H2O America (SJW) Q4 2025 earnings summary

Executive summary

• Reported 2025 diluted EPS of $2.92 and adjusted diluted EPS of $2.99, near the top end of guidance, up from $2.95 in 2024, reflecting strong strategic and financial execution.

• Announced transformative Quadvest acquisition, expected to add $483.6 million to rate base and significantly expand Texas operations, along with Cibolo Valley acquisition.

• Achieved constructive regulatory and legislative outcomes across all states, including new mechanisms for PFAS recovery and rate case deferrals.

• Invested a record $501 million in CapEx in 2025, a 41% increase over 2024, exceeding guidance.

• Increased quarterly dividend by 4.8%, marking the 58th consecutive annual increase, with a $0.44 per share dividend declared for January 2026.

Financial highlights

• 2025 adjusted diluted EPS: $2.99, up from $2.95 in 2024; 2026 standalone EPS guidance: $3.08–$3.18, excluding Quadvest and Cibolo Valley impacts.

• Five-year CapEx plan increased 31% to $2.7 billion for 2026–2030, supporting a projected 13% rate base CAGR.

• Annualized dividend for 2026 expected at $1.76 per share.

• Operating revenue rose 7% to $800.6 million in 2025, with net income up 9% to $102.6 million.

• Operating expenses increased 8% to $623.1 million, mainly due to higher water production and administrative costs.

Outlook and guidance

• Long-term adjusted diluted EPS CAGR target raised to 6%–8%, anchored off 2025 adjusted EPS of $2.99, with expectations to reach the top end over 2026–2030.

• Five-year plan targets $2.7 billion in CapEx and a 13% rate base CAGR through 2030.

• Quadvest acquisition expected to be dilutive to EPS in 2026–2027, accretive from 2028 onward.