H2O America (HTO) Q4 2025 Earnings Call Transcript
The Motley Fool
by newsfeedback@fool.com (Motley Fool Transcribing)February 26, 2026
AI-Generated Deep Dive Summary
H2O America (HTO) reported a strong Q4 2025 performance with diluted EPS of $2.92 GAAP and $2.99 adjusted, hitting the upper end of its guidance range. The company raised its 2026 standalone adjusted EPS outlook to $3.08-$3.18 and increased its long-term EPS growth target to 6-8%, reflecting confidence in its updated financial strategy.
HTO's capital expenditures reached $501 million in 2025, a 41% year-over-year increase, surpassing its budgeted $486 million. The company's five-year CapEx plan stands at $2.7 billion from 2026-2030, up 31% from the previous plan, with 80% expected to be rate-recognized promptly. This investment supports a projected 13% CAGR in its rate base, growing from $2.8 billion in 2025 to $5.1 billion by 2030.
The pending QuadVest acquisition, valued at $540 million enterprise value, is expected to be accretive from 2028 onwards but will cause 10-20% EPS dilution in 2026 and 2027. HTO plans to raise $350-$450 million in equity for QuadVest and $100-$125 million for regular CapEx in 2026, with no additional M&A opportunities factored into its growth targets.
The company's FFO-to-debt ratio stood at 11.2% in 2025, above S&P's downgrade threshold, and is expected to remain strong through 2027. HTO also highlighted its AMI meter rollout progress, with 53% of California meters enabled by end-2025, supporting operational efficiency and customer savings.
These strategic moves position H2O America for sustained
Verticals
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Originally published on The Motley Fool on 2/26/2026