American States Water NYSE: AWR executives highlighted constructive regulatory outcomes, higher full-year earnings, and continued infrastructure investment during the company’s fourth-quarter and full-year 2025 earnings call. President and CEO Bob Sprowls and CFO Eva Tang also pointed to growth at the company’s contracted services business and outlined recent and pending utility expansion efforts in California.
Full-year 2025 earnings and capital investment
Management said 2025 was a “very productive and positive year,” citing final California Public Utilities Commission (CPUC) decisions received in January 2025 for both Golden State Water Company’s water general rate case (GRC) and the company’s electric subsidiary’s rate case.
For the full year, American States Water reported earnings of $3.37 per share, compared with $3.17 per share in 2024. Sprowls and Tang emphasized that 2024 included a one-time tax benefit of $0.13 per share at Golden State Water tied to the final water GRC decision. Excluding that item, adjusted 2024 earnings were $3.04 per share, making the 2025 result $0.33 per share higher on an adjusted basis.
The company invested $210.9 million in infrastructure at its regulated utilities during 2025. Looking ahead, Tang said the company projects $185 million to $225 million of company-funded capital expenditures in 2026.
Fourth-quarter results: reported vs. adjusted comparisons
For the fourth quarter, Tang said consolidated reported earnings were $0.74 per share, compared with $0.75 per share in the prior-year quarter. She noted that fourth-quarter 2024 results included items tied to regulatory decisions, and that fourth-quarter 2023 earnings were $0.56 per share as adjusted for those items.
By segment in the quarter:
- Golden State Water (water utility): Reported earnings were $0.50 per share, compared with $0.52 in the prior-year quarter. Excluding the $0.13 per share water-related tax benefit recorded in fourth-quarter 2024, Tang said adjusted water earnings increased by $0.11 per share, driven largely by new 2025 water rates, higher gains on investments held to fund a retirement plan, lower interest expense, and a lower effective tax rate from changes in certain flow-through items, partially offset by higher operating expenses. She also cited a $0.01 per share headwind from dilution related to shares issued under the company’s at-the-market (ATM) equity program.
- Electric segment: Reported earnings were $0.11 per share, compared with $0.13 a year earlier. Tang said fourth-quarter 2024 electric earnings included $0.06 per share from retroactive rates related to 2023 and the first nine months of 2024, recorded after the final electric GRC decision. Excluding that, she said the segment posted a $0.04 per share increase as adjusted, primarily from “third-year rate increases,” partially offset by higher operating and interest expenses.
- American States Utility Services (ASUS): Earnings were $0.16 per share, up from $0.11, reflecting higher contributions from the contracted services business.
- Parent company: Losses were $0.03 per share, compared with losses of $0.02 in the year-ago quarter, largely due to higher borrowing levels on AWR’s credit facility, partially offset by lower average interest rates.
Revenue and expense drivers in the quarter
Tang said consolidated revenue for the quarter increased by $21.2 million year over year. Water-segment revenues increased $17.4 million, “largely due to new 2025 water rates.” Electric-segment revenues decreased $5.7 million, though she noted fourth-quarter 2024 included $9.2 million of retroactive rates; excluding that prior-year item, she said electric revenues increased partially due to third-year rate increases. ASUS revenue rose to $9.5 million due primarily to the timing of higher construction activity.
On costs, Tang said supply costs increased $10.7 million, mostly from higher per-unit purchased water costs included in customer rates in 2025. Total operating expenses other than supply costs increased $4.2 million. She also pointed to an increase in interest expense (net of interest income), primarily from reduced interest income tied to lower regulatory asset balances, partially offset by lower interest expense. Other income improved largely due to higher gains on retirement plan investments compared with the prior-year quarter.
Regulatory updates and growth initiatives
Sprowls said Golden State Water has begun preparing its next water rate case, expected to be filed by July 1, 2026. He also reiterated that the final water GRC decision ordered Golden State Water to move from full revenue decoupling and a full supply cost balancing account to a modified revenue adjustment mechanism (MRAM) and an incremental supply cost balancing account effective January 1, 2025. Management said the change could increase future volatility tied to consumption and water supply mix, though Sprowls said 2025 results were not materially impacted overall.
For 2026, Sprowls said the CPUC approved Golden State Water’s full second-year rate increases effective January 1, 2026, which he said results in higher adopted operating revenues less water supply costs for 2026 of approximately $32 million compared to 2025. He added that nearly $11 million of the increase relates to advice letter capital projects.
The company also discussed several service area expansion efforts:
- San Juan Oaks (Central Coast): Sprowls said the CPUC approved certificates establishing rates and recovery of incremental asset purchase prices through future customer rates. The transaction closed in May 2025 and included initial backbone assets of $10.7 million conveyed by the developer. The planned community is expected to reach about 1,300 customers at full build-out, anticipated by 2034 under the current schedule.
- Sutter Point (Northern California): Management said the CPUC approved a settlement establishing initial water service rates for 2026 through 2028. The first development is expected to serve up to 3,800 customer connections over the next five years, with a longer-term plan allowing for 17,500 dwelling units at full build-out over 20-plus years.
- Norwalk acquisition: Sprowls said Golden State Water signed an agreement with the City of Norwalk to acquire its water system assets, serving almost 900 primarily residential customers. In January 2026, Golden State Water filed a CPUC application to expand its certificate and include the $5.25 million purchase price in rate base. If approved as filed, the acquisition is forecast to increase revenues by approximately $1 million.
On water cost of capital timing, Sprowls said the CPUC approved a one-year deferral of the industry cost-of-capital application to May 1, 2027, with an effective date of January 1, 2028, leaving the current mechanism in place. He said Golden State Water’s current authorized return on rate base is 7.93% through December 31, 2027.
For Bear Valley Electric, Sprowls said the utility filed a new GRC application on January 30, 2026 for rates covering 2027 through 2030, requesting capital budgets of approximately $133 million for the four-year cycle, plus approximately $17 million (plus AFUDC) for advice-letter capital projects. The filing also requested a return on equity of 11.3%, an embedded cost of debt of 5.92%, a 60/40 equity/debt capital structure, and a return on rate base of 9.15%. He also said the CPUC approved a settlement authorizing $28 million (plus AFUDC) of solar and battery storage projects, which management said would help meet about 18% of Bear Valley Electric’s renewables portfolio standard requirement.
ASUS performance, liquidity, and dividends
ASUS contributed $0.61 per share in 2025, compared with $0.55 in 2024, which Sprowls described as an 11% increase. He attributed the gain to higher management fee revenue (including full-year contributions from Joint Base Cape Cod and Naval Air Station Patuxent River), resolution of various economic price adjustments, increased construction activity, and lower interest expense from lower borrowing levels, partially offset by higher operating expenses and dilution from ATM share issuance. The company said ASUS was awarded $29.4 million in new capital upgrade construction projects during 2025 expected to be completed through 2028, and projected 2026 ASUS earnings contribution of $0.63 to $0.67 per share.
On cash flow, Tang said net cash provided by operating activity was $229.7 million in 2025, up from $198.7 million in 2024, driven largely by new rates, approved surcharges, PFAS litigation settlement proceeds, ASUS construction billing and collections, and timing of vendor payments. Under the ATM program, the company raised $67 million in net proceeds during 2025 and had $40.7 million remaining authorization; Tang said the company does not expect to continue the program once the remaining balance is utilized.
American States Water also highlighted its dividend track record. Sprowls said the company increased the quarterly cash dividend by 8.3% in 2025, marking its 71st consecutive year of annual dividend increases. He added that the quarterly dividend rate has grown at an 8.5% compound annual rate over the last five years, consistent with the company’s long-term policy targeting dividend CAGR of more than 7%.
About American States Water NYSE: AWR
American States Water Company NYSE: AWR, founded in 1929 and headquartered in San Dimas, California, is a publicly traded utility holding company. The company operates primarily through two regulated segments—water and electric utilities—and provides non-regulated water system services. Over its history, American States Water has expanded its footprint through strategic acquisitions and organic growth, positioning itself as a reliable provider of essential services in its core territories.
Within its regulated water utility segment, American States Water serves more than 250,000 residential, commercial and industrial customers across 35 communities in six counties of California.
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