Badger Meter Reports 13.5% Revenue Growth to $222.2 Million in Q1 2025

Badger Meter, Inc. reported a significant increase in financial performance for the first quarter of 2025, with net sales reaching $222.2 million, up from $196.3 million in the same period last year, marking an increase of 13.5%. The company's net earnings also rose to $38.4 million, or $1.30 per diluted share, compared to $29.1 million, or $0.99 per diluted share, in the prior year. This growth was primarily driven by a 16% increase in utility water market sales, which totaled $197.3 million, bolstered by higher sales of mechanical and ultrasonic meters, ORION® Cellular endpoints, and BEACON® Software as a Service (SaaS) revenue.

The company experienced notable changes in its financial metrics compared to the previous fiscal period. Gross margin increased to 42.9% of sales, up from 39.3% in the prior year, reflecting improved sales volumes and a favorable product mix. Operating earnings for the quarter were $49.4 million, representing 22.2% of sales, compared to $36.6 million, or 18.6% of sales, in the same quarter of 2024. Selling, engineering, and administration expenses rose to $46.0 million, primarily due to the inclusion of expenses from the recently acquired SmartCover, which contributed $6.2 million in revenue for the two months following its acquisition.

Strategically, Badger Meter completed the acquisition of Hadronex, Inc., known as SmartCover, on January 30, 2025, for $184.9 million. This acquisition is expected to enhance the company's offerings in sewer line and lift station monitoring solutions. Additionally, the company acquired the Telog® product line and Unity Remote Monitoring software for $3.0 million in cash in January 2024. These acquisitions are part of Badger Meter's strategy to expand its product portfolio and market presence, particularly in the utility water sector.

Operationally, Badger Meter reported an increase in receivables to $111.9 million, reflecting higher sales activity, while inventories rose to $149.4 million. The company's primary working capital as a percentage of sales increased to 22.0%, up from 20.8% at the end of 2024. The total number of shares outstanding as of April 8, 2025, was 29,453,307. The company continues to focus on geographic expansion and product adoption, particularly in the North American market, where it estimates that approximately 40% of water meters have been converted to advanced metering infrastructure (AMI) systems.

Looking ahead, Badger Meter remains optimistic about its growth prospects, driven by ongoing trends in water management and sustainability. The company is well-positioned to capitalize on the increasing demand for smart water solutions and the transition from traditional metering to advanced technologies. However, it also acknowledges potential challenges, including rising input costs due to recent trade policy changes and tariffs. The company plans to manage these challenges through strategic supply chain and pricing actions while continuing to monitor market conditions closely.