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A maker of smart meters and the networks and software that connect them, Itron helps electricity, gas, and water utilities read meters remotely and manage their grids. Born in 1977 in a Hauser Lake, Idaho garage as a spinoff of the utility Washington Water Power, the company pioneered handheld electronic meter reading, and its name blends "information" and "electronics."
Itron Q2 revenue falls 7% to $562.9M, but gross margin reaches 41.0% as backlog grows for the first time in two years.
grew for the first time since mid-2024. fell 7% to $562.9 million as deployment timing pushed Networked Solutions revenue down 17%, but widened 4.1 points to 41.0% on favorable mix, and rose 8% to $96.8 million. The inflection suggests new orders are again outpacing shipments, even as the top line waits for deployments to catch up.
Key takeaways
rose to $1.68 billion from $1.54 billion a year ago and $1.6 billion last quarter — the first increase since the multi-quarter decline began in mid-2024, indicating new order intake now exceeds shipments.
reached 41.0%, up 4.1 points , with product margin at 38.1% and service margin at 52.9%; management attributed the expansion to favorable customer and product mix and operational efficiencies.
fell 7% to $562.9 million, driven by a 17% decline in Networked Solutions — which management said reflected customer deployment timing — partially offset by 13% growth in Outcomes and the addition of the Resiliency Solutions .
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue fell 7% to $562.9M, but gross margin expanded to 41.0% and adjusted EBITDA rose 8% to $96.8M.
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Total decreased 7% to $562.9M, driven by a 17% drop in Networked Solutions due to customer deployment timing, partially offset by 13% growth in Outcomes and the new Resiliency Solutions .
fell 22% to $53.3 million, while was $1.59; rose 8% to $96.8 million, reflecting the even as operating expenses rose 5% on higher and R&D costs.
grew 22% to $417 million, and the company repurchased $152.2 million in stock during the first half while holding $745.2 million in cash.
stood at $1.58 billion following the $805 million convertible note issuance that funded the Locusview acquisition, nearly double the year-ago level of $787.0 million.
What changed
reversed its decline: after holding at $1.6 billion in Q1 FY2026 and $1.5 billion through much of FY2025, it rose to $1.68 billion — answering the question raised in prior quarters about whether new order intake would begin to match or exceed shipments.
continued to climb, reaching 41.0% from 40.3% last quarter and 36.9% a year ago; the 52.9% service margin exceeded even the 53.8% peak in Q1 FY2026, suggesting the favorable software and service mix flagged in earlier quarters is persisting rather than normalizing.
The Networked Solutions 's 17% decline deepened from the 13% drop in Q1 FY2026, extending the weakness that management attributed to deployment timing — a second consecutive quarter of decline that raises the question of when the segment returns to growth.
growth decelerated to 22% from 28% last quarter, though the absolute level rose to $417 million from $414 million, indicating the base is still expanding even as the growth rate moderates.
What to watch
Whether continues to grow in Q3 FY2026, confirming the inflection is sustained and new order intake is reliably outpacing shipments — or whether the Q2 increase was a single-quarter event.
Whether the Networked Solutions returns to growth in Q3 FY2026 after two consecutive quarters of double-digit declines attributed to deployment timing.
Whether can hold at or above 41% as the service and software mix that drove the expansion persists, particularly given the 52.9% service margin.
The pace of growth in Q3 FY2026 — whether the 22% rate stabilizes or decelerates further as the base grows.
Total improved 410 to 41.0%, with product margin up to 38.1% and service margin up to 52.9%, reflecting favorable mix and operational efficiencies.
fell 22% to $53.3M, while decreased slightly to $1.59; grew 8% to $96.8M.
Operating expenses rose 5% to $154.6M, primarily from higher of intangibles, R&D, and IT costs.
grew 22% to $417M, and twelve-month increased to $1.68B from $1.54B.
Liquidity remained strong with $745.2M in cash; the company issued $805M in convertible notes and repurchased $152.2M in stock during the first half.
Quantitative and Qualitative Disclosures About Market Risk
Interest rate risk is minimal with no variable-rate debt; foreign exchange risk is actively hedged via monthly forward contracts.
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At June 30, 2026, the company had no outstanding variable-rate debt, so interest rate risk from its line is currently absent.
Non-U.S. dollar revenues were 26% of total revenues for both the three and six months ended June 30, 2026, up from 25% and 24% in the prior-year periods.
The primary foreign currency exposure is the euro, arising from non-U.S. dollar transactions in international subsidiaries.
The company uses monthly foreign exchange forward contracts (not designated for ) to reduce earnings volatility from currency revaluation.
As of June 30, 2026, 36 forward contracts were in place, with notional amounts ranging from $118,850 to $26.6 million, covering the euro, pound sterling, Indonesian rupiah, Canadian dollar, Australian dollar, and other currencies.
Derivatives are used only to manage existing exposures; the company does not trade or speculate with derivative contracts.
For a complete list of Risk Factors, refer to Part I, Item 1A: Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the Securities and Exchange Commission on February 17, 2026.
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For a complete list of Risk Factors, refer to Part I, Item 1A: Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the Securities and Exchange Commission on February 17, 2026.