Badger Meter (BMI) investor relations material

Executive summary

• Achieved total sales of $236 million in Q3 2025, up 13% year-over-year, with base sales (excluding SmartCover) rising 8% and strong demand for utility water, SaaS, and BlueEdge smart water solutions.

• Operating earnings increased 13% to $46.1 million, with operating margin at 19.6% and base margin at 20.7%; diluted EPS rose 10% to $1.19.

• Record free cash flow of $48.2 million, up 14.8% year-over-year, aided by lower cash taxes and strong operations.

• SmartCover acquisition contributed to sales growth, expanded capabilities, and is expected to be EPS accretive in year two.

• Dividend increased for the 33rd consecutive year, with annual rate up 18% to $1.60 per share.

Financial highlights

• Gross margin expanded 50 basis points to 40.7%, with new normalized range set at 39%-42%.

• Operating income rose to $46.1 million, up 13.5% year-over-year; EBITDA reached $54.8 million.

• Utility water sales grew 14% (8% excluding SmartCover); flow instrumentation sales up 4%.

• Net earnings for Q3 2025 were $35.1 million, up from $32.0 million in Q3 2024.

• Cash and cash equivalents at quarter-end were $201.7 million, down from $295.3 million at year-end due to acquisition and dividend payments.

Outlook and guidance

• Management expects high single-digit average top-line growth over the next five years, supported by innovation and SaaS expansion.

• Normalized gross margin range raised to 39%-42% due to pricing and technology adoption.

• Q4 expected to be seasonally lower due to fewer operating days, but year-to-date trajectory supports a solid year-end.

• Durable macro trends and 85% replacement-driven base demand underpin positive industry outlook.

• Focus on expanding actionable data offerings and benefiting from AMI conversion trends.