BADGER METER INC
For the period ended Jun 30, 2026. Filed Jul 23, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 23, 2026
BMI$158.18-0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-20.
0001193125-26-163625
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-23.
0001193125-26-313981
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 60 previous paragraphs and 70 current paragraphs.
47 unchanged; 12 reworded; 8 added; 1 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
Effective May 1, 2026, the Company acquired 100% of the outstanding stock of UDlive Limited (UDlive), headquartered in Alton, England. UDlive is a provider of hardware-enabled software solutions for sewer line monitoring. The purchase consideration was $94.4 million, net of cash acquired, with a potential earn-out of up to an additional $50.0 million based on the achievement of established EBITDA targets in the 24 month period following the acquisition date. The earn-out is payable within 90 days following April 30, 2028, or, if disputed, 21 days following the agreement as to or determination of the earn-out amount. The UDlive acquisition will be accounted for under the purchase method, and accordingly, the results of operations will be included in the Company's financial statements from the date of acquisition.
Current report
Current Business Trends
Current report
Global investment in artificial intelligence, computing infrastructure and hyperscale data center expansion has increased demand for various electronic components used in our products. As suppliers allocate manufacturing capacity to support AI-related applications and data center deployments, we have experienced and may continue to experience longer lead times, reduced component availability, and increased procurement costs for certain critical electronic components. The Company maintains strong relationships with its vendors and remains in frequent communication to monitor and assess changes in market conditions. In addition, the Company continues to evaluate dual-source opportunities, execute on strategic inventory purchases, and optimize safety stock levels to mitigate potential supply chain disruptions and associated cost pressures. The Company will implement pricing initiatives, where possible, to offset any cost increases. While management believes these actions reduce the Company’s exposure, prolonged supply chain constraints could adversely affect future operating results.
Current report
The Company's net sales for the three months ended June 30, 2026 were $222.3 million, a decrease of 6.6% compared to $238.1 million during the same period in 2025. Sales of utility water products were $195.0 million, a decrease of 8.1% from the prior year’s $212.2 million. The utility water decline reflects expected uneven AMI project pacing, partially offset by increased BEACON SaaS revenue and other BlueEdge beyond the meter solution offerings, as well as revenue associated with the acquisition of UDlive of $2.0 million. Sales of flow instrumentation products were $27.3 million compared to the prior year’s $25.9 million, an increase of 5.6%, with growth in water-focused end markets.
Current report
Results of Operations - Six Months Ended June 30, 2026
Current report
Net Sales
Current report
Earnings
Current report
Total operating earnings for the six months ended June 30, 2026 were $74.5 million, or 17.6% of sales, compared to $94.3 million, or 20.5% of sales, in the comparable prior year period. Gross margin dollars decreased $18.1 million, with gross margin as a percent of sales of 41.2%, a decrease from 42.0% in the prior year comparable period. SEA expenses were $100.6 million or 23.7% of sales compared to $99.0 million or 21.5% in the comparable prior year period. The year-over-year increase in SEA expense was the result of the inclusion of UDlive acquisition described above and increased personnel costs including salaries and benefits, partially offset by a decrease in incentive compensation.
Removed paragraphs (1)
Previous report
Current Business Trends – Tariffs
Reworded paragraphs (12)
Previous wording
The ORION® family of endpoints offers water utilities a choice of industry-leading options for communicating meter reading and event data. ORION Cellular endpoints power our Network as a Service (NaaS) approach to AMI, eliminating the need for the utility to install and maintain infrastructure, enabling rapid or gradual deployment, and enhancing network reliability. ORION mobile read endpoints support customers looking to deploy an AMR solution.
Current wording
The ORION® family of endpoints offers water utilities a choice of industry-leading options for communicating meter reading and event data. ORION Cellular endpoints power our Network as a Service (NaaS) approach to AMI, eliminating the need for the utility to install and maintain infrastructure, enabling rapid or gradual deployment, and enhancing network reliability. ORION mobile read endpoints support customers looking to deploy an AM R solution.
Previous wording
In 2025, the U.S. government implemented a series of trade tariffs on goods imported into the U.S. from various countries. In many cases, these tariffs resulted in reciprocal tariffs and other actions on goods being exported from the U.S. These associated tariffs are complex and continue to evolve as negotiations occur. We evaluate the impact of global tariffs and trade restrictions on our business and operations and leverage our manufacturing footprint, when possible, through the use of the USMCA trade agreement to minimize impact. Additionally, we have enacted certain price increases to offset tariff costs that we are not able to mitigate. In February 2026, a Supreme Court ruling invalidated certain tariffs previously imposed. The Company is currently reviewing and evaluating the opportunity for potential tariff refunds. As the global economic environment, trade and tariff negotiations continue to evolve, the Company will continue to evaluate the exposure and work to mitigate these costs.
Current wording
In 2025, the U.S. government implemented a series of trade tariffs on goods imported into the U.S. from various countries. In many cases, these tariffs resulted in reciprocal tariffs and other actions on goods being exported from the U.S. These associated tariffs are complex and continue to evolve as negotiations occur. We evaluate the impact of global tariffs and trade restrictions on our business and operations and leverage our manufacturing footprint, when possible, through the use of the USMCA trade agreement to minimize impact. Additionally, we have enacted certain price increases to offset tariff costs that we are not able to mitigate. In February 2026, a Supreme Court ruling invalidated certain tariffs previously imposed. The Company has reviewed and applied for tariff refunds, as applicable. As the global economic environment, trade and tariff negotiations continue to evolve, the Company will continue to evaluate the exposure and work to mitigate these costs.
Previous wording
Total operating earnings for the three months ended March 31, 2026 were $35.2 million, or 17.4% of sales, compared to $49.4 million, or 22.2% of sales, in the comparable prior year quarter. Gross margin dollars decreased $11.1 million, with gross margin as a percent of sales of 41.7%, a decrease from 42.9% in the prior year comparable quarter due to lower sales volume and less favorable product mix. Selling, engineering and administration (SEA) expenses were $49.2 million or 24.3% of sales in the first quarter of 2026 compared to $46.0 million or 20.7% of sales in the comparable prior year quarter. The increase in SEA expenses was mainly due to higher personnel costs including higher salaries and benefits, a full quarter of SmartCover SEA expenses and $1.2 million of acquisition related costs partially offset by lower management incentive costs.
Current wording
Total operating earnings for the three months ended June 30, 2026 were $39.4 million, or 17.7% of sales, compared to $44.9 million, or 18.8% of sales, in the comparable prior year quarter. Gross margin dollars decreased $7.0 million, with gross margin as a percent of sales of 40.8%, a decrease from 41.1% in the prior year comparable quarter due to lower sales volumes and product mix. Selling, engineering and administration (SEA) expenses were $51.4 million or 23.1% of sales compared to $52.9 million or 22.2% in the comparable prior year quarter. The decrease in SEA expenses was due to decreased incentive compensation and other cost containment actions, partially offset by final transaction-related costs for the UDlive acquisition of $1.2 million. The inclusion of UDlive results for two months along with related intangible asset amortization combined added $1.8 million to year-over-year expenses.
Previous wording
The provision for income taxes as a percentage of earnings before income taxes for the quarter ended March 31, 2026 was 24.8% compared to 24.4% for the comparable prior year period. Interim provisions are based on an estimate of the overall annual rate that can vary due to state taxes, the relationship of foreign and domestic earnings, other credits, allowances and discrete items.
Current wording
The provision for income taxes as a percentage of earnings before income taxes for the quarter ended June 30, 2026 was 25.2% compared to 24.5% for the comparable prior year period. Interim provisions are based on an estimate of the overall annual rate that can vary due to state taxes, the relationship of foreign and domestic earnings, and other credits and allowances.
Previous wording
As a result of the above-mentioned items, net earnings for the three months ended March 31, 2026 were $27.3 million, or $0.93 per diluted share, compared to $38.4 million, or $1.30 per diluted share, for the same period in 2025.
Current wording
As a result of the above-mentioned items, net earnings for the three months ended June 30, 2026 were $29.7 million, or $1.02 per diluted share, compared to $34.6 million, or $1.17 per diluted share, for the same period in 2025.
Previous wording
The Company's net sales for the three months ended March 31, 2026 were $202.3 million compared to $222.2 million during the same period in 2025. Net sales into the utility water market were $178.4 million, a decrease of 9.6% from the prior year’s $197.3 million due to project timing dynamics of previously completed project deployments and customer short cycle order pacing, partially offset by BEACON SaaS, SmartCover, water quality and network monitoring product revenue. Sales of products into the global flow instrumentation end markets were $23.9 million compared to the prior year’s $24.9 million, a decrease of 4.1%, with modest growth in water-related markets more than offset by declines in de-emphasized applications.
Current wording
The Company's net sales for the six months ended June 30, 2026 were $424.6 million compared to $460.3 million during the same period in 2025. Sales into the utility water market were $373.4 million, a decrease of 8.8% from the prior year’s $409.5 million due to uneven AMI project pacing partially offset by increased BEACON SaaS revenue and water quality product revenue, as well as revenue associated with the acquisition of UDlive of $2.0 million. Sales of flow instrumentation products were $51.2 million compared to the prior year’s $50.8 million, an increase of 0.8%.
Previous wording
Overall, PWC decreased $13.0 million compared to the previous year-end. Receivables at March 31, 2026 decreased $2.1 million due to timing of shipments and lower sales activity in the first quarter of 2026. The Company believes its receivables balance is fully collectible. Inventories increased $23.3 million due to timing of inventory receipts related to current quarter shipments. Payables as of March 31, 2026 were $34.2 million higher than the prior year-end due to timing of payments and the increase in inventory levels.
Current wording
PWC increased $9.5 million compared to the previous year-end. Receivables at June 30, 2026 increased $8.9 million due to timing of shipments. The Company believes its receivables balance is fully collectible. Inventories increased $26.1 million due to the timing of inventory receipts and sales pacing in the first half of 2026. Payables at June 30, 2026 were $25.5 million higher than the prior year-end due to timing of payments and increased inventory levels.
Previous wording
Cash provided by operations in the first three months of 2026 was $33.9 million compared to $33.0 million in the same period of 2025. Lower net earnings were offset by increased cash flow from primary working capital balances in 2026 versus 2025, resulting in minimal change in cash from operations.
Current wording
Cash provided by operations in the first six months of 2026 was $60.6 million compared to $77.6 million in the same period of 2025. Lower net earnings and working capital differential were the largest contributors to the decrease in cash provided by operations compared to the same period in 2025.
Previous wording
Property, plant and equipment expenditures for the first three months of 2026 were $4.4 million compared to $3.0 million in the comparable prior year period.
Current wording
Property, plant and equipment expenditures for the first six months of 2026 were $9.3 million compared to $6.9 million in the comparable prior year period.
Previous wording
Cash and cash equivalents at March 31, 2026 decreased to $205.5 million from $226.0 million at December 31, 2025, the result of the $33.9 million of cash provided by operations, offset by common stock repurchases and payment of the quarterly dividend.
Current wording
Cash and cash equivalents at June 30, 2026 decreased to $95.7 million from $226.0 million at December 31, 2025, the result of the $60.6 million cash provided by operations, offset by $94.4 million deployed for the UDlive acquisition, $63.5 million for the repurchase of Company common stock and $23.3 million for the payment of quarterly dividends.
Previous wording
The Company's credit facility includes a $150.0 million multi-currency line of credit that supports commercial paper (up to $100.0 million). The facility includes several features that enhance the Company's financial flexibility including an increase feature, acquisition holiday, and favorable financial covenants. The Company was in compliance with all covenants as of March 31, 2026. The Company believes that its operating cash flows, available borrowing capacity, and its ability to raise capital provide adequate resources to fund ongoing operating requirements, future capital expenditures and the development of new products. The Company had $154.6 million of unused credit lines available at March 31, 2026.
Current wording
The Company's credit facility includes a $150.0 million multi-currency line of credit that supports commercial paper (up to $100.0 million). The facility includes several features that enhance the Company's financial flexibility including an increase feature, acquisition holiday, and favorable financial covenants. On June 5, 2026, the Company amended and extended its credit facility, with an extended maturity date of July 8, 2031. The Company was in compliance with all covenants as of June 30, 2026. The Company believes that its operating cash flows, available borrowing capacity, and its ability to raise capital provide adequate resources to fund ongoing operating requirements, future capital expenditures and the development of new products. The Company had $154.6 million of unused credit lines available at June 30, 2026.
Previous wording
The Company is subject to contingencies related to environmental laws and regulations. A future change in circumstances with respect to these specific matters or with respect to sites formerly or currently owned or operated by the Company, off-site disposal locations used by the Company, and property owned by third parties that is near such sites, could result in future costs to the Company and such amounts could be material. Expenditures for compliance with environmental control provisions and regulations during 2025 and the first quarter of 2026 were not material.
Current wording
The Company is subject to contingencies related to environmental laws and regulations. A future change in circumstances with respect to these specific matters or with respect to sites formerly or currently owned or operated by the Company, off-site disposal locations used by the Company, and property owned by third parties that is near such sites, could result in future costs to the Company and such amounts could be material. Expenditures for compliance with environmental control provisions and regulations during 2025 and the first two quarters of 2026 were not material.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The total purchase consideration for UDlive, net of cash acquired, was $94.4 million. The acquisition was funded by cash on hand. The fair value of the potential earn-out at June 30, 2026 was $12.0 million and was recorded as a liability. The fair value of the earn-out was calculated using a Monte Carlo simulation model which incorporated projected EBITDA and adjusted the volatility and discount rate to reflect the risk profile of EBITDA. The Company's preliminary allocation of the purchase price included $0.7 million of account receivables, $5.7 million of inventories, $3.4 million of other assets, $53.8 million of intangible assets and $69.9 million of goodwill that is not deductible for tax purposes. The intangible assets acquired are primarily developed technology, customer relationships and trademarks with estimated average useful lives of 10 to 12 years. The Company also assumed $1.7 million of payables, $13.6 million of net deferred income tax liabilities, $10.0 million of deferred revenue and $1.7 million of other liabilities as part of the acquisition. The preliminary allocation of the purchase price to the net assets acquired was based upon the estimated fair values, at the date of acquisition. As of June 30, 2026, the Company had not completed its analysis for estimating the fair value, including the finalization of the fair value of the assets acquired and contingent consideration. Revenue associated with UDlive from the date of acquisition through June 30, 2026 was $2.0 million. UDlive is reported within the utility water product line and the Company will continue to operate under a single segment.
Current report — wording carried from elsewhere
The provision for income taxes as a percentage of earnings before income taxes for the six months ended June 30, 2026 was 25.0% compared to 24.4% for the comparable prior year period. Interim provisions are based on an estimate of the overall annual rate that can vary due to state taxes, the relationship of foreign and domestic earnings, and other credits and allowances.
Current report — wording carried from elsewhere
As a result of the above-mentioned items, net earnings for the six months ended June 30, 2026 were $57.1 million, or $1.95 per diluted share, compared to $73.0 million, or $2.47 per diluted share, for the same period in 2025.