ITRON, INC.

Previous wording

We operate under the Itron brand worldwide and manage and report under three operating segments: Device Solutions, Networked Solutions, and Outcomes. The product and operating definitions of the three segments are as follows:

Current wording

We operate under the Itron brand worldwide and manage and report under four reportable segments: Device Solutions, Networked Solutions, Outcomes, and Resiliency Solutions. Resiliency Solutions is a new reportable segment starting in the fourth quarter of 2025. The product and operating definitions of the four segments are as follows:

Previous wording

Device Solutions –This segment primarily includes hardware products used for measurement, control, or sensing that can have communications capability embedded for use with our broader Itron systems, i.e., hardware-based products that may be part of a complete end-to-end solution. Examples from the Device Solutions portfolio include: standard endpoints that are shipped without Itron communications, such as our standard electricity, gas, and water meters for a variety of global markets and adhering to regulations and standards within those markets, as well as our heat and allocation products; communicating meters that may be sold as part of an Itron end-to-end solution and designed to meet market requirements; and the implementation and installation of communicating and non-communicating devices.

Current wording

Device Solutions –This segment primarily includes hardware products used for measurement, control, or sensing. Examples from the Device Solutions portfolio include: standard endpoints that are shipped without Itron communications, such as our standard electricity, gas, and water meters for a variety of global markets and adhering to regulations and standards within those markets, as well as our heat and allocation products; communicating meters designed to operate outside of Itron end-to-end solutions and designed to meet market requirements; and the implementation and installation of associated devices.

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 Industrial Internet of Things (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 endpoints (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 endpoints and data networks. The Industrial Internet of Things (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

Outcomes –This segment primarily includes our value-added, enhanced software and services in which we enable grid edge intelligence and manage, organize, analyze, and interpret raw, anonymized data using artificial intelligence, machine learning, statistical modeling, and other analytics. This allows us to help utilities improve decision making, maximize operational profitability, engage consumers, enhance resource efficiency, improve grid resiliency and reliability, and deliver value for utilities and smart cities. Outcomes supports high-value use cases, such as data management, grid operations, distributed intelligence, AMI operations, gas distribution and safety, water operations management, revenue assurance, DERMs, energy forecasting, consumer engagement, smart payment, and fleet energy resource management. Utilities leverage these outcomes to unlock the capabilities of their networks and devices, improve the productivity of their workforce, increase the reliability of their operations, manage and optimize the proliferation of distributed energy resources (DERs), address grid complexity, and enhance the customer experience. Revenue from these offerings are primarily recurring in nature and would include any direct management of Device Solutions, Networked Solutions, and other third-parties' products on behalf of our end customers.

Current wording

Outcomes –This segment primarily includes our value-added, enhanced software and services in which we utilize distributed compute to manage, organize, analyze, and interpret raw, anonymized data using artificial intelligence, machine learning, statistical modeling, and other analytics. This delivers new value for utilities, municipalities, and cities through improving decision making, maximizing operational profitability, engaging consumers, ensuring safety, enhancing resource efficiency, and improving grid resiliency and reliability. Outcomes supports high-value use cases, such as data management, grid planning and operations, AMI operations, gas distribution safety, non-revenue water reduction, revenue assurance, distributed energy resources (DER) management, energy forecasting, consumer engagement, and smart payment. Utilities leverage these outcomes to unlock the capabilities of their networks and devices, improve the productivity of their workforce, increase the reliability of their operations, manage and optimize the proliferation of DERs, address grid complexity, and enhance the customer experience. Revenue from these offerings are primarily recurring in nature and would include any direct management of Device Solutions, Networked Solutions, and other third-parties' products on behalf of our end customers.

Previous wording

We have three measures of segment performance: revenues, gross profit (margin), and operating income (margin). Intersegment revenues are minimal. Certain operating expenses are allocated to the operating segments based upon internally established allocation methodologies. Interest income, interest expense, other income (expense), the income tax provision (benefit), and certain corporate operating expenses are neither allocated to the segments nor included in the measures of segment performance.

Current wording

We use adjusted operating income (margin) as the primary measure of segment performance. In addition, we believe adjusted gross profit (margin) provides further understanding of our segments' performance. Intersegment revenues are minimal. Certain operating expenses are allocated to the reportable segments based upon internally established allocation methodologies. Interest income, interest expense, other income (expense), the income tax provision (benefit), and certain corporate operating expenses are neither allocated to the segments nor included in the measures of segment performance.

Previous wording

To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (GAAP), we use certain adjusted or non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share (EPS), adjusted EBITDA, free cash flow, and constant currency. We provide these non-GAAP financial measures because we believe they provide greater transparency and represent supplemental information used by management in its financial and operational decision making. We exclude certain costs in our non-GAAP financial measures as we believe the net result is a measure of our core business. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Our non-GAAP financial measures may be different from those reported by other companies.

Current wording

To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (GAAP), we use certain adjusted or non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share (EPS), adjusted EBITDA, free cash flow, adjusted gross profit, adjusted operating income, and constant currency. We provide these non-GAAP financial measures because we believe they provide greater transparency and represent supplemental information used by management in its financial and operational decision making. We exclude certain costs in our non-GAAP financial measures as we believe the net result is a measure of our core business. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Our non-GAAP financial measures may be different from those reported by other companies.

Previous wording

•Revenues were $2.4 billion compared with $2.2 billion last year, an increase of$267.2 million, or 12%

Current wording

•Revenues were $2.4 billion in both periods

Previous wording

•Total backlog was $4.7 billion and twelve-month backlog was $1.8 billion at December 31, 2024, compared with $4.5 billion and $2.0 billion at December 31, 2023

Current wording

•Total backlog was $4.5 billion and twelve-month backlog was $1.6 billion at December 31, 2025, compared with $4.7 billion and $1.8 billion at December 31, 2024

Previous wording

Effective September 19, 2024, Itron's Board of Directors authorized a repurchase up to $100 million of our common stock over an 18-month period (the 2024 Stock Repurchase Program). The repurchase program is intended to comply with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended. We repurchased no shares under the 2024 Stock Repurchase Program.

Current wording

Effective September 19, 2024, Itron's Board of Directors authorized a repurchase up to $100 million of our common stock over an 18-month period (the 2024 Stock Repurchase Program). The repurchase program is intended to comply with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended. From November 3 through November 6, 2025, Itron repurchased 942,577 shares of its common stock for a total of $100 million, fully utilizing the authorized capacity under the 2024 Stock Repurchase Program.

Previous wording

Total Company GAAP and Non-GAAP Highlights and Endpoints Under Management:

Current wording

Total Company GAAP, Non-GAAP Highlights, and Annual Recurring Revenue:

Previous wording

Revenues increased $267.2 million in 2024 compared with 2023. Product revenues increased $267.9 million in 2024, and service revenues decreased $0.7 million. Device Solutions increased by $20.9 million; Networked Solutions increased by $199.8 million; and Outcomes increased by $46.6 million when compared with the same period last year.

Current wording

Revenues decreased $73.6 million in 2025 compared with 2024. Product revenues decreased $122.4 million in 2025, and service revenues increased $48.8 million. Device Solutions decreased by $29.5 million; Networked Solutions decreased by $92.8 million; and Outcomes increased by $45.6 million when compared with the same period last year. Resiliency Solutions revenues were $3.0 million in 2025.

Previous wording

No single customer represented more than 10% of total revenues for the years ended December 31, 2024 and 2023. Our 10 largest customers accounted for 33% of total revenues in 2024 and 36% of total revenues in 2023.

Current wording

No single customer represented more than 10% of total revenues for the years ended December 31, 2025 and 2024. Our 10 largest customers accounted for 32% of total revenues in 2025 and 33% of total revenues in 2024.

Previous wording

Gross margin was 34.4% for 2024, compared with 32.8% in 2023. We were favorably impacted by product and solution mix and manufacturing efficiencies from increased volumes. Product sales gross margin increased to 32.9% in 2024 from 30.7% in 2023. Gross margin on service revenues decreased to 44.6% from 46.0%.

Current wording

Gross margin was 37.7% for 2025, compared with 34.4% in 2024. We were favorably impacted by product and solution mix and manufacturing efficiencies. Product sales gross margin increased to 35.7% in 2025 from 32.9% in 2024. Gross margin on service revenues increased to 49.0% from 44.6%.

Previous wording

Refer to Operating Segment Results section below for further detail on total company revenues and gross margin.

Current wording

Refer to Reportable Segment Results section below for further detail on total company revenues and gross margin.

Previous wording

Operating expenses decreased $9.8 million for the year ended December 31, 2024 as compared with the same period in 2023. This was primarily the result of a $41.3 million decrease in restructuring costs, as well as a $1.1 million decrease in amortization of intangible assets. The decrease was partially offset by $26.3 million increase in sales, general and administrative expenses and a $6.3 million increase in research and development expenses. The increases in sales, general and administrative and research and development expenses were primarily driven by increased labor costs. Refer to Item 8: Financial Statements and Supplementary Data, Note 4: Intangible Assets and Liabilities, and Note 13: Restructuring for more details.

Current wording

Operating expenses increased $3.8 million for the year ended December 31, 2025 as compared with the same period in 2024. This was primarily the result of a $13.9 million increase in sales, general and administrative expenses driven by increased labor costs. The increase was partially offset by a $8.0 million decrease in research and development expenses driven by reduced professional service expenses as compared with 2024, as well as a $1.7 million decrease in restructuring costs and a $0.6 million loss on sale of business recognized in 2024. Refer to Item 8: Financial Statements and Supplementary Data, Note 13: Restructuring for more details.

Previous wording

Total other income (expense) for the year ended December 31, 2024 was net income of $20.4 million compared with net expense of $1.5 million in 2023. The net increase was driven by a $25.3 million increase in interest income primarily due to interest earned from the cash proceeds of the 2024 Notes, as well increased other income due to a $3.1 million foreign currency loss recognized in 2023 compared with a gain of $1.1 million in 2024. This increase was offset by an increase in other interest expense driven by a $5.8 million interest accrual for the 2024 Notes recognized in 2024 and a $1.8 million increase in amortization of prepaid debt fees.

Current wording

Total other income (expense) for the year ended December 31, 2025 was net other income of $29.2 million compared with net other income of $20.4 million in 2024. The net increase was driven by a $13.8 million increase in interest income primarily due to interest earned from the cash proceeds of the 2024 Notes, as well as increased other income due to a $2.1 million pension expense credit recognized in 2025. This increase was offset by $5.2 million additional interest expense related to the 2024 Notes, which were outstanding throughout 2025 compared with June 21 through December 31 of 2024, and a $1.6 million increase in amortization of prepaid debt fees.

Previous wording

Our income tax expense was $43.4 million and $29.1 million for the years ended December 31, 2024 and 2023. Our tax rate for the year ended December 31, 2024 differed from the U.S. federal statutory tax rate of 21% due to changes in valuation allowances, the level of profit or losses in domestic and international jurisdictions, stock-based compensation, tax credits, settlement of tax audits, and uncertain tax positions.

Current wording

Our income tax expense was $38.9 million and $43.4 million for the years ended December 31, 2025 and 2024. Our tax rate for the year ended December 31, 2025 differed from the U.S. federal statutory tax rate of 21% due to changes in valuation allowances, the level of profit or losses in domestic and international jurisdictions, stock-based compensation, tax credits, expiration of statute of limitations, and uncertain tax positions.

Previous wording

For a description of our operating segments, refer to Part I, Item 1: Business, Our Operating Segments included in this Annual Report on Form 10-K and the Overview section above. The following tables and discussion highlight significant changes in trends or components of each operating segment:

Current wording

For a description of our reportable segments, refer to Part I, Item 1: Business, Our Reportable Segments included in this Annual Report on Form 10-K and the Overview section above. The following tables and discussion highlight significant changes in trends or components of each reportable segment:

Previous wording

Gross margin was 25.9% in 2024 compared with 23.2% in 2023. The 270 basis point increase over the prior year was primarily due to an improved product mix and manufacturing efficiencies.

Current wording

Adjusted gross margin was 31.2% in 2025 compared with 25.9% in 2024. The 530 basis point increase over the prior year was primarily due to an improved customer and product mix as a result of the end-of-life of certain lower margin products.

Previous wording

Gross margin was 36.2% in 2024 compared with 34.5% in 2023. The 170 basis point increase was primarily related to favorable product and solutions volumes and mix as well as improved operational efficiencies.

Current wording

Adjusted gross margin was 39.1% in 2025 compared with 36.2% in 2024. The 290 basis point increase was primarily related to favorable customer mix.

Previous wording

Revenues increased $46.6 million, or 17%, in 2024 compared with 2023. This increase was driven by software licenses, services, and the Elpis Squared acquisition. Changes in foreign currency exchange rates favorably impacted revenues by $0.5 million.

Current wording

Revenues increased $45.6 million, or 15%, in 2025 compared with 2024. This increase was driven by higher recurring revenue, as well as professional services and hardware sales. Changes in foreign currency exchange rates favorably impacted revenues by $1.0 million.

Previous wording

Operating expenses not directly associated with an operating segment are classified as Corporate unallocated. These expenses decreased $18.3 million in 2024 as compared with 2023. This was due to a decrease of $41.3 million in restructuring, as well as a $1.1 million decrease in amortization of intangible assets. The decreases were partially offset by a $23.5 million increase in sales, general and administrative expenses as compared with 2023. The increase in sales, general, and administrative expenses was primarily driven by increased labor costs. Refer to Item 8: Financial Statements and Supplementary Data, Note 4: Intangible Assets and Liabilities and Note 13: Restructuring for more details.

Current wording

Operating expenses not directly associated with a reportable segment are classified as Corporate unallocated. These expenses increased $6.1 million in 2025 as compared with 2024. This was due to an increase of $11.9 million in sales, general and administrative expenses primarily driven by increased labor costs. The increase was partially offset by a $3.8 million decrease in product development expenses driven by reduced professional service expenses as compared with 2024, as well as a $1.7 million decrease in restructuring costs and a $0.6 million loss on sale of business recognized in 2024. Refer to Item 8: Financial Statements and Supplementary Data, Note 13: Restructuring for more details.

Previous wording

Cash and cash equivalents at December 31, 2024 was $1.05 billion compared with $302.0 million at December 31, 2023. The $749.2 million increase in cash and cash equivalents in the 2024 period was primarily the net proceeds provided by the 2024 convertible notes issuance and net cash provided by operating activities as a result of higher earnings, partially offset by cash used in investing activities for the acquisition of Elpis Squared and a slight increase in cash paid for acquisition of property, plant, and equipment.

Current wording

Cash and cash equivalents at December 31, 2025 was $1.02 billion compared with $1.05 billion at December 31, 2024. The $30.8 million decrease in cash and cash equivalents in the 2025 period was primarily driven by cash used in investing activities for the acquisition of Urbint, Inc. (Urbint) and in financing activities for the common stock repurchase partially offset by net cash provided by operating activities as a result of higher earnings and increased working capital conversion.

Previous wording

Cash provided by operating activities in 2024 was $113.2 million higher than in 2023. This increase was primarily due to increased earnings and working capital conversion, partially offset by higher restructuring and variable compensation payments in 2024.

Current wording

Cash provided by operating activities in 2025 was $167.8 million higher than in 2024. This increase was primarily due to increased earnings and working capital conversion.

Previous wording

Net cash used in investing activities in 2024 was $63.4 million, compared with net cash used in investing activities in 2023 of $23.3 million. This movement was primarily related to net cash used for the acquisition of Elpis Squared for $34.1 million along with $3.7 million increased purchases of property, plant, and equipment in 2024.

Current wording

Net cash used in investing activities in 2025 was $349.7 million, compared with net cash used in investing activities in 2024 of $63.4 million. This movement was primarily related to net cash used for the acquisition of Urbint of $325.0 million in 2025 and compared with the acquisition of Elpis Squared for $34.1 million in 2024, along with $7.7 million decreased purchases of property, plant, and equipment in 2025.

Previous wording

Net cash provided by financing activities during 2024 was $579.6 million, compared with $3.5 million used in 2023. In 2024, cash provided by financing activities is due primarily to the issuance of the 2024 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 used by financing activities during 2025 was $97.5 million, compared with $579.6 million provided in 2024. In 2025, cash used to repurchase common stock totaling $100.0 million, partially offset by cash received from issuance of common stock of $7.3 million. In 2024, cash provided by financing activities is due primarily to the issuance of the 2024 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 resulted in a decrease of $5.1 million in 2024 and an increase of $1.9 million in 2023. 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 resulted in an increase of $10.3 million in 2025 and a decrease of $5.1 million in 2024. Our foreign currency exposure relates to non-U.S. dollar denominated balances in our international subsidiary operations.

Previous wording

Free cash flow increased due to higher operating cash flow, partially offset by higher spending for property, plant, and equipment. See the cash flow discussion of operating and investing activities above.

Current wording

Free cash flow increased due to higher operating cash flow, as well as decreased spending for property, plant, and equipment. See the cash flow discussion of operating and investing activities above.

Previous wording

$254.0 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. However, that date may be advanced to December 14, 2025 if Itron does not settle or extend a sufficient portion of the outstanding 2021 convertible notes, as detailed in the seventh amendment.

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 December 31, 2025, no amount was outstanding under the 2025 credit facility, and$43.8 million was utilized by outstanding standby letters of credit, resulting in$706.2 million available for borrowing. As of December 31, 2025,$256.2 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 we do not settle or extend a sufficient portion of our outstanding convertible notes, as detailed in the 2025 credit facility.

Previous wording

On June 21, 2024, we closed the sale of $805 million in convertible notes (the 2024 Notes) in a private placement to qualified institutional buyers. These convertible notes accrue interest at a rate of 1.375% per annum, payable semi-annually in arrears on January 15 and July 15 of each year, beginning on January 15, 2025. The notes will mature on July 15, 2030, unless earlier repurchased, redeemed, or converted in accordance with their terms.

Current wording

On June 21, 2024, we closed the sale of $805 million in convertible notes (the 2024 Notes) in a private placement to qualified institutional buyers. These convertible notes accrue interest at a rate of 1.375% per annum, payable semi-annually in arrears on January 15 and July 15 of each year, with the first payment made January 15, 2025. The 2024 Notes will mature on July 15, 2030, unless earlier repurchased, redeemed, or converted in accordance with their terms.

Previous wording

On February 23, 2023, our Board of Directors approved a restructuring plan (the 2023 Projects). The 2023 Projects include activities that continue Itron's efforts to optimize its global supply chain and manufacturing operations, sales and marketing organizations, and other overhead. These projects are expected to be substantially complete by early 2025, with an estimated $28.5 million in cash payments remaining as of December 31, 2024 with cash outflows expected through 2027.

Current wording

On February 23, 2023, our Board of Directors approved a restructuring plan (the 2023 Projects). The 2023 Projects include activities that continue Itron's efforts to optimize its global supply chain and manufacturing operations, sales and marketing organizations, and other overhead. These projects were substantially complete as of March 31, 2025. For the year ended December 31, 2025, we paid out $26.4 million related to all our restructuring projects. As of December 31, 2025, $19.0 million was accrued for these restructuring projects, of which $15.0 million is expected to be paid within the next 12 months.

Previous wording

Effective September 19, 2024, Itron's Board of Directors authorized a repurchase up to $100 million of our common stock over an 18-month period (the 2024 Stock Repurchase Program). The repurchase program is intended to comply with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended. We repurchased no shares under the 2024 Stock Repurchase Program.

Current wording

Effective September 19, 2024, Itron's Board of Directors authorized a repurchase up to $100 million of our common stock over an 18-month period (the 2024 Stock Repurchase Program). The repurchase program is intended to comply with Rule 10b-18 promulgated under the Securities Exchange Act of 1934, as amended. From November 3 through November 6, 2025, Itron repurchased 942,577 shares of its common stock for a total of $100 million, fully utilizing the authorized capacity under the 2024 Stock Repurchase Program.

Previous wording

Operating lease obligations are disclosed in Item 8: Financial Statements and Supplementary Data, Note 19: Leases and do not include common area maintenance charges, real estate taxes, and insurance charges for which we are obligated. Amounts due under operating lease liabilities during 2025 are $15.9 million and are $27.6 million for 2026 and beyond.

Current wording

Operating lease obligations are disclosed in Item 8: Financial Statements and Supplementary Data, Note 19: Leases and do not include common area maintenance charges, real estate taxes, and insurance charges for which we are obligated. Amounts due under operating lease liabilities during 2026 are $16.8 million and are $21.6 million for 2027 and beyond.

Previous wording

We regularly enter into standard purchase orders in the ordinary course of business that may obligate us to purchase materials and other items but may not yet qualify for recognition in our Consolidated Balance Sheets. Purchase orders and other purchase obligations can include open-ended agreements that provide for estimated quantities over an extended delivery period. At December 31, 2024, purchase orders and other purchase obligations were $641.4 million, which includes capital expenditures of $13.0 million. The purchase orders may include durations longer than one year, but these long-term agreements generally contain termination clauses that could require payment if the commitments were canceled, and as such the total above is considered short-term as of December 31, 2024.

Current wording

We regularly enter into standard purchase orders in the ordinary course of business that may obligate us to purchase materials and other items but may not yet qualify for recognition in our Consolidated Balance Sheets. Purchase orders and other purchase obligations can include open-ended agreements that provide for estimated quantities over an extended delivery period. At December 31, 2025, purchase orders and other purchase obligations were $391.9 million, which includes capital expenditures of $8.4 million. The purchase orders may include durations longer than one year, but these long-term agreements generally contain termination clauses that could require payment if the commitments were canceled, and as such the total above is considered short-term as of December 31, 2025.

Previous wording

Other long-term liabilities consist of warranty obligations, estimated pension benefit payments, and other obligations. Estimated pension benefit payments include amounts to be paid from our assets for unfunded plans and reflect expected future service. The following table summarizes our known obligations to make future payments pursuant to certain contracts as of December 31, 2024.

Current wording

Other long-term contractual obligations consist of warranty obligations and estimated pension benefit payments. Estimated pension benefit payments include amounts to be paid from our assets for unfunded plans and reflect expected future service.

Previous wording

The period of cash settlement for long-term unrecognized tax benefits, which include accrued interest and penalties, cannot be reasonably estimated with the respective taxing authorities. For further information on defined benefit pension plans, income taxes, warranty obligations, and unearned revenue for extended warranties, refer to Item 8: Financial Statements and Supplementary Data, Note 8: Defined Benefit Pension Plans, Note 11: Income Taxes, Note 12: Commitments and Contingencies, and Note 17: Revenues.

Current wording

The period of cash settlement for long-term unrecognized tax benefits, which include accrued interest and penalties, cannot be reasonably estimated with the respective taxing authorities. For further information on defined benefit pension plans, income taxes, and warranty obligations, refer to Item 8: Financial Statements and Supplementary Data, Note 8: Defined Benefit Pension Plans, Note 11: Income Taxes, and Note 12: Commitments and Contingencies.

Previous wording

Based on current projections, we expect to pay, net of refunds, approximately $67 million in U.S. federal and state taxes and $14 million in foreign and local income taxes in 2025.

Current wording

Based on current projections, we expect to pay, net of refunds, approximately $6 million in U.S. state taxes and $18 million in foreign and local income taxes in 2026. We expect net refunds of approximately $25 million in U.S. federal taxes.

Previous wording

As of December 31, 2024, there was $46.1 million of cash and short-term investments held by certain foreign subsidiaries in which we are permanently reinvested for tax purposes. As a result of recent changes in U.S. tax legislation, any repatriation in the future would not result in U.S. federal income tax. Accordingly, there is no provision for U.S. deferred taxes on this cash. If this cash were repatriated to fund U.S. operations, additional withholding tax costs may be incurred. Tax is only one of the many factors that we consider in the management of global cash. Accordingly, the amount of taxes that we would need to accrue and pay to repatriate foreign cash could vary significantly.

Current wording

As of December 31, 2025, there was $70.3 million of cash and short-term investments held by certain foreign subsidiaries in which we are permanently reinvested for tax purposes. As a result of recent changes in U.S. tax legislation, any repatriation in the future would not result in U.S. federal income tax. Accordingly, there is no provision for U.S. deferred taxes on this cash. If this cash were repatriated to fund U.S. operations, additional withholding tax costs may be incurred. Tax is only one of the many factors that we consider in the management of global cash. Accordingly, the amount of taxes that we would need to accrue and pay to repatriate foreign cash could vary significantly.

Previous wording

In certain of our consolidated international subsidiaries, we have joint venture partners who are minority shareholders. Although these entities are not wholly-owned by Itron, Inc., we consolidate them because we have a greater than 50% ownership interest and/or because we exercise control over the operations. The noncontrolling interest balance in our Consolidated Balance Sheets represents the proportional share of the equity of the joint venture entities, which is attributable to the minority shareholders. At December 31, 2024, $3.6 million of our consolidated cash balance was held in our joint venture entities. As a result, the minority shareholders of these entities have rights to their proportional share of this cash balance, and there may be limitations on our ability to repatriate cash to the United States from these entities.

Current wording

In certain of our consolidated international subsidiaries, we have joint venture partners who are minority shareholders. Although these entities are not wholly owned by Itron, Inc., we consolidate them because we have a greater than 50% ownership interest and/or because we exercise control over the operations. The noncontrolling interest balance in our Consolidated Balance Sheets represents the proportional share of the equity of the joint venture entities, which is attributable to the minority shareholders. At December 31, 2025, $4.2 million of our consolidated cash balance was held in our joint venture entities. As a result, the minority shareholders of these entities have rights to their proportional share of this cash balance, and there may be limitations on our ability to repatriate cash to the United States from these entities.

Previous wording

As of December 31, 2024, we expect to make cash payments of approximately $64 million for variable compensation during the first quarter of 2025.

Current wording

As of December 31, 2025, we expect to make cash payments of approximately $49 million for variable compensation during the first quarter of 2026.