Tom Deitrich, Itron's President and Chief Executive Officer, and Joan Hooper, Senior Vice President and Chief Financial Officer, will review Itron's third quarter results and provide a general business update and outlook. 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. During the third quarter, Itron set new records for margins, profit, and free cash flow on revenue in line with expectations.
Financial highlights on slide four include revenue of $582 million, adjusted EBITDA of $97 million, non-GAAP earnings per share of $1.54, and free cash flow of $113 million. On slide five, our third quarter bookings were $380 million, with a total backlog at the end of the quarter of $4.3 billion. Turning to slide six, utilities are operating in an increasingly complex environment marked by accelerating load growth, rising costs, heightened regulatory scrutiny, and greater technical demands. This is reflected in the ongoing expansion of distributed intelligence-enabled endpoints, which topped 16 million deployed by the end of the third quarter, with more than 10 million additional units in backlog.
Licensed DI applications grew 119% year over year to 20 million at quarter end. Grid Edge Intelligence defines the future of agile, data-driven distribution infrastructure and continues to expand opportunities for our Outcomes segment, which grew 11% year over year, led by higher recurring revenue. Although project conversion to backlog is taking longer, lumpy bookings are a familiar pattern and do not alter our long-term business trajectory. Our opportunity pipeline has expanded by over 25% since the start of the year.
| Metric | Period | Current guidance |
|---|---|---|
| Full-year 2025 revenue | FY2025 | $2.35B-$2.36B (midpoint down 3% YoY, ~2% growth normalized for $125M of 2024 catch-up revenue) (set/narrowed) |
| Full-year 2025 non-GAAP EPS | FY2025 | $6.84-$6.94 (midpoint up 23% YoY, 16% normalized for tax) (raised on favorable tax item) |
| Full-year 2025 effective tax rate | FY2025 | ~12% (lowered) |
| Q4 2025 revenue | Q4 2025 | $555M-$565M (midpoint down 9% YoY) (issued) |
| Q4 2025 non-GAAP EPS | Q4 2025 | $2.15-$2.25 (assumes negative ~19% tax rate from a $39M discrete benefit; ~7% growth normalized) (issued) |
| 2027 targets | FY2027 | reaffirmed; revenue possibly toward low end of range, margin/FCF toward high end (reaffirmed) |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | down (to $582M, near top of guided range) | Planned portfolio changes and timing of large project deployments |
| Gross margin | +360 bps to 37.7% (record) | Favorable customer and product mix |
| Adjusted EBITDA | +10% to $97M (record) | Higher gross profit fall-through |
| Free cash flow | +92% to $113M (record) | Improved working capital, lower tax payments, higher operational earnings |
| Non-GAAP EPS | -$0.30 to $1.54 | Higher tax expense (-$0.51) outweighing +$0.22 pre-tax operating improvement; prior-year tax was unusually low |
| Device Solutions revenue | -19% constant currency to $104M | Expected decline in legacy electricity products in EMEA and lower North America water volumes |
| Network Solutions revenue | -6% to $394M | Timing of project deployments |
| Outcomes revenue | +10% constant currency to $84M | Continued growth of recurring revenue |
| Licensed DI applications | +119% to 20M | Continued expansion of distributed intelligence adoption |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Booking lumpiness / project push-outs | — | Some hardware-oriented projects pushed to the right amid complex utility operating environment; management frames lumpiness as a familiar pattern that does not alter long-term trajectory | Emerging headwind, framed as transient |
| Grid edge / distributed intelligence | — | 16M+ DI endpoints deployed, 10M+ in backlog, DI apps up 119%; described as the future of agile data-driven distribution | Expanding |
| Recurring / Outcomes software mix | — | Recurring revenue bookings goal for the year already passed in Q3; Outcomes backlog up 36% YoY and over 20% of total backlog | Growing |
| Margin expansion | skepticism two years ago on gross-margin targets | Record gross, EBITDA, operating margins; doubts on margin targets now erased | Improving |
| M&A / inorganic growth | — | Urbint acquisition announced; balance sheet strength supports continued inorganic pursuit | Active |
| 2027 targets | prior framework | On track; some metrics already achieved or ahead; revenue possibly low end, other metrics high end | Reaffirmed |