SABESP (SBSP3) Q2 2025 earnings summary

Executive summary

• Revenue and net income saw significant year-over-year growth, with H1 2025 revenue reaching R$17.4 billion and net income R$3.6 billion, driven by tariff adjustments, volume growth, and cost discipline.

• Capex accelerated, totaling R$3.6 billion in Q2 2025 and R$6.5 billion in H1 2025, supporting infrastructure expansion and universalization targets.

• Over 1.3 million people gained water access and 1.4 million gained sewage treatment in the first year post-privatization.

• Major investments included smart metering contracts, digital payment solutions, and technology upgrades.

• Capital increase of R$3.4 billion raised total equity to R$40.4 billion.

Financial highlights

• Net income rose 77% year-over-year to R$2.1 billion in Q2 2025, with EBITDA up 29.4% to R$3.89 billion and adjusted EBITDA margin at 64.2%.

• Net operating revenue for H1 2025 was R$17.4 billion, up 30.7% year-over-year.

• Personnel expenses fell 10.3% year-over-year, mainly due to an 11% headcount reduction.

• Cash and cash equivalents increased to R$4.6 billion at quarter-end.

• Capex reached R$3.6 billion in Q2 2025; R$10.6 billion in the last 12 months.

Outlook and guidance

• Capex is expected to remain at around R$3.5 billion per quarter, with a shift in profile as major sewage plant expansions conclude.

• Management expects operating cash generation and available credit lines to be sufficient for commitments and investments.

• Efficiency programs and cost-saving initiatives are expected to continue delivering benefits, with further ramp-up in discount removal gains in H2 2025.

• Social tariff impacts will persist in H2 but will be compensated in the tariff cycle effective January 2027.

• Proceeds from Blue Bonds issuance will fund sustainable projects.