Executive Summary

Q4 revenue $613M (+6% YoY) and non-GAAP EPS $1.35; gross margin 34.9% (+90 bps YoY). Bookings hit a record $1.4B and total backlog reached $4.7B .
Results materially exceeded the company’s prior Q4 guidance: revenue topped the $600–$610M range and non-GAAP EPS exceeded the $1.00–$1.10 range; QoQ revenue (-0.4%) and EPS declined from Q3’s elevated levels .
2025 outlook initiated: Q1 revenue $610–$620M and non-GAAP EPS $1.25–$1.35; FY25 revenue $2.4–$2.5B and non-GAAP EPS $5.20–$5.60, framed as “flat” YoY but ~6% growth when normalizing for $125M catch-up revenue in 2024 .
Catalysts: record bookings/backlog and Outcomes segment momentum; watch tariff policy (Mexico components) and Europe water softness; 9–12 month bookings-to-revenue lag tempers near-term revenue translation .

What Went Well and What Went Wrong

What Went Well

Record commercial momentum: quarterly bookings $1.4B and total backlog $4.7B; Outcomes revenue set a company record in Q4 .
Outcomes growth engine: Outcomes revenue +25% YoY; management targets ~75–80% recurring mix over time, citing growing app ecosystem on 13.4M DI endpoints and 15M licensed apps (“the ecosystem is really just getting started”) .
Profitability and cash generation: adjusted EBITDA $81M (+19% YoY) and Q4 free cash flow $70M; full-year gross margin and adjusted EBITDA reached record levels, supported by mix/efficiencies .

What Went Wrong

QoQ moderation from Q3 peak: revenue $615M→$613M, non-GAAP EPS $1.84→$1.35, reflecting strong Q3 tax benefit and one-time items; Outcomes margin lumpiness from one-time license content .
Device Solutions softness: Q4 Device Solutions revenue -4% YoY (constant currency -5%), tied to legacy electricity products; management expects Devices to be down YoY in 2025 .
Macro watch items: potential Mexico tariff exposure on components and caution on European water market; 9–12 month bookings-to-revenue lag pushes much of Q4 bookings rev beyond 2025 .

Financial Results

Consolidated Performance vs Prior Quarters

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($USD Millions)	$609	$615	$613
GAAP Diluted EPS ($)	$1.10	$1.70	$1.26
Non-GAAP Diluted EPS ($)	$1.21	$1.84	$1.35
Gross Margin (%)	34.6%	34.1%	34.9%
Adjusted EBITDA ($USD Millions)	$77.1	$88.6	$81.4
Free Cash Flow ($USD Millions)	$44.6	$58.7	$70.2

Segment Revenue Breakdown

Segment Revenue ($USD Millions)	Q2 2024	Q3 2024	Q4 2024
Device Solutions	$118.6	$122.7	$108.5
Networked Solutions	$412.7	$416.7	$413.1
Outcomes	$77.8	$76.0	$91.2
Total	$609.1	$615.5	$612.9

KPIs and Operating Metrics

KPI	Q2 2024	Q3 2024	Q4 2024
Bookings ($USD Millions)	$447	$487	$1,400
Total Backlog ($USD Billions)	$4.1	$4.0	$4.7
DI Endpoints Shipped (Cumulative)	—	—	13.4M
Licensed DI Applications (Cumulative)	—	—	15.0M
Free Cash Flow ($USD Millions)	$44.6	$58.7	$70.2

Notes: DI endpoints/applications reflect cumulative installed/licensed counts disclosed in Q4 call .

Versus Estimates

S&P Global consensus estimates for Q4 2024 were unavailable at the time of this analysis; therefore, quantified “vs consensus” comparisons could not be provided. However, actual Q4 results exceeded the company’s prior Q4 guidance (see Guidance Changes) .
S&P Global disclaimer: Consensus values were not retrievable due to system limitations; if provided, they would be sourced from S&P Global Capital IQ.

Guidance Changes

Metric	Period	Previous Guidance	Current/Actual	Change
Revenue ($USD Millions)	Q4 2024	$600–$610	$612.9 (reported)	Raised vs prior guidance (actual above range)
Non-GAAP Diluted EPS ($)	Q4 2024	$1.00–$1.10	$1.35 (reported)	Raised vs prior guidance (actual above range)
Revenue ($USD Billions)	FY 2024	$2.428–$2.438 (updated on Oct 31)	$2.441 (reported)	Achieved/above range
Non-GAAP Diluted EPS ($)	FY 2024	$5.28–$5.38 (updated on Oct 31)	$5.62 (reported)	Above range
Revenue ($USD Millions)	Q1 2025	—	$610–$620 (initiated)	Initiated
Non-GAAP Diluted EPS ($)	Q1 2025	—	$1.25–$1.35 (initiated)	Initiated
Revenue ($USD Billions)	FY 2025	—	$2.4–$2.5 (initiated)	Initiated
Non-GAAP Diluted EPS ($)	FY 2025	—	$5.20–$5.60 (initiated)	Initiated

Management noted FY25 is “flat” vs FY24 reported but ~6% YoY growth after normalizing for $125M catch-up revenue in 2024; EPS midpoint implies ~8% YoY growth at a 25% tax rate .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 & Q3)	Current Period (Q4 2024)	Trend
AI/Technology initiatives & DI platform	Strong adoption of Grid Edge Intelligence; Outcomes +16–17% YoY; segment records in Q2; continued growth in Q3	13.4M DI endpoints shipped; 15M apps licensed; Outcomes revenue record; recurring mix targeted at 75–80% over time	Strengthening; ecosystem expanding
Supply chain and tariffs	Inventory buffers; multi-sourcing; general operational efficiencies supporting margins	Monitoring potential Mexico tariffs (components exposure); carrying extra inventory to buffer “on/off” tariffs; China imports minimal	Risk watch; prepared with flexibility
Tariffs/Macro & Regulatory	Approvals timing impacting bookings-to-revenue; constructive regulatory backdrop	Back-end-loaded 2024 bookings; typical 9–12 months to revenue; regulatory environment constructive despite higher-for-longer rates	Timing pushes rev to 2026; constructive policy
Product performance (Segments)	Devices up on water; Networks up new projects; Outcomes up on software/services	Devices down on legacy electricity; Networks +6% YoY; Outcomes +25% YoY with Q4 license lumpiness	Mix shifting toward Networks/Outcomes
Regional trends	NA leading; APAC strong (ANZ); Europe stable	NA leads; APAC strong (ANZ); caution on Europe water “punched above weight” in 2024	NA/ANZ strong; Europe cautious
R&D/Cost actions	Efficiency improvements; margin expansion	Two factory closures add ~$10M 2025 savings vs 2024; continued path toward 2027 targets	Structural margin support

Management Commentary

“Record quarterly bookings of $1.4 billion, producing a new record total backlog level of $4.7 billion…driven by the continued adoption of our Grid Intelligence platform” .
“The Outcomes business should be our fastest-growing business…we definitely think that having about a 75% to 80% recurring revenue…is ultimately where we land” .
“We anticipate a book-to-bill ratio of at least 1:1 for 2025” .
“We anticipate 2025 revenue to be…$2.4–$2.5 billion…flat year-over-year, but ~6% growth when normalizing 2024 to exclude the $125 million of catch-up revenue” .
On tariffs: “We definitely are operating with a fair amount of components coming in from Mexico…we do carry a bit more inventory…to give us…supply chain flexibility” .

Q&A Highlights

Free cash flow and cash deployment: FCF conversion expected to increase in 2025; >$1B cash contributing to EPS via interest income; active M&A pipeline focused on Outcomes/Grid Intelligence capabilities .
Outcomes growth runway: Recurring mix targeted ~75–80% over time; Q4 license content created margin lumpiness; long runway for multi-app per endpoint adoption .
Bookings cadence: Expect book-to-bill ≥1:1 in 2025; less back-end loaded than 2024 but still lumpy quarter-to-quarter .
Macro/trade: Monitoring Mexico tariff risk; multi-sourcing underway; regulatory environment remains constructive despite higher rates .
Backlog vs flat FY25 rev: Lower 12-month backlog reflects timing (Q4 bookings largely >12 months); confidence in FY25 outlook given customer-level visibility and normalization math .

Estimates Context

Wall Street consensus (S&P Global) for Q4 2024 was unavailable at the time of request; quantified comparisons versus consensus cannot be provided.
Relative to company guidance: Q4 revenue exceeded the $600–$610M range (reported $612.9M), and non-GAAP EPS exceeded $1.00–$1.10 (reported $1.35) .
S&P Global disclaimer: Consensus values were not retrievable due to system limitations; if provided, they would be sourced from S&P Global Capital IQ.

Key Takeaways for Investors

Commercial momentum is robust: record $1.4B Q4 bookings and $4.7B backlog, with Networks/Outcomes comprising ~90%+ of backlog—supporting multi-year revenue visibility beyond 2025 .
Outcomes is the structural growth driver: record Q4 revenue, expanding app ecosystem, and a targeted 75–80% recurring revenue mix should lift quality of earnings over time despite quarterly lumpiness .
2025 guidance appropriately conservative: “flat” headline growth masks ~6% normalized growth (ex-2024 catch-up); EPS midpoint implies ~8% growth at 25% tax rate—focus on execution and mix .
Watch Devices and Europe water: Devices likely down YoY and caution on Europe water may modestly weigh near-term mix/margins; Networks/Outcomes offset via project deployments/software/services .
Macro/trade risk management: Mexico tariff exposure on components and 9–12 month bookings-to-revenue lag are key watch items; inventory buffers and multi-sourcing help operational resilience .
Cash and FCF optionality: rising FCF conversion and >$1B cash provide latitude for disciplined Outcomes/DI-centric M&A, while interest income currently accretes to EPS .
Near-term trading lens: Strong Q4 beat vs company guidance and record bookings/backlog are supportive; monitor Q1 execution and tariff headlines for sentiment shifts .

ITRON, INC. (ITRI)·Q4 2024 Earnings Summary