SABESP (SBSP3) Q3 2025 earnings summary

Executive summary

• Water production rose 4.4% year-over-year to 809 million m³, with active connections up 0.6% and sewage connections up 1.1%, reflecting post-privatization investment focus and operational improvements.

• Adjusted EPS rose to R$1.88 in 3Q25 from R$1.72 in 3Q24, while reported EPS dropped to R$3.16 from R$8.94 due to prior year non-recurring financial asset bifurcation impacts.

• Strategic transformation advanced, with CapEx reaching R$4.0 billion in the quarter and a R$39 billion work backlog contracted through 2029.

• Major progress on regulatory and commercial fronts, including resolution of legacy discount disputes and launch of zero-based budgeting.

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

Financial highlights

• Adjusted net revenue was R$5,468 million, up 0.1% year-over-year; adjusted EBITDA grew 15% to R$3,206 million (59% margin); adjusted net income reached R$1,284 million, up 9.5% year-over-year.

• Cash flow from operations increased 22% year-over-year to R$1.7 billion; net cash from operating activities was R$3.17 billion in 3Q25.

• One-time gains included R$1.9 billion from court-ordered payments, with R$430 million impacting EBITDA.

• CapEx accelerated 175% year-over-year to R$4.0 billion in 3Q25, with R$10.4 billion YTD (+151% YoY).

• Reported net income declined 64.7% year-over-year due to non-recurring items and asset bifurcation.

Outlook and guidance

• Universalization targets are on track, with only 3% remaining to meet the 95% sewage treatment threshold and significant progress in potable water and sewage connections.

• 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.

• CapEx backlog of R$39 billion through 2029, with continued focus on universalization and efficiency.