Slide 1: Second 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 Second Quarter 2023 Earnings Conference Call August 3, 2023 ©2023 ITRON PROPRIETARY ©2023 ITRON PROPRIETARY Q2 2023 Earnings Conferen
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: Second Quarter 2023 Performance Summary
SECOND QUARTER 2023 PERFORMANCE SUMMARY » Revenue in Q2’23 of $541 million » Adjusted EBITDA in Q2’23 of $49 million » Non-GAAP diluted EPS in Q2’23 of $0.65 » Free cash flow in Q2’23 of $36 million ©2023 ITRON PROPRIETARY Q2 2023 Earnings Conference Call | 4
Slide 5: Bookings and Backlog
BOOKINGS AND BACKLOG » Q2’23 bookings of $475M $4.2 $4.6 $4.6 $4.5 $4.1 » Q2’23 book to bill of 0.9 » Ending backlog of $4.5B $2.1 $1.9 $2.0 $1.7 $1.6 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 12-Month Backlog Total Backlog Note: Chart in US$ billions, the revenue from Q2’23 12-month backlog may vary based on a
Slide 6: Operational Insights
OPERATIONAL INSIGHTS » Operating environment more stable » Component availability improving faster than anticipated » Strong execution and operating leverage demonstrated during Q2 2023 » Itron technology creates customer value and enhances digital capabilities » Distributed Intelligence deployment
Slide 7: Consolidated GAAP Results: Q2'23
CONSOLIDATED GAAP RESULTS: Q2’23 $ in millions (except per share amounts) Q2 2023 Q2 2022 Change Revenue $541.1 $431.9 25% Change in constant currency 25% Gross margin 32.1% 29.2% 290 bps Operating income (loss) $35.1 ($33.5) NM Net income (loss) attributable to Itron, Inc. $24.2 ($37.0) NM Earnings
Slide 8: Consolidated Non-GAAP & Cash Results: Q2'23
CONSOLIDATED NON-GAAP & CASH RESULTS: Q2’23 $ in millions (except per share amounts) Q2 2023 Q2 2022 Change Non-GAAP operating income $41.4 $9.0 358% Non-GAAP operating margin 7.6% 2.1% 550 bps Non-GAAP net income attributable to Itron, Inc. $29.8 $3.1 852% Adjusted EBITDA $49.3 $17.5 182% Adjusted
Slide 9: Revenue Year-over-Year Bridge: Q2'23
REVENUE YEAR-OVER-YEAR BRIDGE: Q2’23 +7% +34% +17% +25% Chart in millions, Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2023 ITRON PROPRIETARY Q2 2023 Earnings Conference Call | 9
Slide 10: Non-GAAP EPS Year-over-Year Bridge: Q2'23
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: Q2’23 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2023 ITRON PROPRIETARY Q2 2023 Earnings Conference Call | 10
Slide 11: Device Solutions Segment: Q2'23
DEVICE SOLUTIONS SEGMENT: Q2’23 Revenue, gross margin and operating margin $ in millions, actual currency Revenue increased 8% (7% in constant currency) $113 » Growth in Water vertical $105 21.8% Gross margin increased 860 bps » Favorable mix » Increased operational efficiencies 13.2% 12.4% Operatin
Slide 12: Networked Solutions Segment: Q2'23
NETWORKED SOLUTIONS SEGMENT: Q2’23 Revenue, gross margin and operating margin $ in millions, actual currency $361 Revenue increased 34% (34% in constant currency) $269 » Improving supply chain conditions Gross margin increased 40 bps 33.4% 33.8% » Favorable product mix » Improved operational efficie
Slide 13: Outcomes Segment: Q2'23
OUTCOMES SEGMENT: Q2’23 Revenue, gross margin and operating margin $ in millions, actual currency $67 Revenue increased 16% (17% in constant currency) » Increase in recurring services and software license sales, $58 driven by Distributed Intelligence 38.7% 40.8% Gross margin increased 210 bps » Incr
Slide 14: Debt and Liquidity Overview: June 30, 2023
DEBT AND LIQUIDITY OVERVIEW: JUNE 30, 2023 US$M Debt $460 » Net leverage 1.6x at end of Q2’23 » Zero interest convertible notes $227 Free Cash Flow and Liquidity » Free cash flow of $36M » Cash and equivalents of $233M » $500M revolver 1 Total Debt Net Debt 1. Excludes amortization of debt fees. ©20
Slide 15: Q3'23 Outlook
Q3’23 OUTLOOK Revenue of $535 - $545 million • At the midpoint, up 28% vs. Q3 2022 Non-GAAP diluted EPS of $0.44 - $0.56 • At the midpoint, up 117% vs. Q3 2022 ©2023 ITRON PROPRIETARY Q2 2023 Earnings Conference Call | 15
Slide 16: 2023 Full-Year Guidance Update
2023 FULL-YEAR GUIDANCE UPDATE Prior Guidance Revised Guidance Revenue $1.85 - $1.95B $2.11 - $2.14B Non-GAAP EPS $0.70 - $1.10 $2.03 - $2.28 • Revenue, at the midpoint, up 12% vs. prior guidance • NG EPS, at the midpoint, up 140% vs. prior guidance ©2023 ITRON PROPRIETARY Q2 2023 Earnings Conferenc
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 $1,035.7 $907.2 14% Growth in constant currency 15% Gross margin 31.9% 28.8% 310 bps Operating income (loss) $24.7 ($26.7) NM Net income (loss) attributable to Itron, Inc. $12.4 ($36.1) NM Ear
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 $72.7 $18.3 297% Non-GAAP operating margin 7.0% 2.0% 500 bps Adjusted EBITDA $88.8 $36.4 144% Adjusted EBITDA margin 8.6% 4.0% 460 bps Non-GAAP net income attribut
Slide 20: Revenue Year-over-Year Bridge: YTD'23
REVENUE YEAR-OVER-YEAR BRIDGE: YTD’23 -3% +23% +14% +15% Chart in Millions. Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2023 ITRON PROPRIETARY Q2 2023 Earnings Conference Call | 20
Slide 21: Non-GAAP EPS Year-over-Year Bridge: YTD'23
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: YTD’23 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2023 ITRON PROPRIETARY Q2 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 $244 Revenue down 5% (3% in constant currency) » Product pruning and sale of our C&I gas business $231 » Partially offset by growth in the Water vertical Gross margin up 630 bps 20.9% » Favorab
Slide 23: Networked Solutions Segment: YTD'23
NETWORKED SOLUTIONS SEGMENT: YTD’23 Revenue, gross margin and operating margin $ in Millions, actual currency $674 Revenue up 23% (23% in constant currency) $548 » Improving supply chain conditions 33.1% 33.8% Gross margin up 70 bps » Favorable product mix » Improved operational efficiencies 24.3% 2
Slide 24: Outcomes Segment: YTD'23
OUTCOMES SEGMENT: YTD’23 Revenue, gross margin and operating margin $ in Millions, actual currency $130 Revenue up 13% (14% in constant currency) » Increase in recurring services and software license sales, $115 driven by Distributed Intelligence 41.8% Gross margin up 310 bps 38.7% » Increase in sof
Slide 25: FX Impact Summary
FX IMPACT SUMMARY $ in Millions Average USD/Euro: Average USD/Euro: $1.09 Q2’23 vs $1.07 Q2’22 $1.08 YTD’23 vs $1.09 YTD’22 YoY YoY Change YoY YoY Change Revenue Q2’23 Excluding Revenue YTD’23 Excluding Change Change FX FX Device Solutions $113.2 8.0% 6.9% Device Solutions $231.4 -5.3% -3.3% 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 Q2 2023 Earnings Conference Call | 27
Slide 28: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2023 ITRON PROPRIETARY Q2 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 Thank You 737-242-8448 david.means@itron.com www.itron.com