Badger Meter Reports Fourth Quarter and Full Year 2025 Financial Results
MILWAUKEE--( BUSINESS WIRE)-- Badger Meter, Inc. (NYSE: BMI) today reported results for the fourth quarter and full year ended December 31, 2025.
Fourth Quarter 2025 Highlights
Full Year 2025 Highlights
Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer, remarked, “Our full year 2025 results included another year of record sales, profitability and cash flow. Sustained demand for our smart water management solutions drove solid performance across the entire BlueEdge ® portfolio. Several recently-completed AMI projects, and awarded projects that will begin implementation in 2026, reinforce the tangible benefits that drive adoption of our industry-leading cellular AMI solution.
Additionally, we deployed capital on-hand to acquire SmartCover in early 2025, expanding our comprehensive suite of tailorable solutions to include broader sewer monitoring and stormwater management hardware and software capabilities. Adding SmartCover to our BlueEdge suite of smart water management solutions positions us for long-term growth across the entire water cycle. I would like to thank the entire Badger Meter team for demonstrating agility throughout 2025 as we navigated unpredictable global trade conditions, continued to support our customers in their adoption of our market-leading solutions and successfully executed the acquisition and integration of SmartCover."
Fourth Quarter Operating Results
Utility water sales grew 9% year-over-year, or 2% excluding SmartCover. Ongoing customer adoption of digital smart water solutions, including increased sales of ultrasonic meters, ORION® Cellular radios, BEACON® SaaS, and water quality solutions, were the primary drivers of growth compared to the prior-year quarter. As expected, fewer operating days in the fourth quarter and previously-communicated project pacing effects contributed to the 6% sequential decline in utility water sales versus the third quarter of 2025, illustrating the long-standing and inherent top-line unevenness that can occur quarter-to-quarter and year-to-year, regardless of underlying market conditions.
Sales of flow instrumentation products remained largely flat year-over-year with modest growth in the water-focused end markets offsetting declines across the array of de-emphasized applications.
Operating earnings increased 10% year-over-year to $43.0 million, with operating profit margins expanding 40 basis points to 19.5%. Base operating earnings of $42.8 million increased 9.0% year-over-year, driving 140 basis points of Base operating margin expansion. Gross margin was up 180 basis points to 42.1% from the prior-year quarter. Gross margin continued to benefit from structural sales mix driven by ultrasonic meters, cellular AMI, water quality, and SmartCover sales, which were above line average. Additionally, the same project pacing effects that impacted utility water sales benefited margins due to lower pass-through revenue such as meter installation and ancillary meter pit supplies, which tend to be below line average.
Total Selling, Engineering and Administration (SEA) expenses increased by $6.4 million year-over-year to $49.9 million, due primarily to the addition of SmartCover, including $1.6 million of intangible asset amortization. Base SEA expense increased $1.3 million, or 2.9% year-over-year. In total, SEA as a percent of sales increased to 22.6% from 21.2% in the prior-year quarter, with Base SEA as a percent of sales increasing a modest 30 basis points.
The tax rate for the fourth quarter of 2025 was 24.8% compared to 27.1% in the prior-year comparable period. As a result of the above, combined with lower interest income year-over-year, EPS was $1.14, an increase of 10% compared to $1.04 in the prior-year quarter.
Full Year 2025 Recap
Bockhorst continued, “I'm proud of our performance in 2025, delivering double-digit revenue growth, profit margin expansion and record free cash flow conversion. Durable demand, driven by long-term secular trends favoring the adoption of smart water management solutions, continues to support robust and profitable top-line growth.
"In 2025, we increased our normalized gross margin range from 38-40% to 39-42% to reflect the structural mix benefit that corresponds with expanding our installed base of software-enabled solutions. Finally, disciplined execution in both the Base business and throughout the SmartCover integration supported another year of robust free cash flow generation.
"Nearly two years after the formal launch of our BlueEdge suite of comprehensive smart water management solutions, I'm thrilled with our robust opportunity funnel spanning both customer water usage and beyond the meter applications. We now address a comprehensive range of common, but complex challenges across the water cycle from source water monitoring to wastewater management. Our growing list of BlueEdge-enabled customers highlights the benefits of pressure management, leak detection, water quality and network monitoring applications. The strength of our balance sheet enables us to continue our capital allocation priorities of R&D leadership, returning cash to shareholders and executing value-creating acquisitions, like SmartCover, to further assist customers in addressing their water infrastructure challenges."
Badger Meter Selected to Modernize Puerto Rico’s Water Infrastructure
Following a rigorous multi‑year competitive pilot, the Puerto Rico Aqueduct and Sewer Authority (PRASA) selected Badger Meter's advanced metering infrastructure (AMI) solutions for a project designed to strengthen the island’s water system resiliency. PRASA will use Badger Meter's cellular AMI solution, featuring E‑Series® Ultrasonic meters, ORION Cellular endpoints, and BEACON SaaS. The project, one of the world’s largest AMI deployments, will enhance operational efficiency, reduce non‑revenue water and streamline billing activities for 1.6 million service connections.
Outlook
Bockhorst concluded, "We enter 2026 with the same conviction in our ability to deliver, over a forward five-year time horizon, high single-digit sales growth, year-over-year operating profit margin expansion, and free cash flow conversion in excess of 100% of earnings. The key drivers enabling these long-term outcomes include growing the installed base of our industry-leading cellular AMI solution, accelerating the adoption of BlueEdge technologies, and targeting value-accretive international expansion opportunities. Our selection for the transformative PRASA AMI project is just one illustrative example of the types of projects that inform this forward growth outlook.
"The second half of 2025 included a concentrated mix of concluding AMI turnkey projects, resulting in Base revenue growth that was lower than our five-year forward outlook. Looking ahead, we expect this dynamic to persist through the first half of 2026, until several awarded projects begin multi-year turnkey deployments.
"Our track record of disciplined execution and innovation has consistently delivered strong shareholder returns over the long run. As we advance technologies that enable utilities to manage and protect the world’s most precious resource, we remain well-positioned to capitalize on a robust pipeline of growth opportunities. This ongoing commitment to operational excellence and strategic investment supports our ability to deliver differentiated solutions, drive long-term value creation, and address the evolving needs of our customers.”
Conference Call and Webcast Information
Badger Meter management will hold a conference call to discuss the Company’s fourth quarter and full year 2025 results today, Wednesday January 28, 2026 at 10:00 AM Central/11:00 AM Eastern time. A live listen-only webcast and the related presentation will be available on the Events & Presentations section of the Company’s investor relations website. Individuals wishing to participate in the call should use this online registration link: https://events.q4inc.com/analyst/249539465?pwd=bn49BzDU.
Safe Harbor Statement
Certain statements contained in this news release, as well as other information provided from time to time by Badger Meter, Inc. (the “Company”) or its employees, may contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those statements. The Company’s results are subject to general economic conditions, variation in demand from customers, continued market acceptance of new products, the successful integration of acquisitions, competitive pricing and operating efficiencies, supply chain risk, material and labor cost increases, tax reform and foreign currency risk. See the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission for further information regarding risk factors, which are incorporated herein by reference. Badger Meter disclaims any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or any other reason.
Non-GAAP Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this news release also contains non-GAAP ("Base") measures. Reconciliations of these measures to the most comparable GAAP measures can be found in the supplemental reconciliation schedule attached.
Each of the non-GAAP ("Base") measures referenced in this news release and associated reconciliation tables should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measure. Management believes that these Base measures provide useful information to investors and other stakeholders by facilitating year-over-year comparisons of Badger Meter's Base operating results in the first year following an acquisition. All Base measures referenced herein exclude the contribution of SmartCover.
About Badger Meter
With more than a century of water technology innovation, Badger Meter provides comprehensive water management solutions through its BlueEdge ® suite. This tailorable portfolio of smart measurement hardware, reliable communications, data visualization and analytics software and ongoing support and industry expertise give customers the edge in optimizing their operations and contributing to the sustainable use and protection of the world’s most precious resource. For more information, visit www.badgermeter.com.
BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except share and earnings per share data)
Three Months Ended December 31,
Twelve Months Ended December 31,
2025
2024
2025
2024
(Unaudited)
(Unaudited)
(Unaudited)
Net sales
$
220,706
$
205,182
$
916,663
$
826,558
Cost of sales
127,719
122,422
534,593
497,374
Gross margin
92,987
82,760
382,070
329,184
Selling, engineering and administration
49,938
43,537
198,649
171,248
Operating earnings
43,049
39,223
183,421
157,936
Interest income, net
(1,565
)
(2,924
)
(5,124
)
(8,613
)
Other pension and postretirement (income) costs
(28
)
12
(112
)
49
Earnings before income taxes
44,642
42,135
188,657
166,500
Provision for income taxes
11,067
11,418
47,023
41,558
Net earnings
$
33,575
$
30,717
$
141,634
$
124,942
Earnings per share:
Basic
$
1.14
$
1.05
$
4.82
$
4.26
Diluted
$
1.14
$
1.04
$
4.79
$
4.23
Shares used in computation of earnings per share:
Basic
29,375,279
29,368,656
29,398,469
29,355,741
Diluted
29,542,816
29,559,950
29,569,496
29,533,543
BADGER METER, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
Assets
December 31,
December 31,
2025
2024
(Unaudited)
Cash and cash equivalents
$
226,016
$
295,305
Receivables
112,356
84,325
Inventories
151,935
143,408
Other current assets
16,770
17,078
Total current assets
507,077
540,116
Net property, plant and equipment
79,636
74,260
Intangible assets, at cost less accumulated amortization
118,496
45,066
Other long-term assets
32,793
45,201
Goodwill
235,575
111,770
Total assets
$
973,577
$
816,413
Liabilities and Shareholders' Equity
Payables
$
72,299
$
55,659
Accrued compensation and employee benefits
37,619
34,912
Other current liabilities
40,798
27,634
Total current liabilities
150,716
118,205
Deferred income taxes
3,477
3,652
Long-term deferred revenue, employee benefits and other
106,090
88,324
Shareholders' equity
713,294
606,232
Total liabilities and shareholders' equity
$
973,577
$
816,413
BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended December 31,
Twelve Months Ended December 31,
2025
2024
2025
2024
(Unaudited)
(Unaudited)
(Unaudited)
Operating activities:
Net earnings
$
33,575
$
30,717
$
141,634
$
124,942
Adjustments to reconcile net earnings to net cash provided by operations:
Depreciation
2,777
2,773
11,103
11,103
Amortization
6,023
5,295
23,481
21,082
Deferred income taxes
(854
)
(11,074
)
(854
)
(11,074
)
Noncurrent employee benefits
91
(141
)
136
(153
)
Stock-based compensation expense
2,745
1,587
9,190
6,182
Changes in:
Receivables
2,688
8,370
(20,115
)
(1,444
)
Inventories
753
13,687
(987
)
10,320
Payables
2,462
(6,919
)
14,399
(12,161
)
Prepaid expenses and other assets
(528
)
(7,540
)
(3,804
)
(15,312
)
Other liabilities
5,069
15,312
9,515
21,549
Total adjustments
21,226
21,350
42,064
30,092
Net cash provided by operations
54,801
52,067
183,698
155,034
Investing activities:
Property, plant and equipment expenditures
(4,033
)
(4,669
)
(14,026
)
(12,818
)
Acquisitions, net of cash acquired
-
-
(184,024
)
(3,000
)
Net cash used for investing activities
(4,033
)
(4,669
)
(198,050
)
(15,818
)
Financing activities:
Dividends paid
(11,738
)
(9,985
)
(43,529
)
(35,847
)
Proceeds from exercise of stock options
-
-
554
751
Repurchase of common stock for treasury stock
(15,002
)
-
(15,002
)
-
Net cash used for financing activities
(26,740
)
(9,985
)
(57,977
)
(35,096
)
Effect of foreign exchange rates on cash
295
(1,063
)
3,040
(597
)
Increase (decrease) in cash and cash equivalents
24,323
36,350
(69,289
)
103,523
Cash and cash equivalents - beginning of period
201,693
258,955
295,305
191,782
Cash and cash equivalents - end of period
$
226,016
$
295,305
$
226,016
$
295,305
APPENDIX
BADGER METER, INC.
RECONCILIATION OF NON-GAAP PERFORMANCE MEASURES TO GAAP PERFORMANCE MEASURES
(in thousands, except share and earnings per share data)
Three Months Ended December 31,
Twelve Months Ended December 31,
2025
SmartCover
Base
2025
SmartCover
Base
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Net sales
$
220,706
$
11,834
$
208,872
$
916,663
$
39,677
$
876,986
Selling, engineering and administration
49,938
5,133
44,805
198,649
19,424
179,225
Operating earnings (loss)
43,049
291
42,758
183,421
(1,746
)
185,167
Operating earnings as % of sales
19.5
%
2.5
%
20.5
%
20.0
%
-4.4
%
21.1
%
* SmartCover results are included from the date of acquisition of January 30, 2025
** SmartCover amortization was $1.6 million for the three months ended December 31, 2025 and $5.8 million for the eleven months ended December 31, 2025 and reported as part of Selling, engineering and administration expenses