Executive Summary

Q1 delivered record gross margin (35.8%) and strong EPS on mix and execution; non-GAAP EPS of $1.52 beat S&P Global consensus by ~$0.20, while revenue of $607.2M was slightly below consensus and Q4 guide midpoint due to shipment timing and a tough prior-year compare with catch-up revenue . Q1 2025 S&P Global consensus: Revenue $614.5M*, EPS $1.317*.
Backlog remained near record at $4.7B with book-to-bill ~0.9x; Outcomes grew 14% YoY and segment margins expanded, underscoring progress toward a higher software/recurring mix .
Management introduced Q2 guide: revenue $605–$615M and non-GAAP EPS $1.30–$1.40, effectively bracketing consensus, and kept full-year 2025 guide unchanged pending Q2 (tariffs now a ~$15M EBITDA headwind, back-half weighted) .
Potential stock catalysts: sustained gross margin outperformance, resiliency of bookings/backlog, pace of Outcomes margin expansion, and clarity on tariff mitigation and 2H weighting .

What Went Well and What Went Wrong

What Went Well

Margin and earnings beat: “Record gross margin and strong earnings growth were driven by our disciplined manufacturing” with non-GAAP EPS $1.52 vs $1.317* consensus; adjusted EBITDA grew 15% YoY to $87.9M .
Quote: “Favorable product mix and continued strong execution supported margin expansion and earnings growth ahead of expectations.” — CEO Tom Deitrich .
Outcomes momentum: Outcomes revenue +14% YoY; Q1 Outcomes gross margin 39.2% and operating margin 18.2%, reflecting higher-margin software mix and operating leverage .
Balance sheet strength: Cash $1.12B, net leverage ~0.4x; company highlighted M&A priority to add software content, with net cash likely near-term .

What Went Wrong

Top-line softness vs consensus/guide midpoint: Revenue $607.2M vs $614.5M* consensus and below prior Q4 guide midpoint (Q1 guide was $610–$620M), driven by shipment timing and tough comp from prior-year catch-up revenue .
Tariff headwind emerging: Estimated ~$15M EBITDA impact in 2025 (net of mitigation), largely back-half weighted pending pricing/sourcing changes; introduces uncertainty to 2H earnings cadence .
Mixed Networked Solutions dynamics: Segment revenue -1% YoY on timing and prior-year catch-up; gross margin down ~20 bps YoY on mix (still strong), highlighting some variability across projects .

Financial Results

Headline P&L vs prior periods

Metric	Q1 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$603.4	$612.9	$607.2
Gross Margin %	34.0%	34.9%	35.8%
GAAP Diluted EPS	$1.12	$1.26	$1.42
Non-GAAP Diluted EPS	$1.24	$1.35	$1.52
Adjusted EBITDA ($M)	$76.5	$81.4	$87.9
Free Cash Flow ($M)	$34.2	$70.2	$67.5

Q1 2025 Actual vs S&P Global Consensus

Metric	Q1 2025 Actual	Q1 2025 Consensus	Surprise
Revenue ($USD Millions)	$607.2	$614.5*	-$7.3M (~-1.2%)*
Non-GAAP Diluted EPS	$1.52	$1.317*	+$0.203 (~+15%)*
Values with asterisk (*) retrieved from S&P Global.

Segment Revenue (YoY and sequential context)

Segment Revenue ($USD Millions)	Q1 2024	Q4 2024	Q1 2025
Device Solutions	$126.8	$108.5	$125.9
Networked Solutions	$407.5	$413.1	$402.7
Outcomes	$69.2	$91.2	$78.5
Q1 2025 segment margins (from call): Device Solutions GM ~30.0%, OM 24.2%; Networked Solutions GM 36.9%, OM 28.8%; Outcomes GM 39.2%, OM 18.2% .

KPIs and Balance Sheet

KPI	Q1 2025
Bookings	$530M (8-K) ; management also cited ~$580M on call (disclosure variance)
Book-to-Bill	~0.9x
Backlog	$4.7B
Distributed Intelligence Capable Endpoints Shipped (cumulative)	14.4M; >10M in backlog
Outcomes Recurring Revenue Mix	~70% this quarter (target ~80% over time)
Cash & Equivalents	$1.12B
Total Debt	~$1.265B
Net Debt	~$142M
Net Leverage	~0.4x

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q1 2025	$610–$620M (given on 2/25/25)	Actual $607.2M	Below prior guide (timing/compare)
Non-GAAP EPS	Q1 2025	$1.25–$1.35 (given on 2/25/25)	Actual $1.52	Raised vs prior guide (beat)
Revenue	Q2 2025	—	$605–$615M	New quarterly guide
Non-GAAP EPS	Q2 2025	—	$1.30–$1.40	New quarterly guide
Revenue	FY 2025	$2.4–$2.5B (assumed 2024 trade policies)	Unchanged (no update in Q1)	Maintained
Non-GAAP EPS	FY 2025	$5.20–$5.60	Unchanged (no update in Q1)	Maintained

Q2 2025 guide vs S&P Global consensus: Revenue $609.4M*, EPS $1.332*; guide brackets consensus at midpoints . Values with asterisk (*) retrieved from S&P Global.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q1 2025)	Trend
Grid edge intelligence adoption	Q3: Platform aligns with market needs ; Q4: “Accelerate adoption” highlighted	Continued strong adoption; 14.4M DI-capable endpoints shipped; >10M in backlog	Strengthening
Outcomes growth/mix	Q3: Outcomes +17% YoY ; Q4: Outcomes segment revenue record	Outcomes +14% YoY; GM 39.2%, OM 18.2%; ~70% recurring mix	Improving margins/recurring mix
Tariffs/macro	FY25 outlook assumed 2024 trade regime	~$15M EBITDA headwind net; back-half weighted; regional supply strategy & pricing/sourcing mitigation	Emerging headwind; mitigations in place
Bookings/backlog durability	Q3 backlog $4.0B; bookings $487M ; Q4 backlog record $4.7B; bookings $1.4B	Backlog $4.7B; Q1 book-to-bill ~0.9x; bookings cited as $530M (8-K) or ~$580M (call)	Elevated backlog; bookings normalizing
Regulatory environment for software	—	Constructive; ~40 states allow performance-based rates; supports Outcomes monetization structures	Supportive for software monetization

Management Commentary

“First quarter margin expansion and earnings growth were ahead of expectations due to favorable product mix and continued strong execution.” — Tom Deitrich, President & CEO .
“Record gross margin…driven by our disciplined manufacturing and the ability to meet our customers' core needs…Customer demand…driven by…grid edge intelligence platform.” — CEO prepared remarks .
“Bookings in the first quarter of $580 million…book-to-bill of 0.9:1…$4.7 billion backlog at quarter end remained near record levels.” — CEO; note 8-K shows $530M bookings .
Tariffs: “EBITDA impact for the year…~$15 million net of mitigation…current estimate may change.” — CEO .
Liquidity/capital allocation: “As of March 31, net leverage was 0.4x and cash and equivalents were $1.1 billion.” M&A priority to add software content; buybacks secondary .

Q&A Highlights

Tariffs and guide cadence: Management will not update FY25 until after Q2; $15M EBITDA headwind is mostly 2H as pricing/sourcing changes and on-hand inventory timing flow through .
Pricing flexibility and capex: Company has enhanced pricing flexibility post-COVID and does not expect incremental capex to mitigate tariffs .
Devices margin trajectory: Segment margins are ahead of 2027 targets via portfolio pruning and mix shift; some seasonality (heat allocation) may introduce quarterly variability .
Bookings disclosure change: 12-month backlog metric removed from presentation due to noise; underlying demand unchanged .
Outcomes mix: ~70% recurring in Q1; long-term aspiration ~80% .

Estimates Context

Q1 2025 vs S&P Global consensus: Revenue $607.2M vs $614.5M* (miss); non-GAAP EPS $1.52 vs $1.317* (beat) .
Q2 2025 guidance vs S&P: Revenue $605–$615M vs $609.4M*; EPS $1.30–$1.40 vs $1.332* — both ranges bracket consensus midpoints .
Values with asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

Quality of earnings improving: Record gross margin and operating discipline drove a sizable EPS beat despite modest top-line softness; mix (Devices/Outcomes) and cost execution are key earnings drivers .
Backlog remains robust (~$4.7B) with book-to-bill ~0.9x; near-term revenue cadence governed by deployment timing rather than demand deterioration .
Tariffs are a manageable 2H headwind (~$15M EBITDA net), with mitigation via regional supply, alternate sourcing and pricing; monitor policy changes and the timing of pricing take-up .
Outcomes trajectory is central to the multiple: double-digit growth, improving margins, high and rising recurring mix, and a constructive regulatory backdrop for software monetization .
Balance sheet offers option value: ~$1.1B cash and low net leverage create capacity for software-focused M&A; watch for deals that accelerate Outcomes scale/margins .
Q2 guide brackets consensus; with H1 tracking above prior EPS consensus (per CFO), estimate revisions likely tilt upward for the year pending tariff progression and 2H visibility .
Disclosure nuance: Bookings cited as $530M in 8-K and ~$580M on the call; rely on filed figure for models but note management’s commentary for qualitative trend assessment .

Notes on non-GAAP: EPS and adjusted EBITDA exclude amortization of intangibles, debt fees, restructuring, loss on sale and acquisition/integration costs; reconciliations provided in the 8-K .

Additional relevant press releases in Q2-to-date show product innovation (Solar Battery Access Point) and gas metering milestones (Intelis), supporting the longer-term Outcomes/network strategy .

ITRON, INC. (ITRI)·Q1 2025 Earnings Summary