Key Highlights

  • Revenue rose 3% to USD 599 million, GAAP diluted EPS rose to USD 1.61 and non-GAAP EPS to USD 1.94.
  • Annual recurring revenue grew 25% to USD 423 million, and adjusted EBITDA reached a quarterly record of USD 115 million.
  • Adjusted gross margin rose 350 basis points to 41.3%, and total backlog was USD 4.3 billion at quarter end.
  • Full-year non-GAAP EPS guidance rose to USD 6.72 to 6.82, and revenue guidance narrowed to USD 2.37 to 2.385 billion.

Recurring Revenue and Margin Gains

Itron (NASDAQ:ITRI) reported third-quarter revenue of USD 599 million on Tuesday, up 3% from USD 582 million, at the top end of its outlook. Net income attributable to the company was USD 71.4 million, or USD 1.61 per diluted share, against USD 65.6 million and USD 1.41. Non-GAAP EPS was USD 1.94, up USD 0.40 and ahead of management expectations. Nine-month revenue was USD 1.749 billion against USD 1.796 billion, and nine-month net income was USD 178.1 million against USD 199.4 million.

Annual recurring revenue grew 25% to USD 423 million, accelerating from 21% growth in the second quarter. Adjusted EBITDA reached a record USD 115 million, and non-GAAP operating income rose 20% to USD 107 million. Adjusted gross margin was 41.3%, up 350 basis points on customer and product mix and operating efficiencies.

Chief Executive Thomas Deitrich described a shift from an industrial cycle model toward structural earnings leverage and recurring revenue growth, driven by utility needs around load growth, aging infrastructure and grid resiliency.

Segments and Backlog

Networked Solutions revenue was USD 390 million, down 1% on project deployment timing. Outcomes revenue rose 9% to USD 92 million on higher services revenue. Device Solutions revenue fell 2% to USD 102 million on lower legacy gas product sales. Resiliency Solutions, which reflects recent acquisitions, contributed USD 16 million.

Bookings were USD 482 million and total backlog was USD 4.3 billion, with software-intensive segments more than 25% of the total. Management said large customer awards remain uneven between quarters because they follow utility and regulatory timelines, and described gas distribution as a larger-than-usual opportunity with multiple awards over the next two to three years. The company also cited an expanded collaboration with PG&E to deploy grid edge endpoints that locate fault indicators and reduce wildfire risk. Distributed intelligence endpoints shipped to date reached 19.4 million.

Cash and Outlook

Free cash flow was USD 96 million against USD 113 million, reflecting working capital growth, higher tax payments and lower interest income. Liquidity was USD 1.6 billion, made up of USD 840 million of cash and USD 722 million available under the revolving credit facility, and net leverage was 1.9 times.

For the fourth quarter, management guided to revenue of USD 621 million to USD 636 million, about 10% growth at the midpoint, and non-GAAP EPS of USD 1.70 to USD 1.80. For 2026, it guided to revenue of USD 2.37 billion to USD 2.385 billion and non-GAAP EPS of USD 6.72 to USD 6.82, with the EPS range raised. The company noted that memory and selected component costs are rising and said it is using pricing mechanisms and productivity actions to offset them.

Grid Technology Markers to Follow

Tracking points include annual recurring revenue against USD 423 million, component cost trends relative to the 350 basis point gross margin gain, and backlog against USD 4.3 billion.

Further items are the timing of gas distribution awards, Networked Solutions revenue after the 1% decline, and free cash flow relative to USD 96 million.