Core Viewpoint - Badger Meter's recent earnings report showed a mixed performance, with earnings per share missing estimates but net sales increasing year over year, indicating potential growth despite challenges in the market [2][10]. Financial Performance - Badger Meter reported Q2 2025 earnings per share (EPS) of $1.17, missing the Zacks Consensus Estimate by 3.3%, but up from $1.12 in the same quarter last year [2]. - Quarterly net sales reached $238.1 million, a 10% increase from $216.7 million in the prior year, driven by higher utility water sales and contributions from the SmartCover acquisition [2]. - Gross profit was $97.8 million, up from $85.4 million year over year, with a gross margin of 41.1%, reflecting a 170 basis point improvement [6]. - Operating earnings increased by 8% year over year to $44.9 million, while operating margin slightly declined to 18.8% from 19.2% [7]. Segmental Performance - Utility water sales rose 11% year over year, supported by the adoption of digital smart water technologies, with organic utility water sales up 6% excluding SmartCover [4]. - Flow instrumentation sales remained flat year over year, as growth in water-related markets was offset by reduced demand in non-water-related applications [5]. Cost and Expenses - Selling, general and administrative (SGA) expenses increased by 20.7% year over year to $52.9 million, primarily due to the SmartCover acquisition [8]. - Without the SmartCover impact, SGA expenses rose by 8%, driven by higher personnel costs and deferred compensation expenses [8]. Cash Flow and Liquidity - In Q2 2025, Badger Meter generated $44.6 million in net cash from operating activities, compared to $36.4 million a year ago [9]. - As of June 30, 2025, the company had $165.2 million in cash and cash equivalents, with total current liabilities of $138.7 million [9]. Outlook - The company is optimistic about achieving high single-digit revenue growth in the long term, supported by strong industry fundamentals and sustained customer demand [10]. - However, estimates have been trending downward, with a consensus estimate shift of -8.68%, leading to a Zacks Rank of 5 (Strong Sell) [11][13].