Q4 2024 Itron Inc Earnings Call

February 25, 2025

After the speaker's presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone you will then hear an automated message advising yohan is reyes. Please.

Note that today's conference is being recorded.

Speaker Change: I'll now hand, the conference over just speak a host Paul Vincent Vice President of Investor Relations. Please go ahead.

Speaker Change: Good morning, and welcome to <unk> fourth quarter 2024 earnings Conference call.

[music].

Speaker Change: Tom Patrick <unk>, President and Chief Executive Officer, Joan Hooper, Senior Vice President and Chief Financial Officer will review <unk> fourth quarter results and provide a general business update and outlook.

Yeah.

Good day, Thank you for standing by welcome to transport quarter, 'twenty 'twenty four earnings release conference call.

Speaker Change: Earlier today, the company issued a press release announcing its results.

At this time all participants are in a listen only mode.

Speaker Change: This release also includes details related to the conference call and webcast replay information.

Speaker Change: After the speaker's presentation, there will be a question and answer session. Just a question during the session you will need to press star one on your telephone you will then hear an automatic message advising Yohan <unk> Suisse. Please.

Speaker Change: Accompanying today's call is a presentation that is available through the webcast and on our corporate website under the Investor Relations tab.

Note that today's conference is being recorded.

Speaker Change: Following prepared remarks, the call will open for questions using the process. The operator described.

Speaker Change: I'll turn the conference over just speaker host, Paul Vincent Vice President of Investor Relations. Please go ahead.

Speaker Change: Before Tom begins a reminder, that our earnings release and financial presentation include non-GAAP financial information that we believe enhances the overall understanding of our current and future performance.

Speaker Change: Good morning, and welcome to <unk> fourth quarter 2024 earnings Conference call.

Tom Patrick: Tom Patrick <unk>, President and Chief Executive Officer.

Speaker Change: Reconciliations of differences between GAAP and non-GAAP financial measures are available in our earnings release and on our Investor Relations website.

Joan Hooper: Joan Hooper Senior Vice President and Chief Financial Officer will review <unk> fourth quarter results and provide a general business update and outlook.

Speaker Change: We will be making statements. During this call that are forward. Looking these statements are based on current expectations and assumptions that are subject to risks and uncertainties.

Joan Hooper: Earlier today, the company issued a press release announcing its results.

Joan Hooper: This release also includes details related to the conference call and webcast replay information.

Speaker Change: Actual results could differ materially from these expectations because of factors that were presented in today's earnings release and comments made during this conference call as well as those presented in the risk factors section of our Form 10-K, and other reports and filings with the Securities and Exchange Commission.

Joan Hooper: Accompanying today's call is a presentation that is available through the webcast and on our corporate website under the Investor Relations tab.

Joan Hooper: Following prepared remarks, the call will open for questions using the process. The operator described.

Speaker Change: All company comments estimates or forward looking statements are made in a good faith attempt to provide appropriate insight to our current and future operating and financial environment.

Speaker Change: Before Tom begins I remind you that our earnings release and financial presentation include non-GAAP financial information that we believe enhances the overall understanding of our current and future performance.

Speaker Change: Materials discussed today February 25, 2025 may materially change and we do not undertake any duty to update any of our forward looking statements.

Speaker Change: Reconciliations of differences between GAAP and non-GAAP financial measures are available in our earnings release and on our Investor Relations website.

Speaker Change: Now please turn to page four of our presentation as our CEO, Tom Dietrich begins his remarks.

Tom Dietrich: Thank you Paul Good morning, everyone and thank you for joining our call.

Tom Dietrich: The <unk> team executed well during the fourth quarter, producing results above expectations and demonstrating our strategic and financial progress. These results cap record full year revenue for our growth segments of networked solutions and outcomes.

Tom Dietrich: Financial highlights for the fourth quarter are detailed on slide four and include revenue of $613 million.

Tom Dietrich: Adjusted EBITDA of $81 million non-GAAP earnings per share of $1 35.

Speaker Change: Materials discussed today February 25, 2025 may materially change and we do not undertake any duty to update any of our forward looking statements.

Tom Dietrich: Free cash flow of $70 million.

Tom Dietrich: Turning to slide five beyond the financial results performance highlights for the fourth quarter include record quarterly bookings of $1 4 billion, producing a new record total backlog level of $4 7 billion.

Speaker Change: Now please turn to page four of our presentation as our CEO, Tom Dietrich begins his remarks.

Speaker Change: Thank you Paul Good morning, everyone and thank you for joining our call.

Tom Dietrich: Market demand remains stable with a healthy pipeline of opportunities related to grid resiliency grid capacity safety and automation driven by the continued adoption of our grid intelligence platform, which now includes $13 4 million distributed intelligence endpoints shipped and over 15 million applications license.

Speaker Change: The <unk> team executed well during the fourth quarter, producing results above expectations and demonstrating our strategic and financial progress. These results cap record full year revenue for our growth segments of networked solutions and outcomes.

Speaker Change: Financial highlights for the fourth quarter are detailed on slide four and include revenue of $613 million.

Tom Dietrich: <unk>.

Tom Dietrich: Turning to slide six the full year 2024 bookings of $2 7 billion contributed to our record year end backlog and a 2024 book to Bill ratio of 111, and our backlog is dominated by grid edge intelligence platform content from our networked solutions and outcomes segments, including over 10 million.

Speaker Change: Adjusted EBITDA of $81 million non.

Speaker Change: non-GAAP earnings per share of $1 35.

Speaker Change: Free cash flow of $70 million.

Speaker Change: Turning to slide five beyond the financial results performance highlights for the fourth quarter include record quarterly bookings of $1 4 billion.

And endpoints and associated platform elements.

Speaker Change: Producing a new record total backlog level of $4 7 billion.

Tom Dietrich: Selected bookings highlight our business expansion during the fourth quarter.

Demand remained stable with a healthy pipeline of opportunities related to grid resiliency grid capacity safety and automation driven by the continued adoption of our grid intelligence platform, which now includes $13 4 million distributed intelligence endpoints shipped and over 15 million applications licensed.

Tom Dietrich: <unk> electric power company, serving the Washington, DC area and <unk> have partnered to offer an impactful residential demand response program.

Tom Dietrich: <unk> has supported Potomac electrics.

Tom Dietrich: Goals of providing flexible and on demand load control, creating an efficient non wireless capacity.

Tom Dietrich: The program has enrolled nearly 500000 participants that utilized direct load control devices and smart thermostats to reduce the load on pepco system. During the most demand heavy periods in Q4, pepco extended their multi year relationship with iPhone, enabling continued participant support and laying the <unk>.

Speaker Change: Turning to slide six the full year 2024 bookings of $2 $7 billion contributed to our record year end backlog and a 2024 book to Bill ratio of 111, and our backlog is dominated by grid edge intelligence platform content from our networked solutions and outcomes segments, including <unk>.

Tom Dietrich: <unk> for the next generation of grid edge demand response technologies, including <unk> distributed intelligence capability.

Speaker Change: Over 10 million endpoints and associated platform elements.

Speaker Change: Selected bookings highlight our business expansion during the fourth quarter.

Tom Dietrich: Additionally, one of <unk> longest standing gas customers, who we have been working with through the various stages of their AMR to AMRI transition and future positioning signed an agreement in Q4 for our <unk> technology, which provides the connected metrology on the active grid our solution will help this customer Max.

Speaker Change: <unk> electric power company, serving the Washington, DC area and <unk> have partnered to offer an impactful residential demand response program.

Speaker Change: John has supported Potomac Electrics go.

Speaker Change: <unk> of providing flexible and on demand load control, creating an efficient non wireless capacity.

Tom Dietrich: Safety and grid edge intelligence for their customers.

Speaker Change: The program Hasnt rolled nearly 500000 participants that utilized direct load control devices and smart thermostats to reduce the load on pepco system during the most demand heavy periods.

Tom Dietrich: We are delighted to continue to be a trusted partner for the large gas utilities by leading the industry with innovation that delivers true benefits.

Speaker Change: In Q4, Pepco extended their multi year relationship with iPhone, enabling continued participant support and laying the path for the next generation of grid edge demand response technologies, including <unk> distributed intelligence capability.

Tom Dietrich: The challenges our customers confront related to reliability safety resiliency and efficiency are intensifying. This is contributing to our strong pipeline of opportunities and as a result, we anticipate a book to bill ratio of at least one to one for 2025 now.

Speaker Change: Additionally, one of <unk> longest standing gas customers, who we have been working with through the various stages of their AMR to AMRI transition and future positioning signed an agreement in Q4 for our <unk> technology, which provides the connected metrology on the active grid our solution will help this customer Maxim.

Tom Dietrich: Now I will turn the call over to Joan to provide details for our fourth quarter and full year results as well as our outlook for 2025.

Joan Hooper: Thank you Tom I'll review I transfer fourth quarter and full year 2024 results before discussing our financial outlook for the full year 2025 and for the first quarter. Please.

Speaker Change: Safety and grid edge intelligence for their customers.

Tom Dietrich: Please turn to slide seven for a summary of consolidated GAAP results.

Tom Dietrich: Fourth quarter revenue of $613 million increased 6% year over year.

Speaker Change: We are delighted to continue to be a trusted partner for the large gas utilities by leading the industry with innovation that delivers true benefits.

Tom Dietrich: The higher revenue was driven by both strong customer demand and operational execution.

Speaker Change: The challenges our customers confront related to reliability safety resiliency and efficiency are intensifying. This is contributing to our strong pipeline of opportunities and as a result, we anticipate a book to bill ratio of at least one to one for 2025.

Gross margin of 34, 9% was 90 basis points higher than last year due to product mix and operational efficiencies.

Tom Dietrich: GAAP net income of $58 million or $1 26 per diluted share compared to $44 million or <unk> 96 per diluted share in the prior year.

Speaker Change: Now I will turn the call over to Joan to provide details for our fourth quarter and full year results as well as our outlook for 2025.

Tom Dietrich: The improvement was driven by higher levels of operating and interest income, partially offset by higher tax expense.

Joan Hooper: Thank you Tom I'll review I transfer fourth quarter and full year 2024 results before discussing our financial outlook for the full year 2025 and for the first quarter.

Tom Dietrich: Regarding non-GAAP metrics on slide eight non-GAAP operating income was $71 million increased 16% year over year.

Joan Hooper: Please turn to slide seven for summary of consolidated GAAP results.

Tom Dietrich: Adjusted EBITDA of $81 million increased 19%.

Joan Hooper: Fourth quarter revenue of $613 million increased 6% year over year.

Tom Dietrich: non-GAAP net income for the quarter was $62 million or $1 35 per diluted share versus $1 23, a year ago.

Joan Hooper: The higher revenue was driven by both strong customer demand and operational execution.

Tom Dietrich: Free cash flow was $70 million in Q4 versus $39 million a year ago. The improvement reflects strong year over year operational earnings growth and increased interest income.

Joan Hooper: Gross margin of 34, 9% was 90 basis points higher than last year due to product mix and operational efficiencies.

Joan Hooper: GAAP net income of $58 million or $1 26 per diluted share compared to $44 million or <unk> 96 per diluted share in the prior year.

Tom Dietrich: Year over year revenue growth by business segment on slide nine.

Tom Dietrich: Device solutions revenue decreased 5% on a constant currency basis, driven primarily by an expected decline in legacy electric meter sales.

Joan Hooper: The improvement was driven by higher levels of operating and interest income, partially offset by higher tax expense.

Tom Dietrich: Network solutions revenue grew 6% year over year, driven by increased new project deployments and strong operational execution.

Joan Hooper: Regarding non-GAAP metrics on slide eight non-GAAP operating income was $71 million increased 16% year over year.

Tom Dietrich: Outcomes revenue grew 25% year over year, primarily due to increased software licenses and services.

Joan Hooper: Adjusted EBITDA of $81 million increased 19%.

non-GAAP net income for the quarter was $62 million or $1 35 per diluted share versus $1 23, a year ago.

Tom Dietrich: Moving to the non-GAAP year over year EPS bridge on slide 10.

Tom Dietrich: Our Q4, non-GAAP EPS of $1 35 per diluted share increased 12, <unk> year over year.

Joan Hooper: Free cash flow was $70 million in Q4 versus $39 million a year ago. The improvement reflects strong year over year operational earnings growth and increased interest income.

Tom Dietrich: Pre tax operating performance contributed to a 37 per share increase driven by the fall through of higher revenue and gross profit, partially offset by higher operating expenses.

Joan Hooper: Year over year revenue growth by business segment on slide nine.

Joan Hooper: Device solutions revenue decreased 5% on a constant currency basis, driven primarily by an expected decline in legacy electric meter sales.

Tom Dietrich: Higher tax expense had a negative year over year impact of 26 cents per share.

Tom Dietrich: Turning to slides 11 through 13, I'll review Q4 segment results compared with the prior year.

Joan Hooper: Network solutions revenue grew 6% year over year, driven by increased new project deployments and strong operational execution.

Tom Dietrich: Device solutions revenue was 109 million gross margin was 26, 6% and operating margin was 19, 9%.

Joan Hooper: Outcomes revenue grew 25% year over year, primarily due to increased software licenses and services.

Tom Dietrich: Gross margin declined 30 basis points year over year due to product mix, but operating margin was up 240 basis points due to lower operating expenses.

Joan Hooper: Moving to the non-GAAP year over year EPS bridge on slide 10.

Tom Dietrich: Network solutions revenue was $413 million with gross margin of 35, 1% and operating margin of 26%.

Joan Hooper: Our Q4, non-GAAP EPS of $1 35 per diluted share increased 12, <unk> year over year.

Joan Hooper: Pre tax operating performance contributed to a 37 per share increase driven by the fall through of higher revenue and gross profit, partially offset by higher operating expenses.

Tom Dietrich: Gross margin increased 10 basis points year over year due to product mix and operating margin was down 30 basis points due to increased operating expenses.

Tom Dietrich: Outcomes revenue was a record 91 million with gross margin of 44% and operating margin of 22, 8%.

Joan Hooper: Higher tax expense had a negative year over year impact of 26 cents per share.

Joan Hooper: Turning to slides 11 through 13, I'll review Q4 segment results compared with the prior year.

Gross margin increased 420 basis points year over year, and operating margin went up 290 basis points due to a higher margin revenue mix.

Joan Hooper: Device solutions revenue was 109 million gross margin was 26, 6% and operating margin was 19, 9%.

Tom Dietrich: For a recap of full year 2024 results. Please turn to slide 14.

Joan Hooper: Gross margin declined 30 basis points year over year due to product mix, but operating margin was up 240 basis points due to lower operating expenses.

Tom Dietrich: The financial performance was very strong in 2024, and we set several new records.

Tom Dietrich: Revenue of 2.44 billion grew 12% versus 2023, reflecting solid customer demand increased adoption of our grid edge intelligence platform and strong operational performance two.

Joan Hooper: Network solutions revenue was $413 million with gross margin of 35, 1% and operating margin of 26%.

Joan Hooper: Gross margin increased 10 basis points year over year due to product mix and operating margin was down 30 basis points due to increased operating expenses.

Tom Dietrich: 2024 results did include the conversion of $125 million of previously constrained revenue, which will not occur in 2025, our networked solutions and outcomes segments. Both delivered record annual revenue in 2024 gross margin of 34, 4% was a new record for <unk> was up 160 basis points year over year.

Joan Hooper: Outcomes revenue was a record 91 million with gross margin of 44% and operating margin of 22, 8%.

Joan Hooper: Gross margin increased 420 basis points year over year, and operating margin went up 290 basis points due to a higher margin revenue mix.

Tom Dietrich: Due to a higher margin product mix and operational efficiencies.

Tom Dietrich: Adjusted EBITDA was a new record of $324 million or 13, 3% of revenue, which compares with $226 million or 10, 4% in 2023.

Joan Hooper: For a recap of full year 2024 results. Please turn to slide 14.

Joan Hooper: The financial performance was very strong in 2024, and we set several new records.

Joan Hooper: Revenue of 2.44 billion grew 12% versus 2023, reflecting solid customer demand increased adoption of our grid edge intelligence platform and strong operational performance two.

Tom Dietrich: non-GAAP earnings per diluted share was also a new record at $5 62, and compares to $3 30 success in 2023.

Tom Dietrich: Finally, the company achieved a new record for free cash flow of $208 million or 9% of revenue compared to $98 million or 5% of revenue in the prior year.

Joan Hooper: 2024 results did include the conversion of $125 million of previously constrained revenue, which will not occur in 2025, our networked solutions and outcomes segments. Both delivered record annual revenue in 2024 gross margin of 34, 4% was a new record for <unk> was up 160 basis points year over year.

Tom Dietrich: The year over year increase was primarily due to higher operational earnings and interest income.

Tom Dietrich: Please turn to slide 15, I'll review liquidity and debt at the end of the fourth quarter.

Tom Dietrich: Total debt was $1 265 billion and net debt was $214 million.

Due to a higher margin product mix and operational efficiencies.

Tom Dietrich: As of December 31, net leverage was <unk> seven times and cash and equivalents were $1 <unk> $5 billion.

Joan Hooper: Adjusted EBITDA was a new record of $324 million or 13, 3% of revenue, which compares with $226 million or 10, 4% in 2023.

Tom Dietrich: Please turn to slide 16 for our current full year 2025 financial outlook first let me comment on our 2020 for bookings we were quite pleased with the Q4 bookings total of $1 4 billion, which represented over 50% of the total year bookings and was higher than we expected.

Joan Hooper: non-GAAP earnings per diluted share was also a new record at $5 62, and compares to $3 30 success in 2023.

Joan Hooper: Finally, the company achieved a new record for free cash flow of $208 million or 9% of revenue compared to $98 million or 5% of revenue in the prior year.

Tom Dietrich: As we discussed during our last few calls the backend loaded nature of the 2020 for bookings and the typical timeframe between bookings to revenue means most of the new bookings will translate to revenue beyond 2025.

Joan Hooper: The year over year increase was primarily due to higher operational earnings and interest income.

Joan Hooper: Please turn to slide 15, I'll review liquidity and debt at the end of the fourth quarter.

Tom Dietrich: And this timing has been factored into our current outlook for 2025 revenue.

Joan Hooper: Total debt was $1 265 billion and net debt was $214 million.

Tom Dietrich: We anticipate 2025 revenue to be within a range of two four to $2 5 billion.

Joan Hooper: As of December 31, net leverage was <unk> seven times and cash and equivalents were $1 <unk> $5 billion.

Tom Dietrich: At the midpoint this represents flat year over year growth, but when normalizing 2024 to exclude the $125 million of catch up revenue the year over year growth is approximately 6%.

Joan Hooper: Please turn to slide 16 for our current full year 2025 financial outlook first let me comment on our 2020 for bookings we were quite pleased with the Q4 bookings total of $1 4 billion, which represented over 50% of the total year bookings and was higher than we expected.

Tom Dietrich: We currently anticipate 2025, non-GAAP EPS to fall within a range of $5 20 to $5 60 per diluted share.

Tom Dietrich: This EPS outlook assumes an effective tax rate of 25% for the full year.

Joan Hooper: As we discussed during the last few calls the backend loaded nature of the 2020 for bookings and the typical timeframe between bookings to revenue. It means most of the new bookings will translate to revenue beyond 2025.

Tom Dietrich: Quarterly rates could fluctuate based on jurisdictional mix and the timing of tax settlements.

Tom Dietrich: At the midpoint of this EPS range and after normalizing the tax rate to 25% for both here, we expect 2025 year over year earnings growth of approximately 8%.

Joan Hooper: And this timing has been factored into our current outlook for 2025 revenue.

Joan Hooper: We anticipate 2025 revenue to be within a range of two four to $2 5 billion.

Tom Dietrich: Please note that our assumptions assume a stable market environment, including no change to the 2024 trade policies.

Joan Hooper: At the midpoint this represents flat year over year growth, but when normalizing 2024 to exclude the $125 million of catch up revenue the year over year growth is approximately 6%.

Tom Dietrich: The trade situation is obviously very fluid and we will provide any necessary updates on this during our Q1 call.

Tom Dietrich: Now please turn to slide 17 for our first quarter outlook.

Joan Hooper: We currently anticipate 2025, non-GAAP EPS to fall within a range of $5 20 to $5.60 per diluted share.

Tom Dietrich: We anticipate Q1 revenue to be within a range of $610 million to $620 million at 2% year over year increase at the midpoint we.

Joan Hooper: This EPS outlook assumes an effective tax rate of 25% for the full year quarter.

Tom Dietrich: We anticipate first quarter non-GAAP EPS to be within a range of a $1 25 to $1 75 per diluted share, which at the midpoint is approximately 14% year over year growth after normalizing for the tax rate.

Joan Hooper: Quarterly rates could fluctuate based on jurisdictional mix and the timing of tax settlements.

Joan Hooper: At the midpoint of this EPS range and after normalizing the tax rate to 25% for both here, we expect 2025 year over year earnings growth of approximately 8%.

Tom Dietrich: Our 2024 financial results demonstrated good progress toward our 2027 targets for revenue growth margin expansion and increased free cash flow generation, while our revenue growth rate will normalize during 2025, we remain focused on efficiency in pursuit of continued cash flow and profitability growth we remain confident.

Joan Hooper: Please note that our assumptions assume a stable market environment, including no change to the 2024 trade policies. The trade situation is obviously very fluid and we will provide any necessary updates on this during our Q1 call.

Tom: In the 2027 targets discussed at last March's Investor Day, now I will turn the call back to Tom.

Joan Hooper: Now please turn to slide 17 for our first quarter outlook.

Joan Hooper: We anticipate Q1 revenue to be within a range of $610 million to $620 million or 2% year over year increase at the midpoint we.

Tom Dietrich: Thank you Joan.

Tom Dietrich: Our teams executed at a high level across the organization and delivered another solid quarter of results to conclude the year. In addition to several new revenue and bookings records being achieved margins expanded and free cash flow grew these represent important milestones as we progress towards our strategic goals, which can only be.

Joan Hooper: We anticipate first quarter non-GAAP EPS to be within a range of $1 25 to $1.75 per diluted share, which at the midpoint is approximately 14% year over year growth after normalizing for the tax rate.

Tom Dietrich: <unk> achieved by ensuring the success of our customers, who face a myriad of challenges related to the management of energy and water resources, we have built a resilient and experienced team at <unk> and are well positioned for continued success.

Joan Hooper: Our 2024 financial results demonstrated good progress toward our 2027 targets for revenue growth margin expansion and increased free cash flow generation, while our revenue growth rate will normalize during 2025, we remain focused on efficiency in pursuit of continued cash flow and profitability growth we remain confident.

Tom Dietrich: Thank you for joining our call today operator, please open the line for some questions.

Joan Hooper: In the 2027 targets discussed at last March's Investor Day, now I will turn the call back to Tom.

Speaker Change: Ladies and gentlemen to ask a question at this time you wanted to press Star one on your telephone and wait brand name to be announced.

Tom Patrick: Thank you Joan.

Speaker Change: So we draw your question simply press Star one again, please stand by while we compile the Q&A roster.

Tom Patrick: Our teams executed at a high level across the organization and delivered another solid quarter of results to conclude the year. In addition to several new revenue and bookings records being achieved margins expanded and free cash flow grew these represent important milestones as we progress towards our strategic goals, which can only be.

Speaker Change: Yeah.

Speaker Change: Our first question coming from the line of Noah Kaye with Oppenheimer. Your line is now open.

Noah Kaye: Good morning, Thanks for taking the questions.

Noah Kaye: Well I'd like to get and a bit into the demand environment, but I've got to start with our cash generation and the balance sheet here.

Tom Patrick: <unk> achieved by ensuring the success of our customers, who face a myriad of challenges related to the management of energy and water resources, we have built a resilient and experienced team at <unk> and are well positioned for continued success.

Noah Kaye: John maybe first after the strong free cash flow performance in 2004, maybe you can give us some broad indications of what youre thinking about for 2005.

Tom Patrick: Thank you for joining our call today operator, please open the line for some questions.

Noah Kaye: Free cash flow conversion I have to assume.

Speaker Change: Ladies and gentlemen to ask a question at this time you wanted to buy star one on your telephone and wait brand name to be announced.

Noah Kaye: There is some incremental improvement here as well.

Noah Kaye: Just kind of given where capital of factors.

Speaker Change: So enjoy your question simply press Star one again, please stand by while we compile the Q&A roster.

Noah Kaye: But then you're sitting on over $1 billion of cash.

Noah Kaye: Net leverage really attractive here, just talk to us a little bit about the M&A pipeline.

Speaker Change: Yeah.

Speaker Change: Our first question coming from the line of Noah Kaye with Oppenheimer. Your line is now open.

Noah Kaye: In absence of any M&A in the near term, what you're planning to do it.

Noah Kaye: Good morning, Thanks for taking the questions.

Noah Kaye: Over $1 billion of cash.

Speaker Change: Well I'd like to get and a bit into the demand environment, but I got to start with cash generation and the balance sheet here.

Speaker Change: Yeah I'll take the first one and then Tom could talk about when we're looking at again for M&A. So yeah. I would expect continued improvement and continued free cash flow fall through improvement as we go from 2024 to 2025. So if you recall from Investor day, we talked about 10% to 12% of revenue for free cash flow in 2012.

Speaker Change: John maybe first after the strong free cash flow performance in 2004, maybe you can give us some broad indications of what youre thinking about for 2005.

Speaker Change: Free cash flow conversion I have to assume.

Speaker Change: For that was about eight 5% I would expect that percent to continue to go up and get us towards the targets for 2027. So there is a little bit of seasonality in terms of certain payments either for bonus or tax or whatever quarter to quarter, but my comments are are good for the whole year that I expect free cash flow, increasing an increase as a percentage of revenue.

Speaker Change: There's some some incremental improvement here as well.

Speaker Change: Just kind of given where capital factors.

Speaker Change: But then you're sitting on over $1 billion of cash.

Speaker Change: Net leverage really attractive here, just talk to us a little bit about the M&A pipeline.

Speaker Change: In absence of any M&A in the near term, what you're planning to do with.

Speaker Change: Great question about sitting on a lot of cash.

Speaker Change: It is it is actually currently contributing to the EPS. So if you look at the guidance we gave for EPS, it's above where the consensus was.

Speaker Change: Over $1 billion of cash.

Speaker Change: That's really more of an issue of interest income because we are earning quite nice interest rates on the cash we have but obviously, we're not a bank and we're not looking to sit on that cash. So maybe just talk about our pipeline sure.

Speaker Change: Sure from an M&A perspective, we remain very active.

Speaker Change: For that was about eight 5% I would expect that percent to continue to go up and get us towards the targets for 2027, so there's a little bit of seasonality in terms of certain payments either for bonus or tax or whatever quarter to quarter, but my comments are are good for the whole year, then I expect free cash flow, increasing an increase as a percentage of revenue.

Speaker Change: Looking at various targets out there the types of things that we are interested in generally tend to be outcomes forward they tend to be in the.

Speaker Change: Grid intelligence types of areas really rounding out the portfolio that we can offer our customers.

Speaker Change: All the way from from planning to operational technology. So very similar types of things that we've been looking at we just wanted to make sure that we're really really disciplined and have to move that will be.

Speaker Change: Great question about sitting on a lot of cash.

Tom Patrick: It is it is actually currently contributing to the EPS. So if you look at the guidance. We gave for EPS, it's above where the consensus was and Thats really more of an issue of interest income because we are earning quite nice interest rates on the cash we have but obviously, we're not a bank and we're not looking to sit on that cash so maybe Tom just talk about our.

Speaker Change: That's truly scalable on the technology side and be in a position to contribute from a financial perspective.

Speaker Change: Alright. Thanks.

Speaker Change: I think it's just a shift to the demand environment and specifically outcomes, we're starting to see some good operating leverage here.

Speaker Change: Pipeline.

Tom Patrick: Sure from an M&A perspective, we remain very active looking at various targets out there the types of things that we are interested in generally tend to be outcomes forward they tend to be in the.

Tom: In the segment, but Tom to go back to your comments.

Tom: <unk> got 13 million endpoints shipped in the field and I think you said 15 million applications licensed.

Tom Patrick: Grid intelligence types of areas really rounding out the portfolio that we can offer our customers.

Tom: With another 10 million endpoints in backlog that that kind of suggests roughly that.

Tom: The adoption rate of applications in the <unk>.

Tom Patrick: All the way from from planning to operational technology. So very similar types of things that we've been looking at we just wanted to make sure that we're really really disciplined and have a move that will be.

Tom: Recurring revenue per endpoint, if you will still still has an awful lot of runway so talk to us a little bit about what you see for outcomes growth.

Tom Patrick: That's truly scalable on the technology side and be in a position to contribute from a financial perspective.

Tom: Over the next year or two and specifically what you see for kind of the recurring revenue portion of it.

Tom: The outcomes business should be our fastest growing business for 424% to 25 on a year over year basis.

Tom Patrick: Alright. Thanks.

Tom Patrick: I think it's just a shift to the demand environment and specifically outcomes, we're starting to see some good operating leverage here.

Tom: That.

Speaker Change: Is something that we feel good about you correctly pointed out that.

Tom Patrick: In the segment, but it's time to go back to your comments.

Speaker Change: <unk> got 13 million <unk> endpoints shipped in the field and I think you said 15 million applications licensed.

Underlying technologies, the things, we need to get out in the field to create that that Greenfield. If you will for it for outcomes growth is indeed happening on the networking side with the expansion of the grid edge intelligence platform a lot of runway left in terms of applications. If you do that quick math.

Speaker Change: With another 10 million endpoints in backlog that that kind of suggests roughly that.

Speaker Change: The adoption rate of applications in the <unk>.

Speaker Change: Recurring revenue per endpoint, if you will still still has an awful lot of runway so talk to us a little bit about what you see for outcomes growth.

Speaker Change: 15 million applications over 13 million and.

Speaker Change: Endpoints in the fields.

Speaker Change: We absolutely see a world where youre running many apps per endpoint not just a touch over one so we continue to expand the application choices that our customers have we continue to see third parties, writing applications, which we can post on our enterprise application store integrate a bigger choice. So.

Speaker Change: Over the next year or two and specifically what you see for kind of the recurring revenue portion of it.

Speaker Change: The outcomes business should be our fastest growing business for 424% to 25 on a year over year basis.

Speaker Change: That that.

Speaker Change: Is something that we feel good about you correctly pointed out that.

Speaker Change: The ecosystem is really just getting started there I think there's a lot more to be done.

Speaker Change: Underlying technologies, the things, we need to get out in the field to create that that Greenfield. If you will for outcomes growth is indeed happening on the networking side with the expansion of the grid edge intelligence platform a lot of runway left in terms of applications. If you did that quick math.

What we would definitely see people doing with these applications is the nuts and bolts of what utilities need to be carrying about its resiliency its reliability. Its safety. It is non wires capability to increase capacity.

Speaker Change: What's actually happening at is understanding where assets are through.

Speaker Change: 15 million applications over 13 million endpoints in the fields.

Speaker Change: And electrical connectivity analysis and understanding location awareness.

Speaker Change: Absolutely see a world, where youre running many apps per endpoint not just a touch over one.

Speaker Change: A lot of this.

Ken: The things that our customers are challenged with you Ken.

Ken: Take a big bite out of it and resolve using software only technology, which creates a.

Speaker Change: So we continue to expand the application choices that our customers have we continue to see third parties, writing applications, which we can host on our enterprise application store.

Ken: Our high barrier to.

Ken: To competition and a really good return on investment for our customers and it accrues nicely to us we.

Speaker Change: Great a bigger choice. So the ecosystem is really just getting started there I think there's a lot more to be done what we would definitely see people doing with these applications is the nuts and bolts of what utilities need to be carrying about its resiliency its reliability. Its safety. It is non wires capability to increase.

Ken: We definitely think that having about 75% to 80% recurring revenue types of number in the outcome space is ultimately where we land is still going to be noisy quarter to quarter, depending on the individual licensing deals and things of that sort.

Ken: What you saw in Q4, it was a little bit below that level.

Speaker Change: Capacity.

Speaker Change: What's actually happening at is understanding where assets are through.

Ken: As we did have some onetime licensing content inside of that.

Speaker Change: And electrical connectivity analysis and understanding location awareness so a lot of.

Ken: Fourth quarter numbers, so expect a little bit of that Lumpiness as we continue to grow but think 75% recurring revenue with the outcome spaces is the right place for us to land over the years ahead.

Speaker Change: The things that our customers are challenged with you can.

Speaker Change: I would take a big bite out of it and resolve using software only technology, which creates a.

Speaker Change: Great. Thank you.

Ken: Thank you.

Speaker Change: High barrier to competition and a really good return on investment for our customers and it accrues nicely to us we.

Speaker Change: Our next question coming from the line of.

Speaker Change: Ben Cohen with Baird. Your line is now open.

Ben Cohen: Hey, guys. Thanks for taking my questions just following up on <unk>.

We definitely think that having about 75% to 80% recurring revenue types of number and the outcome space is ultimately where we land, it's still going to be noisy quarter to quarter, depending on individual licensing deals and things of that sort.

Speaker Change: That environment.

Speaker Change: Could you just talk about.

Ben Cohen: You bet.

Ben Cohen: In North America.

Ben Cohen: Kind of big deals.

Ben Cohen: But just if you could tie in.

Speaker Change: What you saw in Q4, it was a little bit below that level.

Ben Cohen: If there is any kind of pushback.

Speaker Change: As we did have some onetime licensing content inside of that.

Ben Cohen: Public utility commissions, just because right.

Ben Cohen: What you'll see rates have decreased so much forward.

Speaker Change: Fourth quarter numbers, so expect a little bit of that Lumpiness as we continue to grow but think 75% recurring revenue and the outcome space is the right place for us to land over the years ahead.

Ben Cohen: Sure so start with the pipeline of opportunities remains very strong as I commented in prior quarters, so that the customers.

Speaker Change: Great color. Thank you.

Ben Cohen: Need to invest in resiliency and capacity increases safety automation said the opportunity funnel has never been been bid better on a global basis North America clearly continues to lead the pack and we would expect those opportunities to remain in view.

Speaker Change: Thank you.

Next.

Speaker Change: Coming from the line of.

Speaker Change: Ben Cohen with Baird. Your line is now open.

Ben Cohen: Hey, guys. Thanks for taking my questions just following up on all of their demand environment.

Speaker Change: Can you just talk about Tibet.

Ben Cohen: On a global basis, there are certain places around the globe in Asia Pacific, which also remained very strong Australia, and New Zealand being probably at the top of that list.

By region North America.

Speaker Change: Kind of big deals and then just.

Speaker Change: If you could tie in.

Speaker Change: Or is there any kind of pushback.

Ben Cohen: Europe I would say is flat, we're taking a bit more of a cautious approach on Europe as the water market there has definitely.

Speaker Change: From public utility commissions, just because rates.

Speaker Change: What's your CD rates have decreased so much.

Speaker Change: Forward.

Speaker Change: Sure.

Speaker Change: I'm still a little bit above its weight in 'twenty for that probably doesn't continue for forever.

Speaker Change: So start with the.

Speaker Change: <unk> of opportunities it remains very strong as I commented in prior quarters, so that the customers.

Speaker Change: We'll watch that as that is a bit more of a short term turns business in terms of how it flows through the <unk>.

Speaker Change: Need to invest in resiliency and capacity increases safety automation that said the opportunity funnel has never been been bid better on a global basis North America clearly continues to lead the pack and we would expect those opportunities to remain in view.

Speaker Change: Bookings and backlog and the revenue overall, so that's how I would characterize it on the on the big deal front.

Speaker Change: As always there are large deals and there are small deals are fourth quarter bookings had more than 680 individual deals and it was.

Speaker Change: On a global basis, there are certain places around the globe in Asia Pacific, which also remained very strong in Australia, and New Zealand being probably at the top of that list.

Speaker Change: Well over 280 customers. So it is a very wide market swaps that we continue to operate on its still 90% plus networks and outcomes overall, so the parts of our business that we're starting to grow we're targeting to grow rather continue to do so.

Speaker Change: Europe I would say is flat, we're taking a bit more of a cautious approach on Europe as the water market. There has definitely punched it a little bit above its weight in 2000 and for that probably doesn't continue for forever. So we'll watch that as that is a bit more of a short term turns biz.

Speaker Change: Relative to the.

Speaker Change: Regulatory environment, its still very constructive so clearly that interest rates are a little bit higher.

Speaker Change: <unk> in terms of how it flows through the <unk>.

Speaker Change: Then.

Speaker Change: People were hoping higher for longer perhaps is a decent way to think about it but utility commissions are absolutely still.

Speaker Change: Bookings and backlog and the revenue overall, so that's how I would characterize it on the on the big deal front.

Speaker Change: Our proven deals and we see it as a very constructive environment on a global basis.

Speaker Change: As always there are large deals and there are small deals are fourth quarter bookings had.

Thanks.

Speaker Change: Thank you circling back to the comment you've made about a competitive moat.

Speaker Change: More than 680 individual deals and it was well over 280 customers. So it is a very wide market swaps that we continue to operate on its still 90% plus networks and outcomes.

Speaker Change: Most of the work that was awarded to us, but about applications to be written.

Speaker Change: On your network.

Speaker Change: Can you just talk about that maybe a little more depth.

Speaker Change: I assume competitors don't have that and then just a competitive environment.

Speaker Change: Overall, so the parts of our business that we're starting to grow we're targeting to grow rather continue to do so relative.

Speaker Change: Our water business rewards to be for sale.

Speaker Change: Scope.

Speaker Change: Over at Atlanta, just how are you guys thinking.

Speaker Change: Relative to the <unk>.

Speaker Change: Regulatory environment.

Speaker Change: Barbara.

Speaker Change: It's still very constructive so clearly the interest rates are a little bit higher.

Speaker Change: Okay.

Speaker Change: So.

Speaker Change: I certainly think we have a pretty substantial lead in the grid edge intelligence in our language distributed intelligence downloadable agents and applications into to endpoints.

Speaker Change: Then.

People were hoping higher for longer perhaps is a decent way to think about it but utility commissions are absolutely still.

Speaker Change: Our proven deals and we see it as a very constructive environment on a global basis.

Speaker Change: I don't think the competition is anywhere close to the $13 million and points in the field already landed today. So there are competitors clearly that are talking about these types of capabilities and will of course respect.

Speaker Change: Thanks.

Speaker Change: Circling back to the comments you've made about a competitive moat.

Speaker Change: It was the word you used but about applications being written.

Speaker Change: On your network.

Speaker Change: Could you just talk about that review a little bored.

Speaker Change: The competition, but we want to play our game and make sure we continue to innovate in the in the marketplace.

Speaker Change: I assume competitors don't have that and then just the competitive environment I know, there's still a water business rewards to be for sale.

Speaker Change: Overall, so I think that it is good for our customers and good for us and good for our investors when people add incremental applications and use cases on top of.

Speaker Change: So turnover.

Speaker Change: Just how you guys see the competitive environment.

Speaker Change: So.

Speaker Change: I certainly think we have a pretty substantial lead in the grid edge intelligence in our language distributed intelligence downloadable agents and applications into 10 points.

Speaker Change: The infrastructure that's already landed in the field.

Speaker Change: And that is a.

Speaker Change: A pretty nice scenario for us overall.

Speaker Change: There is a lot of.

Speaker Change: I would say uncertainty in the marketplace with.

Speaker Change: The competition is anywhere close to 13 million endpoints in the field already landed today. So there are competitors clearly that are talking about these types of capabilities and will of course respect.

Speaker Change: With various competition.

Speaker Change: Making changes in their business model as everyone is looking to.

Find ways to be more competitive in the future. So spending less time thinking about competition and more time about what we can do to.

Speaker Change: The competition, but we want to play our game and make sure we continue to innovate in the in the marketplace.

Speaker Change: To help our customers and grow our business a lot faster.

Speaker Change: Sounds good thank you guys.

Speaker Change: Thanks Ben.

Speaker Change: Overall, so I think that it is good for our customers and good for us and good for our investors when people add incremental applications and use cases on top of.

Speaker Change: Thank you.

Speaker Change: Next question coming from the line of Jeff Osborne with Cowen. Your line is now open.

Speaker Change: Great.

Speaker Change: Excuse me good morning, just a couple of quick ones rapid fire here, but on the bookings for twenty-five Tom <unk> on the book to Bill above one would you expect a similar back end loaded nature of the year.

Speaker Change: The infrastructure that's already landed in the field.

Speaker Change: And that is a.

A pretty nice scenario for us overall.

Speaker Change: There is a lot of.

Speaker Change: Or a bit more even spread out throughout the year.

Speaker Change: I would say uncertainty in the marketplace with.

Speaker Change: Yes, I would say that.

Speaker Change: With various competition.

Speaker Change: It's always difficult to predict quarter to quarter as to what things would look like.

Speaker Change: Making changes in their business model as everyone is looking to.

Speaker Change: Find ways to be more competitive in the future. So spending less time thinking about competition and more time about what we can do.

Speaker Change: So right now I wouldn't necessarily forecast the big hockey stick like we had in 'twenty four but I wouldn't expect it to be perfectly linear quarter to quarter, either but definitely see a rich pipeline of opportunities in that one to one for the year still makes a lot of sense based on what visibility we have today.

Speaker Change: To help our customers and grow our business a lot faster.

Speaker Change: Sounds good thank you guys.

Ben Cohen: Thanks Ben.

Speaker Change: Thank you.

Speaker Change: Our next question coming from the line of Jeff Osborne with Cowen. Your line is now open.

Speaker Change: Got it and then just can you articulate given there may be some tariffs on met.

Speaker Change: Great.

Speaker Change: Mexico I don't believe you have any notable manufacturing there, but I wasn't sure on supply chain copper steel and closures or anything like that that comes from that region. How should we think about it there is the Mexico tariff for 25% and the impact to you folks.

Jeff Osborne: Excuse me good morning, just a couple of quick ones rapid fire here, but on the bookings for 2005 time Archie on the book to Bill above one would you expect a similar back end loaded nature of the year.

Speaker Change: Or a bit more even spread out throughout the year.

Speaker Change: Yes, I think it's going to depend on the details as to what it looks like we definitely.

Speaker Change: Yes, I would say that it is always difficult to predict quarter to quarter as to what things would look like.

Speaker Change: Our operating with a fair amount of components coming in from Mexico. So that is something that we'd have to watch out for the details on China isn't a meaningful important market for us.

Speaker Change: So right now I wouldn't necessarily forecast the big hockey stick like we had in 'twenty, four but I wouldn't expect it to be perfectly linear quarter to quarter either.

Speaker Change: We don't have any meaningful amount of.

But definitely see a rich pipeline of opportunities in that one to one for the year still makes a lot of sense based on what visibility we have today.

Speaker Change: Metals in a raw sense coming in so those arent necessarily important but Mexico.

Speaker Change: Mexico, we are mindful as to what that might look like in the in the quarters ahead.

Speaker Change: Got it and then just can you articulate given there may be some tariffs on Mexico I don't believe you have any notable manufacturing there, but I wasn't sure on supply chain copper steel and closures or anything like that that comes from that region. How should we think about it if there is a mexico tariff for 25% and the impact to you folks.

Speaker Change: And just to follow up on it.

Speaker Change: Sorry, just one last comment I would make there is we do carry a bit more inventory to try to make sure. We're in a position to give us as much supply chain flexibility in the event.

Speaker Change: Yes, I think it's going to depend on the details as to what it looks like we definitely.

Speaker Change: <unk> could be on again off again that is <unk>.

Speaker Change: Certainly a possibility that we're cognizant of and make sure we plan our supply chain accordingly.

Speaker Change: Got it that's helpful and just maybe a quick follow up on that topic have you started any intermediate qualification of alternative suppliers now from that jurisdiction.

Speaker Change: The event that they are more permanent or not at that point.

We don't have any meaningful amount of <unk>.

Speaker Change: Juncture yet.

Speaker Change: Metals in a raw sense coming in so those arent necessarily important but.

Speaker Change: Yes, we do have a very strong multi sourcing program around the globe.

Speaker Change: Mexico, we are mindful as to what that might look like in the in the quarters ahead.

Speaker Change: It is.

Speaker Change: I would say part of the solution, but it isn't a perfect solution.

Speaker Change: And just to follow up on it.

Speaker Change: It takes a bit more engineering I think to create meaningful world.

Speaker Change: Just uncertain and it's really hard to make large investments.

Speaker Change: One way or the other in the current environment.

Speaker Change: Got it and then last one if I could sneak it in is just one of your competitors.

Speaker Change: <unk> could be on again off again.

Speaker Change: Certainly a possibility that we're cognizant of and make sure we plan our supply chain accordingly.

Speaker Change: Certainly highlighting outcomes similar type applications and services as well as a percentage of their revenue I'm. Just curious could you remind us how you folks describe or define services.

Got it that's helpful and just maybe a quick follow up on that topic have you started any intermediate qualification of alternative suppliers not from that jurisdiction.

Speaker Change: Maybe relative to peers I know both parties are maybe on the same page as it relates to network services, but when you talk about 90% being networks and outcomes is there any type of managed services that you may be including or excluding or maybe.

Speaker Change: The event that they are more permanent or not at that point.

Speaker Change: Sure Yes.

Speaker Change: Yes, we do have a very strong multi sourcing program around the globe.

Speaker Change: It is.

Speaker Change: Maybe including or excluding that makes you folks on different pages as it relates to those metrics that people are reporting.

Speaker Change: I would say part of the solution, but it isn't a perfect solution.

Speaker Change: It takes a bit more engineering I think to create meaningful world.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Just uncertain and it's really hard to make large investments.

Speaker Change: Numbers and facts and figures, let me make sure that.

Speaker Change: I'm clear on it so of the new bookings in Q4, and our total backlog, 90% of that is networks and outcomes. So that's the 90% plus.

Speaker Change: One way or the other in the current environment.

Speaker Change: Got it and then last one if I could sneak it in is just one of your competitors.

Speaker Change: Number where we run in terms of software and services.

Speaker Change: As a total percent percentage of revenue is probably in the.

Speaker Change: Maybe relative to peers I know both parties aren't maybe on the same page as it relates to network services, but when you talk about 90% being networks and outcomes is there any type of managed services that you may be including or excluding or maybe.

Speaker Change: It can vary quarter to quarter, but 15% to 20% overall is software and services.

Speaker Change: The majority of software and services are indeed in outcomes, but there is a small slice that oftentimes.

Speaker Change: In the networks P&L software and services and outcomes, obviously both have.

Speaker Change: Maybe including or excluding that makes you folks on different pages as it relates to those metrics that people are reporting.

Speaker Change: A portion of that revenue, which is managed services overall, so I do believe theres, probably some differences in terms of what.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: Numbers and facts and figures, let me make sure that.

Speaker Change: Competition classifies in different areas, but I don't know that I can do the accounting for them I just unclear on what it is for us.

Speaker Change: I'm clear on it so all of the new bookings in Q4, and our total backlog, 90% of that is networks and outcomes. So that's the 90% plus.

Speaker Change: I appreciate it that's all I had thank you.

Speaker Change: A number.

Speaker Change: Thank you.

Where we run in terms of software and services.

Speaker Change: Thank you.

Speaker Change: Our next question coming from the line of.

Speaker Change: Total percent percentage of revenue is probably in the.

Masa Son: Masa son with BNP Paribas. Your line is now open.

Speaker Change: It can vary quarter to quarter, but 15% to 20% overall is software and services.

Speaker Change: Hi, This is Joe <unk> online for Moses Sutton Congrats on the quarter.

Speaker Change: The majority of software and services are indeed in outcomes, but there is a small slice that often times.

Speaker Change: Should we think about lumpiness for outcomes margins into 'twenty five as the business continues to ramp this quarter moves it.

Speaker Change: In the networks P&L software and services and outcomes, obviously both have.

Speaker Change: Closer to 227 targets, but just trying to get a near term picture is the recurring base builds and how one off services will continue to impact lumpiness.

Speaker Change: A portion of that revenue, which is managed services overall, so I do believe theres, probably some differences in terms of what.

Speaker Change: Yes, I think about the full year I would certainly expect outcomes gross margins to increase versus the full year 'twenty four but given the kind of the subscale nature, we've talked about you're going to have variability from quarter to quarter. So we did have a lot of onetime license revenue in Q4, which allowed us to get to the 44% I don't I would caution you not to think.

Speaker Change: Competition classifies in different areas, but I don't know that I can do the accounting for them I just unclear on what it is for us.

Speaker Change: Appreciate it that's all I had thank you.

Speaker Change: Thank you.

Speaker Change: Our next question coming from the line of.

Speaker Change: That's the new baseline that we go off and Thats going to continue to be lumpy, but again for the full year I would expect outcomes to continue to improve their gross margin percent.

Masa Son: Masa son with BNP Paribas. Your line is now open.

Joe: Hi, This is Joe <unk> online for Moses Sutton Congrats on the quarter.

Should we think about lumpiness for outcomes margins into 'twenty five as the business continues to ramp this quarter moves it closer to 227 targets, but just trying to get a near term picture is the recurring base builds and how one off services will continue to impact lumpiness.

Speaker Change: Thank you.

Speaker Change: Next question coming from the line of Martin Malloy with Johnson Rice <unk> Company. Your line is now open.

Martin Malloy: Good morning, congratulations on the strong year.

Joe: Yes, if I think about the full year I would certainly expect outcomes gross margins to increase versus the full year 'twenty four but given the kind of the subscale nature, we've talked about you're going to have variability from quarter to quarter. So we did have a lot of onetime license revenue in Q4, which allowed us to get to the 44% I don't I would caution you not to pay.

Speaker Change: Put together.

Speaker Change: The first question if you could maybe give us a update on the partnerships.

Speaker Change: You have got with.

Speaker Change: Companies like GE for Nova in ABB, and how those are progressing.

Speaker Change: Sure.

Speaker Change: They are in the stage that is I'll call them pilots with customers today, So we'll lead customer.

Joe: That's the new baseline that we go off and Thats going to continue to be lumpy, but again for the full year I would expect outcomes to continue to improve their gross margin percent.

Speaker Change: <unk> really starting to think about how to use the technology, we want to make sure we've got the.

Speaker Change: The platforms from from both of the partners wired together properly to to be able to help the customer so not yet in a stage where it is is generating revenue through the P&L, but certainly strong interest on the part of customers.

Joe: Thank you.

Next question coming from the line of Martin Malloy with Johnson Rice <unk> Company. Your line is now open.

Martin Malloy: Good morning, congratulations on the strong year.

Speaker Change: The thesis behind those partnerships very much is to help our customers absorb new technology faster.

Joe: Put together.

Speaker Change: The first question if you could maybe give us a update on the partnerships.

Speaker Change: We definitely continue to get strong customer feedback that this is one of the helpful ways, we can do that.

You have got with.

Joe: Companies like GE for Nova in ABB, and how those are progressing.

Speaker Change: And we continue to work closely with with various partnerships GE <unk> Schneider, Microsoft Mobility House voted AI are just a couple of them that are top of mind.

Speaker Change: Sure.

Speaker Change: They are in the stage that is I'll call them pilots with customers today, So we'll lead customer.

Speaker Change: Really starting to think about how to use the technology, we want to make sure we've got the.

Speaker Change: Answer your question.

Speaker Change: Okay.

Speaker Change: Thank you for that and then follow up question wanted to ask about the Luma press release from December if you can give us any more color there in terms of.

Speaker Change: What's gone on the backlog maybe timing of installation.

Speaker Change: Sure very pleased to support Luma, PREPA and the modernization of their distribution grid.

Speaker Change: The thesis behind those partnerships very much is to help our customers absorb new technology faster.

Speaker Change: That is an important project to improve the resiliency and reliability of the electrical service.

Speaker Change: We definitely continue to get strong customer feedback that this is one of the hopeful ways, we can do that.

Speaker Change: On the island. It is our full grid edge intelligence platform. So it's got strong content for both networks and outcomes in it the projects really just getting started.

Speaker Change: And we continue to work closely with with various partnerships GE <unk> Schneider, Microsoft Mobility House voted AI are just a couple of them that are top of mind.

Speaker Change: I think most of the revenue is in the years ahead, rather than something that is immediately a big pop.

Speaker Change: Answer your question.

Speaker Change: Okay.

Speaker Change: For 2025, so think of it as probably a three to four year project overall and it'll it'll rollout in that typical timeframe.

Speaker Change: Thank you for the follow up question wanted to ask about the Luma press release from December if you can give us any more color there in terms of.

Speaker Change: What's gone on the backlog maybe timing of installation.

Speaker Change: Great. Thank you I'll turn it back.

Speaker Change: Sure very pleased to support Luma, PREPA and the modernization of their distribution grid.

Speaker Change: Thank you.

Speaker Change: Our next question coming from the line of Chip Moore with Roth Capital Partners. Your line is now open.

Speaker Change: That is an important project to improve the resiliency and reliability of the electrical service.

Chip Moore: Good morning, Thanks for taking the question.

Chip Moore: I wanted to ask one on just the outlook for 2025.

Speaker Change: On the island. It is our full grid edge intelligence platform. So it's got strong content for both networks and outcomes in it. The project is really just getting started.

Chip Moore: Third in the backend loaded bookings last year and I think.

Chip Moore: You called out some conservatism around the European.

Speaker Change: I think most of the revenue is in the years ahead, rather than something that is immediately a big pop.

Chip Moore: Water meter business, just maybe help us think about biggest risks to that outlook and then what you think you could drive better than expected results.

Speaker Change: For 2025, so think of it as probably a three to four year project overall and it'll it'll rollout in that typical timeframe.

Chip Moore: Yes, just to give a little bit more color again, I would caution you not just to look at the flat year over year, you really do have to normalize 24 for the catch up revenue. So it gets you about 6% growth within our segments.

Speaker Change: Great. Thank you I'll turn it back.

Speaker Change: Thank you.

Chip Moore: I would expect devices to probably be down year over year. They had an unusually strong 24 with water and as Tom said.

Speaker Change: Thank you.

Speaker Change: And our next question coming from the line of Chip Moore with Roth Capital Partners. Your line is now open.

Chip Moore: We're being cautious there because certainly the economies in Europe are suffering a little bit networks I would expect to be flat to very very low growth because of the catch up that's really all networks revenue that came in 24 of the $125 million and as Tom indicated we expect outcomes to have another strong year I don't know that theres a lot of risk.

Chip Moore: Good morning, Thanks for taking the question.

Chip Moore: I wanted to ask one on just the outlook for 2025.

Chip Moore: Third in the backend loaded bookings last year and I think.

Chip Moore: You called out some conservatism around the European.

Chip Moore: Water meter business, just maybe help us think about the biggest risks to that outlook and then what you think it could drive better than expected results.

Chip Moore: To the topline.

Chip Moore: As we mentioned in the earnings outlook is we haven't assumed any new trade policy. So again to the extent that really happens, we'll update accordingly, but that would probably be the biggest risk is if the macro trade environment.

Chip Moore: It gives us a big headwind.

Speaker Change: Very helpful, John and maybe just a follow up on.

Chip Moore: I would expect devices to probably be down year over year. They had an unusually strong 24 with water and as Tom said.

Speaker Change: Margins in trajectory on those 2027 targets you just completed some cost actions I think at the end of last year, just kind of revisit those and how you think about that path.

Chip Moore: We're being cautious there because certainly the economies in Europe are are suffering a little bit networks I would expect to be flat to very very low growth because of the catch up that's really all networks revenues that came in $24 million to $125 million and as Tom indicated we expect outcomes to have another strong year I don't know that theres a lot of risk.

Speaker Change: Yes, I mean, I think we're in a good place relative to our our trajectory to get to 2027 again the top line.

Speaker Change: Well at the time, we did it off 23 actuals and it was a 5% to 7% revenue CAGR from 2327 Wells you update for the strong 24 in the guidance I just gave for 25, you really just need.

Chip Moore: To the topline.

Speaker Change: In like 3% to 7% range to get to 27, So we're well on our way no issues in my in my view of hitting the top line targets.

Chip Moore: It gives us a big headwind.

Speaker Change: Also we are doing really good I think on hitting the increased profile for gross margin and free cash flow generation, so not too worried about hitting those targets as well caution everybody to try not to accelerate them into an earlier year, let us continue to see how things evolve as you mentioned, we did shut two factories down at the tail end of 2024.

Speaker Change: Very helpful, John and maybe just a follow up on.

Speaker Change: Margins in trajectory on those 2027 targets you just completed some cost actions I think at the end of last year, just kind of revisit those and how you think about that path. Thanks.

Speaker Change: Yes, I mean, I think we're in a good place relative to our our trajectory to get to 2027 again the top line.

Speaker Change: <unk> in aggregate, that's maybe $10 million of of cost savings.

Speaker Change: <unk> 25 over 24, and then there is still a little bit of the.

Speaker Change: The backlog that has does not have indexation and so that's maybe a headwind going the other way, but as I mentioned in an earlier question I do expect gross margin to improve.

Speaker Change: Like 3% to 7% range to get to 2007, so we're well on our way no issues in my in my view of hitting the top line targets.

Speaker Change: Over a year and get us on the pathway towards that 27 targets.

Speaker Change: Perfect I appreciate it thanks.

Speaker Change: Thank you.

Speaker Change: And our next question coming from the lineup.

Andrew: Andrew <unk> with Canaccord Genuity. Your line is now open.

Speaker Change: Good morning.

Speaker Change: Yes, Andrew on for Austin Moeller, Thanks for taking the questions just first year.

Speaker Change: <unk> in aggregate, that's maybe $10 million of cost savings.

The record quarterly bookings in mind and regulatory delays mentioned in previous quarters appears the approval process ended given the $1 4 billion in bookings this quarter.

Speaker Change: 25% over 24, and then there is still a little bit of the.

Speaker Change: The backlog that has does not have indexation, so thats, maybe a headwind going the other way, but as I mentioned in an earlier question I do expect gross margin to improve year over year and get us on the pathway towards that 27 targets.

Speaker Change: In terms of the revenue recognition from these contracts do you.

Speaker Change: CBS deals flowing through the P&L in the second half of the year I think you mentioned, maybe 2026. So if you could provide some color there.

Speaker Change: Appreciate it.

Speaker Change: Yes, just let me reiterate what I said in the prepared comments is our typical kind of bookings to starting the revenue is nine to 12 months. So that's why the high end, 52% I think of our 2024 annual bookings came in Q4 and so as we've been signaling for the last several quarters, we didn't expect much of that to come into.

Speaker Change: Perfect I appreciate it thanks.

Speaker Change: Thank you.

Speaker Change: And our next question coming from the line of Andrew <unk> with Canaccord Genuity. Your line is now open.

Speaker Change: Yes.

Speaker Change: Good morning.

Speaker Change: Yes, Andrew on for Austin Moeller, Thanks for taking the questions.

Speaker Change: Revenue in 25, so nine to 12 months is sort of at.

Speaker Change: This first year.

Speaker Change: With the record quarterly bookings in mind and regulatory delays mentioned in previous quarters.

Speaker Change: That timeframe in terms of getting the revenue started and then typically within a project. There is a start and then a kind.

Speaker Change: Appears the approval process ended given the $1 4 billion in bookings this quarter.

Speaker Change: The increases over time, and then kind of goes down so.

Speaker Change: In terms of the revenue recognition from these contracts do you.

Speaker Change: We took all that into account in the 2025 revenue guidance and if you look at that.

Speaker Change: CBS deals flowing through the P&L in the second half of the year I think you mentioned maybe 2026. So if you could provide some color there I'd appreciate it.

Speaker Change: CAGR required often as I just mentioned to get from the 25 targets to 27, 3% to 7% off $25 and we expect growth to accelerate again in 'twenty six 'twenty seven.

Speaker Change: Just let me reiterate what I said in the prepared comments is our typical kind of bookings to starting the revenue is nine to 12 months. So that's why the high end, 52% I think of our 2024 annual bookings came in Q4 and so as we've been signaling for the last several quarters, we didn't expect much of that to come into.

Speaker Change: Yeah.

Speaker Change: Got it thank you and just a follow up.

Speaker Change: Just looking at the $1 4 billion in bookings this quarter again.

Speaker Change: Removing the call it $1 billion in bookings that were going through that regulatory approval process over the past couple of quarters.

Speaker Change: Revenue in 25, so nine to 12 months is sort of at.

Speaker Change: For the year the business did like for under $25 million per quarter. In bookings is this cadence that can be expected in 2025 or how should we be thinking about that.

Speaker Change: That timeframe in terms of getting the revenue started and then typically within a project. There is a start and then a kind of increases overtime and then kind of goes down so.

Speaker Change: Yes, the bookings will be a little bit lumpy quarter to quarter. So.

Speaker Change: We took all that into account in the 2025 revenue guidance and if you look at the <unk>.

Speaker Change: It's very difficult given the bookings discipline, we used for us to call it down to an exact quarter as to when something will happen.

Speaker Change: CAGR required often as I just mentioned to get from the 25 targets to 27, 3% to 7% off $25 and we expect growth to accelerate again in 'twenty six 'twenty seven.

Speaker Change: So I was bracing for a little bit of lumpiness quarter to quarter.

Speaker Change: Okay.

Speaker Change: Got it thank you and just a follow up.

Speaker Change: But I would not expect it to be quite as much of a hockey stick.

Just looking at the $1 4 billion in bookings this quarter again.

Speaker Change: Waiting until Q4, two to book this year, so a little bit.

Speaker Change: We're moving the call it $1 billion in bookings that were going through that regulatory approval process over the past couple of quarters.

Speaker Change: Flatter kind of profile, but in total I would expect it to be a book to bill of one to one or greater for the year. So.

Speaker Change: For the year, the business did like $425 million per quarter in bookings is this.

Speaker Change: If our outlook on revenue was two 4% to two five.

Speaker Change: And so that can be expected in 2025, or how should we be thinking about that.

Speaker Change: Kind of range you can do the math on what the bookings really ought to be and go from there.

Speaker Change: Yes, the bookings will be a little bit lumpy quarter to quarter. So.

Speaker Change: Got it thank you and if I could just squeeze one more in.

Speaker Change: Very difficult given the bookings discipline, we used for us to call it down to an exact quarter as to when something will happen.

Speaker Change: Just looking at Q1 'twenty five has there been any uptick in demand for endpoints and grid edge intelligence and California in the aftermath of the wildfires.

Speaker Change: So.

Speaker Change: Brace you for a little bit of lumpiness quarter to quarter.

Speaker Change: Certainly can.

Speaker Change: I would not expect it to be quite as much of a hockey stick where everything waiting until Q4 two to book this year, so a little bit.

Speaker Change: Before near wildfires, it very tragic situation in our Hearts go out to everybody that's been affected by that.

Speaker Change: The technology that we provide our customers is absolutely helpful in dealing with all sorts of.

Speaker Change: Flatter kind of profile, but in total I would expect it to be a book to bill of one to one or greater for the year. So.

Speaker Change: Environmental impacts, whether it's floods or fires or hurricanes.

Speaker Change: If our outlook on revenue was two 4% to two five.

Speaker Change: Doesn't really matter and you got to have better visibility out at the edge of the grid and Thats clearly.

A range you can do the math on what the bookings really ought to be and go from there.

Speaker Change: What we're working with our customers on across the country, including up and down the coast in California, a lot of our wildfire mitigation technology was originally developed with northern California P. J quite honestly in mind.

Speaker Change: Got it thank you and if I could just squeeze one more in just looking at.

Speaker Change: Q1, 25 has there been any uptick in demand for endpoints and grid edge intelligence and California in the aftermath of the wildfires.

Speaker Change: And I think we've got room to grow in wildfire prone areas to deploy that technology more widely.

Speaker Change: Certainly.

Speaker Change: California wildfires it very tragic situation in our Hearts go out to everybody that's been affected by that.

Speaker Change: Got it thank you so much.

Speaker Change: Thank you.

Speaker Change: The technology that we provide our customers is absolutely helpful in dealing with all sorts of.

Speaker Change: And as a reminder to ask a question. Please press star one one and wait for your name to be announced our next question coming from the lineup Scott Graham with Seaport Research Partners. Your line is now open.

Speaker Change: Environmental impacts, whether it's floods or fires or hurricanes.

Speaker Change: It doesn't really matter as you got to have better visibility out at the edge of the grid and Thats clearly.

Scott Graham: Yes, hi, good morning, Thanks for taking the question.

Speaker Change: I actually have two or three questions.

Scott Graham: Two.

Scott Graham: The operating expenses that were a little bit higher in the two segments, what what was that about.

Scott Graham: You just kind of saw that maybe you had a better than expected quarter underway and then may be spent some money in December to spend some of that all.

Speaker Change: And I think we've got room to grow in wildfire prone areas to deploy that technology more widely.

Scott Graham: Not really again, we we monitor our expenses throughout the year and sometimes the timing of whether it's outside services are some of the investments are both our corporate team and our segments are making they can go through the year. So we focus more on on the annual.

Speaker Change: Got it thank you so much.

Speaker Change: Thank you.

Speaker Change: And as a reminder to ask a question. Please press star one one and wait for your name to be announced.

Speaker Change: Our next question coming from the lineup Scott Graham with Seaport Research Partners. Your line is now open.

Scott Graham: The level of spending for the segments in it and if I look across the company. We ended up at 22, 7% of revenue, which is right within that range of 22 to 23 that we've been targeting.

Scott Graham: Yes, hi, good morning, Thanks for taking the question.

Speaker Change: I actually have two or three questions.

Speaker Change: Yes. Thank you.

Speaker Change: Keep us too.

Speaker Change: The other question is simply kind of about the.

Speaker Change: The operating expenses that were a little bit higher in the two segments.

Speaker Change: The environment, where obviously the call them the power stocks. If you will the industrial companies that service in some way direct or indirect data center markets.

Speaker Change: What was that about.

Speaker Change: That you just kind of saw that maybe you had better than expected quarter underway and then may be spent some money in December to spend some of that at all.

Speaker Change: I'm not really again, we we monitor our expenses throughout the year and sometimes the timing of whether it's outside services are some of the investments are both our corporate team and our segments are making they can go through the year. So we focus more on on the annual.

Speaker Change: Obviously with the.

Speaker Change: Key seek.

Speaker Change: News.

Speaker Change: A month and a half ago.

Speaker Change: Cheaper AI.

Speaker Change: More cooler burning call it AI.

Speaker Change: Level of spending for the segments and if I look across the company. We ended up at 22, 7% of revenue, which is right within that range of 22% to 23 that we've been targeting.

Speaker Change: There's been a lot of speculation about utilities.

Speaker Change: <unk> back there.

Speaker Change: Lower capital spending needs in years ahead.

Speaker Change: Yes. Thank you.

Speaker Change: Obviously I'm not talking about right now, but are you hearing anything from your customers you have so many of them you serve such a wide base of electric utilities out. There are you hearing them talk about maybe the need to grow.

Speaker Change: The other question is simply kind of about the.

Speaker Change: The environment, where obviously the call them the power stocks, if you will the industrial companies.

Speaker Change: Roll some things back in light of this product.

Speaker Change: <unk> service in some way direct or indirect data center markets.

Speaker Change: Not at all no. So we havent seen.

Speaker Change: Obviously with the <unk>.

Speaker Change: Seek.

Speaker Change: Any trends in that direction at all is that the amount of if I just use electricity as the as the poster child here the amount of electricity growth is dramatic.

Speaker Change: News.

Speaker Change: A month and a half ago.

Speaker Change: Cheaper AI.

Speaker Change: More cooler burning call it AI.

Speaker Change: Over the next years, we need 40% more by $2040, 50% more by 2050.

Speaker Change: There is.

Speaker Change: Lot of speculation about utilities rolling back there.

Speaker Change: That is a very strong trend that growth is certainly driven by multiple factors, it's driven by AI data centers as you notice, but it's also driven by re shoring of manufacturing, so I would say alive and well and no change utilities are very much struggling to keep up with the.

Speaker Change: Lower capital spending needs in years ahead, obviously I'm not talking about right now but are you hearing anything from your customers you have so many of them you serve such a wide base of electric utilities out. There are you hearing them talk about maybe the need to.

Speaker Change: Demand increase and find out a way to deal with it so quarter to quarter ebb and flow is a long term trajectory and building infrastructure takes a long time.

Speaker Change: Roll some things back.

Speaker Change: In light of this product.

Speaker Change: Not at all no. So we havent seen.

Speaker Change: Any trends in that direction at all is that the amount of if I just use electricity as the as the poster child here the amount of electricity growth is dramatic.

Speaker Change: So alive, and well and I don't expect that to change in the in the quarters and years ahead.

That's helpful. Thanks, Tom.

Speaker Change: Thank you.

Speaker Change: Over the next years, we need 40% more by $2040, 50% more by 2050.

Speaker Change: And our next question coming from the line of.

Harrison: Gotcha Harrison with Piper Sandler.

Alan.

Speaker Change: Good morning, everybody and thanks for taking the question and congrats on the results and the 2024, our commercial momentum.

Harrison: So my first question is on the guidance.

Harrison: The 12 month backlog was down call. It 10 ish percent year over year.

Harrison: But you are guiding to flat revs.

Speaker Change: Demand increase and find out a way to deal with it so quarter to quarter ebb and flow is a long term trajectory and building infrastructure. It takes a long time.

Speaker Change: Which suggests maybe perhaps more projects that you expect to book and ship in 'twenty five 'twenty four or maybe some other factor at play I was wondering if you could just help us unpack what drives that whats behind that and what what youre seeing in the market that gives you. The confidence that you can have flat revenues with a lower 12 month backlog.

Speaker Change: So alive, and well and I don't expect that to change in the in the quarters and years ahead.

Tom: That's helpful. Thanks, Tom.

Harrison: This year.

Speaker Change: Thank you.

Speaker Change: And our next question coming from the lineup.

Harrison: I was going to say, we have quite a bit of visibility by by customers. So again part of the reason the 12 month is.

Speaker Change: Gotcha Harrison with Piper Sandler.

Speaker Change: Alan.

Harrison: Is so lower compared to the bookings we have for the quarter is what I mentioned, which is theyre very back end loaded and much of the Q4 bookings were not expecting in revenue in the next 12 months. So therefore, they are in the post 12 months piece of the backlog. So yes. There is some element of kind of book and ship in the in the fiscal year, but.

Speaker Change: Good morning, everybody and thanks for taking the question and congrats on the results and the 2024, our commercial momentum.

Speaker Change: So my first question is on the guidance.

The 12 month backlog was down call. It 10 ish percent year over year.

Speaker Change: But you are guiding to flat revs.

Harrison: We're confident with the outlook that we gave in terms of I've seen the pipeline and understanding the current timing of projects.

Harrison: And I think it's also important that you look at the catch up revenue. So December 31, 2024 was was higher 12 months backlog by that $125 million or so compared to.

Speaker Change: This year.

Harrison: Where we stand today. So there is a little bit of that 12 month backlog was up slightly from.

Speaker Change: I'm going to say, we have quite a bit of visibility by by customers. So again part of the reason the 12 month is.

Harrison: From Q3 to Q4, so that the visibility that John talked about is exactly what.

Speaker Change: Is so lower compared to the bookings we entered the quarter is what I mentioned, which is theyre very back end loaded and much of the Q4 bookings were not expecting in revenue in the next 12 months. So therefore, they are in the post 12 months piece of the backlog. So yes. There is some element of kind of book and ship in the in the fiscal year, but.

Harrison: We note and how we see our customers rolling things out.

Harrison: That 12 month backlog is also very much.

Harrison: Based on what customers are forecasting in terms of their project deployment timeframes. So it can move up and down depending on how projects are progressing through the installation.

Speaker Change: We're confident with the outlook that we gave in terms of I've seen the pipeline and understanding the current timing of projects.

Harrison: And phase in their profiles as well.

Speaker Change: And I think it's also important that you look at the catch up revenue. So December 31, 2024 was was higher 12 months backlog by that $125 million or so compared to.

Speaker Change: Got it I appreciate the commentary there and then.

Harrison: On the bookings front, Tom I know you indicated the book to Bill above one one.

Speaker Change: Where we stand today. So there is a little bit of that 12 month backlog was up slightly from.

Speaker Change: Wondering if I could help you help us.

Could help us maybe refine that a low do you think that would be that you can build on the $2 $7 billion.

Speaker Change: From Q3 to Q4, so that the visibility that John talked about is exactly what.

Speaker Change: Last year and 25, so what the book to Bill with the bookings on an absolute basis be up year over year.

Speaker Change: We note and how we see our customers rolling things out.

Speaker Change: That 12 month backlog is also very much.

Speaker Change: Because more than one of the very wide range and then.

Speaker Change: Based on what customers are forecasting in terms of their project deployment timeframes. So it can move up and down depending on how projects are progressing through the installation.

Speaker Change: And then as it pertains to all the business that you won in 'twenty four just curious how you know how much of that is.

Speaker Change: Market growth versus market share gains, maybe if you could talk about win rates.

Speaker Change: That would also be helpful.

Speaker Change: And phase in their profiles as well.

Speaker Change: Sure so.

Speaker Change: Book to Bill of one to one or greater is still that as good estimate as we can give you today.

Got it I appreciate the commentary there and then on.

Speaker Change: The bookings front, Tom I know you indicated the book to Bill above one wonder.

Speaker Change: Becomes very difficult to predict the exact regulatory cycles and things beyond that point. So if our outlook on revenue is two four to two five.

Speaker Change: I'm wondering if I could help you help us or if you could help us maybe refined that are low do you think that would be that you can build on the $2 $7 billion last year and $25. So what the book to Bill with the bookings on an absolute basis be up year over year.

Speaker Change: That gives you some sense of where the bookings number would be.

Speaker Change: I don't want to hazard, a guess of year over year bookings at this point as we progress through the year it'll become.

Speaker Change: Just because more than one of the very wide range and then.

Speaker Change: Much more clear.

Speaker Change: Clear as to what the pace of wins really would look like on the notion of share gains and <unk>.

Speaker Change: And then as it pertains to all the business that you won in 'twenty four just curious how you know how much of that is <unk>.

Speaker Change: Market growth versus market share gains, maybe if you could talk about win rates.

Speaker Change: When loss ratios.

Speaker Change: We definitely see strong take up of our portfolio of offerings certainly in the electricity space the need for better visibility and control out at the edge of the grid the need for agile infrastructure is fueling them.

Speaker Change: That would also be helpful.

Speaker Change: Sure so.

Speaker Change: Book to Bill of one to one or greater is still that as good estimate as we can give you today.

Speaker Change: It becomes very difficult to predict the exact regulatory cycles and things beyond that point. So if our outlook on revenue is two four to two five.

Speaker Change: A very nice pipeline of opportunities and a strong win rate for us So I think in the.

Speaker Change: Certainly in the electricity and the gas space Theres, probably a little bit of share shift there but.

Speaker Change: That gives you some sense of where the bookings number would be.

Speaker Change: I don't want to hazard, a guess of year over year bookings at this point as we progress through the year it will become.

Speaker Change: Very reflective of the strength of the portfolio and fueled by the growth in the marketplace.

Much more clear.

Speaker Change: That's helpful. Thank you if I could just maybe sneak one more in just a question on trade.

Speaker Change: Clear as to what the pace of wins really would look like on the notion of share gains and <unk>.

Speaker Change: No.

Speaker Change: You're saying that you have.

Speaker Change: When loss ratios.

Speaker Change: A natural inventory buffer that you've been working on for I think over a year now.

Speaker Change: So that gives you a little bit of a cushion, but I'm just curious how quickly can you pass on any tariffs to your to your customers.

Speaker Change: And then.

Speaker Change: Are there any sensitivities that you can give us that would help us think about risk from Mexico.

Speaker Change: A very nice pipeline of opportunities and a strong win rate for us So I think in the.

Speaker Change: Gross margins. Thank you.

Speaker Change: Certainly in the electricity and the gas space Theres, probably a little bit of share shift there but.

Speaker Change: Yes on the notion of pricing.

Speaker Change: And what we do with customers.

Speaker Change: Very reflective of the strength of the portfolio and fueled by the growth in the marketplace.

Speaker Change: Clearly, we want to be responsible business people and help our customers.

Speaker Change: In both directions, so the ability to pass on costs.

Speaker Change: That's helpful. Thank you if I could just maybe sneak one more in just a question on trade.

Speaker Change: Very much depends on.

Speaker Change: No.

Speaker Change: The fact patterns in the specifics overall, so it's difficult to forecast in the absence of any real details.

Speaker Change: You're saying that you have.

Speaker Change: A natural inventory buffer that you've been working on for I think over a year now.

Speaker Change: So that gives you a little bit of a cushion, but I'm just curious how quickly can you pass on any tariffs to your to your customers.

Speaker Change: What the tariff regime may look like.

Speaker Change: What I would say is that it's very clear that the customers need to improve their grid performance their resiliency and reliability and that doesn't change based on that the trade policy in place it certainly could alter the timing and pace of projects.

Speaker Change: And then.

Speaker Change: Are there any sensitivities that you can give us that would help us think about risk from Mexico.

Speaker Change: Gross margins. Thank you.

Speaker Change: Yes on the notion of pricing.

Speaker Change: In a.

Speaker Change: Capital constrained world that exists, but I don't think it ultimately changes the destination overall, we've got strong support in the administration for grid resiliency and reliability you heard that from from Secretary right during his.

Speaker Change: And what we do with customers.

Speaker Change: Clearly, we want to be responsible business people and help our customers.

Speaker Change: In both directions, so the ability to pass on costs.

Speaker Change: Very much depends on.

Speaker Change: Confirmation testimony of grid resiliency is fundamentally important and I think that that's something that is important for the country and it's important for a larger re shoring strategy.

Speaker Change: The fact patterns in the specifics overall, so it's difficult to forecast in the absence of any real details.

Speaker Change: What the tariff regime may look like.

Speaker Change: Thank you.

Speaker Change: And there are no further questions in the queue. At this time I will now turn the call back over to Mr. Tom Deitrich for any closing remarks.

Tom Deitrich: Thank you all for joining our call today, we look forward to updating everyone that after Q1 until then thanks.

Speaker Change: In a.

Tom Deitrich: This concludes today's conference call. Thank you all for participating and you may now disconnect.

Speaker Change: Confirmation testimony of grid resiliency is fundamentally important and I think that that's <unk>.

Speaker Change: That is important for the country and it's important for a larger re shoring strategy.

Speaker Change: Thank you.

Speaker Change: And there are no further questions in the queue. At this time I will now turn the call back over to Mr. Tom Deitrich for any closing remarks.

Tom Deitrich: Thank you all for joining our call today, we look forward to updating everyone that after Q1 until then thanks.

Tom Deitrich: This concludes today's conference call. Thank you all for participating and you may now disconnect.

Tom Deitrich: Okay.

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Q4 2024 Itron Inc Earnings Call

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