Badger Meter Reports Decline in Q1 2026 Financial Performance

Badger Meter, Inc. reported a decline in financial performance for the first quarter of 2026, with net sales totaling $202.3 million, down from $222.2 million in the same period last year. The decrease in revenue was primarily attributed to project timing dynamics and customer order pacing in the utility water market, which saw sales drop to $178.4 million from $197.3 million. The company's gross margin also fell, amounting to $84.3 million, or 41.7% of sales, compared to $95.4 million, or 42.9% of sales, in the prior year. Net earnings for the quarter were $27.3 million, translating to $0.93 per diluted share, a decrease from $38.4 million, or $1.30 per diluted share, in the previous year.

In terms of operational metrics, Badger Meter's selling, engineering, and administration expenses increased to $49.2 million, representing 24.3% of sales, compared to $46.0 million, or 20.7% of sales, in the prior year. This rise in expenses was largely due to higher personnel costs and the inclusion of SmartCover's expenses following its acquisition. The company’s primary working capital as a percentage of sales decreased to 20.0% from 20.9% at the end of 2025, reflecting a $13.0 million reduction in overall working capital.

Strategically, Badger Meter continues to expand its product offerings and market presence. The company completed the acquisition of SmartCover, a provider of sewer line and lift station monitoring solutions, for $184 million in January 2025. This acquisition is expected to enhance Badger Meter's utility water product line. Additionally, on April 13, 2026, the company announced a purchase agreement to acquire UDlive Ltd for $100 million, further solidifying its position in the water management solutions market.

Geographically, the company reported a decline in sales across various regions, with U.S. sales dropping to $178.6 million from $201.9 million. However, sales in Europe and Asia showed modest growth, indicating potential areas for future expansion. The company’s cash and cash equivalents decreased to $205.5 million from $226.0 million at the end of 2025, primarily due to stock repurchases and dividend payments.

Looking ahead, Badger Meter anticipates continued challenges in the utility water market due to project timing and order pacing. However, the company remains optimistic about the growth potential of its SmartCover and UDlive acquisitions, as well as the increasing adoption of its BEACON software solutions. The company plans to leverage its strong relationships with telecommunications providers to enhance its smart water solutions and address the evolving needs of its customers.