NYSE:BMI
BADGER METER INC
A leading US-based manufacturer of water flow measurement devices driving growth through organic innovation and strategic M&A in the residential and commercial utility sectors.
Key Metrics
Investment Thesis
Bull Case
Investors should consider Badger Meter due to its consistent double-digit revenue growth trajectory over the last three years and a strong balance sheet with current assets significantly exceeding current liabilities. The company's ability to generate substantial operating cash flow while funding aggressive growth through acquisitions positions it well for long-term value creation in an essential infrastructure market.
Bear Case
Concerns arise regarding the high level of goodwill on the balance sheet at $235.6M which could be vulnerable to impairment charges if integration fails or market conditions deteriorate. Additionally, the substantial decline in cash reserves from a beginning balance of $295.3M to an ending balance of $226.0M suggests aggressive spending that may pressure liquidity if organic growth slows.
About BADGER METER INC
Badger Meter Inc. designs, manufactures, and sells mechanical and electronic water flow measurement devices, primarily serving the US residential market through its core brand and the commercial/industrial sector via acquisitions. The company generates revenue from product sales, installation services, and maintenance contracts across North America, leveraging a broad portfolio of meter technologies including ultrasonic and mechanical meters. With significant capital deployed into acquisitions totaling $184M recently, Badger continues to expand its market presence and technological capabilities in the critical utility infrastructure space.
Analysis
Management Discussion
Badger Meter delivered robust financial performance with revenue growing to $916.7M in 2025, up significantly from $565.6M in 2022, while net income climbed to $141.6M reflecting strong operational leverage and margin expansion. The company successfully converted high operating cash flow of $183.7M into strategic investments, utilizing $198.1M in investing cash flows primarily for acquisitions and capital expenditures of $14.0M to modernize its manufacturing base.
Industry Overview
The global water metering industry is experiencing steady demand driven by aging infrastructure replacement cycles and the rapid adoption of smart utility technologies for leak detection and conservation. Regulatory bodies are increasingly mandating digital capabilities in meters, creating a favorable environment for manufacturers that have successfully transitioned from purely mechanical to hybrid electronic solutions.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $565.6M | $703.6M | $826.6M | $916.7M |
| Cost of Revenue | $345.6M | $427.2M | $497.4M | $534.6M |
| Gross Profit | $220.0M | $276.4M | $329.2M | $382.1M |
| Operating Expenses | $132.7M | $158.4M | $171.2M | $198.6M |
| Operating Income | $87.3M | $118.0M | $157.9M | $183.4M |
| R&D | $15.8M | $19.0M | $19.2M | $21.6M |
| G&A | $132.7M | $158.4M | $171.2M | $198.6M |
| Stock-Based Comp | $3.1M | $5.2M | $6.2M | $9.2M |
| Depreciation | $11.1M | $10.9M | $11.1M | $11.1M |
| Amortization | $8.6M | $8.6M | $9.1M | $14.7M |
| Other OpEx | $-15.8M | $-19.0M | $-19.2M | $-21.6M |
| Non-Operating Income | $422.0K | $3.9M | $8.6M | $5.2M |
| Pre-Tax Income | $87.7M | $122.0M | $166.5M | $188.7M |
| Income Tax | $21.2M | $29.4M | $41.6M | $47.0M |
| Continuing Ops | $66.5M | $92.6M | $124.9M | $141.6M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $66.5M | $92.6M | $124.9M | $141.6M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $66.5M | $92.6M | $124.9M | $141.6M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $347.8M | $442.2M | $540.1M | $507.1M |
| Accounts Receivable | $76.7M | $83.5M | $84.3M | $112.4M |
| Inventory | $119.9M | $153.7M | $143.4M | $151.9M |
| Prepaid Expenses | $13.3M | $13.2M | $17.1M | $16.8M |
| Other Current Assets | $138.1M | $191.8M | $295.3M | $226.0M |
| Long-Term Assets | $255.2M | $274.7M | $276.3M | $466.5M |
| PP&E (Net) | $73.5M | $73.9M | $74.3M | $79.6M |
| Goodwill | $101.3M | $113.2M | $111.8M | $235.6M |
| Operating Leases | $6.5M | $5.5M | $5.9M | $12.5M |
| Other LT Assets | $73.9M | $82.2M | $84.4M | $138.8M |
| Total Assets | $603.0M | $716.9M | $816.4M | $973.6M |
| Current Liabilities | $110.3M | $131.9M | $118.2M | $150.7M |
| Accounts Payable | $71.4M | $81.8M | $55.7M | $72.3M |
| Other Current Liab | $38.9M | $50.1M | $62.5M | $78.4M |
| Long-Term Liabilities | $50.3M | $68.5M | $92.0M | $109.6M |
| Total Liabilities | $160.6M | $200.4M | $210.2M | $260.3M |
| Shareholders' Equity | $442.4M | $516.5M | $606.2M | $713.3M |
| Retained Earnings | $395.2M | $458.7M | $547.8M | $645.9M |
| AOCI | $-6.0M | $-1.6M | $-7.9M | $6.5M |
| Treasury Stock | $37.3M | $37.0M | $36.7M | $51.6M |
| Total L&E | $603.0M | $716.9M | $816.4M | $973.6M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $66.5M | $92.6M | $124.9M | $141.6M |
| Non-Cash Adjustments | $-62.7M | $-68.3M | $14.3M | $-6.8M |
| Working Capital Changes | $78.6M | $85.9M | $15.8M | $48.8M |
| Cash from Operations | $82.5M | $110.1M | $155.0M | $183.7M |
| Capital Expenditures | $5.9M | $12.0M | $12.8M | $14.0M |
| Cash from Investing | $-5.9M | $-29.1M | $-15.8M | $-198.1M |
| Share Buybacks | $427.0K | — | $0 | $15.0M |
| Dividends Paid | $24.9M | $29.1M | $35.8M | $43.5M |
| Cash from Financing | $-24.6M | $-28.1M | $-35.1M | $-58.0M |
| FX Effect | $-1.1M | $828.0K | $-597.0K | $3.0M |
| Net Change in Cash | $50.9M | $53.7M | $103.5M | $-69.3M |
| Beginning Cash | $87.2M | $138.1M | $191.8M | $295.3M |
| Ending Cash | $138.1M | $191.8M | $295.3M | $226.0M |
Frequently Asked Questions
How does BADGER METER INC make money?
Residential Water Measurement Devices leveraging the core Badger brand for single-family homes, Commercial & Industrial Solutions acquired to serve municipal and large-scale water utilities, and Electronic Metering Systems providing advanced data collection capabilities.
What are the main risks for BMI?
Regulatory shifts such as smart meter mandates or privacy concerns affecting electronic meter adoption, sensitivity to economic downturns reducing residential construction volumes, currency fluctuations impacting international operations, and integration challenges from large-scale acquisitions like the recent $184M spend.
What is BMI's competitive advantage?
Dominant market share in the US residential segment with a legacy of over 100 years creating high switching costs for municipalities, a robust direct sales force offering superior customer service, and a diversified product portfolio that mitigates reliance on any single technology type.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.