Executive Summary

Q2 2025 delivered record profitability and cash flow: gross margin 36.9% (up 230 bps YoY), adjusted EBITDA $89.8M, and free cash flow ~$91M; revenue was $606.8M, roughly flat YoY and sequentially .
EPS beat Street: non-GAAP EPS $1.62 vs consensus $1.33; revenue modestly below consensus ($606.8M vs $609.4M); margin expansion and higher interest income drove the beat while project timing and lack of constrained revenue catch-up weighed on revenue (S&P Global estimates*).
Guidance reset: FY 2025 revenue lowered to $2.35–$2.40B (from $2.40–$2.50B), while non-GAAP EPS raised to $6.00–$6.20 (from $5.20–$5.60), reflecting stronger mix/efficiency despite slower near-term deployments amid macro/trade-policy uncertainty .
Stock narrative catalyst: management emphasized secular grid-edge demand, record margins, and Outcomes momentum; near-term caution on regulatory pacing and tariff volatility is balanced by bookings strength and DI adoption trends .

What Went Well and What Went Wrong

What Went Well

Record gross margin and profitability: total gross margin reached 36.9% (+230 bps YoY), non-GAAP operating income $82.2M (+19% YoY), adjusted EBITDA $89.8M (+16% YoY), and free cash flow ~$90.7M .
Strategic mix shift and portfolio optimization: Devices margin uplift from exiting lower-margin legacy electric products; Networks/Outcomes benefited from favorable customer/product mix; CEO: “quarterly record levels of margin, profitability, and cash flow” .
Outcomes momentum and DI scaling: Outcomes revenue +9% YoY; DI-capable endpoints shipped reached 15.3M and licensed apps surpassed 18M (+~140% YoY), underpinning recurring software growth .

What Went Wrong

Revenue modestly below consensus and down slightly YoY: $606.8M vs Street $609.4M and vs Q2’24 $609.1M; absence of prior-year constrained revenue catch-up and project timing drove the shortfall (S&P Global estimates*) .
Near-term macro/regulatory/trade friction: customers more deliberate, regulatory pacing and annual capex buckets stretching deployments; guidance reflects slower activity despite constructive long-term outlook .
Segment softness: Devices revenue −5% YoY and Networked Solutions −1% YoY; Networks faced timing issues and lack of catch-up revenue; Outcomes growth slowed to +9% (sub-10% QoQ) with mix-driven variability .

Financial Results

Consolidated performance vs prior quarters

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$612.9	$607.2	$606.8
GAAP Diluted EPS ($)	$1.26	$1.42	$1.47
Non-GAAP Diluted EPS ($)	$1.35	$1.52	$1.62
Gross Margin (%)	34.9%	35.8%	36.9%
Adjusted EBITDA ($USD Millions)	$81.4	$87.9	$89.8
Free Cash Flow ($USD Millions)	$70.2	$67.5	$90.7

Q2 2025 actuals vs Wall Street consensus

Metric	Consensus	Actual
Revenue ($USD Millions)	$609.4*	$606.8
Non-GAAP Diluted EPS ($)	$1.33*	$1.62
EPS - # of Estimates	8*	—
Revenue - # of Estimates	10*	—
Values retrieved from S&P Global.*

Year-over-year comparatives (Q2 2025 vs Q2 2024)

Metric	Q2 2024	Q2 2025
Revenue ($USD Millions)	$609.1	$606.8
Gross Margin (%)	34.6%	36.9%
GAAP Diluted EPS ($)	$1.10	$1.47
Non-GAAP Diluted EPS ($)	$1.21	$1.62
Adjusted EBITDA ($USD Millions)	$77.1	$89.8
Free Cash Flow ($USD Millions)	$44.6	$90.7

Segment breakdown (Q2 2025)

Segment	Revenue ($USD Millions)	YoY	Gross Profit ($USD Millions)	Operating Income ($USD Millions)
Device Solutions	$112.8	−5%	$33.6	$25.5
Networked Solutions	$408.9	−1%	$157.2	$121.0
Outcomes	$85.1	+9%	$32.8	$15.7
Total	$606.8	—	$223.6	$76.4

KPIs and operating metrics

KPI	Q4 2024	Q1 2025	Q2 2025
Total Backlog ($USD Billions)	$4.7	$4.7	$4.5
Bookings ($USD Millions)	$1,400	$530	$454
DI Endpoints Shipped (Cumulative, Millions)	13.4	14.4	15.3
Licensed Applications (Cumulative, Millions)	15+	—	18+

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q3 2025	—	$570–$585M	New issuance
Non-GAAP Diluted EPS	Q3 2025	—	$1.45–$1.55	New issuance
Revenue	FY 2025	$2.40–$2.50B	$2.35–$2.40B	Lowered
Non-GAAP Diluted EPS	FY 2025	$5.20–$5.60	$6.00–$6.20	Raised

Management rationale: slower near-term deployments (macro/trade-policy uncertainty, regulatory pacing) pressured revenue, while portfolio mix and efficiency improvements lifted earnings power; normalized for ~$125M 2024 constrained revenue catch-up, revenue trajectory remains constructive .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Grid Edge/DI adoption	13.4M DI endpoints; strong Outcomes pipeline; recurring mix building	15.3M endpoints; 18M+ app licenses; Outcomes +9% YoY	Improving scale, steady growth
Tariffs/trade policy	Tariff sensitivity; Mexico components; inventory buffer; multi-sourcing	EPS resilient; near-term macro/trade uncertainty impacting pacing; tariff volatility monitored	Mixed: operational mitigation, macro headwinds
Regulatory pacing	Constructive environment but timing affects backlog-to-revenue 9–12 months	Customers/regulators more deliberate; rate-case balance; pushes projects right	Slightly slowing deployments
Product/segment mix	Devices pruning; Outcomes margin path; Networks strong projects	Devices margin uplift from exiting low-margin SKUs; Networks timing; Outcomes mix variability	Margin mix favorable
Regional dynamics	NA leading; APAC strong; Europe cautious on water	Europe re-emerging interest in edge intelligence; disciplined solution selling	Selective strengthening
Capital allocation/M&A	Target Outcomes/software assets; disciplined deployment	Active pipeline; Outcomes-oriented acquisitions prioritised	Ongoing

Management Commentary

CEO: “Itron delivered solid second quarter results driving quarterly record levels of margin, profitability, and cash flow” .
CFO: “Gross margin of 36.9% is an all-time quarterly record…non-GAAP operating income of $82M was an all-time record; adjusted EBITDA of $90M was also a new record” .
CEO on near-term environment: “Customers and regulators face a more complex environment, leading to slower project deployments and delayed decisions…we are lowering our full year revenue outlook midpoint by ~3%…and raising EPS outlook midpoint by 13%” .
CFO on guidance mechanics: FY 2025 revenue $2.35–$2.40B vs prior $2.40–$2.50B; non-GAAP EPS $6.00–$6.20 vs $5.20–$5.60; assumes ~22% effective tax rate .

Q&A Highlights

Margin durability: EBITDA margin higher than expected, driven by device portfolio changes (closure of low-margin France factory) and favorable mix; Networks/Outcomes margins fluctuate with deployment phase/software mix .
Revenue pacing/backlog: Slower deployment pace (labor, sequencing, budgets) affecting backlog conversion; no cancellations; backlog pushouts create easier comps next year but too early to quantify .
Regulatory environment: PUCs balancing ratepayer pressure with infrastructure needs; approvals continue but deliberation increases complexity and timing .
M&A and capital allocation: Focus on Outcomes/software assets; active funnel; disciplined capital deployment; cash balances contributing to interest income until deployed .
DI/Outcomes runway: DI endpoints and applications scaling; recurring revenue per endpoint set to expand; Outcomes gross margin path subject to quarterly mix .

Estimates Context

Q2 2025: EPS beat ($1.62 vs $1.33*), revenue slight miss ($606.8M vs $609.4M*); Street had 8 EPS and 10 revenue estimates, underscoring margin upside vs conservative revenue timing (S&P Global estimates*).
FY 2025: Post-update, company revenue guidance ($2.35–$2.40B) aligns with Street revenue ~$2.356B*, but company EPS guidance ($6.00–$6.20) is below current consensus ~$6.87*, implying potential downward estimate revisions unless margin outperformance persists (S&P Global estimates*).
Values retrieved from S&P Global.*

Key Takeaways for Investors

Margin-driven EPS upside despite flat revenue: mix optimization and operational efficiency are offsetting near-term deployment pacing—supporting premium on profitability quality .
Short-term: Expect muted revenue growth as regulatory/capex timing elongates backlog conversion; trading setup favors owning on pullbacks given resilient earnings algorithm and recurring software build .
Medium-term thesis: DI/Outcomes scale (endpoints, apps) expands recurring revenue and moat; secular grid demand (AI/data centers, reshoring, resiliency) sustains multi-year growth .
Guidance mix shift: Monitor execution against raised EPS and lowered revenue guide; watch Q3 delivery vs outlook ($570–$585M, $1.45–$1.55 EPS) as a near-term check on deployment pacing .
Tariff/regulatory watch: Headline risk on trade policy changes and rate-case deliberation can affect timing but not destination; multi-sourcing and pricing flexibility mitigate earnings risk .
Capital deployment optionality: Robust cash and low net leverage position Itron for accretive Outcomes/software M&A, a catalyst for multiple expansion .
Segment lens: Devices margins structurally improved; Networks timing normalizes; Outcomes margin trajectory positive but quarterly mix remains variable—position sizing should reflect this .

Appendix: Source Documents

Q2 2025 8-K and press release:
Q2 2025 earnings call transcript:
Q1 2025 press release/8-K/call:
Q4 2024 press release/8-K/call:
Values retrieved from S&P Global for consensus estimates.*

ITRON, INC. (ITRI)·Q2 2025 Earnings Summary