American Water Works Company, Inc. reported its fourth‑quarter 2025 results on February 18 2026, posting adjusted earnings of $1.24 per share and revenue of $1.271 billion. Year‑over‑year, adjusted EPS rose 7.8% from $1.15 in Q4 2024, while revenue increased 5.8% from $1.274 billion. The company’s adjusted EPS missed consensus estimates of $1.28 by $0.04, a 3.1% shortfall, but revenue beat the consensus range of roughly $1.20–$1.22 billion.
The EPS miss was driven by higher operating and financing costs, while revenue beat expectations thanks to rate recoveries and the impact of 18 acquisitions completed across seven states. Management highlighted a $3.2 billion capital program in 2025 and noted that the quarter’s performance was supported by new rate recoveries and the acquisitions.
American Water reaffirmed its 2026 adjusted EPS guidance of $6.02 to $6.12, unchanged from the prior outlook, signaling confidence in sustained earnings growth. The company’s capital plan for 2026 is $3.7 billion, with a 2026‑2030 plan of $19–$20 billion, underscoring a continued focus on infrastructure investment.
The company also confirmed the all‑stock acquisition of Essential Utilities, valued at $20.24 billion, with a closing target of early 2027. The merger will combine the two firms into a water utility with approximately 4.7 million connections across 17 states; shareholders approved the merger proposals on February 10.
Investors reacted positively to the earnings release, citing the reaffirmed guidance and merger approval as key drivers of confidence. The EPS miss and higher cost profile were noted as headwinds, and analysts highlighted the company’s high debt‑to‑equity ratio and low Altman Z‑Score as potential financial risks.
American Water continues to invest heavily in regulated operations while maintaining dividend growth, but it must manage debt and cost pressures to sustain its long‑term growth trajectory.
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