Itron Q2 Earnings Call Highlights

Key Points

• Itron reported $563 million in Q2 2026 revenue, while adjusted EBITDA rose 8% to $97 million and non-GAAP EPS reached $1.59. Record adjusted gross margin of 41.4% reflected favorable business mix, operational efficiencies and cost discipline.
• Networked Solutions revenue fell 17% because of project-deployment timing, but Outcomes revenue increased 13% and annual recurring revenue grew 21% year over year. Bookings totaled $550 million, with backlog holding at $4.4 billion and the pipeline expanding.
• Itron raised its full-year non-GAAP EPS outlook to $6.30–$6.50, up 7% at the midpoint from its February forecast, while maintaining a 2026 revenue outlook of $2.37–$2.41 billion. Third-quarter revenue is expected to reach $590–$600 million.

Itron NASDAQ: ITRI reported second-quarter 2026 revenue of $563 million, with record gross margin and earnings that exceeded the company’s expectations despite lower year-over-year revenue tied to the timing of Networked Solutions project deployments.

Chief Executive Officer Tom Deitrich said the quarter demonstrated the company’s improved operating model, citing stronger mix, execution and operational-efficiency measures. Itron reported annual recurring revenue of $417 million, adjusted EBITDA of $97 million, non-GAAP earnings per share of $1.59 and free cash flow of $81 million.

“The operating model we have built now delivers structurally better earnings power,” Deitrich said. He added that deployment timing can shift between quarters because a meaningful portion of Itron’s business involves large, multiyear utility programs, but said the company believes its margin and efficiency improvements are durable.

Margins Rise as Revenue Mix Shifts

Second-quarter revenue was within the company’s prior outlook range, though it declined from the prior-year period because of Networked Solutions deployment timing. The decline was partly offset by growth in the Outcomes segment.

GAAP gross margin was 41%, up 410 basis points from a year earlier. Adjusted gross margin reached a quarterly record of 41.4%, an increase of 460 basis points year over year. Joan Hooper, Itron’s senior vice president and chief financial officer, attributed the improvement to favorable mix, operational efficiencies and cost discipline.

GAAP net income was $53 million, or $1.19 per diluted share, compared with $68 million, or $1.47 per share, a year earlier. Hooper said the decline reflected lower interest income and a higher effective tax rate. Non-GAAP operating income rose 8% to $89 million, while adjusted EBITDA also increased 8% to $97 million. Non-GAAP net income was $71 million, or $1.59 per diluted share, compared with $1.62 per share in the prior-year quarter.

• Device Solutions revenue was $111 million, down 3% on a constant-currency basis, with adjusted gross margin of 34.8%.
• Networked Solutions revenue was $339 million, down 17% because of deployment timing, with adjusted gross margin of 42.8%.
• Outcomes revenue was $96 million, up 13% on higher services revenue, with adjusted gross margin of 38.8%.
• Resiliency Solutions, which includes the Urbint and Locusview acquisitions, contributed about $16 million of revenue, with adjusted gross margin of 75%.

Free cash flow totaled $81 million, compared with $91 million a year ago. The company said higher tax payments and lower interest income were partly offset by working-capital timing.

Backlog Holds at $4.4 Billion, With Pipeline Growth Continuing

Second-quarter bookings were $550 million, in line with Itron’s expectations, and total backlog stood at $4.4 billion at quarter-end. Deitrich said large project bookings can be uneven because customer decisions are often linked to regulatory approval processes, but he characterized the pipeline as continuing to expand heading into the second half of 2026, 2027 and beyond.

During the quarter, Itron cited platform-as-a-service programs with 1789 LUX Partners and several municipalities, an expanded relationship with the Los Angeles Department of Water and Power, and Sacramento Municipal Utility District’s plans to expand its Riva deployment. Deitrich said these wins illustrate growing adoption among municipal and public-power customers in addition to investor-owned utilities.

The company’s annual recurring revenue increased about 21% year over year, while Deitrich said Outcomes continued to generate strong year-over-year growth. In response to a question, management said the number of licensed applications had approached 28 million, up more than 50% year over year.

Deitrich said utilities are facing reliability, resiliency and affordability pressures alongside changing electricity-demand patterns, including industrial load growth and AI-driven power demand. He said those conditions are supporting demand for grid-edge intelligence, non-wires alternatives, time-to-power solutions and other tools designed to improve the use of existing distribution infrastructure.

Company Raises Full-Year EPS Outlook

Itron projected third-quarter revenue of $590 million to $600 million, representing 2% year-over-year growth at the midpoint and 6% sequential growth. It expects third-quarter non-GAAP earnings per share of $1.50 to $1.60, up 1% year over year at the midpoint.

For the full year, the company narrowed its revenue outlook to $2.37 billion to $2.41 billion, similar to the range first provided in February. At the midpoint, the outlook represents 1% growth from 2025. Hooper said the forecast implies nearly 8% year-over-year and sequential growth in the second half, reflecting a more back-end-loaded revenue profile in 2026.

Itron raised its full-year non-GAAP EPS outlook to $6.30 to $6.50, which Hooper said represents a 7% increase at the midpoint from its February outlook. While the expected figure remains below 2025 on an as-reported basis, she said the midpoint would be about 7% above 2025 when normalized for tax rate and interest-income differences.

Management expects full-year gross margin to be close to 40%, although margins may decline modestly from first-half levels as mix changes. The company said supply conditions remain stable overall, though it is proactively managing areas of tightness, including memory pricing.

At quarter-end, Itron had total debt of $1.6 billion, net leverage of 2.3 times and liquidity of $1.5 billion, including $745 million in cash and equivalents and $707 million available under its revolving credit facility. During the quarter, the company repurchased $52 million of shares, or approximately 644,000 shares, under its authorization.

On the recent Urbint and Locusview acquisitions, Hooper said integration is tracking to plan. Itron continues to expect Resiliency Solutions revenue of $65 million to $70 million for 2026 and gross margin of about 70%. Deitrich said cross-selling activity has begun, though he did not identify specific cross-selling wins during the call.

About Itron (NASDAQ:ITRI)

Itron, Inc NASDAQ: ITRI is a global technology company that develops innovative solutions to measure, manage and analyze the use of energy and water. Its comprehensive portfolio includes smart meters, data collection devices, communication networks and advanced software applications designed to optimize utility operations and foster sustainable resource management. The company's offerings enable utilities and cities to accurately monitor consumption patterns, streamline billing processes and improve grid reliability.

Itron's product lineup spans a range of hardware and software solutions, from residential and commercial smart meters to meter data management systems (MDMS), networked communication platforms and analytics tools.

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