Badger Meter, Inc. (BMI): Business Model Canvas [Dec-2025 Updated]

You're looking at a company that's successfully pivoting its core utility business from just selling meters to owning the data stream, and frankly, the numbers back up the strategy. Honestly, seeing their $128.9 million cash from operations in the first nine months of 2025 tells you the replacement-driven hardware side is still rock solid, but the real story is the software layer-their BEACON® and BlueEdge™ platforms. This smart water solutions leader, which just closed a key acquisition in January 2025 to bolster wastewater monitoring, is using a direct sales force for big municipal contracts while building recurring revenue streams. If you want to see exactly how they balance Cost of Goods Sold (COGS) for manufacturing against their growing Software-as-a-Service (SaaS) stickiness, dive into the full nine-block breakdown below.

Badger Meter, Inc. (BMI) - Canvas Business Model: Key Partnerships

You're looking at how Badger Meter, Inc. structures its external relationships to deliver its BlueEdge™ suite and flow instrumentation. Honestly, the success we're seeing in 2025 is deeply tied to who they work with, both through acquisition and strategic alignment.

Technology and software integration firms for the BlueEdge™ platform

The integration of acquired technology is a key partnership strategy. The January 2025 acquisition of SmartCover Systems for $185 million brought their sewer and lift station monitoring technologies directly into the BlueEdge suite, augmenting network monitoring applications. SmartCover, which had approximately $35 million in annual revenue, adds sensors and software to the platform, helping Badger Meter, Inc. offer an end-to-end solution across the water cycle. This focus on software integration is paying off; software revenue surged 25% in Q1 2025, fueled by BlueEdge suite integrations, signaling a strong move toward recurring revenue streams.

Global distribution network partners for international market reach

While the core business remains strong in the U.S., Badger Meter, Inc. supports its global reach through established physical infrastructure and channel partners. The company operates four U.S. distribution centers and maintains a variety of global sales offices, with innovation/R&D centers in locations like Lulea, Sweden, and manufacturing in places like Neuffen, Germany, and Brno, Czech Republic. This footprint helps them serve international utility customers, though specific partner names aren't always public. The strategy is to leverage this footprint to improve operating costs and extend connectivity resilience globally.

Strategic sourcing partners to mitigate tariff-related cost pressures

Navigating the trade environment requires tight relationships with sourcing and logistics providers. Management stated that strategic sourcing initiatives and pricing actions were implemented to offset 80% of tariff impacts as of Q1 2025. This resilience is quantified by the company's Tariff Resilience Score of 7/10 as of October 18, 2025, suggesting a high degree of protection. Furthermore, the use of the Nogales, Mexico facility helps limit exposure for residential meters due to USMCA compliance. These efforts helped support a gross margin of 40.7% in Q3 2025, leading the company to raise its normalized gross margin range to 39-42% from the historical 38-40%.

Research and development collaborators for advanced metering tech

Innovation is grounded in internal R&D centers, but external collaboration helps accelerate specific technology development. Badger Meter, Inc. maintains dedicated R&D centers for specialized areas:

• R&D for Ultrasonic technology development in Lulea, Sweden.
• R&D for Communication technologies and advanced metering development in Milwaukee, WI.
• An R&D center located in Tulsa, OK.

This focus on R&D supports the development of the core measurement hardware and connectivity that underpins the BlueEdge platform.

Original Equipment Manufacturers (OEMs) for flow instrumentation integration

Badger Meter, Inc. serves Original Equipment Manufacturers (OEMs) as part of its broader flow instrumentation segment. Strength in water-related markets within this segment contributed to a 4% year-over-year sales increase in Q3 2025. The company offers a wide range of measurement and control products, including meters, sensors, monitors, and valves, which are integrated into various systems by these OEM partners. The overall Utility Water segment, which includes these sales, grew 16% in Q1 2025.

Here's a quick look at how the financial performance reflects the success of these integrated and strategic relationships through the first three quarters of 2025:

The company's commitment to its partners, from acquisitions like SmartCover to its sourcing strategies, is clearly reflected in the 10.2% year-over-year EPS growth reported for Q3 2025, reaching $1.19 per share.

Badger Meter, Inc. (BMI) - Canvas Business Model: Key Activities

Manufacturing and assembly of flow measurement hardware remains a core activity, supporting the Utility Water segment, which accounted for approximately 88% of net sales in 2024.

Developing and integrating BEACON® SaaS and BlueEdge™ software solutions is a key driver of growth. In the first quarter of 2025, utility water sales increased 16% year-over-year, with BEACON® SaaS sales leading the digital adoption. By the third quarter of 2025, utility water sales were up 14% year-over-year, again citing BEACON® SaaS sales as a primary driver. For context, 2024 software sales were over $56 million, a 30% increase year-over-year.

Strategic acquisitions are a defined key activity, exemplified by the purchase of SmartCover Systems on January 31, 2025, for $185 million in cash. SmartCover, which provides real-time monitoring for collection systems, contributed approximately $35 million in annual revenue at the time of acquisition. The integration of SmartCover is noted in 2025 results, with Selling, Engineering and Administration (SEA) expenses in Q2 2025 including $1.6 million of intangible asset amortization related to the deal.

Operational excellence initiatives are directly tied to margin performance. The record gross margin of 42.9% in Q1 2025 resulted from favorable sales mix and benefits from these initiatives. In Q3 2025, gross margin was 40.7%, expanding 50 bps due to ongoing structural mix improvement. Management is now raising the normalized gross margin range to 39-42%.

Managing a replacement-driven base demand business model is augmented by the transition to digital solutions. The ongoing adoption of cellular AMI and the BlueEdge suite continues to augment this historically replacement-driven model.

Here's a look at how the financial results reflect these activities across the first three quarters of 2025:

The company's key activities involve a mix of physical product manufacturing and high-growth software integration.

• Manufacturing and assembly of flow measurement hardware.
• Developing and integrating BEACON® SaaS and BlueEdge™ software solutions.
• Acquiring SmartCover Systems for $185 million in January 2025.
• Achieving Q1 2025 Gross Margin of 42.9% via operational excellence.
• Managing a base business model supplemented by digital adoption.

Badger Meter, Inc. (BMI) - Canvas Business Model: Key Resources

You're looking at the core assets Badger Meter, Inc. (BMI) relies on to generate revenue and maintain its market position as of late 2025. These aren't just things they own; they are the engines driving their smart water strategy.

Proprietary BlueEdge™ suite and BEACON® software platform

The BlueEdge™ suite is the unifying element, tying together the physical measurement technology with the digital layer. This is where the data transformation happens. The BEACON® Software as a Service (SaaS) solution is central here, taking raw data-like 15-minute interval meter readings-and turning it into actionable intelligence for utility managers. This platform integrates with the ORION® Cellular Network as a Service (NaaS) to deliver that information securely. For instance, in projects like Galveston's, this allows operators to use near real-time data from BEACON® to proactively flush lines and dose chemicals accurately.

E-Series Ultrasonic and mechanical meter intellectual property

The intellectual property around the E-Series Ultrasonic meters is a key differentiator. These meters use solid-state technology, meaning they have no moving parts, which translates directly into minimal maintenance and superior long-term accuracy, especially at low flow rates, compared to older mechanical designs. This technology is robust, housed in a weatherproof, UV-resistant casing, and meets or exceeds standards like AWWA C715 and C750. This IP is defintely a core asset for capturing revenue through high-accuracy measurement.

Manufacturing and supply chain facilities, including in Mexico

Badger Meter, Inc. maintains a geographically diverse manufacturing footprint to manage costs and supply chain risk. Key production facilities are located in the United States, specifically Milwaukee, Wisconsin; Racine, Wisconsin; Tulsa, Oklahoma; and Collegeville, Pennsylvania. Internationally, they operate manufacturing sites in Nogales, Mexico; Brno, Czech Republic; and Bern, Switzerland, supported by a development facility in Luleå, Sweden. The Nogales, Mexico, operation has historically been a key part of their cost-reduction strategy.

Strong cash provided by operations, totaling $128.9 million in 9M 2025

Financial strength is a resource in itself, allowing for investment in innovation and acquisitions. The company reported $128.9 million in cash provided by operations for the first nine months of 2025. This is supported by recent quarterly performance; for example, Q3 2025 saw robust cash provided by operations totaling $51.3 million. This consistent cash generation supports shareholder returns, evidenced by the recent 18% increase in the annual dividend rate to $1.60 per share.

Here's a quick look at some of the recent financial outputs that feed into this resource base:

Installed base of meters and solutions in over 50 countries

The sheer scale of deployment represents a massive installed base, which serves as a recurring opportunity for software and service upgrades. Badger Meter, Inc. has its meters and solutions deployed in over 50 countries globally. This international footprint is critical for driving the adoption of their digital offerings like BlueEdge™ across diverse regulatory and operational environments.

The core resources can be summarized by their scope:

• Proprietary software platform supporting real-time data analytics.
• Patented solid-state ultrasonic meter technology.
• Global manufacturing footprint including facilities in Mexico.
• Significant cash generation capability, noted at $128.9 million for 9M 2025.
• Market penetration across more than 50 countries.

Badger Meter, Inc. (BMI) - Canvas Business Model: Value Propositions

You're looking at the core reasons why utilities and industrial customers choose Badger Meter, Inc. (BMI) over competitors. It's not just about selling a meter anymore; it's about selling a complete, data-driven water management system. This shift is what underpins their durable financial performance, even with macro uncertainties.

Comprehensive smart water solutions, expanding beyond just the meter

Badger Meter, Inc. offers a full suite of solutions under the BlueEdge suite, moving far past simple flow measurement. This means providing tools for the entire water cycle, including treatment and network monitoring. The focus is on delivering value through technology integration, not just hardware replacement.

The Utility Water segment remains the bedrock of the business. For the third quarter of 2025, utility water sales grew 14% year-over-year, or 8% when you exclude the SmartCover contribution. Total consolidated sales for that quarter hit $235.7 million.

The value proposition here is the breadth of the portfolio, which includes:

• Metering hardware, including ultrasonic meters.
• BEACON Software as a Service (SaaS) offerings.
• Water quality and remote monitoring solutions.
• Wastewater and distribution network monitoring.

Real-time data analytics for water conservation and system efficiency

The real value in smart water is the data you get back. Badger Meter, Inc. delivers this through its ORION Cellular endpoints and the BEACON SaaS platform, giving utilities actionable insights almost instantly. This moves the customer from reactive maintenance to proactive management.

For instance, the ORION Cellular endpoints, paired with BEACON SaaS, provide 15-minute interval data right to your fingertips. This granularity helps in quickly identifying leaks or usage abnormalities, which directly helps decrease non-revenue water.

The financial commitment to software shows its importance. In 2024, software revenue totaled $56 million, reflecting a five-year Compound Annual Growth Rate (CAGR) of 28%. This recurring revenue stream is a key differentiator.

Cellular-based Advanced Metering Infrastructure (AMI) for reliable communication

You benefit from Badger Meter, Inc.'s decade of leadership in cellular AMI, which is offered as a Network as a Service (NaaS) approach. This means you don't have to build or maintain your own gateway infrastructure, saving you capital expenditure and operational headaches. They work with multiple cellular carriers to assure reliability.

The market is clearly moving this way. The company estimates that approximately 40% of water meters installed in the United States have been converted to AMI systems as of early 2025. Demand for their industry-leading cellular AMI solutions was cited as a primary driver for the 13% total sales growth in Q3 2025.

Wastewater network monitoring via the SmartCover acquisition

The January 2025 acquisition of SmartCover Systems for $185 million, funded with available cash, immediately expanded the value proposition into wastewater monitoring. This adds sewer line and lift station monitoring to the BlueEdge suite, helping utilities prevent sewer overflow spills.

Management expects this new piece to contribute approximately $35 million in annual sales, initially with high single-digit EBITDA margins. In Q3 2025, SmartCover contributed $11.110 million to net sales. Management reiterated that it should become earnings accretive in its second year post-acquisition.

Here's a quick look at the financial context of the acquisition:

Durable, replacement-driven demand in the non-cyclical utility market

The utility market is inherently non-cyclical, which provides a stable foundation for Badger Meter, Inc.'s business. While technology adoption drives growth, the underlying need for meter replacement provides a durable floor. The Utility Water segment made up 88% of the company's net sales in 2024.

This stability is reflected in their commitment to shareholders. Badger Meter, Inc. increased its annual dividend by 18% to $1.60 per share, marking the 33rd consecutive year of dividend growth. This consistency is incredibly rare.

The value proposition is built on this dual engine:

• Augmentation: Cellular AMI and SaaS augment the historically replacement-driven model.
• Resilience: The utility market provides a non-cyclical base for operations.
• Shareholder Return: 33 years of consecutive dividend increases signal financial health.

Here are some key performance indicators that back up this value proposition:

Finance: draft 13-week cash view by Friday.

Badger Meter, Inc. (BMI) - Canvas Business Model: Customer Relationships

You're looking at how Badger Meter, Inc. (BMI) locks in its utility customers, which is defintely more than just shipping a meter. It's about building a long-term, data-driven partnership, especially as municipalities grapple with aging infrastructure and water scarcity.

Dedicated sales and engineering support for large-scale AMI project execution

Executing large Advanced Metering Infrastructure (AMI) projects involves navigating uneven cycles of bids, awards, and installations, but Badger Meter, Inc. supports this with its differentiated Cellular AMI and the comprehensive BlueEdge™ smart water management solutions. The company is focused on providing the necessary support to see these large-scale deployments through to completion, leveraging its sales network to accelerate adoption, as seen with the integration of SmartCover® Systems, where the goal is to accelerate municipal adoption of sewer and lift station monitoring.

Long-term, sticky relationships with municipal utility customers

The relationships are built on a foundation of trust and consistent performance, evidenced by the company increasing its annual dividend rate by 18% to $1.60 per share in Q3 2025, marking the 33rd consecutive year of dividend growth. This financial stability reflects the perceived durability of their customer base. Badger Meter, Inc. controls the full water intelligence stack-meters, radios, software, and analytics-used by over 50,000 U.S. water utilities. The sticky nature of the recurring revenue stream reinforces these long-term ties.

Subscription-based software support (SaaS) for recurring engagement

The shift to software is a major relationship driver, as it creates continuous engagement beyond the initial hardware sale. In the first quarter of 2025, software revenue surged 25% year-over-year, and the BEACON® SaaS platform's recurring revenue accounted for 25% of total software sales in that period. While the majority of sales are recognized at the point of delivery, the subscription-based SaaS revenue, which is described as the real engine, is a smaller portion of total revenue but is doubling in stickiness and profitability annually. The acquisition of SmartCover in January 2025 also adds meaningful annual recurring software and support revenues from sewer and lift-station monitoring.

Here's a quick look at the recurring revenue and adoption context as of mid-2025:

Customer-focused execution to drive technology adoption trends

The company's execution is aimed at helping utilities address massive global issues, such as non-revenue water losses, which globally average between 15% and 30% of treated water. The BlueEdge™ suite is central to this, integrating IoT-enabled hardware and cloud analytics to empower utilities with real-time data. In North America, Badger Meter, Inc. is among the top five companies by installed base of water AMI endpoints. The IT solutions segment, which leverages IoT and data management for loss prevention, is the fastest-growing market segment in the smart water meter space.

Consultative approach to tailor BlueEdge™ solutions to utility needs

BlueEdge™ is positioned as an umbrella brand for a suite of tailorable solutions that integrate water technology, software, and services. This means the deployment is customized to address specific applications across the water cycle, allowing the relationship to grow with the customer's journey, from select initial deployments to potentially all elements over time based on their readiness. The platform encompasses a comprehensive suite of instruments, sensors, communication systems, and software-enabled insights, offering tailored solutions that address specific challenges faced by utilities, commercial, and industrial customers.

• BlueEdge™ supports deployments from individual lift stations to full-scale network monitoring.
• It includes AMI, pressure management, leak detection, and water quality monitoring.
• The approach helps utilities transition into the utility of the future by providing actionable data.
• The company focuses on delivering a better experience for consumers as a triple win outcome.

Badger Meter, Inc. (BMI) - Canvas Business Model: Channels

You're looking at how Badger Meter, Inc. (BMI) gets its water technology and software into the hands of its customers as of late 2025. The channel strategy is clearly bifurcated between large, direct utility relationships and broader distribution for hardware and specialized instrumentation.

Direct sales force for large municipal utility contracts

The direct channel is clearly aimed at securing the largest utility contracts, which fall primarily under the Utility Water segment. This segment is the bedrock of the business, contributing approximately 88% of net sales in 2024. The success of this channel is evident in the year-over-year growth figures reported through the first three quarters of 2025. For instance, Utility Water sales increased 16% year-over-year in the first quarter of 2025, even after excluding the SmartCover acquisition contribution, which was 12% growth organically. By the third quarter of 2025, Utility Water sales were up 14% year-over-year (or 8% excluding SmartCover). This sustained growth indicates the direct sales team is successfully placing advanced metering infrastructure (AMI) and related solutions with major municipal customers.

Global network of distributors and resellers for hardware sales

While the high-touch municipal sales are direct, the broader hardware and flow instrumentation sales likely rely heavily on the distributor and reseller network. The Flow Instrumentation segment, which accounted for the remaining 12% of net sales in 2024, shows mixed results, suggesting channel variability. In the first quarter of 2025, these sales declined 5%, but by the third quarter, they had rebounded to a 4% increase, driven by strength in water-related markets. This segment often includes sales to commercial, industrial, and OEM customers who are serviced through channel partners.

Integrated software platforms (BEACON®) delivered via cloud services

This is where Badger Meter, Inc. (BMI) locks in long-term value through recurring revenue. The BEACON® SaaS platform is a key component of the BlueEdge™ suite, delivered via cloud services. The channel for this is tightly coupled with the hardware sales (meters and ORION® Cellular radios) but is recognized separately for its high-margin nature. In the first quarter of 2025, software revenue surged 25% year-over-year. Furthermore, the recurring revenue component from BEACON® itself accounted for 25% of total software sales in Q1 2025. This cloud delivery channel is critical, as it supports the company's goal of maintaining a normalized gross margin in the 39-42% range.

OEM channels for flow instrumentation product integration

The OEM channel is a specific subset of the Flow Instrumentation business, where Badger Meter, Inc. (BMI) products are integrated into other manufacturers' systems. The performance of this channel is reflected in the overall Flow Instrumentation sales figures. For example, in Q3 2025, Flow Instrumentation sales increased 4% year-over-year. The company is actively managing this channel by de-emphasizing non-water related applications, which helped offset lower demand in those areas.

Here's a quick look at the top-line financial context for these channels through the first nine months of 2025:

The mix of sales is what drives the margin profile, so you need to watch the software component closely. In Q1 2025, the company achieved a record operating profit margin of 22.2%.

The key ways Badger Meter, Inc. (BMI) reaches its customers include:

• Direct sales engagement for major utility infrastructure projects.
• A global distributor network supporting hardware and industrial sales.
• Cloud-based delivery of the BEACON® SaaS platform for recurring revenue.
• Targeted OEM partnerships for flow instrumentation integration.

The company raised its normalized gross margin guidance to 39-42%, showing confidence in the channel mix favoring higher-value technology sales. Finance: draft 13-week cash view by Friday.

Badger Meter, Inc. (BMI) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Badger Meter, Inc. as of late 2025, which is heavily weighted toward essential infrastructure, giving it a defintely non-cyclical demand profile for the majority of its business.

The primary customer segment is clearly Municipal Water Utilities, which fall under the Utility Water product line. This segment is the engine of Badger Meter, Inc.'s revenue. For the full year 2024, this line accounted for approximately 88% of net sales, while the Flow Instrumentation line made up about 12%.

The focus on digital water solutions is driving this segment's growth. For instance, in the third quarter of 2025, Utility Water sales increased 14% year-over-year, or 8% when excluding the contribution from the SmartCover acquisition completed in January 2025. This growth is fueled by the adoption of ORION Cellular advanced metering infrastructure (AMI) solutions, BEACON Software as a Service (SaaS) revenues, and water quality monitoring.

The Industrial and Commercial Clients, served largely through the Flow Instrumentation product line, represent the smaller, more variable portion of the business. This segment saw sales essentially flat with 2023 levels in 2024, as growth in water-related applications offset declines in other areas. More recently, in the third quarter of 2025, Flow Instrumentation sales increased 4% year-over-year, showing modest recovery as strength in water-related markets balanced lower demand elsewhere.

The segment covering Water and Wastewater Treatment Facilities is increasingly being served through integrated offerings. The January 2025 acquisition of SmartCover for $185 million directly targets sewer and lift station monitoring capabilities, which are crucial for wastewater infrastructure. This capability is now integrated into the BlueEdge portfolio, which is Badger Meter, Inc.'s suite of tailorable solutions.

For International Utilities, the United States remains the largest market, but expansion efforts are noted in specific regions. The BlueEdge offering is being marketed in select international markets, including the UK and the Middle East. However, the Q2 2025 report indicated that sales in the Middle East, along with Mexico, declined during that period. The company maintains global sales offices, including locations in the UK (Hethel and Manchester) and a manufacturing site in Sweden for Ultrasonics.

While Original Equipment Manufacturers (OEMs) are not broken out as a separate revenue line, they are served through both the Utility Water and Flow Instrumentation segments. The Flow Instrumentation segment's flat performance in 2024 suggests that OEM demand in certain non-water applications was weak enough to negate growth in water-related OEM uses.

Here's a quick look at how the two main product lines have performed recently, showing the continued dominance of Utility Water:

The overall trend shows the Utility Water segment, driven by digital adoption, consistently delivering double-digit growth, while Flow Instrumentation is more sensitive to broader industrial cycles. The company's total sales for the first nine months of 2025 reached approximately $700.3 million ($222.2M in Q1 + $238.1M in Q2 + $235.7M in Q3), up from $611.3 million in the comparable 2024 period.

• Demand is described as durable for cellular AMI and BlueEdge solutions.
• The company increased its annual dividend rate by 18% to $1.60 per share in Q3 2025.
• The gross margin target range was raised to 39-42% from the historical 38-40%.
• In Q3 2025, Base operating profit margins expanded to 20.7%.

Finance: draft 13-week cash view by Friday.

Badger Meter, Inc. (BMI) - Canvas Business Model: Cost Structure

You're looking at the costs Badger Meter, Inc. (BMI) incurs to deliver its water technology solutions, which is key to understanding their profitability structure post-SmartCover acquisition.

The foundation of the cost structure is tied directly to product delivery. For the third quarter ended September 30, 2025, the Gross Margin stood at 40.7%. This means the Cost of Goods Sold (COGS) for hardware manufacturing and materials represented approximately 59.3% of the total sales for that period. This margin benefited from structural sales mix improvement, even as implemented price increases only partially offset tariff-related cost pressures.

Operating expenses show the scale of the corporate and innovation engine. Total Selling, Engineering, and Administration (SEA) expenses for Q3 2025 were $49.8 million, which translated to 21.1% of the quarter's sales. This figure includes specific costs related to the recent integration.

Here's a quick look at the key cost components and related financial data for Q3 2025 (in US\$ in millions, except percentages):

The amortization of intangible assets, a direct result of acquisitions like SmartCover, is a specific line item impacting reported costs. For Q3 2025, the amortization specifically from SmartCover was $1.6 million, which was embedded within the total GAAP amortization of $6.0 million for the quarter. The total GAAP amortization for the nine months ended September 30, 2025, reached $17.5 million.

Research and development (R&D) investment for digital innovation is a strategic cost, though the specific Q3 2025 R&D expense amount isn't explicitly broken out in the primary cost tables provided. What is clear is the impact on cash flow; the record free cash flow in Q3 2025 reflected lower cash taxes due to timing around tax law changes pertaining to the deductibility of research and development costs.

Capital expenditures reflect investment in operational defintely excellence and capacity. You should note the following:

• Capital Expenditures for the third quarter of 2025 were ($3.1 million).
• Year-to-Date 2025 Capital Expenditures totaled ($10.0 million).
• This compares to Year-to-Date 2024 Capital Expenditures of ($8.1 million).

The composition of the SEA increase also reveals underlying operational cost drivers:

• The year-over-year increase in SEA, excluding SmartCover, was $1.2 million, or 3%.
• This base increase was driven by higher personnel costs, including bonus and incentive expense based on business performance.
• A $1.8 million benefit related to a deferred compensation plan, due to stock price change, partially offset the base SEA expense in the quarter.

Finance: draft 13-week cash view by Friday.

Badger Meter, Inc. (BMI) - Canvas Business Model: Revenue Streams

You're looking at how Badger Meter, Inc. (BMI) brings in the money, and as of late 2025, it's heavily tilted toward the water utility sector, but with a growing, high-margin software component. Honestly, the numbers tell a clear story about where the focus is.

Total Net Sales for the first nine months of 2025 were approximately $696.0 million. This figure reflects the cumulative revenue from the first, second, and third quarters of 2025. For context, the individual quarterly sales were:

• Q1 2025 Total Sales: $222.2 million
• Q2 2025 Total Sales: $238.1 million
• Q3 2025 Total Sales: $235.7 million

The primary engine remains the Utility Water Product Line sales, which historically represented the vast majority of revenue. In fiscal 2024, this line accounted for approximately 88% of net sales. This segment is fueled by the continued market adoption of their differentiated solutions. For instance, in the third quarter of 2025, utility water sales increased 14% year-over-year (or 8% excluding the SmartCover acquisition).

A key driver within this segment, and a significant revenue stream in its own right, is the Recurring Software-as-a-Service (SaaS) revenue from BEACON® AMA and BlueEdge™. In the full year 2024, total software sales were over $56 million, marking an increase of approximately 30% year-over-year. This recurring revenue stream continues to be a primary driver of growth across the 2025 quarters, showing consistent momentum.

The second major product line, Flow Instrumentation product sales to industrial and non-water markets, is the smaller piece of the pie, making up about 12% of 2024 net sales. This stream has seen more variability in 2025. Sales declined 5% in Q1 2025, were essentially flat in Q2 2025, but then saw an increase of 4% in Q3 2025 as strength in water-related markets offset lower demand in de-emphasized end markets.

To manage the environment, the company has employed Strategic pricing actions to offset cost pressures and drive margin expansion. This is critical for protecting profitability. For example, in the third quarter of 2025, gross margin was 40.7%, up 50 basis points from 40.2% in the prior year quarter, with implemented price increases partially mitigating certain tariff impacts. This focus on pricing and operational excellence led management to raise the normalized gross margin range from the historical 38-40% to a new range of 39-42% for the full year 2025 outlook.

Here's a quick look at how the revenue segments stacked up based on the latest full-year benchmark and recent trends:

The financial discipline is evident in the margin management. If you look at the Base operating margin expansion in Q3 2025, it increased 120 basis points to 20.7%, showing that the pricing actions and operational focus are working to improve profitability even amid external pressures. Finance: draft 13-week cash view by Friday.