H2O America (SJW) Q2 2025 earnings summary

Executive summary

• Rebranded as H2O America with a new NASDAQ ticker, reflecting a national water utility platform and leadership changes, including a new CEO, COO, CFO, and Chief Accounting Officer.

• Delivered strong Q2 2025 results: diluted EPS of $0.71 (up 11%), adjusted diluted EPS of $0.75 (up 14%), and net income of $24.7 million (up 19%) year-over-year.

• Announced the $540 million acquisition of Quadvest in Houston, expected to expand Texas operations and customer base significantly by 2029.

• Operating revenue for Q2 2025 was $198.3 million, up 13% year-over-year, driven by rate increases and higher usage.

• Received $6.4 million in legal settlement proceeds related to PFAS litigation in Q2 2025.

Financial highlights

• Q2 2025 diluted EPS was $0.71 (GAAP), adjusted diluted EPS was $0.75, both up year-over-year; YTD diluted EPS was $1.20, adjusted EPS $1.25.

• Revenues increased 13% in Q2 2025 and 12% YTD, driven by rate increases, infrastructure mechanisms, and higher customer usage.

• Water production expenses rose 15% in Q2 and 14% YTD; other operating expenses increased 13% in Q2 and 8% YTD.

• Operating income for Q2 2025 was $43.9 million, up from $40.6 million in Q2 2024.

• Dividends per share increased to $0.42 in Q2 2025, with 57 consecutive years of annual increases.

Outlook and guidance

• Reaffirmed 2025 adjusted diluted EPS guidance of $2.90–$3.00 and 5%–7% annual earnings growth through 2029, expecting to be in the top half of the range.

• Estimated 2025 utility capital expenditures of $451 million, with $207 million (44%–45%) invested as of June 30, 2025.

• Quadvest acquisition expected to be dilutive in 2026–2027, accretive in 2028, and meaningfully accretive to long-term growth.

• Over the next five years, $1.9 billion in capital expenditures is expected, including $300 million for PFAS treatment.

• Guidance subject to risks including regulatory, integration of Quadvest, and market conditions.