Badger Meter (BMI) Q4 2025 earnings summary

Executive summary

• Achieved record full-year sales of $916.7 million, up 11% year-over-year, and Q4 sales of $220.7 million, up 8%, driven by robust demand for cellular AMI solutions and SmartCover integration.

• Operating earnings for the year rose 16% to $183.4 million, with operating profit margins expanding to 20.0% and Q4 margin at 19.5%.

• EPS increased 13% year-over-year to $4.79 for the full year and 10% to $1.14 for the quarter.

• Record free cash flow of $170 million for FY 2025, up 19% year-over-year, with FCF/earnings at 120%.

• Major multi-year AMI project awarded by PRASA in Puerto Rico, one of the largest global deployments, with shipments expected to begin in 2026.

Financial highlights

• Q4 2025 sales reached $220.7 million, up 8% year-over-year; full year sales were $916.7 million, up 11%.

• Q4 gross margin improved 180 bps to 42.1% on higher volumes and favorable sales mix.

• SaaS revenue, including SmartCover, exceeded $74 million, representing 8% of total sales and growing at a 28% CAGR over five years.

• SmartCover delivered $40 million in 2025 sales, with profitability improving post-integration.

• Utility water product line sales increased 9% year-over-year (2% base); flow instrumentation sales were flat.

Outlook and guidance

• Management projects high single-digit sales growth, annual operating margin expansion, and free cash flow conversion above 100% of earnings over the next five years.

• Expect lower growth in the first half of 2026, with higher growth in the second half as new projects ramp up.

• Several large AMI projects, including the PRASA contract in Puerto Rico, are expected to drive future growth.

• Gross margin headwinds anticipated in 2026 from elevated copper and component costs, but structural mix remains a positive driver.

• Recurring SaaS revenue base and strong bid pipeline underpin growth expectations.