H2O America (SJW) Q3 2024 earnings summary

Executive summary

• Achieved 10% year-over-year revenue growth and 7% net income growth in Q3 2024, with year-to-date net income up 8%, driven by rate increases, customer growth, and regulatory progress across all utilities.

• Diluted EPS for Q3 2024 was $1.17 (GAAP) and $1.18 (adjusted); year-to-date diluted EPS was $2.18 (GAAP) and $2.21 (adjusted), with adjusted net income up 11% year-to-date.

• Invested $252 million in infrastructure year-to-date, representing 76% of the 2024 capital budget.

• Recognized for sustainability and workplace excellence, including being named one of America's Greenest Companies 2025 and Connecticut Water as a Top Workplace.

Financial highlights

• Q3 2024 revenue was $225.1 million (up 10% year-over-year); net income was $38.7 million (up 7%); diluted EPS was $1.17 (up 4%).

• Adjusted Q3 2024 net income was $39.0 million (up 8%); adjusted diluted EPS was $1.18 (up 4%).

• Year-to-date 2024 revenue reached $550.6 million (up 10%); net income was $71.0 million (up 8%); adjusted net income was $72.0 million (up 11%).

• Water production expenses increased 16% in Q3 and 14% year-to-date, mainly from higher supply costs and usage.

• Q3 2024 operating expenses rose 12% to $166.7 million; Q3 gross margin was 26%.

Outlook and guidance

• Reaffirmed 2024 GAAP diluted EPS guidance of $2.65–$2.75 and adjusted EPS of $2.68–$2.78.

• Five-year capital expenditure plan of $1.6 billion, including $230 million for PFAS treatment.

• Long-term EPS growth rate targeted at 5%–7%, anchored off 2022 EPS of $2.43.

• Guidance excludes real estate sales and M&A activities; Texas drought and regulatory decisions may impact results.