Itron Announces First Quarter 2025 Financial Results

LIBERTY LAKE, Wash., May 01, 2025 (GLOBE NEWSWIRE) -- Itron, Inc. (NASDAQ: ITRI), which is innovating the way utilities and cities manage energy and water, announced today financial results for its first quarter ended March 31, 2025. Key results for the quarter include (compared with the first quarter of 2024): Revenue of $607 million, increased 1%;Gross profit of $217 million, increased 6%;GAAP net income attributable to Itron, Inc. of $65 million, increased $14 million;GAAP diluted earnings per share of $1.42, increased $0.30 per share;Non-GAAP diluted EPS of $1.52, increased $0.28 per share;Adjusted EBITDA of $88 million, increased 15%; andFree cash flow of $67 million, increased $33 million. "First quarter margin expansion and earnings growth were ahead of expectations due to favorable product mix and continued strong execution," said Tom Deitrich, Itron’s president and CEO. “Customer demand remained steady during the first quarter driven by grid efficiency, automation, and agile infrastructure solutions. Utilities are embracing new technologies and Itron's leadership in providing grid edge intelligence solutions at scale continues to be reflected in the Company's performance.” Summary of First Quarter Consolidated Financial Results(All comparisons made are against the prior year period unless otherwise noted) RevenueTotal first quarter revenue increased 1%, to $607 million. This comparison includes catch-up of previously constrained revenue that occurred during Q1'24. Device Solutions revenue decreased 1%, or a 2% increase in constant currency, due to increased smart water sales partially offset by decreased legacy electricity sales. Networked Solutions revenue decreased 1%, due to timing of shipments and project deployments, and the catch-up of previously constrained revenue that occurred during Q1'24. Outcomes revenue increased 14%, due to increased recurring revenue and software licenses. Gross MarginItron's first quarter gross margin of 35.8% increased 180 basis points from the prior year due to product mix and operational efficiencies. Operating Expenses and Operating IncomeGAAP operating expenses of $141 million decreased $2 million from the prior year. Non-GAAP operating expenses of $137 million decreased $1 million. GAAP operating income of $76 million was $13 million higher than the prior year and non-GAAP operating income of $80 million was $13 million higher than the prior year. Both increases were due to higher gross profit and lower operating expenses. Net Income and Earnings per ShareNet income attributable to Itron, Inc. for the quarter was $65 million, or $1.42 per diluted share, compared with net income attributable to Itron, Inc. of $52 million, or $1.12 per diluted share in 2024. The increase was driven by higher GAAP operating income and interest income, partially offset by higher tax expense. Non-GAAP net income attributable to Itron, Inc., which excludes the expenses associated with amortization of intangible assets, amortization of debt placement fees, restructuring, loss on sale of business, acquisition and integration, and the tax effect of excluding these expenses, was $70 million, or $1.52 per diluted share, compared with $57 million, or $1.24 per diluted share, in 2024. The increase was due to higher non-GAAP operating income and interest income, partially offset by higher tax expense. Cash FlowNet cash provided by operating activities was $72 million in the first quarter compared with $41 million in the prior year. Free cash flow was $67 million in the first quarter compared with $34 million in the prior year. The increase in free cash flow was primarily due to higher earnings, interest income, and working capital. Other Measures Total backlog at quarter end was $4.7 billion compared with $4.3 billion in the prior year. Bookings in the quarter totaled $530 million. Q2 2025 Outlook Outlook for the second quarter of 2025 is as follows: Revenue between $605 and $615 millionNon-GAAP diluted EPS between $1.30 and $1.40 Earnings Conference CallItron will host a conference call to discuss the financial results contained in this release at 10 a.m. EDT on May 1, 2025. Interested parties may listen to the conference call on a live webcast. The webcast, along with a supplemental presentation, may be accessed from the company’s website at https://investors.itron.com/events-presentations. Participants should access the webcast 10 minutes prior to the start of the call. A webcast replay of the conference call will be available through May 8, 2025 and may be accessed on the company's website at https://investors.itron.com/events-presentations. About ItronItron is a proven global leader in energy, water, smart city, IIoT and intelligent infrastructure services. For utilities, cities and society, we build innovative systems, create new efficiencies, connect communities, encourage conservation and increase resourcefulness. By safeguarding our invaluable natural resources today and tomorrow, we improve the quality of life for people around the world. Join us: www.itron.com Itron® is a registered trademark of Itron, Inc. All third-party trademarks are property of their respective owners and any usage herein does not suggest or imply any relationship between Itron and the third party unless expressly stated. Cautionary Note Regarding Forward Looking StatementsThis release contains, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical factors nor assurances of future performance. These statements are based on our expectations about, among others, revenues, operations, financial performance, earnings, liquidity, earnings per share, cash flows and restructuring activities including headcount reductions and other cost savings initiatives. This document reflects our current strategy, plans and expectations and is based on information currently available as of the date of this release. When we use words such as "expect", "intend", "anticipate", "believe", "plan", "goal", "seek", "project", "estimate", "future", "strategy", "objective", "may", "likely", "should", "will", "will continue", and similar expressions, including related to future periods, they are intended to identify forward-looking statements. Forward-looking statements rely on a number of assumptions and estimates. Although we believe the estimates and assumptions upon which these forward-looking statements are based are reasonable, any of these estimates or assumptions could prove to be inaccurate and the forward-looking statements based on these estimates and assumptions could be incorrect. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors. Therefore, you should not rely on any of these forward-looking statements. Some of the factors that we believe could affect our results include our ability to execute on our restructuring plans, our ability to achieve estimated cost savings, the rate and timing of customer demand for our products, rescheduling of current customer orders, changes in estimated liabilities for product warranties, adverse impacts of litigation, changes in laws, regulations, tariffs, sanctions, trade policies and retaliatory responses, our dependence on new product development and intellectual property, future acquisitions, changes in estimates for stock-based and bonus compensation, increasing volatility in foreign exchange rates, international business risks, uncertainties caused by adverse economic conditions, including without limitation those resulting from extraordinary events or circumstances and other factors that are more fully described in Part I, Item 1A: Risk Factors included in our Annual Report on Form 10-K for the year ended Dec 31, 2024 and other reports on file with the Securities and Exchange Commission. Itron undertakes no obligation to update or revise any information in this press release. Non-GAAP Financial Information To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (GAAP), we use certain adjusted or non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share (EPS), adjusted EBITDA, free cash flow, and constant currency. We provide these non-GAAP financial measures because we believe they provide greater transparency and represent supplemental information used by management in its financial and operational decision making. We exclude certain costs in our non-GAAP financial measures as we believe the net result is a measure of our core business. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Our non-GAAP financial measures may be different from those reported by other companies. When providing future outlooks and/or earnings guidance, a reconciliation of forward-looking non-GAAP diluted EPS to the GAAP diluted EPS has not been provided because we are unable to predict with reasonable certainty the potential amount or timing of restructuring related expenses and their related tax effects without unreasonable effort. These costs are uncertain, depend on various factors and could have a material impact on GAAP results for the guidance period. A more detailed discussion of why we use non-GAAP financial measures, the limitations of using such measures, and reconciliations between non-GAAP and the nearest GAAP financial measures are included in this press release. For additional information, contact: Itron, Inc. Paul VincentVice President, Investor Relations(512) 560-1172 David MeansDirector, Investor Relations(737) 242-8448Investors@itron.com Itron, Inc. LinkedIn: https://www.linkedin.com/company/itroninc X: https://twitter.com/ItronInc Newsroom: https://itron.com/newsroom Blog: https://itron.com/blog ITRON, INC.CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited, in thousands, except per share data) Three Months EndedMarch 31, 2025 2024 Revenues Product revenues$523,141 $527,822 Service revenues 84,010 75,620 Total revenues 607,151 603,442 Cost of revenues Product cost of revenues 346,442 356,707 Service cost of revenues 43,490 41,356 Total cost of revenues 389,932 398,063 Gross profit 217,219 205,379 Operating expenses Sales, general and administrative 86,911 85,971 Research and development 50,090 52,401 Amortization of intangible assets 4,479 3,986 Restructuring (553) 198 Loss on sale of business 79 23 Total operating expenses 141,006 142,579 Operating income 76,213 62,800 Other income (expense) Interest income 11,710 3,846 Interest expense (5,593) (1,893) Other income (expense), net (51) 463 Total other income (expense) 6,066 2,416 Income before income taxes 82,279 65,216 Income tax provision (16,929) (13,429)Net income 65,350 51,787 Net income (loss) attributable to noncontrolling interests (124) 66 Net income attributable to Itron, Inc.$65,474 $51,721 Net income per common share - Basic$1.44 $1.13 Net income per common share - Diluted$1.42 $1.12 Weighted average common shares outstanding - Basic 45,338 45,652 Weighted average common shares outstanding - Diluted 46,172 46,357 ITRON, INC.SEGMENT INFORMATION (Unaudited, in thousands) Three Months EndedMarch 31, 2025 2024 Product revenues Device Solutions$125,387 $125,908 Networked Solutions 374,522 381,305 Outcomes 23,232 20,609 Total Company$523,141 $527,822 Service revenues Device Solutions$484 $844 Networked Solutions 28,210 26,211 Outcomes 55,316 48,565 Total Company$84,010 $75,620 Total revenues Device Solutions$125,871 $126,752 Networked Solutions 402,732 407,516 Outcomes 78,548 69,174 Total Company$607,151 $603,442 Gross profit Device Solutions$37,753 $30,064 Networked Solutions 148,714 151,025 Outcomes 30,752 24,290 Total Company$217,219 $205,379 Operating income Device Solutions$30,471 $21,703 Networked Solutions 116,109 116,678 Outcomes 14,330 9,091 Corporate unallocated (84,697) (84,672) Total Company$76,213 $62,800 Total Gross Margin 35.8% 34.0% ITRON, INC.CONSOLIDATED BALANCE SHEETS (Unaudited, in thousands)March 31, 2025 December 31, 2024ASSETS Current assets Cash and cash equivalents$1,123,267 $1,051,237 Accounts receivable, net 346,599 350,473 Inventories 281,878 270,725 Other current assets 150,784 143,457 Total current assets 1,902,528 1,815,892 Property, plant, and equipment, net 112,453 115,428 Deferred tax assets, net 315,180 310,280 Other long-term assets 44,342 41,827 Operating lease right-of-use assets, net 27,230 28,957 Intangible assets, net 38,744 43,109 Goodwill 1,062,665 1,052,130 Total assets$3,503,142 $3,407,623 LIABILITIES AND EQUITY Current liabilities Accounts payable$164,417 $144,929 Other current liabilities 50,028 61,241 Wages and benefits payable 90,241 137,384 Taxes payable 18,241 19,689 Current portion of debt, net 457,747 — Current portion of warranty 14,934 14,302 Unearned revenue 187,812 150,720 Total current liabilities 983,420 528,265 Long-term debt, net 786,137 1,242,424 Long-term warranty 7,583 7,839 Pension benefit obligation 61,253 59,537 Deferred tax liabilities, net 623 565 Operating lease liabilities 22,322 25,350 Other long-term obligations 132,725 132,215 Total liabilities 1,994,063 1,996,195 Equity Common stock 1,708,588 1,689,835 Accumulated other comprehensive loss, net (96,383) (109,931) Accumulated deficit (123,830) (189,304) Total Itron, Inc. shareholders' equity 1,488,375 1,390,600 Noncontrolling interests 20,704 20,828 Total equity 1,509,079 1,411,428 Total liabilities and equity$3,503,142 $3,407,623 ITRON, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited, in thousands)Three Months Ended March 31, 2025 2024 Operating activities Net income$65,350 $51,787 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization of intangible assets 12,068 12,744 Non-cash operating lease expense 2,923 3,814 Stock-based compensation 16,558 11,429 Amortization of prepaid debt fees 1,781 888 Deferred taxes, net (5,461) (1,579) Loss on sale of business 79 23 Restructuring, non-cash (25) (194) Other adjustments, net (338) (322)Changes in operating assets and liabilities, net of acquisition and sale of business: Accounts receivable 6,414 (36,826) Inventories (10,099) (5,559) Other current assets (5,959) (9,690) Other long-term assets (1,087) (4,824) Accounts payable, other current liabilities, and taxes payable 10,529 48,412 Wages and benefits payable (48,692) (40,561) Unearned revenue 39,113 35,738 Warranty 241 1,489 Restructuring (8,328) (7,166) Other operating, net (2,950) (18,295) Net cash provided by operating activities 72,117 41,308 Investing activities Acquisitions of property, plant, and equipment (4,639) (7,145) Business acquisitions, net of cash and cash equivalents acquired — (34,126) Other investing, net 5 125 Net cash used in investing activities (4,634) (41,146) Financing activities Issuance of common stock 2,195 1,564 Prepaid debt fees (175) (206) Other financing, net (259) (281) Net cash provided by financing activities 1,761 1,077 Effect of foreign exchange rate changes on cash and cash equivalents 2,786 (2,682)Increase (decrease) in cash and cash equivalents 72,030 (1,443)Cash and cash equivalents at beginning of period 1,051,237 302,049 Cash and cash equivalents at end of period$1,123,267 $300,606 About Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared in accordance with GAAP, we use certain non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, free cash flow, and constant currency. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP, and other companies may define such measures differently. For a reconciliation of each non-GAAP measure to the most comparable financial measure prepared and presented in accordance with GAAP, please see the table captioned Reconciliations of Non-GAAP Financial Measures to the Most Directly Comparable GAAP Financial Measures. We use these non-GAAP financial measures for financial and operational decision making and/or as a means for determining executive compensation. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and ability to service debt by excluding certain expenses that may not be indicative of our recurring core operating results. These non-GAAP financial measures facilitate management's internal comparisons to our historical performance, as well as comparisons to our competitors' operating results. Our executive compensation plans exclude non-cash charges related to amortization of intangibles and certain discrete cash and non-cash charges, such as restructuring, loss on sale of business, or acquisition and integration related expenses. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. We believe these non-GAAP financial measures are useful to investors because they provide greater transparency with respect to key metrics used by management in its financial and operational decision making and because they are used by our institutional investors and the analyst community to analyze the health of our business. Non-GAAP operating expenses and non-GAAP operating income – We define non-GAAP operating expenses as operating expenses excluding certain expenses related to the amortization of intangible assets, restructuring, loss on sale of business, and acquisition and integration related expenses. We define non-GAAP operating income as operating income excluding the expenses related to the amortization of intangible assets, restructuring, loss on sale of business, and acquisition and integration related expenses. Acquisition and integration related expenses include costs, which are incurred to affect and integrate business combinations, such as professional fees, certain employee retention and salaries related to integration, severances, contract terminations, travel costs related to knowledge transfer, system conversion costs, and asset impairment charges. We consider these non-GAAP financial measures to be useful metrics for management and investors because they exclude the effect of expenses that are not related to our core operating results. By excluding these expenses, we believe that it is easier for management and investors to compare our financial results over multiple periods and analyze trends in our operations. For example, in certain periods, expenses related to amortization of intangible assets may decrease, which would improve GAAP operating margins, yet the improvement in GAAP operating margins due to this lower expense is not necessarily reflective of an improvement in our core business. There are some limitations related to the use of non-GAAP operating expenses and non-GAAP operating income versus operating expenses and operating income calculated in accordance with GAAP. We compensate for these limitations by providing specific information about the GAAP amounts excluded from non-GAAP operating expense and non-GAAP operating income and evaluating non-GAAP operating expense and non-GAAP operating income together with GAAP operating expense and operating income. Non-GAAP net income and non-GAAP diluted EPS – We define non-GAAP net income as net income attributable to Itron, Inc. excluding the expenses associated with amortization of intangible assets, amortization of debt placement fees, restructuring, loss on sale of business, acquisition and integration related expenses, and the tax effect of excluding these expenses. We define non-GAAP diluted EPS as non-GAAP net income divided by diluted weighted-average shares outstanding during the period calculated on a GAAP basis and then reduced to reflect any anti-dilutive impact of the convertible notes hedge transactions. We consider these financial measures to be useful metrics for management and investors for the same reasons that we use non-GAAP operating income. The same limitations described above regarding our use of non-GAAP operating income apply to our use of non-GAAP net income and non-GAAP diluted EPS. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP measures and evaluating non-GAAP net income and non-GAAP diluted EPS together with GAAP net income attributable to Itron, Inc. and GAAP diluted EPS. For interim periods the budgeted annual effective tax rate (AETR) is used, adjusted for any discrete items, as defined in Accounting Standards Codification (ASC) 740 - Income Taxes. The budgeted AETR is determined at the beginning of the fiscal year. The AETR is revised throughout the year based on changes to our full-year forecast. If the revised AETR increases or decreases by 200 basis points or more from the budgeted AETR due to changes in the full-year forecast during the year, the revised AETR is used in place of the budgeted AETR beginning with the quarter the 200 basis point threshold is exceeded and going forward for all subsequent interim quarters in the year. We continue to assess the AETR based on latest forecast throughout the year and use the most recent AETR anytime it increases or decreases by 200 basis points or more from the prior interim period. Adjusted EBITDA – We define adjusted EBITDA as net income (a) minus interest income, (b) plus interest expense, depreciation and amortization, restructuring, loss on sale of business, acquisition and integration related expenses, and (c) excluding income tax provision or benefit. Management uses adjusted EBITDA as a performance measure for executive compensation. A limitation to using adjusted EBITDA is that it does not represent the total increase or decrease in the cash balance for the period and the measure includes some non-cash items and excludes other non-cash items. Additionally, the items that we exclude in our calculation of adjusted EBITDA may differ from the items that our peer companies exclude when they report their results. We compensate for these limitations by providing a reconciliation of this measure to GAAP net income. Free cash flow – We define free cash flow as net cash provided by operating activities less cash used for acquisitions of property, plant and equipment. We believe free cash flow provides investors with a relevant measure of liquidity and a useful basis for assessing our ability to fund our operations and repay our debt. The same limitations described above regarding our use of adjusted EBITDA apply to our use of free cash flow. We compensate for these limitations by providing specific information regarding the GAAP amounts in the reconciliation. Constant currency – We refer to the impact of foreign currency exchange rate fluctuations in our discussions of financial results, which references the differences between the foreign currency exchange rates used to translate operating results from the entity's functional currency into U.S. dollars for financial reporting purposes. We also use the term "constant currency", which represents financial results adjusted to exclude changes in foreign currency exchange rates as compared with the rates in the comparable prior year period. We calculate the constant currency change as the difference between the current period results and the comparable prior period's results restated using current period foreign currency exchange rates. The tables below reconcile the non-GAAP financial measures of operating expenses, operating income, net income, diluted EPS, adjusted EBITDA, and free cash flow with the most directly comparable GAAP financial measures. ITRON, INC.RECONCILIATIONS OF NON-GAAP FINANCIAL MEASURESTO THE MOST DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES(Unaudited, in thousands, except per share data) TOTAL COMPANY RECONCILIATIONSThree Months Ended March 31, 2025 2024 NON-GAAP OPERATING EXPENSES GAAP operating expenses$141,006 $142,579 Amortization of intangible assets (4,479) (3,986) Restructuring 553 (198) Loss on sale of business (79) (23) Acquisition and integration (51) (318) Non-GAAP operating expenses$136,950 $138,054 NON-GAAP OPERATING INCOME GAAP operating income$76,213 $62,800 Amortization of intangible assets 4,479 3,986 Restructuring (553) 198 Loss on sale of business 79 23 Acquisition and integration 51 318 Non-GAAP operating income$80,269 $67,325 NON-GAAP NET INCOME & DILUTED EPS GAAP net income attributable to Itron, Inc.$65,474 $51,721 Amortization of intangible assets 4,479 3,986 Amortization of debt placement fees 1,737 844 Restructuring (553) 198 Loss on sale of business 79 23 Acquisition and integration 51 318 Income tax effect of non-GAAP adjustments (1,157) 201 Non-GAAP net income attributable to Itron, Inc.$70,110 $57,291 Non-GAAP diluted EPS$1.52 $1.24 Non-GAAP weighted average common shares outstanding - Diluted 46,172 46,357 ADJUSTED EBITDA GAAP net income attributable to Itron, Inc.$65,474 $51,721 Interest income (11,710) (3,846) Interest expense 5,593 1,893 Income tax provision 16,929 13,429 Depreciation and amortization 12,068 12,744 Restructuring (553) 198 Loss on sale of business 79 23 Acquisition and integration 51 318 Adjusted EBITDA$87,931 $76,480 FREE CASH FLOW Net cash provided by operating activities$72,117 $41,308 Acquisitions of property, plant, and equipment (4,639) (7,145) Free Cash Flow$67,478 $34,163

Itron Announces First Quarter 2025 Financial Results

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