Resource management provider Itron (NASDAQ: ITRI) announced better-than-expected revenue in Q1 CY2026, but sales fell by 3.3% year on year to $587 million. On the other hand, next quarter’s revenue guidance of $565 million was less impressive, coming in 6.2% below analysts’ estimates. Its non-GAAP profit of $1.49 per share was 20.3% above analysts’ consensus estimates.

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"Itron’s first quarter results were ahead of our expectations on strong execution and certain projects running ahead of schedule, resulting in record gross profit", said Tom Deitrich, Itron’s president and CEO.

Company Overview

Founded by a small group of engineers who wanted to build a more efficient way to read utility meters, Itron (NASDAQ: ITRI) offers energy and water management products for the utility industry, municipalities, and industrial customers.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, Itron grew its sales at a sluggish 2.3% compounded annual growth rate. This was below our standards and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Itron’s annualized revenue growth of 1.4% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

Itron also breaks out the revenue for its most important segments, Product and Service, which are 81.4% and 18.6% of revenue. Over the last two years, Itron’s Product revenue (measurement and control equipment) averaged 4.3% year-on-year declines. On the other hand, its Service revenue ( project management, installation, consulting) averaged 16.6% growth.

This quarter, Itron’s revenue fell by 3.3% year on year to $587 million but beat Wall Street’s estimates by 2.6%. Company management is currently guiding for a 6.9% year-on-year decline in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 3.9% over the next 12 months. While this projection indicates its newer products and services will fuel better top-line performance, it is still below average for the sector.

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Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Itron was profitable over the last five years but held back by its large cost base. Its average operating margin of 6.1% was weak for an industrials business. This result is surprising given its high gross margin as a starting point.

On the plus side, Itron’s operating margin rose by 18.3 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Itron generated an operating margin profit margin of 11.5%, down 1 percentage points year on year. Conversely, its gross margin actually rose, so we can assume its recent inefficiencies were driven by increased operating expenses like marketing, R&D, and administrative overhead.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Itron’s EPS grew at 31.5% compounded annual growth rate over the last five years, higher than its 2.3% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Itron’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Itron’s operating margin declined this quarter but expanded by 18.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Itron, its two-year annual EPS growth of 31.7% is similar to its five-year trend, implying strong and stable earnings power.

In Q1, Itron reported adjusted EPS of $1.49, down from $1.52 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Itron’s full-year EPS of $7.11 to shrink by 14.2%.

Key Takeaways from Itron’s Q1 Results

We were impressed by how significantly Itron blew past analysts’ EBITDA expectations this quarter. We were also excited its adjusted operating income outperformed Wall Street’s estimates by a wide margin. On the other hand, its revenue guidance for next quarter missed and its EPS guidance for next quarter fell short of Wall Street’s estimates. Overall, we think this was still a decent quarter with some key metrics above expectations. The market seemed to be hoping for more, and the stock traded down 2.8% to $84.44 immediately after reporting.

Is Itron an attractive investment opportunity right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here (it’s free).