Core Insights - Badger Meter, Inc. (BMI) reported Q3 2025 EPS of $1.19, exceeding the Zacks Consensus Estimate by 7.2% and up from $1.08 in the same quarter last year [1][7] - Quarterly net sales reached $235.7 million, a 13.1% increase from $208.4 million year-over-year, driven by higher utility water sales [1][7] - The company maintains a positive outlook on long-term growth, supported by strong demand for its smart water management solutions and a robust opportunity pipeline [2][11] Financial Performance - Gross profit for the quarter was $95.8 million, up from $83.9 million year-over-year, with a gross margin of 40.7%, an increase of 50 basis points [5][7] - Operating earnings increased by 13% year-over-year to $46.1 million, while operating margin slightly declined to 19.6% [8] - Selling, engineering, and administration (SEA) expenses rose 11.8% year-over-year to $49.8 million, primarily due to the addition of SmartCover [9] Segmental Performance - Utility water sales grew by 14% year-over-year, with an 8% increase even when excluding SmartCover, driven by higher ultrasonic meter volumes and increased BEACON Software-as-a-Service sales [4] - Flow instrumentation sales increased by 4% year-over-year, supported by strength in water-related markets [4] Cash Flow & Liquidity - In Q3 2025, Badger Meter generated $51.3 million in net cash from operating activities, compared to $45.1 million a year ago [10] - As of September 30, 2025, the company had $201.7 million in cash and cash equivalents, up from $165.2 million as of June 30, 2025 [10] Strategic Outlook - The company expects to achieve an average high single-digit top-line growth rate over the next five years, driven by technology adoption and strategic pricing initiatives [11] - With a raised normalized gross margin range of 39%–42%, the company is well-positioned to invest in innovation and pursue value-creating acquisitions [12]