Badger Meter Delivers Record-Breaking Quarter with Strong Revenue Growth and Margin Expansion
Badger Meter, a leading provider of flow measurement and control solutions for the water industry, has announced its impressive first-quarter 2025 results, showcasing significant revenue growth and margin expansion.
In a conference call on April 17, 2025, Badger Meter's management team reported that total sales grew by 13% year-over-year in Q1 2025. Excluding the impact of the SmartCover acquisition, sales increased by 10%, building on the 23% growth experienced in the fourth quarter of last year. This strong performance was driven by the continued adoption of cellular Advanced Metering Infrastructure (AMI) and associated products, such as meters, ORION cellular endpoints, and BEACON software.
The utility water product line sales saw a notable increase of 16% year-over-year or 12% when excluding the SmartCover revenue for the two months since its acquisition. This growth was largely driven by cellular AMI adoption, which continues to be a key driver in the water industry's technology adoption.
Badger Meter's operating profit margins reached an impressive record of 22.2%, expanding 360 basis points year-over-year. Gross profit margins also saw significant improvement, reaching 42.9% in Q1 2025, a 360 basis point increase from the prior year comparable quarter and above the company's normalized gross margin range of 38-40%. The favorable sales mix scenario contributed to this positive outcome.
Software revenue grew by an impressive 25% in the quarter, with software becoming the top revenue growth contributor. While variations in gross margins may occur due to changes in customer and product mix, Badger Meter remains confident in its normalized gross margin range of 38-40%, assuming no further changes in global economic and trade policies.
Badger Meter's Chairman, President, and CEO, Ken Bockhorst, expressed satisfaction with the company's start to the year, citing solid revenue growth, record operating margins, and robust earnings per share improvement. The acquisition of SmartCover has been well-received by customers, who recognize the value of adding sewer and water quality monitoring capabilities to Badger Meter's BlueEdge suite of water management solutions.
Bob Wrocklage, Chief Financial Officer, highlighted the company's operating performance, citing strong margins and revenue growth. While there remains uncertainty surrounding tariffs and macroeconomic conditions, Badger Meter is confident in its ability to navigate these challenges and continue driving sales and operating synergies from the SmartCover acquisition.
The company's management team emphasized their commitment to guiding investors through this uncertain environment, with Ken Bockhorst noting that a discussion on tariffs will be included in the outlook provided later in the call. As Badger Meter continues to deliver strong performance, investors and analysts are likely to remain keenly interested in the company's prospects for growth and profitability.
With its record-breaking quarter and impressive revenue growth, Badger Meter has solidified its position as a leading provider of flow measurement and control solutions for the water industry. As the company looks to the future, investors can expect continued focus on driving sales and operating synergies from the SmartCover acquisition, while navigating the evolving tariff and macroeconomic landscape.
The conference call provided valuable insights into Badger Meter's performance and outlook, with management team members taking questions from analysts and investors. As the company continues to execute its strategy and drive growth, stakeholders can expect regular updates on its progress and prospects for the future.
