Itron Announces Third Quarter 2024 Financial Results
LIBERTY LAKE, Wash., Oct. 31, 2024 (GLOBE NEWSWIRE) -- Itron, Inc. (NASDAQ:ITRI), which is innovating the way utilities and cities manage energy and water, announced today financial results for its third quarter ended September 30, 2024. Key results for the quarter include (compared with the third quarter of 2023):
Revenue of $615 million, increased 10%;
Gross profit of $210 million, increased 12%;
GAAP net income attributable to Itron, Inc. of $78 million, increased $38 million;
GAAP diluted earnings per share of $1.70, increased $0.83 per share;
Non-GAAP diluted EPS of $1.84, increased $0.86 per share;
Adjusted EBITDA of $89 million, increased 29%; and
Free cash flow of $59 million, increased $30 million.
"Operational momentum continued during the third quarter and solid execution by our team led to results ahead of expectations." said Tom Deitrich, Itron's president and CEO. "The market, fueled by growth in energy and water demand, and increasing need to make infrastructure more agile aligns with Itron's grid edge intelligence platform, uniquely positioning us to help our customers meet or exceed their objectives."
Summary of Third Quarter Consolidated Financial Results(All comparisons made are against the prior year period unless otherwise noted)
RevenueTotal third quarter revenue increased 10%, to $615 million, due to strong operational execution.
Device Solutions revenue increased 11%, or 10% in constant currency, due primarily to growth in smart water and electric demand.
Networked Solutions revenue increased 8%, due primarily to increased new projects and ongoing deployments.
Outcomes revenue increased 17%, or 16% in constant currency, due primarily to an increase in recurring revenue, services, and software.
Gross MarginItron's third quarter gross margin of 34.1% increased 70 basis points from the prior year due to operational efficiencies.
Operating Expenses and Operating IncomeGAAP operating expenses of $136 million increased $3 million from the prior year. Non-GAAP operating expenses of $131 million increased $2 million.
GAAP operating income of $74 million was $19 million higher than the prior year and non-GAAP operating income of $79 million was $20 million higher than the prior year. Both increases were due to higher gross profit, partially offset by higher operating expenses.
Net Income and Earnings per ShareNet income attributable to Itron, Inc. for the quarter was $78 million, or $1.70 per diluted share, compared with net income attributable to Itron, Inc. of $40 million, or $0.87 per diluted share in 2023. The increase was driven by higher GAAP operating income and interest income, and less tax expense.
Non-GAAP net income attributable to Itron, Inc., which excludes the expenses associated with amortization of intangible assets, amortization of debt placement fees, restructuring, loss on sale of business, strategic initiatives, acquisition and integration, and the tax effect of excluding these expenses, was $84 million, or $1.84 per diluted share, compared with $45 million, or $0.98 per diluted share, in 2023. The increase was due to higher non-GAAP operating income and interest income, and less tax expense.
Both GAAP and Non-GAAP net income and EPS benefited from a favorable resolution of a foreign tax audit resulting in an increase in net income of approximately $14 million or $0.30 cents per diluted share.
Cash FlowNet cash provided by operating activities was $65 million in the third quarter compared with $34 million in the prior year. Free cash flow was $59 million in the third quarter compared with $28 million in the prior year. The increase in free cash flow was primarily due to higher earnings.
Other Measures
Total backlog at quarter end was $4.0 billion compared with $4.2 billion in the prior year. Bookings in the quarter totaled $487 million.
Q4 2024 Outlook and Full Year 2024 Guidance Update
Outlook for the fourth quarter of 2024 is as follows:
Revenue between $600 and $610 million
Non-GAAP diluted EPS between $1.00 and $1.10
Itron's guidance for the full year 2024 has been updated as follows:
Revenue between $2.428 to $2.438 billion vs. prior guidance of $2.385 to $2.415 billion
Non-GAAP diluted EPS between $5.28 to $5.38 vs. prior guidance of $4.45 to $4.65
Earnings Conference CallItron will host a conference call to discuss the financial results contained in this release at 10 a.m. EDT on October 31, 2024. Interested parties may listen to the conference call on a live webcast. The webcast, along with a supplemental presentation, may be accessed from the company's website at https://investors.itron.com/events-presentations. Participants should access the webcast 10 minutes prior to the start of the call. A webcast replay of the conference call will be available through November 8, 2024 and may be accessed on the company's website at https://investors.itron.com/events-presentations.
About ItronItron is a proven global leader in energy, water, smart city, IIoT and intelligent infrastructure services. For utilities, cities and society, we build innovative systems, create new efficiencies, connect communities, encourage conservation and increase resourcefulness. By safeguarding our invaluable natural resources today and tomorrow, we improve the quality of life for people around the world. Join us: www.itron.com
Itron® is a registered trademark of Itron, Inc. All third-party trademarks are property of their respective owners and any usage herein does not suggest or imply any relationship between Itron and the third party unless expressly stated.
Cautionary Note Regarding Forward Looking StatementsThis release contains, and our officers and representatives may from time to time make, "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical factors nor assurances of future performance. These statements are based on our expectations about, among others, revenues, operations, financial performance, earnings, liquidity, earnings per share, cash flows and restructuring activities including headcount reductions and other cost savings initiatives. This document reflects our current strategy, plans and expectations and is based on information currently available as of the date of this release. When we use words such as "expect", "intend", "anticipate", "believe", "plan", "goal", "seek", "project", "estimate", "future", "strategy", "objective", "may", "likely", "should", "will", "will continue", and similar expressions, including related to future periods, they are intended to identify forward-looking statements. Forward-looking statements rely on a number of assumptions and estimates. Although we believe the estimates and assumptions upon which these forward-looking statements are based are reasonable, any of these estimates or assumptions could prove to be inaccurate and the forward-looking statements based on these estimates and assumptions could be incorrect. Our operations involve risks and uncertainties, many of which are outside our control, and any one of which, or a combination of which, could materially affect our results of operations and whether the forward-looking statements ultimately prove to be correct. Actual results and trends in the future may differ materially from those suggested or implied by the forward-looking statements depending on a variety of factors. Therefore, you should not rely on any of these forward-looking statements. Some of the factors that we believe could affect our results include our ability to execute on our restructuring plans, our ability to achieve estimated cost savings, the rate and timing of customer demand for our products, rescheduling of current customer orders, changes in estimated liabilities for product warranties, adverse impacts of litigation, changes in laws and regulations, our dependence on new product development and intellectual property, future acquisitions, changes in estimates for stock-based and bonus compensation, increasing volatility in foreign exchange rates, international business risks, uncertainties caused by adverse economic conditions, including without limitation those resulting from extraordinary events or circumstances and other factors that are more fully described in Part I, Item 1A: Risk Factors included in our Annual Report on Form 10-K for the year ended Dec. 31, 2023 and other reports on file with the Securities and Exchange Commission. Itron undertakes no obligation to update or revise any information in this press release.
Non-GAAP Financial Information
To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (GAAP), we use certain adjusted or non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operating income, non-GAAP net income, non-GAAP diluted earnings per share (EPS), adjusted EBITDA, free cash flow, and constant currency. We provide these non-GAAP financial measures because we believe they provide greater transparency and represent supplemental information used by management in its financial and operational decision making. We exclude certain costs in our non-GAAP financial measures as we believe the net result is a measure of our core business. We believe these measures facilitate operating performance comparisons from period to period by eliminating potential differences caused by the existence and timing of certain expense items that would not otherwise be apparent on a GAAP basis. Non-GAAP performance measures should be considered in addition to, and not as a substitute for, results prepared in accordance with GAAP. We strongly encourage investors and shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. Our non-GAAP financial measures may be different from those reported by other companies. When providing future outlooks and/or earnings guidance, a reconciliation of forward-looking non-GAAP diluted EPS to the GAAP diluted EPS has not been provided because we are unable to predict with reasonable certainty the potential amount or timing of restructuring related expenses and their related tax effects without unreasonable effort. These costs are uncertain, depend on various factors and could have a material impact on GAAP results for the guidance period. A more detailed discussion of why we use non-GAAP financial measures, the limitations of using such measures, and reconciliations between non-GAAP and the nearest GAAP financial measures are included in this press release.
For additional information, contact:
Itron, Inc.
Paul VincentVice President, Investor Relations(512) 560-1172
David MeansDirector, Investor Relations(737)
Itron, Inc.
LinkedIn: https://www.linkedin.com/company/itroninc
X: https://twitter.com/ItronInc
Newsroom: https://itron.com/newsroom
Blog: https://itron.com/blog
ITRON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per share data)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Revenues
Product revenues
$
538,249
$
480,355
$
1,598,978
$
1,361,482
Service revenues
77,213
80,417
228,995
234,978
Total revenues
615,462
560,772
1,827,973
1,596,460
Cost of revenues
Product cost of revenues
362,579
332,035
1,076,033
951,666
Service cost of revenues
43,285
41,534
126,503
127,276
Total cost of revenues
405,864
373,569
1,202,536
1,078,942
Gross profit
209,598
187,203
625,437
517,518
Operating expenses
Sales, general and administrative
79,639
76,576
254,023
231,176
Research and development
51,237
51,644
156,691
154,769
Amortization of intangible assets
4,814
4,663
13,311
14,433
Restructuring
(723
)
(615
)
(624
)
36,868
Loss on sale of business
698
45
656
675
Total operating expenses
135,665
132,313
424,057
437,921
Operating income
73,933
54,890
201,380
79,597
Other income (expense)
Interest income
13,420
2,642
22,394
5,968
Interest expense
(5,605
)
(2,445
)
(9,788
)
(6,479
)
Other income (expense), net
677
646
695
(1,162
)
Total other income (expense)
8,492
843
13,301
(1,673
)
Income before income taxes
82,425
55,733
214,681
77,924
Income tax provision
(3,515
)
(15,388
)
(32,124
)
(24,513
)
Net income
78,910
40,345
182,557
53,411
Net income attributable to noncontrolling interests
951
173
1,559
874
Net income attributable to Itron, Inc.
$
77,959
$
40,172
$
180,998
$
52,537
Net income per common share - Basic
$
1.73
$
0.88
$
3.98
$
1.16
Net income per common share - Diluted
$
1.70
$
0.87
$
3.91
$
1.15
Weighted average common shares outstanding - Basic
44,982
45,462
45,458
45,393
Weighted average common shares outstanding - Diluted
45,839
45,950
46,239
45,768
ITRON, INC.
SEGMENT INFORMATION
(Unaudited, in thousands)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Product revenues
Device Solutions
$
122,119
$
110,138
$
365,956
$
340,098
Networked Solutions
390,201
352,771
1,158,857
964,909
Outcomes
25,929
17,446
74,165
56,475
Total Company
$
538,249
$
480,355
$
1,598,978
$
1,361,482
Service revenues
Device Solutions
$
619
$
