Badger Meter (BMI) Q1 2026 earnings summary

Executive summary

• Q1 2026 sales declined 9% year-over-year to $202.3 million, primarily due to project pacing, timing, and weaker short-cycle municipal orders, partially offset by growth in SaaS and monitoring products.

• Operating earnings fell to $35.2 million (17.4% margin), down from $49.4 million (22.2%) in Q1 2025, with diluted EPS dropping to $0.93 from $1.30.

• Net earnings were $27.3 million, compared to $38.4 million in the prior year quarter.

• Management remains confident in long-term growth, citing a robust pipeline of awarded AMI projects and favorable industry trends.

• Acquisition of UDlive for $100 million expands sewer line monitoring capabilities and is expected to be accretive to EPS in year one.

Financial highlights

• Gross margin was 41.7%, down from 42.9% year-over-year, near the upper end of the normalized range.

• Utility water sales declined 10% year-over-year, while flow instrumentation sales were down 4%.

• Selling, engineering, and administration expenses rose to $49.2 million (24.3% of sales), up $3.1 million year-over-year, partly due to higher personnel and acquisition costs.

• Free cash flow was approximately $30 million, consistent with the prior year.

• Cash and cash equivalents at quarter-end were $205.5 million, down from $226.0 million at year-end 2025.

Outlook and guidance

• Full-year 2026 organic revenue, excluding acquisitions, is expected to be relatively flat versus 2025, with sequential improvement anticipated as the year progresses and awarded projects deploy in the second half.

• Management expects operating leverage to improve in the second half as projects ramp up.

• Long-term demand outlook remains positive, supported by a robust project pipeline and favorable macro trends.

• 85% of base demand is replacement-driven, supporting resilient results.