Abstract
Badger Meter Inc. is scheduled to release its second-quarter 2026 results on July 22, 2026 Pre-MKt; this preview consolidates recent financial data and consensus expectations to frame the company’s quarterly revenue, profitability and earnings trajectory alongside prevailing institutional views.Market Forecast
Market expectations for Badger Meter Inc. point to second-quarter revenue of 220.20 million US dollars, a year-over-year decrease of 7.07%, with EBIT forecast at 39.16 million US dollars (-14.00% YoY) and adjusted EPS of 1.01 (-19.81% YoY). Based on prior management commentary, gross margin is expected to remain within the 39%–42% target range, while net profitability is likely constrained by lower volume and mix until larger projects ramp in the second half.Management has indicated that timing dynamics are the key variable for the main metering and AMI (advanced metering infrastructure) business, with second-quarter organic revenue still soft year over year but a sequential improvement in activity and a planned acceleration in the second half as awarded AMI deployments begin rolling out. Within the portfolio, recurring software and monitoring solutions recognized over time remain the most promising area, underpinned by robust demand for BEACON SaaS and network/water-quality monitoring; last quarter’s over‑time revenue was 24.70 million US dollars and management cited year‑over‑year growth in these offerings, positioning them as a stabilizing contributor to margins and cash generation.
Last Quarter Review
In the prior quarter, Badger Meter Inc. reported revenue of 202.28 million US dollars (-8.97% YoY), a gross profit margin of 41.69%, net profit attributable to shareholders of 27.34 million US dollars, a net profit margin of 13.51%, and adjusted EPS of 0.93 (-28.46% YoY). Quarter on quarter, net profit declined by 18.59%, reflecting volume headwinds and a less favorable mix as large projects paused ahead of scheduled second‑half deployments.Operationally, the company maintained gross margin within its 39%–42% target range despite softer revenue, demonstrating pricing resilience and cost discipline. From a revenue recognition perspective, 177.58 million US dollars was recognized at a point in time and 24.70 million US dollars over time, while within the portfolio utility water sales declined 10% year over year and flow instrumentation declined 4% year over year; by contrast, BEACON SaaS, smart infrastructure, and water‑quality/network monitoring products grew year over year, highlighting the strength of recurring solutions.
Current Quarter Outlook
Core metering and AMI project shipments
The core business is centered on smart meters, endpoints, and AMI solutions delivered through project rollouts and distribution channels. For the second quarter, management has guided for organic revenue to be down year over year, consistent with the digestion period between four completed large AMI deployments and nine awarded projects that are scheduled to ship in the second half. This creates a “revenue air pocket” in the first half but does not change the underlying demand pattern, as the backlog remains intact and is expected to begin converting later in the year. Mix will matter: project shipments generally pull through endpoints and network gear, while distribution sales carry different margin profiles; if project shipments remain limited in the quarter, gross margin should stay near the mid‑range of the 39%–42% target, with some upside as pricing and cost controls offset volume deleverage. Inventory normalization at customers and the timing of municipal approvals can still swing quarterly revenue, but the overall cadence implied by awarded projects suggests sequential improvement as the year progresses.Recurring SaaS and network monitoring (over‑time revenue)
Recurring software and monitoring services, which are recognized over time, continue to scale as utilities adopt BEACON cloud analytics, cellular endpoints, and digital monitoring for water quality and networks. In the first quarter this revenue was 24.70 million US dollars, and management pointed to year‑over‑year growth in BEACON SaaS and network/water‑quality monitoring, reinforcing the stickiness and predictability of this stream. For the second quarter, this line is positioned to remain resilient and provide ballast to profitability even as hardware revenue is influenced by project timing. The announced acquisition of Udlive is intended to deepen the company’s capabilities in wastewater and network intelligence; while the near‑term financial impact is limited by transaction timing, the combination of software analytics and sensing hardware improves cross‑sell potential and supports a higher mix of over‑time revenue. As recurring products grow, the margin mix should gradually benefit from higher software content and services leverage, helping to stabilize earnings through cycles in hardware project awards.Stock‑price swing factors this quarter
Three factors are likely to matter most for the share price reaction to the second‑quarter release. The first is the magnitude of the year‑over‑year revenue decline relative to conservative expectations: consensus now embeds revenue of 220.20 million US dollars (-7.07% YoY) and EPS of 1.01 (-19.81% YoY), so incremental downside or upside around these figures will drive the initial move. The second is management’s color on second‑half execution: investors will look for firmed deployment schedules, conversion of the nine large AMI projects in backlog, and any expansion in awarded connections that would validate a stronger second‑half ramp; commentary on order intake and awarded AMI connections can meaningfully influence estimates and valuation. The third is profitability quality and cash dynamics: confirmation that gross margin tracks within the 39%–42% range, that operating costs remain controlled, and that free cash flow aligns with earnings will be key to confidence in the earnings base; any detail on pricing, supply chain, and component costs, as well as progress integrating Udlive offerings, will inform margin direction and medium‑term growth.Analyst Opinions
Bullish views outnumber bearish ones in recent months, with a ratio of 2:1 in favor of the bullish camp. Notably, RBC Capital maintained an Outperform rating and set a price target of 169 US dollars, emphasizing that first‑half weakness is driven by project timing and a slower book‑and‑ship channel, while seven of nine large AMI projects in backlog represent share gains as customers transition to the company’s cellular AMI; RBC expects execution on this backlog to be the catalyst for a re‑rating as shipments ramp in the second half. In a separate note, RBC highlighted that the company’s investor day spotlighted growth avenues beyond meters—including SaaS and water quality—and reiterated that the market is in “wait‑and‑see” mode for the anticipated second‑half sales ramp, with backlog conversion the linchpin for sentiment improvement.Stifel Nicolaus reaffirmed a Buy rating with a 140 US dollars price target, signaling confidence that demand fundamentals remain supportive despite near‑term variability and that sustained mid‑to‑high 30s to low 40s gross margin can be preserved through disciplined pricing and cost controls. Bulls broadly frame the second quarter as a transitional period rather than a directional reset: consensus cuts have already reset expectations lower, and the tone of management’s second‑half commentary may matter more than small variances to quarterly numbers. From this perspective, clarity on AMI deployment schedules, evidence of continued BEACON SaaS signings, and color on expanding awarded AMI connections would likely underpin upward revisions to the back‑half run‑rate.
These bullish views converge on three points relevant to the upcoming print. First, the demand pipeline and awarded projects appear intact and are set to progressively translate into revenue as deployments commence, supporting a sequential improvement thesis. Second, the recurring revenue base—BEACON SaaS and network/water‑quality monitoring—continues to grow, helping to cushion margins and cash flow even when hardware revenue is uneven, and potentially supporting valuation multiples that price in durable growth. Third, the company’s reaffirmed gross‑margin guardrails and cost discipline give analysts confidence that earnings power will normalize as shipment timing headwinds abate; achieving the midpoint of the 39%–42% gross‑margin range while holding operating expense flat would, in analysts’ view, keep the earnings bridge to the second half intact. Overall, the majority stance anticipates that the second quarter will be a step toward the larger second‑half ramp rather than a new baseline, with execution on backlog and recurring revenue momentum as the principal catalysts for rebuilding confidence in the earnings trajectory.