Financial Data and Key Metrics Changes - In Q2 2025, revenue increased by $20.7 million or 8.5% to $265 million compared to $244.3 million in Q2 2024 [11] - Net income for the quarter was $42.2 million or $0.71 per diluted share, compared to $40.6 million or $0.70 per diluted share in Q2 2024 [12] - Non-GAAP EPS increased by 15% year over year, reflecting strong performance despite regulatory challenges [8] Business Line Data and Key Metrics Changes - Capital spending was up approximately 7% quarter over quarter, with capital investments for the quarter totaling $119.4 million and year-to-date investments at $229.5 million [15] - The primary drivers of year-to-date diluted EPS growth were tariff rate changes and increased customer usage, contributing $0.75 per diluted share [14] Market Data and Key Metrics Changes - The company maintained a strong liquidity profile with $50.5 million in unrestricted cash and $240 million in available credit [16] - The Texas utility subsidiary is experiencing growth, with increasing customer connections and paid commitments reflecting sustained demand in the Austin-San Antonio region [31] Company Strategy and Development Direction - The company is focused on growth through acquisitions and capital investments, including a new wastewater treatment facility in California [29] - The company is actively pursuing a general rate case in California, requesting $398 million over the years 2026-2028 for infrastructure improvements [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the timely completion of the rate case, indicating it is a top priority for the assigned commissioner [48] - The company remains committed to investing in water quality and infrastructure, with a focus on PFAS compliance and treatment projects [25] Other Important Information - The company received an A+ stable credit rating from S&P Global, reflecting a strong balance sheet [17] - The board approved a quarterly dividend of $0.30 per share, representing a 10.71% increase earlier this year [19] Q&A Session Summary Question: Expectations for the GRC decision timeline - Management indicated that the rate case is on schedule, with the assigned commissioner prioritizing its completion [48][49] Question: Impact of EPA's PFAS timeline on investments - Management confirmed that they are proceeding with planned investments despite the EPA's extended compliance deadlines, emphasizing customer health and safety [55][56] Question: Clarification on capital expenditure shifts - Management explained that shifts in capital expenditures were due to timing adjustments, with no significant changes to core CapEx plans [62][66] Question: Status of water decoupling legislation in California - Management provided an update on Senate Bill 473, which aims to implement full decoupling for water utilities, noting strong legislative support [70][72] Question: Coverage of PFAS-related costs through settlements - Management estimated that settlements could cover approximately $40 to $60 million of the anticipated $226 million in PFAS-related costs [83][84]

Core Insights - California Water Service Group (CWT) reported quarterly earnings of $0.71 per share, exceeding the Zacks Consensus Estimate of $0.46 per share, and showing a year-over-year increase from $0.70 per share [1] - The company achieved revenues of $264.95 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 17.30% and increasing from $244.3 million a year ago [2] - The stock has underperformed the market, losing about 1% since the beginning of the year compared to the S&P 500's gain of 8.2% [3] Earnings Performance - The earnings surprise for the recent quarter was +54.35%, and the company has surpassed consensus EPS estimates three times over the last four quarters [1][2] - The earnings outlook for the upcoming quarters includes a consensus EPS estimate of $1.18 on revenues of $298.59 million for the next quarter and $2.32 on revenues of $961.23 million for the current fiscal year [7] Industry Context - The Utility - Water Supply industry is currently ranked in the top 39% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact investor decisions [5][6]

Second Quarter 2025 Earnings Presentation July 31, 2025 Today's Speakers Marty Kropelnicki Chairman & CEO James Lynch Sr. Vice President, CFO & Treasurer Shilen Patel Chief Business Development Officer and Vice President, TWSC, Inc. 2 Signed agreements to add up to 15,000+ new wastewater connections through a master planned community in Silverwood, California 5 Received first PFAS settlement payment for California, Washington, and New Mexico Maintained industry leading credit rating for Cal Water of A+/stab ...

Financial Performance - Q2 2025 net income was $42.2 million, or diluted earnings per share of $0.71, representing a 3.9% increase from Q2 2024 net income of $40.6 million[6]. - Q2 2025 revenue increased by $20.7 million, or 8.5%, to $265.0 million compared to $244.3 million in Q2 2024, with customer water usage up 5.0% contributing an additional $7.0 million[7]. - Year-to-date (YTD) 2025 revenue decreased by $46.1 million, or 9.0%, to $468.9 million compared to $515.0 million YTD in 2024, but increased by 9.7% compared to YTD 2024 non-GAAP revenue[10]. - Operating revenue for Q2 2025 was $264.954 million, an increase from $244.299 million in Q2 2024, representing an increase of 8.3%[27]. - Net income attributable to California Water Service Group for Q2 2025 was $42.168 million, compared to $40.551 million in Q2 2024, reflecting a growth of 4.0%[27]. - The company reported a net operating income of $51.809 million for Q2 2025, compared to $48.166 million in Q2 2024, reflecting a growth of 5.4%[27]. - Reported GAAP Revenue for Q2 2025 was $264,954 million, an increase from $244,299 million in Q2 2024, while the six-month revenue decreased from $515,048 million in 2024 to $468,927 million in 2025[29]. - Adjusted Revenue (non-GAAP) for Q2 2025 was $264,954 million, compared to $247,083 million in Q2 2024, with a six-month increase from $427,566 million in 2024 to $468,927 million in 2025[29]. - Reported GAAP Net Income for Q2 2025 was $42,168 million, slightly up from $40,551 million in Q2 2024, while the six-month net income decreased from $110,468 million in 2024 to $55,499 million in 2025[29]. - Adjusted Net Income (non-GAAP) for Q2 2025 was $42,168 million, compared to $42,384 million in Q2 2024, with a six-month increase from $46,488 million in 2024 to $55,499 million in 2025[29]. - Reported GAAP Diluted Earnings Per Share for Q2 2025 was $0.71, up from $0.70 in Q2 2024, while the six-month EPS decreased from $1.90 in 2024 to $0.93 in 2025[29]. - Adjusted Diluted Earnings Per Share (non-GAAP) for Q2 2025 was $0.71, compared to $0.73 in Q2 2024, with a six-month increase from $0.81 in 2024 to $0.93 in 2025[29]. Capital Investments and Expenses - Capital investments for the six months ending June 30, 2025, were $229.5 million, up 7.0% from $214.4 million YTD in 2024[14]. - Operating expenses for Q2 2025 increased by $17.0 million, or 8.7%, to $213.1 million compared to Q2 2024, primarily due to increased water production costs[9]. - Operating expenses for Q2 2025 totaled $213.145 million, up from $196.133 million in Q2 2024, an increase of 8.7%[27]. Assets and Liabilities - Total assets as of June 30, 2025, were $5.399 billion, up from $5.180 billion as of December 31, 2024, indicating an increase of 4.2%[26]. - Net utility plant increased to $4.335 billion as of June 30, 2025, from $4.159 billion at the end of 2024, a growth of 4.2%[26]. - Total current liabilities rose to $686.080 million as of June 30, 2025, compared to $538.364 million at the end of 2024, an increase of 27.5%[26]. Dividends and Shareholder Returns - The company declared its 322nd consecutive quarterly dividend of $0.30 per share, reflecting a five-year compound annual dividend growth rate of 7.7%[20]. - Dividends per share increased to $0.30 in Q2 2025 from $0.28 in Q2 2024, marking a growth of 7.1%[27]. Legal and Regulatory Matters - The company received $10.6 million from the first installment of PFAS litigation settlement proceeds, with additional installments expected in the future[19]. - The 2024 California General Rate Case proposes to increase total revenue by $140.6 million, or 17.1%, in 2026, and includes a Low-Use Water Equity Program to assist lower-income customers[15]. Operational Developments - An agreement was signed to own and operate the Silverwood wastewater and recycled water systems, expected to serve over 15,000 customer connections upon full development[18]. - As of June 30, 2025, the company's cash and cash equivalents totaled $96.1 million, with an additional short-term borrowing capacity of $240 million[12]. Financial Adjustments - The company is adjusting its financial measures to exclude the effects of 2023 interim rate relief, providing a clearer view of its 2025 performance compared to 2024[28].

Core Insights - California Water Service Group reported solid financial performance for Q2 2025, reflecting effective cost management and ongoing rate proceedings across multiple states [3][4] - The company continues to focus on capital delivery plans while ensuring safe and affordable water services for customers [4] Financial Highlights - Q2 2025 net income was $42.2 million, or $0.71 per diluted share, representing a 3.9% increase from Q2 2024's net income of $40.6 million, or $0.70 per diluted share [6][7] - Year-to-date (YTD) 2025 net income decreased by 49.8% to $55.5 million, or $0.93 per diluted share, compared to $110.5 million, or $1.90 per diluted share in YTD 2024 [7][14] - Q2 2025 revenue increased by $20.7 million, or 8.5%, to $265.0 million compared to $244.3 million in Q2 2024 [7] - YTD 2025 revenue decreased by $46.1 million, or 9.0%, to $468.9 million compared to $515.0 million in YTD 2024 [7] Capital Investments and Infrastructure - The company invested $119.4 million in water system infrastructure during Q2 2025 and $229.5 million YTD 2025, marking a 7.0% increase compared to YTD 2024 [6][12] - The 2024 California General Rate Case (GRC) is progressing on schedule, with proposed investments exceeding $1.6 billion from 2025 to 2027 [13][14] Regulatory and Legal Developments - The company executed an agreement to own and operate the Silverwood wastewater and recycled water systems, expected to serve approximately 500 connections initially, with full buildout projected to exceed 15,000 connections [16][17] - The company received $10.6 million from the first installment of PFAS litigation settlement proceeds, which will be used to offset capital expenditures for compliance with PFAS regulations [18] Sustainability and Dividends - The 2024 Sustainability Report highlighted a 23.5% reduction in Scope 1 and 2 greenhouse gas emissions from the 2021 baseline and 100% compliance with water quality standards [19][21] - The company declared its 322nd consecutive quarterly dividend of $0.30 per share, reflecting a 58-year history of dividend increases and a five-year compound annual growth rate of 7.7% [19][21]

Core Points - California Water Service Group declared its 322nd consecutive quarterly dividend of $0.30 per common share, payable on August 22, 2025, to stockholders of record as of August 11, 2025 [1] Company Overview - California Water Service Group is the parent company of several regulated utilities, including California Water Service, Hawaii Water Service, New Mexico Water Service, Washington Water Service, and Texas Water Service, providing water and wastewater services to over 2.1 million people across these states [2]

Core Viewpoint - California Water Service Group (CWT) is expected to report a year-over-year decline in earnings and revenues for the quarter ended June 2025, with a consensus outlook indicating a significant drop in earnings per share (EPS) and revenues [1][3]. Earnings Expectations - The consensus EPS estimate for California Water Service Group is $0.46, reflecting a year-over-year decrease of 34.3% [3]. - Revenues are anticipated to be $225.89 million, which is a decline of 7.5% compared to the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has remained unchanged over the last 30 days, indicating stability in analyst expectations [4]. - The Most Accurate Estimate for California Water Service Group is higher than the Zacks Consensus Estimate, resulting in a positive Earnings ESP of +29.50%, suggesting a bullish outlook from analysts [12]. Earnings Surprise Prediction - A positive Earnings ESP is a strong indicator of a potential earnings beat, especially when combined with a Zacks Rank of 1 (Strong Buy), 2 (Buy), or 3 (Hold) [10]. - California Water Service Group currently holds a Zacks Rank of 3, indicating a likelihood of beating the consensus EPS estimate [12]. Historical Performance - In the last reported quarter, California Water Service Group exceeded the expected EPS of $0.16 by delivering $0.22, resulting in a surprise of +37.50% [13]. - Over the past four quarters, the company has surpassed consensus EPS estimates three times [14]. Industry Comparison - American Water Works (AWK), another player in the water supply industry, is expected to report earnings of $1.49 per share for the same quarter, reflecting a year-over-year increase of 4.9% [19]. - American Water Works has a current Earnings ESP of +0.67% and a Zacks Rank of 2 (Buy), suggesting a strong likelihood of beating the consensus EPS estimate [20].

Core Insights - California Water Service (Cal Water) has signed a 20-year power purchase agreement with EDPR NA Distributed Generation LLC for a solar photovoltaic array to be installed at its Northeast Bakersfield Treatment Plant, aimed at reducing environmental impact and energy costs [1][2][3] Group 1: Partnership Details - The solar array will have a capacity of 2.35 MWdc / 1.75 MWac and is expected to generate approximately 3,800 megawatt-hours of renewable energy annually [1][2] - The partnership is projected to save about $1.7 million in grid energy costs over the agreement's term, based on current electric rates in the Bakersfield District [2] Group 2: Company Commitments - Cal Water emphasizes its commitment to environmental stewardship and aims to meet greenhouse gas emissions reduction targets through this partnership [3] - The company has been recognized as one of "America's Most Responsible Companies" and "World's Most Trustworthy Companies" by Newsweek, highlighting its dedication to sustainability and community well-being [4] Group 3: EDPR NA DG Overview - EDPR NA Distributed Generation focuses on accelerating the adoption of distributed generation and has an operating capacity of 337 MW across 545 active sites [5] - The company provides a comprehensive range of renewable energy services, including financing, development, construction, and operation of energy and storage assets [5]

Core Insights - California Water Service (Cal Water) has signed a 20-year power purchase agreement with EDPR NA Distributed Generation LLC for a solar photovoltaic array to be installed at the Northeast Bakersfield Treatment Plant [1][2] - The solar array is expected to generate approximately 3,800 megawatt-hours of renewable energy annually, which will help reduce grid energy costs by about $1.7 million over the agreement's term [2][3] Company Overview: California Water Service - Cal Water provides water utility services to over 2.1 million people in California through 499,400 service connections, focusing on enhancing quality of life and sustainability [4] - The company has been recognized as one of "America's Most Responsible Companies" and "World's Most Trustworthy Companies" by Newsweek, highlighting its commitment to integrity and environmental stewardship [4] Company Overview: EDPR NA Distributed Generation - EDPR NA DG focuses on accelerating the adoption of distributed generation and offers a range of renewable energy services across North America [5] - The company has an operating capacity of 337 megawatts across 545 active sites, showcasing its extensive involvement in renewable energy infrastructure [5]

Core Viewpoint - California Water Service Group (CWT) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, supported by a strong history of exceeding expectations [1]. Earnings Performance - The company has a solid track record of surpassing earnings estimates, with an average surprise of 78.75% over the last two quarters [2]. - In the most recent quarter, CWT was expected to report earnings of $0.22 per share but instead reported $0.16 per share, resulting in a surprise of 37.50%. In the previous quarter, the consensus estimate was $0.15 per share, while the actual earnings were $0.33 per share, leading to a surprise of 120.00% [3]. Earnings Estimates and Predictions - Recent estimates for California Water Service Group have been trending upward, with a positive Zacks Earnings ESP (Expected Surprise Prediction) indicating a strong likelihood of an earnings beat [6]. - The current Earnings ESP for the company is +29.50%, suggesting that analysts have recently become more optimistic about its earnings prospects [9]. Zacks Rank and Success Rate - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests that CWT has a high probability of beating consensus estimates, with historical data indicating that nearly 70% of stocks with this combination achieve positive surprises [7][9].