10-QPeriod: Q2 FY2025

American Water Works Company, Inc. Quarterly Report for Q2 Ended Jun 30, 2025

Filed July 30, 2025For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) reported solid financial results for the quarter and six months ended June 30, 2025. The company saw an increase in operating revenues driven by rate increases in its Regulated Businesses segment, reflecting successful recovery of capital and acquisition investments. Diluted earnings per share rose to $1.48 for the quarter and $2.53 for the six-month period, up from $1.42 and $2.37, respectively, in the prior year. The company continues to execute its growth strategy through significant capital investments in infrastructure and a planned acquisition, demonstrating a commitment to expanding its service offerings and customer base. AWK maintained a strong balance sheet with total assets growing to $33.91 billion. The company also reported positive developments in regulatory matters, with several general rate case authorizations becoming effective, contributing to the revenue growth. Liquidity remains robust, supported by operating cash flows and a significant revolving credit facility. While facing ongoing regulatory, legal, and environmental matters, the company's proactive management and strategic investments position it well for continued stability and growth in the essential water and wastewater utility sector.

Financial Statements
Beta
Revenue$1.27B
Operating Expenses$787.00M
Operating Income$489.00M
Net Income$289.00M
EPS (Basic)$1.48
EPS (Diluted)$1.48
Shares Outstanding (Basic)195.00M
Shares Outstanding (Diluted)195.00M

Key Highlights

  • 1Operating revenues increased by $127 million for the quarter and $258 million for the six months ended June 30, 2025, primarily driven by authorized rate increases and infrastructure surcharges.
  • 2Diluted Earnings Per Share (EPS) improved to $1.48 for the three months and $2.53 for the six months ended June 30, 2025, compared to $1.42 and $2.37 in the prior year, respectively.
  • 3Total assets grew to $33.91 billion as of June 30, 2025, from $32.83 billion as of December 31, 2024, indicating continued investment and asset growth.
  • 4The company invested $1.3 billion in capital expenditures for infrastructure improvements and replacements in the first six months of 2025.
  • 5AWK announced a significant acquisition agreement with Nexus Regulated Utilities, LLC, for approximately $315 million, expected to add nearly 47,000 customer connections across eight states.
  • 6Total annualized incremental revenues from general rate case authorizations effective in 2025 are expected to be $232 million.
  • 7The company maintained a strong liquidity position with total available liquidity of $1.17 billion as of June 30, 2025.

Frequently Asked Questions

Operating revenues increased significantly due to authorized rate increases in the Regulated Businesses segment, including the implementation of general rate cases and infrastructure surcharges across various states. These rate adjustments are primarily intended to recover capital investments made in infrastructure and acquisitions.

American Water is focused on significant capital investment in infrastructure and regulated acquisitions. For 2025, the company plans to invest approximately $3.3 billion in these growth strategies. In the first six months of 2025, $1.3 billion was invested in infrastructure improvements and replacements, and $21 million was used for acquisitions.

American Water entered into a Purchase and Sale Agreement with Nexus Regulated Utilities, LLC on May 19, 2025, to acquire specified entities for approximately $315 million. This acquisition is expected to add nearly 47,000 customer connections in eight states. The closing is subject to customary conditions, including regulatory approvals, and is anticipated by August 2026.

The company is involved in several legal and environmental matters, including the Dunbar, West Virginia class action litigation with a proposed settlement preliminarily approved, and multi-district litigation concerning PFAS. A significant initial settlement payment of $34 million, net of costs, was received from 3M Company for the PFAS litigation, with additional payments anticipated.