ITRON, INC.

Previous wording

Networked Solutions – This segment primarily includes a combination of communicating devices (e.g., smart meters, modules, endpoints, and sensors), network infrastructure, network design services, and associated head-end management and application software designed and sold as a complete solution for acquiring and transporting robust application-specific data. Networked Solutions includes products and software for the implementation, installation, and management of communicating devices and data networks. The IIoT solutions supported by this segment include automated meter reading (AMR); advanced metering infrastructure (AMI) for electricity, water, and gas; distributed energy resource management (DERMs); grid edge devices; distribution automation communications; smart street lighting; smart city sensors and applications; and leak detection and applications for both gas and water systems. Our IIoT platform allows utility and smart city applications to be run and managed on a flexible multi-purpose network.

Current wording

Networked Solutions – This segment primarily includes a combination of communicating devices (e.g., smart meters, modules, endpoints, and sensors), network infrastructure, network design services, and associated headend management and application software designed and sold as a complete solution for acquiring and transporting robust application-specific data. Networked Solutions includes products, software and services for the implementation, installation, and management of communicating devices and data networks. The IIoT solutions supported by this segment include automated meter reading (AMR) and advanced metering infrastructure (AMI) for electricity, water, and gas; distributed energy resource management (DERMs); grid edge devices; distribution automation communications; smart lighting; and smart city sensors and applications. Our IIoT platform allows utility and smart city applications to be run and managed on a flexible, secure, and interoperable multi-purpose network.

Previous wording

Refer to the Non-GAAP Measures section below on pages 42-45 for information about these non-GAAP measures and the detailed reconciliation of items that impacted non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, and free cash flow in the periods presented.

Current wording

Refer to the Non-GAAP Measures section below on pages 45-48 for information about these non-GAAP measures and the detailed reconciliation of items that impacted non-GAAP operating expenses, non-GAAP operating income, non-GAAP net income, non-GAAP diluted EPS, adjusted EBITDA, and free cash flow in the periods presented.

Previous wording

•Net income attributable to Itron, Inc. was $68.3 million compared with net income of $51.3 million in 2024

Current wording

•Net income attributable to Itron, Inc. was $65.6 million compared with net income of $78.0 million in 2024

Previous wording

•Total backlog was $4.5 billion, and twelve-month backlog was $1.5 billion at June 30, 2025, compared with$4.1 billion and$1.8 billion at June 30, 2024

Current wording

•Total backlog was $4.3 billion, and twelve-month backlog was $1.5 billion at September 30, 2025, compared with$4.0 billion and$1.7 billion at September 30, 2024

Previous wording

Highlights and significant developments for thesix months ended June 30, 2025 compared with the six months ended June 30, 2024

Current wording

Highlights and significant developments for thenine months ended September 30, 2025 compared with the nine months ended September 30, 2024

Previous wording

•Revenues were $1.2 billion in both periods

Current wording

•Revenues were $1.8 billion in both periods.

Previous wording

•Net income attributable to Itron, Inc. was $133.8 million compared with net income of $103.0 million in 2024

Current wording

•Net income attributable to Itron, Inc. was $199.4 million compared with net income of $181.0 million in 2024

Previous wording

•GAAP diluted EPS increased by$0.37 to $1.47 in 2025

Current wording

•GAAP diluted EPS increased by $0.39 to $4.30 in 2025

Previous wording

•Non-GAAP diluted EPS was $1.62, an increase of $0.41 compared with 2024

Current wording

•Non-GAAP diluted EPS was $4.68, an increase of $0.41 compared with 2024

Previous wording

(1)These measures exclude certain expenses that we do not believe are indicative of our core operating results. See pages 42-45 for information about these non-GAAP measures and reconciliations to the most comparable GAAP measures.

Current wording

(1)These measures exclude certain expenses that we do not believe are indicative of our core operating results. See pages 45-48 for information about these non-GAAP measures and reconciliations to the most comparable GAAP measures.

Previous wording

Total revenues decreased $2.3 million in the current 2025 quarter, compared with the same period in 2024. Product revenues decreased by $15.7 million, and service revenues increased $13.4 million. Device Solutions decreased by $5.8 million; Networked Solutions decreased by $3.8 million; and Outcomes increased by $7.3 million when compared with the same period last year. Changes in exchange rates favorably impacted total revenues by $4.4 million, of which $3.8 million favorably impacted Device Solutions.

Current wording

Total revenues decreased $33.8 million in the current 2025 quarter, compared with the same period in 2024. Product revenues decreased by $43.9 million, and service revenues increased $10.1 million. Device Solutions decreased by $19.1 million; Networked Solutions decreased by $23.0 million; and Outcomes increased by $8.3 million when compared with the same period last year. Changes in exchange rates favorably impacted total revenues by $4.8 million, of which $4.2 million favorably impacted Device Solutions.

Previous wording

Total revenues increased $1.4 million compared with the same period in 2024. Product revenues decreased by $20.4 million, and service revenues increased by $21.8 million. Device Solutions decreased by $6.7 million; Networked Solutions decreased by$8.6 million; and Outcomes increased by $16.6 million when compared with the same period last year. Changes in exchange rates unfavorably impacted total revenues by$0.8 million.

Current wording

Total revenues decreased $32.4 million compared with the same period in 2024. Product revenues decreased by $64.3 million, and service revenues increased by $31.9 million. Device Solutions decreased by $25.8 million; Networked Solutions decreased by$31.6 million; and Outcomes increased by $24.9 million when compared with the same period last year. Changes in exchange rates favorably impacted total revenues by$4.0 million, of which $4.7 million favorably impacted Device Solutions and $1.2 million unfavorably impacted Networked Solutions.

Previous wording

Gross margin in the 2025 period was 36.9%, compared with 34.6% in 2024. Product sales gross margin increased to 34.8% for the quarter in 2025, compared with 33.1% in 2024. Gross margin on service revenues increased to 48.9% in 2025, compared with 45.0% in 2024.

Current wording

Gross margin in the 2025 period was 37.7%, compared with 34.1% in 2024. Product sales gross margin increased to 35.4% for the quarter in 2025, compared with 32.6% in 2024. Gross margin on service revenues increased to 50.9% in 2025, compared with 43.9% in 2024.

Previous wording

Gross margin was 36.3%, compared with 34.3% in 2024. Product sales gross margin increased to 34.3%, compared with 32.7% in 2024, and gross margin on service revenues increased to 48.6%, compared with 45.2% in 2024.

Current wording

Gross margin was 36.8%, compared with 34.2% in 2024. Product sales gross margin increased to 34.6%, compared with 32.7% in 2024, and gross margin on service revenues increased to 49.4%, compared with 44.8% in 2024.

Previous wording

Operating expenses decreased $0.2 million for the six months ended June 30, 2025 as compared with the same period in 2024. This was primarily the result of a $1.6 million decrease in research and development expenses driven by reduced professional service expenses, partially offset by a $0.6 million increase in restructuring expenses and a $0.5 million increase in amortization of intangible assets. Refer to Item 1: Financial Statements (Unaudited), Note 4: Intangible Assets and Note 12: Restructuring for additional information.

Current wording

Operating expenses increased $1.9 million for the nine months ended September 30, 2025 as compared with the same period in 2024. This was primarily the result of a $3.6 million increase in sales, general and administrative expenses, primarily driven by increased labor costs, and a $1.5 million increase in restructuring expenses, partially offset by a $2.8 million decrease in research and development expenses driven by reduced professional service costs and a $0.7 million loss on sale of business recognized in 2024. Refer to Item 1: Financial Statements (Unaudited), Note 12: Restructuring included in this Quarterly Report on Form 10-Q for additional information.

Previous wording

Total other income (expense) for the three and six months ended June 30, 2025 was income of $7.1 million and $13.1 million, compared with income of $2.4 million and $4.8 million in the same period in 2024. The increase in net other income for the three months ended June 30, 2025, as compared with the same period in 2024, was driven by the $7.2 million increase in interest income primarily due to interest earned on the invested proceeds from the 2024 Notes, partially offset by the interest cost of those same notes, totaling $2.8 million in 2025, compared with $0.3 million in 2024.

Current wording

Total other income (expense) for the three and nine months ended September 30, 2025 was income of $8.9 million and $22.1 million, compared with income of $8.5 million and $13.3 million in the same period in 2024.

Previous wording

The increase in net other income for the six months ended June 30, 2025, as compared with the same period in 2024, was driven by the $15.0 million increase in interest income primarily due to interest earned on the invested proceeds from the 2024 Notes. This increase was offset by an increase in other interest expense driven by a $5.5 million interest accrual for the 2024 Notes recognized during the period as well as a $1.7 million increase in amortization of prepaid debt fees compared with the same period in 2024. Refer to Item 1: Financial Statements (Unaudited), Note 6: Debt included in this Quarterly Report on Form 10-Q for additional information.

Current wording

The increase in net other income for the nine months ended September 30, 2025, as compared with the same period in 2024, was driven by the $15.2 million increase in interest income, primarily due to interest earned on the invested proceeds from the 2024 convertible notes (the 2024 Notes). Additionally, interest expense increased by $5.2 million in 2025 as the 2024 Notes were outstanding for the entire nine-month period, and amortization of prepaid debt fees increased by $1.7 million compared with the same period in 2024. Refer to Item 1: Financial Statements (Unaudited), Note 6: Debt included in this Quarterly Report on Form 10-Q for additional information.

Previous wording

For the three and six months ended June 30, 2025, our income tax expense was $14.7 million and $31.7 million, compared with income tax expense of $15.2 million and $28.6 million for the same period in 2024. Our tax rate for the three and six months ended June 30, 2025 of 18% and 19% differed from the federal statutory rate of 21% due to the impact of valuation allowances on deferred tax assets, the forecasted mix of earnings in domestic and international jurisdictions, the effect of cross-border tax laws, nondeductible executive compensation, a benefit related to stock-based compensation, tax credits, state taxes, and uncertain tax positions. Our tax rate for the three and six months ended June 30, 2024 of 23% and 22% differed from the federal statutory rate of 21% due to the impact of valuation allowances on deferred tax assets, the forecasted mix of earnings in domestic and international jurisdictions, U.S. taxation of foreign earnings including GILTI (Global Intangible Low Taxed Income), net of Section 250 deduction, Subpart F income, a benefit related to stock-based compensation, tax credits, state taxes, and uncertain tax positions.

Current wording

For the three and nine months ended September 30, 2025, our income tax expense was $24.5 million and $56.1 million, compared with income tax expense of $3.5 million and $32.1 million for the same period in 2024. Our tax rate for the three and nine months ended September 30, 2025 of 27% and 22% differed from the federal statutory rate of 21% due to the impact of valuation allowances on deferred tax assets, the forecasted mix of earnings in domestic and international jurisdictions, the effect of cross-border tax laws, nondeductible executive compensation, a benefit related to stock-based compensation, tax credits, state taxes, and uncertain tax positions. Our tax rate for the three and nine months ended September 30, 2024 of 4% and 15% differed from the federal statutory rate of 21% due to the impact of valuation allowances on deferred tax assets, the forecasted mix of earnings in domestic and international jurisdictions, U.S. taxation of foreign earnings including GILTI (Global Intangible Low-Taxed Income), net of Section 250 deduction, Subpart F income, a benefit related to stock-based compensation, tax credits, state taxes, and uncertain tax positions. Approximately $14 million in discrete tax benefits were recorded related to the favorable resolution of a foreign tax audit in the three months ended September 30, 2024.

Previous wording

A sweeping legislative package formally titled "An act to provide for reconciliation pursuant to title II of H. Con. Res. 14" (the "Act") was signed into law on July 4, 2025. Since ASC 740 requires the income tax effects of a change in tax law to be recognized in the period of enactment, this Act does not have any impact on our annual effective tax rate as of June 30, 2025. The legislation includes numerous changes to existing tax law that are retroactive to 2025, including provisions for the current deductibility of certain property additions and domestic research and development costs. Additionally, multiple changes are effective beginning in 2026. We anticipate the 2025 provisions to reduce and defer income tax payments to future tax years. We are in the process of evaluating the impact the Act will have on our subsequent consolidated financial statements and related disclosures.

Current wording

A sweeping legislative package formally titled "An act to provide for reconciliation pursuant to title II of H. Con. Res. 14" (the "Act"), and commonly referred to as the One Big Beautiful Bill Act, was signed into law on July 4, 2025. Since ASC 740 requires the income tax effects of a change in tax law to be recognized in the period of enactment, this Act is incorporated into our annual effective tax rate and current and expected cash taxes as of September 30, 2025. Included in our effective tax rate this quarter is an increase of approximately $4 million in full year tax expense, and a reduction in forecasted cash taxes of approximately $45 million from amounts calculated before passage of the Act. These results are driven by numerous changes to existing tax law that are retroactive to 2025, including provisions for the current deductibility of certain property additions and deductibility of current and previously capitalized domestic research and development costs. Additionally, multiple changes are effective beginning in 2026 and we are continuing to evaluate the impacts they will have on our subsequent consolidated financial statements and related disclosures.

Previous wording

Revenues decreased $5.8 million, or 5%. Changes in foreign currency exchange rates favorably impacted revenues by $3.8 million. Revenues were lower due to the planned decrease in electric meter sales, partially offset by higher smart water product sales.

Current wording

Revenues decreased $25.8 million, or 7%. Changes in foreign currency exchange rates favorably impacted revenues by $4.7 million. Revenues were lower due to the decreased legacy product shipments, partially offset by higher smart water shipments.

Previous wording

For the three months ended June 30, 2025, gross margin was 29.8%, compared with 26.3% for the same period in 2024. The 350 basis point increase over the prior year was primarily due to an improved product mix.

Current wording

For the three months ended September 30, 2025, gross margin was 30.9%, compared with 27.2% for the same period in 2024. The 370 basis point increase over the prior year was primarily due to an improved customer and product mix.

Previous wording

For the six months ended June 30, 2025, gross margin was 29.9%, compared with 25.0% for the same period in 2024. The 490 basis point increase over the prior year was primarily due to an improved product mix.

Current wording

For the nine months ended September 30, 2025, gross margin was 30.2%, compared with 25.7% for the same period in 2024. The 450 basis point increase over the prior year was primarily due to an improved customer and product mix.

Previous wording

Operating expenses increased $0.6 million, or 8%, compared with 2024. The increase was primarily due to higher product development and marketing costs.

Current wording

Operating expenses increased $0.3 million, or 4%, compared with 2024. The minor increase was primarily due to higher product development costs.

Previous wording

Revenues decreased $8.6 million, or 1%, for the first six months of 2025, compared with the same period in 2024. The decline was primarily due to an unusually large first half 2024 level, which included a significant amount of catch-up of previously supply chain constrained revenue. Changes in foreign currency exchange rates unfavorably impacted revenues by $1.5 million.

Current wording

Revenues decreased $31.6 million, or 3%, for the first nine months of 2025, compared with the same period in 2024. The decline was primarily due to timing of customer deployments and an unusually large first half 2024 volume, which included a significant amount of catch-up of previously supply chain constrained revenue. Changes in foreign currency exchange rates unfavorably impacted revenues by $1.2 million.

Previous wording

Gross margin was 38.5% for the period ending June 30, 2025, compared with 36.9% in 2024. The 160 basis point increase was primarily related to a favorable product and customer mix.

Current wording

Gross margin was 38.2% for the 2025 period, compared with 36.6% in 2024. The 160 basis point increase was primarily related to a favorable customer and product mix.

Previous wording

Operating expenses increased $1.5 million, or 4%, for the quarter in 2025, compared with the same period in 2024. The increase was primarily related to higher employee costs.

Current wording

Operating expenses decreased $1.5 million, or 4%, for the quarter in 2025, compared with the same period in 2024. The decrease was primarily related to lower product development costs.

Previous wording

Operating expenses decreased $0.2 million for the first six months of 2025, compared with the same period in 2024. The decrease was primarily related to lower product development costs.

Current wording

Operating expenses decreased $1.7 million, or 2%, for the first nine months of 2025, compared with the same period in 2024. The decrease was primarily related to lower product development costs.

Previous wording

For the 2025 period, revenues increased $7.3 million, or 9%, compared with the 2024 period. This increase was driven by recurring revenue, as well as software licenses. Changes in foreign currency exchange rates favorably impacted revenues by $0.5 million.

Current wording

For the 2025 period, revenues increased $8.3 million, or 11%, compared with the 2024 period. This increase was driven by higher recurring revenue.

Previous wording

Revenues increased $16.6 million, or 11%, for the first six months of 2025, compared with 2024. This increase was driven by recurring revenue, as well as software licenses.

Current wording

Revenues increased $24.9 million, or 11%, for the first nine months of 2025, compared with 2024. This increase was driven by higher recurring revenue, as well as software licenses.

Previous wording

Gross margin increased to 38.8% for the period ending in 2025, compared with 34.9% for last year. The 390 basis point increase was driven by software license and services mix.

Current wording

Gross margin increased to 38.8% for the period ending in 2025, compared with 35.0% for last year. The 380 basis point increase was driven by improved revenue mix and lower costs.

Previous wording

Operating expenses for the 2025 period increased $0.7 million, or 4%, compared with the same period last year. This was primarily related to increased employee costs.

Current wording

Operating expenses for the 2025 period increased $0.5 million, or 4%, compared with the same period last year. This was primarily related to increased product development costs.

Previous wording

Operating expenses for the first six months of 2025 increased $1.9 million, or 6%, compared with the same period last year. This was primarily related to increased employee costs.

Current wording

Operating expenses for the first nine months of 2025 increased $2.4 million, or 5%, compared with the same period last year. This was primarily related to increased product development and marketing costs.

Previous wording

Operating expenses not directly associated with an operating segment are classified as Corporate unallocated. These expenses decreased $1.4 million, or 2%, for the three months ended June 30, 2025 compared with the same period in 2024. This decrease was primarily the result of a $2.4 million decrease in sales, general and administrative expenses partially offset by a $1.3 million increase in restructuring expenses.

Current wording

Operating expenses not directly associated with an operating segment are classified as Corporate unallocated. These expenses increased $2.8 million, or 4%, for the three months ended September 30, 2025 compared with the same period in 2024. This increase was primarily the result of a $4.1 million increase in sales, general and administrative expenses driven by increased labor costs and a $0.9 million increase in restructuring expenses, partially offset by a $1.1 million decrease in product development expenses and a $0.7 million loss on sale of business recognized in 2024.

Previous wording

For the first six months of 2025, Corporate unallocated expenses decreased $1.4 million, or 1%, compared with the 2024 period. This decrease was primarily the result of a $1.2 million decrease in sales, general and administrative expenses and a $1.5 million decrease in product development expenses partially offset by a $0.6 million increase in restructuring expenses and a $0.5 million increase in amortization of intangible assets.

Current wording

For the first nine months of 2025, Corporate unallocated expenses increased $1.4 million, or 1%, compared with the 2024 period. This increase was primarily the result of a $2.9 million increase in sales, general and administrative expenses driven by increased labor costs and a $1.5 million increase in restructuring expenses, partially offset by a $2.5 million decrease in product development expenses and a $0.7 million loss on sale of business recognized in 2024. Refer to Item 1: Financial Statements (Unaudited), Note 12: Restructuring included in this Quarterly Report on Form 10-Q for additional information.

Previous wording

Cash and cash equivalents were $1.22 billion at June 30, 2025, compared with $1.05 billion at December 31, 2024. The $173.0 million increase in cash and cash equivalents during the 2025 period was primarily net cash provided by operations as a result of higher earnings.

Current wording

Cash and cash equivalents were $1.33 billion at September 30, 2025, compared with $1.05 billion at December 31, 2024. The $280.7 million increase in cash and cash equivalents during the 2025 period was primarily net cash provided by operations as a result of higher earnings.

Previous wording

Cash provided by operating activities during the six months in 2025 was $168.8 million compared with $93.0 million during the same period in 2024. The increase was primarily due to increased earnings in 2025 and a net increase in working capital (current assets less current liabilities) conversion compared with the same period in 2024, partially offset by increased income tax payments in 2025.

Current wording

Cash provided by operating activities during the nine months in 2025 was $286.6 million compared with $158.3 million during the same period in 2024. The increase was primarily due to increased earnings in 2025, an increase in working capital (current assets less current liabilities) conversion compared with the same period in 2024, and lower income tax payments in 2025.

Previous wording

During the six months ended June 30, 2025, net cash used in investing activities was $10.7 million compared with $47.8 million in 2024, resulting in a change of $37.2 million. The movement was primarily related to net cash used for the acquisition of Elpis Squared for $34.1 million in 2024, along with $3.6 million in reduced purchases of property, plant, and equipment in 2025 compared with the same period in 2024.

Current wording

During the nine months ended September 30, 2025, net cash used in investing activities was $16.8 million compared with $54.4 million in 2024, resulting in a change of $37.6 million. The movement was primarily related to net cash used for the acquisition of Elpis Squared for $34.1 million in 2024, along with $5.8 million in reduced purchases of property, plant, and equipment in 2025 compared with the same period in 2024.

Previous wording

Net cash provided by financing activities during the six months in 2025 was $4.8 million, compared with net cash provided of $576.8 million for the same period in 2024. The change is due primarily to the issuance in 2024 of the convertible notes, net of total debt issuance cost, totaling $784 million, partially offset by the purchase of the capped call for the convertible offering of $109.0 million and common stock repurchased totaling $100.0 million.

Current wording

Net cash provided by financing activities during the nine months in 2025 was $1.8 million, compared with $576.1 million for the same period in 2024. The change is due primarily to the issuance in 2024 of the convertible notes, net of total debt issuance cost, totaling $784 million, partially offset by the purchase of the capped call for the convertible offering of $109.0 million and common stock repurchased totaling $100.0 million.

Previous wording

The effect of exchange rates on the cash balances of currencies held in foreign denominations at June 30, 2025 was an increase of $10.1 million, compared with a decrease of $3.5 million for the same period in 2024. Our foreign currency exposure relates to non-U.S. dollar denominated balances in our international subsidiary operations.

Current wording

The effect of exchange rates on the cash balances of currencies held in foreign denominations at September 30, 2025 was an increase of $9.0 million, compared with an increase of $0.4 million for the same period in 2024. Our foreign currency exposure relates to non-U.S. dollar denominated balances in our international subsidiary operations.

Previous wording

We originally entered into our credit facility on January 5, 2018 (together with the subsequent eight amendments, the 2018 credit facility). The 2018 credit facility provides a multicurrency revolving line of credit (the revolver) with a principal amount of up to $500 million. The revolver also contains a $300 million standby letter of credit sub-facility and a $50 million swingline sub-facility. As of June 30, 2025, no amount was outstanding under the 2018 credit facility, and $45.3 million was utilized by outstanding standby letters of credit, resulting in $454.7 million available for borrowing. As of June 30, 2025, $254.7 million was available for additional standby letters of credit under the letter of credit sub-facility, and no amounts were outstanding under the swingline sub-facility. Amounts borrowed under the revolver may be repaid and reborrowed until the revolver's maturity on October 18, 2026, at which time all outstanding loans together with all accrued and unpaid interest must be repaid.

Current wording

On September 25, 2025, we entered into a third amended and restated credit agreement (the 2025 credit facility) providing for committed credit facilities in the amount of$750 million. The 2025 credit facility consists of a multi-currency revolving line of credit (the revolver) in the amount of$750 million. The revolver includes a standby letter of credit sub-facility in the amount of$300 million, and a swingline sub-facility in the amount of$50 million. As of September 30, 2025, no amount was outstanding under the 2025 credit facility, and $45.1 million was utilized by outstanding standby letters of credit, resulting in $704.9 million available for borrowing. As of September 30, 2025, $254.9 million was available for additional standby letters of credit under the letter of credit sub-facility, and no amounts were outstanding under the swingline sub-facility. Any outstanding principal under the revolver is due at maturity on September 25, 2030. Principal amounts paid prior to the maturity date may be reborrowed prior to such date. However, that date may be advanced to April 15, 2030 if Itron does not settle or extend a sufficient portion of its outstanding convertible notes, as detailed in the 2025 credit facility.