Badger Meter's Q2 Earnings Miss Estimates, Revenues Beat, Stock Down

Core Insights - Badger Meter, Inc. (BMI) reported Q2 2025 EPS of $1.17, missing the Zacks Consensus Estimate by 3.3%, but up from $1.12 in the same quarter last year [1] - Quarterly net sales reached $238.1 million, a 10% increase from $216.7 million year-over-year, driven by higher utility water sales and contributions from the SmartCover acquisition [1] Segment Performance - Utility water sales increased by 11% year-over-year, supported by the adoption of digital smart water technologies and higher demand for metering solutions [4] - Flow instrumentation sales remained flat year-over-year, with slight growth in water-related markets offset by reduced demand in non-water-related applications [5] Financial Performance - Gross profit rose to $97.8 million from $85.4 million in the prior year, with a gross margin of 41.1%, up 170 basis points year-over-year [6] - Operating earnings increased by 8% year-over-year to $44.9 million, while operating margin slightly declined to 18.8% [7] Cash Flow & Liquidity - Cash from operations grew to $44.6 million from $36.4 million a year ago, with cash and cash equivalents at $165.2 million as of June 30, 2025 [11] Management Commentary - Management noted strong demand for its cellular AMI solution and BlueEdge portfolio, despite macroeconomic challenges [2] - The integration of SmartCover is expected to reveal new market opportunities [2] Outlook - The company anticipates high single-digit revenue growth in the long term, supported by strong industry fundamentals and sustained customer demand [12]