Itron, Inc. (NASDAQ:ITRI) reported second-quarter 2026 results with lower revenue but record gross margins, higher adjusted EBITDA, and increased its full-year earnings outlook, reflecting continued operational improvements despite softer project timing.
Key Investor Takeaways
- Itron raised its full-year 2026 non-GAAP EPS guidance while reaffirming a constructive demand outlook for utility infrastructure.
- Second-quarter revenue declined 7% year over year to $563 million, primarily due to lower Networked Solutions revenue.
- Itron (NASDAQ:ITRI) delivered record adjusted gross margin of 41.4% and increased adjusted EBITDA by 8% despite lower sales.
- Annual recurring revenue grew 21% to $417 million, highlighting continued expansion of recurring software and services.
- The company expects full-year revenue of $2.37 billion to $2.41 billion and non-GAAP diluted EPS of $6.30 to $6.50.
Why ITRI Stock Is in Focus
Itron reported second-quarter revenue of $563 million, down 7% from the prior year as lower Networked Solutions revenue, driven by project deployment timing and lower volumes, outweighed continued growth in its Outcomes business.
While revenue declined, profitability improved. Adjusted gross margin reached a record 41.4%, up 460 basis points year over year, supported by favorable customer and product mix as well as operational efficiencies. Adjusted EBITDA increased 8% to $97 million, while non-GAAP operating income rose to $89 million.
Annual recurring revenue increased 21% to $417 million, reflecting continued growth in software and service-related revenue streams. Outcomes revenue also rose 13%, while Resiliency Solutions contributed $16 million as integration activities continued following recent acquisitions.
GAAP net income declined to $53 million, or $1.19 per diluted share, from $68 million, or $1.47 per diluted share, primarily due to lower interest income and a higher effective tax rate. Non-GAAP diluted EPS slipped modestly to $1.59 from $1.62.
Based on its second-quarter performance, Itron raised its full-year 2026 non-GAAP EPS guidance to between $6.30 and $6.50 while maintaining expected revenue of $2.37 billion to $2.41 billion.
Why This Matters for Investors
Although headline revenue declined, the results suggest Itron continues to improve profitability through operational execution and a more favorable business mix.
The combination of record gross margins, higher adjusted EBITDA, and strong recurring revenue growth indicates the company’s earnings are becoming less dependent on quarterly fluctuations in project timing. Continued expansion of recurring revenue may also provide greater visibility into future financial performance.
Management’s decision to raise earnings guidance despite unchanged revenue expectations suggests confidence that margin improvements and operating efficiencies will continue through the remainder of 2026. The company also pointed to sustained demand for grid modernization, resiliency, and utility infrastructure as supportive long-term industry trends.
What to Watch Next
Investors will likely monitor whether delayed Networked Solutions projects convert into revenue during the second half of the year, continued growth in annual recurring revenue, and progress integrating the Urbint, Locusview, and Resiliency Solutions businesses. Execution against the updated earnings outlook and bookings activity will also remain key indicators of future performance.