Q2 2026 Badger Meter Inc Earnings Call Transcript
Key Points
- Badger Meter Inc (BMI) delivered sequentially improved sales in the second quarter, with a 9% increase over the first quarter.
- The company reaffirmed its outlook for improving sequential top-line results for the rest of the year.
- Flow Instrumentation product line sales were up 6% year-over-year, driven by broad-based water application demand.
- The company successfully managed operating cost controls, resulting in improved operating leverage versus the first quarter.
- Badger Meter Inc (BMI) finalized a five-year renewal of its $150 million credit facility, providing ample financial flexibility.
- Total sales in Q2 were $222.3 million, representing a 7% decline year-over-year.
- Operating earnings declined 12% year-over-year, with margins down 110 basis points to 17.7%.
- Gross margin was down 30 basis points from the second quarter of 2025, primarily due to lower sales volumes and project mix.
- Free cash flow was $21.9 million, down from $40.6 million in the prior-year comparable quarter.
- The company faces increasing electronic component cost and availability pressures due to AI and data center build-out demand.
Ladies and gentlemen, welcome to the second-quarter 2026 Badger Meter earnings conference call. (Operator Instructions)
It is now my pleasure to turn the conference call over to Dan Weltzien, Chief Financial Officer and Treasurer. Please go ahead, Mr. Weltzien.
Good morning. Thank you for joining the Badger Meter second-quarter 2026 earnings conference call. I'm here today with Ken Bockhorst, our Chairman, President, and Chief Executive Officer; and Bob Wrocklage, our Executive Vice President of North America Municipal Utility.
This morning, we posted the earnings release and related slide presentation on our website. As a quick reminder, any forward-looking statements made on this call are subject to various risks and uncertainties, the most important of which are outlined in our news release and SEC filings.
On today's call, we may refer to certain non-GAAP financial metrics, including base results, which exclude the impact of UDlive, acquired
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