Tom Deitrich, Itron's President and Chief Executive Officer, and Joan Hooper, Senior Vice President and Chief Financial Officer, will review Itron's first 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. While project timing provided a modest tailwind in Q1 revenue, we anticipate the first half to be consistent with our initial guidance.
The adoption of flexible and intelligent solutions is accelerating, and that is translating into durable compounding growth over time. Total company annual recurring revenue at quarter end was $414 million, up 28% due to strong organic growth, plus our recently acquired Resiliency Solutions segment. Our customers continue to work in a complex environment balancing global uncertainty, affordability concerns, resiliency imperatives, and growing demand variability. Our first quarter bookings were $476 million, bringing the total backlog to $4.4 billion at quarter end, in line with our expectations.
This engagement reflects the growing demand for distributed intelligence and grid edge computing as utilities modernize their networks to improve reliability, resilience, and operational efficiency. Importantly, this program highlights Itron's ability to deliver an integrated, first of its kind solution that brings together smart devices, software, and communication to support next-generation grid operations. The integration of Resiliency Solutions segment is on track, and the team is already contributing meaningfully. The digital construction management team extended a contract with a large natural gas pipeline customer, a strong signal of the customer value of deploying our platform.
| Metric | Period | Current guidance |
|---|---|---|
| Revenue | Q2 2026 | $560 million-$570 million (down ~7% YoY at midpoint) (New Q2 outlook; first half consistent with February annual outlook) |
| Non-GAAP EPS | Q2 2026 | $1.25-$1.35 per diluted share (down ~8% YoY at midpoint after normalizing for tax rate and interest income) (New Q2 outlook) |
| Full-year revenue vs 2027 targets | 2026 / 2027 targets | Toward low end of range; ahead on gross margin, EBITDA, cash flow and EPS (Unchanged from prior call; second half expected to be back-half loaded) |
| Metric | YoY | Note |
|---|---|---|
| Outcomes revenue | +20% constant currency (+22% as cited by CEO) | Higher recurring and services revenue |
| Networked Solutions revenue | -14% constant currency | Timing of large project deployments |
| Device Solutions revenue | -9% constant currency | Expected decline in legacy electricity products in EMEA and timing of North America projects |
| Adjusted gross margin | +490 bps to 40.7% | Favorable mix and operational efficiencies, including roll-off of pre-inflation-priced backlog |
| Adjusted EBITDA | +5% to $92 million | Higher operating income on favorable mix and efficiencies |
| Free cash flow | $79 million vs $67 million prior year | Lower tax payments |
| Annual recurring revenue | +28% to $414 million | Strong organic growth plus the acquired Resiliency Solutions segment |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| Grid modernization as a durable multi-year structural trend | — | Management views grid modernization as inevitable, citing aging infrastructure, distributed energy resources, and AI-driven demand; expects utility distribution spending to grow at least through end of the decade | Rising |
| Shift to recurring revenue (Outcomes and Resiliency Solutions) | — | Combined 25% of backlog and growing; Outcomes runs two-thirds to three-quarters recurring, Resiliency mostly recurring; ARR up 28% | Rising |
| Networks deployment timing and back-half loading | Discussed on prior call; year expected to be back-half loaded | Q1 benefited from accelerated first-half project deployments; second-half uptick depends on Networks deployment conversion | Steady |
| Integration of Urbint and Locusview (Resiliency Solutions) | Outlined in February call as accretive to revenue growth, gross margin and EBITDA but dilutive to 2026 EPS | Integration on track and the top 2026 priority; segment contributed $16 million revenue at 73% gross margin; no synergies booked yet | Steady |
| Government grid funding (GRIP to DOE SPARK program) | — | Some GRIP projects were put on hold or canceled, now largely being replaced by the new DOE SPARK program; no project cancellations seen at Itron | Rising |