Core Insights - Badger Meter, Inc. reported record sales, profitability, and cash flow for the full year 2025, driven by sustained demand for smart water management solutions [2][11] - The acquisition of SmartCover in early 2025 expanded Badger Meter's capabilities in sewer monitoring and stormwater management, positioning the company for long-term growth [3][11] Fourth Quarter 2025 Highlights - Utility water sales increased by 9% year-over-year, or 2% excluding SmartCover, with growth driven by customer adoption of digital smart water solutions [5][9] - Operating earnings rose by 10% year-over-year to $43.0 million, with operating profit margins expanding to 19.5% [7][9] - Total sales reached $220.7 million, an 8% increase from $205.2 million in the prior year [9][10] Full Year 2025 Highlights - Record sales of $916.7 million, up 11% from $826.6 million in 2024, with base sales increasing by 6% year-over-year [9][11] - Operating earnings for the year increased by 16% to $183.4 million, with operating profit margins at 20.0% [9][11] - Diluted earnings per share (EPS) increased by 13% to $4.79, compared to $4.23 in 2024 [9][11] Strategic Initiatives - The company emphasized the importance of its BlueEdge suite of smart water management solutions, which addresses various challenges across the water cycle [12][13] - Badger Meter's selection for the Puerto Rico Aqueduct and Sewer Authority's AMI project highlights its capabilities in enhancing water system resiliency [14] Financial Performance - Gross margin improved to 42.1%, benefiting from a favorable sales mix and lower pass-through revenue [7][9] - Cash provided by operations reached $54.8 million in Q4 2025 and $183.7 million for the full year [9][11] Outlook - The company anticipates high single-digit sales growth and operating profit margin expansion over the next five years, driven by the adoption of cellular AMI solutions and international expansion opportunities [15][16]

Core Viewpoint - Badger Meter, Inc. (NYSE:BMI) is recognized as a strong investment opportunity, particularly in the smart water metering sector, with a Buy rating initiated by Jefferies and a price target of $220, indicating confidence in the company's growth despite recent slowdowns [2][3]. Group 1: Company Performance and Growth - Badger Meter has a solid track record of acquisitions, completing 14 since 2010, which has reinforced its leadership in water technology [4]. - The company recently acquired SmartCover Systems for $185 million, and management is on track to achieve expected sales and cost synergies from this acquisition [4]. - Free cash flow (FCF) margins have significantly improved from approximately 6% in 2015 to around 18% today, driven by the expansion of software-as-a-service offerings [5]. Group 2: Dividend Growth and Financial Health - Badger Meter is positioned as a dividend growth story, with a current dividend yield of about 0.9%, utilizing only 25% of its FCF for dividend payments, allowing for potential future increases [6]. - The company has a history of raising its dividend for 33 consecutive years, indicating strong financial health and commitment to returning value to shareholders [6]. Group 3: Industry Position and Innovation - With over a century of innovation in water technology, Badger Meter provides comprehensive water management solutions through its BlueEdge suite, highlighting its industry expertise [7].

Core Points - Badger Meter, Inc. declared a regular quarterly cash dividend of $0.40 per share, marking an 18% increase from the previous $0.34 per share, payable on December 5, 2025 [1][12] - The Board approved a new share repurchase authorization for up to $75 million of the Company's outstanding common stock through November 30, 2028, replacing the previous authorization [2][3] - The company has a history of returning capital to shareholders, with 33 consecutive years of dividend growth, and aims to enhance long-term shareholder value through opportunistic buybacks [4] Financial Performance - For the third quarter of 2025, Badger Meter reported total sales of $235.7 million, a 13% increase from $208.4 million in the prior year [8] - Base sales reached $224.5 million, reflecting an 8% year-over-year increase, while operating earnings rose 13% to $46.1 million [8] Business Strategy - The company emphasizes a disciplined capital allocation framework, which has historically benefited both the company and its shareholders [4] - The new share repurchase program allows for flexibility in purchasing shares based on market conditions and other factors [3]