Q3 2024 Badger Meter Inc Earnings Call Transcript
Key Points
- Badger Meter Inc (BMI) reported a strong 12% year-over-year top-line sales growth in the third quarter, despite challenging comparisons.
- The company achieved record operating margins of 19.5%, with both gross margin expansion and SEA leverage contributing.
- Software as a service revenues increased approximately 35% in the quarter, highlighting the growing customer reliance on their BEACON digital solution.
- Badger Meter Inc (BMI) generated record quarterly free cash flow of $42 million, a 48% increase from the prior year.
- The company continues to see strong demand for its BlueEdge suite of utility smart water solutions, with utility water product line sales increasing 14% year-over-year.
- Sales for the flow instrumentation product line were flat in the quarter, indicating challenges in certain end markets.
- The company anticipates fewer customer operating days in the fourth quarter due to the US holiday season, which could impact sales.
- Hurricane-related recovery activities in the Southeastern US have the potential to temporarily delay certain utility projects.
- The income tax provision increased to 25.3% from 20.3% in the prior year, impacting net earnings.
- Despite strong performance, the company acknowledges the potential for unevenness in sales growth due to external factors like weather events and market conditions.
Ladies and gentlemen, welcome to the third-quarter 2024 Badger Meter earnings conference call. After the prepared remarks there will be an opportunity to ask questions. (Operator Instructions) It's now my pleasure to turn the conferencei over to Karen Bauer, Vice President of Investor Relations, Corporate Strategy and Treasurer. Please go ahead, Ms. Bauer.
Good morning and thank you for joining the Badger Meter third-quarter 2024 earnings conference call. On the call with me today are Ken Bockhorst, Chairman, President and Chief Executive Officer; and Bob Wrocklage, Chief Financial Officer.
Also joining our call today is [Barb] (inaudible), our new Senior Director of Investor Relations. I've made the decision to retire after our annual shareholder meeting in the spring of 2025. Barb and I will be working together over the next six months to see mostly transition Investor Relations, sustainability and strategy activities. And I know she will be a great
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