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Segment Information
 9 Months Ended
Sep. 30, 2024
Segment Reporting [Abstract]  
Segment Information Segment Information
We operate under the Itron brand worldwide and manage and report under three operating segments: Device Solutions, Networked Solutions, and Outcomes.

We have three GAAP measures of segment performance: revenues, gross profit (gross margin), and operating income (operating margin). Intersegment revenues are minimal. Certain operating expenses are allocated to the operating segments based upon internally established allocation methodologies. Corporate operating expenses, interest income, interest expense, other income (expense), and the income tax provision (benefit) are neither allocated to the segments, nor are they included in the measure of segment performance. Goodwill impairment charges are recognized in Corporate unallocated. In addition, we allocate only certain production assets and intangible assets to our operating segments. We do not manage the performance of the segments on a balance sheet basis.

Segment Products

Device Solutions – This segment primarily includes hardware products used for measurement, control, or sensing. These products generally do not have communications capability or may be designed for use with non-Itron systems. Examples from the Device Solutions portfolio include: standard endpoints that are shipped without Itron communications, such as our standard gas, electricity, and water meters for a variety of global markets and adhering to regulations and standards within those markets, as well as our heat and allocation products; communicating meters that are not a part of an Itron end-to-end solution and designed to meet market requirements; and the implementation and installation of said hardware products.

Networked Solutions – This segment primarily includes a combination of communicating devices (e.g., smart meters, modules, endpoints, and sensors), network infrastructure, and associated head-end management and application software designed and sold as a complete solution for acquiring and transporting robust application-specific data. Networked Solutions includes products and software for the implementation, installation, and management of communicating devices and data networks. The Industrial Internet of Things (IIoT) solutions supported by this segment include automated meter reading (AMR); advanced metering infrastructure (AMI) for electricity, water and gas; distributed energy resource management (DERMs); smart grid and distribution automation; smart street lighting; and leak detection and applications for both gas and water systems. Our IIoT platform allows utility and smart city applications to be run and managed on a flexible multi-purpose network.

Outcomes – This segment primarily includes our value-added, enhanced software and services, artificial intelligence, and machine learning in which we enable grid edge intelligence and manage, organize, analyze, and interpret raw, anonymized data to improve decision making, maximize operational profitability, enhance resource efficiency, improve grid analytics, and deliver results for consumers, utilities, and smart cities. Outcomes supports high-value use cases, such as data management, grid operations, distributed intelligence, AMI operations, gas distribution and safety, water operations management, revenue assurance, DERMs, energy forecasting, consumer engagement, smart payment, and fleet energy resource management. Utilities leverage these outcomes to unlock the capabilities of their networks and devices, improve the productivity of their workforce, increase the reliability of their operations, manage and optimize the proliferation of distributed energy resources (DERs), address grid complexity, and enhance the customer experience. Revenue from these offerings are primarily recurring in nature
and would include any direct management of Device Solutions, Networked Solutions, and other third-parties' products on behalf of our end customers.

Revenues, gross profit, and operating income associated with our operating segments were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
In thousands2024202320242023
Product revenues
Device Solutions$122,119 $110,138 $365,956 $340,098 
Networked Solutions390,201 352,771 1,158,857 964,909 
Outcomes25,929 17,446 74,165 56,475 
Total Company$538,249 $480,355 $1,598,978 $1,361,482 
Service revenues
Device Solutions$619 $631 $2,084 $2,085 
Networked Solutions26,512 32,200 78,076 94,460 
Outcomes50,082 47,586 148,835 138,433 
Total Company$77,213 $80,417 $228,995 $234,978 
Total revenues
Device Solutions$122,738 $110,769 $368,040 $342,183 
Networked Solutions416,713 384,971 1,236,933 1,059,369 
Outcomes76,011 65,032 223,000 194,908 
Total Company$615,462 $560,772 $1,827,973 $1,596,460 
Gross profit
Device Solutions$33,342 $26,919 $94,637 $75,351 
Networked Solutions149,648 135,203 452,830 362,852 
Outcomes26,608 25,081 77,970 79,315 
Total Company$209,598 $187,203 $625,437 $517,518 
Operating income
Device Solutions$26,485 $17,675 $71,913 $45,837 
Networked Solutions115,231 102,503 349,353 266,052 
Outcomes11,186 10,280 30,928 35,867 
Corporate unallocated(78,969)(75,568)(250,814)(268,159)
Total Company73,933 54,890 201,380 79,597 
Total other income (expense)8,492 843 13,301 (1,673)
Income before income taxes
$82,425 $55,733 $214,681 $77,924 

For the three months ended September 30, 2024, one customer represented 10.7% of total company revenue. This revenue is included in both the Networked Solutions and Outcomes reporting segments. For the three months ended September 30, 2023, and the nine months ended September 30, 2024 and 2023, no single customer represented more than 10% of total company revenue.
Revenues by region were as follows:
Three Months Ended September 30,Nine Months Ended September 30,
In thousands2024202320242023
United States and Canada$505,606 $452,583 $1,486,090 $1,256,042 
Europe, Middle East, and Africa86,670 81,394 272,107 265,814 
Asia Pacific23,186 26,795 69,776 74,604 
Total Company$615,462 $560,772 $1,827,973 $1,596,460 

Depreciation expense is allocated to the operating segments based upon each segment's use of the assets. All amortization expense is recognized within Corporate unallocated. Depreciation and amortization of intangible assets expense associated with our operating segments was as follows:
Three Months Ended September 30,Nine Months Ended September 30,
In thousands2024202320242023
Device Solutions$3,423 $2,976 $8,853 $9,467 
Networked Solutions4,219 4,074 12,234 12,273 
Outcomes1,510 1,270 4,470 3,748 
Corporate unallocated5,564 5,325 15,422 16,525 
Total Company$14,716 $13,645 $40,979 $42,013