Badger Meter’s third quarter results saw revenue and profit exceed Wall Street expectations, but the market responded negatively, with shares declining after the announcement. Management attributed the sales growth to continued demand for its cellular AMI (Advanced Metering Infrastructure) solutions and the BlueEdge modular smart water management suite. CEO Kenneth Bockhorst noted that the company managed ongoing tariff and trade-related cost pressures effectively, maintaining gross margins above historical norms. The team highlighted higher ultrasonic meter volumes, growth in software-as-a-service offerings, and contributions from the Smart Cover acquisition as important factors in the quarter.

Is now the time to buy BMI? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Badger Meter’s Q3 Earnings Call

• Robert Mason (Baird) questioned the rationale for raising the gross margin range amid ongoing tariff risks. CFO Robert Wrocklage explained that the decision was due to sustained structural mix benefits and a lack of new tariff shocks.
• Nathan Jones (Stifel) asked about Smart Cover’s growth and profitability outlook. CEO Kenneth Bockhorst confirmed Smart Cover’s strong revenue momentum and reiterated it should be earnings accretive in its second year post-acquisition.
• Jeffrey Reive (RBC) pressed for details on pricing actions taken to offset tariff costs. Wrocklage noted that targeted, product-specific price increases have been implemented, and expects price realization to catch up with costs in the next quarters.
• Andrew Krill (Deutsche Bank) inquired about the sustainability of high single-digit growth targets for 2026. Bockhorst responded that while year-to-year performance can be uneven, overall confidence in long-term growth remains solid.
• Bobby Zulper (Raymond James) asked about the impact of federal stimulus funds on metering sales. Bockhorst clarified that such funding has not been a meaningful driver, with utilities relying instead on budget allocations for critical technology upgrades.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will monitor (1) the pace of adoption and customer feedback for BlueEdge and Smart Cover solutions, (2) the company’s ability to sustain its margin profile amid evolving tariff and cost pressures, and (3) the conversion of project pipeline activity into new deployments and recurring software revenue. Additionally, developments in federal funding and utility budget cycles will be important to track for indications of demand stability.

Badger Meter currently trades at $177.21, down from $187.53 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free for active Edge members).

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