ITRI Q2 Earnings Beat, Sales Lag, Stock Sinks 10% on Mixed Outlook

Itron Inc. (ITRI) reported non-GAAP earnings per share (EPS) of $1.62 for the second quarter of 2025, which beat the Zacks Consensus Estimate by 21.8%. The company reported earnings of $1.21 per share in the prior-year quarter. The bottom line exceeded management’s guidance ($1.30-$1.40), driven by Strong pretax operational results.

Revenue of $607 million was almost flat compared with $609 million in the prior-year quarter. This comparison factors in the recognition of previously constrained revenue that was realized in the second quarter 2024. The Zacks Consensus Estimate was pegged at $609.3 million. Despite navigating macroeconomic uncertainties and shifting trade dynamics, the top line came in the upper end of the guided range ($605-$615 million).

The long-term market outlook remains favorable, supported by growing electricity demand, heightened requirements for resilience and reliability, and a continued emphasis on efficiency and safety. In the near term, however, a more challenging regulatory and customer landscape is contributing to slower project execution and decision-making in some segments. As a result, ITRI is adjusting its full-year revenue outlook, lowering the midpoint by nearly 3%.

It now projects 2025 revenue of $2.35-$2.4 billion compared with the previous estimate of $2.4-$2.5 billion. Meanwhile, increasing customer demand for high-value solutions, combined with improved operational efficiency, has led to a 13% upward revision in Itron's full-year EPS outlook midpoint. Non-GAAP EPS is now expected to be in the $6.00-$6.20 range, up from the earlier estimate of $5.20-$5.60.

Itron, Inc. Price, Consensus and EPS Surprise

Itron, Inc. price-consensus-eps-surprise-chart | Itron, Inc. Quote

Product revenues were $517.2 million (85.2% of total revenues), down 3% year over year. Service revenues totaled $89.6 million (14.8%), up 17.6%.

Itron ended the quarter with a record backlog of $4.5 billion, up from $4.1 billion a year ago. Second-quarter bookings reached $454 million, reflecting healthy demand and strong customer engagement.

In response to the mixed performance and lowered revenue expectations, ITRI’s shares declined 10% and closed the trading session at $124.54 on July 31. The stock has gained 23.1% in the past year compared with the Zacks Electronics-Testing Equipment industry’s rise of 3.3%.

Segments in Detail

Device Solutions (18.6% of total revenues): Revenue from this segment fell 5% (or 8% in constant currency) to $113 million, adversely impacted by portfolio optimization and lower legacy electricity product sales. However, this was partially offset by increased water sales.

Networked Solutions (67.4%): Revenue dipped 1% to $409 million, primarily due to the absence of revenue catch-up seen in the prior-year quarter and delays in shipments and project deployments.

Outcomes (14%): Revenue rose 9% to $85 million, driven by growth in recurring revenue and software licenses, reflecting increased adoption of Itron’s intelligent infrastructure solutions.

Operating Details

Itron’s gross margin for the quarter rose significantly to 36.9%, a 230 basis point improvement year over year. This increase was attributed to a favorable product and customer mix.

Non-GAAP operating expenses remained flat at $141 million.

Non-GAAP operating income reached a record high of $82 million, marking a 19% year-over-year increase.

Adjusted EBITDA also hit a new record at $90 million, representing 14.8% of revenue, and reflecting a 16% increase compared to the prior year.

Balance Sheet & Cash Flows

As of June 30, 2025, cash and cash equivalents totaled $1.224 billion compared with $1.123 million as of March 31, 2025. Accounts receivable were $340.3 million.

As of June 30, net long-term debt was $787 million compared with $786.1 million as of March 31.

The company generated strong cash flow, with net cash from operations totaling $97 million and free cash flow of $91 million, nearly doubling the prior year’s performance. The improvement was driven by stronger earnings, increased interest income and lower tax payments.

Q3 2025 Outlook

For the third quarter of 2025, ITRI expects revenues to be between $570 million and $585 million, down 6% year over year at the midpoint.

Non-GAAP EPS is anticipated to be in the range of $1.45-$1.55, with about an 18% fall at the midpoint from last year.

ITRI’s Zacks Rank

Currently, Itron carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here

Recent Performance of Other Companies

Cognex Corporation (CGNX) came out with quarterly earnings of 25 cents per share, beating the Zacks Consensus Estimate of 23 cents per share. This compares to earnings of 23 cents per share a year ago.

Cognex posted revenues of $249 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 4.96%. This compares to year-ago revenues of $239 million.

In the past six months, shares of CGNX have lost 13.4%.

Fortive Corporation (FTV) reported second-quarter 2025 adjusted earnings per share (EPS) of 58 cents from continuing operations, which missed the Zacks Consensus Estimate of 60 cents. The bottom line increased 3.6% year over year.

Revenues declined 0.4% year over year to $1.02 billion. The top line beat the Zacks Consensus Estimate by 0.8%. Core revenues decreased 0.7% year over year.

FTV has lost 29.5% in the past year.

Simulations Plus, Inc. (SLP) reported third-quarter fiscal 2025 adjusted earnings of 45 cents per share, which expanded 66.7% year over year. The figure also surpassed the Zacks Consensus Estimate of 26 cents per share.

Quarterly revenues jumped 10% year over year to $20.4 million, driven by continued momentum across its software and services business segments, along with a $2.4 million boost from the Pro-ficiency acquisition.

In the past, shares of SLP have declined 67%.

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This article originally published on Zacks Investment Research (zacks.com).

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