HTO · H2O America Q2 FY2026 earnings call record财报电话会记录

“Our results during the first half of 2026 were consistent with our internal expectations and supportive of both our standalone 2026 adjusted diluted EPS guidance of $3.08-$3.18, as well as our long-term EPS CAGR target of 6%-8%.”

“While we grew our underlying adjusted net income by 17% during the first half of 2026, this was more than offset by the higher share count as weighted average diluted shares outstanding were 19% higher during the first half of 2026 versus 2025 as a result of leveraging our ATM program throughout 2025 and our equity issuance in early March of this year.”

“As discussed on our call last quarter, we took advantage of what we viewed as a receptive equity market following our year-end update and decided to take the Quadvest acquisition-related equity risk off the table by coming to the market in early March with an equity raise that we ultimately upsized to $700 million.”

“That puts us at 43% of our full year 2026 CapEx budget of $483 million, which does not include the impacts of Quadvest.”

“There is also $0.25 of higher revenues for pass-through water supply costs that are largely offset in our water production expenses, such that they do not impact our net income.”

“$0.10 from increases in water production balancing and memorandum accounts, primarily related to the full cost balancing account in California, and $0.05 from higher customer usage.”

“Shifting from the first half results to our full year 2026 and beyond expectations, the details and figures on slide 12 should look familiar to everyone, as we are reiterating all aspects of our financial guidance, including our expectations to deliver a nonlinear EPS CAGR over the 2026 to 2030 period at or above the top end of our 6%-8% long-term organic EPS growth target.”

“We still expect to raise between $100 million and $200 million of debt across the parent and Texas operating companies levels to fund the Quadvest transaction, although, as we previously indicated, we have more flexibility now regarding the timing, given the upsized March equity issuance.”

“Specifically, Quadvest's 99,000 connections under contract and pending development at the end of June 2026 is nearly 14% higher than the 87,000 at year-end 2025, despite converting roughly 5,400 connections into active customers.”

“Every $1 of avoided operating expense enables recovery of $7 of the much-needed capital investments with a neutral impact on customer bills.”

“Over the last 10 years, Valley Water has increased its rates for purchased water at a 10% compounded annual growth rate, or roughly 150% on an absolute basis.”

“I said $100-$200 of debt, we also have another, say, $100-$150, which we typically issue through our ATM that we financed this year under that equity issuance.”