SABESP (SBSP3) Q1 2026 earnings summary

Executive summary

• Adjusted net revenue rose 10.9% year-over-year to R$6,021 million, driven by tariff increases and commercial initiatives.

• Adjusted EBITDA increased 26% to R$3.8 billion, with margin expanding to 63% due to efficiency gains and cost discipline.

• Adjusted net income grew 32% year-over-year to R$1.6 billion, supported by improved operations and lower debt spreads.

• CapEx reached R$3.7–3.8 billion in Q1, up 31% year-over-year, advancing universal access and infrastructure projects.

• Customer base stable at 9.5 million water and 8.2 million sewage connections, with service quality prioritized.

Financial highlights

• Reported net revenue was R$9,965 million, with adjusted net revenue from sanitation services at R$6,021 million (+10.9% YoY); price contributed 12%, volume up 2.4%, mix reduced by 3.4%.

• Adjusted EBITDA margin improved to 63% from 55% year-over-year.

• Adjusted net income margin rose to 26% from 22% year-over-year.

• CapEx: R$3.7–3.8 billion (+31% YoY), with 87% of water, 77% of sewage collection, and 71% of sewage treatment targets for 2024–2026 already met.

• Net debt: R$32.5 billion; net debt/adjusted EBITDA at 1.7x, improved from 2.4x in 1Q25.

Outlook and guidance

• CapEx expected to ramp up through the year, with a compounding curve and two-thirds of CapEx typically unitized annually.

• Regulatory discussions on CapEx plan for 2024–2029 ongoing, with more clarity expected by Q3.

• Implementation of new regulatory accounting principles and RAB methodology targeted for year-end.

• CapEx backlog stands at R$41.7 billion from April 2026 to 2029, supporting universalization and infrastructure expansion.

• Social tariff program growth expected to be organic and minor unless regulatory changes occur.