Essential Utilities Reports Q2 2026 Results
Key Terms
gaap financial
non-gaap financial
compound annual growth rate financial
pfas technical
Affirms Financial and Growth Guidance
-
GAAP Earnings of
$0.37 $0.38 -
Affirms anticipated growth in earnings per share at a compound annual growth rate of 5 to
7% -
Increased quarterly dividend
5.25% -
Invested
$662.2 million $1.7 billion -
Received orders from Public Utilities Commission of
Ohio and the Virginia State Corporation Commission approving merger with American Water
Company Highlights
“Our commitment to operational efficiency, proactive cost optimization, and value driven customer experience investments underpins our confidence in driving strong performance for 2026. While our organization transitions towards the targeted Q1 2027 merger with American Water, we remain steadfast in our commitment to driving peak operational performance,” said Essential Utilities Chairman and Chief Executive Officer Christopher Franklin. “We are confident that the combination with American Water will bring exciting new opportunities, and we believe that, together, we will deliver significant benefits to our combined customers and shareholders. Crucially, both companies share a dedicated focus on smart capital deployment targeting measurable reliability and quality service. This will allow us to uphold our strong safety and reliability metrics while continuing to deliver affordable, cost-effective utility solutions,” Franklin added.
“The regulatory approval processes for our merger with American Water continue to progress. On June 22nd, we received approval of the merger from the Virginia State Corporation Commission, and on May 14th we received approval from the Public Utilities Commission of
As a reminder, we filed in all pertinent states before the end of 2025. In February, at the special shareholder meeting to approve the merger, approximately
Second Quarter 2026 Operating Results
Essential reported GAAP net income of
The second quarter Q2 2026 non-GAAP EPS of
Revenues for the quarter were
Essential’s regulated water segment reported revenues for the quarter of
Essential’s regulated natural gas segment reported revenues for the quarter of
For the first six months of 2026, the Company reported revenues of
Dividend
As previously announced on July 29, 2026, Essential’s board of directors increased the quarterly cash dividend,
Essential Utilities has paid consecutive quarterly cash dividends for over 80 years and has increased the dividend 36 times in the last 35 years.
Financing
As of June 30, 2026, Essential’s weighted average cost of fixed-rate long-term debt was
Rate Activity
Thus far in 2026, the Company’s regulated water segment received rate awards or infrastructure surcharges that will increase annual revenues in
The Company currently has base rate cases or infrastructure surcharges pending in
Capital Expenditures
Essential invested approximately
Water Utility Growth by Acquisition
Essential’s continued growth by acquisition allows the company to provide safe and reliable water and wastewater service to a larger customer base than it could from organic customer growth alone.
Since 2015, Essential has acquired approximately
In May 2026, the Company acquired Integra Water Texas, LLC's wastewater system in
The pipeline of potential water and wastewater municipal acquisitions the Company is actively pursuing represents approximately 400,000 total customers.
Merger with American Water Works Company, Inc.
The Company is continuing to progress through the process of obtaining the consents and approvals needed to successfully consummate the proposed merger with American Water. On February 10, 2026, shareholders of both companies voted overwhelmingly in favor of merger-related proposals. In 2025, Essential submitted applications for required regulatory approval in all states where applicable. On June 22, 2026, we received an order from the Virginia State Corporation Commission approving the merger. Previously we had obtained regulatory approval for the merger from public utility commissions in
We continue to expect the merger to close in the first quarter of 2027.
Financial and Growth Guidance
The Company’s latest expectations are the following:
-
Anticipated growth in long-term earnings per share at a compound annual growth rate of
5% to7% from the adjusted 2024 earnings per share of$1.97 -
In 2026, regulated infrastructure investments are expected to be
$1.7 billion - Multiyear plan to ensure that finished water does not exceed the federal maximum contaminant level of the six EPA-regulated PFAS chemicals.
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 and infrastructure investment 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 supplements investors the ability to measure the company’s financial operating performance for 2024, including by adjustment, as compared to the Company’s operating performance in 2024.
2Q 2026 Earnings Call Information
Date: August 5th, 2026
Time: 11 a.m. EDT (please dial in by 10:45 a.m.)
Webcast and slide presentation link: https://www.essential.co/events-and-presentations/events-calendar
The call and presentation will be webcast live so interested parties may listen over the internet by logging on to Essential.co and following the link for Investors. The conference call will be archived in the Investor Relations section of the company’s website following the call.
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
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 anticipated receipt of regulatory approvals for, and closing of, the company’s proposed merger with American Water; the guidance range of net income per diluted common share; the anticipated amount of infrastructure investment in 2026; and the Company’s anticipated use of equity and debt financing. There are important factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements including: the expected timing and likelihood of completion of our proposed merger with American Water; 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 successfully execute any equity or debt financing transactions, 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 municipally owned systems presently under agreement and successfully complete other acquisitions and dispositions; 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 | Six Months Ended | |||||||||
| June 30, | June 30, | |||||||||
2026 |
2025 |
2026 |
2025 |
|||||||
| Operating revenues | $ |
530,854 |
$ |
514,907 |
$ |
1,392,613 |
$ |
1,298,533 |
||
| Operations and maintenance expense | $ |
153,635 |
$ |
148,510 |
$ |
329,430 |
$ |
286,334 |
||
|
|
|
|
|||||||
| Net income | $ |
105,725 |
$ |
107,827 |
$ |
330,117 |
$ |
391,616 |
||
|
|
|
|
|||||||
| Basic net income per common share | $ |
0.37 |
$ |
0.38 |
$ |
1.16 |
$ |
1.41 |
||
| Diluted net income per common share | $ |
0.37 |
$ |
0.38 |
$ |
1.16 |
$ |
1.41 |
||
| Basic average common shares outstanding |
|
283,655 |
|
280,275 |
|
283,419 |
|
277,748 |
||
| Diluted average common shares outstanding |
|
284,088 |
|
280,725 |
|
283,998 |
|
278,335 |
||
| Essential Utilities, Inc. and Subsidiaries | ||||||||||||||
| Consolidated Statement of Operations | ||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||||
| June 30, | June 30, | |||||||||||||
2026 |
2025 |
2026 |
2025 |
|||||||||||
| Operating revenues | $ |
530,854 |
|
$ |
514,907 |
|
$ |
1,392,613 |
|
$ |
1,298,533 |
|
||
| Cost & expenses: | ||||||||||||||
| Operations and maintenance |
|
153,635 |
|
|
148,510 |
|
|
329,430 |
|
|
286,334 |
|
||
| Purchased gas |
|
46,201 |
|
|
56,735 |
|
|
284,816 |
|
|
241,376 |
|
||
| Depreciation |
|
109,578 |
|
|
99,542 |
|
|
216,687 |
|
|
196,306 |
|
||
| Amortization |
|
3,714 |
|
|
3,977 |
|
|
7,334 |
|
|
6,590 |
|
||
| Taxes other than income taxes |
|
24,453 |
|
|
20,872 |
|
|
50,433 |
|
|
43,751 |
|
||
| Total |
|
337,581 |
|
|
329,636 |
|
|
888,700 |
|
|
774,357 |
|
||
| Operating income |
|
193,273 |
|
|
185,271 |
|
|
503,913 |
|
|
524,176 |
|
||
| Other expense (income): | ||||||||||||||
| Interest expense |
|
89,111 |
|
|
79,809 |
|
|
176,418 |
|
|
161,874 |
|
||
| Interest income |
|
(510 |
) |
|
(301 |
) |
|
(2,121 |
) |
|
(530 |
) |
||
| Allowance for funds used during construction |
|
(5,739 |
) |
|
(7,027 |
) |
|
(11,499 |
) |
|
(12,859 |
) |
||
| Other, net |
|
1,295 |
|
|
391 |
|
|
1,220 |
|
|
98 |
|
||
| Income before income taxes |
|
109,116 |
|
|
112,399 |
|
|
339,895 |
|
|
375,593 |
|
||
| Income tax expense (benefit) |
|
3,391 |
|
|
4,572 |
|
|
9,778 |
|
|
(16,023 |
) |
||
| Net income | $ |
105,725 |
$ |
107,827 |
|
$ |
330,117 |
$ |
391,616 |
|
||||
| Net income per common share: | ||||||||||||||
| Basic | $ |
0.37 |
$ |
0.38 |
|
$ |
1.16 |
$ |
1.41 |
|
||||
| Diluted | $ |
0.37 |
$ |
0.38 |
|
$ |
1.16 |
$ |
1.41 |
|
||||
| Average common shares outstanding: | ||||||||||||||
| Basic |
|
283,655 |
|
|
280,275 |
|
|
283,419 |
|
|
277,748 |
|
||
| Diluted |
|
284,088 |
|
|
280,725 |
|
|
283,998 |
|
|
278,335 |
|
||
| Essential Utilities, Inc. and Subsidiaries | |||
| Condensed Consolidated Balance Sheets | |||
| (In thousands of dollars) | |||
| (Unaudited) | |||
| June 30, | December 31, | ||
2026 |
2025 |
||
| Net property, plant and equipment | 14,746,257 |
14,263,682 |
|
| Current assets | 465,309 |
610,396 |
|
| Regulatory assets and other assets | 4,730,421 |
4,590,767 |
|
19,941,987 |
19,464,845 |
||
| Total equity | 7,018,256 |
6,857,456 |
|
| Long-term debt, excluding current portion, net of debt issuance costs and unamortized discount on debt | 8,421,198 |
8,110,167 |
|
| Current portion of long-term debt and loans payable | 83,312 |
171,961 |
|
| Other current liabilities | 515,677 |
592,522 |
|
| Deferred credits and other liabilities | 3,903,544 |
3,732,739 |
|
19,941,987 |
19,464,845 |
||
Essential Utilities, Inc. and Subsidiaries |
|||
Reconciliation of GAAP to Non-GAAP Financial Measures |
|||
(In Thousands, except per share amounts) |
|||
| 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 microgrids and distributed energy projects and recognized a gain of |
|||
| (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 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 |
|||
| 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 (Earnings per share)): | |||
| Basic | $ |
2.17 |
|
| Diluted | $ |
2.17 |
|
| Adjusted income per common share (Non-GAAP financial measure (Adjusted Earnings per share)): | |||
| Basic | $ |
1.97 |
|
| Diluted | $ |
1.97 |
|
| Average common shares outstanding: | |||
| Basic |
|
273,914 |
|
| Diluted |
|
274,421 |
|
| 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 adjusted earnings per share, a non-GAAP financial measures referenced in this release, to the most comparable GAAP financial measure. Adjusted earnings per share does not comply with |
|||
Adjusted earnings per share is one of the primary metrics used by management to evaluate the Company’s financial performance and compare it to that of its peers, evaluate the effectiveness of the Company’s business strategies, and in connection with executive compensation decisions. This measure is also frequently used by analysts, investors, and others to evaluate industry peers. Further, the Company believes adjusted earnings per share is helpful in highlighting trends in the Company’s results because it allows for more consistent comparisons of performance between periods by excluding gains and losses that are non-operational in nature or outside the control of management. The Company further believes that this non-GAAP financial measure is useful to investors as a more meaningful way to compare the Company’s operating performance against its guidance. This non-GAAP measure does, however, have certain limitations and should not be considered as an alternative to earnings per share or any other performance. |
|||
Adjusted earnings per share adjusts for the following items: |
|||
| (1) costs associated with the pending merger with American Water; and | |||
| (2) the income tax impact of the non-GAAP adjustment described above. | |||
| Three Months Ended | |||
| June 30, 2026 | |||
| Net income (GAAP financial measure) | $ |
105,725 |
|
| Adjustments: | |||
| (1) Costs associated with the pending merger with American Water |
|
1,191 |
|
| (2) The income tax impact of the non-GAAP adjustment described above |
|
(321 |
) |
| Adjusted income (Non-GAAP financial measure) | $ |
106,595 |
|
| Net income per common share (GAAP financial measure): | |||
| Basic | $ |
0.37 |
|
| Diluted | $ |
0.37 |
|
| Adjusted income per common share (Non-GAAP financial measure): | |||
| Basic | $ |
0.38 |
|
| Diluted | $ |
0.38 |
|
| Average common shares outstanding: | |||
| Basic |
|
283,655 |
|
| Diluted |
|
284,088 |
|
| 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 adjusted earnings per share, a non-GAAP financial measures referenced in this release, to the most comparable GAAP financial measure. Adjusted earnings per share does not comply with |
|||
| Adjusted earnings per share is one of the primary metrics used by management to evaluate the Company’s financial performance and compare it to that of its peers, evaluate the effectiveness of the Company’s business strategies, and in connection with executive compensation decisions. This measure is also frequently used by analysts, investors, and others to evaluate industry peers. Further, the Company believes adjusted earnings per share is helpful in highlighting trends in the Company’s results because it allows for more consistent comparisons of performance between periods by excluding gains and losses that are non-operational in nature or outside the control of management. The Company further believes that this non-GAAP financial measure is useful to investors as a more meaningful way to compare the Company’s operating performance against its guidance. This non-GAAP measure does, however, have certain limitations and should not be considered as an alternative to earnings per share or any other performance. | |||
| Adjusted earnings per share adjusts for the following items: | |||
| (1) costs associated with the pending merger with American Water; and | |||
| (2) the income tax impact of the non-GAAP adjustment described above. | |||
| Six Months Ended | |||
| June 30, 2026 | |||
| Net income (GAAP financial measure) | $ |
330,117 |
|
| Adjustments: | |||
| (1) Costs associated with the pending merger with American Water |
|
17,521 |
|
| (2) The income tax impact of the non-GAAP adjustment described above |
|
(4,716 |
) |
| Adjusted income (Non-GAAP financial measure) | $ |
342,922 |
|
| Net income per common share (GAAP financial measure): | |||
| Basic | $ |
1.16 |
|
| Diluted | $ |
1.16 |
|
| Adjusted income per common share (Non-GAAP financial measure): | |||
| Basic | $ |
1.21 |
|
| Diluted | $ |
1.21 |
|
| Average common shares outstanding: | |||
| Basic |
|
283,419 |
|
| Diluted |
|
283,998 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20260803594126/en/
Media Contact:
David Kralle
Vice President, 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
Source: Essential Utilities Inc.