BMI

Badger Meter (BMI) recently fell 1.84%, lagging the broader market as investors looked ahead to its upcoming earnings report. Expectations point to modest year over year gains in both earnings and revenue. The stock carries a Zacks Rank #3 Hold, and earnings estimates have seen slight upward revisions over the past month. For investors watching Badger Meter, the focus now is on whether the upcoming results align with those refreshed forecasts. At around $135.61 per share, Badger Meter has seen its short term momentum cool, with a 1 day share price return that declined 1.84%. This contrasts with a 90 day share price return of 9.45%, a year to date share price decline of 23.12%, and a 1 year total shareholder return that declined 25.01% as investors reassess earnings risks and longer term growth expectations. Scan beyond Badger Meter and compare its current setup with hand picked US industrial tech peers in the 38 power grid technology and infrastructure stocks. Bulls point to Badger Meter’s steady revenue and net income growth, while bears highlight the recent share price decline and questions around how much optimism is already in the stock. Which side does the current valuation support? Badger Meter's most followed narrative pegs fair value at $155.11, above the last close at $135.61, which puts a spotlight on the earnings and margin story behind that gap. Read the complete narrative. Read the complete narrative. Want to understand why this narrative supports a higher fair value for Badger Meter? The crux is a mix of steady revenue growth, firmer margins and a future earnings profile that leans on recurring software and data. Curious which specific growth and profitability assumptions have been baked into that outlook and how they link to the higher valuation multiple by 2029? The full narrative lays out the building blocks in detail. Result: Fair Value of $155.11 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, that upside narrative for Badger Meter still depends on smooth AMI deployment execution and no major hit to margins from higher input costs or competition. Find out about the key risks to this Badger Meter narrative. That 12.6% upside narrative leans on earnings forecasts and target prices, but Badger Meter's current P/E of 31.3x tells a different story. It sits above the US Electronic industry at 29.6x and the fair ratio estimate of 24.5x, which points to limited margin for error if growth underdelivers. For a closer look at what those earnings multiples imply if sentiment or growth expectations shift, See what the numbers say about this price — find out in our valuation breakdown. With sentiment on Badger Meter clearly mixed, it helps to look past the headlines, move quickly, and test the data yourself. To see the optimism behind the rewards that analysts are watching, check the 1 key reward. If Badger Meter has your attention, do not stop there. The right comparison set can quickly show you where risk, income, or value might look more compelling. Target resilient balance sheets and fundamentals that can better handle surprises by scanning the list of solid balance sheet and fundamentals (51 results). Hunt for potential value opportunities by checking companies that currently screen as 44 high quality undervalued stocks. Prioritise stability and income in one move by reviewing companies highlighted as 12 dividend fortresses. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include BMI. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

A month has gone by since the last earnings report for Sensata (ST). Shares have lost about 11.5% in that time frame, underperforming the S&P 500. Will the recent negative trend continue leading up to its next earnings release, or is Sensata due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent drivers for Sensata Technologies Holding N.V. before we dive into how investors and analysts have reacted as of late. Sensata Q2 Earnings Beat on Broad Growth and Productivity Gains Sensata reported second-quarter 2026 adjusted earnings of 98 cents per share, up 12.6% year over year. The figure beat the consensus estimate of 93 cents by 5.4%, supported by higher revenues and productivity gains. Revenues of $990.60 million increased 5.0% and surpassed the consensus estimate of $969.57 million by 2.2%. Organic growth was 4.4%, with all three segments expanding. On-road truck orders grew at a double-digit pace, reinforcing management’s view of a second-half recovery in North American truck builds. Operating Margin Advances on Productivity Adjusted operating income rose 8.0% year over year to $193.30 million. The adjusted operating margin expanded 50 basis points to 19.5%, reflecting stronger volumes and improved productivity. Adjusted gross profit increased 7.4% to $313.80 million, with the corresponding margin rising 70 basis points to 31.7%. Adjusted selling, general and administrative expenses climbed to $88.50 million from $80.60 million. Adjusted corporate operating expenses increased to $60.90 million from $51.10 million, mainly due to higher variable compensation tied to stronger performance. Research and development expenses declined to $31.90 million from $32.60 million. Automotive Portfolio Drives Outgrowth Automotive revenues increased 3.3% year over year to $544.80 million, while organic sales rose 1.8%. Content gains and production mix helped the segment outperform flat global vehicle production. Revenues from both internal-combustion and electric-vehicle applications outgrew production in North America and Europe. Segment operating income improved to $131.70 million from $121.10 million, lifting margin 120 basis points to 24.2%. India automotive revenues exceeded $20 million in the quarter and grew more than 40%, supported by local customer wins and the company’s localization strategy. Other Segments Deliver Organic Growth Aerospace, Defense and Commercial Equipment revenues advanced 11.5% to $233.70 million, including 10.9% organic growth. Operating income rose to $65.10 million from $51.20 million, and margin expanded 340 basis points to 27.8% on strong volume leverage. Revenue growth extended across aerospace, defense, on-road trucks and off-highway equipment. Industrials revenues grew 2.9% to $212.10 million and increased 4.2% organically, aided by share gains and stabilizing U.S. HVAC production. Operating income slipped to $57.50 million from $57.90 million, while margin contracted 100 basis points to 27.1%. Sensata invested roughly $1.50 million of incremental operating expenses in data center growth initiatives. Data Center Opportunity Expands The company secured three additional hyperscaler concept specifications in the quarter, bringing the year-to-date total to five across four major hyperscalers. Sensata was also named a preferred vetted vendor by a major hyperscaler. One specification led to an award for pressure and temperature sensors in coolant distribution units, with shipments expected to begin in the first quarter of 2027. Management expects the addressable market per megawatt to expand 1.5 to 2.5 times as data centers adopt higher-voltage architectures, liquid cooling and more on-site power generation. Revenue from related industrial components approximately doubled in the first half of 2026 from the prior-year period. Cash Generation Supports Deleveraging Net cash from operating activities increased 49.0% to $210.00 million. Free cash flow jumped 61.4% to $186.40 million, and conversion improved to 130% of adjusted net income from 91%. Working-capital initiatives reduced the cash conversion cycle by about 15 days over the past 18 months. ST used $400 million of cash to retire roughly $406 million of long-term debt. Gross debt ended the quarter at $2.46 billion, while net debt was $2.06 billion. Net leverage declined to 2.4 times trailing 12-month adjusted EBITDA from 3.0 times a year ago. Return on invested capital rose 120 basis points to 11.3%. Q3 Guidance Points to Growth For the third quarter of 2026, Sensata expects revenues of $957-$987 million, representing growth of 3-6% from $932 million a year earlier. Adjusted operating income is projected at $186-$193 million, with an adjusted operating margin of 19.4-19.6%. Adjusted earnings are forecast at 93-97 cents per share, up 4-9% from 89 cents. The outlook includes about $10 million each of tariff costs and customer pass-through revenues, leaving adjusted operating income, net income and earnings unaffected. Seasonal European automotive shutdowns are expected to weigh on sequential revenues. It turns out, fresh estimates have trended upward during the past month. Currently, Sensata has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock has a score of A on the value side, putting it in the top quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of this revision looks promising. Interestingly, Sensata has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Sensata belongs to the Zacks Instruments - Control industry. Another stock from the same industry, Badger Meter (BMI), has gained 6% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Badger Meter reported revenues of $222.32 million in the last reported quarter, representing a year-over-year change of -6.6%. EPS of $1.02 for the same period compares with $1.17 a year ago. Badger Meter is expected to post earnings of $1.21 per share for the current quarter, representing a year-over-year change of +1.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.2%. Badger Meter has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sensata Technologies Holding N.V. (ST) : Free Stock Analysis Report Badger Meter, Inc. (BMI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

It has been about a month since the last earnings report for Badger Meter (BMI). Shares have added about 4% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Badger Meter due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers. BMI Q2 Earnings Beat on Project Ramps Badger Meter reported second-quarter 2026 earnings of $1.02 per share, down 12.8% year over year but 1.0% above the $1.01 consensus. Revenues of $222.32 million fell 6.6% but beat the $221.06 million estimate by 0.6%. Sequential sales increased 10% as awarded utility projects began initial deployments and order rates improved from the first quarter. Utility water sales declined 8%, while flow instrumentation revenues rose 6% on strength in water-related markets. BMI's Utility Sales Begin To Recover Utility water sales were down 9% excluding two months of UDlive, reflecting uneven advanced metering infrastructure project pacing. However, organic utility sales improved 8% sequentially. Higher software and other BlueEdge beyond-the-meter sales partly offset lower AMI-related product revenues. Shipments started for the PRASA project, while several other awarded projects entered early deployment. Management said the nine-project cohort remains broadly solid, although implementation can vary by project and remain uneven because of customer schedules and installation timing. Badger Meter's Flow Business Adds Support Flow instrumentation sales increased 6% year over year, supported by broad demand in water-related applications. The quarter also benefited from data-center orders for clamp-on meters and MAG meters used in cooling and flow-monitoring systems. Management cautioned that the product line should still be viewed as a GDP-like, low-single-digit grower over the five-year strategic horizon. At the ACE26 trade show, customer interest also centered on ORION cellular technology, EyeOnWater Premium, the BEACON Field app and the Cobalt embedded artificial intelligence offering. BMI Protects Margins Through Cost Discipline Gross margin contracted 30 basis points to 40.8% as lower volumes and project mix weighed on profitability. The result remained within Badger Meter's normalized 39%-42% range. Operating earnings declined 12.2% to $39.38 million, while operating margin fell 110 basis points to 17.7%. Base operating earnings, which exclude UDlive, decreased 9.5% to $40.62 million, with margin down 40 basis points to 18.4%. Selling, engineering and administration expenses declined 2.9% to $51.40 million as spending controls and lower incentive compensation offset acquisition-related costs. Electronic component costs and availability remain a watch item. Badger Meter Works Down Working Capital Free cash flow fell to $21.90 million from $40.60 million a year earlier. Cash from operations was $26.71 million, while capital expenditures totaled $4.84 million. Primary working capital rose to 22.9% of sales from 20.0% at the end of the first quarter. During the quarter, BMI spent $94.38 million on acquisitions, $25.25 million on share repurchases and $11.59 million on dividends. It ended June with $95.73 million in cash and an undrawn $150 million credit facility. About $90 million remains under the repurchase authorization. BMI Adds UDlive To Broaden Water Monitoring UDlive contributed $2.03 million in sales for May and June and recorded an operating loss of $1.25 million. Its amortization expense was $0.80 million, and management expects ongoing annual intangible amortization of about $5.00 million. The acquisition expands Badger Meter's sewer-line monitoring leadership and global capabilities. Management attributed the modest initial revenue contribution to timing and said integration progress and early commercial interest were strong. UDlive also complements SmartCover within the company's broader beyond-the-meter portfolio. Badger Meter Reaffirms the 2026 Outlook Management continues to expect base quarterly revenues to improve sequentially through the remainder of 2026. Third-quarter sales are expected to rise from the second quarter, while full-year revenues excluding UDlive are projected to be flattish with 2025. Year-over-year growth is expected to be weighted toward the fourth quarter. Some awarded projects may reach full run rates by year-end, while others will not be at full run rate by then. The company also reaffirmed its five-year framework for high-single-digit sales growth, 10%-15% EPS growth and free cash flow conversion above 100% of net income. In the past month, investors have witnessed a downward trend in fresh estimates. Currently, Badger Meter has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a score of D on the value side, putting it in the bottom 40% for this investment strategy. Overall, the stock has an aggregate VGM Score of F. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Badger Meter has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Badger Meter, Inc. (BMI) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Badger Meter, Inc. BMI has a cleaner entry point after a 33.5% decline over the past year, but the second-quarter beat does not settle the investment debate. The company still has durable water-sector demand, improving sequential sales and a flexible balance sheet. The offset is lower year-over-year revenues, weaker margins, acquisition costs and a valuation that requires steady execution. Badger Meter reported second-quarter 2026 earnings of $1.02 per share, topping the Zacks Consensus Estimate of $1.01 by 1.0%. Revenues of $222.32 million beat the consensus mark of $221.06 million by 0.6%. The beat is less convincing than the headline. Earnings fell 12.8% from the prior year, while revenues declined 6.6%, making the durability of the recovery more important than modest upside versus expectations. Badger Meter, Inc. price-eps-surprise | Badger Meter, Inc. Quote Utility water sales fell 8%, or 9% excluding two months of UDlive, as advanced metering infrastructure deployments remained uneven. Flow instrumentation sales rose 6% on water-related demand. Xylem Inc. XYL gives investors broader water technology exposure across water and wastewater applications. Itron, Inc. ITRI is relevant because it serves utilities with metering, communications and infrastructure solutions. The strongest near-term positive was the 10% sequential increase in sales. Awarded utility projects began initial deployments, including PRASA and several others, while order rates improved from the first quarter. Management expects base quarterly revenues to improve sequentially through the rest of 2026. Third-quarter sales are expected to rise from the second quarter, but year-over-year growth is expected to be heavily weighted toward the fourth quarter. That timing matters. Full-year revenues excluding UDlive are still expected to be roughly flattish with 2025, and some awarded projects may not reach full run rates by year-end. A larger project cohort provides more coverage, but customer schedules, installation timing and short-cycle municipal orders can still shift quarterly performance. Image Source: Zacks Investment Research Badger Meter generated free cash flow of $21.9 million in the quarter, down from $40.6 million a year earlier. Cash from operations was $26.71 million, while capital expenditures totaled $4.84 million. The company ended June 2026 with $95.73 million in cash and an undrawn $150 million credit facility. This supports research, acquisitions, dividends and repurchases.Liquidity is not the same as accelerating cash generation. Primary working capital rose to 22.9% of sales from 20.0% at the end of the first quarter, reflecting project timing. BMI spent $94.38 million on acquisitions, $25.25 million on share repurchases and $11.59 million on dividends during the quarter. Management still targets full-year free cash flow conversion above 100% of net income. BMI trades at 28.48 times forward 12-month earnings and 19.02 times trailing 12-month enterprise value to EBITDA. Both are below the company’s five-year medians of 44.85 and 29.02, respectively. That discount to history does not make the stock inexpensive. The enterprise value to EBITDA multiple remains above the Zacks sub-industry at 9.23 times and the S&P 500 at 18.24 times. The $141 price target is based on 28.1 times forward 12-month earnings. That embeds confidence in project execution, margin discipline and profitable acquisition integration. The margin setup leaves limited room for another setback. Gross margin slipped 30 basis points to 40.8%, while operating margin fell 110 basis points to 17.7%. Electronic component costs remain pressure points. The bottom line is that Badger Meter’s pullback alone is not enough to make the stock a buy. Sequential sales improvement, early project deployments and a flexible balance sheet support the stock, but weaker year-over-year results and margin pressure keep the risk-reward balanced. A stronger case would require more consistent project shipments, margin stabilization and clearer evidence that UDlive and other acquired assets can become profitable contributors. Currently, Badger Meter has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Badger Meter, Inc. (BMI) : Free Stock Analysis Report Itron, Inc. (ITRI) : Free Stock Analysis Report Xylem Inc. (XYL) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Image source: The Motley Fool. Wednesday, Jul. 22, 2026 at 11 a.m. ET Chairman, President, and Chief Executive Officer - Ken Bockhorst Chief Financial Officer and Treasurer - Dan Weltzien Executive Vice President of North America Municipal Utility - Bob Wrocklage Operator: It is now my pleasure to turn the conference call over to Dan Weltzien, Chief Financial Officer and Treasurer. Please go ahead, Mr. Weltzien. Dan Weltzien: Good morning. Thank you for joining the Badger Meter Second Quarter 2026 Earnings Conference Call. I'm here today with Ken Bockhorst, our Chairman, President, and Chief Executive Officer, and Bob Wrocklage, our Executive Vice President of North America Municipal Utility. This morning, we posted the earnings release and related slide presentation on our website. As a quick reminder, any forward-looking statements made on this call are subject to various risks and uncertainties, the most important of which are outlined in our news release and SEC filings. On today's call, we may refer to certain non-GAAP financial metrics, including base results, which exclude the impact of UDlive, acquired May 1st, 2026. Our release and earnings presentation provide a reconciliation between the most directly comparable GAAP measure and any non-GAAP financial measures discussed. With that, I'll turn the call over to Ken. Ken Bockhorst: Thanks, Dan. Good morning. As expected, we delivered sequentially improved sales in the second quarter as a number of our previously awarded AMI projects began initial ramping of shipments. We also saw a modest increase in our short-term order rates and within flow instrumentation. Importantly, we are reaffirming our outlook for improving sequential top-line results for the balance of the year, with full year 2026 organic revenue still expected to be roughly flattish with 2025 levels. The team executed well on the margin front as we continue to manage operating cost controls as we described in detail last quarter. I'll turn the call over to Dan to walk through the specifics of the quarter. Bob will provide an update on commercial activity and collective customer feedback from our recent annual AWWA ACE trade show. I'll come back to cover the outlook and take your questions. Go ahead, Dan. Dan Weltzien: Thank you, Ken. Turning to slide three, total sales in Q2 were $222.3 million, representing a 7% decline year-over-year. Excluding the two-month benefit of UDlive sales of approximately $2 million, base sales were down 7.5% year-over-year. Importantly, base sales were 9% higher than first quarter levels, as we anticipated, with a number of awarded projects in the pipeline beginning their initial ramp in shipments. Note that we will not be providing individual project-level detail from the anonymized subset of awarded but not yet started projects list that we shared last quarter. As we mentioned during Investor Day back in May, product shipments for the PRASA project have begun. Utility water sales declined 8% year-over-year, and excluding the acquisition, were down 9%, reflecting the project pacing dynamics we have been discussing for some time. Lower AMI-related product revenue was partially offset by higher software, as well as collective beyond the meter growth. It is important to note that utility sales improved 8% sequentially on an organic basis. Sales for the flow instrumentation product line were up 6% year-over-year, as we experienced broad-based water application demand. Turning to profitability, overall, we delivered improved operating leverage versus the first quarter, the result of sequentially higher sales and the favorable impact of cost actions put into place earlier in the year. On a year-over-year basis, operating earnings declined 12%, with margins down 110 basis points to 17.7%. Base operating profit margins, excluding UDlive, were 18.4%, down 40 basis points from last year's second quarter. Gross margin was 40.8%, down 30 basis points from the second quarter of 2025, primarily reflecting lower sales volumes and project mix. Gross margins remained solidly in the upper half of our normalized range, indicative of the resiliency of our overall structural mix and pricing discipline. One item I want to call out is the increasing level of electronic component cost and availability pressures, which are a byproduct of the AI and data center build-out demand. While we have been able to adequately mitigate these impacts to date, the challenges posed by these pressures are not easing. Turning to selling, engineering, and administrative expenses, the second quarter's $51.4 million was $1.6 million lower year-over-year due to the benefit of spending controls, lower incentive compensation, and specific cost containment actions. These more than offset $1.8 million from the addition of UDlive for two months, including related intangible asset amortization, along with the final $1.2 million of transaction-related costs, which combined added approximately $3 million to year-over-year spending. For your ongoing modeling, our preliminary expectation for UDlive intangible asset amortization is approximately $5 million annually. The effective income tax rate was 25.2%, compared to 24.5% last year. Finally, diluted earnings per share were $1.02, down 13% from $1.17 in the prior year period. Primary working capital as a percentage of sales was 22.9%, up from 20.0% at the prior quarter end. The receivable increase simply relates to revenue timing, and we anticipate working down the above-average inventory levels resulting from the revenue pacing dynamics throughout the fiscal year. Free cash flow was $21.9 million, down from $40.6 million in the prior year comparable quarter, given lower earnings, the temporary increases in working capital. As always, we remain focused on delivering full-year cash flow conversion in excess of 100% of net earnings. In the second quarter of 2026, we repurchased 204,000 shares for a total of $25.3 million and have approximately $90 million remaining on our current share repurchase authorization. Over the past three quarters, we have deployed roughly $80 million in share repurchases. Finally, as noted in the release, we did finalize a five-year renewal of our $150 million credit facility in the quarter. This facility remains undrawn and provides us with ample financial flexibility under attractive terms, including its expansion feature. With that, I'll turn the call over to Bob. Bob Wrocklage: Thanks, Dan. Last month, we had the opportunity to connect with multiple customers, engineering consulting firms, and investors at ACE 2026 in Washington, D.C. For those not able to visit in person, we showcased our AMI and beyond-the-meter applications in a way that conveys our ability to deliver critical outcomes our customers are seeking across the full water cycle, from source water to wastewater treatment. From the many customer conversations, it is clear that the market remains constructive about our solutions as utilities continue to prioritize modernization, efficiency, and visibility across their water and wastewater networks. These long-term secular drivers remain intact. In fact, our meetings with consultants during the show who were looking to gain further insight into our water cycle spanning solutions were booked solid. Given the role these consultants play in the early part of the opportunity funnel, it bodes well for the long-term durability of the multi-decade transformation of the water sector and for our competitive position. Consultant and customer discussions were heavily focused on both the hardware and software components of our Network as a Service or NaaS solutions. Of particular focus were advancements to network resiliency and flexibility in communication devices such as dynamic multi-carrier SIM technology and our enhanced ORION Lens endpoint solution for metal pit lids. From a software standpoint, EyeOnWater Premium, our BEACON Field app, and of course our embedded AI functionality, Cobalt, garnered strong interest. Collective feedback reinforced our NaaS leadership position and an AMI hardware and software set that provides value to all utility stakeholders and their customers. Finally, we continued to educate utilities on stormwater and sewer line applications with the broad solution portfolios from both SmartCover and now UDlive. As Dan noted, we are starting to see early ramp activity at PRASA and several other awarded projects beginning deployment, which will continue to advance as the year progresses. I will remind you that these include both turnkey and supply-only projects, and that implementations will continue to be uneven, the result of numerous external factors inherent in the industry. With that, I'll turn the call back to Ken. Ken Bockhorst: Thanks, Bob. Looking ahead, as we noted in the release, we continue to anticipate sequential improvement in base quarterly revenue dollars as each quarter progresses, resulting in full year 2026 revenue, excluding UDlive, flat-ish with 2025. As we noted last quarter, and as Bob just reiterated, you should read that not as flat but flat-ish, with variability and unevenness in project ramping and short-term order patterns. Given the fourth quarter represents the easiest year-over-year comparison, you should expect the year-over-year base sales growth rate to be heavily weighted to Q4. As noted last quarter, we implemented certain cost reduction actions and have been maintaining spending discipline to protect margin integrity as we navigate revenue pacing throughout the year. As Dan mentioned, we are actively managing the electronics availability and cost dynamics. While we continue to navigate quarter-to-quarter factors, our confidence in the long-term outlook for the business has not wavered. To reinforce what you heard from our team at our recent Investor Day, we have multiple enduring revenue and profitability drivers underpinned by the ongoing digital transformation of the water sector, which we believe will positively drive shareholder value. These include the long-term durable growth foundation of replacement demand, which is bolstered by AMI adoption and hardware-enabled recurring software. The extension of our offerings across the full water cycle with our beyond-the-meter technologies. Leveraging core innovation excellence as well as acquisitions to continue to strengthen our competitive position. Finally, building on our disciplined execution, which we believe will extend the profitable growth runway into the future. Finally, I'd like to call out our recently published 2025 sustainability report, which highlights our progress across the key pillars of our solutions, operations, and people. It remains clear that by managing sustainability as a business process, it enables us to both provide industry-leading water solutions to grow our business while also reducing our environmental footprint. With that, Operator, please open the line for questions. Jeff Reive: Thank you. Good morning, everyone. Now that we are about at the halfway point of the year and certain projects have commenced initial deployment, how has your visibility into the second half ramp change versus 90 days ago? Are any at risk of slipping into 2027? Ken Bockhorst: Hey, Jeff. As we talked about last quarter, we fully expected as the year progressed, it would become a little more clear to us how things would play out, given how important the nine projects are to the rest of the year, and frankly, the positivity they have for the next several years. As you know, we talked about PRASA has begun, and a few of the other projects have begun. We'll always note that there can be possible unevenness, the total cohort of nine projects feels like it's pretty solid at this point. Jeff Reive: Okay. Got it. To hit that flattish organic revenue target for the year, do all of the projects need to start shipping in the back half, is there ample cushion in that guide? Ken Bockhorst: Yeah. Just keep in mind, it's not like they're all starting at the beginning of Q3, there's multiple phase-ins and pieces. It is a whole collection of we're expecting some certain positivity around these projects. We also have a robust funnel around just near-term projects that are in negotiation and other things that are not part of that. Yeah, in Q2 we had a higher daily turn rate of orders than we had in Q1. Those numbers of factors give us the confidence to remain on this flattish for the remainder of the year stance. Jeff Reive: Got it. I could just sneak in one more on UDlive. Seems like the revenues were a bit lower than I would have expected on the trailing revenue. Is that just a timing issue, maybe related to the May close, or is there anything else driving that? Ken Bockhorst: Yeah, definitely just the timing issue. As with any acquisition, particularly sometimes with small companies, you get just certain distractions and things. Yep, certainly understand that question, but not concerned at all. Jeff Reive: Great. Thank you. Quinn Fredrickson: Good morning, guys. On the short cycle portion of the business, could you put a finer point there on what you saw in the quarter, maybe in context of the $15 million-$20 million shortfall in the first quarter, how second quarter compared to what you would expect seasonally, and if there is any additional room for a short cycle recovery in the back half? Ken Bockhorst: Yeah. As we did expect, Q1 was the outlier in terms of short order cycle rates, as you called it. We would just say it was more normal-ish in Q2 and typical of the operating environment. We certainly don't intend to get into sizing every quarter. I think in Q1 it was outsized enough that we did that, just to provide some more clarity for investors to understand what happened. We're really not going to get into that from quarter-to-quarter because that portion of the business is always somewhat uneven by nature. Quinn Fredrickson: Okay. Thanks, Ken. Dan, just given your comments on electronic component costs, any additional color on how to think about price cost or gross margin in the back half? Perhaps any details you can share on your memory exposure as well would be helpful. Ken Bockhorst: Quinn, I think it's important context here. We've been here before, right? If you go back to 2021 with supply chain shocks and electronics availability and inflation. We know that the entire world is going through this isn't a Badger Meter challenge at the moment, but we are positioned to continue to manage this accordingly, to work our way through it. We wanted to call out the potential supply issues there. From a margin point of view, just like all the other puts and takes structurally, we certainly feel fine within our range, just wanted to call this out. Dan, any other color if you'd like. Dan Weltzien: Yeah, I think you hit on the two relevant points here, there really are two things that we're managing through right now. It is a cost component dynamic that we're dealing with, also availability. As Ken mentioned, we're managing through both. Quinn Fredrickson: Thank you both. James Ko: Good morning. Thanks for taking questions here. I wanted to touch on the awarded project ramp-up timeline. Looking at the historical revenue profile of the cohorts that you guys shared, it seems like deployment tends to peak like one or two years after deployment. Should we expect kind of similar dynamic for the nine kind of awarded projects that you guys shared? Bob Wrocklage: Yeah, that's a lot to unpack because just like every acquisition is different, every AMI project is different. Absolutely, you pace from this arrangement of, there's nothing in the base, and then initial implementation begins. Product shipments in a supply-only case begin or even in a turnkey solution. That is married up with the installation activity. There is a ramp concept. I don't know that you could pinpoint the average project to a particular year or time duration, because some projects will be three years in nature, some will be five. I think the curve that you're describing in terms of a ramp, a scale of deployment for a period of time, and then as projects begin to wind down, that other side of the curve begins to decline. Trying to pinpoint precisely an average project is a very difficult thing to do in this industry. James Ko: Great. Thanks for the color. I think you guys talked about other opportunities outside of just nine award projects. Can you provide more color on opportunities funnels outside of those awarded projects that you guys shared? Bob Wrocklage: I think your point is perfect because I think sometimes when you publish a list of a cohort, particularly of the scope and scale that we did, that almost implies that those are the key projects and only projects. That is absolutely not the case. That was a representative sample of projects that spanned everything from utility projects to investor-owned projects, from competitive conversions to incumbency experiences, and then a dynamic of both supply and turnkey-type projects. It's important to note, that was chosen very purposefully to illustrate those factors, but those are not the only projects. Whether we're selling direct or whether we're going through distribution, there are absolutely lots of opportunities, and sometimes those opportunities come through as turnkey or projects that we would've disclosed like that. In other cases, that's coming through that short cycle order rate that I think has now been coined as a term. Really that, in my mind, is implied to be those things that we have limited visibility to in terms of direct ordering behavior. Those are taking place all day, every day in the natural course, and as Ken indicated, that rate of activity improved versus Q1 levels or increased versus Q1 levels. That's what's happening here in Q2, and that's what we're forecasting forward in our full-year outlook of getting to flattish on an organic basis. James Ko: Great. Thanks for taking questions. Nathan Jones: Good morning, everyone. Bob Wrocklage: Good morning. Nathan Jones: I guess I'll follow up on the project ramp-ups to begin with. We've been focused on how they ramp up in the back half of the year, I guess the question is, are they at full run rate as we exit the end of the year, or is there further for them to go to hit a full run rate as we get into 2027, and you should continue to see that sequential improvement as we get into early next year just from those specific projects? Ken Bockhorst: Yeah. The one thing that, as Bob pointed out, it's hard to compare one project to another and what a ramp rate looks like and how long it goes for. I think we did provide a little bit more detail at Investor Day that showed some of the actual projects of how they flow and some of the unevenness. Some of them will be at full run rate end of year, some of them will not, but that also doesn't mean that they might slow down or speed up in any particular quarter. The main thing to think about that makes us feel good about it is that it is a large cohort as well as the other pieces going forward, and it gives us more air cover to deal with some of that unevenness than we've dealt with in the past few quarters. Nathan Jones: Okay. I guess the second question is going to be on price and costs. You talked about increasing electronics costs. I know copper's become a bit less important over the years, but it has increased significantly, so have transportation costs and all of that kind of stuff. Can you talk about where you are in terms of price cost? Are you able to pass this through to customers? Within these projects, are there contractual pass-through of increased costs, or do you have some exposure to increased costs there? Thanks for taking the questions. Bob Wrocklage: Yep. Nathan, I guess I'll take that in two parts. First, just talking about price cost dynamics, that's an ongoing discussion that we're having internally and with customers as we're looking at RFP opportunities and working with customers on pricing individual projects. We feel good about our ability to continue to recapture cost increases that we see within the market through our pricing excellence programs and really how we look at each individual opportunity. I'll also just remind you again, the biggest driver of our overall gross margins is the structural mix benefits that we continue to see. As we move from mechanical to static metering, more cellular AMI deployments, and then the beyond the meter and software solutions that come along with that, are really the main drivers toward that gross margin performance that we see over time. In terms of specifically within our contracts, we negotiate in most contracts, I'll say, the ability to pass along escalations throughout the three, four, five-year deployments that we might have. While not maybe 100% in all of our contracts, that's certainly a common term that we're negotiating with our customers. Nathan Jones: Thanks for taking the questions. Bobby Zolper: Hey, thanks for taking the question. I think I saw that you renewed your credit facility. It seemed like also relative to the pace you were repurchasing shares at the Investor Day versus the end of the quarter, that may have decelerated a little bit. Is there anything to read into that in terms of what you'll be doing with your excess capital? Does that imply that you're going to be doing more deals versus repurchasing shares? Ken Bockhorst: Bobby, it's just a continued balanced approach to our capital allocation priorities. Continuing to invest in the business and make sure that we're super focused on our R&D innovation growth runways, returning cash to shareholders, obviously dividends, and for three consecutive quarters, we've been buying shares. We still have $90 million left on the authorization. That's obviously something we've been doing recently, and we still are every bit as excited about M&A as we were. Nothing has really changed from when we saw you in May. Dan Weltzien: Bobby, I'll just add, the renewal of that credit facility was largely driven by the fact that was due to expire in July of this year. We enjoy having that financial flexibility of having that facility in place. Bobby Zolper: All right. I appreciate it. Thank you. Just in terms of swing factors to get to flattish for the year, I know there's this letter floating around about the PRASA project from, I think it's the Resident Commissioner of Puerto Rico. Since that was published in early June, has that, I guess, changed your opinion of the likelihood of the PRASA project hitting your expectations for the year? Ken Bockhorst: Yeah. Bobby, the normal disclaimer of we don't talk about legal issues and things publicly, but nothing has changed on our view on the PRASA project. It's been public that there have been several reviews over the years. It's gone to appeals courts, and it's been to other things, and nothing has changed the fact that from our view, they ran a fair and open process, and we won it. Bob Wrocklage: I think it's just important to add, while your question is very process specific, the idea of challenging a procurement process or appealing the application of a procurement process is very common to our industry. This is all government bidding, government contracting. The things that you're mentioning here are commonplace in the United States as well. Obviously, sometimes those can be more or less supercharged depending upon the political environment. The point is, this is a common thing that we deal with and anticipate in the normal course, all day, every day. Bobby Zolper: All right. I appreciate it. Thank you. Andrew Krill: Hi. Thanks. Good morning, everyone. Ken, I think in the prepared remarks, you noted 4Q organic sales, the growth would be heavily weighted to that quarter. For 3Q, can you grow organically, or is there a chance sales are still down year-over-year on that tough comp? Thanks. Ken Bockhorst: Not getting into specific quarterly guidance. I will tell you though, we do expect sequential growth again in Q3 over Q2. Not going to size up what that growth is, but I think just wanted to be pointing out the fact that obviously the comp in Q4 is easier than the comp in Q3. Just wanted to point out that the growth rate will be more heavily skewed to four than three. Andrew Krill: Okay. Fair enough. Flow instrumentation, I didn't get a ton of air time, but the growth there, very impressive, and pretty sudden. Could you unpack what drove that? Is this sustainable, or was it more one time large order? I think that can happen here. Can we extrapolate that looking forward, or does this revert back to the low single digit area that product line tends to grow at? Thanks. Ken Bockhorst: Yeah. Two things. I just want to call out again the law of small numbers. I'll point that out even when the growth rate is higher than when it's lower. We still view this product line as GDP-like in growth over the five-year strategic horizon. We've kind of downplayed in the past some of our role in what we sell into data centers. We get asked that a lot. Frankly, as a whole, it's not a big percentage of Badger Meter revenue. Within that flow instrumentation product line, we have two particular products that do well in data centers. It's our clamp-on meters that are really flexible to use and finding a lot of headway in data centers, mag meters for cooling towers and monitoring flow. We do have a couple of products that do really well there. In this particular quarter, we had some orders that came through and drove it a little higher. Since I'm talking about data centers, we also have good opportunities there within water quality. I would caution you to stick with the GDP-like low single digits growth on average. Andrew Krill: Yeah. Thank you. Scott Graham: Hey, good morning. Nice that there was a pause there, maybe that she meant to put a drum roll. Don't know. All things aside from the other questions, which were all good ones, the UDlive loss, are you saying that it includes so you're saying intangibles are $5 million for the year, so $1.25 million for a quarter, and I know less than that because it's a partial quarter. Are you saying the difference between the intangibles, and the loss is made up by these transaction costs? In other words, is the $3 million that you referred to inclusive of the $1.25 million, or is that separate? Dan Weltzien: Yeah. Scott, what we were trying to point out there in the SCA dollars in the quarter is there's two pieces. There's the $1.8 million, which is just the ongoing run rate of SCA that you should see coming from UDlive. We did a reconciliation this quarter to break apart the consolidated business from the base business so that you can specifically see that. In that breakout reconciliation, that does not include the other piece, which is the transaction costs of $1.2 million that were the remaining transaction costs within the quarter. Ongoing run rate is that $1.8 million, which includes the intangible asset amortization, and the transaction costs are separate from that. Scott Graham: Very clear. Thank you. The other question I had was, Bob, you referred to successes in talking at the recent trade show with meetings with consultants. You brought in digital. Could you give us more color on what you mean there? I know you guys have a lot of things going on in digital, and the use of consultants, I was maybe just not clear what you were trying to say there. Bob Wrocklage: Yeah. That trade show in and of itself is, of course, designed to reach many an audience, and the comments in the script were very specific to the engineering consulting community. That's an opportunity for us to meet with those consultants, understand what opportunities they're working on, but also to then sometimes talk about things that have been launched already that they may not be aware of, or in many cases foreshadow what is forthcoming for hardware and software. In those meetings, we're able to provide a whole view to both hardware and software solutions. In that case, that was a trade show very much focused on the clean water side, so it was all about Advanced Metering Infrastructure. Through those discussions, the combination of the evolution of our hardware set, our NaaS capabilities, and then the software enablement reaching all constituents of the utility. No longer just the billing read, but in large part, workflows associated with utility efficiency and customer care, enabling the field service crews to see the real-time power of BEACON data and as they're doing work in the field, and then EyeOnWater with consumers. The collective feedback was, your leadership in cellular, which started as a differentiated form of AMI, has evolved now into NaaS capabilities that is fully encompassing all stakeholders at utilities, and even importantly, the customer of those utilities who are the citizenry using water in every city and state. The collective feedback was, this is no longer just a discussion about cellular versus fixed network. It's a discussion about Badger Meter's cellular leadership, NaaS capabilities, and that's become the industry standard. Your leadership position is evident not only in your financial results, but in the products that you bring to market and our ability to provide customers with those outcomes, and consulting firms recognize that. Scott Graham: It is very helpful. Thanks, Bob. Ryan Connors: Good morning. You've been very comprehensive, but I do have a couple of things left on my list here. One, I wanted to go back to the improvement in short cycle orders that you talked about, and I'm wondering whether the exit by one of your competitors from the mechanical meter space has anything to do with that. Obviously, you also see static growing faster, but you're still in the mechanical business, and I know that's a big part of the install base. Was that at all a factor there? Ken Bockhorst: I would not say it was a factor that fast. It will be a factor, because we are the provider of the premier mechanical meter that much of the market still very much desires. There was no sizable impact at all within that quarter that we would call out, but we feel happy about that decision by that competitor. Bob Wrocklage: I think that's a reinforcement of our longstanding "choice matters" approach to our BlueEdge portfolio. We continue to believe that there's a place for both mechanical meters and ultrasonic meters in the decision-making that utilities undertake, whether it's upon standard replacement cycle or whether they're making technology adoption decisions. Ken's exactly right. That did not manifest itself in the short term, it's certainly something we hope to capitalize on. Ryan Connors: Got it. Okay. Sticking with that theme of ultrasonic versus mechanical, one of the things we've heard from some of the peers, not necessarily from Badger Meter, but that although there's positives to the ultrasonic side for the customer and for the manufacturers as well, the barriers to entry on ultrasonic and static tend to be a little lower than in some of the traditional mechanical applications. Would you agree with that? Have you heard that? Do you think that's been a factor at all in the competitive shifts and just curious your thoughts or your reaction to that? Ken Bockhorst: Well, what I would tell you about that is if you look at, we'll just start with the question that you just asked. A very large portion of the market still by choice, chooses mechanical. If anyone comes in with ultrasonic, obviously there's a large portion of the market, if that's their only offering, that they can't participate in to begin with. Secondly, when you do come in with a me-too product of ultrasonic and you're trying to compete with very large, entrenched, strong, great competitors like us, Sensus, and Neptune as the big three who all have that and have the relationships and really the incumbency position is so strong, it's still very hard to get over for new entrants. I would agree with you that a technology for technology base, yes, they have a me-too product, but I think there's a lot more to it than that to be successful in this market. Ryan Connors: Got it. Fair enough. Thanks for your time. Ken Bockhorst: Sure. Michael Fairbanks: Hey, just on the electronic component pressures, can you clarify what these sub-components exactly are? Then maybe what products in the portfolio this would affect? Thank you. Ken Bockhorst: Yeah. Michael, it's really a broad-based thing. As you can imagine, it's the electronics industry in total. That could be certain capacitors that are used in different offerings. It could be right down to the bare boards that circuit boards are made from. It's kind of across the way. Memory chips obviously are a big part of AI and hyperscaling. It's kind of a general macroeconomic comment that us and everyone else out there is going to be dealing with, so. Dan Weltzien: Then tying to specific products, this isn't intended to create fear in any way. I'm just saying this as an obvious connection tie, that all relates to any of the enabled products that have electronics. It's ORION Cellular, it's ultrasonic products, it's beyond-the-meter technologies. As Ken alluded to in the prepared remarks and in his first answer, we've dealt with this before. Everyone's dealing with the same situation. This is not a Badger-unique challenge. This is a industry challenge. Ken Bockhorst: Yeah. One of the things that frankly in our industry positions us better than everybody else is the fact that last time this beared out, that being on the newest electronics, being on the newest platforms, our innovation edge was important last time, and the flexibility of our cellular offering versus fixed networks and all of those things that were positive factors for us the last time still are true today. Michael Fairbanks: Got it. Maybe as a follow-up, you called out the working capital increase on the quarter. How should we think about working capital in the second half of this year as you gear up for more of these projects? Dan Weltzien: Yeah. There's probably two things to focus on there. On the receivable side, certainly there's some timing impacts within any given quarter in terms of when shipments are going out and those types of things. The other side is the inventory. A couple of things to point out there. Number one, when we acquired UDlive, it came along with some inventory, so that contributes to the increase there. Obviously there's no sales in the trailing 12 months, so that's going to work itself out over time. We mentioned some cost pressures as you look at things from a year-over-year perspective, things like copper is more expensive, so just naturally the dollars that are sitting there on the balance sheet are higher. Again, with some of the revenue pacing things throughout the first half of the year, there was just some supply that showed up a bit earlier than we needed it. Fully anticipate working through that in the back half. I think the other thing to just point out is as sales continue to grow sequentially here in the third and fourth quarter, the sales base in the calculation of primary working capital as a percentage of sales is going to help that percentage to normalize as well. Those are all factors, I think, to what we're seeing right now. Michael Fairbanks: Thank you. Dan Weltzien: Thank you, Operator. Just a quick note for your planning that our third quarter 2026 earnings release is tentatively scheduled for October 21st, 2026. As most of you know, Barb is no longer with Badger Meter, so please don't hesitate to reach out to me if you have any follow-ups at [email protected]. Have a great day. 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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Badger Meter (BMI) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in Badger Meter, Inc.? Here are five stocks we like better. Badger Meter’s Q2 sales and earnings fell year over year, with total sales down 7% to $222.3 million and diluted EPS down to $1.02 from $1.17. Management said the quarter was still in line with expectations and sequentially improved as previously awarded AMI projects began shipping. Utility water sales declined, but flow instrumentation grew. Utility sales were hurt by project pacing and lower AMI revenue, while flow instrumentation rose 6% on broad-based demand, including data center-related orders for cooling and flow monitoring. The company reaffirmed its full-year outlook for sequential revenue improvement and “flat-ish” organic revenue versus 2025, while also continuing share buybacks and focusing on cash flow recovery as inventory normalizes. Why Institutions Keep Buying Badger Meter After the Big Drop Badger Meter (NYSE:BMI) reported lower second-quarter 2026 sales and earnings from the prior year, but management said revenue improved sequentially as previously awarded advanced metering infrastructure projects began shipping and reaffirmed its expectation for improving quarterly revenue through the rest of the year. Chief Financial Officer and Treasurer Dan Weltzin said total sales for the quarter were $222.3 million, down 7% year-over-year. Excluding about $2 million in sales from UDlive, which Badger Meter acquired on May 1, base sales declined 7.5% from the prior-year period. However, base sales rose 9% from the first quarter, which management said reflected initial shipment ramps on several awarded projects. → Buyback Boom: These 3 Companies Are Betting Billions on Their Own Stocks Badger Meter Gets an Upgrade—2 Stocks That Could Follow Chairman, President and Chief Executive Officer Ken Bockhorst said the results were in line with expectations. “As expected, we delivered sequentially improved sales in the second quarter as a number of our previously awarded AMI projects began initial ramping of shipments,” he said. He added that the company saw “a modest increase” in short-term order rates and in flow instrumentation. Weltzin said utility water sales declined 8% year-over-year, or 9% excluding the acquisition, due to the project pacing dynamics the company has been discussing. Lower AMI-related product revenue was partially offset by higher software and growth in what the company calls beyond-the-meter offerings. On an organic basis, utility sales increased 8% sequentially. → 3 Photonics Companies Making Quantum Tech Possible 3 bullish mid-cap earnings plays for January 2024 Flow instrumentation sales rose 6% from a year earlier, supported by broad-based water application demand. In the question-and-answer session, Bockhorst said the company benefited from orders tied to data center applications, including clamp-on meters and magnetic meters used for cooling towers and flow monitoring. However, he cautioned that the business should still be viewed as having “GDP-like” growth over the company’s five-year strategic horizon. The company also confirmed that product shipments for the PRASA project have begun. Bockhorst said several other awarded projects have also started, and that the overall cohort of nine previously discussed awarded projects “feels like it’s pretty solid at this point.” Management declined to provide individual project-level details. → AI Data Centers Need Power, and These 2 Industrials Are Cashing In Operating earnings declined 12% year-over-year, and operating margin fell 110 basis points to 17.7%. Excluding UDlive, base operating margin was 18.4%, down 40 basis points from the year-ago quarter. Gross margin was 40.8%, down 30 basis points from the second quarter of 2025. Weltzin attributed the decline primarily to lower sales volumes and project mix, but said gross margins remained in the upper half of the company’s normalized range, reflecting “the resiliency of our overall structural mix and pricing discipline.” Selling, engineering and administrative expenses totaled $51.4 million, down $1.6 million from the prior year. Weltzin said spending controls, lower incentive compensation and cost containment actions more than offset about $3 million of year-over-year spending tied to UDlive and transaction-related costs. The company expects UDlive intangible asset amortization of approximately $5 million annually. Diluted earnings per share were $1.02, down from $1.17 a year earlier. The effective tax rate was 25.2%, compared with 24.5% in the prior-year quarter. Free cash flow was $21.9 million, down from $40.6 million in the prior-year quarter. Weltzin cited lower earnings and temporary increases in working capital. Primary working capital as a percentage of sales rose to 22.9% from 20.0% at the end of the prior quarter. Weltzin said the increase in receivables was related to revenue timing, while inventory levels were above average due to revenue pacing dynamics. He said the company expects to work down inventory through the fiscal year and remains focused on full-year cash flow conversion in excess of 100% of net earnings. During the quarter, Badger Meter repurchased 204,000 shares for $25.3 million. Weltzin said the company has about $90 million remaining under its current share repurchase authorization and has deployed roughly $80 million in buybacks over the past three quarters. The company also renewed a five-year, $150 million credit facility, which remains undrawn. Management reaffirmed its outlook for sequential improvement in base quarterly revenue for the balance of 2026. Excluding UDlive, Badger Meter continues to expect full-year organic revenue to be “flat-ish” with 2025 levels. Bockhorst emphasized that the outlook should not be interpreted as perfectly flat, citing variability in project ramping and short-term order patterns. He said year-over-year base sales growth is expected to be heavily weighted toward the fourth quarter because it represents the company’s easiest comparison. On short-cycle demand, Bockhorst said the first quarter was an outlier and that second-quarter order rates were “more normal-ish” and typical of the operating environment. He said a higher daily turn rate of orders in the second quarter, combined with project activity, supports the company’s full-year stance. Management also discussed electronic component cost and availability pressures driven by demand from artificial intelligence and data center build-outs. Weltzin said the company has been able to mitigate the impacts to date, but the pressures are not easing. Bockhorst said Badger Meter has managed similar supply chain challenges before and remains positioned to work through them. Bob Wrocklage, Executive Vice President of North America Municipal Utility, said feedback from the AWWA ACE 2026 trade show in Washington, D.C., remained constructive. He said utilities continue to prioritize modernization, efficiency and visibility across water and wastewater networks. Wrocklage said discussions with consultants and customers focused on both hardware and software components of the company’s Network as a Service offerings, including network resiliency, dynamic multi-carrier SIM technology and the ORION Lens endpoint solution for metal pit lids. He also cited interest in EyeOnWater Premium, the BEACON Field app and Badger Meter’s embedded AI functionality, Cobalt. Management said the company is continuing to educate utilities on stormwater and sewer line applications through SmartCover and UDlive. Bockhorst said the company’s confidence in the long-term outlook remains intact, supported by replacement demand, AMI adoption, recurring software, beyond-the-meter technologies and acquisitions. Badger Meter, founded in 1905 and headquartered in Milwaukee, Wisconsin, is a global leader in flow measurement and control solutions. The company's core business centers on the design, manufacture and sale of water meters, control valves and related accessories for municipal and industrial water utilities. Over its more than a century of operation, Badger Meter has built a reputation for precision engineering, durability and compliance with international regulatory standards. The company's product portfolio includes mechanical and ultrasonic water meters, electromagnetic flow meters for industrial applications, and a range of control valves that help utilities manage pressure and flow in distribution networks. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "Badger Meter Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

This article first appeared on GuruFocus. Total Sales: $222.3 million, a 7% decline year-over-year. Base Sales: Down 7.5% year-over-year, excluding UDlive sales. Utility Water Sales: Declined 8% year-over-year; down 9% excluding acquisition. Flow Instrumentation Sales: Up 6% year-over-year. Operating Earnings: Declined 12% year-over-year; margins down 110 basis points to 17.7%. Base Operating Profit Margins: 18.4%, down 40 basis points from last year. Gross Margin: 40.8%, down 30 basis points from the second quarter of 2025. Selling, Engineering, and Administrative Expenses: $51.4 million, $1.6 million lower year-over-year. Effective Income Tax Rate: 25.2%, compared to 24.5% last year. Diluted Earnings Per Share: $1.02, down 13% from $1.17 in the prior year period. Free Cash Flow: $21.9 million, down from $40.6 million in the prior-year comparable quarter. Share Repurchases: 204,000 shares for $25.3 million; $90 million remaining on authorization. Credit Facility: Five-year renewal of $150 million, undrawn. Warning! GuruFocus has detected 6 Warning Sign with TDY. Is BMI fairly valued? Test your thesis with our free DCF calculator. Release Date: July 22, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Badger Meter Inc (NYSE:BMI) delivered sequentially improved sales in the second quarter, with a 9% increase over the first quarter. The company reaffirmed its outlook for improving sequential top-line results for the rest of the year. Flow Instrumentation product line sales were up 6% year-over-year, driven by broad-based water application demand. The company successfully managed operating cost controls, resulting in improved operating leverage versus the first quarter. Badger Meter Inc (NYSE:BMI) finalized a five-year renewal of its $150 million credit facility, providing ample financial flexibility. Total sales in Q2 were $222.3 million, representing a 7% decline year-over-year. Operating earnings declined 12% year-over-year, with margins down 110 basis points to 17.7%. Gross margin was down 30 basis points from the second quarter of 2025, primarily due to lower sales volumes and project mix. Free cash flow was $21.9 million, down from $40.6 million in the prior-year comparable quarter. The company faces increasing electronic component cost and availability pressures due to AI and data center build-out demand. Q: How has your visibility into the second-half ramp changed versus 90 days ago, and are any projects at risk of slipping into 2027? A: Kenneth Bockhorst, CEO: As the year progressed, it became clearer how things would play out. PRASA and a few other projects have begun, and while there can be unevenness, the total cohort of nine projects feels solid at this point. Q: To hit the flattish organic revenue target for the year, do all projects need to start shipping in the back half, or is there ample cushion in that guide? A: Kenneth Bockhorst, CEO: Not all projects start at the beginning of Q3. There are multiple phase-ins, and we have a robust funnel of near-term projects in negotiation. The higher daily turn rate of orders in Q2 compared to Q1 gives us confidence in our flattish stance for the year. Q: On UDlive, revenues were lower than expected. Is this a timing issue related to the May close, or is there anything else driving that? A: Kenneth Bockhorst, CEO: It's definitely just a timing issue. With any acquisition, particularly small companies, there are certain distractions, but we are not concerned. Q: Could you provide more color on the short-cycle portion of the business and any additional room for recovery in the back half? A: Kenneth Bockhorst, CEO: Q1 was an outlier in terms of short order cycle rates. Q2 was more normal-ish and typical of the operating environment. We don't intend to size every quarter as it's always somewhat uneven by nature. Q: Can you clarify the electronic component pressures and which products in the portfolio this would affect? A: Kenneth Bockhorst, CEO: It's a broad-based issue affecting the electronics industry, including capacitors and circuit boards. It impacts products like ORION Cellular, ultrasonic products, and Beyond the Meter technologies. This is an industry-wide challenge, not unique to Badger Meter. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

MILWAUKEE, July 22, 2026--(BUSINESS WIRE)--Badger Meter, Inc. (NYSE: BMI) today reported results for the second quarter ended June 30, 2026. Second Quarter 2026 Highlights Total sales of $222.3 million increased 10% sequentially from the first quarter and were 7% lower than the prior year’s $238.1 million. Base1 sales were $220.3 million. Operating earnings declined 12% year-over-year to $39.4 million, with operating profit margins of 17.7% versus 18.8% in the prior year comparable quarter. Base operating earnings of $40.6 million decreased 9% year-over-year, with Base operating profit margins of 18.4%. Diluted earnings per share (EPS) of $1.02, down from $1.17 in the second quarter of 2025. Held inaugural investor day articulating the durability of the business model and reiterating the long-term financial framework of high-single digit growth. Completed acquisition of UDlive Limited (UDlive) effective May 1, 2026, extending sewer line monitoring leadership and global capabilities. "Consistent with our expectations, second quarter results marked a sequential step-up in quarterly sales performance as order rates improved from first quarter levels and certain awarded utility water projects commenced their initial deployments," said Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer. "While year-over-year revenue declined against the highest quarterly revenue in Badger Meter history, we delivered solid sequential operating leverage including the benefit of cost management actions initiated in the quarter. Our pipeline of awarded projects remains broadly on schedule to further ramp in the second half of 2026, and we continue to curate the multi-year opportunity funnel for both metering and beyond the meter applications. Since closing on the acquisition of UDlive on May 1, we’ve made solid progress in our integration efforts and initial commercial interest has been strong. I want to thank our team for their execution and collaborative efforts in support of our customers." Second Quarter 2026 Operating Results Utility water sales declined 8% year-over-year, including two months of the UDlive acquisition. Excluding the acquisition, sales increased 8% sequentially from the first quarter, yet were down 9% year-over-year, reflecting the continued uneven ramp of AMI projects partially offset by higher sales of software and other BlueEdge® beyond the meter solution offerings. Sales of flow instrumentation products increased 6% year-over-year, with growth in water-related markets. Operating earnings declined 12% year-over-year to $39.4 million, with operating profit margins down 110 basis points to 17.7%. Base operating earnings of $40.6 million decreased 9% year-over-year, with Base operating profit margins of 18.4%, down 40 basis points year-over-year. Gross margin of 40.8% was 30 basis points lower than the prior year’s 41.1% despite the sales decline and solidly within the normalized range of 39-42%. Selling, Engineering and Administration (SEA) expenses of $51.4 million were $1.6 million lower year-over-year. Base SEA expenses of $49.6 million declined $3.4 million or 6% year-over-year due to the benefit of tight spending controls, lower incentive compensation and other cost containment actions partially offset by final transaction-related costs for UDlive of $1.2 million. The inclusion of UDlive results for two months along with related intangible asset amortization combined added $1.8 million to year-over-year expenses. The effective tax rate for the second quarter of 2026 was 25.2%, compared to 24.5% in the prior year. As a result of the above, EPS of $1.02 declined 13% from the prior year’s $1.17. Outlook Bockhorst concluded, "At the halfway point of the year, we remain squarely focused on managing the impacts of uneven AMI project phasing while continuing to advance long-term growth initiatives. As we expected, several of the awarded projects in the pipeline are beginning to proceed into deployment. We continue to anticipate an improvement in revenue run-rate in the back half of the year, with full‑year revenue, excluding acquisitions, flattish versus 2025. Finally, we remain diligent in our cost management focus to mitigate the temporary sales pacing effects. "At our recent Investor Day in May, we reiterated our long-term financial framework including high single digit growth for the forward five-year period. This is supported by our innovative smart water solutions portfolio and differentiated selling model which positions us to benefit from the multi-decade digital transformation of the global water sector. We continue to capture opportunities underpinned by these favorable secular trends in both metering and beyond the meter applications. "In addition, our solid cash flow and credit availability provide us with the financial flexibility to execute on our capital allocation priorities including investing in growth, returning cash to shareholders and accretive acquisitions. In support of these priorities, we recently renewed our undrawn credit facility of $150 million, including its accordion and other attractive features. "Finally, our recently released 2025 Sustainability Report highlights our use of continuous improvement processes to mitigate risk and make progress across a range of targeted outcomes, including an 11% reduction in water intensity. Importantly, our focus on sustainable solutions creates growth opportunities and enhances shareholder value by enabling our customers to be more efficient, resilient and sustainable in their water operations and protect the world’s most precious resource." 1 Adjusted metrics ("Base") are non-GAAP measures excluding the results of UDlive acquired May 1, 2026. See appendix for reconciliations of these GAAP to non-GAAP measures. Conference Call and Webcast Information Badger Meter management will hold a conference call to discuss the Company’s second quarter 2026 results today, Wednesday, July 22, 2026 at 10:00 AM Central/11:00 AM Eastern time. A live listen-only webcast and the related presentation will be available on the Events & Presentations section of the Company’s investor relations website. Those wishing to actively participate in the conference call must pre-register using the following link: https://events.q4inc.com/attendee/407684818 Safe Harbor Statement Certain statements contained in this news release, as well as other information provided from time to time by Badger Meter, Inc. (the "Company") or its employees, may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those statements. The Company’s results are subject to general economic conditions, variation in demand from customers, continued market acceptance of new products, the successful integration of acquisitions, competitive pricing and operating efficiencies, supply chain risk, material and labor cost increases, tax reform and foreign currency risk. See the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for further information regarding risk factors, which are incorporated herein by reference. Badger Meter disclaims any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or any other reason. About Badger Meter With more than a century of water technology innovation, Badger Meter provides comprehensive water management solutions through its BlueEdge® suite. This tailorable portfolio of smart measurement hardware, reliable communications, data visualization and analytics software and ongoing support and industry expertise give customers the edge in optimizing their operations and contributing to the sustainable use and protection of the world’s most precious resource. For more information, visit www.badgermeter.com. APPENDIX View source version on businesswire.com: https://www.businesswire.com/news/home/20260722025919/en/ Contacts Dan Weltzien, Vice President – CFO and [email protected]

Badger Meter (BMI) came out with quarterly earnings of $1.02 per share, beating the Zacks Consensus Estimate of $1.01 per share. This compares to earnings of $1.17 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +0.99%. A quarter ago, it was expected that this manufacturer of products that measure gas and water flow would post earnings of $1.2 per share when it actually produced earnings of $0.93, delivering a surprise of -22.5%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. Badger Meter, which belongs to the Zacks Instruments - Control industry, posted revenues of $222.32 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 0.90%. This compares to year-ago revenues of $238.1 million. The company has topped consensus revenue estimates two times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. Badger Meter shares have lost about 16.4% since the beginning of the year versus the S&P 500's gain of 9.7%. While Badger Meter has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for Badger Meter was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $1.25 on $244.76 million in revenues for the coming quarter and $4.51 on $911.84 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Instruments - Control is currently in the top 20% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. Another stock from the same industry, Sensata (ST), has yet to report results for the quarter ended June 2026. The results are expected to be released on July 29. This maker of sensing, electrical protection, control and power management products is expected to post quarterly earnings of $0.93 per share in its upcoming report, which represents a year-over-year change of +6.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. Sensata's revenues are expected to be $964 million, up 2.2% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Badger Meter, Inc. (BMI) : Free Stock Analysis Report Sensata Technologies Holding N.V. (ST) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributed the 7.5% organic sales decline to previously discussed project pacing dynamics, specifically lower AMI-related product revenue compared to the prior year. Sequential organic growth of 9% was driven by the initial shipment ramp-up of several major awarded projects, including the PRASA project. Flow instrumentation sales grew 6% year-over-year, benefiting from niche demand in data center applications such as cooling tower monitoring and clamp-on meters. Operating margins were protected through proactive cost containment actions and lower incentive compensation, offsetting lower sales volumes and project mix headwinds. The company emphasized its 'choice matters' strategy, maintaining that both mechanical and static metering remain essential to meeting diverse utility customer needs. Management highlighted that the digital transformation of the water sector remains a multi-decade secular driver, supported by strong engagement with engineering consultants. Management reaffirmed full-year 2026 organic revenue guidance to be roughly flattish with 2025 levels, with growth heavily weighted toward the fourth quarter. The outlook assumes continued sequential improvement in quarterly revenue as the cohort of nine major awarded projects continues to scale. Guidance for the back half of the year incorporates a return to more 'normal-ish' short-cycle order rates following an atypical shortfall in the first quarter. The company expects to achieve full-year free cash flow conversion in excess of 100% of net earnings as elevated inventory levels are worked down. Future profitability is expected to be driven by structural mix shifts toward higher-margin static meters, cellular AMI deployments, and recurring software solutions. Management flagged increasing cost and availability pressures for electronic components, driven by global demand for AI and data center infrastructure. The UDLive acquisition is expected to contribute approximately $5 million in annual intangible asset amortization starting in 2026. Inventory levels remained temporarily elevated due to revenue pacing dynamics and the inclusion of UDLive's initial balance sheet. Management noted that while procurement processes for large projects like PRASA are often challenged or appealed, they remain confident in the fairness of the awarded contract. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management stated the cohort of nine projects feels solid, with several having already commenced initial deployments. They noted that while project implementation is inherently uneven due to external factors, they have not identified specific risks of these projects slipping into 2027. The company is leveraging 'pricing excellence' programs to recapture cost increases and noted that most long-term contracts include escalation clauses. Management emphasized that structural mix—moving from mechanical to static and software—remains the primary driver of gross margin resiliency. Management believes a competitor's exit from the mechanical space reinforces Badger Meter's leadership in providing a full 'Blue Edge' portfolio of both mechanical and static options. They argued that while ultrasonic technology has lower barriers to entry, new entrants struggle to overcome the deep incumbency and relationships held by established players. Management cautioned that while data center demand provided a boost this quarter, the segment should still be viewed as a GDP-like, low-single-digit grower over a 5-year horizon. The recent outperformance was attributed to the 'law of small numbers' and specific orders for cooling tower and water quality applications.