Essential Utilities (WTRG) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenues rose 28% to $783.6 million, with net income up 6.8% to $283.8 million and GAAP EPS of $1.03, driven by regulatory recoveries, acquisitions, and higher gas volumes.

• Full-year 2025 EPS guidance reaffirmed at $2.07–$2.11, with a multi-year EPS CAGR target of 5–7% through 2027.

• Infrastructure investment for 2025 is planned at $1.4–$1.5 billion, with $270.5 million invested in Q1 and $7.8 billion planned through 2029.

• Closed acquisitions in Ohio and Pennsylvania, with six pending deals expected to add over 210,000 customers and $340 million in purchase price.

• Dividend growth averages 7% annually since 2015, with a payout ratio maintained at 60–65% and over 80 years of consecutive payments.

Financial highlights

• Operating income increased 46.9% to $338.9 million, with net cash from operating activities at $299.5 million, up from $240.7 million in Q1 2024.

• Operations and maintenance expense was $137.8 million, up 0.7% year-over-year, with purchased gas costs up 42.4%.

• Depreciation and amortization grew 10.7% to $99.4 million, reflecting ongoing capital investment.

• Dividend of $0.3255/share declared for Q1 2025.

• Net property, plant, and equipment totaled $13.32 billion as of March 31, 2025.

Outlook and guidance

• 2025 EPS guidance affirmed at $2.07–$2.11; long-term EPS CAGR target of 5–7% through 2027.

• Planned capital investment of $7.8 billion from 2025–2029 for water and gas system improvements.

• Combined utility rate base expected to grow at 8% CAGR, with water at 6% and gas at 11%.

• Water customer base expected to grow 2–3% annually; natural gas customer base stable.

• Committed to 60% reduction in Scope 1 & 2 GHG emissions by 2035 and compliance with EPA PFAS rules.