SABESP (SBSP3) Q3 2025 earnings summary

Executive summary

• Adjusted net income rose 9.5% year-over-year to R$1,284 million, while reported net income fell 64.7% due to non-recurring effects in 3Q24 from financial asset bifurcation and construction revenue recognition.

• Adjusted EBITDA increased 15% year-over-year to R$3,206 million (59% margin), driven by higher volumes, cost reductions, and efficiency initiatives.

• Investments reached a record R$4.0 billion in 3Q25, up 175% year-over-year, supporting universalization and infrastructure expansion.

• Water production rose 4.4% year-over-year to 809 million m³, with active connections up 0.6% and sewage connections up 1.1%.

• Operational efficiency improved, with reductions in general/admin expenses, power consumption, and workforce.

Financial highlights

• Adjusted net revenue was R$5,468 million (+0.1% YoY); adjusted EBITDA margin reached 59%; adjusted net income margin was 23%.

• Cash flow from operations increased 22% YoY to R$1.7 billion in Q3 and R$7.45 billion in 9M25.

• Net revenue for 3Q25 was R$9,425 million, down 37.2% YoY due to the absence of the prior year’s financial asset bifurcation.

• OPEX decreased 15% year-over-year, driven by lower personnel, electricity, and general expenses.

• One-time gains included R$1.95 billion from court-ordered payments, with R$430 million impacting EBITDA.

Outlook and guidance

• Universalization targets are on track, with water supply and sewage connections exceeding annual goals by October 2025 and only 3% remaining to meet the 95% sewage treatment threshold.

• Smart metering rollout to install 4.4 million IoT meters by 2029, with 1 million installed in 9M25.

• Water system resilience projects to add 22 m³/s capacity by 2030, with R$6.3 billion CapEx planned.

• Decarbonization roadmap targets 15% total emissions reduction and 41% cut in emission intensity by 2035.

• The company expects operational cash generation and available credit lines to cover future commitments and investments.