Itron, Inc. (NASDAQ:ITRI) Q4 2022 Earnings Call Transcript

Martin Malloy: I wanted to ask about the guidance. And I would have anticipated for the level of revenue that you’re guiding to, that the earnings per share would be higher. Could you maybe give us some help in terms of the magnitude for the variable comp that you talked about? And also, any help would be appreciated on the gross profit margin side.

Joan Hooper: Yes. I think I answered the gross profit already. So from an annual perspective, I think at or slightly above the full year 2022 level. In terms of OpEx, I think you’ve sort of talked about that we’re going to continue to be a little bit higher as the revenue is not at the scale level. So for OpEx, I think it’s also in a percentage similar to 2022 which would imply higher dollar OpEx between ’22 and ’23. And as I mentioned on the call, think a lot of that is the variable comps. So I really don’t want to talk about exactly how much our variable comp is but it was materially enough that we mentioned it. The other thing I would point to 2022 is EPS versus 2023, we normalized for you in the discussion point. So the tax rate in overall ’22 was 4%.

The tax rate in ’23 is 28%. And so we had a lot of favorable discrete mostly linked to statute limitations expirations in ’22. It can normalize for the same tax rate year-to-year. 2022 would have been $0.85 on the midpoint of our guidance is $0.90 so roughly 6%. And again, we’ve built the guidance based on our current view of supplier commitments. And to the extent they’re better than that, more predictable, we’ll be in a position to update the guidance in the August time frame.

Martin Malloy: Okay, that’s helpful. Then in terms of the record backlog here, can you break down maybe what — how much of that is outcomes? And how much of that is network solutions.

Joan Hooper: Yes. I mean, over 90% is networks and outcomes. It doesn’t materially change much from quarter to quarter.

Operator: Thank you. And I will now turn the call back over to Mr. Tom Dietrich for any closing remarks.

Tom Deitrich: Very good. Thank you all for joining us today. We look forward to updating you on our progress after Q1. Thanks, all.

Operator: Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may now disconnect.