Itron Q4 2025 Earnings Call - Record profitability and ARR surge, resiliency acquisitions lift margins but shave 2026 EPS

Conference Operator: Please note that today’s conference is being recorded. I will now hand the conference over to your speaker host for today, Paul Vincent, Vice President of Investor Relations. Please go ahead.

Paul Vincent, Vice President of Investor Relations, Itron: Good morning, and welcome to Itron’s fourth quarter 2025 earnings conference call. Tom Deitrich, Itron’s President and Chief Executive Officer, and Joan Hooper, Senior Vice President and Chief Financial Officer, will review Itron’s fourth quarter results and provide a general business update and outlook. Earlier today, the company issued a press release announcing its results. This release also includes details related to the conference call and webcast replay information. Accompanying today’s call is a presentation that is available through the webcast and on our corporate website under the Investor Relations tab. Following prepared remarks, the call will open for questions using the process the operator described. Before Tom begins, a reminder that our earnings release and financial presentation include non-GAAP financial information that we believe enhances the overall understanding of our current and future performance.

Reconciliations of differences between GAAP and non-GAAP financial measures are available in our earnings release and on our investor relations website. We will be making statements during this call that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially from these expectations because of factors that were presented in today’s earnings release and comments made during this conference call, as well as those presented in the Risk Factors section of our Form 10-K and other reports and filings with the Securities and Exchange Commission. All company comments, estimates, or forward-looking statements are made in a good-faith attempt to provide appropriate insight to our current and future operating and financial environment. Materials discussed today, February 17, 2026, may materially change, and we do not undertake any duty to update any of our forward-looking statements.

Now, please turn to page four of our presentation as our CEO, Tom Deitrich, begins his remarks.

Tom Deitrich, President and Chief Executive Officer, Itron: Thank you, Paul. Good morning, and thank you for joining our call. Itron delivered another quarter of record earnings and profitability, underscoring the durability of our model and accelerating demand for Grid Edge Intelligence. Highlights on slide 4 include revenue of $572 million, adjusted EBITDA of $99 million, non-GAAP EPS of $2.46, and free cash flow of $112 million. These financial results reflect strong execution as our customers modernize the grid and rely more heavily on Itron solutions. Modern civilization depends on energy and water systems that cannot fail, and increasingly, those systems depend on intelligence. Itron is the provider of intelligent infrastructure that underpins reliability, resilience, and safety.

Our value has grown significantly, as demonstrated by increased adoption of Grid Edge Intelligence, Outcomes growth, record financial results, surging annual recurring revenue, and the expansion of our offerings through strategic acquisitions. Turning to slide 6, our fourth quarter bookings were $737 million, with a total backlog at quarter end of $4.5 billion. Continued momentum in Grid Edge Intelligence demand resulted in a record backlog for our Outcomes segment. Our fourth quarter bookings were driven by numerous Grid Edge solutions, supporting grid modernization and reliability of infrastructure. These include the expansion of a long-standing relationship with Exelon through a new multiyear, multi-application agreement. This extension underscores the business benefits, technical flexibility, and proven value of our solutions, including security, consumer privacy, and operations optimization.

Another meaningful fourth quarter win involves collaboration with a large early adopter AMI customer to responsibly address operational continuity, business risk, and affordability. Aging legacy systems and readiness for next-generation technologies are often misaligned, and our customers turn to us to help them bridge this gap. Itron’s Utility IQ solution reinforces our commitment to open ecosystems, and customer flexibility is designed around interoperability across technologies. Our product and service offerings provide a clear path forward to simultaneously maintain an aging system while smoothly transitioning to more capable and consumer-oriented services. Additionally, we are expanding our partnership with a large Canadian utility by providing additional Grid Edge capabilities focused on distributed intelligence, enabling real-time grid visibility, analytics, and control.

As an expansion to our commitment to utility resiliency, we announced during the quarter the acquisition of Urbint, a provider of AI-enhanced solutions for emergency preparedness and response, damage prevention, and worker safety. We also announced the acquisition of Locusview, a provider of solutions for digital construction management, which automates the process from planning to closeout, deploying field-based capture of as-built infrastructure to enhance the speed and integrity of grid build-out. With both acquisitions now closed, we are introducing a new reporting segment named Resiliency Solutions. We are thrilled to welcome these teams to Itron. Resiliency Solutions expands our reach, allowing Itron to support our customers through every step of the asset lifecycle, from planning, to build-out, to operations, to maintenance and protection.... Itron is a long-standing industry anchor in the operations space, providing grid edge technology.

Additionally, our leading energy forecasting products are used by 90% of the independent system operators and over 70% of the electricity operators in North America. Over the past years, we have added power flow analysis and planning software solutions to support detailed grid planning and interconnect analysis. The addition of Urbint’s emergency preparedness and response, worker safety, and damage prevention solution augments our planning, maintenance, and protection offerings. Most recently, Locusview provides leading digital construction management solutions. In total, Itron supports our customers through the asset lifecycle. Proactive resiliency is a top priority for our customers, which aligns well with our strategic investments and drives higher margins and recurring revenue growth in 2026 and beyond. I will now pass on to Joan to cover the financial results for the company.

Joan Hooper, Senior Vice President and Chief Financial Officer, Itron: Thank you, Tom. I’ll review Itron’s fourth quarter and full year 2025 results before discussing our financial outlook for 2026. Financial performance was strong in the fourth quarter and set company records for gross margin, non-GAAP earnings per share, EBITDA, and free cash flow as a percentage of revenue. Please turn to slide 8 for a summary of consolidated GAAP results. Fourth quarter revenue of $572 million was higher than the range we expected and lower than the prior year due to planned portfolio changes and the timing of large project deployments. Gross margin was 560 basis points higher than last year due to favorable customer and product mix. GAAP net income of $102 million, or $2.21 per diluted share, compared to $58 million, or $1.26 in the prior year.

The improvement was driven by higher operating income and lower tax expense. Regarding non-GAAP metrics on slide 9, adjusted gross margin of 40.7% was a record and increased 580 basis points versus Q4 2024. Non-GAAP operating income of $91 million increased 28% year-over-year. Adjusted EBITDA of $99 million increased 21%, and both the dollar amount and the percentage of revenue at 17% were new records. Non-GAAP net income for the quarter was $113 million, or $2.46 per diluted share, versus $1.35 a year ago. This is a new quarterly record for the company. Free cash flow was $112 million in Q4 versus $70 million a year ago. The increase reflects year-over-year earnings growth and improved working capital.

Year-over-year revenue growth by business segment is on slide 10. Device Solutions revenue decreased 7% on a constant currency basis due to the expected decline in legacy electricity products in EMEA and the timing of project deployments in North America. Network Solutions revenue decreased 15% year-over-year, primarily due to the timing of project deployments. Outcomes revenue increased 22% on a constant currency basis due to an increase in delivery services and the continued growth of recurring revenue. Our new segment, Resiliency Solutions, which includes revenue from November third, when our acquisition of Urbint closed, contributed $3 million of revenue. Beginning with the Q1 reporting, the combined Locusview and Urbint results will be reported in this segment.

Moving to the non-GAAP year-over-year EPS bridge on slide 11, our Q4 non-GAAP EPS of $2.46 per diluted share increased $1.11 year over year. Pre-tax operating performance contributed a $0.45 per share increase, driven by the fall through of higher gross profit. Lower tax expense had a positive year-over-year impact of $0.69 per share. Turning to slides 12 through 15, I’ll review Q4 segment results compared with the prior year. Device Solutions revenue was $105 million. Adjusted gross margin was 34.4%, and operating margin was 26.6%. Both margin results are segment quarterly records. Adjusted gross margin increased 780 basis points year over year due to favorable customer and product mix, and operating margin was up 670 basis points.

Network Solutions revenue was $352 million, with adjusted gross margin of 42% and operating margin of 32.2%. Adjusted gross margin increased 690 basis points year-over-year due to favorable customer and product mix, and operating margin was up 620 basis points. Outcomes revenue was a record $112 million, with adjusted gross margin of 41.7% and operating margin of 27%. Adjusted gross margin decreased 230 basis points year-over-year due to lower software license mix, but operating margin increased 420 basis points due to higher operating leverage. Resiliency Solutions with revenue of $3 million, an adjusted gross margin of 76%, and a negative operating margin of 3.6%.

For a recap of full year 2025 results, please turn to slide 16. Revenue of $2.37 billion was down 3% year-over-year. Recall, 2024 results included catch-up of previously constrained revenue that did not occur in 2025. As our business continues to evolve, we are introducing a new metric of annual recurring revenue, or ARR. For 2025, we ended the year with approximately $368 million of ARR. Profitability and cash generation performance were very strong in 2025, and we set several new annual records. They were a gross margin of 37.7%.

adjusted EBITDA of $374 million, or 15.8% of revenue, non-GAAP earnings per share of $7.13 per share, and free cash flow of $383 million, or 16.2% of revenue. Turning to Slide 17, I’ll review liquidity and debt at the end of the fourth quarter. Total debt was $1.265 billion, and cash and equivalents were $1.02 billion. Our cash balance was down $312 million versus last quarter, due to the acquisition of Urbint for $325 million and $100 million of stock buyback, partially offset by Q4 free cash flow of $112 million.

The previously announced $525 million acquisition of Locusview closed during the first quarter of 2026, and therefore is not reflected in this balance. As of December 31, net leverage was 0.7 times. Please turn to Slide 18 for our full year 2026 financial outlook. We anticipate 2026 revenue to be within a range of $2.35 billion-$2.45 billion. The midpoint of this range represents 1% growth versus 2025. We currently anticipate 2026 non-GAAP earnings per share to fall within a range of $5.75-$6.25 per diluted share. The EPS outlook assumes an effective tax rate of 22% for the full year. Quarterly rates could fluctuate based on jurisdictional mix and the timing of tax settlements.

At the midpoint of this EPS range, and after normalizing the tax rate to 22% for both years, we expect 2026 year-over-year earnings to be down by approximately $0.32, which is driven by our two recent acquisitions. Although we do not issue forward outlooks by segment, we are providing some information on the size of our two recent acquisitions, which will make up our new Resiliency Solutions segment. In the full year 2026 range I just provided, we included a revenue contribution of approximately $65 million-$70 million, with gross margins of approximately 70% for this new segment. Resiliency Solutions is expected to be immediately accretive to Itron’s revenue growth, gross margins, and EBITDA, but will be dilutive to 2026 earnings per share due to less interest income, given the $850 million we spent for the two companies.

In the full year outlook I just provided, the dilutive impact to earnings per share from the two acquisitions is approximately $0.38 per share. We expect the two acquisitions will be earnings per share accretive by the end of 2027. Now, please turn to Slide 19 for our first quarter outlook. We anticipate Q1 revenue to be within a range of $565 million-$575 million, down 6% versus Q1 of last year. We anticipate first quarter non-GAAP earnings per share to be within a range of $1.20-$1.30 per diluted share, which at the midpoint is down approximately $0.27 versus last year. Lower interest income, driven by the two acquisitions, is reducing Q1 2026 earnings per share by approximately $0.13 per share.

As Tom noted, the environment our customers operate in is evolving rapidly, which creates new opportunities, but also new challenges and complexity. Our teams are working collaboratively with our customers to keep up with the pace of change, and we are executing on our strategy. Although our business will never move in a straight line in the short term, the future looks very bright, and we are confident in the course we are on. Now I’ll turn the call back to Tom.

Tom Deitrich, President and Chief Executive Officer, Itron: Thank you, Joan. Utilities today are no longer simply asset operators. They are real-time system managers balancing electrification, decentralization, affordability, and resilience. Grid transformation is structural, not cyclical, and it requires trusted data, secure networks, and operational intelligence embedded directly into the grid. This is where Itron competes and Itron wins. Our heritage is rooted in hardware and networks, and our future combines high-growth, durable, annual recurring revenue driven by data, AI, software, and services. Intelligence only matters when it is built on trusted data that is tightly integrated into operations. Itron provides that foundation, helping customers move from reaction to visibility, automation, and prediction. We remain focused on backlog quality, revenue growth, margin expansion, and cash generation. Our strategy delivers durable earnings growth and compound shareholder value through customer trust and solution relevance. Grid scaling and transformation is structurally unavoidable and cannot happen without greater intelligence.

Itron is the intelligent infrastructure provider of modern energy and water systems. We provide real-time intelligence our customers require to operate efficiently. With more than $1 billion of durable outcomes backlog, rapidly growing annual recurring revenue, and expanding solutions for critical customer problems, Itron is well-positioned for the multiyear grid build-out in the years ahead. Thank you for joining our call today. Operator, please open the line for some questions.

Joan Hooper, Senior Vice President and Chief Financial Officer, Itron: Thank you. Ladies and gentlemen, to ask a question at this time, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, simply press star one one again. Please stand by while we compile the Q&A roster. Now, first question coming from the line of Noah Kaye with Oppenheimer. Your line is now open.

Noah Kaye, Analyst, Oppenheimer: Well, good morning. Thanks for taking the questions. I have a lot to get to, but I’ll keep it to two, in consideration of others. I think the key question here, in terms of the market environment and the behavior you’re seeing, Tom, is maybe to get an update on, you know, how utility demand and behavior are kind of trending now. You know, you talked in past quarters about, you know, some shifting dynamics in terms of how utilities go to market. I guess, to what extent are you seeing some of that, you know, stabilize or inflect here? Can you kind of give us an update on the pipeline and what KPIs you’re really paying attention to, to understand the shape of the demand environment from here? Thank you.

Tom Deitrich, President and Chief Executive Officer, Itron: Thanks, Noah. The fourth quarter bookings were strong, as we had expected, $737 million, and that’s composed of several hundred unique wins. So the market is very constructive in moving forward. Second point I guess I would make is around some of the slips or the delays that we saw back in the middle of last year. We have not seen any further movement. Those things did move out of the year as we expected, but the externalities that really caused that, some of the froth around data center siting and government programs slipping out or funding being uncertain, that stuff has not continued on. It’s still there on those individual projects, but it hasn’t caused additional slips.

So what we see today is bookings moving at a much more normalized pace. It’s lumpy, but it, it’s always lumpy, so call it normal. There’s always some customer-specific phasing types of things inside of there. Relative to the metrics or the KPIs that you asked about there, I would say pipeline growth is certainly a key metric. That was up 27%, from the end of 2024 to the end of 2025. We continue to see that pace thus far into 2026. We looked at outcomes backlog growth, which was up 58% year-over-year and now over $1 billion.

And certainly we’re really focused in on the stability of revenue and revenue growth for the future with ARR as the metric and the way to think about that. So $368 million of ARR at the end of Q4, that’s up 20% year-over-year from the end of 2024. So there’s a lot of really good stuff happening underneath all of that, and I would say the environment continues to be really constructive for us-

Noah Kaye, Analyst, Oppenheimer: Mm-hmm

Tom Deitrich, President and Chief Executive Officer, Itron: ... through the fourth quarter and into 2026 and beyond.

Noah Kaye, Analyst, Oppenheimer: That is a segue into the second question. Just on this ARR metric, so just so we all understand, this is an ARR run rate that you were at, at the end of Q4, the $368 million?

Tom Deitrich, President and Chief Executive Officer, Itron: Yes, it is.

Noah Kaye, Analyst, Oppenheimer: Okay.

Tom Deitrich, President and Chief Executive Officer, Itron: 360 at the end of the fourth.

Noah Kaye, Analyst, Oppenheimer: Right. You know, as we think about what the 2026 guide implies, where do you think that could kind of be at the midpoint as we get into kind of the end of this year?

Joan Hooper, Senior Vice President and Chief Financial Officer, Itron: Sorry, you mean specifically, what does it mean for ARR?

Noah Kaye, Analyst, Oppenheimer: Yep.

Joan Hooper, Senior Vice President and Chief Financial Officer, Itron: Yeah, I would expect we would still see kind of mid-teens to maybe up to 20% growth. And again, that would be calculated from year-end 2025 to year-end 2026. So that’s that was a fourth quarter annualized number.

Noah Kaye, Analyst, Oppenheimer: And that’s-

Joan Hooper, Senior Vice President and Chief Financial Officer, Itron: Yeah.

Noah Kaye, Analyst, Oppenheimer: And that’s organic, not including the acquisitions, right? So...

Joan Hooper, Senior Vice President and Chief Financial Officer, Itron: Well, it now does include for 2024. It just had a little bit of Locusview, sorry, of Urbint, but for the 2026 expectations had both acquisitions in there.

Noah Kaye, Analyst, Oppenheimer: Great. I’ll turn it over. Thank you.

Conference Operator: Thank you. Our next question coming from the line of Mark Strauss with J.P. Morgan. The line is now open. Mark, please check your mute button.

Mark Strauss, Analyst, J.P. Morgan: Oh, I’m so sorry. Can you hear me now?

Joan Hooper, Senior Vice President and Chief Financial Officer, Itron: Yes, we can hear you.

Mark Strauss, Analyst, J.P. Morgan: Yeah. Okay. I’m sorry about that. Good morning. Thank you for taking our questions. I wanted to ask, you know, we’ve seen some investor concerns lately about AI disrupting kind of traditional software companies. I’m just curious, when you look at your resiliency solutions business and your outcomes business, can you just talk about kind of the barriers to entry and kind of at a high level, what you see as your right to win within those markets? Then I have a quick follow-up. Thank you.

Tom Deitrich, President and Chief Executive Officer, Itron: Both of the components inside of Resiliency Solutions, digital construction management, as well as the protection solutions that we have, both of those components really rely on field service tools and the usage of those tools. So, when you have thousands and thousands of workers in the field using the tool to capture the data, you’ve got a really, really sticky solution overall. So I’ll give you an example. The big winter storm that went across the United States, Winter Storm Erin, what was this? Two weeks or so ago, really put ice and snow from Texas to Maine all the way across the U.S.

What we saw was 3.5 million hours of restoration usage of the solution that we have for emergency preparedness and response. That data capture, that field service use, those tools are incredibly, incredibly sticky. When you look at it from the value that the customer gets, there’s a really interesting clip of the CEO of Southern Company talking about the use of AI models to predict where to position crews and understand what weather patterns mean for their business. A really good example of how that tool, because of field use and the stickiness associated with it in terms of data capture, generates real value in terms of reduced restoration times and improved performance for communities and for our customers.

So, there’s a perfect example as to why the tools that we have and why when we apply AI, it really comes down to how the data is captured, how it’s processed, and making sure that the results are trusted, which our customers clearly do.

Jeff Osborne, Analyst, TD Cowen: ... Great. Thanks, Tom. And then a quick follow-up, Joan. Appreciate the color with the resiliency solutions, you know, contribution in 2026 guide. Just given it’s a new segment, can you talk about kind of seasonality that we should expect in revenue and margins, if you don’t mind? Thank you.

Joan Hooper, Senior Vice President and Chief Financial Officer, Itron: Yeah, I don’t see it as a seasonal business. I think it’ll be pretty steady, and obviously, as they sign new contracts that have subscription-based revenue, you’ll see it grow over time. But I don’t see a big swing in one quarter versus another.

Jeff Osborne, Analyst, TD Cowen: Great. Thank you.

Conference Operator: Thank you. Our next question coming from the line of David Sunderland with Baird. Your line is now open.

David Sunderland, Analyst, Baird: Hey, good morning, guys. Thank you very much for taking my question. Lots of questions recently from investors just about utility ordering patterns and if it’s structural disruption versus just, I guess, lots of wood to chop in the near term. Wondering, specifically, if you could talk about what you’re seeing in the Book and Ship business trends, maybe how much is assumed for this year, or how we think about the bookings needed throughout this year to set up and underpin your 2027 targets? Then I have one brief follow-up.

Tom Deitrich, President and Chief Executive Officer, Itron: Yeah. I would say that the trends in terms of ordering patterns have really started to normalize. Some of the delays that we saw in the middle of last year, which were exogenous events, that those have played through. We haven’t seen any cancellations because of those types of things, maybe some project timelines stretching out, but I would consider it much more normalized today. On the Book and Ship business, we definitely continue to see good Book and Ship business.

As customers are coping with some of the environment that they operate in, book and ship oftentimes tends to be a go-to tool that customers have to cope with uncertainty in their business model if they don’t have the right things in place from a regulatory standpoint, for example. The ability that we have to bridge our customers through a transition in terms of technology is really important. I referenced that in some of the prepared remarks of working with customers to smooth transitions of technology, so they don’t have to do a rip and replace, but more find ways to grow the capability over time. So certainly in the electricity space, I would say book and ship alive and well.

Water in the U.S. probably has slowed down a little bit. You’ve seen that in probably some of the competitive landscape that’s out there, but that’s probably a less important trend for us. Book and Ship in Europe continues to operate on a normalized level. So, again, overall market very constructive in terms of what to expect in the year ahead.

David Sunderland, Analyst, Baird: That’s super helpful, and thank you for that, Tom. Maybe just to follow up, I appreciate the commentary you gave qualitatively, just about the distributed intelligence, some of the new offerings, the commentary from Southern, and kind of what you’re seeing there and from customers out there in the market. But wondering if you could give any more color just on penetration of these and maybe attach rates, which I know isn’t a formal metric. But just thinking about core customers and adopting some of these new things, maybe the endpoints that you could see converted over. I guess I don’t know the timeframe. But just thinking about how this may trend in the near to longer term, and the rate of adoption specifically. Thank you very much.

Tom Deitrich, President and Chief Executive Officer, Itron: Yeah. The trend for DI adoption continues to be very good and very strong. So endpoints up 25% year-over-year, the number of apps up 70% year-over-year, so it continues absolutely at the pace we would have expected. We still have 10 million in backlog, ready to move out the door, approximately. So things are continuing to be normalized in that area. And if you happen to be at DistribuTECH, a large show, you certainly would have seen the notion of grid edge intelligence everywhere across the industry. So this isn’t an if, it’s inevitable. It’s absolutely happening.

It’s the way our customers need to cope with the world around them and the complexity of the environment that they operate in. We’ve seen particular growth in things like distributed energy resource management. So we’re over 3 million devices, things like thermostats and load control switches and that sort of thing, that are connected up. We’re dispatching about 70 GWh a year. And in terms of activity, things like VPPs and other programs to manage it. We’ve seen tremendous growth in analytics as to how to make sense of all of the data. Those are the things that really do underpin the growth. And I think the right way to think about it from a financial perspective is ARR.

There’s lots of different models that our customers use to procure these types of solutions, and that’s why we think ARR is a meaningful metric for the business, and something to watch.

David Sunderland, Analyst, Baird: Super helpful. I’ll pass it on. Thank you, Tom.

Joan Hooper, Senior Vice President and Chief Financial Officer, Itron: Thanks, David. Our next question coming from the line of Jeff Osborne with TD Cowen. Your line is now open.

Jeff Osborne, Analyst, TD Cowen: Yeah, thank you. Just a couple quick ones on my side, Tom. Can you share what, when you typically start the year, what level of the forward guidance is usually in backlog? And then maybe how that changed this year as you approached giving guidance.

Tom Deitrich, President and Chief Executive Officer, Itron: It will always be a bit varied, so it depends on the timeline that you’re looking at. We would go into the quarter with probably something on the order of 80% in backlog, and I would say that, you know, we’re not so far off of that in terms of what’s happening. It clearly has a tail to it, so it’s lower the further you go out in time, but that’s sort of the normal flow. As I mentioned in one of the questions earlier, certainly the environment is leading customers to have probably a slightly higher percentage of book and ship, and that is really what we’re thinking about as we set guidance for the year.

Jeff Osborne, Analyst, TD Cowen: ... Got it. My last question is just, I think you mentioned the pipeline that you’re pursuing is up 27%. I was wondering, a metric that you don’t give, but just to give us a sense of, are you gaining share or not, is can you articulate the relative to the backlog, which has regulatory approval, the sort of awarded technically contracts to Itron, but, you know, not through the regulatory process. Is that funnel or pool of awards, so to speak, you know, larger than anticipated or past trends? Or like, what, what’s the general trend on sort of share gains, and then you being technically awarded something and then still working its way through that sort of regulatory process?

Tom Deitrich, President and Chief Executive Officer, Itron: Yeah, I think it’s hard to judge that in any one moment of time. If you look at the trend over the last several years, yeah, I definitely think you see our share trending up in the core markets that we are driving to participate in and the level of content that we have. If you focus in on the U.S. specifically and in the electricity space, I think that you know, it’s very fair to say the big are getting bigger and the smaller are definitely getting squeezed, and we being the largest, are clearly a beneficiary there.

Jeff Osborne, Analyst, TD Cowen: Got it. That’s all I have. Thank you.

Conference Operator: Thank you. Our next question coming from the line of Chip Moore with Roth Capital Partners. Your line is now open.

Chip Moore, Analyst, Roth Capital Partners: Hey, good morning. Thanks for taking the question. I wanted to ask another on the normalization you’re seeing on project activity. Just maybe, you know, understanding it’s inherently lumpy, but is there a way to help us think about, you know, if you didn’t see those slips last year, you know, how we might be thinking about organic growth here in 2026? Is, you know, sort of mid to high single digits, still the right way to think about that?

Tom Deitrich, President and Chief Executive Officer, Itron: Yeah, I would take a step back and focus on the bigger picture. The business structure is fundamentally different now than what it used to be. We clearly still have a significant portion of our business, which is large project deployments and networking overall, and that absolutely has some level of lumpiness to it in terms of the bookings. How that flows through, it’s generally over the next three to four years in terms of how it expresses itself for the revenue itself. But the piece of the business which clearly is growing nicely for us, we continue to see good pace of growth, 20% year-over-year in Outcomes, for example, in Q4.

And this, the notion of annual recurring revenue, that is most of Resiliency Solutions, a good portion of Outcomes and a sliver of the Networks business falls into that category. That really is a significant structural difference in our business overall. So, that’s how I would focus on it and think about the business itself. We will continue to be beneficiaries of a market that is structurally, inevitably going to grow when it comes to grid deployment. There’s just no way modern society will fulfill anything close to where the money is going in terms of data centers and reshoring and manufacturing and electrification of everything, unless distribution spend continues at pace.

Chip Moore, Analyst, Roth Capital Partners: Very helpful, Tom. I think, you know, you called out surging ARR, right, in the prepared remarks. Just, you know, help us think about, you know, where that could be going, you know, as we get more normalization and, you know, perhaps changes in rate-making dynamics, just, you know, where could Outcomes, you know, how much has that been held back, and where could that go?

Tom Deitrich, President and Chief Executive Officer, Itron: Well, yeah, we certainly—what we saw with some of the network slowdown, I’m going back a couple of years now, when we had component constraints, network—the Outcomes business will still grow and, you know, call it 10%, year-over-year. As that, those components became available, and we did fulfill that networking revenue, you saw Outcomes growth rates pick up, and certainly the 20%+ year-over-year in Q4 is good evidence of that. We’re confident Outcomes can continue to grow, and now we have a new leg in the stool with Resiliency Solutions adding another tool in the toolbox to help our customers cope with some of the real challenges that are out there.

If we are gonna see grid deployment, you’re gonna have to figure out how to build this stuff faster, and that’s where digital construction management helps. If you are gonna have more floods and fires and storms, you’re gonna have to respond to disasters. And again, that’s where Resiliency Solution really helps. We can move it to a much more proactive environment, and that is absolutely gonna benefit what our business can and will be in the future.

Chip Moore, Analyst, Roth Capital Partners: Maybe just one last follow-up to that, Tom, just on those new capabilities. Is there a way to, you know, help us think competitively? Is this helping you to, you know, land new proposals? Obviously, there’s more TAM there. And then competitively, right, some of your competitors, I think, are backing down on some of the more complex deployments. Just a broader update. Thank you.

Tom Deitrich, President and Chief Executive Officer, Itron: Sure. Maybe take a perspective on the customer concentration specifically. Itron has 8,000 customers worldwide, Urbint and Locusview, think of it as, you know, tens of customers each. So we clearly have the ability with the sales reach that we have to move those solutions into a broader landscape and really help our customers solve a different set of problems globally. The notion of how we’re better together, one of the slides in the investor deck showed that circle diagram. But think about the ability to help your customer all the way through the asset life cycle, from when you’re doing the planning to through the build process and into the operational piece.

Itron has traditionally known for a long period of time what’s quote, unquote, inside of wires, pipes and wires. Now we know where pipes and wires are, so we can help with solutions for restoration and improve the overall offering. So those are the types of things that I think will continue to drive growth for our business and how we benefit compared to perhaps some of the other offerings that are out there. Feel really good about our competitive position and expect to be able to support our customers using it.

Joseph Osha, Analyst, Guggenheim Partners: Thanks very much.

Conference Operator: Thank you. Our next question in queue coming from the line of Scott Graham with Seaport Research Partners. The line is now open.

Scott Graham, Analyst, Seaport Research Partners: Hey, good morning, and thanks for taking the question. Tom, I was wondering where you now believe the 20s where you land in, you know, the next couple of years in terms of revenues. And I think last time I asked you if maybe it was $2.6 million-$2.8 million in 2027 as a revenue goal, that maybe the lower half of that made more sense. You know, your response, if I recall, was, you know, kind of maybe. Are you thinking, you know, more maybe, that maybe the lower end of that range because of some of these scope reductions, the complexity, you know, deployment complexity reductions, and what happened in 2025 is, maybe the lower end of the 2027 goal more appropriate?

Tom Deitrich, President and Chief Executive Officer, Itron: Thanks, Scott. I would say that it’s really important to point out that gross margin, EBITDA, free cash flow for the 27 targets, we already achieved them in 2025. So we feel really good about that, and we’re sure we can continue forward on those types of metrics. On the revenue side of things, the 2027 revenue number, we still see that target as standing. Yeah, perhaps to your point, it’ll depend on the pace of network deployments as to where we land in the range, probably towards the lower end. But it’s just because we have achieved most of that 27 model by the time we got to the end of 2025.

We think it’s appropriate to reset long-term targets with an investor day. We haven’t really picked a date yet, but I would suspect sometime in the next year or so, we will set up that and set out some new longer-term targets.

Scott Graham, Analyst, Seaport Research Partners: That’s fair. I appreciate that. My follow-up question is really kind of around the bookings. I know you said that bookings were strong. They were, they were down on a year-over-year basis. Obviously, you had the, you know, crazy fourth quarter a year ago comp. But, you know, on a full year basis, they were still down versus the 2024 level by about 4%. So I was just sort of wondering when we can start to see bookings really inflect upward, and, you know, is it that, you know, it’s another quarter or two away? Are you seeing things move through a pipeline like you did a year ago? If you could help us on that, that’d be great.

Tom Deitrich, President and Chief Executive Officer, Itron: Sure. I think I’ve covered a lot of the points that are really important on this topic earlier on, so forgive me if I get a little bit repetitive. But, pipeline growth being up dramatically, we think is a good signal of where things are really trending. The business is absolutely structurally changing, with Outcomes backlog now being above $1 billion and continuing to outpace the growth on some of the other businesses, exactly as we had planned. Bookings will always be a little bit lumpy on the networking side of things, just because of the nature of the business itself.

But the environment we find ourselves in now is, I will say, normal lumpy, rather than some of the, the exogenous things, really starting to, to delay, the, the overall profile. So, we still feel really good about the trajectory of the business and, and how we will continue to support our customers. We have the solutions they need, and we are a trusted partner, so future continues to be bright.

Scott Graham, Analyst, Seaport Research Partners: Thanks very much.

Conference Operator: Thank you. Our next question coming from the line of Joseph Osha with Guggenheim Partners. Your line is now open.

Joseph Osha, Analyst, Guggenheim Partners: Hi, and thanks for taking my question. I only have one. Tom, you’ve talked about lead times for the business kind of marching out a bit. Historically, when you did disclose it more precisely, your 12-month backlog had been around kind of 35% or so of the total backlog. I’m wondering if you can give us some color on that currently. Thank you.

Tom Deitrich, President and Chief Executive Officer, Itron: The twelve-month backlog is right around $1.6 billion right now. That’ll be in the 10-K when it is published. That’s up meaningfully over where it was at the end of Q3, so I think it’s roughly $150 million or so higher from the prior quarter. As I commented earlier, the business is structurally different now. We do expect book and ship is a bit higher during the interim period overall. So what I would say is it’s very difficult to try to come up with a historical compare that’s meaningful, just because there’s been so much noise in how things have flowed through from the COVID days to the post-COVID supply constraints to where we are today.

Our guidance absolutely reflects the best view that we have for the year, and we feel really good about the trajectory of the business.

Joseph Osha, Analyst, Guggenheim Partners: Thank you.

Conference Operator: Thank you. I’m showing no further questions in queue at this time. I will now turn the call back over to Mr. Tom Deitrich for any closing remarks.

Tom Deitrich, President and Chief Executive Officer, Itron: Thank you, Lydia. Thank you, everyone, for joining, and we look forward to updating you on the next call.

Conference Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation. You may now disconnect.