Highlights

  • H2O America completed the Quadvest acquisition on October 1, 2026, with cash consideration at closing of approximately $542.7 million.
  • Third quarter 2026 operating revenue was $250,229 thousand and net income was $43,044 thousand, or $0.99 per diluted share.
  • Nine-month net income was $88,646 thousand, and $620.2 million of proceeds were received from an underwritten common stock offering.
  • Water Utility Services estimates 2026 utility capital expenditures of approximately $440 million, with $304.1 million invested at September 30, 2026.

H2O America (NASDAQ: HTO) shares were trading at USD 60.31 on October 27, 2026, up 3.12%, with a relative volume at time of 2.79. The water and wastewater utility holding company issued 3,937,654 shares in an underwritten offering in March, completed the Quadvest acquisition on October 1, and filed its quarterly report for the period ended September 30, 2026 on October 26.

H2O America is a Delaware corporation with principal executive offices at 110 West Taylor Street in San Jose, California. It is a holding company that owns public utilities providing water and wastewater services through San Jose Water Company, The Connecticut Water Company, The Maine Water Company and SJWTX, Inc., which does business as The Texas Water Company. As of September 30, 2026, the subsidiaries provided water service to approximately 409,000 water and wastewater service connections and served a combined population of over 1.6 million people in California, Connecticut, Maine and Texas. Its fiscal year ends December 31.

Third Quarter and Nine-Month Results

For the three months ended September 30, 2026, operating revenue was $250,229 thousand, compared with $240,550 thousand a year earlier. Operating expenses were $189,740 thousand, compared with $175,923 thousand. Net income was $43,044 thousand, compared with $45,132 thousand, and diluted earnings per share were $0.99, compared with $1.27.

Adjusted net income, a non-GAAP measure, was $45,197 thousand, compared with $45,450 thousand, and adjusted diluted earnings per share, also non-GAAP, were $1.04, compared with $1.27.

For the nine months ended September 30, 2026, operating revenue was $643,996 thousand, compared with $606,404 thousand. Net income was $88,646 thousand, compared with $86,358 thousand, and diluted earnings per share were $2.13, compared with $2.48. The company said higher merger and acquisition costs and outsourced services costs contributed to the increase in general and administrative expenses.

Quadvest Acquisition, Financing and Liquidity

On October 1, 2026, H2O America, through The Texas Water Company, completed the acquisition of assets of Quadvest, including the assets of Quadvest, L.P. and Quadvest Wholesale LLC. Aggregate cash consideration transferred at closing was approximately $542.7 million, consisting of $480.9 million related to Quadvest L.P. and $61.8 million related to Quadvest Wholesale LLC.

In the nine months ended September 30, 2026, the company received $620.2 million in proceeds from an underwritten offering of common stock, and the net proceeds were used to finance the acquisition and to support capital investment. Forward purchase agreements relating to 6,439,308 shares were settled for net proceeds of $330.0 million, and agreements relating to 1,107,862 shares remained outstanding.

Cash and cash equivalents were $572,957 thousand at September 30, 2026. Net cash provided by operating activities was $184,694 thousand for the nine months. Long-term debt outstanding was $1,881.4 million, and borrowings under unsecured lines of credit were $200.3 million. Standard & Poor's rates H2O America A- with a negative outlook, a revision made on July 15, 2025 following the announcement of the Quadvest acquisition.

Rates, Capital Plans and Legal Matters

Pending proceedings include a Connecticut general rate case filed May 11, 2026 requesting a $28.8 million increase, with a decision expected February 2027, and a Maine general rate case filed April 13, 2026 requesting a $9.5 million increase, with a decision expected in the second quarter of 2027.

Water Utility Services estimates 2026 utility capital expenditures of approximately $440 million, excluding approximately $25 million of capitalizable cloud-based computing costs. Over the next five years it expects approximately $2,568 million in capital expenditures, including approximately $400 million in PFAS treatment facilities, a portion of which is subject to state regulatory approval.

The Connecticut Water Company has been a defendant since October 2023 in a putative class action lawsuit alleging that its water contained contaminants. The case is pending in the State of Connecticut Superior Court, and the company said it is defending itself in the lawsuit.