American Water Works Reports 9.7% Revenue Growth to $1.451 Billion in Q3 2025

American Water Works Company, Inc. reported significant financial performance in its latest 10-Q filing for the third quarter of 2025, with operating revenues reaching $1.451 billion, a 9.7% increase from $1.323 billion in the same period last year. For the nine months ended September 30, 2025, revenues totaled $3.869 billion, up from $3.483 billion in 2024. The company’s net income attributable to common shareholders was $379 million for the third quarter, compared to $350 million in the prior year, resulting in diluted earnings per share of $1.94, up from $1.80. The increase in revenue and profitability was primarily driven by new rates implemented in the Regulated Businesses segment, which allowed for the recovery of capital and acquisition investments.

The company experienced notable operational changes, including the addition of approximately 11,000 water and wastewater customers through ten acquisitions completed during the first nine months of 2025. The total capital investment in the Regulated Businesses for infrastructure improvements and acquisitions was approximately $2.1 billion, with plans to invest around $3.2 billion in 2025. Additionally, American Water's customer base grew organically by approximately 14,600 new customers during the same period. The company also entered into 24 agreements for pending acquisitions, which are expected to add around 98,000 customers.

In terms of strategic developments, American Water announced an Agreement and Plan of Merger with Essential Utilities, Inc. on October 26, 2025. This stock-for-stock transaction will see Essential become a wholly owned subsidiary of American Water, pending regulatory approvals. The merger is expected to close by the end of the first quarter of 2027. Furthermore, the company is in the process of acquiring regulated water and wastewater systems from Nexus Water Group, with an estimated purchase price of $315 million, which will add nearly 47,000 customer connections across several states.

The company’s operational metrics indicate a solid performance, with total assets increasing to $34.748 billion as of September 30, 2025, compared to $32.830 billion at the end of 2024. The total long-term debt also rose to $13.022 billion from $12.518 billion, reflecting ongoing investments in infrastructure. American Water's effective income tax rate for the third quarter was 23.3%, slightly higher than the previous year's 22.7%, primarily due to changes in the amortization of excess accumulated deferred income taxes.

Looking ahead, American Water remains focused on its growth strategy through capital investments and acquisitions, while also navigating regulatory challenges and market conditions. The company anticipates continued revenue growth driven by infrastructure investments and rate adjustments, although it acknowledges potential risks related to regulatory approvals and market fluctuations. The outlook for the remainder of 2025 includes expectations for further customer growth and operational efficiencies, alongside the successful execution of its merger and acquisition strategies.