Company Overview - Badger Meter specializes in flow measurement and analytics solutions for water utilities and industrial clients globally, with a revenue growth of 13% in the third quarter [1][10] - The company provides a range of products including mechanical and static water meters, radio and software technologies, and flow instrumentation [4][6] - Badger Meter's revenue is primarily generated from proprietary hardware, software, and cloud-based analytics, with opportunities for recurring service and technology upgrades [4][6] Financial Performance - As of November 25, 2025, Badger Meter's stock price was $182.60, reflecting a 16.5% decline over the past year, underperforming the S&P 500 by 30.1 percentage points [3] - The company's market capitalization stands at $5.3 billion, with a trailing twelve months (TTM) revenue of $901.11 million and a net income of $138.8 million [3] Recent Developments - Badger Meter's stock experienced a significant drop in July due to disappointing second-quarter results, and it has not fully recovered despite strong third-quarter performance [9][10] - The company announced an 18% increase in its annual dividend rate, indicating confidence in its financial health [10] - CEO Kenneth C. Bockhorst highlighted strong demand for the company's cellular AMI and BlueEdge™ smart water management solutions, despite facing macroeconomic and policy challenges [10] Market Position - Badger Meter is recognized as a leading provider of flow measurement and control technologies, leveraging its proprietary hardware and cloud-based analytics to support efficient resource management for water utilities and industrial clients [6] - The company serves a diverse customer base, including municipal water utilities, industrial markets, and original equipment manufacturers both in the U.S. and internationally [5][6]

Core Viewpoint - Badger Meter's recent earnings report indicates strong performance, with earnings per share surpassing estimates and significant revenue growth, despite ongoing macroeconomic challenges [3][4][12]. Financial Performance - Badger Meter reported Q3 2025 earnings per share of $1.19, exceeding the Zacks Consensus Estimate by 7.2% and up from $1.08 in the same quarter last year [3]. - Quarterly net sales reached $235.7 million, a 13.1% increase from $208.4 million year-over-year, driven by higher utility water sales [3]. - Gross profit for the quarter was $95.8 million, up from $83.9 million in the prior-year quarter, with a gross margin of 40.7%, reflecting a 50 basis point improvement year-over-year [7]. Segmental Performance - Utility water sales increased by 14% year-over-year, with an 8% rise even when excluding SmartCover, driven by higher ultrasonic meter volumes and increased demand for BEACON Software-as-a-Service [6]. - Flow instrumentation sales grew by 4% year-over-year, supported by strength in water-related markets [6]. Cash Flow and Liquidity - The company generated $51.3 million in net cash from operating activities in Q3 2025, compared to $45.1 million a year ago [10]. - As of September 30, 2025, Badger Meter had $201.7 million in cash and cash equivalents, up from $165.2 million as of June 30, 2025 [10]. Strategic Outlook - The company is optimistic about long-term growth prospects, expecting an average high single-digit top-line growth rate over the next five years, driven by technology adoption and strategic pricing initiatives [12]. - Badger Meter has raised its normalized gross margin range to 39%–42%, positioning itself well for innovation and value-driven acquisitions [13]. Market Reaction - Following the earnings release, there has been an upward trend in fresh estimates for Badger Meter, indicating positive market sentiment [14][16]. - The stock currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [16].

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]