Badger Meter’s first quarter was met with a pronounced negative market reaction, as the company’s sales and non-GAAP earnings fell short of analyst expectations. Management attributed the decline to two key factors: the completion of several large advanced metering infrastructure (AMI) projects, and weaker-than-expected short-cycle orders from utilities. CEO Kenneth Bockhorst described the revenue shortfall as primarily timing-related, emphasizing, “This first quarter outcome is timing-related and does not reflect a structural change in either market demand, our broader competitive position, or the long-term market drivers of our business.”
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Badger Meter (BMI) Q1 CY2026 Highlights:
- Revenue: $202.3 million vs analyst estimates of $231.1 million (9% year-on-year decline, 12.5% miss)
- Adjusted EPS: $0.93 vs analyst expectations of $1.22 (24% miss)
- Adjusted EBITDA: $44.23 million vs analyst estimates of $54.12 million (21.9% margin, 18.3% miss)
- Operating Margin: 17.4%, down from 22.2% in the same quarter last year
- Market Capitalization: $3.59 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 From Badger Meter’s Q1 Earnings Call
- Nathan Jones (Stifel): Asked about the causes behind short-cycle order weakness. CEO Kenneth Bockhorst explained that the dip was timing-related with no specific underlying factor, emphasizing, “It is relatively normal.”
- Nathan Jones (Stifel): Queried confidence in the PRASA project ramping up on time. Bockhorst and EVP Robert Wrocklage expressed higher confidence given receipt of initial purchase orders and installation partners being lined up.
- Jeffrey Reeve (RBC Capital Markets): Inquired about risk of project starts slipping into 2027. Bockhorst said their outlook reflects current levels of project planning activity, and confidence is higher today than previously.
- James Coe (Jefferies): Asked about the drivers behind Badger Meter’s share gains in AMI projects. Bockhorst credited leadership in cellular AMI and software, as well as the ability to convert both meters and radios from competitors.
- Scott Graham (Seaport): Sought clarification on incremental margin expectations as revenue recovers. CFO Daniel Weltzien confirmed that, while project mix may lower gross margin, operating leverage and SEA discipline should keep incrementals in line with recent history.
Catalysts in Upcoming Quarters
Looking forward, our analysts will be monitoring (1) the pace and timing of deployment for new AMI projects, particularly any slippage into 2027, (2) recovery trends in short-cycle utility orders and their impact on the overall revenue trajectory, and (3) the integration progress and early revenue contribution from the UDLive acquisition. Updates on recurring software and analytics adoption will also be critical indicators of long-term positioning.
Badger Meter currently trades at $122.50, down from $152.29 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).
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