Badger Meter (NYSE:BMI) reported first-quarter 2026 results that reflected the impact of large AMI project timing and a softer-than-expected short-cycle order environment, while management emphasized that it views the quarter’s weakness as temporary and tied to normal variability in the business.
First-quarter sales fell 9% as projects and short-cycle orders softened
Chairman, President and CEO Kenneth Bockhorst said the company operates in a market supported by “strong long-term macro drivers, recurring replacement cycles, and increasing adoption of advanced technologies,” but added that results can be “uneven quarter to quarter and year to year.” He noted that strong growth from 2023 through 2025 was amplified by “multi-year cellular AMI share gains and overlapping project activity,” which reduced the visibility of that unevenness.
Robert Wrocklage, executive vice president of North America municipal utility, said the short-cycle weakness appeared timing-related rather than structural. “From our look at customer segmentation of where the weakness came from, it’s definitely indicative more of timing aspects than certainly anything related to our positioning in the market or share,” Wrocklage said, adding the company was “not chalking it up to geographic weather.”
Management outlined AMI project pacing and highlighted awarded projects expected to start in 2H 2026
Wrocklage walked through a cohort of four sizable AMI projects that began deployment in 2023—JEA, OUC, PCU and Galveston—representing nearly 800,000 connections. He explained that two were supply-only projects and two were turnkey deployments that included installation labor and ancillary equipment, with the turnkey scope producing significantly higher revenue than equivalently sized supply-only work.
He said those projects “peaked in 2024 and declined through 2025 as the projects approached completion,” while backlog moved from elevated levels in 2023 and 2024 toward more normalized levels in 2025. Entering 2026, with those projects largely completed and backlog normalized, weaker short-cycle ordering became more visible in reported revenue.
Looking forward, Wrocklage pointed to a set of awarded AMI projects expected to begin deployment in the back half of 2026. He said the snapshot reflects common industry lags between award and deployment and includes a range of funding sources such as capital budgets, rate cases, grants and WIFIA loans. Importantly, he said the project set represents “between 2.6 million and 3.6 million connections over multiple years,” which he described as meaningfully larger than the prior 800,000-connection cohort.
On PRASA, Wrocklage said the company received “the first significant purchase order for the project in the first quarter” and expects installation partners to begin deployment activity “around mid-year.” In response to questions, Bockhorst said the company’s confidence has increased: “The fact that we have a PO, the fact that we know that installation partners are lined up, the confidence is higher today than it was before.”
Margins remained within targeted range; free cash flow and buybacks continued
Chief Financial Officer Daniel Weltzien said utility water sales declined 10% year-over-year, reflecting project pacing and short-cycle weakness. He noted that lower metering product revenue was “partially offset” by increased BEACON SaaS, SmartCover, water quality and network monitoring product revenues, adding that growth in the “beyond the meter” product line was a bright spot in the quarter.
Gross margin was 41.7%, down 120 basis points from the prior-year period, which Weltzien said reflected product and project mix. He said margins remained “robust” and near the top end of the company’s normalized range, reiterating confidence in its 39% to 42% gross margin range for the rest of the year.
Selling, engineering and administrative expenses increased to $49.2 million, up $3.1 million year-over-year, driven primarily by $1.2 million in transaction costs tied to the UDlive acquisition, higher personnel costs and an additional month of SmartCover SE&A costs, partially offset by reduced incentive compensation. Operating earnings were about $35.2 million and operating margin was 17.4% versus 22.2% a year earlier. Diluted EPS was $0.93 compared to $1.30.
Weltzien said the company generated about $30 million in free cash flow, in line with the first quarter of 2025. Badger Meter repurchased 256,000 shares for $38 million during the quarter and had $115 million remaining under its authorization as of March 31, 2026.
Bockhorst also said the company implemented “measured cost reduction actions,” including “a 10% salary reduction for our executive officers for the next six months,” aimed at maintaining spending discipline as it navigates revenue pacing.
UDlive acquisition announced; management expects back-half weighted 2026 revenue
Bockhorst said the company signed a definitive agreement to acquire UDlive for $100 million, funded with cash on hand plus contingent consideration. He described UDlive as a U.K.-based provider of hardware-enabled software solutions for sewer line monitoring that complements SmartCover by expanding sewer monitoring across more use cases, network conditions and geographies.
He said UDlive’s differentiation is reflected in a “90% tender success rate since inception” and high technology assessment scores. In the trailing 12 months ended February 2026, UDlive generated approximately $22 million in revenue and delivered positive operating profit. Management said the deal is expected to be accretive to EPS in year one and anticipates closing at the end of April.
Discussing the market, Bockhorst said adoption remains early. For the U.S., he said “less than 0.5% of the manhole covers” have monitoring, while utilities face real problems such as combined sewer overflows, inflow and infiltration, and opportunities for sewer cleaning optimization. In the U.K., he said regulation is a major driver, pointing to the AMP8 spending cycle as an investment catalyst.
Outlook: full-year 2026 organic revenue expected to be roughly in line with 2025
While Badger Meter typically does not provide formal guidance, Bockhorst said the company is offering more transparency given investors are navigating the project pacing dynamic “for the first time in several years.” After the softer start to 2026, he said the company now anticipates full-year 2026 organic revenue (excluding UDlive) to be “in line with 2025.”
He said second-quarter 2026 organic revenue is expected to improve sequentially from the “trough of Q1,” but to be down year-over-year against “the highest quarterly revenue figure in the company’s history.” As awarded projects enter deployment and short-cycle orders recover from first-quarter levels, management expects sequential improvement as the year progresses.
In the Q&A, Bockhorst emphasized the variability in short-cycle ordering is inherent to selling into thousands of utilities and said it is not tied to a single factor. “It’s just happened at this particular time,” he said. He also said that in metering, “nothing gets canceled. Things only move right,” adding the company expects “some recovery” from first-quarter short-cycle levels.
Badger Meter also announced its inaugural Investor Day will be held May 21 in New York City, with a webcast available, and said its second-quarter 2026 earnings release is tentatively scheduled for July 22, 2026.
About Badger Meter (NYSE:BMI)
Badger Meter, founded in 1905 and headquartered in Milwaukee, Wisconsin, is a global leader in flow measurement and control solutions. The company’s core business centers on the design, manufacture and sale of water meters, control valves and related accessories for municipal and industrial water utilities. Over its more than a century of operation, Badger Meter has built a reputation for precision engineering, durability and compliance with international regulatory standards.
The company’s product portfolio includes mechanical and ultrasonic water meters, electromagnetic flow meters for industrial applications, and a range of control valves that help utilities manage pressure and flow in distribution networks.
