Itron (ITRI) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $587 million, down 3% year-over-year, but exceeded expectations due to accelerated deployments and strong execution.

• Adjusted EBITDA was $92 million (up 5% year-over-year), and non-GAAP EPS was $1.49; free cash flow totaled $79 million.

• Annual recurring revenue reached $414 million, up 28% year-over-year, driven by organic growth and acquisitions.

• Integration of Resiliency Solutions, including Urbint and Locusview, is progressing well, with Locusview acquired for $546.6 million.

• Backlog at quarter end was $4.4 billion, with Outcomes and Resiliency Solutions comprising 25% of total backlog.

Financial highlights

• GAAP net income was $53.5 million ($1.18 per diluted share), down from $65.5 million ($1.42) last year due to higher operating expenses and lower interest income.

• Adjusted gross margin improved to 40.7%, up 490 basis points year-over-year; GAAP gross margin was 40.3%.

• Non-GAAP operating income and adjusted EBITDA both increased 5% year-over-year to $84.5 million and $92 million, respectively.

• Free cash flow increased to $79 million from $67 million a year ago, mainly due to lower tax payments.

• Product revenues declined 9% to $477.8 million, while service revenues grew 30% to $109.2 million year-over-year.

Outlook and guidance

• Q2 2026 revenue is expected between $560 million and $570 million, down 7% year-over-year at the midpoint.

• Q2 2026 non-GAAP EPS is projected at $1.25–$1.35 per diluted share, down year-over-year.

• Full-year outlook remains consistent with prior guidance, with anticipated back-half weighted growth driven by network deployments.

• Guidance assumes EUR/USD at 1.16 and a 22% effective non-GAAP tax rate.

• Management expects sufficient liquidity for at least the next 12 months and into the foreseeable future.