Badger Meter: 3 Key Takeaways for Long-Term Investors
Software expansion and pricing power are lifting profitability even as component costs rise.
Badger Meter (BMI) reported a 5% sequential increase in base sales for its third quarter of 2026, excluding its recent acquisition of UDlive, while maintaining profitability near the top of its long-term target range. Despite electronic component supply constraints, the company emphasized its structural mix of software-as-a-service recurring software subscriptions and ultrasonic meters, which help protect its earnings.
Base gross margin stood at 42.1%, near the top of its normalized range, showcasing the resiliency of its overall structural mix and pricing discipline.
CEO Ken Bockhorst highlighted the company's reliance on its position in municipal utility infrastructure, allowing it to pass electronic component cost increases to customers without sacrificing sales volume. The company's OneNetwork, a real-time software platform, integrates advanced metering infrastructure, automated remote meter reading, and water quality analytics, enabling customers to identify issues faster and make better operational decisions.
Accelerating utility project rollouts and management's satisfaction with current momentum suggest that growth will continue in the fourth quarter of 2026, despite fewer total operating days due to holidays. Cash generation supported a 10% dividend increase, extending a 34-year growth streak. The company remains committed to its strategic formula, focusing on customers, innovative technologies, and operational excellence.
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