hto-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________________________________

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-8966

H2O AMERICA

(Exact name of registrant as specified in its charter)

Delaware

77-0066628

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

110 West Taylor Street, San Jose, CA

95110

(Address of principal executive offices)

(Zip Code)

(408) 279-7800

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

HTO

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Non-accelerated filer ☐

Accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of October 21, 2025, there were 35,805,089 shares of the registrant’s Common Stock outstanding.

Table of Contents


TABLE OF CONTENTS

		Page
Forward-Looking Statements		3
PART I	FINANCIAL INFORMATION	4
Item 1.	Financial Statements	4
	Condensed Consolidated Statements of Comprehensive Income (unaudited) For the Three and Nine Months Ended September 30, 2025 and 2024	4
	Condensed Consolidated Balance Sheets (unaudited) as of September 30, 2025 and December 31, 2024	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) For the Three and Nine Months Ended September 30, 2025 and 2024	7
	Condensed Consolidated Statements of Cash Flows (unaudited) For the Nine Months Ended September 30, 2025 and 2024	9
	Notes to Unaudited Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32
PART II	OTHER INFORMATION	33
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	36
Item 6.	Exhibits	37
Signatures		38

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FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Some of these forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “projects,” “strategy,” or “anticipates,” or the negative of those words or other comparable terminology. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict.

The accuracy of such statements is subject to a number of risks, uncertainties and assumptions including, but not limited to, the following factors:

•the risks associated with the proposed transactions with Quadvest, L.P., a Texas limited partnership and Quadvest Wholesale, LLC, a Texas limited liability company (together “Quadvest”), including, the risk of the proposed transactions not closing on the anticipated timeline, or at all, the ability to obtain required regulatory approvals, and the ability to successfully integrate Quadvest’s operations and realize the projected financial and other benefits of the proposed transactions;

•the effect of water, utility, environmental and other governmental policies and regulations, including regulatory actions concerning rates, authorized return on equity, authorized capital structures, capital expenditures, per- and polyfluoroalkyl substances (“PFAS”) and other decisions;

•changes in demand for water and other services;

•unanticipated weather conditions and changes in seasonality including those affecting water supply and customer usage;

•the effect of the impacts of climate change;

•unexpected costs, charges or expenses;

•our ability to successfully evaluate investments in new business and growth initiatives;

•contamination of our water supplies and damage or failure of our water equipment and infrastructure;

•the risk of work stoppages, strikes and other labor-related actions;

•catastrophic events such as fires, earthquakes, explosions, floods, ice storms, tornadoes, hurricanes, terrorist acts, physical attacks, cyber-attacks, epidemic, or other similar occurrences;

•changes in general economic, political, business and financial market conditions, including changes resulting from the recent U.S. government shutdown;

•the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, changes in interest rates, compliance with regulatory requirements, compliance with the terms and conditions of our outstanding indebtedness and general market and economic conditions; and

•legislative and general market and economic developments.

These risks, uncertainties and other factors may cause the actual results, performance or achievements of H2O America to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Results for a quarter are not indicative of results for a full year due to seasonality and other factors. In addition, actual results, performance or achievements are subject to other risks and uncertainties that relate more broadly to our overall business, including those more fully described in our filings with the SEC, including our most recent reports on Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements are not guarantees of future performance, and speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

In May 2025, the Company changed the corporate name from SJW Group to H2O America. We will not distinguish between our prior and current corporate name and will refer to our current corporate name throughout this quarterly report on Form 10-Q. As such, unless expressly indicated or the context requires otherwise, the terms “H2O America,” “company,” “we,” “us,” and “our” in this document refer to H2O America, a Delaware corporation, and, where appropriate, its subsidiaries.

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PART I. FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

H2O America and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(in thousands, except share and per share data)


	Three months ended September 30,			Nine months ended September 30,
	2025		2024	2025		2024
Operating revenue	$	240,550	225,063	$	606,404	550,619
Operating expense:
Production Expenses:
Purchased water	38,163		54,310	101,537		118,631
Power	8,175		3,396	15,509		8,560
Groundwater extraction charges	39,608		25,081	84,253		54,759
Other production expenses	12,374		12,919	36,857		36,020
Total production expenses	98,320		95,706	238,156		217,970
Administrative and general	31,306		25,708	87,861		71,964
Maintenance	8,016		8,512	22,985		23,080
Property taxes and other non-income taxes	9,516		9,361	27,217		26,610
Depreciation and amortization	28,765		27,423	85,797		84,159

Total operating expense	175,923		166,710	462,016		423,783
Operating income	64,627		58,353	144,388		126,836
Other (expense) income:
Interest on long-term debt and other interest expense	(17,898)		(17,516)	(54,292)		(53,394)
Pension non-service credit	1,587		940	4,810		2,829

Other, net	2,607		(1,197)	5,384		2,659
Income before income taxes	50,923		40,580	100,290		78,930
Provision for income taxes	5,791		1,928	13,932		7,883
Net income	45,132		38,652	86,358		71,047
Other comprehensive loss, net	—		—	—		(442)
Comprehensive income	$	45,132	38,652	$	86,358	70,605

Earnings per share
—Basic	$	1.27	1.17	$	2.49	2.19
—Diluted	$	1.27	1.17	$	2.48	2.18
Dividends per share	$	0.42	0.40	$	1.26	1.20
Weighted average shares outstanding
—Basic	35,543,224		32,896,967	34,706,183		32,458,666
—Diluted	35,643,826		32,982,580	34,797,374		32,530,954

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H2O America and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share data)


	September 30, 2025		December 31, 2024
Assets
Utility plant:
Land	$	44,657	44,657
Depreciable plant and equipment	4,526,148		4,249,314
Construction work in progress	277,948		179,486
Intangible assets	51,683		51,604
Total utility plant	4,900,436		4,525,061
Less: accumulated depreciation and amortization	1,102,312		1,036,450
Net utility plant	3,798,124		3,488,611

Nonutility properties	1,314		1,314
Less: accumulated depreciation	101		98
Net nonutility properties	1,213		1,216

Current assets:
Cash and cash equivalents	11,314		11,114

Accounts receivable:
Customers, net of allowances for credit losses of $1,050 and $1,172 on September 30, 2025 and December 31, 2024, respectively	86,008		68,679
Income tax	—		5,953
Other	6,490		7,059
Accrued unbilled revenue	73,131		60,847

Prepaid expenses	15,989		10,297
Current regulatory assets	7,047		18,172
Other current assets	7,227		8,593
Total current assets	207,206		190,714
Other assets:
Regulatory assets, less current portion	242,376		224,055
Investments	19,271		18,087
Postretirement benefit plans	70,092		66,422

Goodwill	640,311		640,311
Other	32,061		28,893
Total other assets	1,004,111		977,768
Total assets	$	5,010,654	4,658,309

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H2O America and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share data)


	September 30, 2025		December 31, 2024
Capitalization and liabilities
Capitalization:
Stockholders’ equity:
Common stock, $0.001 par value; authorized 70,000,000 shares; issued and outstanding shares 35,805,089 on September 30, 2025 and 33,629,169 on December 31, 2024	$	36	34
Additional paid-in capital	941,759		827,796
Retained earnings	579,908		537,184
Accumulated other comprehensive income	1,960		1,960
Total stockholders’ equity	1,523,663		1,366,974
Long-term debt, less current portion	1,756,955		1,706,904
Total capitalization	3,280,618		3,073,878

Current liabilities:
Lines of credit	126,368		119,124
Current portion of long-term debt	18,010		3,648
Accrued groundwater extraction charges, purchased water and power	42,457		25,118
Accounts payable	61,238		56,256
Accrued interest	18,319		17,476
Accrued payroll	13,596		15,193

Current regulatory liabilities	3		1,122
Other current liabilities	24,172		23,236
Total current liabilities	304,163		261,173

Deferred income taxes	302,959		276,043
Advances for construction	183,892		155,397
Contributions in aid of construction	343,295		340,738
Postretirement benefit plans	44,264		45,063
Regulatory liabilities, less current portion	528,206		483,719
Other noncurrent liabilities	23,257		22,298
Commitments and contingencies
Total capitalization and liabilities	$	5,010,654	4,658,309

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H2O America and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share and per share data)


	Common Stock			Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Total Stockholders’ Equity
	Number of Shares	Amount
Balances, December 31, 2024	33,629,169	$	34	827,796	537,184	1,960	1,366,974
Net income	—	—		—	16,551	—	16,551

Stock-based compensation	—	—		1,210	(9)	—	1,201
Issuance of restricted and deferred stock units	31,587	—		(908)	—	—	(908)
Employee stock purchase plan	26,129	—		1,116	—	—	1,116
Common stock issuance, net of costs	495,900	—		26,545	—	—	26,545
Dividends paid ($0.42 per share)	—	—		—	(14,142)

SEC Form 10-Q filed by H2O America