Q4 Earnings Beat: Badger Meter Soars with Strong Performance
Earnings Highlights:
* Revenue: $205.2 million (12.5% YoY growth, 2.3% beat)
* EPS (GAAP): $1.04 (3.7% beat)
* Operating Margin: 19.1% (up from 17.6% in Q4 2023)
* Free Cash Flow Margin: 23.1% (up from 19.7% in Q4 2023)
Key Takeaways:
* Badger Meter outpaced market expectations for both revenue and EPS.
* Strong sales growth, expanding profit margins, and robust EPS growth drove the positive results.
* The acquisition of SmartCover® Systems enhances the company's water data monitoring capabilities.
* Despite a projected revenue growth slowdown, Badger Meter's performance remains above the industry average.
Company Overview:
* Pioneer in water control and measurement equipment since 1905
* Leading provider of non-discretionary water meters, driving steady demand
* Focus on digitization and data collection has fueled innovation and incremental sales
Long-Term Performance:
* Exceptional 14.2% annualized sales growth over the last five years
* 20.9% annualized revenue growth over the last two years indicates strong demand acceleration
Profitability:
* Elite operating margin of 16.8% over the last five years
* Consistent margin expansion, with a 1.5 percentage point increase in Q4 to 19.1%
Earnings Quality:
* Earnings per share (EPS) grew at a compounded annual growth rate of 21.2% over the last five years
* Two-year annual EPS growth of 36.7%, highlighting accelerating profitability
Analysts' Outlook:
* Wall Street expects 12-month revenue growth of 8.1%
* Full-year EPS projected to grow 10.8% to $4.23