H2O America Reports 12.5% Revenue Growth and Plans Acquisition of Quadvest

H2O America, formerly known as SJW Group, reported a significant increase in its financial performance for the second quarter of 2025, with operating revenue reaching $198.3 million, up 12.5% from $176.2 million in the same period last year. For the first half of 2025, the company generated $365.9 million in revenue, a 12.4% increase compared to $325.6 million in the first half of 2024. The net income for the second quarter was $24.7 million, reflecting a 19% increase from $20.7 million year-over-year, while the six-month net income rose to $41.2 million, a 27% increase from $32.4 million in the prior year.

The growth in revenue was primarily driven by rate increases in California and Connecticut, alongside a rise in customer counts and consumption. The company reported an increase of 331 customers in the second quarter and 559 in the first half of 2025. However, this growth was tempered by higher water production expenses, which increased by 8% in the second quarter due to rising costs for purchased water and groundwater extraction. Total operating expenses for the second quarter were $154.4 million, up from $135.6 million in the previous year.

In terms of strategic developments, H2O America announced plans to acquire the water and sewer utility assets of Quadvest, L.P. for approximately $483.6 million, along with an additional $56.4 million for wholesale operations. This acquisition is expected to enhance the company's operational scale and market presence, particularly in the rapidly growing Houston area. The company also reported a successful equity distribution agreement, raising $83.7 million in net proceeds from the sale of common stock during the first half of 2025.

Operationally, H2O America serves approximately 407,000 water and wastewater service connections, catering to over 1.6 million people across California, Connecticut, Maine, and Texas. The company’s water supply sources include groundwater, surface water, and purchased water, with a focus on maintaining sufficient supply levels amid ongoing drought conditions in certain regions. As of June 30, 2025, the company had a total asset value of $4.8 billion, up from $4.7 billion at the end of 2024.

Looking ahead, H2O America anticipates continued growth driven by strategic acquisitions and regulatory rate increases. However, the company also faces challenges, including rising production costs and regulatory scrutiny. The management remains optimistic about the future, emphasizing the importance of effective water management and customer service in sustaining growth and profitability.