貝奇邁特 (BMI) 2026 年第三季法說會：利潤率提升與第四季成長展望

重點總覽

• 2026 財年第三季銷售額為 2.359 億美元，與去年同期持平。扣除來自 UDlive 的 560 萬美元後，基礎銷售額年減 2%，但季增 5%。
• 營業利潤增長 4%，營業利益率擴張 60 個基點至 20.2%。基礎營業利益率達 20.9%，上升 130 個基點。
• 毛利率上升 120 個基點至 41.9%。超音波水錶的有利產品組合與更高的 SaaS 營收，抵銷了電子零件成本壓力以及 UDlive 存貨公平價值調升攤銷的影響。
• 稀釋後每股盈餘 (EPS) 由 1.19 美元成長 4% 至 1.24 美元。自由現金流為 4,030 萬美元，去年同期則為 4,820 萬美元。
• 管理層預期第四季基礎銷售額將實現季增與年增，儘管工作天數減少了 5%。管理層補充說明，全年有機營收預計將呈低個位數百分比下滑。
• 貝奇計量 (Badger Meter) 預期成長動能將延續至 2027 年，不過管理層並未提供具體的年度預測，並強調專案時程存在變數。

核心財務數據

業務與營運表現

隨著先前得標的專案持續量產擴大，包括向波多黎各水道暨污水管理局 (PRASA) 進一步出貨，基礎公用事業水務銷售額季增 5%。AMI 相關產品銷售額下滑，部分被軟體營收的增加所抵銷。

管理層形容公用事業的潛在需求相當穩健。在經歷異常疲軟的第一季後，第二季與第三季的短週期需求已恢復正常。公司表示，從公用事業機構與顧問評估專案、進行 RFP（徵求建議書）到積極部署的整體管道，依然如近年來一樣強勁。

在面對基期較高的挑戰下，流量儀表銷售額仍年增 2%。貝奇計量 (Badger Meter) 也指出資料中心應用的需求有所增加，不過這部分的營收基期相對仍小。

該公司正式推出 OneNetwork，這是一個整合 AMI、網路監測與水質數據的即時平台。該平台旨在幫助公用事業機構檢測水壓事件、水質變化及無收益水異常增加，同時協調營運應對措施。

UDlive 與 SmartCover 持續支持貝奇計量 (Badger Meter) 將業務拓展至傳統水錶量測領域之外。管理層表示，這兩項業務均符合公司的長期成長策略。

管理層業績展望

隨著得標的公用事業專案進一步推進，管理層預期 2026 財年第四季基礎銷售額將實現季增與年增。公司將第四季預期的成長形容為溫和，並指出受假期影響，該季的工作天數減少了 5%。

針對 2026 全年，管理層澄清預計有機營收將呈低個位數百分比下滑。

貝奇計量 (Badger Meter) 對於將成長動能延續至 2027 年並重回高個位數成長的戰略目標表示有信心。然而，由於專案部署與短週期需求可能按季度發生變化，公司拒絕提供具體的 2027 年預測。

公司持續預計毛利率將保持在預定的 39% 至 42% 區間內。與 UDlive 相關的初步年度無形資產攤銷額維持在大約 500 萬美元。

風險與關注焦點

隨著 AI 和資料中心建設拉動整個供應鏈的需求，電子零件成本與供應緊張的壓力進一步升溫。管理層表示，截至目前的定價、採購及營運措施已減緩相關影響，但季度之間的時程波動效應仍有可能發生。

大型公用事業專案的進度可能因安裝人力、天候及客戶時程安排而起伏不定。PRASA 已於第二季與第三季開始接收產品，預計於第四季展開安裝，但管理層警告切勿假設安裝進度會呈現線性增長。

由於營收認列時程與電子零件安全庫存的影響，庫存水準仍高於正常值。公司預計在年底結算時逐步降低這些庫存餘額。

利潤率表現對產品組合仍具敏感度，包括超音波水錶、軟體、統包工程專案及電子零件成本。此外，UDlive 的存貨公平價值調升攤銷亦對第三季毛利率產生稀釋作用。

分析師問答亮點

• 第四季及全年營收：管理層預期第四季基礎銷售額將呈溫和的季增與年增。管理層補充說明，全年有機營收應呈低個位數百分比下滑。
• 利潤率表現強勁：超音波水錶比重提升與軟體業務持續成長是主要的正面驅動因素。管理層表示，並無關稅退稅等有意義的一次性收益。
• 2027 年成長潛力：比較基期較低與專案推進，支撐了公司重回高個位數戰略成長軌跡的信心，但管理層並未量化 2027 年的具體展望。
• PRASA 部署進度：產品已於第二季開始出貨並在第三季持續進行。目前已聘請安裝承包商，預計於第四季開始安裝，惟仍受一般執行變數影響。
• 資本配置：貝奇計量 (Badger Meter) 在第三季回購了 5,500 萬美元的股票，授權額度內仍剩餘約 3,500 萬美元。公司於 8 月將年度股利調升 10%，標誌著連續第 34 年調升股利。

電話會議完整逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Ladies and gentlemen, welcome to the Third Quarter 2026 Badger Meter Earnings Conference Call. [Operator Instructions]

It is now my pleasure to turn the conference over to Dan Weltzien, Chief Financial Officer and Treasurer. Please go ahead, Mr. Weltzien.

Daniel Weltzien

Good morning. Thank you for joining the Badger Meter Third Quarter 2026 Earnings Conference Call. I'm here today with Ken Bockhorst, our Chairman, President and Chief Executive Officer; and Bob Wrocklage, our Executive Vice President of North America Municipal Utility.

This morning, we posted the earnings release and related slide presentation on our website. As a reminder, any forward-looking statements made on this call are subject to various risks and uncertainties, the most important of which are outlined in our news release and SEC filings.

On today's call, we may refer to certain non-GAAP financial metrics, including base results, which exclude the impact of UDlive acquired May 1, 2026. Our release and earnings presentation provide a reconciliation between the most directly comparable GAAP measure and any non-GAAP financial measures discussed.

With that, I'll turn the call over to Ken.

Kenneth Bockhorst

Thanks, Dan, and good morning. We were pleased with the sales and operating profit performance in the quarter. Excluding the solid revenue contribution of the UDlive acquisition, third quarter base sales increased 5% sequentially from the second quarter. This was largely in line with our expectations and the result of the ongoing ramp of previously disclosed awarded projects and solid underlying market demand in the quarter.

As noted in the release, we continue to anticipate both sequential and year-over-year improvement in revenue in the fourth quarter and expect to sustain this growth momentum into 2027, which I'll discuss further in the outlook. The team executed well on the profitability front as we continued operating cost management actions to mitigate the uneven 2026 sales cadence while also addressing ongoing material cost pressures related to broad electronic supply chain dynamics as we described last quarter.

I'll turn the call over to Dan to walk through the specifics of the quarter, and then Bob will provide an update on commercial activity, including our formal launch of OneNetwork. I'll then come back to cover the outlook and take your questions.

Go ahead, Dan.

Daniel Weltzien

Thanks, Ken. Turning to Slide 3. Total sales in Q3 were $235.9 million, in line with the third quarter of 2025. Excluding the benefit of UDlive sales of $5.6 million, base sales were down 2% year-over-year. Sequentially, base sales were 5% higher than the second quarter levels with a number of the previously disclosed awarded projects ramping, including another quarter of PRASA shipments. Utility water sales were flat year-over-year and excluding the acquisition, were down 3%, reflecting the same project pacing dynamics mentioned earlier.

Lower AMI-related product sales were partially offset by higher software revenue. It is important to note that base utility sales improved 5% sequentially. Sales of the flow instrumentation product line were up 2% year-over-year against the prior year's most difficult comparison as we experienced broad-based water application demand. We continue to see increasing demand in data center applications for our flow instrumentation products, albeit from a relatively small revenue base. We were pleased with operating profitability this quarter, largely the result of higher sales, ongoing structural mix benefit to gross margins and effective price/cost management.

On a year-over-year basis, operating earnings increased 4% with margins up 60 basis points to 20.2% Base operating profit margins, excluding UDlive were 20.9%, up 130 basis points from last year's third quarter.

Gross margin was 41.9%, up 120 basis points from the third quarter of 2025, reflecting structural mix improvements primarily from higher ultrasonic meter sales and continued growth of our Software-as-a-Service revenue, partially offset by the dilutive impact of UDlive's inventory fair value step-up amortization in the quarter. Base gross margin was 42.1% at the top end of our normalized range, indicative of the resiliency of our overall structural mix and pricing discipline.

Last quarter, I called out the increasing level of electronic component costs and availability pressures to gross margins, which are a byproduct of the AI and data center build-out demand. As demonstrated by our margin performance, we have thus far been able to adequately mitigate these impacts. However, the challenges posed by these pressures have not abated.

Turning to selling, engineering and administrative expenses. The third quarter's $51.1 million was $1.3 million higher year-over-year, including $2.3 million from the addition of UDlive, inclusive of the intangible asset amortization. This was partially offset by lower incentive compensation and the benefit of appropriate cost controls. As a reminder, our preliminary expectation for UDlive intangible asset amortization is approximately $5 million annually. The effective income tax rate in the quarter was 25.1% compared to 26.1% last year.

Finally, diluted earnings per share were $1.24, an increase of 4% from $1.19 in the prior year period. Primary working capital as a percentage of sales was 23.6%, up slightly from 22.9% at the prior quarter end. We anticipate continuing to work down the above-average inventory levels resulting from revenue pacing dynamics and electronic safety stock levels as the year concludes.

Free cash flow was $40.3 million, down from $48.2 million in the prior year comparable quarter. As always, we remain focused on delivering free cash flow conversion in excess of 100% of net earnings. In the third quarter of 2026, we repurchased 423,000 shares for a total of approximately $55 million and have roughly $35 million remaining on our current share repurchase authorization.

With that, I'll turn the call over to Bob.

Robert Wrocklage

Thanks, Dan. A few weeks ago, we had the opportunity to connect with customers, engineering consulting firms and investors at WEFTEC in New Orleans. During the show, we formally launched OneNetwork, our real-time network monitoring and analysis platform for water and wastewater utilities.

For those that attended our Investor Day back in May of this year, you heard an early preview of OneNetwork. In short, OneNetwork brings AMI, network monitoring and water quality data together in one platform, enabling customers to identify issues sooner, coordinate responses faster and make more informed operational decisions.

Why is this important? Utilities today have an immense amount of data from online sensors to SCADA and GIS information. OneNetwork provides a unified real-time view of this disconnected data to make it usable. By moving from fragmented data to a single operational view, OneNetwork empowers utilities through alerts, advanced analytics and workflows to better manage issues such as pressure events, water quality changes and non-revenue water spikes. This saves utilities both time and money while increasing their capability to respond faster and act with purpose.

WEFTEC visitors were able to view OneNetwork demonstrations and customer and consultant interest was high. It serves as another example of our competitive differentiation through innovation, portfolio constructions and the benefits derived by customers from our sole focus on value-driven water technology.

One important way we gain critical feedback and inform our innovation is through our engaged customer community, which encompasses in-person and virtual discussions throughout the year. This week, we had the signature event, ENGAGE Live hosted in our hometown of Milwaukee, where current and prospective customers interacted with our leadership, product management and sales and customer support teams.

Among other outcomes, the event has served to share best practices for implementations, outcomes and funding sources as well as gain insight and share feedback on our future product and software plans. It is clear from talking to customers that utility needs for and interest in our tailorable solutions to meet their increasing challenges remains high, and we are well positioned to capitalize on these opportunities to improve customer outcomes.

With that, I'll turn the call back to Ken.

Kenneth Bockhorst

Thanks, Bob. Looking ahead to the fourth quarter, I'll reiterate here what we said in the release, which is consistent with our discussions over the past few quarters. We continue to anticipate further ramping of awarded utility projects, noting, as always, the inherent unevenness typical of the business. We expect both year-over-year and sequential quarterly base sales growth in the fourth quarter of 2026, despite fewer total operating days given the holidays, which is a standard annual dynamic.

While I won't delve into 2027 specifics at this point, I will note that our conviction in sustaining this growth momentum into 2027 as well as the long-term growth profile for Badger Meter remains intact as we continue to manage usual quarter-to-quarter dynamics. We remain committed to the strategic formula that has driven our prolonged success, focusing on our customers, offering innovative and differentiated technologies and driving operational excellence.

You heard Bob speak to advancements in software outcomes and customer engagement, which reinforce our multiyear opportunities in both metering and beyond the meter growth. Our long-standing capital allocation approach of investing in growth while also returning cash to shareholders also supports this long-term growth strategy.

For example, in August, we increased our annual dividend rate by 10%, marking the 34th consecutive year of increases, and we repurchased $55 million of our outstanding shares, bringing the trailing 4 quarters to over $130 million.

In summary, I remain optimistic about our team's ability to deliver value creation opportunities for our customers and shareholders alike.

With that, operator, please open the line for questions.

Operator

[Operator Instructions]

Your first question comes from the line of Nathan Jones with Stifel.

分析師問答

Nathan Jones

I guess, Ken, I'm going to start off with the 4Q guidance. You guys have talked about full year revenue being flattish. The 4Q guide being sequentially and year-over-year better would be a pretty wide range to get into something that would be flattish. So I'm hoping you can put a finer point on what you think 4Q revenue is likely to be? And what's the upper and lower bound view on flattish?

Kenneth Bockhorst

Yes. Yes. Thanks, Nathan. Yes. When we put that term out there earlier in the year, you'll recall that at Investor Day, when we were asked on flattish, I called out, don't expect upside, right? So on a year-over-year basis, I was pretty vocal on the best case would be flat year-over-year. The way things have played out, we're really proud of where we're headed going into Q4, looking at year-over-year growth. We said we'd exit the year with momentum. We're doing that. When we talk about modest growth in the quarter, that keeps in mind the 5% fewer workdays in the quarter, but we expect to be up. So if you needed to peg me on something at this point, I would say that I would expect modest growth in the quarter sequentially and perhaps low single digits on a year-over-year full year basis.

Nathan Jones

Okay. That's helpful. I guess my follow-up question is on gross margins, which were much better than I expected them to be in the quarter given some of the pressures that you were facing from lower gross margins on some of the projects that are ramping up. Obviously, there's inflation that's passing through. So maybe you can just talk a little bit about the dynamics there, what led to those gross margins being as strong as they were and how you're thinking about those in the fourth quarter and as we head into next year?

Kenneth Bockhorst

Yes, sure. So first thing, I want to clarify, I'm sure you understood what I meant, but I didn't say the word down. So we expect to be down year-over-year, low single digits, just to be clear. In terms of...

Nathan Jones

Low single digits year-over-year...

Kenneth Bockhorst

Full year, down low single digits.

Nathan Jones

Low single digit. Full year, down low single digits, 4Q up low single digits? Or was that not what you said?

Kenneth Bockhorst

I'm not providing a digits on the up for Q4. Modestly up.

Nathan Jones

Down low single digits full year. Got it.

Kenneth Bockhorst

Correct. Got it. Perfect. Now when it comes to margin -- yes, sure thing. When it comes to margins, I'll just reiterate what we've said for several years now. We have this really positive structural mix that regardless of operating conditions, it does tend to get incrementally better every year when we have really nice growth in software that's higher margin. Beyond the meter is all higher margin.

So the structural mix remains greatly intact, which helps us with a really strong floor on margins. And then also our hallmark, I think, for the last 5 or 6 years is when challenged, we've performed in a really operationally excellent way. So we understood what the challenges are, and I'm really proud of our team, how we handled it. I'll turn it to Dan here for some more specifics. But just generally, I feel really good of how we've navigated the quarter.

Daniel Weltzien

Yes. And so Nathan, if I look at the quarter specifically and go back to the remarks that I had in the script, the biggest 2 drivers within the quarter were what I called out, which was ultrasonic meter mix generally across the residential space and then continued software growth. So as we move throughout the year, and as you know, the resiliency of our software growth is in the installed base. And so despite the unevenness that we've experienced throughout the year, that software growth has continued.

All the other things I've called out in prior quarters are the same drivers that we're paying attention to, both on the positive side from a structural mix perspective, but also on the downside risk perspective from turnkey mix and electronic component availability and supply and cost. So it's really all of the same drivers. It's just how does that particular quarter play out.

Nathan Jones

No onetimers like tariff refunds or anything in the quarter?

Daniel Weltzien

Nothing meaningful.

Operator

Your next question comes from the line of Quinn Fredrickson with Baird.

Quinn Fredrickson

Recognize you have these larger AMI projects kicking off, but the release mentioned solid underlying demand trends in the third quarter. I know you don't break it out, but even qualitatively, does the underlying day-to-day replacement business feel like it's getting a little healthier or more normal? Just any commentary there?

Kenneth Bockhorst

Yes. Just if we circle back to how we talked about this in Q1, we were pointing out that on that shorter visibility window, there is inherent unevenness, can be up, can be down. And certainly, we were surprised to how far down in Q1. But Qs 2 and 3 have been perfectly normal. So obviously, to get to the result that we did, Q2 was better than Q1. Q3 was better than Q1. So structurally, demand feels good to us. And while Q1 was down, the year has really been pretty normal other than that one outlier.

Quinn Fredrickson

Great. Second, just on PRASA. There's been some headlines about drought and water supply pressures in Puerto Rico. Is the urgency around the AMI rollout changed at all with that? Or does that create any more urgency to create a faster deployment schedule? Just any commentary on how that impacts the project there?

Kenneth Bockhorst

Yes. So it wouldn't be appropriate for me to comment on their ability or desire to go faster or not. The challenges you read about are certainly real, and that's why they're looking to adopt our AMI system. What I can tell you is we've begun shipping product this year. We had mentioned that we began in Q2 and Q3 because they're ramping up to get started with installations. They've hired the installation contractors. They're in planning, and they're expecting to start installations in Q4.

Yes, I think ideally, if they could go faster, they'd love to. But the way these projects are, I should probably point out that just because the projects are ramping, they will also be inherently uneven. Some go faster, some go slower from quarter-to-quarter as you run into manpower challenges or weather issues. So the project starting, inclusive of PRASA and the others feels great for the long term, but I do always want to remind people quarter-to-quarter, there can be variation even though these projects are in flight.

Operator

The next question comes from the line of Jeff Reive with RBC Capital Markets.

Jeffrey Reive

So given the 9 projects ramping, UDlive annualizing midyear next year and kind of easier comps across all 4 quarters, is it fair to expect a return to high single-digit organic next year? Or could that ramp dynamic actually push you above that range?

Kenneth Bockhorst

Yes. I think the math equation of that sounds correct, right? As we head into Q4, that's an easier year-over-year comp and the first couple of quarters are certainly easier than the back half will be. I'm not going to peg a year because of all the inherent unevenness I just talked about when short cycles can be and how projects can ramp or not, but we feel really good about the year in general in terms of our ability to get back on our strategic growth horizon of high single digits. But to peg the year is probably not great at the moment, but we feel good about it.

Jeffrey Reive

Fair enough. And then last quarter, you flagged the increasing electronic component costs and availability pressures tied to AI and data center demand. Have those pressures escalated further? And have you needed to take any incremental pricing or sourcing actions?

Kenneth Bockhorst

Yes. So they have escalated. So we do continue to see some price escalation. We do continue to see availability challenges. Again, I want to point out, our team has been excellent this time and the last time we faced a similar situation. We understand the challenge in front of us. Our team is working hard on it. Fortunately, for us, our portfolio is highly valued by our customers. They understand what we do for them, and we're able to extract the value that we deserve. So the word -- I'd rather talk about that than pricing. But yes, we can balance price/cost dynamics pretty effectively.

Operator

The next question comes from the line of James Ko with Jefferies.

Jae Hyun Ko

Just one quick clarification question. When you say low single-digit decline for the full year, is that organic or inclusive of UDlive here?

Kenneth Bockhorst

That is organic.

Jae Hyun Ko

Awesome. Yes. And I guess, can we talk about like the non-metering businesses like UDlive and SmartCover, how they are doing, whether those are growing above the company average and whether those are kind of trending in line with your deal case?

Kenneth Bockhorst

Yes. So as you know, those are also in our utility bucket that we talked about more broadly. UDlive is still very public. We're really excited about the opportunities as we were when we acquired both of these companies. It's an absolute need that every utility customer deals with. It's an innovative product. We've got the right sales channel. So feel good about the progress on UDlive, feel equally as good about SmartCover, and that will continue to be part of this high-digit growth story that we talked about for years to come.

Operator

The next question comes from the line of Scott Graham with Seaport.

Scott Graham

I have 2 questions for you. First is, I know you talked about underlying demand in a previous question. I'm just wondering, the other 2 of the big 3, so to speak, are talking about the category having been fairly sluggish all year. And it's hard to say if they're parsing out their software businesses. But certainly, the metering units seems to be an issue this year. Could you talk about that a little bit and kind of why that weakness has kind of pervaded all year and perhaps what you're thinking that the category looks like in units, meter units next year?

Kenneth Bockhorst

Yes. So that's a great question. So with 50,000 utilities of different sizes and shapes and geographies, it's hard for me to tell you across the board, a cookie-cutter answer that the market is down x percent. I don't know what the other big 2 have in terms of projects like we detailed for you. They may have different unevenness in their business that -- actually, I'm certain they have it. I just don't know what their particular mix is.

So it wouldn't be appropriate for me to comment on what their issue is. But what I see and when we talk to customers, and we -- as Bob pointed out, we saw customers at WEFTEC, we saw customers this week in Milwaukee. And I get all the noise that's out there about the market and all the things that people have talked about in the past around funding, but our customers are looking forward to the future to deal with the issues that they have to deal with. They have to upgrade their infrastructure. They have to be better informed about what decisions to make with their limited resources. And we're just really happy that they're choosing our portfolio. So I shouldn't comment on the other guys.

Scott Graham

Okay. I wanted to just also ask about the gross margin in the backlog. And I know the backlog has been burned down a lot in the last couple of years with supply chain getting better. I'm just wondering, you have a little bit more visibility now on these projects, which are now starting to ship. I was just sort of hoping if you can just tell us that the gross margin backlog, how much of that is linked to CPI? And for the rest of it, how are you handling price increases?

Kenneth Bockhorst

Yes. So I would just reiterate that even though we've been operating at the higher end, just given all the mix things that can happen and some of the lack of visibility on short term, as you pointed out, we feel really good about our ability to operate within the 39% to 42% gross margin range that we talked about. We feel great as we resume growth, being able to get back to that really good leverage of SEA that we've talked about before. So all in, it feels manageable to us to stay within the margin ranges that we've consistently communicated.

Operator

Your next question comes from the line of William Grippin with Barclays.

William Grippin

All right. Apologies to come back to the margin question again. But your commentary last quarter when you called out some of the supply chain cost pressures, it felt to me like maybe you were trying to signal something, right? And here with third quarter results, clearly, margin was quite good at the high end of your long-term target range. Are you trying to signal something in terms of how we should expect margin to trend in the fourth quarter or even into next year as some of these larger projects start to ramp and perhaps I don't know if there's any notable differences in your contract structures we should be aware of there.

Daniel Weltzien

Yes. So when I signal those things, I'm trying to signal the whole of all of the components that go into our gross margin picture. And again, I always remind people, structural mix is the biggest driver. And so when we call out in the quarter, what's happening with ultrasonic meter mix and what's happening with software mix, maybe that's masking some of what's happening on the electronics side, but we're also managing that dynamic as well.

And so me calling that out as a particular risk isn't trying to, in the next quarter, tell you what's going to happen. It's just trying to show you that there's multiple levers that contribute to what our margin performance is in any given quarter or month -- quarter or year. And at the time where we are right now, we started to talk about that pressure here in the second quarter and as of the end of the third quarter, I would say the challenges still exist. We've been able to manage it. We feel over the long term, we'll be able to continue to manage it. But quarter-to-quarter, there can be leading and lagging impacts of that.

William Grippin

Appreciate that color. And then maybe a bit of a long shot here. Are you able to share how much PRASA contributed in the third quarter to the top line?

Kenneth Bockhorst

No, we're not going to get into that. I think the other thing, William, that's important to notice, too, is throughout the year, we have won other projects, too, like the year has gone on and been normal. So I know there's a lot of focus on PRASA and rightfully so because it's very large. But the year has played out really well and really, I guess, normalized for us. So we're not going to get into quarter-by-quarter any project on what it is, but we're happy that we've seen these projects beginning to start. And what that does is quarter-to-quarter can be uneven. But how we look at the business over the 5-year horizon, we feel fantastic that these are all now moving to in-flight status.

Operator

The next question comes from Michael Fairbanks with JPMorgan.

Michael Fairbanks

On one of those last points you made, Ken, beyond the cohort of projects that you've talked about extensively, how would you say the pipeline and awards or even backlog beyond that are trending compared to this time last year?

Kenneth Bockhorst

Yes. So throughout the past several years, when we look at the universe of utilities that are currently working with consultants to scope out doing metering projects, which are revenue later in our 5-year horizon or the people that are currently in RFP that are going through the selection processes up to and including in-flight projects, that whole piece feels as robust as it has over the past several years.

Michael Fairbanks

Okay. Great. And then we saw share buybacks accelerate this quarter. How are we thinking about capital allocation from here?

Kenneth Bockhorst

Yes. So our capital allocation priorities remain the same. So we're going to continue to invest in the business and extend our lead in R&D and innovation. We're going to continue to return cash to shareholders and 34 years of increased dividends. We're certainly in a position to continue on that trend.

And in terms of share buybacks, we still have $35 million on the authorization. Even before this period when we weren't buying shares, we've always had an authorization open. So -- so I would imagine as long as we feel great about our superior position of being a cash generator, we'll be able to do that. And this year, we also did a really exciting acquisition. So regardless of this being a pretty challenging year for us, we've been able to navigate through this, execute on all 3 of our important capital allocation priorities, and we'll continue to do that going forward.

Operator

We have now reached the end of the Q&A session. I will now turn the call back to Dan Weltzien for closing remarks.

Daniel Weltzien

Thank you, operator. Just a quick note for your planning purposes that our year-end 2026 earnings release is tentatively scheduled for January 28, 2027. Feel free to reach out to me if you have any follow-ups at investors@badgermeter.com. Have a great day.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.