Badger Meter's Q1 Earnings Call: Our Top 5 Analyst Questions

Badger Meter’s first quarter results were met with a positive market reaction, as the company delivered solid year-over-year sales growth, significant margin improvement, and robust earnings expansion. Management attributed these results to strong adoption of its advanced metering technology, particularly the growth in software-based offerings and the successful integration of the recently acquired SmartCover business. CEO Kenneth Bockhorst highlighted that customer and product mix were especially favorable, emphasizing a 25% increase in software revenue and continued momentum in utility water products. The company noted that these factors, combined with disciplined operating execution, enabled Badger Meter to achieve record operating margins despite an environment marked by tariff and supply chain uncertainties.

Is now the time to buy BMI? Find out in our full research report (it’s free).

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 Badger Meter’s Q1 Earnings Call

• Andrew Krill (Deutsche Bank) asked about the sustainability of margin gains and the impact of favorable product mix. CEO Kenneth Bockhorst reiterated the durability of structural margin improvements, while CFO Robert Wrocklage acknowledged some drivers were episodic and not guaranteed to recur each quarter.
• Nathan Jones (Stifel) questioned the potential impact of tariffs on costs and whether pricing actions could fully offset them. Wrocklage responded that the situation is manageable under current conditions, but the company will continue monitoring for any significant changes.
• Nathan Jones (Stifel) also inquired if customers were pulling forward orders in anticipation of price hikes or supply disruptions. Bockhorst clarified that 75% of revenue is direct to end-users, limiting the potential for order acceleration, and order patterns remained normal.
• Jeffrey Reeve (RBC) asked about the health of municipal budgets and the risk that inflation could reduce meter demand. Bockhorst explained that utilities tend to prioritize metering investments even during tight budgets, as meters are essential for revenue collection.
• Rob Mason (Baird) sought clarification on the timing of price increases to offset tariffs. Bockhorst said customer notifications are forthcoming and emphasized a measured approach, ensuring fairness and responding to market dynamics rather than leading pricing actions.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will be monitoring (1) the pace of integration and sales synergies from the SmartCover acquisition, (2) the company’s ability to implement and sustain pricing actions in response to evolving tariffs and input cost pressures, and (3) continued expansion of software and technology-enabled product adoption. Execution on these fronts will be key indicators of Badger Meter’s ability to maintain growth and margin resilience amidst a shifting macroeconomic landscape.

Badger Meter currently trades at $243.00, up from $183.94 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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