Itron (ITRI) Q2 2026 earnings summary

Executive summary

• Q2 2026 revenue was $563 million, down 7% year-over-year, with annual recurring revenue up 21% to $417 million and adjusted EBITDA of $97 million.

• GAAP net income was $53 million ($1.19 per diluted share), down 22% year-over-year, mainly due to lower interest income and higher tax rates.

• Record gross margin and strong free cash flow drove earnings above expectations, reflecting operational efficiencies and favorable product mix.

• Backlog remains robust at $4.4 billion, with $550 million in bookings and a growing pipeline, supporting future revenue visibility.

• Major acquisitions, including Locusview and Urbint, enhanced the Resiliency Solutions segment, with integration progressing and early cross-selling underway.

Financial highlights

• Adjusted gross margin reached a record 41.4%, up 460 basis points year-over-year; GAAP gross margin was 41.0%.

• Adjusted EBITDA was $96.8 million, up 8% year-over-year; free cash flow was $81 million, down from $90.7 million last year.

• Non-GAAP net income was $71 million ($1.59 per diluted share); GAAP diluted EPS was $1.19.

• Net leverage was 2.3x; total debt was $1.6 billion; cash and cash equivalents at quarter end were $745 million.

• Share repurchases totaled $152 million year-to-date, including $52 million in Q2.

Outlook and guidance

• Q3 2026 revenue expected at $590–$600 million, up 2% year-over-year and 6% sequentially; non-GAAP EPS guidance: $1.50–$1.60.

• Full-year 2026 revenue outlook narrowed to $2.37–$2.41 billion; non-GAAP EPS raised to $6.30–$6.50, midpoint 7% above prior outlook.

• Sequential growth in the second half expected at ~8%; full-year non-GAAP EPS at midpoint up 7% from February outlook, but down 10% year-over-year.

• Management expects existing cash, operations, and access to capital markets to be sufficient for at least the next 12 months.

• No significant decrease in long-term customer demand identified.