California Water Service(US:CWT)2026-02-26 17:00Financial Data and Key Metrics Changes - In Q4 2025, revenue was $220 million, a slight decrease from $222 million in Q4 2024. Net income for the quarter was $11.5 million, or $0.19 per diluted share, compared to $19.7 million, or $0.33 per diluted share in the prior year [11][12] - For the full year 2025, operating revenue was $1 billion, compared to $1.37 billion in 2024. When compared to non-GAAP 2024 revenue of $949.3 million, revenue increased by $50.8 million, or approximately 5.4%. Net income attributed to the group was $128.2 million, compared to $190.8 million in 2024, reflecting a 1% increase when compared to non-GAAP 2024 income [13][14] Business Line Data and Key Metrics Changes - The company invested a record $517 million into infrastructure systems in 2025, including $52.3 million in Q4 alone, representing a 19.8% increase over construction levels in 2024 [9][15] - The company maintained an A+ stable credit rating from S&P, one of the highest-rated credit utilities in North America [10] Market Data and Key Metrics Changes - The company experienced a significant weather impact in December 2025, which negatively affected financial results, particularly in California due to exceptionally wet and cold weather [8][11] - The company received approval for a 3% interim rate increase in California, implemented in January 2026, following a delay in the rate case decision [10][12] Company Strategy and Development Direction - The company announced the acquisition of Nevada and Oregon operations from Nexus Water, which will expand its geographical footprint and solidify its position in the Western U.S. water industry [4][22] - The company plans to continue pursuing growth opportunities in high-growth areas and strategic acquisitions that align with its capital investment strategy [40][41] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the timely completion of the 2024 California General Rate Case, highlighting proactive engagement with regulators and a focus on affordability for customers [35][56] - The company is committed to addressing PFAS regulations and has allocated significant capital for related projects, with plans to spend between $50 million and $70 million in 2026 [66][68] Other Important Information - The company declared its 324th consecutive quarterly dividend of $0.33 per share and announced an intended annual dividend of $1.34 per share for 2026, representing an 8.1% increase over 2025 [19][20] - The company maintains a strong liquidity profile with $51.8 million in unrestricted cash and $45.6 million in restricted cash, along with approximately $470 million available on bank lines of credit [18] Q&A Session Summary Question: Is the delay of cases something that should be expected as a new norm? - Management indicated that recent efforts by the California Water Association have focused on educating commissioners about the impacts of delays, leading to a more timely process for future cases [51][56] Question: What are the regulatory mechanisms in Oregon or Nevada? - Management highlighted that Nevada has a reasonable commission allowing phased-in statewide rates and a hybrid rate environment, while Oregon has mechanisms for interim rates and construction work in progress [59][60] Question: Update on PFAS funding and plans? - Management confirmed ongoing plans to address PFAS regulations, with significant spending allocated for treatment and infrastructure improvements, emphasizing the importance of water quality [66][68]