Resource management provider Itron (NASDAQ: ITRI) reported Q4 CY2025 results exceeding the market’s revenue expectations, but sales fell by 6.7% year on year to $571.7 million. On the other hand, next quarter’s revenue guidance of $570 million was less impressive, coming in 1.8% below analysts’ estimates. Its non-GAAP profit of $2.46 per share was 12.4% above analysts’ consensus estimates.

Is now the time to buy Itron? Find out by accessing our full research report, it’s free.

“Grid Edge Intelligence platform adoption drove strong financial results in the fourth quarter,” said Tom Deitrich, Itron’s president and CEO.

Company Overview

Founded by a small group of engineers who wanted to build a more efficient way to read utility meters, Itron (NASDAQ: ITRI) offers energy and water management products for the utility industry, municipalities, and industrial customers.

Revenue Growth

Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Itron grew its sales at a sluggish 1.7% compounded annual growth rate. This wasn’t a great result, but there are still things to like about Itron.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Itron’s annualized revenue growth of 4.4% over the last two years is above its five-year trend, which is encouraging.

We can better understand the company’s revenue dynamics by analyzing its most important segments, Product and Service, which are 83% and 17% of revenue. Over the last two years, Itron’s Product revenue (measurement and control equipment) averaged 3.4% year-on-year declines. On the other hand, its Service revenue ( project management, installation, consulting) averaged 14% growth.

This quarter, Itron’s revenue fell by 6.7% year on year to $571.7 million but beat Wall Street’s estimates by 1.7%. Company management is currently guiding for a 6.1% year-on-year decline in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 1.7% over the next 12 months, a slight deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will see some demand headwinds. At least the company is tracking well in other measures of financial health.

The 1999 book Gorilla Game predicted Microsoft and Apple would dominate tech before it happened. Its thesis? Identify the platform winners early. Today, enterprise software companies embedding generative AI are becoming the new gorillas. a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.

Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Itron was profitable over the last five years but held back by its large cost base. Its average operating margin of 5.8% was weak for an industrials business.

On the plus side, Itron’s operating margin rose by 17.2 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Itron generated an operating margin profit margin of 13.8%, up 3.5 percentage points year on year. Since its gross margin expanded more than its operating margin, we can infer that leverage on its cost of sales was the primary driver behind the recently higher efficiency.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Itron’s EPS grew at an astounding 30.9% compounded annual growth rate over the last five years, higher than its 1.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Itron’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Itron’s operating margin expanded by 17.2 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Itron, its two-year annual EPS growth of 46% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q4, Itron reported adjusted EPS of $2.46, up from $1.35 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Itron’s full-year EPS of $7.14 to shrink by 17%.

Key Takeaways from Itron’s Q4 Results

We were impressed by how significantly Itron blew past analysts’ EBITDA expectations this quarter. We were also glad its EPS outperformed Wall Street’s estimates. On the other hand, its EPS guidance for next quarter missed and its full-year revenue guidance fell slightly short of Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 4.3% to $93.23 immediately following the results.

So should you invest in Itron right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).