BMIBy Calypso Research7 min read

Badger Meter (BMI) Q1 2026 Earnings Analysis

Badger Meter's Q1 Was Ugly. The Stock Price Agrees.

Key Takeaways

Badger Meter (BMI) reported Q1 2026 earnings with revenue of $202M, representing a -9.0% year-over-year change. The stock moved -24.1% on earnings day.

The bull case: A large, visible pipeline of awarded AMI and sewer-monitoring projects, combined with proven share gains, resilient margins, and underpenetrated adjacency markets like SmartCover/UDLive, supports a return to high-single-digit growth and strong cash generation beyond a temporary 2026 air pocket.

The bear case: Extended weakness in short-cycle demand and slippage of large AMI projects such as PRASA into 2027, amid competitive pricing pressure on big bids, could turn “flattish” 2026 into a multi-year growth slowdown with incremental margin compression versus recent peak levels.

Financial Highlights

  • Revenue: $202M (-9.0% YoY)
  • Gross Profit: $84M (41.7% margin, -1.3% YoY)
  • Operating Income: $35M (17.4% margin, -4.9% YoY)
  • Net Income: $27M
  • TTM Revenue: $897M

Stock Performance

  • Earnings Day Move: -24.1%
  • Year-to-Date: -34.5%
  • 1-Year Return: -42.2%
  • vs. S&P 500 (since earnings): -35.1%
  • vs. Nasdaq (since earnings): -37.0%

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What Management Said

Here are the key debates and direct quotes from Badger Meter's Q1 2026 earnings call:

How “Short-Cycle” Weakness and Project Pacing Affect 2026 Revenue Outlook

Sentiment: Mixed

"In this particular case, I would not limit it to one thing. It just happened at this particular time and with unfortunate timing given what Robert had just talked about on where we are in the midst of this air pocket, but not really one thing. It is relatively normal." — Kenneth Bockhorst
"The thing I will reinforce here is the variability that we are talking about specific to Q1 that is now more visible has always existed, inclusive of the 2023 to 2025 time frame… It is just happening to be more visible in 2026." — Robert Wrocklage

Visibility, Timing, and Risk Around PRASA and Other Awarded AMI Projects

Sentiment: Mixed

"The fact that we have a PO and that we know installation partners are lined up—our confidence is higher today than it was before." — Kenneth Bockhorst
"As the year progresses and we get closer to each of these projects getting into deployment mode, we see more activity… As we get closer and closer, our confidence level is better today than it was ninety days ago." — Kenneth Bockhorst

Sustainability of Gross Margins and Incremental Margins as Mix Shifts (Turnkey, PRASA, Short-Cycle)

Sentiment: Positive

"The 39% to 42% range we still have confidence in, and that is where we anticipate operating for the rest of the year." — Daniel Weltzien
"On PRASA… the gross margins on that are not at the line-average level as other projects we have been awarded. However, the SEA leverage on a project like that is still very interesting and gets us back to operating leverage that is in line with the rest of the business." — Daniel Weltzien

Short-Cycle Demand Quality: Timing Blip or Emerging Macro/Budget Headwind?

Sentiment: Mixed

"We are not getting from the market in any way that people are constraining budgets for the normal replacement demand that comes with metering. It just happens to be an air pocket at the same time that there is a project air pocket." — Kenneth Bockhorst
"A lot of people—even though we talk about short-term variability… the majority of the business is short cycle… Utilities order when they want them… Even when backlog was elevated, it moved from short visibility to slightly more visibility; it was not like we had a huge backlog that we were chunking through." — Kenneth Bockhorst

Competitive Position, Share Gains, and Pricing Power in AMI and Meters

Sentiment: Positive

"For the most part, we have been a 121-year leader in the industry for meters; now we are also the leader in the industry for AMI, and we are pulling in both ways." — Kenneth Bockhorst
"Our value-based pricing principles all remain intact, so we are extracting the price that we deserve for providing this value at a price that customers see the value to invest in." — Kenneth Bockhorst

Bull Case

A large, visible pipeline of awarded AMI and sewer-monitoring projects, combined with proven share gains, resilient margins, and underpenetrated adjacency markets like SmartCover/UDLive, supports a return to high-single-digit growth and strong cash generation beyond a temporary 2026 air pocket.

Bear Case

Extended weakness in short-cycle demand and slippage of large AMI projects such as PRASA into 2027, amid competitive pricing pressure on big bids, could turn “flattish” 2026 into a multi-year growth slowdown with incremental margin compression versus recent peak levels.

Looking Ahead

With revenue declining -9.0% year-over-year, investors will be watching for signs of a turnaround at Badger Meter, particularly around how “Short-Cycle” Weakness and Project Pacing Affect 2026 Revenue Outlook. With operating margins at 17.4%, margin trends will remain a focal point. The market's negative earnings-day reaction signals that investors need to see stronger execution, and the next earnings report will be a key catalyst for the stock.

Frequently Asked Questions

What was Badger Meter's revenue in Q1 2026?

Badger Meter reported Q1 2026 revenue of $202M, representing a -9.0% year-over-year change.

Did Badger Meter beat earnings expectations in Q1 2026?

The stock declined -24.1% on earnings day, suggesting the results fell short of market expectations. The current bull case centers on: A large, visible pipeline of awarded AMI and sewer-monitoring projects, combined with proven share gains, resilient margins, and underpenetrated adjacency markets like SmartCover/UDLive, supports a return to high-single-digit growth and strong cash generation beyond a temporary 2026 air pocket.

What is the bull case for BMI stock?

The bull case for BMI centers on: A large, visible pipeline of awarded AMI and sewer-monitoring projects, combined with proven share gains, resilient margins, and underpenetrated adjacency markets like SmartCover/UDLive, supports a return to high-single-digit growth and strong cash generation beyond a temporary 2026 air pocket.

What is the bear case for BMI stock?

The bear case for BMI centers on: Extended weakness in short-cycle demand and slippage of large AMI projects such as PRASA into 2027, amid competitive pricing pressure on big bids, could turn “flattish” 2026 into a multi-year growth slowdown with incremental margin compression versus recent peak levels.

How has BMI stock performed since its Q1 2026 earnings?

BMI moved -24.1% on the day of its Q1 2026 earnings report, underperforming the S&P 500 by +35.1% since earnings. Year-to-date, the stock has returned -34.5%.

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