Essential Utilities (WTRG) Q2 2026 earnings summary

Executive summary

• Q2 2026 GAAP EPS was $0.37 and adjusted EPS was $0.38, excluding merger-related costs; revenues rose 3.1% year-over-year to $530.9 million, with net income at $105.7 million, down from $107.8 million in Q2 2025.

• For the first half of 2026, revenues increased 7.2% to $1.39 billion, with net income at $330.1 million, down from $391.6 million in the prior year.

• Regulatory approvals for the merger with American Water have been received in multiple states, with shareholder approval obtained and closing expected by Q1 2027.

• Integration planning for the merger is underway, with strong collaboration between teams.

• Long-term EPS growth guidance of 5–7% CAGR through 2027 is reaffirmed, anchored to adjusted 2024 EPS of $1.97.

Financial highlights

• Q2 2026 GAAP EPS was $0.37; adjusted non-GAAP EPS was $0.38, with H1 2026 adjusted EPS at $1.21.

• Q2 2026 operating income was $193.3 million, up from $185.3 million year-over-year.

• Positive EPS drivers included $0.06 from regulatory recoveries/surcharges, $0.02 from higher water volumes, and $0.01 from customer growth.

• O&M expenses for H1 2026 were $329.4 million, including $17.5 million in merger-related costs; excluding merger costs, O&M rose 2.6%.

• Quarterly dividend increased by 5.25% to $0.3606 per share.

Outlook and guidance

• Multi-year EPS growth guidance of 5–7% through 2027 is reaffirmed, based on adjusted 2024 EPS of $1.97.

• Infrastructure investments for 2026 are projected at $1.7 billion, with $8.7 billion planned through 2030.

• Guidance includes acquisitions expected to close in 2026, but excludes DELCORA.

• Focus remains on maintaining a strong balance sheet, improving cash position, and growing the dividend with a payout ratio of 60%-65%.

• Ongoing plan to comply with EPA PFAS regulations.