Slide 1: Third Quarter 2022 Earnings Conference Call
Tom Deitrich – President and Chief Executive Officer Joan Hooper – Senior Vice President and Chief Financial Officer Kenneth Gianella – Vice President, Investor Relations Third Quarter 2022 Earnings Conference Call November 3, 2022 ©2022 ITRON PROPRIETARY ©2022 ITRON PROPRIETARY Q3 2022 Earnings Con
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Certain matters in this presentation and being discussed today, that are not statements of historical fact, constitute forwar d-looking statements relating to current or future financial performance, management's plans and objectives for future operations, product plans an
Slide 3: Conference Call Agenda
CONFERENCE CALL AGENDA » CEO – Business and Operations Update » CFO – Financial Results » Q&A
Slide 4: Q3'22 Performance Summary
Q3’22 PERFORMANCE SUMMARY » Revenue of $421 million » Adjusted EBITDA of $24 million » Non-GAAP diluted EPS of $0.23 » Free cash flow of $11 million ©2022 ITRON PROPRIETARY Q3 2022 Earnings Conference Call | 4
Slide 5: Bookings and Backlog
BOOKINGS AND BACKLOG $4.1 $4.2 » Q3’22 bookings of $578M $4.0 $3.9 $3.4 » Q3’22 Book to bill of 1.4 » Record ending backlog of $4.2B $1.5 $1.6 $1.7 $1.6 $1.4 » 12-month backlog of $1.6B Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 12-Month Backlog Total Backlog Note: Chart in US$ Billions, the revenue from backlog
Slide 6: Operational Insights
OPERATIONAL INSIGHTS » Strong market demand persisting » Supply constraints significant to backlog to revenue conversion » Inflationary costs remain elevated » Outcomes progress impacted by network build out delays ©2022 ITRON PROPRIETARY Q3 2022 Earnings Conference Call | 6
Slide 7: Consolidated GAAP Results: Q3'22
CONSOLIDATED GAAP RESULTS: Q3’22 $ in millions (except per share amounts) Q3 2022 Q3 2021 Change Revenue $420.9 $486.9 -14% Change in constant currency -9% Gross margin 28.5% 27.7% 80 bps Operating income $6.9 $4.2 65% Net income (loss) attributable to Itron, Inc. $4.1 ($1.9) NM Earnings (loss) per
Slide 8: Consolidated Non-GAAP & Cash Results: Q3'22
CONSOLIDATED NON-GAAP & CASH RESULTS: Q3’22 $ in millions (except per share amounts) Q3 2022 Q3 2021 Change Non-GAAP operating income $14.8 $16.4 -10% Non-GAAP operating margin 3.5% 3.4% 10 bps Non-GAAP net income attributable to Itron, Inc. $10.5 $9.5 11% Adjusted EBITDA $24.3 $26.1 -7% Adjusted EB
Slide 9: Revenue Year-over-Year Bridge: Q3'22
REVENUE YEAR-OVER-YEAR BRIDGE: Q3’22 -27% -1% -2% -9% Chart in Millions, Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2022 ITRON PROPRIETARY Q3 2022 Earnings Conference Call | 9
Slide 10: Non-GAAP EPS Year-over-Year Bridge: Q3'22
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: Q3’22 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2022 ITRON PROPRIETARY Q3 2022 Earnings Conference Call | 10
Slide 11: Device Solutions Segment: Q3'22
DEVICE SOLUTIONS SEGMENT: Q3’22 Revenue, gross margin and operating margin $ in Millions, actual currency $152 Revenue down 38% and 27% in constant currency » Product pruning and sale of our C&I gas business » Component shortages resulting in unfulfilled demand $94 Gross margin up 90 bps 14.8% 15.7%
Slide 12: Networked Solutions Segment: Q3'22
NETWORKED SOLUTIONS SEGMENT: Q3’22 Revenue, gross margin and operating margin $ in Millions, actual currency $274 Revenue down 2% and 1% in constant currency $270 » Component shortages resulting in delayed deployments 32.8% Gross margin down 250 bps 30.3% » Unfavorable mix » Inflationary pressures 2
Slide 13: Outcomes Segment: Q3'22
OUTCOMES SEGMENT: Q3’22 Revenue, gross margin and operating margin $ in Millions, actual currency $60 Revenue down 5% and 2% in constant currency $57 » Continued decline in EMEA prepay business 37.5% 41.0% Gross margin up 350 bps » Increased operational efficiencies » Offset by reduction in new depl
Slide 14: Debt and Liquidity Overview: September 30, 2022
DEBT AND LIQUIDITY OVERVIEW: SEPTEMBER 30, 2022 US$M Debt $460 » Net leverage 3.8x at end of Q3’22 » Zero interest convertible notes $245 Free Cash Flow and Liquidity » Q3 Free cash flow of $11M » Cash and equivalents of $215M » $500M revolver 1 Total Debt Net Debt 1. Excludes amortization of debt f
Slide 15: Q4'22 Insights and Outlook
Q4’22 INSIGHTS AND OUTLOOK » Cautiously optimistic about supply availability improving over time » Visibility remains hampered by supplier decommitments and the non-linear timing » Anticipate this volatile supply environment to continue through the end of 2022 $ in millions (except per share amounts
Slide 16: Appendix
APPENDIX
Slide 17: Consolidated GAAP Results: YTD'22
CONSOLIDATED GAAP RESULTS: YTD’22 $ in millions (except per share amounts) YTD 2022 YTD 2021 Change Revenue $1,328.1 $1,495.9 -11% Growth in constant currency -8% Gross margin 28.7% 30.2% -150 bps Operating income (loss) ($19.8) $28.2 NM Net loss attributable to Itron, Inc. ($31.9) ($22.4) -43% Loss
Slide 18: Consolidated Non-GAAP & Cash Results: YTD'22
CONSOLIDATED NON-GAAP & CASH RESULTS: YTD’22 $ in millions (except per share amounts) YTD 2022 YTD 2021 Change Non-GAAP operating income $33.1 $82.2 -60% Non-GAAP operating margin 2.5% 5.5% -300 bps Adjusted EBITDA $60.7 $112.0 -46% Adjusted EBITDA margin 4.6% 7.5% -290 bps Non-GAAP net income attri
Slide 19: Revenue Year-over-Year Bridge: YTD'22
REVENUE YEAR-OVER-YEAR BRIDGE: YTD’22 -22% flat -2% -8% Chart in Millions. Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2022 ITRON PROPRIETARY Q3 2022 Earnings Conference Call | 19
Slide 20: Non-GAAP EPS Year-over-Year Bridge: YTD'22
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: YTD’22 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2022 ITRON PROPRIETARY Q3 2022 Earnings Conference Call | 20
Slide 21: Device Solutions Segment: YTD'22
DEVICE SOLUTIONS SEGMENT: YTD’22 Revenue, gross margin and operating margin $ in Millions, actual currency Revenue down 31% and 22% in constant currency » Product pruning and sale of our C&I gas business $488 » Component shortages resulting in unfulfilled demand 17.5% $338 Gross margin down 260 bps
Slide 22: Networked Solutions Segment: YTD'22
NETWORKED SOLUTIONS SEGMENT: YTD’22 Revenue, gross margin and operating margin $ in Millions, actual currency $828 $818 Revenue down 1% and flat in constant currency » Component shortages resulted in delayed deployments Gross margin down 390 bps 36.1% » Inflationary pressures 32.2% » Unfavorable pro
Slide 23: Outcomes Segment: YTD'22
OUTCOMES SEGMENT: YTD’22 Revenue, gross margin and operating margin $ in Millions, actual currency $180 Revenue down 5% and 2% in constant currency $172 » Decline in EMEA prepay business 37.8% 39.5% Gross margin up 170 bps » Increased operational efficiencies Operating margin down 240 bps 19.2% » Hi
Slide 24: FX Impact Summary
FX IMPACT SUMMARY $ in Millions Average USD/Euro: Average USD/Euro: $1.01 Q3’22 vs $1.18 Q3’21 $1.07 YTD’22 vs $1.20 YTD’21 YoY YoY Change YoY YoY Change Revenue Q3'22 Excluding Revenue YTD'22 Excluding Change Change FX FX Device Solutions $94 -38.3% -27.3% Device Solutions $338 -30.7% -22.2% Networ
Slide 25: Non-GAAP Financial Measures
NON-GAAP FINANCIAL MEASURES To supplement our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States (GAAP), we use certain adjusted or non- GAAP financial measures, including non-GAAP operating expense, non-GAAP operati
Slide 26: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2022 ITRON PROPRIETARY Q3 2022 Earnings Conference Call | 26
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2022 ITRON PROPRIETARY Q3 2022 Earnings Conference Call | 27
Slide 28: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2022 ITRON PROPRIETARY Q3 2022 Earnings Conference Call | 28
Slide 29: Thank You
INVESTOR RELATIONS CONTACTS Kenneth P. Gianella Vice President, Investor Relations 669-770-4643 ken.gianella@itron.com David Means Director, Investor Relations Thank You 737-242-8448 david.means@itron.com www.itron.com