Essential Utilities — Nov 4, 2025 release
Fiscal 2025 third-quarter results · 8-K Item 2.02 · Exhibit 99.1 · 0001552781-25-000394
Showing in the filing
Regulated water segment rate base compounded annual growth rate
“approximately 6%”
Period
FY2029
Measure
Company-defined measure
Source
Guidance table
All guidance in this release · 19
GAAP earnings per share vs. prior for FY2025
“above the prior guidance range of $2.07-$2.11 due to non-recurring benefits”
Quarterly cash dividend for Q4 FY2025
“$0.3426 per share”
Quarterly cash dividend
“$0.3426 per share of common stock”
Greene County data center water treatment pl… for FY2029
“expected to be operational in mid-2029”
Merger with American Water Works Company, Inc. for Q1 FY2027
“expected to close by the end of the first quarter of 2027”
Long-term earnings per share growth for the long term
“compounded annual growth rate of 5 to 7% from the adjusted 2024 earnings per share of $1.97 (Non-GAAP)”
Long-term earnings per share compounded annu… for the long term
“5 to 7%”
Regulated infrastructure investments for FY2029
“approximately $7.8 billion”
Regulated water segment rate base compounded… for FY2029
“approximately 6%”
Regulated natural gas segment rate base comp… for FY2029
“approximately 11%”
Combined regulated utility rate base compoun… for FY2029
“over 8%”
Regulated water customer base (equivalent dw… for the long term
“between 2 and 3%”
Equity raise via ATM program for FY2027
“expects to raise equity via its ATM program”
Equity raised via ATM program for FY2025
“expects to raise a total of approximately $350 million in equity, including $25 million to finance its recently announced data center investment”
Reduction of Scope 1 and Scope 2 greenhouse … for FY2035
“60%”
PFAS compliance for the long term
“Multiyear plan to ensure that finished water does not exceed the federal maximum contaminant level of the six EPA-regulated PFAS chemicals”
Multiyear plan for finished water PFAS compl… for the long term
“does not exceed the federal maximum contaminant level of the six EPA-regulated PFAS chemicals”
Regulated infrastructure investments for FY2025
“$1.4 to $1.5 billion”
Regulated natural gas customer base for FY2025
“stable”
Exhibit 99.1 · full document
Exhibit 99.1
Essential
Utilities Reports Third Quarter 2025 Results
· Earnings
per share of $0.33 for Q3 2025 vs. $0.25 for Q3 2024
· For
2025, expect to achieve GAAP earnings per share above the prior guidance range of $2.07-$2.11
due to non-recurring benefits; reaffirm long-term guidance
· Invested
$983 million in the first nine months of the year; on track to invest $1.4 to $1.5 billion
in infrastructure in 2025
· Announced
$26 million investment in major data center in Western Pennsylvania
· Announced
agreement to combine with American Water to create a leading regulated U.S. water and
wastewater utility
BRYN MAWR, Pa. (November 4, 2025)
– Essential Utilities Inc. (NYSE: WTRG) today reported results for the third quarter ended September 30, 2025. Essential’s
net income of $92.1 million or $0.33 per share for the third quarter of 2025 compared favorably to $69.4 million or $0.25 per
share reported for the third quarter of 2024.
“As
we delivered another robust quarter, both our water and gas divisions continue to contribute to Essential’s consistent track record
of growth and fidelity to our stakeholder commitments,” said Essential Utilities Chairman and Chief Executive Officer Christopher
Franklin. “With our recently announced investment in an exciting data center project, we are demonstrating our advanced
capability to innovate so we can meet evolving customer and community needs.”
Operating Results
Essential reported net income
of $92.1 million and earnings per share of $0.33 for the third quarter of 2025, compared to net income of $69.4 million and earnings
per share of $0.25 for the same period in 2024. Comparing this quarter’s earnings to those of the third quarter of 2024,
primary drivers include increases in rates across both business segments and a prior year credit to bad debt expense related to
its Pennsylvania water customer assistance program. These are partially offset by increases in depreciation and amortization expense,
interest expense, and operations and maintenance expense.
Revenues for the quarter were $477.0 million
compared to $435.3 million in the third quarter of 2024, an increase of 9.6%. Increases in rates were the primary revenue drivers. Operations
and maintenance expenses increased to $153.1 million for the third quarter 2025, compared to $144.4 million in the third quarter of 2024,
primarily due to increases in employee-related costs, bad debt expense, production costs for water and wastewater operations, and other
costs. These were partially offset by a decrease in legal expense, outside services, and other expenses in our regulated natural gas
segment due to capitalization in the current period compared to the prior period.
Essential’s regulated
water segment reported revenues for the quarter of $364.1 million, an increase of 8.8% compared to $334.5 million in the third
quarter of 2024. Water and wastewater rates were the largest contributor to the increase in revenues for the period. Operations
and maintenance expenses for Essential’s regulated water segment increased to $105.7 million for the third quarter of 2025
compared to $96.4 million in the third quarter of 2024, driven partially by a prior year credit to bad debt expense related to
its Pennsylvania water customer assistance program, employee-related costs, and production costs for water and wastewater operations.
Essential’s regulated
natural gas segment reported revenues for the quarter of $108.5 million, a 12.1% increase compared to $96.7 million in the third
quarter of 2024, driven primarily by increased rates. Operations and maintenance expenses for Essential’s regulated natural
gas segment decreased to $47.5 million for the third quarter of 2025 compared to $49.0 million in the third quarter of 2024, primarily
due to decreases in materials and supplies expense, legal expense, and outside services and other expenses due to capitalization
in the current period compared to the prior period. These were partially offset by increases in labor and employee benefits and
other costs.
As
of September 30, 2025, Essential reported year-to-date net income of $483.7 million, or $1.73 per share, compared to $410.6 million,
or $1.50 per share through the same period of 2024.
For the
first nine months of 2025, the company reported revenues of $1,775.5 million, an increase of 19.8%, due mainly to regulatory recoveries,
increased purchased gas costs, and higher volumes in the regulated natural gas segment, compared to $1,481.7 million in the first
nine months of 2024. Operations and maintenance expenses for the first nine months of 2025 were $439.4 million compared to $423.8
million in 2024, an increase of 3.7%.
Dividend
On October 23 rd , 2025,
Essential’s board of directors declared a quarterly cash dividend of $0.3426 per share of common stock. This dividend will
be payable on December 1 st , 2025, to shareholders of record on November 12 th , 2025. The company has paid
a consecutive cash dividend for 80 years and has increased the dividend 35 times in the last 34 years.
Financing
As of September 30, 2025, Essential’s
weighted average cost of fixed-rate long-term debt was 4.12%, and the company had $1.138 billion available on its credit lines.
Additionally, as of September 30, 2025, the company has raised approximately $300 million in equity pursuant to its ATM program.
Rate Activity
As of November 4, 2025, the company’s
regulated water segment received rate awards and infrastructure surcharges in North Carolina, New Jersey, Ohio, and Pennsylvania,
of $92.6 million, and its regulated natural gas segment received surcharges in Kentucky and Pennsylvania of $8.9 million. The
company currently has base rate cases pending in North Carolina, Ohio, Texas, and Virginia for its regulated water and wastewater
segment for an estimated $96.5 million in incremental annual revenues, and its regulated natural gas segment has a surcharge pending
in Kentucky for an estimated $2.9 million in incremental annual revenues.
Capital Expenditures
Essential invested $983 million
in the first nine months of the year to improve its regulated water and natural gas infrastructure systems and to enhance customer
service across its operations. The company continues to be a leader in replacing miles of aged underground utility pipe and is
committed to maintaining elevated levels of infrastructure investment. From 2025 through 2029, the company plans to invest approximately
$7.8 billion to improve water and natural gas systems and better serve customers through improved information technology. Investments
during this five-year period will include addressing PFAS with over 300 associated projects across its footprint, replacing and
expanding its water and wastewater utility infrastructure, and replacing and upgrading its natural gas utility infrastructure,
with the latter expected to lead to significant reductions in methane emissions that occur in aged gas pipes.
Essential believes it is a leader
in remediating PFAS and will comply with the final EPA rule. The capital investments made to rehabilitate and expand the infrastructure
of the communities Essential serves are critical to its mission of safely and reliably delivering Earth’s most essential
resources.
Water Utility Growth by
Acquisition
Essential’s strategic growth
through acquisition expansion significantly amplifies its capacity to deliver safe and reliable water and wastewater services.
This targeted acquisition strategy enables the company to expand its customer base and service footprint more rapidly than could
be achieved through organic growth initiatives alone. Since 2015, Essential has successfully added acquisitions with over $548
million in rate base, integrating more than 136,000 new customers or equivalent dwelling units into its operations. Year-to-date
in 2025, the company has completed system acquisitions serving approximately 10,300 customers for a total investment of approximately
$58 million.
The company has four signed purchase
agreements for additional wastewater systems in Pennsylvania and Texas that are pending closing and are expected to serve over
200,000 customers or equivalent dwelling units and total approximately $301 million in purchase price. The company’s $276.5
million agreement to acquire the Delaware County Regional Water Quality Control Authority (DELCORA), a Pennsylvania sewer authority
that serves approximately 198,000 equivalent dwelling units in the Philadelphia suburbs, is included among these signed purchase
agreements.
The pipeline of potential water and
wastewater municipal acquisitions that the company is actively pursuing represents approximately 400,000 total customers.
Data Center Business Development
Activity
On August 27th, 2025, the
company announced, via press release, an agreement with International Electric Power III, LLC (IEP), to become an investor in
a 1,400 acre data center facility in Greene County, Pennsylvania.
Based on the agreement, Essential
Utilities, through its subsidiary Aqua, plans to design, build, and operate an 18 million gallons per day (MGD) water treatment
plant to service the power plant and data center. Using raw water from the adjacent Monongahela River, the water plant will support
both power generation and data center cooling needs, leveraging Essential’s deep expertise in water infrastructure and environmental
stewardship. In addition, Essential’s subsidiary Peoples, the largest natural gas utility in Pennsylvania, will provide
gas consulting services and energy management services to the project.
The Greene County project,
expected to be operational in mid-2029, underscores Essential’s commitment to innovation, sustainability, and regional economic
development, while positioning the company’s water, wastewater, and gas expertise as a critical component of the AI-driven
data infrastructure revolution.
Essential previously informed investors
that the company was in active discussions with data center developers representing over 5 gigawatts of power demand.
Merger Agreement with American
Water Works Company, Inc.
On October 27, 2025, the company
announced the entry into a definitive agreement to combine in an all-stock, tax-free merger with American Water Works Company,
Inc. to create a leading regulated U.S. water and wastewater public utility with a pro forma market capitalization of approximately
$40 billion and a combined enterprise value of approximately $63 billion, based on closing stock prices as of October 24, 2025.
The transaction is expected to close
by the end of the first quarter of 2027, subject to customary closing conditions, including, among others, approval from each
company’s shareholders, clearance under the Hart-Scott-Rodino Act, and regulatory approvals, including approval from the
applicable public utility commissions.
Multi-Year Financial and
Growth Guidance
The company reaffirms its
previously initiated long-term earnings guidance. The company’s latest expectations are the following:
· For
2025, expect to achieve GAAP earnings per share above the prior guidance range of $2.07-$2.11
due to non-recurring benefits.
· Since
the company’s 2024 earnings per share was $2.17 on a GAAP basis, anticipated growth
in long-term earnings per share at a compounded annual growth rate of 5 to 7% from the
adjusted 2024 earnings per share of $1.97 (Non-GAAP) for the three-year period through
2027.
· In
2025, regulated infrastructure investments are expected to be $1.4 to $1.5 billion.
· Through
2029, we plan to make regulated infrastructure investments of approximately $7.8 billion.
· Through
2029, the regulated water segment rate base is expected to grow at a compounded annual
growth rate of approximately 6%; this only includes acquisitions scheduled to close in
2025 and excludes DELCORA.
· Through
2029, the regulated natural gas segment rate base is expected to grow at a compounded
annual growth rate of approximately 11%.
· Through
2029, the combined regulated utility rate base is expected to grow at a compounded annual
growth rate of over 8%.
· The
regulated water customer base (or equivalent dwelling units) of the business is expected
to grow at an average annual growth rate of between 2 and 3% from acquisitions and organic
customer growth over the long term.
· The
regulated natural gas customer base of the business is expected to be stable for 2025.
· Through
2027, the company expects to raise equity via its ATM program. In 2025, the company expects
to raise a total of approximately $350 million in equity, including $25 million to finance
its recently announced data center investment. To date, in 2025, the company has issued
approximately $300 million of equity using its ATM.
· Anticipate
the reduction of Scope 1 and Scope 2 greenhouse gas emissions by 60% by 2035 from the
company’s 2019 baseline.
· Multiyear
plan to ensure that finished water does not exceed the federal maximum contaminant level
of the six EPA-regulated PFAS chemicals.
Essential
reaffirms its commitment to substantially reduce Scope 1 and 2 greenhouse gas emissions by 2035. The company plans to achieve
these reductions through extensive gas pipeline replacement, the purchase of renewable energy, accelerated methane leak detection
and repair, and various other planned initiatives. Essential continues to be an industry leader regarding water quality with its
commitment to test and treat for six regulated PFAS chemicals across all states served by its regulated water segment. The company
reaffirms its commitment to providing finished water that will meet the EPA timelines and standards.
Guidance Assumptions
Essential
Utilities does not guarantee future results of any kind. Guidance is subject to risks and uncertainties, including, without limitation,
those factors outlined in the “Forward Looking Statements” of this release and the “Risk Factors” section
of the company’s annual and quarterly reports filed with the Securities and Exchange Commission. The earnings per share,
infrastructure investment, and rate base guidance include the municipal water and wastewater acquisitions for which the company
has entered into signed purchase agreements as of the date the guidance was announced but do not include DELCORA or other potential
acquisitions from the company’s list of acquisition opportunities that currently represents over 400,000 customer equivalents.
While the company remains confident in its ability to close DELCORA, for guidance purposes, DELCORA has been removed from all
guidance metrics. The company’s guidance includes the expectation that the company will continue to issue equity and debt
on an as-needed basis to support acquisitions and capital investment plans.
Essential
Utilities believes that the non-GAAP financial measure “adjusted earnings per share” used for 2024 and identified
as part of its multi-year financial and growth guidance provides investors the ability to measure the company’s financial
operating performance for 2024 by adjustment, which was more indicative of the company’s ongoing operating performance in
2024 and against its guidance range (GAAP) for 2025.
Third Quarter 2025 Webcast
Remarks
Date: November 5, 2025
Time: 9 a.m. ET
Webcast remarks and slide presentation
link: https://www.essential.co/events-and-presentations/events-calendar
Essential will post webcast remarks
for interested parties, who can listen over the internet by logging on to Essential.co and following the link for Investors. The
webcast will be archived in the Investor Relations section of the company’s website for one year following the call. In
light of the recent announcement of the pending merger with American Water Works Company, Inc., Essential will not host an associated
question and answer session as part of its earnings announcement this quarter. Essential expects to resume normal earnings practices
when it reports its fourth quarter 2025 results.
About Essential
Essential
Utilities, Inc. (NYSE: WTRG) delivers safe, clean, reliable services that improve quality of life for individuals, families, and
entire communities. With a focus on water, wastewater and natural gas, Essential is committed to sustainable growth, operational
excellence, a superior customer experience, and premier employer status. We are advocates for the communities we serve and are
dedicated stewards of natural lands, protecting thousands of acres of forests and other habitats throughout our footprint.
Operating as the Aqua and Peoples
brands, Essential serves approximately 5.5 million people across nine states. Essential is one
of the most significant publicly traded water, wastewater service and natural gas providers in the U.S . Learn more at www.essential.co .
Forward-Looking Statements
This release contains forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995, which generally include words such as “believes,”
“expects,” “intends,” “anticipates,” “estimates,” and similar expressions. The
company can give no assurance that any actual or future results or events discussed in these statements will be achieved. Any
forward-looking statements represent its views only as of today and should not be relied upon as representing its views as of
any subsequent date. Readers are cautioned that such forward-looking statements are subject to a variety of risks and uncertainties
that could cause the company’s actual results to differ materially from the statements contained in this release. Such forward-looking
statements include, among others: the company’s belief that it will comply with the finalized EPA PFAS rules, the guidance
range of net income per diluted common share; the anticipated amount of infrastructure investment in 2025 through 2029; the rate
base growth of the company through 2029; that the company is on track to invest $1.4 to $1.5 billion in infrastructure in 2025;
the reduction of Scope 1 and Scope 2 greenhouse gas emissions by 60% by 2035 from the company’s 2019 baseline; the rate
base growth from its organic capital investment program through 2029; the company’s anticipated use of its commercial paper
program; the company’s water utility customer base growth at an average annual long term growth rate of between 2-3% for
acquisitions and organic customer growth; that the company has a multiyear plan to ensure that finished water does not exceed
the federal maximum contaminant level for the six EPA regulated PFAS chemicals; the regulated natural gas customer base of the
business will be stable in 2025; and the expected closing date of the pending merger with American Water by the end of the first
quarter of 2027. There are important factors that could cause actual results to differ materially from those expressed or implied
by such forward-looking statements including: changes in the EPAs regulations; changes in the United States’ governmental
policies, including those from the Executive Branch; disruptions in the global economy; potential disruptions in the supply chain
for raw and finished materials; the continuation of the company’s growth-through-acquisition program; general economic business
conditions; the company’s ability to raise additional equity, including on an as needed basis; housing and customer growth
trends; unfavorable weather conditions; the success of certain cost-containment initiatives; changes in regulations or regulatory
treatment; the company’s ability to successfully close the acquisitions of municipally owned systems presently under signed
agreements and successfully complete other acquisitions and dispositions; the conditions to closing the pending merger with American
Water, including regulatory approvals; and other factors discussed in our Annual Report on Form 10-K and our Quarterly Reports
on Form 10-Q, which are filed with the Securities and Exchange Commission. For more information regarding risks and uncertainties
associated with Essential’s business, please refer to Essential’s annual, quarterly, and other SEC filings. Essential is not under
any obligation - and expressly disclaims any such obligation - to update or alter its forward-looking statements whether as a
result of new information, future events, or otherwise.
Essential Utilities,
Inc. and Subsidiaries
Selected Operating
Data
(In thousands,
except per share amounts)
(Unaudited)
Quarter Ended
Nine Months Ended
September 30,
September 30,
2025
2024
2025
2024
Operating revenues
$ 476,971
$ 435,255
$ 1,775,504
$ 1,481,730
Operations and maintenance expense
$ 153,088
$ 144,368
$ 439,422
$ 423,780
Net income
$ 92,077
$ 69,402
$ 483,693
$ 410,559
Basic net income per common share
$ 0.33
$ 0.25
$ 1.73
$ 1.50
Diluted net income per common share
$ 0.33
$ 0.25
$ 1.73
$ 1.50
Basic average common shares outstanding
281,784
274,021
279,027
273,656
Diluted average common shares outstanding
282,298
274,543
279,560
274,127
Essential Utilities,
Inc. and Subsidiaries
Consolidated
Statement of Operations
(In thousands,
except per share amounts)
(Unaudited)
Quarter Ended
Nine Months Ended
September 30,
September 30,
2025
2024
2025
2024
Operating revenues
$ 476,971
$ 435,255
$ 1,775,504
$ 1,481,730
Cost & expenses:
Operations and maintenance
153,088
144,368
439,422
423,780
Purchased gas
22,506
19,095
263,882
182,498
Depreciation
103,322
91,448
299,628
269,742
Amortization
3,744
1,153
10,334
3,309
Taxes other than income taxes
24,540
24,102
68,291
71,359
Total
307,200
280,166
1,081,557
950,688
Operating income
169,771
155,089
693,947
531,042
Other expense (income):
Interest expense
82,269
76,846
244,143
223,164
Interest income
(1,079 )
(1,394 )
(1,609 )
(2,659 )
Allowance for funds used during construction
(6,180 )
(5,593 )
(19,039 )
(15,503 )
Gain on sale of other assets
(176 )
(239 )
(669 )
(92,067 )
Other, net
(1,439 )
227
(848 )
486
Income before income taxes
96,376
85,242
471,969
417,621
Provision for income tax expense (benefit)
4,299
15,840
(11,724 )
7,062
Net income
$ 92,077
$ 69,402
$ 483,693
$ 410,559
Net income per common share:
Basic
$ 0.33
$ 0.25
$ 1.73
$ 1.50
Diluted
$ 0.33
$ 0.25
$ 1.73
$ 1.50
Average common shares outstanding:
Basic
281,784
274,021
279,027
273,656
Diluted
282,298
274,543
279,560
274,127
Essential Utilities,
Inc. and Subsidiaries
Condensed Consolidated
Balance Sheets
(In thousands
of dollars)
(Unaudited)
September 30,
December 31,
2025
2024
Net property, plant and equipment
$ 13,899,519
$ 13,143,476
Current assets
433,570
485,911
Regulatory assets and other assets
4,560,043
4,397,167
$ 18,893,132
$ 18,026,554
Total equity
$ 6,816,299
$ 6,198,809
Long-term debt, excluding current portion, net of debt issuance costs and unamortized discount on debt
7,692,091
7,368,381
Current portion of long-term debt and loans payable
232,129
329,349
Other current liabilities
495,981
645,319
Deferred credits and other liabilities
3,656,632
3,484,696
$ 18,893,132
$ 18,026,554
Essential Utilities,
Inc. and Subsidiaries
Reconciliation
of GAAP to Non-GAAP Financial Measures
(In thousands,
except per share amounts)
(Unaudited)
The Company is providing disclosure
of the reconciliation of the non-GAAP financial measures to the most comparable GAAP financial measures. The Company believes
that the non-GAAP financial measures “adjusted income” and “adjusted diluted income per common share” provide
investors the ability to measure the Company’s financial operating performance by adjustment, which is more indicative of
the Company’s ongoing operating performance. The Company further believes that the presentation of these non-GAAP financial
measures is useful to investors as a more meaningful way to compare the Company’s operating performance against its guidance
range for 2024.
This reconciliation includes a presentation
of the non-GAAP financial measures “adjusted income” and “adjusted diluted income per common share” and
have been adjusted for the following items:
(1) During the first quarter
of 2024, the Company completed the sale of its interest in three non-utility local microgrid and distributed energy projects and
recognized a gain of $91,236, net of transaction expenses. In October 2023, the Company completed the sale of its regulated natural
gas utility assets in West Virginia. In 2024, the Company received additional proceeds from this sale of regulated natural gas
utility assets in West Virginia and post-transaction activities.
(2) Estimated impact to
Peoples Natural Gas (PNG) operating revenues from warmer than normal weather conditions during 2024 and nonrecurring usage. These
impacts are partially offset by favorable regulated water consumption in 2024 due to drier than normal weather conditions.
(3) The income tax impact
of the non-GAAP adjustments described above.
These financial measures are measures
of the Company’s operating performance that do not comply with U.S. generally accepted accounting principles (GAAP), and
are thus considered to be “non-GAAP financial measures” under applicable Securities and Exchange Commission regulations.
These non-GAAP financial measures are derived from our consolidated financial information, if available, and is provided to supplement
the Company’s GAAP measures, and should not be considered as a substitute for measures of financial performance prepared in accordance
with GAAP.
The following reconciles our GAAP
results to the non-GAAP information we disclose :
Year Ended
December 31, 2024
Net income (GAAP financial measure)
$ 595,314
Adjustments:
(1) Gain on sales of assets and related transaction activities
(94,024 )
(2) Adjustments for estimated effects of unfavorable weather (addback)
18,749
(3) Income tax effect of non-GAAP adjustments
20,859
Adjusted income (Non-GAAP financial measure)
$ 540,898
Net income per common share (GAAP financial measure):
Basic
$ 2.17
Diluted
$ 2.17
Adjusted income per common share (Non-GAAP financial measure):
Basic
$ 1.97
Diluted
$ 1.97
Average common shares outstanding:
Basic
273,914
Diluted
274,421
Media Contact :
David Kralle
Vice President of Public Affairs
Media Hotline: 1.877.325.3477
Media@Essential.co
Investor Contact:
Brian Dingerdissen
Vice President, Treasurer, FP&A
and IR
O: 610.645.1191
BJDingerdissen@Essential.co
the item shown at left
other guidance in this release
Text is the filed exhibit, verbatim.