Financial Data and Key Metrics Changes - The company reported revenue of $607 million for Q2 2025, slightly lower than the previous year due to constrained revenue catch-up [11] - Adjusted EBITDA reached $90 million, marking a 16% year-over-year increase [12] - Non-GAAP earnings per share (EPS) increased to $1.62, up from $1.21 a year ago, reflecting strong operational performance [12] - Free cash flow was a record $91 million, compared to $45 million in the prior year [12] Business Segment Data and Key Metrics Changes - Device Solutions revenue decreased by 8% year-over-year, primarily due to a decline in legacy electric product sales, partially offset by growth in water [13] - Network Solutions revenue decreased by 1% year-over-year, mainly due to the non-recurrence of revenue catch-up from the previous year [13] - Outcomes revenue increased by 9% year-over-year, driven by growth in recurring revenue and software licenses [13] Market Data and Key Metrics Changes - The company shipped over 15.3 million distributed intelligence endpoints by the end of Q2, up from 14.4 million at the end of Q1 [7] - The long-term market outlook remains positive, driven by rising electricity demand and a focus on efficiency and safety, despite short-term project delays [8] Company Strategy and Development Direction - The company is focused on expanding its differentiated Outcomes segment and maintaining market leadership in agile distribution infrastructure [7] - Itron is actively pursuing mergers and acquisitions, particularly in software services, to enhance its portfolio [48] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic and trade policy uncertainties affecting project deployments and decision-making [8] - The full-year revenue outlook midpoint was lowered by approximately 3%, while the EPS outlook midpoint was raised by 13% due to growing customer demand for high-value solutions [8][20] - Management remains confident in the long-term market growth despite short-term challenges [22] Other Important Information - Total debt stood at $1.265 billion, with net debt at $41 million as of June 30 [17] - The company anticipates Q3 revenue between $570 million to $585 million, reflecting a 6% decrease compared to the previous year [18] Q&A Session Summary Question: Margin outlook and factors affecting it - Management indicated that the EBITDA margin is higher than expected due to structural changes in the device business, which improved margins [26][28] Question: Near-term revenue outlook and backlog - Management clarified that the slowdown is more related to backlog deployment rather than book and ship business, with no project cancellations [31][32] Question: Regulatory approval pace and its impact - Management noted that the pace of regulatory approvals is normal, with some projects experiencing delays due to sequencing and labor constraints [38][43] Question: M&A strategy in light of regulatory changes - Management confirmed that the regulatory environment has not changed their M&A strategy, remaining active in seeking accretive acquisitions [48] Question: Earnings growth versus revenue growth - Management expects growth in earnings year-over-year, but the trajectory will depend on the timing of bookings in the second half of the year [51] Question: Complexity of projects and regulatory pushback - Management stated that the complexity of projects is not a significant factor in delays, as regulators focus on balancing consumer costs with utility needs [56][58] Question: European market opportunities - Management expressed optimism about the European market, noting increased interest in edge intelligence solutions [64][66] Question: Aspirational sales targets for 2027 - Management confirmed that there is no change to the 2027 sales targets despite near-term uncertainties [70]

Financial Data and Key Metrics Changes - Itron reported second quarter revenue of $607 million, adjusted EBITDA of $90 million, non-GAAP earnings per share of $1.62, and free cash flow of $91 million, achieving earnings above expectations despite macroeconomic uncertainties [5][11][12] - Gross margin reached an all-time quarterly record of 36.9%, an increase of 230 basis points year-over-year, driven by a favorable product mix [11][12] - Non-GAAP operating income was $82 million, a 19% increase year-over-year, while adjusted EBITDA increased 16% year-over-year [12] Business Segment Data and Key Metrics Changes - Device Solutions revenue decreased by 8% on a constant currency basis, primarily due to a decline in legacy electric product sales, partially offset by growth in water [13] - Network Solutions revenue decreased by 1% year-over-year, attributed to the non-recurrence of revenue catch-up from the previous year [13] - Outcomes revenue increased by 9% year-over-year, driven by growth in recurring revenue and software licenses [13][15] Market Data and Key Metrics Changes - Second quarter bookings totaled $454 million, primarily driven by Network Solutions and Outcomes segments, with expectations for annual bookings to be weighted towards the second half of the year [9] - The company anticipates a full-year revenue range of $2.35 billion to $2.4 billion, reflecting a 3% decline from initial guidance [18] Company Strategy and Development Direction - Itron's strategy focuses on expanding customer infrastructure and enhancing margins, with a strong emphasis on high-value solutions [6][21] - The company is actively pursuing mergers and acquisitions, particularly in software services, to enhance its portfolio [48] Management's Comments on Operating Environment and Future Outlook - Management noted that while the long-term market outlook remains positive, short-term project deployments are slowing due to complex customer and regulatory environments [7][20] - The company is adjusting its full-year revenue outlook midpoint down by approximately 3%, while increasing its EPS outlook midpoint by 13% [7][19] Other Important Information - Total debt stood at $1.265 billion, with net leverage at 0.1 times and cash and equivalents at $1.2 billion as of June 30 [16] - The company is experiencing a push towards higher-margin solutions, particularly in grid efficiency and reliability [31] Q&A Session Summary Question: Insights on margin expectations - Management indicated that the EBITDA margin is higher than expected due to structural changes in the device business, which have improved margins [25][26] Question: Near-term revenue outlook - The slowdown is attributed more to backlog delays rather than book and ship issues, with customers facing constraints in project sequencing and capital budgets [30][31] Question: Regulatory approval timelines - The pace of regulatory approvals is normal, with some projects experiencing delays due to sequencing issues [39][44] Question: M&A strategy amidst regulatory changes - The regulatory environment has not altered the company's M&A strategy, which remains focused on acquiring software services that enhance the portfolio [48] Question: Future revenue growth expectations - Management expects growth year-over-year for 2026, contingent on the trajectory of bookings in the second half of the year [52] Question: Complexity of projects affecting regulatory approvals - The complexity of projects is not a significant factor; regulators are primarily focused on balancing consumer costs with utility needs [58][60]