Yahoo Finance Itron Inc (ITRI) Q1 2024 Earnings Call Transcript Highlights: Stellar Financial Performance and ...
Year-over-Year Revenue Growth: Increased 22% to $603 million.
Adjusted EBITDA: Rose 94% to $76 million.
Non-GAAP Earnings Per Share: Grew 153% to $1.24.
Free Cash Flow: Improved by approximately $40 million to $34 million.
Backlog: Stood at $4.3 billion at quarter end.
Bookings: Totaled $361 million for the quarter.
Gross Margin: Increased by 240 basis points to 34%.
GAAP Net Income: $52 million, compared to a loss of $12 million in the prior year.
GAAP Earnings Per Share: $1.12 per diluted share, up from a loss of $0.26 per share last year.
Release Date: May 02, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Itron Inc (NASDAQ:ITRI) reported a 22% year-over-year increase in revenue, reaching $603 million in Q1 2024, marking the highest level since Q4 2019.
Adjusted EBITDA for Itron Inc (NASDAQ:ITRI) saw a significant increase of 94% year-over-year to $76 million.
Non-GAAP earnings per share for Itron Inc (NASDAQ:ITRI) increased by 153% year-over-year to $1.24.
Free cash flow improved substantially, with Itron Inc (NASDAQ:ITRI) reporting $34 million in Q1 2024 compared to a negative $5 million in the previous year.
Operational execution and market conditions continued to improve for the sixth consecutive quarter, enhancing both top- and bottom-line results for Itron Inc (NASDAQ:ITRI).
Negative Points
Bookings for Q1 2024 were $361 million, reflecting normal seasonality and the timing of new bookings, which might concern some investors looking for more rapid growth.
The gross margin in the Outcomes segment decreased by 760 basis points year-over-year, and operating margin also declined by 740 basis points due to a lower margin revenue mix and increased services costs.
While the backlog at the end of Q1 was substantial at $4.3 billion, the conversion of backlog to revenue remains a critical area to watch for future performance.
Lead times for components, although improving, are still longer than pre-pandemic levels, which could impact the ability to meet demand promptly.
Despite a strong quarter, the guidance for Q2 suggests more subdued growth, which could indicate potential challenges in maintaining the growth momentum through the second half of the year.
Q & A Highlights
Q: Can you discuss the overall health of the supply chain and manufacturing efficiencies at Itron? A: (Thomas Deitrich - CEO) The supply chain and manufacturing processes have improved, allowing us to catch up on approximately $125 million of deferred backlog. Component supply has stabilized, and factories are operating efficiently, contributing to better-than-expected revenue recognition.
Q: How does Itron fit into the ecosystem of enabling providers for data centers? A: (Thomas Deitrich - CEO) Itron plays a crucial role in enhancing distribution network efficiencies through non-wire alternatives, helping utilities manage the significant power demands of data centers without extensive infrastructure overhaul.
Q: Will the focus on data centers affect both the outcomes and network segments? A: (Thomas Deitrich - CEO) Yes, data center demands impact both segments. Networking components are needed for connectivity and visibility, while software solutions in the outcomes segment help manage and balance the power distribution effectively.
Q: What are the drivers behind the robust network solutions margins reported this quarter? A: (Joan Hooper - CFO) The high margins in network solutions this quarter were primarily due to a catch-up in revenue, which may not be sustainable in the short term. Long-term targets remain consistent with the margins achieved.
Q: How does the Elpis acquisition and integration with Schneider ADMS enhance Itron's offerings? A: (Thomas Deitrich - CEO) The acquisition and integration expand our capabilities in power flow analysis and grid planning, allowing utilities to connect distributed energy resources more efficiently, which benefits both our network and outcomes segments.
Q: Can you provide insights into the expected growth and materiality of digitizing water meter infrastructure? A: (Thomas Deitrich - CEO) Digitization of water meters is a significant growth area, driven by the need for more efficient billing and leak detection. This trend is expected to continue, contributing materially to our revenue, particularly as we enhance service offerings with data analytics.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
