Q2 2024 Earnings Summary
Reported on Feb 18, 2025 (Before Market Open)
Pre-Earnings Price$193.99Last close (Jul 18, 2024)
Post-Earnings Price$194.59Open (Jul 19, 2024)
Price Change
$0.60(+0.31%)
- Strong Incremental Margin Performance: Badger Meter has achieved incremental margins of around 30% in recent quarters, exceeding the historical mid-20s levels, due to robust growth and efficient pacing of growth investments. This demonstrates effective operational leverage and enhanced profitability.
- Positive Market Outlook with Strong Backlog and Order Rates: Management remains excited about the level of order rates and backlog, indicating sustained demand and strong visibility into future growth. This positive outlook supports confidence in ongoing sales performance.
- Strategic Investment in Innovation and Market Differentiation: The company continues to organically invest in the business to differentiate its market position through innovation, while controlling expenses at a rate slower than top-line growth. This strategy provides operating leverage for margin improvement and strengthens competitive advantage.
- Badger Meter anticipates that sales growth will normalize into the high single-digit range in the back half of 2024, down from the 23% year-over-year growth reported in the second quarter, indicating a potential slowdown in growth momentum. ,
- Rising copper prices, which are 18% higher year-over-year in the second quarter of 2024, along with other inflationary cost pressures, may exert pressure on gross margins in the back half of the year, potentially limiting profitability.
- The company expects incremental margins to normalize back to the mid-20s level from the recent 30% level, suggesting that future profitability may not continue at the recent higher levels.