Itron’s first quarter performance was met with a negative market reaction, as the company reported flat year-over-year sales that fell short of Wall Street’s revenue expectations. Management pointed to a favorable product mix and disciplined manufacturing as key contributors to record gross and operating margins, with CEO Tom Deitrich highlighting “strong execution” and the company’s ability to meet utility customers’ evolving infrastructure needs. The outcomes segment delivered double-digit growth, but management noted that last year’s unique supply-constrained environment created a challenging comparison for several business lines.
Is now the time to buy ITRI? Find out in our full research report (it’s free).
Itron (ITRI) Q1 CY2025 Highlights:
- Revenue: $607.2 million vs analyst estimates of $614.1 million (flat year on year, 1.1% miss)
- Adjusted EPS: $1.52 vs analyst estimates of $1.32 (15.4% beat)
- Adjusted EBITDA: $87.93 million vs analyst estimates of $83.5 million (14.5% margin, 5.3% beat)
- Revenue Guidance for Q2 CY2025 is $610 million at the midpoint, roughly in line with what analysts were expecting
- Adjusted EPS guidance for Q2 CY2025 is $1.35 at the midpoint, above analyst estimates of $1.29
- Operating Margin: 12.6%, up from 10.4% in the same quarter last year
- Market Capitalization: $5.98 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Itron’s Q1 Earnings Call
- Noah Kaye (Oppenheimer) asked if Itron’s strong first-half earnings and tariff mitigation efforts would support the full-year outlook. CEO Tom Deitrich responded it was too early to update guidance, emphasizing ongoing cost management and monitoring of tariff developments.
- Ben Kallo (R.W. Baird) sought clarity on the removal of 12-month backlog disclosures and the regulatory environment for software sales. Deitrich explained the backlog metric was dropped due to volatility and said regulatory support for software in rate cases remains constructive across most states.
- Jeff Osborne (TD Cowen) questioned the impact of rising tariffs and the flexibility of pricing as a mitigation tool. Deitrich stated current tariff estimates reflect today’s environment, with pricing adjustments implemented where feasible, and no material change expected in capital spending.
- Joe Osha (Guggenheim) addressed gross margin variability and software mix in the Outcomes segment. CFO Joan Hooper noted that margins can fluctuate quarter to quarter due to the mix of high-margin recurring revenue versus lower-margin project work.
- Austin Moeller (Canaccord) inquired about the split between recurring and setup revenues in Outcomes. Deitrich indicated recurring revenue was about 70% of the segment, with a long-term goal around 80% for greater predictability.
Catalysts in Upcoming Quarters
In coming quarters, our analysts will be watching (1) the pace and consistency of recurring software revenue growth, (2) the company’s ability to offset tariff-related cost pressures through sourcing and pricing strategies, and (3) execution on large utility infrastructure projects, particularly those involving distributed intelligence solutions. Progress on regulatory acceptance for software in rate cases and any strategic M&A activity will also be key milestones.
Itron currently trades at $131.25, up from $111.30 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free).
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