Oct 22, 2026 earnings call — OneNetwork launch and Q3 results
Badger Meter reported Q3 total sales of $235.9 million and expects sequential and year-over-year improvement in Q4.
Revenue $0.2B (est $0.2B) · EPS $1.24 (est $1.23)
Key quotes
"On a year-over-year basis, operating earnings increased 4%, with margins up 60 basis points to 20.2%."
"During the show, we formally launched OneNetwork, our real-time network monitoring and analysis platform for water and wastewater utilities."
"Excluding the solid revenue contribution of the UDlive acquisition, third quarter base sales increased 5% sequentially from the second quarter."
Analyst Q&A 7
Q4 revenue and gross margins
Q (Nathan Jones · Stifel): Analyst asked for a clearer view of 4Q revenue and what 'flat-ish' means. He also asked why gross margins were stronger than expected and how to think about margins going forward.
A: Management said they expect modest sequential growth in Q4 but would not peg specific digits for the quarter. They clarified full year is expected to be down low single digits. They said margins were supported by structural mix and operational execution, with ultrasonic meter mix and software growth helping the quarter.
"I didn't say the word down. We expect to be down year-over-year low single digits, just to be clear." — Ken Bockhorst (CEO·CHAIR)
Replacement demand and PRASA timing
Q (Quinn Fredrickson · Baird): Analyst asked if day-to-day replacement demand feels healthier. He also asked if drought in Puerto Rico changed urgency or speed of PRASA's AMI rollout.
A: They said Q2 and Q3 felt normal after a weak Q1, so underlying replacement demand looks normal. On PRASA, they would not comment on PRASA's ability to go faster, but said they have begun shipping product, contractors are hired, and installations are expected to start in Q4; projects can be uneven quarter-to-quarter.
"They're in planning, and they're expecting to start installations in Q4." — Ken Bockhorst (CEO·CHAIR)
Organic growth outlook and component costs
Q (Jeff Reive · RBC): Analyst asked if UDlive ramps and easier comps could return the company to high single-digit organic growth next year. He also asked whether electronic component pressures have escalated and if pricing or sourcing actions were needed.
A: Management said the math describing a return to high single-digit growth sounds correct and they feel good about the year, but they won't peg the year because of unevenness in project ramps. On components, they said pressures have escalated, with ongoing price escalation and availability challenges, but the team is managing the price-cost dynamics and can extract value from customers.
"They have escalated. We do continue to see some price escalation. We do continue to see availability challenges." — Ken Bockhorst (CEO·CHAIR)
UDlive and SmartCover progress
Q (James Ko · Jefferies): Analyst asked whether the stated low single-digit full-year decline was organic. He also asked how UDlive and SmartCover are performing and whether they grow above company average.
A: They confirmed the low single-digit full-year decline is organic. They said UDlive and SmartCover are progressing well, are needed by utilities, have the right sales channels, and will be part of the company's long-term high single-digit growth story.
"So feel good about the progress on UDlive, feel equally as good about SmartCover, and that will continue to be a part of this high single-digit growth story that we talk about for years to come." — Ken Bockhorst (CEO·CHAIR)
Meter units weakness and backlog margins
Q (Scott Graham · Seaport): Analyst asked why metering units were weak across the industry and what meter-unit trends might look like next year. He also asked about gross margin in backlog and how much links to CPI and price increases.
A: Management said it's hard to generalize across 50,000 utilities and they would not comment on other companies; their customers are upgrading infrastructure and choosing their portfolio. On backlog margins, they reiterated confidence they can operate within the 39%-42% gross margin range and can manage SE&A leverage as they resume growth.
"All in, it feels manageable to us to stay within the margin ranges that we have consistently communicated." — Ken Bockhorst (CEO·CHAIR)
Margin drivers and PRASA revenue detail
Q (William Grippin · Barclays): Analyst returned to margin commentary and asked whether management was signaling a trend for Q4 or next year and if larger projects have different contract structures. He also asked how much PRASA contributed to Q3 revenue.
A: They said margin comments reflect many components, with structural mix the biggest driver, and that electronics pressures exist but have been managed; quarter-to-quarter there can be leading and lagging impacts. Management declined to break out PRASA's quarter contribution and noted they won other projects and the year has normalized.
"Again, I always remind people, structural mix is the biggest driver." — Dan Weltzien (CFO)
Pipeline and capital allocation
Q (Michael Fairbanks · JPMorgan): Analyst asked how the pipeline, awards, and backlog beyond the large cohort are trending versus last year. He also asked about capital allocation after buybacks accelerated.
A: They said the universe of utilities currently working with consultants, in RFP, or in-flight feels as robust as it has over the past several years. On capital allocation, priorities remain to invest in R&D and innovation, return cash to shareholders noting 34 years of increased dividends, continue share buybacks with $35 million left on the authorization, and they completed an acquisition this year.
"In terms of share buybacks, we still have $35 million on the authorization." — Ken Bockhorst (CEO·CHAIR)