stock and Shareholder Activities - The company authorized a stock repurchase program of up to $100 million effective September 19, 2024, with no shares repurchased under this program as of the reporting date[93] - The company completed the repurchase of 971,534 shares under the 2023 Stock Repurchase Program for a total of $100 million at an average price of $102.93 per share in June 2024[94] Restructuring and Future Plans - Total expected restructuring costs for the 2023 Projects were $51,256,000, with costs recognized during the three months ended March 31, 2025, amounting to $50,174,000, reflecting a slight increase of 2.2%[87] - The company’s restructuring activities are expected to optimize global supply chain and manufacturing operations, with projects substantially complete as of March 31, 2025[86] Risk Management - The company is focused on risk management strategies to hedge against foreign currency and interest rate risks, using derivative financial instruments[204] - As of March 31, 2025, the company had no outstanding variable rate debt, mitigating interest rate risk[205] - The company entered into 32 foreign exchange forward contracts to manage currency exposure, with notional amounts ranging from $112,486 thousand to $23.5 million[207]

Core Insights - Itron has achieved a significant milestone with the shipment of its 3 millionth Intelis gas meter, received by Peoples Natural Gas, the largest natural gas distribution company in Pennsylvania [1][2]. Company Overview - Itron is a global leader in energy, water, smart city, IIoT, and intelligent infrastructure services, focusing on building innovative systems and creating efficiencies for utilities and cities [3]. Product Features - The Intelis gas meter includes advanced safety features such as automatic valve closure during high pressure, high flow, or high temperature events, enhancing safety for users [5]. - It offers remote shut-off capabilities for safety events, move-outs, or line maintenance, improving operational efficiency [5]. - The meter supports both Automated Meter Reading (AMR) and Advanced Metering Infrastructure (AMI), allowing utilities to transition at their own pace [5]. - Itron provides advanced software for monitoring safety events and alarms generated by the Intelis gas meters, offering real-time visibility for gas distribution management [5]. - The Intelis gas meter is noted as the lightest residential gas meter in North America, weighing 4.35 pounds, which aids in installation and reduces carbon emissions [5]. Strategic Partnership - Peoples Natural Gas has been collaborating with Itron for nearly 30 years, emphasizing the importance of the Intelis gas meters in improving customer service and safety [2].

Core Insights - Itron reported revenue of $607.15 million for the quarter ended March 2025, reflecting a year-over-year increase of 0.6% and an EPS of $1.52, up from $1.24 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $614.27 million by 1.16%, while the EPS exceeded the consensus estimate of $1.30 by 16.92% [1] Revenue Breakdown - Revenue from Networked Solutions was $402.73 million, below the average estimate of $416.08 million, representing a year-over-year decline of 1.2% [4] - Revenue from Outcomes reached $78.55 million, slightly below the average estimate of $79.19 million, but showed a year-over-year increase of 13.6% [4] - Revenue from Device Solutions was $125.87 million, exceeding the average estimate of $119.66 million, with a year-over-year decrease of 0.7% [4] - Total Product Revenue was reported at $523.14 million, compared to the average estimate of $536.93 million [4] Service Revenue Insights - Service Revenue from Device Solutions was $0.48 million, significantly below the average estimate of $1.25 million [4] - Service Revenue from Networked Solutions was $28.21 million, surpassing the average estimate of $25.48 million [4] - Service Revenue from Outcomes was $55.32 million, exceeding the average estimate of $50.30 million [4] - Total Service Revenue was $84.01 million, above the average estimate of $77.03 million [4] Product Revenue Details - Product Revenue from Networked Solutions was $374.52 million, below the average estimate of $391.22 million [4] - Product Revenue from Device Solutions was $125.39 million, exceeding the average estimate of $117.60 million [4] - Product Revenue from Outcomes was $23.23 million, below the average estimate of $28.11 million [4] Profitability Metrics - Gross Profit from Device Solutions was $37.75 million, significantly higher than the average estimate of $31.19 million [4] Stock Performance - Itron's shares have returned +3.7% over the past month, outperforming the Zacks S&P 500 composite, which declined by -0.7% [3] - The stock currently holds a Zacks Rank 2 (Buy), indicating potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $607 million, a 1% increase year over year, with adjusted EBITDA of $88 million and non-GAAP earnings per share of $1.52, reflecting a 22% increase from the previous year [6][13][14] - Free cash flow improved to $67 million compared to $34 million in the prior year, driven by operational earnings growth and improved working capital [15] Business Line Data and Key Metrics Changes - Device Solutions revenue decreased by 1% year over year to $126 million, but increased by 2% on a constant currency basis, with gross margin at 30% and operating margin at 24.2% [15][17] - Network Solutions revenue was $403 million, with a gross margin of 36.9% and operating margin of 28.8%, showing a slight decrease in gross margin due to product mix [17] - Outcomes revenue grew by 14% year over year to $79 million, with gross margin at 39.2% and operating margin at 18.2%, benefiting from a higher margin revenue mix [18] Market Data and Key Metrics Changes - Bookings for the quarter were in line with expectations, resulting in a book-to-bill ratio of 0.9, with a backlog of $4.7 billion, primarily driven by Network Solutions and Outcomes segments [8][9] Company Strategy and Development Direction - The company is focused on optimizing its factory footprint, strengthening supply chain resilience, and growing recurring revenue to capitalize on future opportunities [20] - Itron aims to enhance its industry leadership through innovative solutions that address environmental, operational, and consumer challenges faced by utilities and cities [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased macroeconomic and trade policy uncertainty but expressed confidence in the company's strategic focus and operational execution [20] - The company expects Q2 revenue to be in the range of $605 million to $615 million, with non-GAAP earnings per share anticipated to grow approximately 12% year over year [19] Other Important Information - The estimated EBITDA impact from tariffs for the year is approximately $15 million, with the majority of the impact expected in the latter half of the year [11][62] - The company has a strong liquidity position, with total debt at $1.265 billion and cash and equivalents at $1.1 billion [14] Q&A Session Summary Question: Impact of tariffs on guidance - Management indicated it is premature to update full-year guidance but noted strong Q1 performance and a positive outlook for Q2 [25][26] Question: Device Solutions segment margins - Management expressed satisfaction with the current margins but noted variability due to seasonal factors and product mix [28][29] Question: Backlog and coverage for the year - Management stated that the demand environment remains strong and the outlook is positive, despite potential macroeconomic uncertainties [32][33] Question: Regulatory environment for software capitalization - Management highlighted that the regulatory environment is constructive, with various mechanisms allowing software purchases to be included in rate bases [39] Question: Tariff mitigation efforts - Management clarified that the $15 million estimate includes mitigation measures and is based on current tariff protocols [43][62] Question: M&A and capital deployment - The company is actively seeking acquisitions to enhance software content and drive growth, prioritizing this over share buybacks [71] Question: Recurring revenue mix in Outcomes - Management reported approximately 70% recurring revenue in Q1, with a goal of reaching 80% in the future [76]

Core Insights - Itron reported quarterly earnings of $1.52 per share, exceeding the Zacks Consensus Estimate of $1.30 per share, and showing an increase from $1.24 per share a year ago, resulting in an earnings surprise of 16.92% [1] - The company posted revenues of $607.15 million for the quarter, slightly missing the Zacks Consensus Estimate by 1.16%, but showing a year-over-year increase from $603.44 million [2] - Itron has surpassed consensus EPS estimates in all four of the last quarters and has topped revenue estimates three times during the same period [2] Earnings Outlook - The future performance of Itron's stock will largely depend on management's commentary during the earnings call and the sustainability of its immediate price movement based on the latest earnings numbers and future expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.27, with expected revenues of $602.19 million, and for the current fiscal year, the EPS estimate is $5.40 on revenues of $2.46 billion [7] Industry Context - Itron operates within the Zacks Electronics - Testing Equipment industry, which is currently ranked in the top 38% of over 250 Zacks industries, indicating a favorable industry outlook [8] - Historical data suggests that the top 50% of Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1, which could positively influence Itron's stock performance [8]

Financial Performance - Revenue reached $607 million, a 1% increase year-over-year[4, 9] - Adjusted EBITDA was $88 million[4] - Non-GAAP diluted EPS stood at $1.52[4] - Free cash flow amounted to $67 million[4] - Gross margin increased by 180 bps to 35.8%[9] - Non-GAAP operating margin increased by 200 bps to 13.2%[10] Bookings and Backlog - Q1 2025 bookings totaled $530 million[8] - The book-to-bill ratio was 0.9[8] - Ending backlog reached $4.7 billion[8] Segment Performance - Outcomes segment revenue increased by 14%[26, 28]

Financial Data and Key Metrics Changes - Revenue for the first quarter was $607 million, a 1% increase year over year, with adjusted EBITDA of $88 million and non-GAAP earnings per share of $1.52 [5][12] - Free cash flow improved to $67 million from $34 million a year ago, reflecting strong operational earnings growth [14] - GAAP net income was $65 million or $1.42 per diluted share, compared to $52 million or $1.12 per share in the prior year [13] Business Segment Data and Key Metrics Changes - Device Solutions revenue decreased by 1% year over year to $126 million, but increased by 2% on a constant currency basis, with gross margin at 30% and operating margin at 24.2% [14][16] - Network Solutions revenue was $403 million, with a gross margin of 36.9% and operating margin of 28.8%, showing a slight decrease in gross margin due to product mix [16] - Outcomes revenue grew by 14% year over year to $79 million, with gross margin at 39.2% and operating margin at 18.2% [17] Market Data and Key Metrics Changes - Bookings for the quarter resulted in a book-to-bill ratio of 0.9, with a backlog of $4.7 billion, remaining near record levels [6][7] - Customer demand is driven by the adoption of Itron's Great Edge Intelligence platform, enhancing distribution capacity and infrastructure agility [5][6] Company Strategy and Development Direction - The company is focused on optimizing its factory footprint, strengthening supply chain resilience, and growing recurring revenue to capitalize on future opportunities [19][20] - Itron aims to maintain its industry leadership through the deployment of innovative solutions, positioning itself as a partner of choice for utilities and cities [19][20] Management's Comments on Operating Environment and Future Outlook - Management acknowledged increased macroeconomic and trade policy uncertainty but expressed confidence in navigating near-term challenges [19] - The company expects Q2 revenue to be in the range of $605 million to $615 million, with non-GAAP earnings per share anticipated to grow approximately 12% year over year [18] Other Important Information - The estimated EBITDA impact from tariffs for the year is approximately $15 million, net of mitigation measures [10][42] - The regulatory environment remains constructive for customers, with various mechanisms allowing software purchases to be included in rate bases [38] Q&A Session Summary Question: Impact of tariffs on full year guidance - Management stated it is premature to update full year guidance but noted strong performance in Q1 and expectations for Q2 [24][26] Question: Device Solutions segment margins - Management expressed satisfaction with current margins but indicated variability may occur due to seasonal factors [28][29] Question: Twelve-month backlog removal - Management clarified that the removal was to avoid confusion and stated that the demand environment remains positive [32][33] Question: Regulatory environment for software capitalization - Management noted that the regulatory environment is supportive, with various mechanisms in place for software purchases [36][38] Question: Tariff mitigation efforts - Management explained that the $15 million estimate includes current tariffs and mitigation measures, with most impacts expected in the latter half of the year [62] Question: M&A activity and capital deployment - The priority remains finding acquisitions that enhance software content, with ongoing activity in the M&A space [71][72] Question: Recurring revenue mix in Outcomes segment - Management reported approximately 70% recurring revenue in Q1, with a goal of reaching closer to 80% in the future [75]

Revenue Performance - Total first quarter revenue increased by 1% to $607 million, including a catch-up of previously constrained revenue from Q1 2024[3] - Device Solutions revenue decreased by 1%, while Networked Solutions revenue also decreased by 1% due to timing of shipments and project deployments[4] - Outcomes revenue increased by 14%, driven by higher recurring revenue and software licenses[4] Profitability Metrics - Gross margin improved to 35.8%, an increase of 180 basis points from the prior year, attributed to product mix and operational efficiencies[5] - GAAP operating income rose to $76 million, a $13 million increase from the prior year, due to higher gross profit and lower operating expenses[6] - Net income attributable to Itron, Inc. was $65 million, or $1.42 per diluted share, reflecting a $14 million increase compared to the previous year[7] - Non-GAAP operating income rose to $80,269 in Q1 2025, up from $67,325 in Q1 2024, reflecting a growth of 19.3%[42] - GAAP net income attributable to Itron, Inc. increased to $65,474 from $51,721, representing a growth of 26.5%[44] - Adjusted EBITDA rose to $87,931, up from $76,480, reflecting an increase of 15.5%[44] Cash Flow and Liquidity - Free cash flow increased to $67 million, up $33 million from the prior year, primarily due to higher earnings and interest income[10] - Net cash provided by operating activities was $72,117 in Q1 2025, up from $41,308 in Q1 2024, indicating a growth of 74.7%[29] - Free Cash Flow improved significantly to $67,478 compared to $34,163, marking an increase of 97.5%[44] - Cash and cash equivalents at the end of Q1 2025 were $1,123,267, significantly up from $300,606 at the end of Q1 2024[29] Balance Sheet Highlights - Total assets increased to $3,503,142 in Q1 2025, compared to $3,407,623 in Q1 2024, marking a growth of 2.8%[26] - Total liabilities decreased slightly to $1,994,063 in Q1 2025 from $1,996,195 in Q1 2024[26] - The total equity of Itron, Inc. increased to $1,509,079 in Q1 2025 from $1,411,428 in Q1 2024, showing a growth of 6.9%[26] Future Outlook - The outlook for Q2 2025 includes expected revenue between $605 million and $615 million, and non-GAAP diluted EPS between $1.30 and $1.40[15] Operational Changes - Interest income decreased to $(11,710) from $(3,846), showing a decline of 204.5%[44] - Interest expense increased to $5,593 from $1,893, which is an increase of 195.5%[44] - Income tax provision rose to $16,929 from $13,429, reflecting an increase of 25.5%[44] - Depreciation and amortization slightly decreased to $12,068 from $12,744, a decline of 5.3%[44] - Restructuring costs changed from $198 to $(553), indicating a shift in strategy[44] - Acquisition and integration costs decreased to $51 from $318, showing a reduction of 83.9%[44] Customer Demand and Market Position - Itron's leadership in grid edge intelligence solutions continues to drive customer demand for new technologies[2] Backlog and Bookings - Total backlog at the end of the quarter was $4.7 billion, compared to $4.3 billion in the prior year, with bookings totaling $530 million[11] Quarterly Comparison - Net income for Q1 2025 was $65,350, an increase of 26.2% compared to $51,787 in Q1 2024[28] - Non-GAAP diluted EPS increased to $1.52 in Q1 2025, compared to $1.24 in Q1 2024, representing a growth of 22.6%[42] - Non-GAAP operating expenses decreased to $136,950 in Q1 2025 from $138,054 in Q1 2024, a reduction of 0.8%[42] - The company reported an increase in unearned revenue to $187,812 in Q1 2025, compared to $150,720 in Q1 2024, reflecting a growth of 24.6%[26]