Itron(US:ITRI)2025-10-30 15:59Financial 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]