The 5 Most Interesting Analyst Questions From Badger Meter's Q4 Earnings Call

Badger Meter’s fourth quarter was met with a significant negative market reaction following a shortfall versus Wall Street’s revenue and profit expectations. Management attributed the results to the timing of large advanced metering infrastructure (AMI) project completions and fewer operating days in the quarter. CEO Ken Bockhorst described the impact as a result of “the calendar and quarter-specific customer and project mix,” rather than a change in underlying demand or customer budgets. The team highlighted continued robust demand for cellular AMI solutions and progress integrating the SmartCover acquisition, which contributed to gross margin improvement.

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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 Q4 Earnings Call

• Robert Mason (Baird) asked about the full impact of project completions on Q4 and how project timing might affect early 2026. CEO Ken Bockhorst explained that growth rates will be lower in the first half and higher in the second half of the year due to project ramp timing.
• Nathan Jones (Stifel) requested clarification about the size and phasing of the PRASA project and its impact on Badger Meter’s typical shipment volume. Management detailed that PRASA’s 1.6 million connections represent a material multi-year deployment, equivalent in scale to eight large city projects.
• Jeffrey Reive (RBC Capital Markets) questioned the typical deployment curve for large AMI projects like PRASA and margin implications of U.S.-based manufacturing. Management responded that deployments often span five years, with variability due to resource and weather factors, and that U.S. manufacturing was required by funding rules but margin impacts were factored into the contract.
• Andrew Krill (Deutsche Bank) asked about relative sales outlook compared to competitors and the sustainability of growth given current project backlog. Bockhorst stressed Badger Meter’s differentiated software and AMI offerings and reaffirmed high single-digit growth targets based on awarded and in-flight projects.
• Michael Fairbanks (JPMorgan) inquired about SmartCover’s future growth potential and its role in expanding Badger Meter’s portfolio. Bockhorst highlighted SmartCover’s historical 20%+ annual growth rate and its potential to drive broader adoption of smart water management solutions.

Catalysts in Upcoming Quarters

In the coming quarters, our analysts will closely watch (1) the pace and revenue contribution of the PRASA AMI project rollout, (2) progress in expanding recurring software and analytics revenue streams, and (3) management’s ability to maintain or expand margins despite input cost pressures. The integration of SmartCover and execution on the BlueEdge suite’s cross-selling potential will also be important indicators of Badger Meter’s strategic momentum.

Badger Meter currently trades at $146.50, down from $164.41 just before the earnings. Is the company at an inflection point that warrants a buy or sell? The answer lies in our full research report (it’s free).

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