American Water Works Company, Inc. reported operating revenues of $5.14 billion for the fiscal year 2025, a 9.7% increase compared to $4.68 billion in 2024. The Regulated Businesses segment contributed $4.72 billion to the total, while Other segments accounted for $417 million. Net income attributable to common shareholders was $1.11 billion, or $5.69 per diluted share, compared to $1.05 billion, or $5.39 per diluted share, in the previous year. The company's adjusted diluted earnings per share (non-GAAP) was $5.64, an increase of $0.46 per diluted share compared to the prior year.
The increase in operating revenues was primarily driven by authorized rate increases in the Regulated Businesses, which contributed $406 million. Additionally, acquisitions and organic growth added $49 million to operating revenues. These increases were partially offset by an estimated $36 million decrease due to warmer, drier weather compared to normal in 2024. Operating expenses also increased, with operation and maintenance expenses rising to $2.02 billion from $1.86 billion, and depreciation and amortization increasing to $894 million from $788 million. Interest expense increased to $615 million from $523 million, reflecting higher debt levels.
American Water continued its strategic focus on infrastructure investment and regulated acquisitions. The company invested $3.2 billion in capital projects within its Regulated Businesses, aimed at improving infrastructure and replacing aging facilities. Additionally, $83 million was allocated to acquisitions, adding approximately 20,900 customers. The company anticipates investing between $19 billion and $20 billion over the next five years and between $46 billion and $48 billion over the next ten years, including $3.7 billion in 2026. As of December 31, 2025, the company had entered into 20 agreements with a total aggregate purchase price of $582 million for pending acquisitions in the Regulated Businesses to add approximately 104,300 additional customers.
A significant strategic development was the announcement of a merger agreement with Essential Utilities, Inc., expected to close by the end of the first quarter of 2027. Under the terms of the agreement, Essential’s shareholders will receive 0.305 shares of American Water common stock for each share of Essential common stock. The company also entered into a Purchase and Sale Agreement with Nexus Regulated Utilities, LLC to acquire regulated water and wastewater system assets in eight states for approximately $315 million, subject to regulatory approvals. The company estimates an investment of approximately $2 billion of capital expenditures to install additional treatment facilities in order to comply with the NPDWR for PFAS as proposed. Additionally, the Company estimates that it will incur annual operating expenses of up to approximately $50 million related to testing and treatment, with the majority of the operating expenses beginning near the April 2029 compliance deadline.
About American Water Works Company, Inc.
American Water Works Company, Inc. is the largest publicly traded U.S. water and wastewater utility, serving over 14 million people across 24 states. It operates regulated utilities providing drinking water and wastewater services to residential, commercial, industrial, and public customers. The company owns and manages water infrastructure, focusing on safe, reliable, and affordable service under extensive regulatory oversight, leveraging scale for operational efficiency and strategic acquisitions in its core regulated markets.
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