Badger Meter: 3 Key Takeaways for Long-Term Investors
On its third quarter of 2026 earnings call, held on Oct. 22, 2026, Badger Meter (NYSE:BMI) announced that its base sales, which exclude its May 2026 acquisition of water monitoring company UDlive, grew 5% sequentially over the second quarter. The utility water technology company maintained profitability near the top of its long-term target range despite electronic component supply constraints. Long-term investors should care because expanding high-margin software sales continue to raise the company’s baseline profitability floor. Three things management said stand out.
Badger Meter relies on its structural mix, the proportion of software-as-a-service recurring software subscriptions and ultrasonic meters relative to hardware, to protect its earnings. Base gross margin, which excludes inventory accounting adjustments from the UDlive deal, reached 42.1% in the quarter.
Rapid artificial intelligence data center construction has tightened supply for electronic components, driving up circuit board costs across industrial manufacturing. Badger Meter leverages its essential position in municipal utility infrastructure to pass these cost increases on to customers without sacrificing sales volume.
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