It has been about a month since the last earnings report for Itron (ITRI Quick QuoteITRI - Free Report) . Shares have lost about 3.4% in that time frame, underperforming the S&P 500.

But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Itron due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

Itron’s Q2 Earnings Top Estimates

Itron 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.

Segments in Detail

Device Solutions (19.8% of total revenues): Revenue declined 1% (3% in constant currency or cc) to $111.4 million primarily due to lower legacy electricity product sales.

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.

Margin Strength Highlights Operational Improvements

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, it 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.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a upward trend in fresh estimates.

VGM Scores

At this time, Itron has a average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for value investors.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Itron has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.