Badger Meter Reports Third Quarter 2026 Financial Results

Nine-month diluted EPS fell to $3.19 from $3.65 despite the third quarter's year-over-year improvement.

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MILWAUKEE--(BUSINESS WIRE)-- Badger Meter, Inc. (NYSE: BMI) today reported results for the third quarter ended September 30, 2026.

Third Quarter 2026 Highlights

• Total sales of $235.9 million increased modestly from the prior year’s $235.7 million and improved 6% sequentially from the second quarter. Base¹ sales were $230.3 million.
• Operating earnings increased 4% year-over-year to $47.7 million, with operating profit margins of 20.2% versus 19.6% in the prior year comparable quarter. Base operating earnings of $48.0 million increased 4% year-over-year, with Base operating profit margins of 20.9%.
• Diluted earnings per share (EPS) of $1.24, a 4% increase from $1.19 in the third quarter of 2025.
• Increased annual dividend rate by 10% to $1.76 per share, representing the 34th consecutive year of dividend growth.

“We were pleased with our third quarter financial results delivering continued sequential sales and operating profit improvement,” said Kenneth C. Bockhorst, Chairman, President and Chief Executive Officer. “Consistent with our expectations, third quarter sales reflected the ongoing ramp of awarded utility water projects as well as solid underlying demand trends. I want to thank our employees across the globe for their commitment, contributions and ongoing customer focus.”

Third Quarter 2026 Operating Results

Utility water sales were flat year-over-year, including $5.6 million from the UDlive acquisition. Excluding the acquisition, utility water sales increased 5% sequentially from the second quarter, yet declined 3% year-over-year, reflecting uneven AMI project pacing partially offset by higher software revenue.

Sales of flow instrumentation products increased 2% year-over-year, with strong demand across the water-focused end markets against a difficult prior year comparison.

Operating earnings improved 4% year-over-year to $47.7 million, representing a 60-basis point improvement in operating profit margins to 20.2%. Base operating earnings of $48.0 million increased 4% year-over-year, with Base operating profit margins of 20.9%.

Gross margins of 41.9% were 120 basis points higher than the prior year’s 40.7%. Margin improvement reflects higher sales and structural mix benefits, while UDlive gross margins include the dilutive impact of inventory fair-value step-up amortization.

Selling, Engineering and Administration (SEA) expenses of $51.1 million were $1.3 million higher year-over-year. The inclusion of UDlive results along with related intangible asset amortization combined added $2.3 million to year-over-year expenses. Base SEA expenses of $48.8 million declined $0.9 million or 2% year-over-year due to the benefit of appropriate spending controls and lower incentive compensation.

The effective tax rate for the third quarter of 2026 was 25.1%, compared to 26.1% in the prior year. As a result of the above, EPS of $1.24 increased 4% from the prior year’s $1.19.

Outlook

Bockhorst concluded, “As we enter the final quarter of 2026, we continue to anticipate both sequential and year-over-year Base revenue improvement, inclusive of the fewer operating days typical for the fourth fiscal quarter, and expect to sustain this growth momentum into 2027. We remain steadfastly focused on cost management actions to mitigate the uneven 2026 sales cadence, while effectively addressing ongoing material cost pressures related to broad electronics supply chain dynamics.

"We maintain our focus on long-term strategic priorities including advancing the multi-year opportunity funnel for both metering and beyond the meter applications. We also continue to enhance our BlueEdge^® portfolio of solutions against the backdrop of a multi-decade digital transformation of the global water sector, as demonstrated by the recent launch of OneNetwork™, our real-time network monitoring and analysis software platform.

"During the quarter we repurchased approximately $55 million of our outstanding shares and increased our annual dividend rate for the 34^th consecutive year, demonstrating our commitment to returning cash to shareholders.

"In closing, I remain excited about the value creation opportunities ahead of us as we further our vision to preserve and protect the world’s most precious resource.”

¹ Adjusted metrics (“Base”) are non-GAAP measures excluding the results of UDlive acquired May 1, 2026. See appendix for reconciliations of these GAAP to non-GAAP measures.

Conference Call and Webcast Information

Badger Meter management will hold a conference call to discuss the Company’s third quarter 2026 results today, Thursday, October 22, 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. Those wishing to actively participate in the conference call must pre-register using the following link: https://events.q4inc.com/attendee/365814936

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.

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 September 30,								Nine Months Ended September 30,
		2026				2025				2026				2025
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Net sales		$	235,938			$	235,651			$	660,536			$	695,957
Cost of sales			137,089				139,815				386,587				406,874
Gross margin			98,849				95,836				273,949				289,083
Selling, engineering and administration			51,107				49,752				151,659				148,711
Operating earnings			47,742				46,084				122,290				140,372
Interest income, net			(188	)			(1,330	)			(1,645	)			(3,559	)
Other pension and postretirement income			(28	)			(28	)			(84	)			(84	)
Earnings before income taxes			47,958				47,442				124,019				144,015
Provision for income taxes			12,055				12,365				31,061				35,956
Net earnings		$	35,903			$	35,077			$	92,958			$	108,059
Earnings per share:
Basic		$	1.25			$	1.19			$	3.21			$	3.67
Diluted		$	1.24			$	1.19			$	3.19			$	3.65
Shares used in computation of earnings per share:
Basic			28,750,150				29,424,004				28,999,955				29,405,429
Diluted			28,871,187				29,583,384				29,125,127				29,577,619

BADGER METER, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
Assets	September 30,				December 31,
	2026				2025
	(Unaudited)
Cash and cash equivalents	$	67,928			$	226,016
Receivables		111,826				112,356
Inventories		166,427				151,935
Other current assets		21,719				16,770
Total current assets		367,900				507,077
Net property, plant and equipment		83,473				79,636
Intangible assets, at cost less accumulated amortization		157,513				118,496
Other long-term assets		31,957				32,793
Goodwill		302,805				235,575
Total assets	$	943,648			$	973,577
Liabilities and Shareholders' Equity
Payables	$	70,275			$	72,299
Accrued compensation and employee benefits		21,904				37,619
Other current liabilities		56,117				40,798
Total current liabilities		148,296				150,716
Deferred income taxes		16,616				3,477
Long-term deferred revenue, employee benefits and other		127,604				106,090
Shareholders' equity		651,132				713,294
Total liabilities and shareholders' equity	$	943,648			$	973,577

BADGER METER, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
	Three Months Ended September 30,								Nine Months Ended September 30,
	2026				2025				2026				2025
	(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Operating activities:
Net earnings	$	35,903			$	35,077			$	92,958			$	108,059
Adjustments to reconcile net earnings to net cash provided by operations:
Depreciation		2,636				2,607				8,297				8,326
Amortization		7,555				6,100				20,804				17,458
Noncurrent employee benefits		(154	)			40				(140	)			45
Stock-based compensation expense		2,474				2,041				7,821				6,445
Changes in:
Receivables		9,252				2,503				690				(22,803	)
Inventories		10,702				(5,759	)			(10,508	)			(1,740	)
Payables		(27,510	)			(4,285	)			(3,515	)			11,937
Prepaid expenses and other assets		(2,374	)			(188	)			(10,059	)			(3,276	)
Other liabilities		4,790				13,148				(2,470	)			4,446
Total adjustments		7,371				16,207				10,920				20,838
Net cash provided by operations		43,274				51,284				103,878				128,897
Investing activities:
Property, plant and equipment expenditures		(2,992	)			(3,089	)			(12,258	)			(9,993	)
Proceeds from company owned life insurance plans		454				-				454				-
Acquisitions, net of cash acquired		-				-				(94,375	)			(184,024	)
Net cash used for investing activities		(2,538	)			(3,089	)			(106,179	)			(194,017	)
Financing activities:
Dividends paid		(12,634	)			(11,770	)			(35,936	)			(31,791	)
Proceeds from exercise of stock options		-				-				140				554
Repurchase of common stock for treasury stock		(55,547	)			-				(119,014	)			-
Net cash used for financing activities		(68,181	)			(11,770	)			(154,810	)			(31,237	)
Effect of foreign exchange rates on cash		(360	)			60				(977	)			2,745
(Decrease) Increase in cash and cash equivalents		(27,805	)			36,485				(158,088	)			(93,612	)
Cash and cash equivalents - beginning of period		95,733				165,208				226,016				295,305
Cash and cash equivalents - end of period	$	67,928			$	201,693			$	67,928			$	201,693

 

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 September 30,												Nine Months Ended September 30,
		2026				UDlive				Base				2026				UDlive				Base
		(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)				(Unaudited)
Net sales		$	235,938			$	5,639			$	230,299			$	660,536			$	7,663			$	652,873
Selling, engineering and administration			51,107				2,272				48,835				151,659				4,080				147,579
Operating earnings (loss)			47,742				(276	)			48,018				122,290				(1,524	)			123,814
Operating earnings as % of sales			20.2	%			-4.9	%			20.9	%			18.5	%			-19.9	%			19.0	%
* UDlive results are included from the date of acquisition of May 1, 2026.
** UDlive amortization was $1.2 million and $2.0 million for the three months and nine months ended September 30, 2026, respectively and reported as part of Selling, engineering and administration expenses.
*** UDlive results include $0.5 million and $0.7 million for the three and nine months ended September 30, 2026, respectively, of inventory step-up amortization associated with acquisition accounting.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20261022257041/en/

Dan Weltzien, Vice President – CFO and Treasurer
investors@badgermeter.com

Source: Badger Meter, Inc.

Key Terms

non-gaap financial

Non-GAAP refers to financial measures that companies use to show their earnings or performance without including certain expenses or income that are often added back to give a different picture. It matters because it can make a company's results look better or more favorable, but it may also hide important costs, so investors need to look at both GAAP (official rules) and non-GAAP numbers to get a full understanding.

View in glossary

fair-value step-up amortization financial

An accounting adjustment made after an acquisition that raises the carrying amounts of the acquiree’s assets to their fair values and then charges that additional value to profit and loss over the assets’ remaining useful lives. The “step-up” is the difference between the acquired assets’ book values and the purchase‑price‑allocated fair values; it is recognized as increased depreciation or amortization (or as higher cost of goods sold for inventory) over the applicable amortization or consumption period. As a result, post‑acquisition earnings reflect these higher non‑cash amortization expenses (or realized cost increases when inventory is sold) compared with the acquiree’s pre‑acquisition accounting.