Itron Inc. ITRI reported non-GAAP earnings per share (EPS) of $1.59 for second-quarter 2026, which beat the Zacks Consensus Estimate by 22.3%. The company reported earnings of $1.62 per share in the prior-year quarter. The decline was primarily caused by lower interest income and a higher effective tax rate, which was moderated by growing non-GAAP operating income.
Itron generated second-quarter revenue of $563 million, down 7% year over year. The decline was largely attributable to weakness in the Networked Solutions segment, where revenue fell 17% because of project deployment timing and lower shipment volumes. This slowdown appears to be timing-related rather than demand-driven, as utilities continue investing heavily in grid modernization. Although headline revenue fell short of expectations, the underlying demand environment remains healthy, supported by increasing investments in grid resilience, electrification and infrastructure modernization.
The most encouraging takeaway was management's decision to raise its earnings guidance for 2026. Itron now forecasts non-GAAP EPS between $6.3 and $6.5, up from the prior view of $5.75-$6.25. The higher earnings outlook reflects continued strength in margin expansion, operational execution, demand from utility customers and integration of recent acquisitions. The company reaffirmed its full-year revenue outlook, narrowing the range to $2.37-$2.41 billion, with midpoint growth of 1% year over year. Revenue is expected to be back-end loaded, with second-half revenue projected to grow about 8% year over year and sequentially, consistent with prior expectations.
Product revenues were $453.5 million (80.6% of total revenues), down 12.3% year over year. Service revenues totaled $109.4 million (19.4%), up 22.2%.
At quarter-end, total backlog was $4.4 billion, only slightly below last year's $4.5 billion. Quarterly bookings totaled $550 million, demonstrating continued customer demand despite quarterly revenue fluctuations.
In response to a sizable backlog, expanded bottom line expectation, and continued investment in grid modernization and infrastructure resilience, ITRI’s shares soared 26.2% in trading and closed the session at $107.02 on July 28, 2026.  The stock has gained 23.7% in the past month against the Zacks Electronics-Testing Equipment industry’s fall of 0.3%.
Image Source: Zacks Investment Research
Segments in Detail
Device Solutions (19.8% of total revenues): Revenue declined 1% (3% in constant currency or cc) to $111.4 primarily due to lower legacy electricity product sales. Our estimate was $113.1 million.
Networked Solutions (60.3%): Revenues dipped 17% to $339.2 million, primarily due to the timing of project deployments.
Outcomes (17.1%): Revenues rose 13% to $96.4 million, driven by growth in recurring and services revenue.
Resiliency Solutions (2.8%): Sales, bolstered by the Urbint and Locusview acquisitions, contributed $16 million, with integration progressing according to plan. We estimate the metric at $19 million.
Adjusted gross margin expanded to 41.4%, representing an impressive 460 basis-point improvement over the prior-year period. The margin expansion was driven by improved customer mix, higher-margin product mix, operational efficiencies and better execution across manufacturing and supply chains.
Non-GAAP operating expenses were $144 million, up from $141.4 million a year ago, reflecting the impact of the Urbint and Locusview acquisitions.
Non-GAAP operating income rose to $89 million from $82.2 million a year ago, as stronger gross profit more than offset higher operating expenses.
Balance Sheet & Cash Flows
As of June 30, 2026, cash and cash equivalents totaled $745.2 million compared with $1.1 billion as of March 31, 2026. Accounts receivable were $351.1 million.
As of June 30, net long-term debt was $1.6 billion, the same as of March 31.
Second-quarter operating cash flow reached $88 million compared with $97 million last year. Free cash flow totaled $81 million, down from $91 million. The decline mainly reflected higher tax payments and lower interest income. These were partially offset by favorable working-capital timing.
During the quarter, Itron repurchased $52 million of its shares through open-market buybacks under its existing share repurchase program.
Q3 2026 Outlook
For the third quarter of 2026, ITRI expects revenues to be between $590 million and $600 million, up 2% year over year at the midpoint.
Non-GAAP EPS is anticipated to be in the range of $1.5-$1.6, with about a 1% rise at the midpoint from last year.
International Business Machines Corporation IBM reported relatively modest second-quarter 2026 results with adjusted earnings of $2.93 per share, up 5% year over year and in line with the Zacks Consensus Estimate. Revenues rose 1.1% to $17.16 billion but missed the consensus mark of $17.32 billion by 0.9%. The top-line miss reflected delayed large, capital-expenditure-sensitive software transactions and weaker IBM Z revenues.
Cadence Design Systems CDNS delivered strong second-quarter 2026 results, driven by broad-based demand for its AI-oriented portfolio amid robust design activity and new system architectures across hyperscaler infrastructure and physical AI. Non-GAAP earnings per share (EPS) of $2.11 beat the Zacks Consensus Estimate by 2.9%, increased 27.9% year over year and topped management’s guided range of $2.02 to $2.08. Revenues of $1.584 billion beat the Zacks Consensus Estimate by 0.5% and increased 24.2% year over year. The figure was within the management’s guided range of $1.555-$1.595 billion.
Progress Software Corporation PRGS reported second-quarter fiscal 2026 results wherein revenues came in at $253 million, up 7% year over year and 6% on a constant currency (cc) basis. ARR of $868 million inched up 2% year over year on a cc basis. PRGS reported a 16% year-over-year increase in non-GAAP earnings per share, which stood at $1.62.Â
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