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- **EPS Growth**: Q3 2025 adjusted EPS of $1.27 (8% YoY), narrowing 2025 guidance to $2.95-$3.00.
- **Infrastructure Investment**: $358M spent on water/wastewater systems (74% of $486M budget), with AMI deployment driving efficiency.
- **Texas Acquisitions**: Quadvest deal progressing with 52,400 connections (11.5% YoY growth); Cibolo Valley acquisition expected Q4 2026 close.
- **Q4 Outlook**: EPS decline of $0.27-$0.32 due to regulatory adjustments and higher expenses.
- **Strategic Focus**: Maintaining 5-7% EPS CAGR through 2029, prioritizing disciplined execution and affordability.

**【CEO & Management Remarks】**
- Announced Jonathan Reeder as Senior Director of Treasury & Investor Relations, leveraging his 20+ years of utility sector experience.
- Reported Q3 2025 adjusted EPS of $1.27, up 8% YoY, with year-to-date EPS of $2.53 (14% YoY growth).
- Highlighted infrastructure investments: $358M spent on water/wastewater systems (74% of $486M budget), including advanced metering infrastructure (AMI) deployment in California.
- Announced two Texas acquisitions: Quadvest (pending PUCT approval) and Cibolo Valley wastewater plant (1,500 active connections).
- Reaffirmed 5-7% EPS CAGR through 2029, excluding Quadvest impact (expected accretive in 2028).

**【CFO Financial Commentary】**
- Narrowed 2025 EPS guidance to $2.95-$3.00 (from $2.90-$3.00), reflecting strong execution.
- Q3 revenue growth driven by rate increases (+$14.6M) and higher pass-through costs (+$6.6M), offset by production expenses (+$5.1M).
- Operating expenses up 9% YoY due to pension costs, salaries, and CapEx-related depreciation.
- Raised $108M via ATM program, with $244M available on credit lines.
- Year-to-date tax rate increased to 14% (from 10%) due to higher pre-tax income.

**【CFO Regulatory & M&A Update】**
- Connecticut Water's infrastructure surcharge approved as filed; Texas Water filed $5.1M system improvement charge.
- Quadvest deal: FMV determination expected in December, with STM filing and mid-2026 close.
- Cibolo Valley acquisition: 1,500 active connections, with 250+ under contract, expected to close Q4 2026.
- Quadvest connections grew 11.5% YoY to 52,400, driven by Houston's population growth.

**【Q&A Highlights】**
- **Texas Competition**: American Water's Essential merger viewed as positive industry consolidation; H2O remains focused on disciplined growth without stretching accretion targets.
- **Aquarion Acquisition**: If rejected, H2O would evaluate alternative financing (hybrid debt/equity) but prioritize balance sheet strength.
- **Q4 EPS Outlook**: $0.27-$0.32 decline due to regulatory adjustments (Connecticut rate case favorability lapped), higher operating expenses, and share dilution.
- **Quadvest Financing**: Equity raise timing dependent on FMV disclosure (early 2026) and market conditions.


H2O America (HTO)-28 Oct 25-2025 Q3 Earnings call transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

HTO

HTO fundamentals

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