American Water Works Company (AWK) Q4 2025 earnings summary

Executive summary

• Achieved 2025 adjusted EPS of $5.64, up 8.9% year-over-year, near the upper end of expectations, with GAAP EPS at $5.69 and dividend growth of 8.2%.

• Invested $3.2 billion in infrastructure in 2025, maintaining residential water bills under 1% of median household income and completing 18 acquisitions across seven states.

• Announced a definitive merger agreement with Essential Utilities, with all required state filings and shareholder approvals completed; expected close by end of Q1 2027.

• Added 104,000 customer connections under agreement heading into 2026, with $582 million in deals secured.

• Dividend growth exceeded 8%, supported by strong regulatory execution, including completion of six rate cases and seven active cases in progress.

Financial highlights

• Adjusted EPS grew from $5.18 in 2024 to $5.64 in 2025, driven by authorized rate increases and acquisitions.

• Operating revenues rose $427 million year-over-year to $5.14 billion in 2025, with operating income at $1.88 billion.

• O&M expense rose by $0.42 per share, mainly due to higher employee and production costs; depreciation and financing costs increased by $0.41 and $0.35 per share, respectively.

• Net income attributable to shareholders was $1.11 billion in 2025, up from $1.05 billion in 2024.

• Closed 18 acquisitions in 2025, adding 20,900 customer connections; 79 acquisitions under agreement could add 104,300 more connections.

Outlook and guidance

• Affirmed 2026 adjusted EPS guidance of $6.02–$6.12, representing 8% growth over 2025, with long-term EPS and dividend growth targeted at 7%-9% annually through 2030.

• 2026–2030 financing plan includes $2.5 billion in external equity, with $1 billion to be settled mid-2026; no further equity needs planned until 2029 after $1 billion equity forward entered in 2025.

• Five-year capital plan increased by $2 billion, with $1 billion for EPA PFAS rule compliance and $0.5 billion for Lead & Copper Rule improvements.

• 2026–2030 capital investment plan of ~$29 billion funded by operating cash flows, debt, equity, and sale proceeds.