Itron(US:ITRI)2022-05-02 17:26Financial Data and Key Metrics Changes - Revenue for Q1 2022 was $475 million, a decline of 9% year-over-year or 6% in constant currency, primarily due to supply shortages [15][24] - Adjusted EBITDA was $19 million, and non-GAAP earnings per share was $0.11, down from $0.52 in the prior year [7][18] - Gross margin for the quarter was 28.4%, a decrease of 380 basis points compared to the previous year, attributed to higher component costs and manufacturing inefficiencies [15][21] Business Line Data and Key Metrics Changes - Device Solutions revenue was $140 million, a decline of 14% year-over-year in constant currency, impacted by component shortages and the exit from certain product lines [16][20] - Network Solutions revenue was $279 million, a decrease of 3% year-over-year in constant currency, due to component shortages but partially offset by new deployments [17][21] - Outcomes revenue was $57 million, a 1% decrease in constant currency, primarily due to lower product and software license sales in EMEA [17][22] Market Data and Key Metrics Changes - Total backlog remains near record levels at approximately $3.9 billion, with a 12-month backlog growing to a new record of approximately $1.6 billion [8][9] - The company estimates that semiconductor supply constraints limited revenue by over $100 million in Q1, mainly affecting the network solutions segment [12][24] Company Strategy and Development Direction - The company is focusing on moving towards higher valued networks and outcome-centric solutions while optimizing its manufacturing footprint to an asset-light model [10] - Itron aims to help utilities address aging infrastructure and prepare for the proliferation of electric vehicles and renewable energy sources [11] Management's Comments on Operating Environment and Future Outlook - Management anticipates that semiconductor supply constraints and inflationary pressures will continue to impact operations well into 2022 [12][24] - Despite current challenges, management remains optimistic about future demand for solutions and the company's strategic direction [26][24] Other Important Information - Free cash flow was $2 million in Q1, down from $39 million in the same period last year, primarily due to higher variable compensation payments [23] - The company plans to publish its 2021 ESG report soon, highlighting progress in ESG initiatives and new greenhouse gas reduction targets [26] Q&A Session Summary Question: Update on 2022 guidance - Management stated that they typically provide full-year guidance in February and update it mid-year in August, hence no interim guidance was given [31] Question: Operating environment compared to last quarter - Management noted that supply constraints are still present, with semiconductor availability being a gating factor for revenue [32] Question: Impact of Ukraine-Russia situation on operations - Direct revenue impact from Russia and Ukraine is minimal, but macroeconomic pressures in Europe could slow down operations [40] Question: Pricing actions and backlog - Pricing actions are being implemented across new contracts and backlog discussions, but not all backlog has been repriced yet [44][45] Question: Domestic market outlook - The U.S. market remains healthy with significant interest in second-generation AMI deals and distribution automation [72]