Core Insights - Itron, Inc. (ITRI) reported non-GAAP EPS of $1.54 for Q3 2025, exceeding the Zacks Consensus Estimate by 4.1%, but down 16.3% year-over-year [1][9] - Revenue for the quarter was $581.6 million, a decline from $615.5 million in the prior-year quarter, attributed to portfolio optimization and project timing [2][9] - The company has raised its non-GAAP EPS outlook for 2025 to a range of $6.84 to $6.94, up from previous estimates of $6.00 to $6.20 [5] Financial Performance - Revenue decreased by 5.5% year-over-year, with product revenues at $494.3 million (85% of total revenues) down 8.2%, while service revenues increased by 13.1% to $87.3 million (15%) [5][9] - Gross margin improved to 37.7%, a 360-basis point increase year-over-year, driven by a favorable product and customer mix [11] - Non-GAAP operating income reached a record high of $89 million, marking a 12.7% year-over-year increase [11] Backlog and Bookings - Itron ended the quarter with a record backlog of $4.3 billion, up from $4 billion a year ago, with third-quarter bookings of $380 million [6][9] Segment Performance - Device Solutions segment revenue fell 16% to $103.1 million, impacted by declines in legacy EMEA electricity products and lower water volumes in North America [7] - Networked Solutions revenue dipped 6% to $365.4 million, primarily due to project implementation timing [10] - Outcomes segment revenue rose 11% to $25.8 million, driven by growth in recurring revenue [10] Outlook - For Q4 2025, Itron expects revenues between $555 million and $565 million, representing a 9% decline year-over-year at the midpoint, with non-GAAP EPS anticipated in the range of $2.15 to $2.25 [14] Balance Sheet and Cash Flow - As of September 30, 2025, cash and cash equivalents totaled $1.331 billion, with net long-term debt at $787.9 million [13] - The company generated strong cash flow, with net cash from operations totaling $118 million and free cash flow of $113 million [13]

Financial Performance - Total revenues for Q3 2025 were $581.6 million, a decrease of 5.5% compared to $615.5 million in Q3 2024[9] - Product revenues decreased to $494.3 million in Q3 2025 from $538.2 million in Q3 2024, representing a decline of 8.2%[9] - Service revenues increased by 13.1% to $87.3 million in Q3 2025, up from $77.2 million in Q3 2024[9] - Gross profit for Q3 2025 was $219.5 million, an increase of 4.5% from $209.6 million in Q3 2024[9] - Operating income rose to $81.8 million in Q3 2025, compared to $73.9 million in Q3 2024, reflecting a growth of 10.5%[9] - Net income attributable to Itron, Inc. for Q3 2025 was $65.6 million, down from $78.0 million in Q3 2024, a decrease of 16.0%[9] - Comprehensive income attributable to Itron, Inc. for Q3 2025 was $62.6 million, down from $97.8 million in Q3 2024[10] - Net income for the nine months ended September 30, 2025, was $200.3 million, an increase from $182.6 million in the same period of 2024, representing a growth of 9.6%[19] - Non-GAAP net income attributable to Itron, Inc. was $71.8 million, down from $84.3 million in 2024[148] - Adjusted EBITDA for the three months ended September 30, 2025, was $97.2 million, compared to $88.6 million in 2024[148] Cash and Liquidity - Cash and cash equivalents increased to $1.3 billion as of September 30, 2025, compared to $1.1 billion at the end of 2024[15] - Cash and cash equivalents at the end of the period were $1.33 billion, up from $982.5 million at the end of September 2024, indicating a year-over-year increase of 35.5%[19] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $286.6 million, compared to $158.3 million in 2024, marking an increase of 81%[19] - Free cash flow for the nine months ended September 30, 2025 was $271.6 million, up from $137.4 million in 2024, driven by higher operating cash flow and reduced capital expenditures[205] - Principal sources of liquidity include cash flows from operations, borrowings, and the sale of common stock[207] - Working capital remains in a net favorable position, indicating strong liquidity[207] - The company expects existing cash, cash flows from operations, and access to capital markets to be sufficient for at least the next 12 months[207] Assets and Liabilities - Total assets grew to $3.71 billion as of September 30, 2025, up from $3.41 billion at the end of 2024[15] - Total liabilities remained relatively stable at $2.00 billion as of September 30, 2025, compared to $2.00 billion at the end of 2024[15] - Total equity as of September 30, 2025, was $1.71 billion, an increase from $1.37 billion at the end of September 2024, representing a growth of 24.5%[19] - Total debt remained stable at $1.265 billion as of September 30, 2025, unchanged from December 31, 2024[45] Segment Performance - Device Solutions segment generated product revenues of $103.1 million and service revenues of $0.5 million, totaling $103.6 million for the three months ended September 30, 2025[119] - Networked Solutions segment reported product revenues of $365.4 million and service revenues of $28.3 million, leading to total revenues of $393.7 million for the same period[119] - Outcomes segment achieved product revenues of $25.8 million and service revenues of $58.5 million, resulting in total revenues of $84.3 million for the three months ended September 30, 2025[119] Expenses and Costs - Total operating expenses for Q3 2025 were $137.8 million, a slight increase of 2% from $135.7 million in Q3 2024[167] - The company recorded a $4 million increase in full year tax expense due to changes in tax law effective July 4, 2025[173] - Corporate unallocated expenses for the three months ended September 30, 2025 increased by $2.8 million, or 4%, primarily due to higher sales, general and administrative expenses[196] Stock and Shareholder Information - The company reported a net stock repurchase of $896,000 during the third quarter of 2025[19] - 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[100] - Under the 2023 Stock Repurchase Program, the company repurchased 971,534 shares at an average price of $102.93 for a total of $100 million in June 2024[101] Future Outlook and Strategic Initiatives - The company plans to adopt new accounting standards effective January 1, 2025, which will impact income tax disclosures[27] - The company is evaluating the impact of new guidance on expense disaggregation disclosures effective December 31, 2027[28] - The company has not identified any significant decrease in long-term customer demand for its products and services despite ongoing global economic uncertainties[25] - The company continues to monitor global supply chain disruptions and inflationary pressures on raw materials and labor costs[25] - The company anticipates increased penetration of Outcomes applications as endpoints under management grow, enhancing strategic and operational insights[159] - The company entered into an agreement to acquire Urbint, Inc. for $325 million, expected to close in Q4 2025[149] Tax and Compliance - The effective tax rate for the three months ended September 30, 2025, was 27%, and for the nine months ended September 30, 2025, it was 22%, differing from the federal statutory rate of 21% due to various factors[80] - Approximately $14 million in discrete tax benefits were recorded in the three months ended September 30, 2024, related to the favorable resolution of a foreign tax audit[81] - Unrecognized tax benefits related to uncertain tax positions were $98.584 million as of September 30, 2025, down from $106.132 million at December 31, 2024[84] - The company anticipates that any remaining top-up tax related to OECD Pillar 2 should be immaterial in 2025[83] Other Financial Metrics - The company reported a total other comprehensive income of $47.023 million for the nine months ended September 30, 2025[107] - The total warranty expense for the three months ended September 30, 2025, was $1.975 million, compared to $1.036 million for the same period in 2024[92] - The ending balance of the warranty accrual account as of September 30, 2025, was $20.229 million, compared to $21.732 million for the same period in 2024[91]

Core Insights - Itron reported revenue of $581.63 million for Q3 2025, a year-over-year decline of 5.5%, with EPS at $1.54 compared to $1.84 a year ago, indicating a slight surprise over estimates [1] - The revenue exceeded the Zacks Consensus Estimate of $576.45 million by 0.9%, while the EPS surpassed the consensus estimate of $1.48 by 4.05% [1] Revenue Breakdown - Device Solutions revenue was $103.62 million, below the average estimate of $111.07 million, reflecting a year-over-year decline of 15.6% [4] - Networked Solutions revenue reached $393.7 million, slightly above the average estimate of $383.53 million, with a year-over-year decline of 5.5% [4] - Outcomes revenue was $84.3 million, exceeding the average estimate of $82.67 million, showing a year-over-year increase of 10.9% [4] - Total Product Revenue was $494.32 million, below the average estimate of $499.62 million, representing an 8.2% decline year-over-year [4] - Total Service Revenue was $87.3 million, surpassing the average estimate of $77.03 million, with a year-over-year increase of 13.1% [4] Performance Metrics - Itron's shares returned +12.9% over the past month, outperforming the Zacks S&P 500 composite's +3.6% change [3] - The company holds a Zacks Rank 2 (Buy), suggesting potential for outperformance in the near term [3]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $582 million, with adjusted EBITDA of $97 million and non-GAAP earnings per share of $1.54, reflecting a decrease in revenue compared to the previous year due to planned portfolio changes and project timing [4][9] - Gross margin reached a record 37.7%, up 360 basis points year over year, while GAAP net income was $66 million, down from $78 million in the prior year due to higher tax expenses [9][10] - Free cash flow was a record $113 million, representing 19.5% of revenue, compared to $59 million a year ago, attributed to improved working capital and operational earnings growth [10][13] Business Line Data and Key Metrics Changes - Device Solutions revenue decreased by 19% on a constant currency basis, primarily due to a decline in legacy electricity products in EMEA and lower water volumes in North America [11] - Network Solutions revenue decreased by 6% year over year, mainly due to the timing of project deployments [11] - Outcomes revenue increased by 10% on a constant currency basis, driven by growth in recurring revenue [11][12] Market Data and Key Metrics Changes - The total backlog at the end of Q3 was $4.3 billion, with Q3 bookings at $380 million [4][9] - The company noted that while there is a slower pace on some projects, there have been no project cancellations or declines in customer interest, although market uncertainty has increased [5][6] Company Strategy and Development Direction - The company is focused on enhancing grid performance and reliability through the adoption of grid edge technology, which is expected to drive future growth [5][17] - The recent acquisition of Urbant is expected to complement the company's portfolio and address critical infrastructure needs, with a focus on operational resilience solutions [6][8][17] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that while current dynamics may temper year-end booking expectations, the long-term growth trajectory remains unchanged [6][17] - The company anticipates Q4 revenue to be between $555 million to $565 million, representing a decline of 9% year over year, but expects non-GAAP earnings per share to increase due to favorable tax items [14][15] Other Important Information - The company has seen a 25% expansion in its opportunity pipeline since the start of the year, indicating strong market demand despite current challenges [6][17] - The company’s total debt at the end of Q3 was $1.265 billion, with cash and equivalents at $1.332 billion [13] Q&A Session Summary Question: Clarification on revenue decline and gross margins - Management indicated that the biggest weakness was in Network Solutions due to slower project deployments, but gross margins for Q4 are expected to be similar to Q3 [22][24] Question: Insights on project delays and demand environment - Management confirmed that while there are delays in hardware-oriented projects, recurring revenue bookings are strong, and the overall demand remains robust [25][28] Question: Details on Network Solutions revenue decline - The decline was attributed to the completion of major deployments and customers spreading projects over longer periods due to budget constraints [34][36] Question: Backlog and delivery times - Management noted that some projects are being extended over longer periods, but this does not indicate a loss of backlog or revenue [67][68] Question: Future growth trajectory and Urbant acquisition - Management stated it is too early to provide guidance for 2026, but growth is expected, and the Urbant acquisition is anticipated to enhance service offerings and customer engagement [50][55]

Core Insights - Itron reported quarterly earnings of $1.54 per share, exceeding the Zacks Consensus Estimate of $1.48 per share, but down from $1.84 per share a year ago, representing an earnings surprise of +4.05% [1] - The company achieved revenues of $581.63 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.90%, although this is a decline from $615.46 million year-over-year [2] - Itron has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [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 the stock's price movement based on recent earnings and future expectations [3][4] - The current consensus EPS estimate for the upcoming quarter is $1.46, with expected revenues of $583.15 million, while for the current fiscal year, the EPS estimate is $6.07 on revenues of $2.37 billion [7] Industry Context - Itron operates within the Zacks Electronics - Testing Equipment industry, which is currently ranked in the top 9% of over 250 Zacks industries, indicating a favorable industry outlook [8] - The correlation between near-term stock movements and earnings estimate revisions suggests that tracking these revisions can provide insights into stock performance [5][6]

Financial Performance - Q3 2025 - Revenue reached $582 million[4], a decrease of 5% year-over-year, or 6% in constant currency, due to portfolio optimization and project deployment timing[9] - Adjusted EBITDA was $97 million[4], representing a 10% increase year-over-year, with an adjusted EBITDA margin of 16.7%, up 230 bps[10] - Non-GAAP diluted EPS was $1.54[4], a decrease of 16% year-over-year, impacted by higher non-GAAP income tax expense[10] - Free cash flow surged to $113 million[4], a 93% increase year-over-year, driven by improved working capital, decreased tax payments, and higher earnings[10] Bookings and Backlog - Q3 2025 bookings amounted to $380 million[6], resulting in a book-to-bill ratio of 0.65[6] - The trailing twelve months (TTM) book-to-bill ratio stood at 1.15[6] - Ending backlog reached $4.3 billion[6] Segment Performance - Q3 2025 - Device Solutions revenue decreased by 16% (19% in constant currency)[21], while gross margin increased by 370 bps and operating margin increased by 240 bps[21] - Networked Solutions revenue decreased by 6%[25], but gross margin increased by 340 bps and operating margin increased by 330 bps[26, 27] - Outcomes segment revenue increased by 11% (10% in constant currency)[30], with gross margin up 390 bps and operating margin up 520 bps[31, 32] Outlook - Q4 2025 revenue is projected to be between $555 million and $565 million[37], a 9% decrease at the midpoint compared to Q4 2024[37] - Q4 2025 non-GAAP diluted EPS is expected to be between $2.15 and $2.25[37], a 63% increase at the midpoint compared to Q4 2024, including a discrete tax benefit[37] - Full-year 2025 revenue is projected to be between $2.35 billion and $2.36 billion[38], a 3% decrease at the midpoint compared to 2024[39] - Full-year 2025 non-GAAP EPS is projected to be between $6.84 and $6.94[38], a 23% increase at the midpoint compared to 2024[39]

Revenue Performance - Total revenue for Q3 2025 was $582 million, a decrease of 5% compared to $615 million in Q3 2024[3] - Total revenues for the three months ended September 30, 2025, were $581,625,000, a decrease of 5.5% compared to $615,462,000 for the same period in 2024[23] - Device Solutions product revenues decreased to $103,097,000 in Q3 2025 from $122,119,000 in Q3 2024, representing a decline of 15.6%[23] - Networked Solutions product revenues also saw a decline, falling to $365,378,000 in Q3 2025 from $390,201,000 in Q3 2024, a decrease of 6.3%[23] - The outlook for Q4 2025 includes projected revenue between $555 million and $565 million, with non-GAAP diluted EPS expected between $2.15 and $2.25[15] Profitability Metrics - GAAP net income for the quarter was $66 million, or $1.41 per diluted share, down from $78 million, or $1.70 per diluted share in 2024[7] - Non-GAAP net income was $72 million, or $1.54 per diluted share, down from $84 million, or $1.84 per diluted share in 2024[9] - GAAP operating income for Q3 2025 was $81,783,000, an increase from $73,933,000 in Q3 2024, representing a growth of about 10.5%[40] - Adjusted EBITDA for the quarter was $97 million, reflecting a 10% increase[7] - Adjusted EBITDA for Q3 2025 was $97,248,000, an increase from $88,598,000 in Q3 2024, representing a growth of approximately 7.4%[40] Cash Flow and Working Capital - Free cash flow increased to $113 million, up $55 million from the prior year, driven by improved working capital and higher earnings[10] - Net cash provided by operating activities for the nine months ended September 30, 2025, was $286,631,000, compared to $158,326,000 for the same period in 2024, showing an increase of 81.0%[28] - The company reported net cash provided by operating activities of $117,829,000 for Q3 2025, compared to $65,301,000 in Q3 2024, an increase of about 80.7%[41] - Free cash flow for the nine months ended September 30, 2025, was $271,554,000, compared to $137,448,000 for the same period in 2024, indicating a significant increase of about 97.5%[41] Balance Sheet and Backlog - Total backlog at the end of the quarter was $4.3 billion, compared to $4.0 billion in the prior year[11] - Cash and cash equivalents increased to $1,331,944,000 as of September 30, 2025, compared to $1,051,237,000 at the end of 2024, reflecting a growth of 26.7%[26] - Total current assets reached $2,144,031,000 as of September 30, 2025, up from $1,815,892,000 at the end of 2024, indicating an increase of 18.1%[26] - Total liabilities stood at $1,997,343,000 as of September 30, 2025, slightly up from $1,996,195,000 at the end of 2024[26] Strategic Initiatives - Itron announced the acquisition of Urbint, Inc. for $325 million, expected to close in Q4 2025[12] - The company’s strategic initiatives and acquisition-related expenses totaled $2,552,000 in Q3 2025, compared to $248,000 in Q3 2024, indicating a significant increase in investment in growth strategies[40]

Core Insights - Itron, Inc. reported third quarter financial results for 2025, highlighting record margins, profitability, and cash flow despite a decrease in total revenue compared to the previous year [1][2]. Financial Performance - Total revenue for the third quarter was $582 million, down from $615 million in the prior year, primarily due to portfolio optimization and project deployment timing [2]. - Device Solutions revenue decreased by 16%, or 19% in constant currency, attributed to lower legacy electricity product sales in EMEA and reduced North American water volumes [3]. - Networked Solutions revenue fell by 6% due to project deployment timing, while Outcomes revenue increased by 11%, or 10% in constant currency, driven by higher recurring revenue [3]. Profitability Metrics - Gross margin improved to 37.7%, an increase of 360 basis points from the previous year, due to favorable customer and product mix [4]. - GAAP operating income rose to $82 million, an increase of $8 million from the prior year, while non-GAAP operating income increased by $10 million to $89 million, both driven by higher gross profit [5]. Net Income and Earnings - Net income attributable to Itron, Inc. was $66 million, or $1.41 per diluted share, down from $78 million, or $1.70 per diluted share in 2024, primarily due to higher GAAP income tax expense [6]. - Non-GAAP net income was $72 million, or $1.54 per diluted share, compared to $84 million, or $1.84 per diluted share in the previous year, also impacted by higher non-GAAP income tax expense [7]. Cash Flow and Backlog - Net cash provided by operating activities was $118 million, significantly up from $65 million in the prior year, while free cash flow increased to $113 million from $59 million [8][9]. - Total backlog at the end of the quarter was $4.3 billion, compared to $4.0 billion in the prior year, with bookings totaling $380 million for the quarter [10]. Acquisition Activity - Itron announced the acquisition of Urbint, Inc. for $325 million, expected to close in the fourth quarter of 2025, which will be funded through cash on hand [11].

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Core Insights - Itron, Inc. is supporting Project Jupiter to enhance the integration of distributed energy resources (DER) in Western Australia, utilizing its Low Voltage Distributed Energy Resource Management System (LV DERMS) [1][2]. Group 1: Project Overview - Project Jupiter is a collaboration involving Western Power, Synergy, the Australian Energy Market Operator, and Energy Policy WA, aimed at integrating DERs like rooftop solar and community batteries into the South West Interconnected System (SWIS) [2]. - The project enables households and businesses to participate in virtual power plants (VPPs), facilitating the energy transition [2]. Group 2: Technology and Implementation - Synergy, the largest electricity generator in Western Australia, is implementing Itron's LV DERMS solution, which includes the IEEE 2030.5 Common Smart Inverter Profile-Australia (CSIP-Aus) utility server from Kitu Systems [3]. - The server is designed to register, monitor, and control DERs, enhancing the management of battery energy storage systems [3]. Group 3: Benefits and Future Prospects - Customers will have the option to join a VPP, allowing them to unlock greater value from their energy assets, with Itron's LV DERMS facilitating DER compliance testing [4]. - The project is seen as a significant step in defining and assuring compliance with emerging standards in the energy sector [5].