Essential Utilities(WTRG) - 2025 Q2 - Quarterly Results

Q2 2025 Earnings Release Essential Utilities delivered strong Q2 and H1 2025 results, driven by financial growth, strategic investments, and a positive future outlook Financial Performance Essential Utilities achieved significant financial growth in Q2 and H1 2025, driven by increased net income and revenue from rate adjustments | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $107.8 million | $75.4 million | +43.0% | | Diluted EPS | $0.38 | $0.28 | +35.7% | | Revenues | $514.9 million | $434.4 million | +18.5% | | Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Income | $391.6 million | $341.2 million | +14.8% | | Diluted EPS | $1.41 | $1.25 | +12.8% | | Revenues | $1,298.5 million | $1,046.5 million | +24.1% | - Primary drivers for the quarterly earnings increase were rate hikes in both business segments, which were partially offset by higher depreciation, interest, and operations and maintenance expenses[5][6] Segment Performance Both regulated water and natural gas segments reported robust Q2 2025 revenue growth, primarily due to new rates and higher purchased gas costs | Regulated Water Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $332.3 million | $302.5 million | +9.9% | | O&M Expenses | $100.1 million | $95.6 million | +4.7% | | Regulated Natural Gas Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $177.3 million | $128.2 million | +38.3% | | O&M Expenses | $49.8 million | - | Relatively flat | Shareholder Returns & Financing The company increased its quarterly dividend by 5.25% and maintains a stable financial position with available credit lines - The board of directors declared a 5.25% increase in the quarterly cash dividend to $0.3426 per share[11] - This marks the 35th dividend increase in the last 34 years and continues an 80-year streak of consecutive quarterly cash dividends[11] - As of June 30, 2025, the company's weighted average cost of fixed-rate long-term debt was 4.03%, with $802 million available on its credit lines[12] Operational Highlights & Strategy Essential Utilities advanced its strategy through substantial infrastructure investments, strategic acquisitions, and successful rate adjustments - Invested $613 million in the first half of 2025 and is on track to invest over $1.4 billion for the full year[7][14] - Long-term capital plan includes investing approximately $7.8 billion from 2025 through 2029 to improve water and gas systems, address PFAS, and reduce methane emissions[14] - Closed the acquisition of the City of Beaver Falls wastewater system for $37.75 million, serving approximately 7,000 customers and equivalent dwelling units (EDUs)[17] - The company has four signed purchase agreements pending for additional systems, expected to serve over 200,000 customers, and is actively pursuing a pipeline representing approximately 400,000 total customers[18][19] - As of July 31, 2025, the company received rate awards and surcharges totaling $100.8 million ($92.6 million for water, $8.2 million for gas) and has pending cases for an additional $96.5 million in annual revenue[13] Future Outlook & Guidance The company updated its 2025 EPS guidance upward and reaffirmed long-term growth targets, including significant rate base CAGR and emission reduction goals - For 2025, the company expects to achieve GAAP earnings per share above the guidance range of $2.07-$2.11 due to non-recurring benefits[7][20] | Long-Term Guidance (through 2029 unless noted) | Target | | :--- | :--- | | EPS CAGR (through 2027) | 5% to 7% | | 2025 Regulated Infrastructure Investments | $1.4 to $1.5 billion | | Total Regulated Infrastructure Investments | ~$7.8 billion | | Regulated Water Segment Rate Base CAGR | ~6% | | Regulated Natural Gas Segment Rate Base CAGR | ~11% | | Combined Regulated Utility Rate Base CAGR | >8% | - Reaffirms commitment to reduce Scope 1 and 2 greenhouse gas emissions by 60% by 2035 from a 2019 baseline[21][25] - Guidance assumptions exclude the potential DELCORA acquisition and assume the company will continue to issue equity to support capital plans[22] Financial Statements Unaudited financial statements detail Q2 2025 operating results and the company's financial position, showing growth in income and assets | Selected Operating Data (Q2 Ended June 30, in thousands, except per share data) | 2025 | 2024 | | :--- | :--- | :--- | | Operating revenues | $514,907 | $434,406 | | Net income | $107,827 | $75,385 | | Diluted net income per common share | $0.38 | $0.28 | | Condensed Balance Sheet Data (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Net property, plant and equipment | $13,579,450 | $13,143,476 | | Total Assets | $18,554,285 | $18,026,554 | | Long-term debt (net) | $7,622,994 | $7,368,381 | | Total equity | $6,720,202 | $6,198,809 |