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 guidance, with GAAP EPS at $5.69 and dividend growth of 8.2%.

• Invested $3.2 billion in infrastructure, completed 18 acquisitions, and secured agreements for 104,000 customer connections heading into 2026.

• Announced a definitive merger agreement with Essential Utilities, with all required state filings completed, shareholder approval in February 2026, and expected close by Q1 2027.

• Achieved strong performance in safety, water quality, and regulatory execution, including completion of six rate cases and seven active cases in progress.

• Maintained residential water bills under 1% of median household income.

Financial highlights

• Adjusted EPS rose to $5.64 from $5.18 in 2024, driven by rate increases, customer growth, and regulatory execution.

• Operating revenues increased by $427 million to $5.14 billion in 2025; operating income rose to $1.88 billion.

• O&M expense rose $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.

• Annualized revenue from completed rate proceedings since January 1, 2025, totaled $319 million, with $250 million in infrastructure charges.

• Received full repayment of $795 million HOS seller note in February 2026.

Outlook and guidance

• Affirmed 2026 adjusted EPS guidance of $6.02–$6.12, targeting ~8% EPS growth.

• Long-term EPS and dividend growth expected in the 7%-9% range through 2030.

• Capital investments and acquisitions projected to grow regulated rate base at 8%-9% long-term.

• No further equity needs planned until 2029 after $1 billion equity forward entered in 2025, assuming settlement mid-2026.