California Water Service Group Reports Q2 2025 Financial Results with Increased Net Income

California Water Service Group reported its financial results for the second quarter of 2025, revealing a net income of $42.2 million, or $0.71 per diluted share, compared to $40.6 million, or $0.70 per diluted share, in the same period last year. The increase in net income was primarily driven by an 8.5% rise in operating revenue, which reached $265.0 million, up from $244.3 million in the prior year. This growth was attributed to rate increases and higher customer usage, although it was partially offset by a $17.0 million increase in total operating expenses, primarily due to rising water production costs and other operational expenses.

For the first half of 2025, the company reported a net income of $55.5 million, or $0.93 per diluted share, a significant decrease from $110.5 million, or $1.90 per diluted share, in the same period of 2024. This decline was largely due to a $46.1 million drop in operating revenue, which totaled $468.9 million, compared to $515.0 million in the previous year. The decrease was influenced by a cumulative adjustment related to the delayed approval of the 2021 General Rate Case (GRC) in early 2024, which had a substantial impact on revenue recognition.

In terms of operational metrics, California Water Service Group reported an increase in customer accounts, with a total of 59,581,155 shares of common stock outstanding as of July 21, 2025. The company continues to expand its geographic footprint, providing water utility services across California, Washington, New Mexico, Hawaii, and Texas. The company’s strategic initiatives include a focus on infrastructure improvements, with plans to invest over $1.6 billion from 2025 to 2027, aimed at enhancing water supply reliability and addressing regulatory compliance, particularly concerning contaminants like PFAS.

The company’s financial position remains stable, with total assets increasing to $5.4 billion as of June 30, 2025, up from $5.2 billion at the end of 2024. Total equity also rose to $1.66 billion, reflecting a steady growth trajectory. However, total operating expenses for the first half of 2025 increased by $5.8 million, driven by higher water production costs and operational expenses. The company’s outlook remains cautious, with management noting potential challenges related to regulatory approvals and market conditions, particularly in light of ongoing discussions regarding rate increases and environmental compliance.

Looking ahead, California Water Service Group is focused on its 2024 GRC application, which proposes significant capital investments and aims to decouple revenue from water sales to support low-income customers. The company anticipates that these initiatives will enhance its operational efficiency and financial performance in the coming years, while also addressing the evolving regulatory landscape and customer needs.