Slide 1: Fourth Quarter 2023 Earnings Conference Call
Fourth Quarter 2023 Earnings Conference Call Tom Deitrich – President and Chief Executive Officer Joan Hooper – Senior Vice President and Chief Financial Officer Paul Vincent – Vice President, Investor Relations ©2024 ITRON CONFIDENTIAL PROPRIETARY February 26, 2024
Slide 2: Conference Call Agenda
Conference Call Agenda ▪ CEO – Business and Operations Update ▪ CFO – Financial Results and 2024 Guidance ▪ Q&A
Slide 3: Forward Looking Statements
Forward Looking Statements Certain matters in this presentation and being discussed today, that are not statements of historical fact, constitute forward-looking statements relating to current or future financial performance, management's plans and objectives for future operations, product plans and
Slide 4: Q4 2023 and FY 2023 Performance Summary
Q4 2023 and FY 2023 Performance Summary » Q4 revenue of $577 million and FY revenue of $2.17 billion » Q4 adjusted EBITDA of $68 million and FY adjusted EBITDA of $226 million » Q4 non-GAAP diluted EPS of $1.23 and FY non-GAAP diluted EPS of $3.36 » Q4 free cash flow of $39 million and FY free cash
Slide 5: Bookings and Backlog
Bookings and Backlog » Q4 2023 bookings of $839M $4.5 $4.5 $4.4 $4.2 $4.5 » Book to bill of 1.45 » FY 2023 bookings of $2.16B $2.1 $2.0 $2.0 $2.0 » Ending backlog of $4.5B $1.9 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 12-Month Backlog Total Backlog - Chart in US$ billions, the revenue from Q4’23 12-month backl
Slide 6: Operational Insights
Operational Insights » Customer demand and market trends support strong and stable market outlook » Component supply stable, more predictable » Inventory levels appropriate for a volatile world and to improve resiliency » ~70% of YE 2023 backlog repriced/indexed to address inflationary cost volatili
Slide 7: Consolidated GAAP Results: Q4 2023
Consolidated GAAP Results: Q4 2023 $ in millions (except per share amounts) Q4 2023 Q4 2022 Change Revenue $577.2 $467.5 23% Change in constant currency 22% Gross margin 34.0% 30.1% 390 bps Operating income $49.3 $12.4 298% Net income attributable to Itron, Inc. $44.4 $22.2 100% Earnings per share –
Slide 8: Consolidated Non-GAAP & Cash Results: Q4 2023
Consolidated Non-GAAP & Cash Results: Q4 2023 $ in millions (except per share amounts) Q4 2023 Q4 2022 Change Non-GAAP operating income $60.9 $25.3 141% Non-GAAP operating margin 10.6% 5.4% 520 bps Non-GAAP net income attributable to Itron, Inc. $56.7 $32.2 76% Adjusted EBITDA $68.4 $34.4 99% Adjust
Slide 9: Revenue Year-Over-Year Bridge: Q4 2023
Revenue Year-Over-Year Bridge: Q4 2023 +9% +30% +9% +23% Chart in millions and includes rounding. Segment changes in constant currency. ©2024 ITRON CONFIDENTIAL PROPRIETARY Q4 2023 Earnings Conference Call | 9
Slide 10: Non-GAAP EPS Year-Over-Year Bridge: Q4 2023
Non-GAAP EPS Year-Over-Year Bridge: Q4 2023 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2024 ITRON CONFIDENTIAL PROPRIETARY Q4 2023 Earnings Conference Call | 10
Slide 11: Device Solutions Segment: Q4 2023
Device Solutions Segment: Q4 2023 Revenue, gross margin and operating margin $ in millions, actual currency Revenue increased 13% (9% in constant currency) $114 » Growth in EMEA smart water meter and communication module sales $100 26.9% Gross margin increased 1,560 bps 17.5% » Favorable product mix
Slide 12: Networked Solutions Segment: Q4 2023
Networked Solutions Segment: Q4 2023 Revenue, gross margin and operating margin $ in millions, actual currency $391 Revenue increased 30% (30% in constant currency) $301 » Strong factory output enabled by improved component supply 35.0% » Increase in new deployments 32.8% Gross margin increased 220
Slide 13: Outcomes Segment: Q4 2023
Outcomes Segment: Q4 2023 Revenue, gross margin and operating margin $ in millions, actual currency $73 Revenue increased 10% (9% in constant currency) » Increase in recurring and one-time services $66 Gross margin decreased 670 bps 46.5% » Decrease of software licensing activity 39.8% Operating mar
Slide 14: Full Year 2023 Summary
Full Year 2023 Summary Revenue Year-Over-Year Bridge1 » Revenue of $2.17B up 21% from 2022 » Bookings of $2.16B » Gross margin of 32.8% » Adj EBITDA of $226M Non-GAAP EPS Year-Over-Year Bridge2 » Non-GAAP EPS of $3.36 » Free cash flow of $98M 1. Chart in millions and includes rounding. Segment chang
Slide 15: Debt and Liquidity Overview: December 31, 2023
Debt and Liquidity Overview: December 31, 2023 US$M Debt $460 » Net leverage 0.7x at end of Q4 2023 » Zero interest convertible notes $158 Free Cash Flow and Liquidity » Free cash flow of $39M in Q4 2023 » Cash and equivalents of $302M Total Debt 1 Net Debt » $500M revolver; 2026 maturity 1. Exclude
Slide 16: 2024 Guidance
2024 Guidance Revenue of $2.275 - $2.375 billion » ~7% absolute growth at the midpoint » ~16% growth implied when normalized for supply constrained revenue conversion Non-GAAP diluted EPS of $3.40 - $3.80 » ~14% growth at the midpoint (normalized @ 25% tax rate for both years) Assumptions: » Euro/US
Slide 17: Q1 2024 Outlook
Q1 2024 Outlook Revenue of $575 - $585 million » ~17% growth at the midpoint Non-GAAP diluted EPS of $0.80 - $0.90 » ~68% growth at the midpoint (normalized @ 25% tax rate for both years) ©2024 ITRON CONFIDENTIAL PROPRIETARY Q4 2023 Earnings Conference Call | 17
Slide 18: Appendix
Appendix ©2024 ITRON CONFIDENTIAL PROPRIETARY 18
Slide 19: Consolidated GAAP Results: FY 2023
Consolidated GAAP Results: FY 2023 $ in millions (except per share amounts) FY 2023 FY 2022 Change Revenue $2,173.6 $1,795.6 21% Growth in constant currency 21% Gross margin 32.8% 29.1% 370 bps Operating income (loss) $128.9 ($7.4) NM Net income (loss) attributable to Itron, Inc. $96.9 ($9.7) NM Ear
Slide 20: Consolidated Non-GAAP & Cash Results: FY 2023
Consolidated Non-GAAP & Cash Results: FY 2023 $ in millions (except per share amounts) FY 2023 FY 2022 Change Non-GAAP operating income $192.6 $58.4 230% Non-GAAP operating margin 8.9% 3.3% 560 bps Non-GAAP net income attributable to Itron, Inc. $153.8 $51.0 202% Adjusted EBITDA $225.6 $95.1 137% Ad
Slide 21: Device Solutions Segment: FY 2023
Device Solutions Segment: FY 2023 Revenue, gross margin and operating margin $ in Millions, actual currency $456 Revenue up 4% (3% in constant currency) » Growth in EMEA smart water meter and 23.2% $439 communication module sales » Partially offset by sale of C&I gas business 14.1% 14.4% Gross margi
Slide 22: Networked Solutions Segment: FY 2023
Networked Solutions Segment: FY 2023 Revenue, gross margin and operating margin $ in Millions, actual currency $1,450 Revenue up 30% (30% in constant currency) $1,119 » Strong factory output enabled by improved component supply 34.5% Gross margin up 220 bps 32.3% » Improved cost efficiencies » Highe
Slide 23: Outcomes Segment: FY 2023
Outcomes Segment: FY 2023 Revenue, gross margin and operating margin $ in Millions, actual currency $268 $238 Revenue up 13% (13% in constant currency) » Increased recurring and one-time services 41.4% 40.5% Gross margin down 90 bps » Increased costs Operating margin down 70 bps 19.5% 18.8% » Fall t
Slide 24: FX Impact Summary
FX Impact Summary $ in Millions Average USD/Euro: Average USD/Euro: $1.08 Q4’23 vs $1.02 Q4’22 $1.08 FY’23 vs $1.05 FY’22 YoY YoY Change YoY YoY Change Revenue Q4’23 Excluding Revenue FY’23 Excluding Change Change FX FX Device Solutions $113.5 13.2% 9.4% Device Solutions $455.7 3.9% 3.0% Networked S
Slide 25: Non-GAAP Financial Measures
Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared in accordance with generally accepted accounting principles in the United States (GAAP), we use certain adjusted or non-GAAP financial measures, including non-GAAP operating expense, non-GAAP operatin
Slide 26: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ©2024 ITRON CONFIDENTIAL PROPRIETARY Q4 2023 Earnings Conference Call | 26
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ©2024 ITRON CONFIDENTIAL PROPRIETARY Q4 2023 Earnings Conference Call | 27
Slide 28: GAAP to Non-GAAP Reconciliations
GAAP to Non-GAAP Reconciliations ©2024 ITRON CONFIDENTIAL PROPRIETARY Q4 2023 Earnings Conference Call | 28
Slide 29: Thank You
INVESTOR RELATIONS CONTACTS Paul Vincent Vice President, Investor Relations 512-560-1172 paul.vincent@itron.com David Means Director, Investor Relations 737-242-8448 david.means@itron.com Thank You www.itron.com