10-KPeriod: FY2025

American Water Works Company, Inc. Annual Report, Year Ended Dec 31, 2025

Filed February 18, 2026For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) reported strong financial performance in its 2025 10-K filing, driven by robust growth in its Regulated Businesses segment. The company experienced a significant increase in operating revenues, primarily due to authorized rate increases aimed at recovering infrastructure investments across various states. Strategic acquisitions also contributed to customer base expansion. AWK continues its substantial capital investment program, with plans to invest between $46 billion and $48 billion over the next decade to enhance its water and wastewater infrastructure, focusing on pipe replacement, treatment facility upgrades, and resiliency projects. The company is also advancing its proposed merger with Essential Utilities, Inc., anticipating closure by the first quarter of 2027, which is expected to further expand its market presence and operational efficiencies. Key financial metrics show positive growth, with diluted EPS (GAAP) increasing to $5.69 in 2025, up from $5.39 in 2024. Management highlights adjusted diluted EPS (non-GAAP) of $5.64 for 2025, indicating solid underlying operational performance. Despite facing challenges such as increasing operating costs, higher financing costs, and the ongoing need for infrastructure investment, AWK's diversified operations and proactive regulatory engagement position it for continued stability and growth in the essential water and wastewater utility sector.

Financial Highlights

49 data points
Beta

Revenue

$5.12B

Net Income

$1.11B

21.7% Net Margin

EPS (Diluted)

$5.69

Total Assets

$35.44B

Cash & Equivalents

$98.00M

Free Cash Flow

-$1.07B

Financial Statements
Beta
Revenue$5.12B
Operating Expenses$3.26B
Operating Income$1.88B
Net Income$1.11B
EPS (Basic)$5.69
EPS (Diluted)$5.69
Shares Outstanding (Basic)195.00M
Shares Outstanding (Diluted)195.00M

Key Highlights

  • 1American Water Works Company, Inc. (AWK) reported a strong increase in operating revenues in 2025, largely driven by authorized rate increases in its Regulated Businesses segment, totaling $4.723 billion.
  • 2The company is executing a significant capital investment plan, with approximately $3.2 billion invested in 2025 and projected investments of $46 billion to $48 billion over the next 10 years for infrastructure improvements.
  • 3AWK announced a proposed stock-for-stock merger with Essential Utilities, Inc., with an expected closing date by the end of the first quarter of 2027, aiming for expanded market presence and operational synergies.
  • 4Diluted earnings per share (GAAP) increased to $5.69 in 2025, reflecting growth in net income attributable to common shareholders to $1.111 billion.
  • 5The company continues to prioritize infrastructure renewal, aiming for a pipe replacement cycle better than 100 years within the next decade.
  • 6AWK is actively managing regulatory environments across 14 states, utilizing mechanisms like infrastructure replacement surcharges and future test years to recover capital investments and mitigate regulatory lag.
  • 7The company is addressing environmental compliance costs, including an estimated $2 billion in capital expenditures for PFAS treatment facilities and $1.5 billion for Lead Copper Rule Improvements compliance.

Frequently Asked Questions

American Water Works Company, Inc. primarily operates regulated water and wastewater utilities across 14 states in the United States, serving approximately 14 million people. Its business is largely conducted through its 'Regulated Businesses' segment, which constitutes the vast majority of its operating revenues.

The company has a significant capital investment strategy, planning to invest between $46 billion and $48 billion over the next 10 years. These investments will focus on infrastructure renewal, resiliency, water quality improvements (including PFAS compliance), operational efficiency, and system expansion.

American Water Works Company, Inc. entered into an Agreement and Plan of Merger with Essential Utilities, Inc. on October 26, 2025. The transaction is a stock-for-stock combination, and the company currently estimates the closing to occur by the end of the first quarter of 2027, subject to customary closing conditions, including regulatory approvals.

The company operates in a heavily regulated environment and actively engages with Public Utility Commissions (PUCs) in the states where it operates. It utilizes various regulatory practices, such as infrastructure replacement surcharges and future test years, to ensure recovery of capital investments and operating costs, while aiming to minimize regulatory lag.

American Water is making significant investments to comply with evolving environmental regulations. This includes an estimated $2 billion for installing additional treatment facilities to meet new PFAS drinking water standards and an estimated $1.5 billion for Lead Copper Rule Improvements compliance, focusing on lead service line replacement.