10-QPeriod: Q3 FY2025

American Water Works Company, Inc. Quarterly Report for Q3 Ended Sep 30, 2025

Filed October 29, 2025For Securities:AWK

Summary

American Water Works Company, Inc. (AWK) reported a solid third quarter and first nine months of 2025, demonstrating continued growth driven by capital investments and regulated acquisitions. Operating revenues increased significantly year-over-year, reflecting successful rate adjustments and customer growth. Diluted earnings per share also saw a healthy increase, signaling effective operational management and recovery of infrastructure investments. The company is actively pursuing strategic growth through substantial capital expenditures in infrastructure improvements and targeted acquisitions. A notable development is the announced agreement to merge with Essential Utilities, Inc., a significant transaction expected to close by the first quarter of 2027. AWK also continues to manage its balance sheet effectively, with substantial liquidity and access to capital markets, while navigating regulatory environments across its diverse service territories. Investors should monitor the progress of the Essential merger and ongoing regulatory approvals, as these are key drivers for future growth and operational stability.

Financial Highlights

47 data points
Beta

Revenue

$1.45B

Net Income

$379.00M

26.1% Net Margin

EPS (Diluted)

$1.94

Total Assets

$34.75B

Cash & Equivalents

$166.00M

Free Cash Flow

-$33.00M

Financial Statements
Beta
Revenue$1.45B
Operating Expenses$837.00M
Operating Income$614.00M
Net Income$379.00M
EPS (Basic)$1.94
EPS (Diluted)$1.94
Shares Outstanding (Basic)195.00M
Shares Outstanding (Diluted)195.00M

Key Highlights

  • 1Operating revenues increased by $124 million and $366 million for the three and nine months ended September 30, 2025, respectively, primarily driven by authorized rate increases and infrastructure investments.
  • 2Diluted earnings per share improved to $1.94 for Q3 2025 and $4.47 for the nine months ended September 30, 2025, up from $1.80 and $4.17 in the prior year periods, attributed to rate recovery and capital investment.
  • 3AWK is planning significant capital investments, with approximately $3.2 billion projected for 2025 to fund infrastructure improvements and acquisitions, with $2.2 billion already invested in the first nine months.
  • 4A major strategic move announced is the Agreement and Plan of Merger with Essential Utilities, Inc., a stock-for-stock transaction expected to close by the end of the first quarter of 2027.
  • 5The company received $135 million in net settlement payments from 3M Company related to the PFAS Multi-District Litigation, with plans to seek regulatory approval to benefit customers.
  • 6Long-term debt increased by $504 million to $13,022 million as of September 30, 2025, primarily due to new senior note issuances to fund capital expenditures and general corporate purposes.
  • 7Total assets grew to $34,748 million as of September 30, 2025, up from $32,830 million at the end of 2024, driven by increases in property, plant and equipment.

Frequently Asked Questions

For the three and nine months ended September 30, 2025, American Water Works Company, Inc. reported increased operating revenues and diluted earnings per share compared to the same periods in 2024. This growth was primarily driven by authorized rate increases, recovery of capital investments, and strategic acquisitions. The company continues to invest heavily in infrastructure and expand its customer base.

The company's growth is primarily fueled by significant capital investments in infrastructure improvements and replacements within its Regulated Businesses. Additionally, strategic regulated acquisitions are expanding its customer base. A major initiative is the pending merger with Essential Utilities, Inc., which is expected to create a larger, more diverse utility company.

American Water Works maintains a strong liquidity position with significant availability on its revolving credit facility and substantial cash and cash equivalents. The company has been active in the debt markets, issuing new long-term debt to fund its capital investment plans and refinance existing obligations. The company's debt-to-capitalization ratio remains within its covenant limits, demonstrating prudent financial management.

The company is involved in several significant legal and regulatory matters. These include ongoing general rate cases and infrastructure surcharge filings across various states, which are crucial for revenue recovery and investment justification. A substantial development is the PFAS Multi-District Litigation, from which the company has received a significant settlement payment. Additionally, the pending merger with Essential Utilities is subject to numerous regulatory approvals, which could impact its completion timeline and terms.