Badger Meter, Inc. (BMI): Business Model Canvas [11-2024 Updated]

Discover how Badger Meter, Inc. (BMI) leverages its innovative business model to drive success in the utility metering industry. From strategic partnerships with major telecommunications companies to cutting-edge smart water solutions, Badger Meter is revolutionizing how utilities manage resources. Explore the key components of BMI's Business Model Canvas, including their value propositions, customer segments, and revenue streams, to understand how they maintain a competitive edge in a rapidly evolving market.

Badger Meter, Inc. (BMI) - Business Model: Key Partnerships

Collaborations with telecommunication providers (e.g., AT&T, Verizon)

Badger Meter has established collaborations with major telecommunications providers such as AT&T and Verizon to enhance its smart water solutions. These partnerships facilitate the integration of advanced communication technologies into Badger Meter's products, particularly in the deployment of ORION Cellular endpoints. For instance, the integration of cellular technology allows for real-time data transmission, which is crucial for effective water management systems. This collaboration has contributed to an increase in net sales, particularly with revenue from ORION Cellular endpoints reaching significant levels as part of the overall growth in utility water market sales.

Partnerships with utility companies for smart water solutions

Badger Meter has formed strategic partnerships with various utility companies to implement smart water solutions. These partnerships are pivotal in deploying BEACON SaaS solutions, which have seen a substantial increase in adoption. For the nine months ended September 30, 2024, sales into the utility water market were reported at $543.7 million, marking a 22.5% increase from the previous year. This growth is largely attributed to the adoption of smart water technologies and the expansion of Badger Meter's customer base within utility sectors, enhancing operational efficiencies and service delivery.

Strategic acquisitions to enhance product offerings

In its pursuit of innovation and market expansion, Badger Meter has engaged in strategic acquisitions. Notably, the company acquired Syrinix for a total purchase consideration of $17.1 million. This acquisition included $10.3 million of goodwill and various intangible assets that are expected to bolster Badger Meter's product offerings in flow measurement and monitoring solutions. Additionally, the acquisition of Telog/Unity net assets for $3.0 million reflects Badger Meter's strategy to enhance its capabilities in data analytics and smart water management systems, further solidifying its position in the market.

Partnership Type	Partner	Impact on Revenue	Year of Acquisition	Acquisition Cost
Telecommunication Collaboration	AT&T	Enhanced data transmission capabilities	N/A	N/A
Telecommunication Collaboration	Verizon	Improved smart water solutions	N/A	N/A
Utility Partnership	Various Utility Companies	$543.7 million (2024)	N/A	N/A
Acquisition	Syrinix	Strengthened flow measurement solutions	2023	$17.1 million
Acquisition	Telog/Unity	Enhanced data analytics capabilities	2024	$3.0 million

Badger Meter, Inc. (BMI) - Business Model: Key Activities

Development of smart water technology and solutions

Badger Meter, Inc. is heavily focused on the development of smart water technologies. This includes advancements in Automatic Meter Reading (AMR) and Advanced Metering Infrastructure (AMI). The company's revenue from smart water solutions has significantly increased, contributing to the overall growth in the utility water market.

For the nine months ended September 30, 2024, the net sales in the utility water market were $543.7 million, a 22.5% increase from $443.9 million in 2023. The adoption of smart water technologies has been a key driver of this growth, reflecting a strong market demand for innovative solutions.

Manufacturing of utility and flow instrumentation products

Manufacturing remains a core activity for Badger Meter, focusing on utility and flow instrumentation products. In the nine months ending September 30, 2024, the company reported net sales of $621.4 million, which is a 19.2% increase compared to $521.2 million during the same period in 2023. The manufacturing process includes producing mechanical and ultrasonic meters, as well as communication devices associated with these technologies.

The gross margin for the nine months ended September 30, 2024, was $246.4 million, representing a gross margin percentage of 39.7%, up from 39.3% in the prior year. This improvement is attributed to increased sales volume and a favorable product mix.

Sales and customer support for BEACON SaaS solutions

The BEACON Software as a Service (SaaS) platform is a critical offering for Badger Meter, providing comprehensive data analytics and management solutions for water utilities. For the three months ended September 30, 2024, BEACON SaaS revenues contributed significantly to the company’s overall sales.

In the third quarter of 2024, net sales reached $208.4 million, with BEACON SaaS solutions playing a pivotal role in this growth. The company recognized $15.8 million in revenue from services rendered over time, reflecting the value of ongoing customer support and service contracts associated with the BEACON platform.

Customer support activities encompass training, installation, and ongoing technical assistance, which are essential for maximizing the value of BEACON solutions for clients.

Key Activity	2024 Net Sales (in millions)	2023 Net Sales (in millions)	Growth Rate
Utility Water Market	$543.7	$443.9	22.5%
Flow Instrumentation	$77.7	$77.3	0.5%
Total Net Sales	$621.4	$521.2	19.2%

In summary, the key activities of Badger Meter, Inc. involve the continuous development of smart water technologies, robust manufacturing processes for utility and flow instrumentation products, and comprehensive sales and customer support for their BEACON SaaS solutions. These activities are crucial for delivering their value proposition to customers and driving growth in a competitive market.

Badger Meter, Inc. (BMI) - Business Model: Key Resources

Advanced manufacturing facilities and technology

Badger Meter, Inc. operates advanced manufacturing facilities that are integral to its production of utility metering solutions. As of September 30, 2024, the company reported total assets of $802.9 million, which includes significant investments in property, plant, and equipment totaling $231.8 million, net of accumulated depreciation of $158.5 million. The manufacturing capabilities are enhanced by the use of cutting-edge technologies, including smart measurement hardware and communication solutions like the ORION® system, which facilitates efficient data collection and analysis.

Skilled workforce with engineering expertise

Badger Meter's success is heavily reliant on its skilled workforce. The company employs a diverse range of professionals, particularly in engineering roles, which is critical for innovation in product development. The selling, engineering, and administration expenses for the nine months ended September 30, 2024, amounted to $127.7 million, reflecting the company's commitment to investing in human resources and ensuring operational excellence. This workforce is pivotal in maintaining the high standards of product quality and customer service that Badger Meter is known for.

Strong brand reputation in utility metering

Badger Meter has cultivated a strong brand reputation in the utility metering industry over its century-long history. The company derives nearly 95% of its net sales from water-related applications, with net sales for the nine months ending September 30, 2024, reported at $621.4 million, marking a 19.2% increase from the previous year. This growth is a testament to the trust and reliability associated with the Badger Meter brand, which is crucial for its competitive positioning in the market.

Key Resource	Details	Financial Impact
Manufacturing Facilities	Total assets: $802.9 million; Property, plant, and equipment: $231.8 million	Enables production of advanced metering solutions
Skilled Workforce	SEA expenses: $127.7 million for nine months ending September 30, 2024	Invests in human capital to drive innovation and quality
Brand Reputation	Net sales: $621.4 million, 19.2% increase year-over-year	Strong market presence in utility metering

Badger Meter, Inc. (BMI) - Business Model: Value Propositions

Innovative smart water solutions for efficient resource management

Badger Meter, Inc. focuses on providing innovative smart water solutions that enhance resource management efficiency. In the nine months ended September 30, 2024, the company's net sales reached $621.4 million, reflecting a 19.2% increase compared to $521.2 million in the same period in 2023. This growth was driven by increased adoption of smart water technologies, particularly Advanced Metering Infrastructure (AMI) and the BEACON® software as a service (SaaS) platform.

High-quality and reliable utility metering products

Badger Meter's product line includes high-quality utility metering products known for their accuracy and reliability. In the third quarter of 2024, sales in the utility water market amounted to $183.0 million, up 13.8% from $160.8 million in the prior year. This increase can be attributed to the strong demand for mechanical and ultrasonic meters, which are crucial for effective water management.

Product Category	Sales Q3 2024 (in millions)	Sales Q3 2023 (in millions)	Percentage Increase
Utility Water Market	$183.0	$160.8	13.8%
Flow Instrumentation	$25.4	$25.4	0%

Comprehensive data analytics through BEACON SaaS

The BEACON SaaS platform provides comprehensive data analytics, enhancing visibility and management of water resources. In the nine months ended September 30, 2024, BEACON SaaS revenues contributed significantly to the overall sales growth, which included a notable increase in ORION Cellular endpoints. The platform allows utilities to monitor system performance effectively, leading to improved operational efficiency and sustainability.

Metric	Q3 2024	Q3 2023	Change
Net Earnings	$32.0 million	$26.0 million	+23.1%
Earnings per Share (Diluted)	$1.08	$0.88	+22.7%

Badger Meter, Inc. (BMI) - Business Model: Customer Relationships

Dedicated customer support and training services

Badger Meter, Inc. offers comprehensive customer support and training services aimed at ensuring customers can effectively utilize their products. The company has invested significantly in training initiatives, reflecting their commitment to customer satisfaction. In 2024, Badger Meter allocated approximately $4.5 million towards customer training programs, enhancing product knowledge and operational efficiency for utility providers.

Long-term partnerships with utility providers

Badger Meter establishes long-term partnerships with utility providers, focusing on delivering tailored solutions that meet specific customer needs. In 2024, the company reported a 22.5% increase in net sales to utility water markets, totaling $543.7 million, driven by enhanced collaboration and shared goals with utility partners. This strategic alignment fosters loyalty and ensures mutual growth.

Partnership Type	Sales Growth (%)	Net Sales ($ Million)
Utility Water Market	22.5%	$543.7
Flow Instrumentation	0.5%	$77.7

Engagement through regular feedback and product updates

Badger Meter actively engages in gathering regular feedback from its customers, which serves as a critical input for product development and improvement. The company utilizes feedback mechanisms to incorporate customer suggestions into product updates. In 2024, they launched a new version of the BEACON SaaS platform, which was developed based on customer insights, resulting in a 15% increase in user satisfaction ratings.

Year	Feedback Mechanism	Product Update Launch	User Satisfaction Increase (%)
2024	Surveys & Workshops	BEACON SaaS Version 2.0	15%

Badger Meter, Inc. (BMI) - Business Model: Channels

Direct sales to utility companies and municipalities

Badger Meter, Inc. primarily targets utility companies and municipalities through direct sales. For the nine months ended September 30, 2024, net sales to the utility water market were $543.7 million, representing a 22.5% increase from $443.9 million in the same period of 2023. This growth is attributed to the increased adoption of smart water technologies, particularly Advanced Metering Infrastructure (AMI) solutions, and enhanced sales of both mechanical and ultrasonic meters.

Online platforms for SaaS offerings

Badger Meter has developed a strong online presence for its Software as a Service (SaaS) offerings, particularly through its BEACON® platform. The revenue from BEACON SaaS solutions has contributed significantly to the overall sales growth. For the three months ended September 30, 2024, the company reported net sales of $208.4 million, with SaaS revenues being a key driver of this increase. The company has seen a shift towards recurring revenue models, with SaaS revenues growing alongside traditional hardware sales.

Distribution partnerships for hardware products

Badger Meter also leverages distribution partnerships to enhance its market reach for hardware products. The company has established various strategic alliances that enable it to distribute its measurement hardware and flow instrumentation products efficiently. For the nine months ended September 30, 2024, total sales from flow instrumentation amounted to $77.7 million, a slight increase from $77.3 million in the previous year, indicating stable demand supported by these partnerships.

Channel	Sales (Q3 2024)	Sales (Q3 2023)	Growth Rate
Utility Water Market	$183.0 million	$160.8 million	13.8%
BEACON SaaS Solutions	Included in overall SaaS growth	Not specified	Significant
Flow Instrumentation Products	$25.4 million	$25.4 million	Flat

The company’s strategic focus on direct sales, online platforms, and distribution partnerships positions it well within the evolving smart water technology landscape. These channels collectively enhance Badger Meter’s ability to deliver value to its customers while fostering growth in a competitive market.

Badger Meter, Inc. (BMI) - Business Model: Customer Segments

Utility companies and municipalities

Badger Meter, Inc. primarily serves utility companies and municipalities, which constitute approximately 85% of its net sales. In the nine months ended September 30, 2024, sales into the utility water market reached $543.7 million, a 22.5% increase from $443.9 million in the same period of 2023. This growth is attributed to the increasing adoption of smart water technologies, particularly Advanced Metering Infrastructure (AMI), and the rising demand for both mechanical and ultrasonic meters.

Industrial clients requiring flow measurement solutions

In addition to utility companies, Badger Meter caters to industrial clients that require flow measurement solutions. For the nine months ended September 30, 2024, sales into the global flow instrumentation end markets amounted to $77.7 million, slightly up from $77.3 million in 2023, indicating a 0.5% increase. This sector includes clients from various industries utilizing flow measurement devices for operational efficiency and compliance with regulatory requirements.

Residential consumers using smart metering technologies

Badger Meter also targets residential consumers through its smart metering technologies. The company’s innovative solutions, such as the BEACON® SaaS platform, enhance residential water usage monitoring and management. The rise in sales from smart metering technologies is evident, as the overall net sales for the third quarter of 2024 were $208.4 million, an increase of 11.9% from $186.2 million in the same quarter of 2023. This includes significant contributions from residential applications, which are increasingly seen as essential for efficient water resource management.

Customer Segment	Net Sales (2024)	Net Sales (2023)	Growth Rate
Utility Companies and Municipalities	$543.7 million	$443.9 million	22.5%
Industrial Clients	$77.7 million	$77.3 million	0.5%
Residential Consumers	Included in total net sales	Included in total net sales	11.9% (total growth)

Badger Meter, Inc. (BMI) - Business Model: Cost Structure

Manufacturing and operational costs

The manufacturing and operational costs for Badger Meter, Inc. (BMI) are reflected in the cost of sales, which for the nine months ended September 30, 2024, amounted to $374.95 million, compared to $316.18 million for the same period in 2023. This indicates a significant increase, driven by higher sales volume and inflationary pressures on component costs.

Period	Cost of Sales (in millions)
Nine Months Ended September 30, 2024	$374.95
Nine Months Ended September 30, 2023	$316.18

Additionally, the gross margin for the same period was $246.42 million, reflecting a gross margin percentage of 39.7%, which is an improvement from 39.3% in the prior year. The increase in gross margin is attributed to favorable sales mix and operational efficiencies.

Research and development expenses for innovation

Research and development (R&D) expenses are crucial for Badger Meter's innovation strategy, particularly in smart water technologies. For the nine months ended September 30, 2024, the company incurred R&D expenses totaling approximately $15.79 million, compared to $12.82 million in the same period of 2023. This represents an increase in investment in innovation by 23.3%.

Period	R&D Expenses (in millions)
Nine Months Ended September 30, 2024	$15.79
Nine Months Ended September 30, 2023	$12.82

Marketing and sales expenses to promote products

Marketing and sales expenses, categorized under selling, engineering, and administration (SEA) expenses, were reported at $127.71 million for the nine months ended September 30, 2024, an increase from $119.00 million in the same period of 2023. This reflects a year-over-year increase of 7.4%.

Period	SEA Expenses (in millions)
Nine Months Ended September 30, 2024	$127.71
Nine Months Ended September 30, 2023	$119.00

This increase in marketing and sales expenses is linked to higher personnel-related investments and enhanced spending for promoting the company's innovative products and services.

Badger Meter, Inc. (BMI) - Business Model: Revenue Streams

Sales of utility and flow instrumentation products

The primary revenue stream for Badger Meter, Inc. comes from the sales of utility and flow instrumentation products. For the nine months ended September 30, 2024, the company's net sales totaled $621.4 million, reflecting a 19.2% increase from $521.2 million in the same period in 2023. Specifically, sales into the utility water market reached $543.7 million, an increase of 22.5% compared to $443.9 million in 2023.

Revenue Source	9 Months Ended September 30, 2024 (in millions)	9 Months Ended September 30, 2023 (in millions)	Percentage Change
Utility Water Market	$543.7	$443.9	22.5%
Flow Instrumentation Products	$77.7	$77.3	0.5%
Total Net Sales	$621.4	$521.2	19.2%

Subscription fees from BEACON SaaS solutions

Badger Meter has significantly increased its revenue from subscription fees related to its BEACON SaaS solutions. These solutions have become a crucial part of the company’s offerings, contributing to its growth in the smart water technology sector. The revenue from BEACON SaaS solutions has been integrated into the overall sales figures, with the company reporting that smart water solutions, including BEACON, are driving substantial sales growth. In the third quarter of 2024, the sales figures showed a notable increase across various hardware and software-related sales, positioning BEACON as a key revenue stream.

Service and training fees associated with product installations

Another important revenue stream for Badger Meter comes from service and training fees associated with product installations. The company periodically oversees field installations of its products, which includes providing training and support services to customers. This aspect of the business not only enhances customer satisfaction but also contributes additional revenue. The service fees are part of the overall service offerings that complement the sale of measurement hardware and software solutions.

Revenue Source	Q3 2024 Net Earnings (in millions)	Q3 2023 Net Earnings (in millions)	Percentage Change
Net Earnings	$32.0	$26.0	23.1%
Operating Earnings	$40.6	$31.4	29.5%

For the nine months ended September 30, 2024, the service and training segments have shown resilience, with the overall growth in net earnings attributed to effective management of operational costs and enhanced service offerings. The company’s strategic focus on customer training and support has reinforced its value proposition, leading to increased customer loyalty and repeat business.

Overall, Badger Meter's diverse revenue streams, including product sales, SaaS subscriptions, and associated services, underscore its robust business model aimed at leveraging technology innovations in the utility sector.

Updated on 16 Nov 2024

Resources:

1. Badger Meter, Inc. (BMI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Badger Meter, Inc. (BMI)' financial performance, including balance sheets, income statements, and cash flow statements.
2. SEC Filings – View Badger Meter, Inc. (BMI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.