Slide 1: Second 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 Second Quarter 2022 Earnings Conference Call August 4, 2022 ©2022 ITRON PROPRIETARY ©2022 ITRON PROPRIETARY Q2 2022 Earnings Conf
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 and Guidance Update » Q&A
Slide 4: Q2'22 Performance Summary
Q2’22 PERFORMANCE SUMMARY » Revenue of $432 million » Adjusted EBITDA of $17 million » Non-GAAP diluted EPS of $0.07 » Free cash flow of $10 million ©2022 ITRON PROPRIETARY Q2 2022 Earnings Conference Call | 4
Slide 5: Bookings and Backlog
BOOKINGS AND BACKLOG $4.1 » Q2’22 bookings of $612M $4.0 $3.9 $3.5 $3.4 » Q2’22 Book to bill of 1.4 » Record ending backlog of $4.1B $1.5 $1.6 $1.7 $1.4 $1.4 » Record 12-month backlog of $1.7B Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 12-Month Backlog Total Backlog Note: Chart in US$ Billions, the revenue from
Slide 6: Operational Insights
OPERATIONAL INSIGHTS » Continued robust market demand for our solutions » Supply constraints persisting and will continue to impact H2 2022 » Inflationary pressures and operational inefficiencies impacting performance » Progress with managing and implementing price/cost actions but work to do ©2022
Slide 7: Consolidated GAAP Results: Q2'22
CONSOLIDATED GAAP RESULTS: Q2’22 $ in millions (except per share amounts) Q2 2022 Q2 2021 Change Revenue $431.9 $489.4 -12% Change in constant currency -8% Gross margin 29.2% 30.6% -140 bps Operating loss ($33.5) ($6.9) NM Net loss attributable to Itron, Inc. ($37.0) ($33.1) -12% Loss per share ($0.
Slide 8: Consolidated Non-GAAP & Cash Results: Q2'22
CONSOLIDATED NON-GAAP & CASH RESULTS: Q2’22 $ in millions (except per share amounts) Q2 2022 Q2 2021 Change Non-GAAP operating income $9.0 $26.9 -66% Non-GAAP operating margin 2.1% 5.5% -340 bps Non-GAAP net income attributable to Itron, Inc. $3.1 $12.6 -75% Adjusted EBITDA $17.5 $36.1 -52% Adjusted
Slide 9: Revenue Year-over-Year Bridge: Q2'22
REVENUE YEAR-OVER-YEAR BRIDGE: Q2’22 -27% 2% -3% -8% Chart in Millions, Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2022 ITRON PROPRIETARY Q2 2022 Earnings Conference Call | 9
Slide 10: Non-GAAP EPS Year-over-Year Bridge: Q2'22
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: Q2’22 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2022 ITRON PROPRIETARY Q2 2022 Earnings Conference Call | 10
Slide 11: Device Solutions Segment: Q2'22
DEVICE SOLUTIONS SEGMENT: Q2’22 Revenue, gross margin and operating margin $ in Millions, actual currency $163 Revenue down 36% and 27% in constant currency » Product pruning and sale of our C&I gas business 18.7% » Unfavorable $15M FX impact $105 13.2% Gross margin down 550 bps » Inflationary press
Slide 12: Networked Solutions Segment: Q2'22
NETWORKED SOLUTIONS SEGMENT: Q2’22 Revenue, gross margin and operating margin $ in Millions, actual currency $265 $269 Revenue up 2% as reported and in constant currency » Ramp of new deployments 36.2% » Partially offset by component shortages resulting in unfulfilled 33.4% demand Gross margin down
Slide 13: Outcomes Segment: Q2'22
OUTCOMES SEGMENT: Q2’22 Revenue, gross margin and operating margin $ in Millions, actual currency Revenue down 6% and 3% in constant currency $61 $58 » Decrease in product and software license sales 38.2% 38.7% Gross margin up 50 bps » Increased operational efficiencies Operating margin down 460 bps
Slide 14: Debt and Liquidity Overview: June 30, 2022
DEBT AND LIQUIDITY OVERVIEW: JUNE 30, 2022 US$M Debt $460 » Net leverage 3.8x at end of Q2’22 » Zero interest convertible notes $251 Free Cash Flow and Liquidity » Q2 Free cash flow of $10M » Cash and equivalents of $209M » $500M revolver 1 Total Debt Net Debt 1. Excludes amortization of debt fees.
Slide 15: Mid-Year Guidance Update
MID-YEAR GUIDANCE UPDATE Prior Guidance Revised Guidance Revenue $2.0 - $2.1B $1.85 - $1.9B Non-GAAP EPS $1.25 - $1.75 $0.70 - $0.90 The revised guidance assumes a euro to US dollar foreign exchange rate of 1.06 on average in the second half of 2022, average fully diluted shares outstanding of appro
Slide 16: Itron's ESG Targets
ITRON’S ESG TARGETS 2021 ESG Report Published in June Committed to do our part to limit global warming to 1.5⁰C Developing solutions that enable our customers to improve sustainability & conservation Efforts aligned to the U.N. SDG’s and a member of the U.N. Global Compact Will achieve a >50% reduct
Slide 17: Appendix
APPENDIX
Slide 18: Consolidated GAAP Results: YTD'22
CONSOLIDATED GAAP RESULTS: YTD’22 $ in millions (except per share amounts) YTD 2022 YTD 2021 Change Revenue $907.2 $1,009.0 -10% Growth in constant currency -7% Gross margin 28.8% 31.4% -260 bps Operating income (loss) ($26.7) $24.0 NM Net loss attributable to Itron, Inc. ($36.1) ($20.5) -76% Loss p
Slide 19: 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 $18.3 $65.8 -72% Non-GAAP operating margin 2.0% 6.5% -450 bps Adjusted EBITDA $36.4 $85.9 -58% Adjusted EBITDA margin 4.0% 8.5% -450 bps Non-GAAP net income attrib
Slide 20: Revenue Year-over-Year Bridge: YTD'22
REVENUE YEAR-OVER-YEAR BRIDGE: YTD’22 -20% flat -2% -7% Chart in Millions. Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2022 ITRON PROPRIETARY Q2 2022 Earnings Conference Call | 20
Slide 21: Non-GAAP EPS Year-over-Year Bridge: YTD'22
NON-GAAP EPS YEAR-OVER-YEAR BRIDGE: YTD’22 US$ per share Quarterly totals reflect actual currencies; all variances other than FX exclude currency impact. Chart includes rounding. ©2022 ITRON PROPRIETARY Q2 2022 Earnings Conference Call | 21
Slide 22: Device Solutions Segment: YTD'22
DEVICE SOLUTIONS SEGMENT: YTD’22 Revenue, gross margin and operating margin $ in Millions, actual currency Revenue down 27% and 20% in constant currency » Product pruning and sale of our C&I gas business $336 » Component shortages resulting in unfulfilled demand $244 » Unfavorable $24M FX impact 18.
Slide 23: Networked Solutions Segment: YTD'22
NETWORKED SOLUTIONS SEGMENT: YTD’22 Revenue, gross margin and operating margin $ in Millions, actual currency $553 Revenue down 1% and flat in constant currency $548 » Component shortages resulted in unfulfilled demand » Partially offset by ramp of new deployments 37.7% 33.1% Gross margin down 460 b
Slide 24: Outcomes Segment: YTD'22
OUTCOMES SEGMENT: YTD’22 Revenue, gross margin and operating margin $ in Millions, actual currency Revenue down 4% and 2% in constant currency » Decrease in product and software license sales $120 $115 Gross margin up 80 bps 37.9% 38.7% » Increased operational efficiencies » Favorable mix Operating
Slide 25: Revenue: FX Impact Summary
REVENUE: FX IMPACT SUMMARY $ in Millions Average USD/Euro: Average USD/Euro: $1.07 Q2’22 vs $1.21 Q2’21 $1.09 YTD’22 vs $1.21 YTD’21 YoY YoY Change YoY YoY Change Revenue Q2'22 Excluding Revenue YTD'22 Excluding Change Change FX FX Device Solutions $104.8 -35.7% -26.5% Device Solutions $244.4 -27.2%
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 operati
Slide 27: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2022 ITRON PROPRIETARY Q2 2022 Earnings Conference Call | 27
Slide 28: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2022 ITRON PROPRIETARY Q2 2022 Earnings Conference Call | 28
Slide 29: GAAP to Non-GAAP Reconciliations
GAAP TO NON-GAAP RECONCILIATIONS ©2022 ITRON PROPRIETARY Q2 2022 Earnings Conference Call | 29
Slide 30: 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