Core Insights - Chesapeake Utilities Corporation reported a net income of $19.4 million ($0.82 per share) for Q3 2025, an increase from $17.5 million ($0.78 per share) in Q3 2024, with adjusted net income at $19.5 million ($0.82 per share) compared to $18.1 million ($0.80 per share) in the prior year [2][4][17] - For the first nine months of 2025, net income reached $94.2 million ($4.03 per share), up from $81.9 million ($3.66 per share) in the same period of 2024, with adjusted net income at $94.9 million ($4.06 per share) compared to $84.2 million ($3.76 per share) [4][26] - The company reaffirmed its 2025 EPS guidance range of $6.15 to $6.35 per share and increased its capital guidance range to $425 million to $450 million [8][9] Financial Performance - Adjusted gross margin for Q3 2025 increased by $15.2 million (12.5%) to $137.2 million compared to Q3 2024, driven by natural gas transmission service expansions, regulatory initiatives, and increased CNG, RNG, and LNG services [17][20] - Operating income for Q3 2025 was $45.0 million, a 10.0% increase from $40.9 million in Q3 2024, with adjusted operating income also reflecting growth [18][26] - Year-to-date adjusted gross margin for 2025 was $462.4 million, an increase of $49.3 million (11.9%) from $413.1 million in 2024 [25][31] Growth Initiatives - The company invested $123 million in capital during Q3 2025, generating over $20 million in gross margin from transmission, infrastructure, and transportation projects [7][6] - Chesapeake Utilities completed its Delaware rate case, resulting in tariff-related changes and rate design adjustments [7] - The company is focusing on a multi-year Enterprise Resource Plan (ERP) process to drive business transformation and growth [7] Segment Performance - The regulated energy segment's adjusted gross margin for Q3 2025 was $114.7 million, up from $102.2 million in Q3 2024, reflecting a 12.2% increase [19] - The unregulated energy segment's adjusted gross margin for Q3 2025 was $22.4 million, a 13.1% increase from $19.8 million in Q3 2024, driven by increased CNG, RNG, and LNG services [22][31] - For the nine months ended September 30, 2025, the regulated energy segment's adjusted gross margin was $360.5 million, up from $324.0 million in 2024, while the unregulated segment's adjusted gross margin increased to $101.9 million from $89.2 million [27][31]

Core Viewpoint - Chesapeake Utilities (CPK) is expected to report a year-over-year increase in earnings and revenues for the quarter ended September 2025, with a consensus outlook indicating potential stock price movements based on actual results compared to estimates [1][2]. Earnings Expectations - The consensus estimate for quarterly earnings is $0.90 per share, reflecting a year-over-year increase of +12.5% [3]. - Expected revenues are projected at $171.9 million, which is a 7.3% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 3.98% higher in the last 30 days, indicating a reassessment by analysts [4]. - Chesapeake Utilities has an Earnings ESP of 0%, suggesting no recent differing analyst views from the consensus estimate [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict deviations from consensus estimates, but the predictive power is significant primarily for positive readings [9][10]. - Chesapeake Utilities currently holds a Zacks Rank of 4, which complicates the prediction of an earnings beat [12][13]. Historical Performance - In the last reported quarter, Chesapeake Utilities had an earnings surprise of +4.00%, with actual earnings of $1.04 per share against an expected $1.00 [14]. - Over the past four quarters, the company has beaten consensus EPS estimates two times [15]. Industry Context - Another company in the utility sector, Northwest Natural (NWN), is expected to report a loss of $0.82 per share, indicating a year-over-year change of -15.5% [19]. - Northwest Natural's revenues are expected to be $170.28 million, up 24.4% from the previous year, but it has an Earnings ESP of -6.10% [20].

Core Viewpoint - Chesapeake Utilities Corporation will host a conference call on November 7, 2025, to discuss its financial results for the third quarter and nine months ended September 30, 2025, with the earnings press release issued on November 6, 2025, after market close [1]. Group 1: Conference Call Details - The conference call will take place at 8:30 a.m. ET on November 7, 2025 [1]. - Investors can listen to the call via live webcast, with a registration link provided for participation [2]. - Dial-in information for the question and answer portion includes a toll-free number (800-579-2543) and an international number (785-424-1789) with Conference ID CPKQ325 [2]. Group 2: Company Overview - Chesapeake Utilities Corporation is a diversified energy delivery company listed on the New York Stock Exchange (NYSE: CPK) [3]. - The company offers sustainable energy solutions through various services, including natural gas transmission and distribution, electricity generation and distribution, propane gas distribution, and mobile compressed natural gas utility services [3].

Core Points - Chesapeake Utilities Corporation and its subsidiary Sharp Energy have been recognized as "Stars of Delaware" for the sixth consecutive year, with Chesapeake Utilities named Best Natural Gas/Energy Provider and Sharp Energy awarded Best Propane Company [1][2]. Company Overview - Chesapeake Utilities has over 100 years of experience in providing safe and reliable natural gas service across Delaware and Maryland, operating nearly 2,100 miles of distribution mains and serving more than 110,000 customers [3][7]. - Sharp Energy, a subsidiary of Chesapeake Utilities, has a strong reputation for customer satisfaction, delivering propane to approximately 90,000 customers and maintaining nearly nine million gallons of propane storage [4][8]. Industry Recognition - The Stars of Delaware awards are based on over 44,000 votes from Daily State News readers, highlighting businesses that Delaware residents trust [2]. - The awards were celebrated at a community event in Dover, Delaware, showcasing the importance of local businesses in the community [5].

Core Insights - Chesapeake Utilities Corporation appointed Lisa Eden to its Board of Directors effective September 15, 2025, bringing extensive energy industry experience from her previous role as senior vice president and CFO at TXNM Energy, Inc. [1][2] Group 1: Board Appointment - Lisa Eden's appointment is expected to enhance the Board's collective expertise, particularly in financial acumen and energy sector insights, which will support Chesapeake Utilities' strategic oversight [2][3] - Ms. Eden has over two decades of experience in various executive roles at TXNM Energy, including vice president and treasurer, and has developed expertise in corporate finance, capital markets, and strategic planning [2][3] Group 2: Company Strategy and Vision - Ms. Eden expressed enthusiasm about contributing to Chesapeake Utilities, highlighting the company's strong performance history and commitment to community service [3] - The Board, including chair Jeff Householder, emphasized that Ms. Eden's extensive experience will strengthen the company's ability to deliver energy solutions and drive long-term value for stakeholders [3] Group 3: Company Overview - Chesapeake Utilities Corporation is a diversified energy delivery company listed on the NYSE (CPK), offering sustainable energy solutions through various services including natural gas transmission and distribution, electricity generation, and propane gas distribution [4]

Core Insights - Chesapeake Utilities Corporation celebrated the five-year anniversary of its Safety Town training facility, emphasizing its commitment to safety, education, and community collaboration [1][2][3] Training and Community Engagement - Since its launch in 2020, Safety Town has trained over 1,200 emergency response personnel and hosted more than 200 employee training events, reaching over 50 fire departments and municipalities [2][3] - The facility offers hands-on training experiences, including certifications in various safety protocols such as excavation, leak investigation, and CPR/AED/First Aid [3][5] Charitable Contributions - The company made a charitable contribution of $10,000 to the Delaware Volunteer Firefighter Association to support its scholarship fund, highlighting its community involvement [4] Safety Culture and Commitment - Safety Town is described as a commitment to the safety and resilience of communities, equipping first responders and employees with essential skills for critical situations [5] - Chesapeake Utilities Corporation operates another Safety Town facility in DeBary, Florida, furthering its safety culture and industry leadership [5]

Financial Data and Key Metrics Changes - The company reported adjusted earnings per share (EPS) of $1.04 for Q2 2025, up 21% from 2024, marking the fourth consecutive quarterly increase in earnings relative to the prior year period [7] - Adjusted gross margin was approximately $143 million, up 13% from 2024, driven by investments in infrastructure and operational efficiencies [24] - Adjusted net income was approximately $24 million, up 26% from 2024, reflecting strong performance despite a higher share count [24] Business Line Data and Key Metrics Changes - The regulated segment's adjusted gross margin was approximately $118 million, up 14% from the previous year, driven by organic growth and increased rates from recent rate cases [26] - The unregulated energy segment's adjusted gross margin was up 7% to approximately $25 million, with growth from Marlin Gas Services and Full Circle Dairy, offset by a reduction in propane margins [27] Market Data and Key Metrics Changes - Year-to-date residential customer growth was 4.2% in Delmarva and 3% in Florida compared to the first half of last year, indicating strong demand for natural gas [8] - The company is seeing increased interest from multifamily developments opting for natural gas instead of all-electric builds, which supports overall growth strategy [9] Company Strategy and Development Direction - The company is focused on three pillars of growth: identifying and deploying capital, managing regulatory agendas, and transforming business operations to maintain top quartile growth and shareholder returns [10] - A five-year capital investment plan of $1.5 billion to $1.8 billion has been initiated, with approximately 70% requiring no additional regulatory approval [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the full year 2025 EPS guidance of $6.15 to $6.35, contingent on a successful outcome of the Florida City Gas depreciation study [7][32] - The company is committed to long-term EPS growth of 8% through 2028, supported by ongoing capital investments and operational excellence [31] Other Important Information - The company has increased its 2025 full-year capital expenditure guidance to $375 million to $425 million, reflecting growing demand for natural gas [8] - The company has successfully completed three rate cases, resulting in annual revenue increases of $3.5 million in Maryland, $6.1 million in Delaware, and $8.6 million in Florida [18] Q&A Session Summary Question: Was the successful outcome in the FCG depreciation study assumed in the 2025 guidance? - Yes, the successful outcome was considered within the full guidance range for 2025 [35] Question: How does the company plan to fund the additional CapEx for this year? - The company plans to maintain its target capital structure and utilize available capacity from its revolving credit facility and long-term debt placements [37][39] Question: When will the company refresh its key guidance structure? - The company expects to evaluate and potentially refresh its capital guidance for 2026 in February, as it is still early in the current guidance period [40]

Financial Performance - Adjusted EPS for Q2 2025 was $1.04, a 21% increase compared to $0.86 in Q2 2024[16, 24] - Adjusted Gross Margin for Q2 2025 reached $142.8 million, up 13% from Q2 2024[24] - Adjusted Net Income for Q2 2025 was $24.3 million, a 26% increase from Q2 2024[24] - Year-to-date Adjusted EPS reached $3.25, a 10% increase from YTD 2024[21, 25] - Year-to-date Adjusted Gross Margin was $325.2 million, up 12% from YTD 2024[25] - Year-to-date Adjusted Net Income was $75.4 million, a 14% increase from YTD 2024[25] Capital Expenditure and Projects - The company increased its 2025 capital expenditure guidance by $50 million, with a new range of $375 million to $425 million[17, 30] - A new Ohio pipeline project, with a capital investment of $10 million, will serve a fuel cell powering a data center and is expected to be operational in the first half of 2027[17, 44] - The Worcester Resiliency Upgrade (WRU) project, a $100 million FERC-approved LNG storage facility, is expected to add $3.9 million of additional full-year margin[46, 49, 50] Regulatory and Strategic Initiatives - Final orders were received for all three active rate cases in Delaware, Maryland, and Florida[17] - The company reaffirmed its 2025 Adjusted EPS guidance range of $6.15 to $6.35[30]

Company Performance - Chesapeake Utilities reported quarterly earnings of $1.04 per share, exceeding the Zacks Consensus Estimate of $1 per share, and up from $0.86 per share a year ago, representing an earnings surprise of +4.00% [1] - The company posted revenues of $192.8 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 3.99%, compared to $166.27 million in the same quarter last year [2] - Over the last four quarters, Chesapeake Utilities has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Market Performance - Chesapeake Utilities shares have declined approximately 0.7% since the beginning of the year, while the S&P 500 has gained 7.9% [3] - The company's current Zacks Rank is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.88 on revenues of $162.9 million, and for the current fiscal year, it is $6.27 on revenues of $885.2 million [7] - The outlook for the Utility - Gas Distribution industry is positive, currently ranking in the top 20% of over 250 Zacks industries, suggesting that the industry is likely to outperform the bottom 50% by a factor of more than 2 to 1 [8]

[PART I—FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) [Financial Statements](index=7&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Unaudited condensed consolidated financial statements show significant revenue and net income growth for Q2 and H1 2025, with total assets growing to **$3.74 billion** Condensed Consolidated Statements of Income Highlights (Unaudited) | Metric (in millions) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $192.8 | $166.3 | $491.5 | $412.0 | | **Operating Income** | $50.3 | $40.8 | $137.1 | $120.4 | | **Net Income** | $23.9 | $18.2 | $74.8 | $64.4 | Condensed Consolidated Balance Sheet Highlights (Unaudited) | Metric (in millions) | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $3,737.8 | $3,577.0 | | **Total Liabilities** | $2,238.7 | $2,186.8 | | **Total Stockholders' Equity** | $1,499.1 | $1,390.2 | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $139.2 | $167.4 | | **Net cash used in investing activities** | $(212.7) | $(155.8) | | **Net cash provided by (used in) financing activities** | $67.1 | $(10.1) | Earnings Per Share (Diluted) | Period | Diluted EPS | | :--- | :--- | | **Three Months Ended June 30, 2025** | $1.02 | | **Three Months Ended June 30, 2024** | $0.82 | | **Six Months Ended June 30, 2025** | $3.22 | | **Six Months Ended June 30, 2024** | $2.89 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, revenue recognition, rate cases, segment performance, debt financing, and derivative instruments for hedging - The company adopted ASU 2023-07 for segment reporting and ASU 2023-09 for income tax disclosures, which only impacted disclosures and not the financial position or results of operations[33](index=33&type=chunk)[34](index=34&type=chunk) - In August 2025, the company entered into a Note Purchase Agreement for **$200.0 million** in Senior Notes to reduce short-term borrowings and fund capital expenditures[126](index=126&type=chunk) - The company amended its revolving credit agreement in August 2024, increasing total borrowing capacity to **$450.0 million**. As of June 30, 2025, **$245.3 million** was outstanding[130](index=130&type=chunk)[131](index=131&type=chunk) - The company uses propane and interest rate swap agreements, designated as cash flow hedges, to mitigate risks from commodity price fluctuations and changes in short-term borrowing rates[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=37&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes strong Q2 2025 performance to regulatory initiatives and infrastructure, increasing capital expenditure forecasts Q2 2025 vs Q2 2024 Performance (GAAP) | Metric (in millions) | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Net Income** | $23.9 | $18.2 | +$5.7 | | **Diluted EPS** | $1.02 | $0.82 | +$0.20 | Six Months 2025 vs 2024 Performance (GAAP) | Metric (in millions) | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | **Net Income** | $74.8 | $64.4 | +$10.4 | | **Diluted EPS** | $3.22 | $2.89 | +$0.33 | - The company's growth strategy focuses on prudently deploying capital in existing businesses and new projects, proactively managing its regulatory agenda, and executing business transformation initiatives[143](index=143&type=chunk)[148](index=148&type=chunk) - The company increased its 2025 capital expenditure forecast to a range of **$375.0 million** to **$425.0 million**, up from previous estimates, to support growth projects[248](index=248&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Q2 2025 operating income rose to **$50.3 million**, driven by a **$16.2 million** increase in Adjusted Gross Margin, primarily from Regulated Energy Adjusted Gross Margin by Segment - Q2 2025 vs Q2 2024 | Segment (in millions) | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Regulated Energy** | $117.7 | $103.3 | +$14.4 | | **Unregulated Energy** | $25.0 | $23.4 | +$1.6 | | **Total Adjusted Gross Margin** | $142.8 | $126.6 | +$16.2 | Operating Income by Segment - Q2 2025 vs Q2 2024 | Segment (in millions) | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Regulated Energy** | $51.8 | $40.5 | +$11.3 | | **Unregulated Energy** | $(1.5) | $0.4 | $(1.9) | | **Total Operating Income** | $50.3 | $40.8 | +$9.5 | - Key drivers for the Q2 2025 pre-tax income increase included rate changes (**+$4.1M**), natural gas transmission expansions (**+$3.9M**), contributions from infrastructure programs (**+$3.7M**), and increased CNG/RNG/LNG services (**+$3.5M**)[165](index=165&type=chunk) [Summary of Key Factors Influencing Adjusted Gross Margin](index=48&type=section&id=Summary%20of%20Key%20Factors%20Influencing%20Adjusted%20Gross%20Margin) Adjusted gross margin is significantly influenced by major projects and regulatory initiatives, forecasted to contribute **$84.9 million** in 2025 Forecasted Adjusted Gross Margin from Major Projects & Initiatives (in millions) | Category | Estimate for Fiscal 2025 | Estimate for Fiscal 2026 | | :--- | :--- | :--- | | **Pipeline Expansions** | $22.8 | $45.3 | | **CNG/RNG/LNG Transportation & Infrastructure** | $22.0 | $22.7 | | **Regulatory Initiatives** | $40.1 | $56.0 | | **Total** | **$84.9** | **$124.0** | - The Worcester Resiliency Upgrade project, approved by FERC in January 2025, is expected to generate significant adjusted gross margin of **$10.2 million** in 2026 and **$17.6 million** in 2027 and thereafter[177](index=177&type=chunk)[178](index=178&type=chunk) - Colder weather in H1 2025 compared to H1 2024 contributed an additional **$5.7 million** in adjusted gross margin from increased customer consumption[201](index=201&type=chunk) [Financial Position, Liquidity and Capital Resources](index=62&type=section&id=FINANCIAL%20POSITION,%20LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The company maintains a strong financial position, funding capital expenditures through cash flow, borrowings, and equity, with **$197.1 million** available credit 2025 Forecasted Capital Expenditures (in millions) | Category | Low Estimate | High Estimate | | :--- | :--- | :--- | | **Regulated Energy** | $335.0 | $375.0 | | **Unregulated Energy** | $33.0 | $42.0 | | **Corporate and other** | $7.0 | $8.0 | | **Total** | **$375.0** | **$425.0** | Capitalization (including short-term debt) | Component (in millions) | June 30, 2025 | % of Total | | :--- | :--- | :--- | | **Short-term debt** | $245.3 | 8% | | **Long-term debt** | $1,275.1 | 42% | | **Stockholders' equity** | $1,499.1 | 50% | | **Total capitalization** | **$3,019.5** | **100%** | - Net cash provided by financing activities was **$67.1 million** for H1 2025, driven by **$61.2 million** in stock issuance proceeds and **$46.6 million** in net revolver borrowings, partially offset by **$29.0 million** in dividend payments[263](index=263&type=chunk)[271](index=271&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=67&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company manages interest rate risk with fixed-rate debt and swaps, commodity price risk through recovery mechanisms and hedging - Regulated energy operations have limited commodity price risk due to PSC-authorized fuel cost recovery mechanisms[273](index=273&type=chunk) - Unregulated propane operations use storage (up to **8.6 million gallons**), forward contracts, and derivative hedges to mitigate wholesale price fluctuation risk[274](index=274&type=chunk)[275](index=275&type=chunk) - The company utilizes interest rate swap agreements to mitigate risk associated with changes in short-term borrowing rates on its revolving credit facility[272](index=272&type=chunk) [Controls and Procedures](index=68&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[282](index=282&type=chunk) - No material changes to internal controls over financial reporting occurred during the quarter ended June 30, 2025[283](index=283&type=chunk) [PART II—OTHER INFORMATION](index=68&type=section&id=PART%20II%E2%80%94OTHER%20INFORMATION) [Legal Proceedings](index=68&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Management believes ongoing legal and regulatory proceedings will not materially affect the company's financial position or results - Management does not expect ongoing legal and regulatory proceedings to have a material effect on the company's financial condition or results[284](index=284&type=chunk) [Risk Factors](index=68&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the company's 2024 Annual Report on Form 10-K - The report states there are no material changes from the risk factors disclosed in the 2024 Annual Report on Form 10-K[285](index=285&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=69&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) During Q2 2025, the company repurchased a small number of shares for dividend reinvestment in a Rabbi Trust, without a public program Share Repurchases - Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | **April 2025** | 629 | $128.40 | | **May 2025** | 0 | N/A | | **June 2025** | 0 | N/A | | **Total** | **629** | **$128.40** | - Share purchases were made for the purpose of reinvesting dividends on shares held in the Rabbi Trust for the Non-Qualified Deferred Compensation Plan[286](index=286&type=chunk) [Defaults Upon Senior Securities](index=69&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) There were no defaults upon senior securities during the reporting period - None[287](index=287&type=chunk) [Other Information](index=69&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter[288](index=288&type=chunk) [Exhibits](index=70&type=section&id=ITEM%206.%20EXHIBITS) This section lists filed exhibits, including a Note Purchase Agreement and CEO/CFO certifications - Key exhibits filed include a Note Purchase Agreement dated August 1, 2025, and certifications by the CEO and CFO pursuant to the Securities Exchange Act of 1934[289](index=289&type=chunk)