About $2 billion in revenue, and we are the leader in electric smart grid metering. You talked about the last couple of months of the last year being challenging. I would probably more use the term interesting. For me personally, I think I've just passed the 100-day mark, so it's still interesting with enjoying and having fun with the team every day. More importantly, let's focus a bit on where we believe the value creation is, and that has not changed from an announcement we made back in October on our focus and where we believe the strategic pillars are for our value creation. It really starts with our focus on our North American business. We are a leader in the North American business, and we see the greatest opportunities for our business here in North America.
Built an exceptional business model around different elements of the value chain for utilities, and we're exceptionally well positioned with them and being part of the critical infrastructure for the utilities. Financially, this is also the geography where we have EBITDA margins that are substantially above what we see in the rest of the business and the overall EBITDA margins for the business. Then, last but not least, that means that our return on capital is the best in North America, whereas the other two geographic segments we have, being in EMEA and being in Asia Pacific. That brings me to the second strategic initiative. We announced that we are reviewing what we're doing with our business in EMEA. That's 40% of our business today. That's about $600 million of revenue. We have announced that we're going to revisit and review options for that business going forward.
And we have been over the past, I would say you could actually say, decade, we have adjusted the structure, revised, and refocused the manufacturing footprint and continued to optimize it, but it does not deliver the same EBITDA margins the way the business is set up in Europe for the industry as in America. And yeah, we're trying to shortly address what the outcome is of our strategic review. And then the third element is we're also evaluating a listing in the U.S. for the company stock I mentioned before for the past five years, going on six years now. We've been listed on the Swiss Stock Exchange. And as we are realigning our business around our North American market, we want to also align the capital markets with where our business is. And even today, already 80% of our EBITDA for Landis+Gyr is made in North America.
We're certainly attracted by the liquidity that exists in the U.S. market, whereas it's a much smaller market over in Europe. We continue to believe that we have a highly attractive business in North America, and we want to focus talent and capital allocation on the North American market. This is really the three initiatives that we are focusing on and on the business.
Great. Thanks. Two follow-up questions there, I guess. First off, could you provide a little bit of clarity as to why you think the North American market is structurally superior to EMEA? I mean, is it the nature of the competition? Is it the diverse countries and regulations that you have to tend to in Europe? Just a little clarity there.
Yeah, I can provide a bit of clarity there. You touched on some of them, but I think the most important one in the U.S., we've been able to establish a business model that allows us to participate in various elements of the value chain for utilities. So we are delivering the devices and the infrastructure to them. We operate on a recurring revenue stream, some of the infrastructure elements over a 10-15-year period of time. And back in the utilities, we're also embedded with critical software applications that utilities utilize that, again, delivers a recurring revenue stream for us and embeds us. Over in Europe, we have not been able to replicate the business model. We are much more a device-centric overall business model over in Europe. And you also touched on one important aspect. Anytime we talk about Europe, we are already misleading everyone.
It's really country-by-country specific. It's not a cohesive market. And France does something different from the U.K. Germany does nothing. So very different structure. But we, and that's not just Landis+Gyr as an industry, we try to break out and participate in various elements of the value chain in Europe as well. And we have not succeeded. So that's the business model. And then certainly, as we think about North America, really, after 15 years of no growth in electricity demand, we see electricity demand growth returning to the U.S., sustainable growth that we are just starting to see, and that bodes extremely well for growth of our business going forward.
Yes, for sure, and I'd love to just dig in a bit on that, so electricity demand is increasing in North America. I think there's a perception that may be a little bit incorrect that the companies serving the smart grid may not participate as fully, just given the data centers are kind of in their own local geographies, and that may not propagate as much to the kind of smart grid in residential and kind of local commercial settings, but I think you would present perhaps a different argument there, so help us understand the types of upside that you will see from load growth in the U.S., even if it's largely data center-driven.
I think data center, in a way, for us, it's an indirect part of the growth. Again, in our business model, our customers are utilities, regulated utilities, and they have to deal with the demand growth. Demand growth is driven by multiple elements that we see. Obviously, AI and data centers play into that growth, creating demand growth for electric utilities, but it is just one element of the growth. We also see electricity as being the energy of choice. It's really electrons replacing molecules. We also see onshoring of manufacturing, a driver for demand, and we continue to see population growth as well. There is a multitude of drivers that we see that contribute to sustainable growth in demand for the next decades to come. That growth really requires flexibility, requires efficiency in the grid, and that's really where we play.
So there's a lot of capital expenditures required to facilitate that growth, but we are the flexibility, we are the efficiency element around technology that exists today. So that's why we see the demand being the driver for the growth we see in the market and data center being a small part playing into that.
Got it. One more question on your opening strategic imperative. So help us understand the process and the timeline to potentially exit your EMEA business. I know that you mentioned that you are shutting down your EV business, which is Europe-centric to, I think, help process an exit of EMEA. But what is the sort of timeline for this? What is the timeline for potential U.S. listing?
So on the EMEA business, again, we made the announcement back in October that we are reviewing options for that business. We've also been very open that we have also enlisted a bank for one of those options. And if you saw some of the announcements that we made, in particular, you referred to electric vehicle charging, which is probably the first concrete step in reviewing our setup in EMEA. We entered electric vehicle charging four years ago. It's a European-centric hardware business on the belief that utilities will play a substantial role in utilizing EV charging across Europe. Now looking back, that clearly did not happen strategically. And then on top with some of the slowdown in EV that we saw in Europe, crowding of competition that really led us to the decision to wind down that business.
We absolutely believe EV charging will come back, but it's not for us to wait out our core customer base and our core competencies around utilities. We exited this business. We are winding down that business. Then obviously, in parallel, that helped us to create a much more attractive parameter around our EMEA business as we go down various paths. Concretely, with EV charging, very beneficial for us as well. We articulated that turn into a loss-making business. We've been losing close to $1 million a month into that business. Stopping that EBITDA drag and in addition, creating a more attractive parameter around EMEA. The process, it's a $600 million blue chip business in Europe. I would probably say we're running as fast as one can with having advisors, sell-side advisors in place.
And we certainly want to go back to this crowd and articulate something during 2025, what is the outcome of those various options that we are reviewing. So that's for EMEA. You also asked about the listing. Another initiative that requires a lot of outside advice and focus as well. While listed in Switzerland, we already have U.S. GAAP accounts. So there are some elements in place, but we're working through that, and we're working towards a date that we have articulated in 2026. I think there is a mid-2026 is a realistic, ambitious timeframe that we have articulated multiple times for working towards that.
All right. I think I saw a question in the audience. If we could have a mic up here.
Thank you. I'm not that familiar with your business. When you are monitoring for utilities, is that done on the distribution side? Could you give us a little better feel for what you're actually monitoring and who your direct competition is?
So, okay. So I should have spent a bit more time explaining who we are in Landis+Gyr. So the devices that we've been producing for 100 years, it started out as metering. That was our core. And today, that is still one of the core capabilities of the devices that we offer today. They're probably more called grid edge sensors today than meters, what was the name in the past. And so this is really how we interact with the utilities and the attractiveness of where we sit. It's really the grid edge for the utility, the last element of their infrastructure. And on the other side is the individual consumer. So it's an attractive. So that's what we offer, and that's how we participate in the demand growth and enabling utilities to offer flexibility and resilience in the grid.
If that was helpful to put us in the right perspective, what we do.
There are no other questions from the audience. I will resume. Would you like to follow up?
Yeah, perhaps you could expand a little bit more on it. So we have public companies in the U.S. like ESCO that owns Doble. They are direct with the consumer. I'm assuming that is not a space you're in. And again, could you speak to who your direct competition is?
So other companies in the space in the U.S., that would be a listed company called Itron. In some segment, it would be a company called Xylem playing in some areas of the space. Europe also, ELSTER is a company that is part of Honeywell that is in that space and a substantial number across the world of players that are different from U.S. players that play in Europe and in Asia-Pacific. But since we're in the U.S. today, those are probably the names you're the most familiar with.
Just one more follow-up. Are you the market leader within that, or are you? You mentioned three or four competitors. Where are you in the competitive space?
Globally and here in the U.S., we are the leader in electric metering. As we are focused on electric utilities as our customer base, we are the global leader and we are the leader here in the U.S.
So I'll pick up. I guess the markets were a little taken by surprise by the recent pre-announcement for the March fiscal year, which kind of downgraded your sales and, to a lesser extent, margin views. And maybe just for the sake of the audience and investors here who are somewhat new to the story, if you could help us understand the disconnect between a very strong and healthy multi-year backlog, which I think you expect to continue to grow, versus having to take down the sales view for the fiscal year ending in March so materially. Just help us juxtapose those two dynamics for the sake of investors and understanding the business.
So as articulated the business model before in the U.S., utilities give us multi-year contracts running from 10 to 15 years to provide our service to them over that period of time. So that includes devices, software and services, and software revenue over that period of time. So if you think of our backlog, and we continuously have in the U.S. backlog north of $3 billion, there is about 50%-55% of our backlog is this software and service backlog that has a tenure of eight to 10 years over the life of those contracts. That's one element of the backlog. So extremely predictable, week in, week out, we invoice those devices, we invoice for those revenue streams, and they are recurring and a substantial value standalone.
The other part is the hardware-centric part of our backlog, which is the devices that we talked about, also some infrastructure element that probably has much more, I would say, on average, a three-year horizon on how those devices are deployed in the field. We have seen that backlog be fairly stable over the last, I would say, 18 months or so, maybe 2% or 3% up, which is consistent a bit with the growth that we've seen overall if we exclude any one-offs that we had experienced by the supply chain or pent-up demand. Coming back to the difficult message that we had to deliver around Outlook, and it really comes down to the Outlook that we articulated for 2024. It's really, though it's called for our fiscal 2024 year ending March, it's really, call it a seven-week forecast that we have provided.
Very, very forensically looking into every contract, every shipment that we can make before the end of the year. And there was probably at the beginning of the year, ambition level in our forecast and our view for the year that was not reflected in what I was able to find and what we can do in a seven-week period of time. As I mentioned before, I've just passed the 100-day mark. But in parallel, also nothing has changed in looking at our pipeline, looking at our book-to-bill ratio. I think we have articulated multiple times that we're quite positive on having a nice book-to-bill ratio as we end the year. And certainly, everything if we go further down the road than end of March of our fiscal year, as we look at the pipeline and the prospects, nothing has changed for us how we view the market.
That clarity is quite helpful. One silver lining, I guess, in the pre-announcement, one could say is that you're taking inventory obsolescence charge on some older metering products because your new Revelo network meter is experiencing faster than expected adoption. I think Revelo has been a multi-year success as a smart meter. So just help us understand how Landis+Gyr is winning with the Revelo meter and how that sets the stage for future growth in the smart grid.
Yeah. So Revelo is really our brand name for what is today referred to as grid edge sensor, and our first contract that put grid edge sensor on the map was with a utility up in the Northeast called National Grid. I think that's about three years ago now, the largest awarded contract in the history of our industry to date, I think north of $800 million, and that was a first scale adoption of acknowledging that grid edge sensors or Revelo is actually a requirement for the path forward as we see the growth in electricity demand. So they placed, they decided to go exclusively with us, 5.5 million meters, just that utility alone. So that really put grid edge for us and for the industry on the map, and since that, we have seen adoption across multiple utilities.
Certainly, when we launched the product and as we start to deploy that at scale, there was initially a belief that there will be a parallel path with the product version from before. But every utility segment, from investor-owned utility or municipality to co-op-owned segment, they really embraced the offering of the Revelo. So while we for a while thought that we have to offer both technologies, very quickly became clear we can harmonize and focus on Revelo. And obviously, that's something that we really liked. And it helps us drive the cost down. Volume is the number one cost driver for a new electronic product. So we really like that.
Difficult decision to write off an inventory, but at the end of the day, it's a validation for us on the path that we've embarked on and helping us to create a cost-based 2025 and 2026 forward for the product of choice across the utility industry today.
Your primary competitor reported a few days ago, and they had very strong performance in the part of their business they call outcomes in terms of sales and margins. What is Landis+Gyr doing to kind of transition from its strength, the Revelo sensor or network meter, to help build out an outcomes business, which might be kind of the next arena for growth? I know you have a meaningful service and software exposure, but how do you kind of help build out the outcomes business to perhaps benefit from some of the trends that Itron has been experiencing?
A couple of things let me articulate here. I think if you go back a bit in the history of Landis+Gyr, about 15 years ago, we made an acquisition of a large company here in the U.S. that was exclusively in the software business, software and a bit of service business as well. So it's not something that we just discovered five years. It's been part of the foundation here in the U.S. for us. And even today, we articulate in the U.S. and the business model that are articulated, 32% today of our revenue in the U.S. is around software, is around services, is building, is a recurring revenue stream that we have utilities today. So I think we have a percentage here that is leading in the industry, and that one is quite exciting. And again, we talked about the grid edge sensor, our Revelo.
We firmly believe that will enable business models above and beyond that we have today in our software and service revenue simply with the complexity those devices have and the assistance and the help that utilities need in that aspect. So I think we're exceptionally well positioned, and we are breaking out our profitability already today by segment. In the U.S., we're consistently in the, I would say, 18%-20% EBITDA range. So our business model with the software and service revenue stream allows us to be in 18%, 18%-20% profitability, which again, I believe is the leading profitability in the industry.
Maybe just turning to some of the macro dynamics as it relates to potential tariff dynamics or other regulatory headwinds or tailwinds. As you begin to recover beyond this fiscal year in terms of margins as your sales growth hopefully resumes and you move beyond this inventory obsolescence charge, what types of challenges are you anticipating in having to work around from a potential tariff or regulatory point of view?
So look, I think the tariff situation is the same as for everyone else, and it's a bit in flux every day. I think what helps a bit to understand the devices we talk about, to think of them. It's really think of a high-end laptop with an AI processor that is installed at the side of the house. And I say that because that helps you to get comfortable that our supply chain is absolutely global today. The components that go in those devices today are not made in the U.S. So we have a global supply chain, and that potentially some of the tariffs, as they become clearer, that might trigger some changes and shifts in our global supply chain from country to country. But those components cannot be procured in the U.S. today. There is very limited final assembly done by us for those devices.
For us specifically, that means that is done for us in a facility we own and operate because we believe in that in Mexico, where we have very limited, as I said, value add. So you can, like everyone else in the U.S., every day we play what is the best sourcing and what is the best manufacturing setup. And we feel quite comfortable that the way we understand it today, our manufacturing footprint remains and our sourcing might move around a bit. And certainly, the one element that is cast in stone as of today, any type of tariffs from China, there is no sourcing for our product that goes into our product from China. So the one element that is cast in stone today has absolutely zero impact.
More importantly than on the supply chain and sourcing side is that, like everyone in the industry is, how do I get my customers to compensate me?
Thank you, Peter. Appreciate you joining us virtually today. Congrats on the first 100 days and good luck in the next year or two running Landis. Welcome on board.
Thank you so much. Appreciate it. And yeah, thank you for your interest. Thank you.