Badger Meter, Inc. Q3 2026 Earnings Recap

Badger Meter’s shares rose 13.5% after earnings, as higher-than-expected market confidence appears consistent with improving sequential sales and expanding margins. The quarter still showed a 2% year-over-year decline in base sales, but management expects revenue to improve sequentially and year over year in Q4 and sustain growth momentum into 2027.

Key Takeaways

• Q3 sales were $235.9 million, flat year over year; excluding $5.6 million of UDlive revenue, base sales declined 2%. Base sales rose 5% sequentially.
• Utility water sales were flat year over year, or down 3% excluding the acquisition, as lower AMI-related product sales were partly offset by higher software revenue. Flow instrumentation sales increased 2%.
• Operating earnings rose 4%, with operating margin up 60 basis points to 20.2%; base operating margin was 20.9%, up 130 basis points. Gross margin increased 120 basis points to 41.9%.
• Diluted EPS was $1.24, up 4% from $1.19. Free cash flow declined to $40.3 million from $48.2 million a year earlier.
• Electronic component cost and availability pressures persist, though the company said it had mitigated their impact so far. Management expects Q4 revenue to improve both sequentially and year over year, with growth momentum continuing into 2027.