BMI earnings analysis
What we found in BMI's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Badger Meter reported Q1 net sales of $202,277,000 and diluted EPS of $0.93, both down versus Q1 2025. Gross margin narrowed to 41.69% and operating earnings declined materially, while operating cash flow remained positive at $33,893,000 and the company completed a $38,213,000 share repurchase in the quarter. Management announced a $100 million acquisition of UDlive (expected April 30, 2026) and continues to operate as a single reportable segment with $95.5 million of contract liabilities/unfulfilled obligations.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Positive operating cash flow retained
- Net cash provided by operations was $33,893,000 in Q1 2026, essentially flat with $33,027,000 in Q1 2025, supporting cash generation despite lower earnings.
- Free cash flow remained positive
- Free cash flow (operating cash flow of $33,893,000 less capital expenditures of $4,427,000) was approximately $29,466,000 in Q1 2026.
- Contract liability backlog provides revenue visibility
- The company reported contract liabilities (unsatisfied performance obligations) of $95,529,000 and expects $19,500,000 to be recognized in 2026 and $10,500,000 in 2027.
- Shareholder returns active this quarter
- The company repurchased common stock for treasury stock totaling $38,213,000 and increased quarterly cash dividend to $0.40 per share (from $0.34 per share in Q1 2025).
- Strategic bolt-on acquisition announced
- On April 13, 2026 Badger Meter signed a purchase agreement to acquire UDlive Ltd for $100,000,000 (with an EBITDA-contingent earnout), expected to close April 30, 2026.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Revenue decline year-over-year
- Net sales fell to $202,277,000 in Q1 2026 from $222,211,000 in Q1 2025, a decrease of $19,934,000 (≈8.97%).
- Material margin and operating profit compression
- Gross margin decreased from $95,437,000 to $84,327,000 (a decline of $11,110,000) and operating earnings declined from $49,425,000 to $35,171,000 (a decline of $14,254,000), driving operating margin down to 17.39% from 22.25% (≈4.86 percentage points).
- Net earnings and EPS materially lower
- Net earnings declined to $27,335,000 (diluted EPS $0.93) from $38,398,000 (diluted EPS $1.30) in Q1 2025, a net earnings drop of $11,063,000 (≈28.8%).
- Inventory build while receivables slightly down
- Inventory increased to $175,193,000 at March 31, 2026 from $151,935,000 at December 31, 2025 (increase of $23,258,000), while receivables decreased to $110,290,000 from $112,356,000 (decrease of $2,066,000).
- Working capital and cash reduction due to financing and operations
- Cash and cash equivalents decreased by $20,563,000 to $205,453,000 and current liabilities increased to $169,419,000 from $150,716,000 (increase of $18,703,000); financing uses included $38,213,000 for treasury stock and $11,709,000 of dividends paid.
- Supplier concentration and acquisition earnout/integration risk
- Filing reiterates reliance on single suppliers for most brass castings and certain subassemblies and the UDlive acquisition includes a contingent earnout tied to EBITDA (24-month target) on a $100,000,000 purchase consideration.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.93
- Gross margin
- 41.69%
- Operating margin
- 17.39%
- Segment
- One reportable segment (consolidated) — Total net sales $202,277,000 (Q1 2026).
- Segment
- Utility Water product line ~89% of net sales in 2025 (per MD&A); company manages as a single segment.
- Segment
- Geographic: United States revenue $178,632,000; Europe $11,607,000; Asia $4,216,000 (Q1 2026).
What they said about what is next.
The 10-Q contains no explicit numeric full-year or quarterly guidance. It does disclose $95,529,000 of contract liabilities (unsatisfied performance obligations) and estimates revenue recognition from those obligations of $19,500,000 in 2026, $10,500,000 in 2027, $8,300,000 in 2028, $7,300,000 in 2029, $6,300,000 in 2030, $5,500,000 in 2031 and $38,100,000 thereafter. Management also states the UDlive acquisition is expected to be completed April 30, 2026 and 'is not expected to have a material impact' on the financial statements.
The filing reads worse than the one before it.
What came before.
- 10-K · February 17, 2026
- Badger Meter emphasizes its BlueEdge suite connecting meters, communications (ORION®) and BEACON® software, with ~95% of net sales water-related and Utility Water representing ~89% of net sales in 2025. Financially, Q4…
- 10-Q · July 23, 2025
- Badger Meter reported Q2 net sales of $238,095,000, up from $216,658,000 a year earlier, with gross margin improving to $97,810,000 (41.1%). Net earnings were $34,584,000 (diluted EPS $1.17), and management completed…
- 10-K · February 14, 2025
- Badger Meter positions itself as a focused water-technology provider — "nearly 95% of net sales derived from water-related applications" — with its BlueEdge suite and BEACON SaaS; Utility Water accounted for…
- 10-Q · April 19, 2024
- Badger Meter reported a strong quarter: net sales of $196.28 million (Q1 2024) vs $159.10 million (Q1 2023) and diluted EPS of $0.99 vs $0.66 a year ago. Operating earnings rose to $36.58 million and operating margin…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
Read the next one first.
We read every filing BMI makes the day it lands, and put it next to what the options market did about it. Members get both, and an alert when a filing arrives.
Cancel anytime · Month to month · Switch tiers whenever