H2O America (SJW) investor relations material

Executive summary

• Q1 2026 diluted EPS was $0.49 (GAAP) and $0.50 (adjusted), flat year-over-year, with net income up 15% to $19.0 million, supported by a 9% revenue increase to $183.3 million.

• Completed a $700 million equity offering, including a $400 million forward component, to fund acquisitions and capital needs through 2027; offering was more than 5x oversubscribed.

• Affirmed 2026 EPS guidance of $3.08–$3.18 and long-term EPS CAGR target of 6–8%, with expectations to reach the top end over 2026–2030.

• Continued focus on infrastructure investment, regulatory engagement, and maintaining customer affordability.

• Water supply conditions remained stable across key regions, with sufficient resources projected for 2026.

Financial highlights

• Q1 2026 revenue increased 9% year-over-year, with $0.41 per share gain, half from rate relief in CA, CT, and TX.

• Operating expenses rose 11% to $145.9 million, driven by higher production, maintenance, and depreciation costs.

• Effective tax rate dropped to 15% from 17% year-over-year due to higher flow-through tax benefits.

• Q1 2026 infrastructure investment totaled $85.3 million, 18% of the $483 million full-year CapEx budget.

• Cash and cash equivalents rose to $153.0 million at quarter-end.

Outlook and guidance

• Reiterated 2026 adjusted diluted EPS guidance of $3.08–$3.18, excluding pending acquisitions.

• Five-year capital plan of $2.7 billion, with 80% qualifying for timely regulatory recovery.

• Targeting a 13% rate base CAGR from 2025–2030, with EPS CAGR at or above 6–8% long-term target.

• Quadvest acquisition expected to be dilutive to EPS in 2026–2027, with accretion beginning in 2028.

• Estimated utility capital expenditures for 2026 are $458–$483 million, with $82.1–$85.3 million invested as of March 31.