Itron Raises Profit Outlook While Revenue Growth Remains Uneven

Itron Inc. (NASDAQ:ITRI) shares traded lower on Wednesday after surging 23% to $104.51 on Tuesday.

The rally followed better-than-expected second-quarter adjusted EPS and a raise of fiscal 2026 adjusted EPS guidance above estimates.

The stock is trading lower after investors digest the revenue outlook.

Earnings And Margins

Adjusted EPS of $1.59 beat the $1.29 estimate, while revenue fell 7.2% year over year to $562.9 million, missing the $566.1 million estimate.

GAAP diluted EPS declined to $1.19 from $1.47, while adjusted EPS slipped from $1.62. Net income attributable to Itron fell 22% to $53.3 million, pressured by lower interest income and a higher effective tax rate.

Adjusted gross margin expanded 460 basis points to 41.4% on favorable product and customer mix, operational efficiencies and cost discipline.

Adjusted operating income rose 8% to $89.1 million, while adjusted EBITDA increased 8% to $96.8 million.

GAAP operating income was nearly unchanged at $76.1 million as higher gross profit was offset by increased operating expenses, including acquisition-related amortization.

Segment Performance

Device Solutions revenue fell 1.2% to $111.4 million, while adjusted operating margin increased to 28.3% from 22.6%.

Networked Solutions revenue declined 17% to $339.2 million due to project deployment timing and lower volumes. Adjusted operating margin improved to 33% from 29.6%.

Outcomes revenue rose 13.3% to $96.4 million, driven by higher services revenue, while the adjusted operating margin expanded to 21.3% from 18.4%.

Resiliency Solutions generated $15.8 million in revenue and a 27.7% adjusted operating margin.

Bookings And Cash Flow

Bookings totaled $550 million, while backlog ended the quarter at $4.4 billion. Annual recurring revenue increased 21% to $417 million.

Operating cash flow was $88.1 million and free cash flow totaled $81.5 million. Itron ended the quarter with $745 million in cash and cash equivalents and $1.61 billion in debt (excluding amortization of debt fees).

Outlook

Itron expects third-quarter adjusted EPS of $1.50-$1.60, compared with the $1.54 estimate, and revenue of $590 million-$600 million, below the $607.7 million estimate.

The company raised full-year adjusted EPS guidance to $6.30-$6.50 from $5.75-$6.25, above the $5.96 estimate.

It narrowed revenue guidance to $2.37 billion-$2.41 billion from $2.35 billion-$2.45 billion, compared with the $2.388 billion estimate.

ITRI Price Action: Itron shares were down 4.91% at $101.76 at the time of publication on Wednesday, according to Benzinga Pro data.

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