Itron, Inc.

Good day, and thank you for standing by. Welcome to ITRON's fourth quarter 2023 earnings conference call. At this time, all participants are on a listen-only mode. 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 1-1 on your telephone. You will then hear an automatic message by saying your hand is raised. Please note that today's conference is being recorded. I will now hand the conference over to speaker host, Paul Vincent, Vice President of Investor Relations. Please go ahead.

Good morning and welcome to ITRON's fourth quarter 2023 earnings conference call. Tom Dietrich, ITRON's President and Chief Executive Officer, and Joan Hooper, Senior Vice President and Chief Financial Officer, will review ITRON's fourth quarter results and provide a general business update and outlook. Earlier today, the company issued a press release announcing its results. This release also includes details related to the conference call and webcast replay information. Accompanying today's call is a presentation that is available through the webcast and on our corporate website under the Investor Relations tab. Following prepared remarks, the call will open for questions using the process the operator described. 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. Reconciliations of differences between GAAP and non-GAAP financial measures are available in our earnings release and on our investor relations website. 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. 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. 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 environments. Materials discussed today, February 26, 2024, may materially change, and we do not undertake any duty to update any of our forward-looking statements. Now, please turn to page four of our presentation. As our CEO, Tom Dietrich begins his remarks.

Thank you, Paul. Good morning to everyone, and thank you for joining our call. During the fourth quarter, strong operational execution, improved supply chain balance, and robust customer demand supported financial, results ahead of our expectations, including single quarter record revenue for our network solutions and outcomes segments. The performance highlights for the fourth quarter were year-over-year revenue growth of 23% to $577 million, adjusted EBITDA of $68 million, an increase of 99% year-over-year, non-GAAP earnings per share of $1.23, an increase of 73%, and free cash flow of $39 million, which increased $57 million year-over-year. Turning to slide five, bookings for the fourth quarter of $839 million equated to a book-to-bill ratio of 1.45. This brought cumulative 2023 bookings to $2.16 billion, and our total backlog at year-end was $4.5 billion. Our customers faced pressure due to increased resource demand, climate and sustainability-related challenges, and the need to improve consumer experience. ITRON's platform approach to provide grid edge intelligence has a proven track record in addressing these customer concerns. The magnitude and diversity of bookings during the fourth quarter also reflects the breadth of unmet needs of utilities around the world. Our largest booking was an award from Eversource Energy, who contracted for an advanced endpoint and network rollout in their Massachusetts territory, covering 1.3 million consumers. The program includes deployment services, 10 years of software and associated managed services, and grid edge technology with ITRON's distributed intelligence. This is another large multi-application award for ITRON, and we look forward to supporting Eversource to add value across their territory. Moving to the southeastern U.S., Tampa Electric, or TECO, and ITRON have agreed to work together to migrate TECO's existing DI-capable endpoint and network lighting controllers from a prior generation of ITRON networks to our latest, a multi-service canopy network platform, which will simplify and future-proof the solution for new grid edge intelligence use cases. TECO continues to adopt grid edge intelligence and is increasing the use and scale of distributed intelligence applications, most recently through the deployment of location awareness at scale. By leveraging the consolidated ITRON network and embracing distributed intelligence, TECA will be able to introduce more value and service resilience to their consumers. Further, ITRON will be working with Tulsa, Oklahoma-based One Gas, a provider of natural gas services to more than 2.3 million consumers. One Gas will enhance the intelligence of their network through the deployment of the next generation of communication modules. This project will help One Gas increase reliability, accuracy, and safety for their consumers. Our market demand outlook for 2024 remains constructive and customer interest in new technology continues to accelerate. We anticipate 2024 bookings will result in a book-to-bill ratio of at least one to one. We are observing customers actively exploring projects that could benefit from IIJA funding programs And although too early to accurately quantify, we do anticipate 2024 bookings will include some contributions from various government infrastructure investment programs, including IIJA, with the benefits of these programs flowing through in subsequent years. Slide six provides insights on the operational environment. We continue to see a strong and stable pipeline of customer opportunities with accelerating interest in new technologies. Our customers are facing growing pressure to adapt to a rapidly changing world and digitize critical infrastructure. Requirements to become more efficient and more agile through visibility gathered by ITRON's grid edge intelligence solutions will improve asset management, enhance consumer experience, and reduce inefficiencies. Component supply has improved and has become more predictable. This has allowed ITRON to fulfill a meaningful portion of previously constrained revenue and build inventory of certain critical components in light of a more uncertain and potentially volatile global landscape. During 2023, efforts to improve our price-cost ratio gained traction and we were pleased with the results. Moving forward, we will continue to align our business needs for increased pricing flexibility with the predictability needs of our regulated customers. Exiting 2023, Approximately 70% of our $4.5 billion backlog has been repriced or indexed to help address margin compression in the event of continued inflationary cost volatility. Much of the remaining 30% of backlog is expected to be fulfilled during 2024, which does gate margins primarily in the network solution segments. I will now ask Joan to provide details about our fourth quarter and full year results, as well as our outlook for 2024.