Slide 1: Third 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 Third Quarter 2023 Earnings Conference Call November 2, 2023 ©2023 ITRON PROPRIETARY ©2023 ITRON PROPRIETARY Q3 2023 Earnings Confere
Slide 2: Conference Call Agenda
CONFERENCE CALL AGENDA » CEO – Business and Operations Update » CFO – Financial Results and Guidance Update » 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: Third Quarter 2023 Performance Summary
THIRD QUARTER 2023 PERFORMANCE SUMMARY » Revenue of $561 million » Adjusted EBITDA of $68 million » Non-GAAP diluted EPS of $0.98 » Free cash flow of $28 million ©2023 ITRON PROPRIETARY Q3 2023 Earnings Conference Call | 4
Slide 5: Bookings and Backlog
BOOKINGS AND BACKLOG » Q3’23 bookings of $413M $4.2 $4.6 $4.6 $4.5 $4.3 » Q3’23 book to bill of 0.7 » Ending backlog of $4.3B $2.1 $1.9 $2.0 $2.0 $1.6 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 12-Month Backlog Total Backlog Note: Chart in US$ billions, the revenue from Q3’23 12-month backlog may vary based on a
Slide 6: Operational Insights
OPERATIONAL INSIGHTS » Operational discipline supporting margin expansion » Supply chain recovery occurring faster than expected » Multi-year backlog addresses critical utility needs, including electrification, safety, resilience, and sustainability. » Itron technology helps customers meet sustainab
Slide 7: Consolidated GAAP Results: Q3'23
CONSOLIDATED GAAP RESULTS: Q3’23 $ in millions (except per share amounts) Q3 2023 Q3 2022 Change Revenue $560.8 $420.9 33% Change in constant currency 32% Gross margin 33.4% 28.5% 490 bps Operating income $54.9 $6.9 697% Net income attributable to Itron, Inc. $40.2 $4.1 876% Earnings per share – dil
Slide 8: Consolidated Non-GAAP & Cash Results: Q3'23
CONSOLIDATED NON-GAAP & CASH RESULTS: Q3’23 $ in millions (except per share amounts) Q3 2023 Q3 2022 Change Non-GAAP operating income $59.0 $14.8 299% Non-GAAP operating margin 10.5% 3.5% 700 bps Non-GAAP net income attributable to Itron, Inc. $44.9 $10.5 327% Adjusted EBITDA $68.5 $24.3 181% Adjust
Slide 9: Revenue Year-over-Year Bridge: Q3'23
REVENUE YEAR-OVER-YEAR BRIDGE: Q3’23 +13% +43% +13% +33% Chart in millions and includes rounding. Segment changes in constant currency. ©2023 ITRON PROPRIETARY Q3 2023 Earnings Conference Call | 9
Slide 10: Non-GAAP EPS Year-over-Year Bridge: Q3'23
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: Q3’23 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2023 ITRON PROPRIETARY Q3 2023 Earnings Conference Call | 10
Slide 11: Device Solutions Segment: Q3'23
DEVICE SOLUTIONS SEGMENT: Q3’23 Revenue, gross margin and operating margin $ in millions, actual currency Revenue increased 18% (13% in constant currency) $111 » Growth in water meter sales 24.3% Gross margin increased 860 bps $94 » Favorable product mix » Increased operational efficiencies 15.7% 16
Slide 12: Networked Solutions Segment: Q3'23
NETWORKED SOLUTIONS SEGMENT: Q3’23 Revenue, gross margin and operating margin $ in millions, actual currency $385 Revenue increased 43% (43% in constant currency) $270 » Improving supply chain conditions enabled higher customer 35.1% deliveries 30.3% Gross margin increased 480 bps 26.6% » Favorable
Slide 13: Outcomes Segment: Q3'23
OUTCOMES SEGMENT: Q3’23 Revenue, gross margin and operating margin $ in millions, actual currency $65 Revenue increased 14% (13% in constant currency) $57 » Increase in recurring services 41.0% Gross margin decreased 240 bps 38.6% » Lower software licenses activity, partially offset by increased rec
Slide 14: Debt and Liquidity Overview: September 30, 2023
DEBT AND LIQUIDITY OVERVIEW: SEPTEMBER 30, 2023 US$M Debt $460 » Net leverage 1.1x at end of Q3’23 » Zero interest convertible notes Free Cash Flow and Liquidity $205 » Free cash flow of $28M » Cash and equivalents of $255M » $500M revolver; recently extended to 2026 1 Total Debt Net Debt 1. Exclude
Slide 15: Q4'23 Outlook
Q4’23 OUTLOOK Revenue of $565 - $575 million • At the midpoint, up 22% vs. Q4 2022 Non-GAAP diluted EPS of $0.70 - $0.80 • At the midpoint, up 6% vs. Q4 2022 • Q4 2022 ETR was -30%; normalized for 25% ETR, Y/Y growth is 80%+ ©2023 ITRON PROPRIETARY Q3 2023 Earnings Conference Call | 15
Slide 16: 2023 Full-Year Guidance Update
2023 FULL-YEAR GUIDANCE UPDATE Feb ‘23 Aug ‘23 Nov ‘23 Guidance Guidance Guidance Revenue $1.85 - $1.95B $2.11 - $2.14B $2.16 - $2.17B Non-GAAP EPS $0.70 - $1.10 $2.03 - $2.28 $2.83 - $2.93 • Revenue, at the midpoint, up 21% vs. prior year • Up $265M from initial guidance (at the midpoint) • NG EPS,
Slide 17: Appendix
APPENDIX
Slide 18: Consolidated GAAP Results: YTD'23
CONSOLIDATED GAAP RESULTS: YTD’23 $ in millions (except per share amounts) YTD 2023 YTD 2022 Change Revenue $1,596.5 $1,328.1 20% Growth in constant currency 20% Gross margin 32.4% 28.7% 370 bps Operating income (loss) $79.6 ($19.8) NM Net income (loss) attributable to Itron, Inc. $52.5 ($31.9) NM E
Slide 19: Consolidated Non-GAAP & Cash Results: YTD'23
CONSOLIDATED NON-GAAP & CASH RESULTS: YTD’23 $ in millions (except per share amounts) YTD 2023 YTD 2022 Change Non-GAAP operating income $131.7 $33.1 298% Non-GAAP operating margin 8.2% 2.5% 570 bps Adjusted EBITDA $157.2 $60.7 159% Adjusted EBITDA margin 9.8% 4.6% 520 bps Non-GAAP net income attrib
Slide 20: Revenue Year-over-Year Bridge: YTD'23
REVENUE YEAR-OVER-YEAR BRIDGE: YTD’23 +1% +30% +14% +20% Chart in millions and includes rounding. Segment changes in constant currency. ©2023 ITRON PROPRIETARY Q3 2023 Earnings Conference Call | 20
Slide 21: Non-GAAP EPS Year-over-Year Bridge: YTD'23
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: YTD’23 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2023 ITRON PROPRIETARY Q3 2023 Earnings Conference Call | 21
Slide 22: Device Solutions Segment: YTD'23
DEVICE SOLUTIONS SEGMENT: YTD’23 Revenue, gross margin and operating margin $ in Millions, actual currency $338 $342 Revenue up 1% (1% in constant currency) » Growth in water meter sales 22.0% » Partially offset by product pruning and sale of our C&I gas business 14.9% Gross margin up 710 bps 13.4%
Slide 23: Networked Solutions Segment: YTD'23
NETWORKED SOLUTIONS SEGMENT: YTD’23 Revenue, gross margin and operating margin $ in Millions, actual currency $1,059 Revenue up 29% (30% in constant currency) $818 » Improving supply chain conditions enabled higher 34.3% customer deliveries 32.2% Gross margin up 210 bps » Favorable product mix 25.1%
Slide 24: Outcomes Segment: YTD'23
OUTCOMES SEGMENT: YTD’23 Revenue, gross margin and operating margin $ in Millions, actual currency $195 $172 Revenue up 14% (14% in constant currency) » Increase in software license sales and recurring services 39.5% 40.7% Gross margin up 120 bps » Favorable mix with increases in software licenses a
Slide 25: FX Impact Summary
FX IMPACT SUMMARY $ in Millions Average USD/Euro: Average USD/Euro: $1.09 Q3’23 vs $1.01 Q3’22 $1.08 YTD’23 vs $1.07 YTD’22 YoY YoY Change YoY YoY Change Revenue Q3’23 Excluding Revenue YTD’23 Excluding Change Change FX FX Device Solutions $110.8 17.8% 12.6% Device Solutions $342.2 1.1% 1.1% Network
Slide 26: 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 operatin
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2023 ITRON PROPRIETARY Q3 2023 Earnings Conference Call | 27
Slide 28: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2023 ITRON PROPRIETARY Q3 2023 Earnings Conference Call | 28
Slide 29: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2023 ITRON PROPRIETARY Q3 2023 Earnings Conference Call | 29
Slide 30: Thank You
INVESTOR RELATIONS CONTACTS Paul Vincent Vice President, Investor Relations 512-560-1172 paul.vincent@itron.com David Means Director, Investor Relations Thank You 737-242-8448 david.means@itron.com www.itron.com