Badger Meter Sales Decline as Utility Water Demand Slumps
Diluted earnings per share fell 13% to $1.02 in the second quarter.
Badger Meter (BMI), the flow measurement and control company, reported a decline in second-quarter revenue and earnings as weakness in its utility water segment offset growth in other product lines.
The results highlighted a divergence in the company's portfolio. While flow instrumentation products returned to growth, a contraction in utility water sales weighed on the top line and compressed margins.
Total sales reached $222.3 million, a 7% decrease from the $238.1 million reported in the prior-year period. The result followed a 10% sequential increase from the first quarter of 2026. Diluted earnings per share fell 13% to $1.02 from $1.17 a share in the comparable quarter last year.
Utility water sales declined 8% year-over-year. Excluding the impact of the UDlive acquisition, those sales were down 9% year-over-year, though they rose 8% sequentially from the first quarter. Conversely, sales of flow instrumentation products increased 6% year-over-year, reversing a 4% decline seen in the first quarter.
Operating profit margins compressed to 17.7%, down 110 basis points from 18.8% a year earlier. Base operating profit margins also declined 40 basis points to 18.4%. Gross margin was 40.8%, 30 basis points lower than the prior year's 41.1%, and remains within its normalized range of 39% to 42%.
To mitigate margin pressure, the company reduced base selling, general and administrative expenses by 6% year-over-year to $49.6 million, due to lower incentive compensation and tight spending controls.
Badger Meter expects full-year revenue, excluding acquisitions, to be flattish compared to 2025. The company anticipates an improvement in its revenue run-rate during the second half of 2026.
On May 1, 2026, the company completed the acquisition of UDlive Limited to expand its sewer line monitoring capabilities. Badger Meter reiterated its long-term financial framework of high-single digit growth for the forward five-year period.