ITRI earnings analysis
What we found in ITRI'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
Itron’s Q2 revenue was $562.902 million, down 7% year over year and below the prior quarter’s $587 million, reflecting a 17% Networked Solutions decline tied to customer-deployment timing. Margin performance was notably strong: GAAP gross margin rose 410 bps year over year to 41.0%, supporting flat operating income despite lower revenue. GAAP diluted EPS fell to $1.19 from $1.47, pressured by a 33% tax rate and lower interest income, while six-month free cash flow improved to $160.460 million. The balance sheet absorbed the $515.055 million Locusview acquisition and $152.234 million in repurchases, reducing cash and increasing debt, but liquidity remains ample.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Gross-margin expansion offset volume pressure
- GAAP gross margin expanded 410 bps year over year to 41.0% from 36.9%, and rose 70 bps sequentially from 40.3% in Q1 2026. Product margin increased to 38.1% from 34.8%, while service margin increased to 52.9% from 48.9%.
- Outcomes and recurring revenue accelerated
- Outcomes revenue grew 13% to $96.399 million, with adjusted operating income up 31% to $20.542 million. Annual recurring revenue increased to $417 million from $343 million a year earlier.
- Profitability resilient despite lower sales
- Despite revenue pressure, adjusted EBITDA increased 8% to $96.837 million from $89.799 million. GAAP operating income was essentially flat at $76.066 million versus $76.413 million, while operating margin improved 90 bps sequentially to 13.5%.
- Operating cash conversion remained strong
- Six-month operating cash flow increased to $173.592 million from $168.802 million, and free cash flow increased to $160.460 million from $158.146 million. Capital expenditures were only $13.132 million, equal to 1.1% of six-month revenue.
- Liquidity supports near-term commitments
- Liquidity remains substantial, with $745.229 million of cash and $706.885 million available under the revolver at June 30. Management expects liquidity sources to cover operating activities and commitments for at least the next 12 months.
- Near-term backlog and bookings improved
- Twelve-month backlog rose to $1.680 billion from $1.544 billion a year ago, even as total backlog declined to $4.410 billion from $4.514 billion. Quarterly bookings improved to $550 million from $476 million in Q1 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 contraction led by deployment timing
- Revenue declined 7% year over year to $562.902 million from $606.761 million and fell 4% sequentially from $587 million in Q1 2026. The $69.696 million, or 17%, Networked Solutions decline was attributed primarily to timing of customer deployments.
- EPS declined on taxes and lower other income
- GAAP diluted EPS decreased 19% to $1.19 from $1.47 a year ago, although it improved from $1.18 in Q1 2026. Net income attributable to Itron fell 22% to $53.272 million as the effective tax rate increased to 33% from 18%.
- Acquisition and capital returns raised leverage
- Cash declined $275.168 million from year-end to $745.229 million following $515.055 million of acquisition spending and $152.234 million of share repurchases. Total debt increased to $1.610 billion from $1.265 billion, including the new $805.000 million 2026 convertible notes.
- No formal risk-factor update; macro exposure persists
- No new or revised Item 1A risk factors were presented; the filing instead refers readers to the 2025 Annual Report. Management nevertheless cites potential exposure to tariffs, sanctions, supply disruption and costs, while 26% of Q2 revenue was denominated in non-U.S.-dollar functional currencies.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.19
- Gross margin
- 41.0%
- Operating margin
- 13.5%
- Segment
- Device Solutions: $111.445 million revenue, down 1% year over year from $112.760 million.
- Segment
- Networked Solutions: $339.238 million revenue, down 17% year over year from $408.934 million.
- Segment
- Outcomes: $96.399 million revenue, up 13% year over year from $85.067 million.
- Segment
- Resiliency Solutions: $15.820 million revenue; new reportable segment with no 2025 comparison.
What they said about what is next.
The 10-Q contains no explicit quantitative revenue or EPS guidance; management states it expects existing cash, operating cash flow and capital-markets access to fund operations and commitments for at least the next 12 months.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 28, 2026
- Itron reported Q1 2026 revenue of $586,982,000 and GAAP diluted EPS of $1.18, with gross profit of $236,319,000 (≈40.3% gross margin) and operating income of $67,577,000 (≈11.5% operating margin). Revenue and net income…
- 10-K · February 17, 2026
- Itron reported flat full-year revenues of $2,367,194,000 in 2025 (down $73,643,000 versus 2024) while materially improving profitability: gross margin expanded to 37.7% from 34.4% and GAAP diluted EPS rose to $6.50 from…
- 10-Q · July 31, 2025
- Itron reported Q2 revenue of $606.8M, roughly flat year-over-year (-$2.3M vs Q2 2024) while gross margin expanded to 36.9% and GAAP diluted EPS rose to $1.47. Operating income improved to $76.4M (12.6% op margin) and…
- 10-K · February 25, 2025
- Itron delivered strong FY2024 operating leverage: revenues rose 12% to $2,440,837,000, gross margin expanded to 34.4% (from 32.8%), and GAAP diluted EPS increased to $5.18 (from $2.11). Growth was led by Networked…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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