hto-20260331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________________________________

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2026

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-8966

H2O AMERICA

(Exact name of registrant as specified in its charter)

Delaware

77-0066628

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

110 West Taylor Street, San Jose, CA

95110

(Address of principal executive offices)

(Zip Code)

(408) 279-7800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

HTO

Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Non-accelerated filer ☐

Accelerated filer ☐ Smaller reporting company ☐

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x

As of April 23, 2026, there were 41,840,247 shares of the registrant’s Common Stock outstanding.


TABLE OF CONTENTS

		Page
Forward-Looking Statements		3
PART I	FINANCIAL INFORMATION	4
Item 1.	Financial Statements	4
	Condensed Consolidated Statements of Comprehensive Income (unaudited) for the Three Months Ended March 31, 2026 and 2025	4
	Condensed Consolidated Balance Sheets (unaudited) as of March 31, 2026 and December 31, 2025	5
	Condensed Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the Three Months Ended March 31, 2026 and 2025	7
	Condensed Consolidated Statements of Cash Flows (unaudited) for the Three Months Ended March 31, 2026 and 2025	8
	Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32
PART II	OTHER INFORMATION	34
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
Item 3.	Defaults Upon Senior Securities	34
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36
Signatures		37


	Three months ended March 31,
	2026		2025
Operating revenue	$	183,293	167,599
Operating expense:
Production expenses:
Purchased water	26,945		25,953
Power	4,272		3,483
Groundwater extraction charges	23,209		18,291
Other production expenses	11,998		11,240
Total production expenses	66,424		58,967
Administrative and general	29,807		27,760
Maintenance	8,376		7,499
Property taxes and other non-income taxes	8,954		9,195
Depreciation and amortization	32,306		28,282

Total operating expense	145,867		131,703
Operating income	37,426		35,896
Other (expense) income:
Interest on long-term debt and other interest expense	(18,838)		(18,272)
Pension non-service credit	1,939		1,603

Other, net	1,879		795
Income before income taxes	22,406		20,022
Provision for income taxes	3,393		3,471
Net income	19,013		16,551
Other comprehensive loss, net	—		—
Comprehensive income	$	19,013	16,551

Earnings per share
—Basic	$	0.50	0.49
—Diluted	$	0.49	0.49
Dividends per share	$	0.44	0.42
Weighted average shares outstanding
—Basic	37,931,742		33,778,792
—Diluted	38,549,353		33,868,565


	March 31, 2026		December 31, 2025
Assets
Utility plant:
Land	$	44,498	44,600
Depreciable plant and equipment	4,785,471		4,688,644
Construction work in progress	257,175		269,272
Intangible assets	51,683		51,683
Total utility plant	5,138,827		5,054,199
Less: accumulated depreciation and amortization	1,140,243		1,120,232
Net utility plant	3,998,584		3,933,967

Nonutility properties	2,166		1,683
Less: accumulated depreciation and amortization	104		103
Net nonutility properties	2,062		1,580

Current assets:
Cash and cash equivalents	153,008		20,686

Accounts receivable:
Customers, net of allowances for credit losses of $748 and $722 on March 31, 2026 and December 31, 2025, respectively	62,069		62,471
Income tax	1,520		2,720
Other	11,263		7,710
Accrued unbilled revenue	65,189		68,971

Prepaid expenses	14,747		11,634
Current regulatory assets	7,848		8,315
Other current assets	7,770		8,086
Total current assets	323,414		190,593
Other assets:
Regulatory assets, less current portion	246,540		246,547
Investments	20,243		19,711
Postretirement benefit plans	82,493		80,967

Goodwill	640,311		640,311
Other	39,657		35,890
Total other assets	1,029,244		1,023,426
Total assets	$	5,353,304	5,149,566


	March 31, 2026		December 31, 2025
Capitalization and liabilities
Capitalization:
Stockholders’ equity:
Common stock, $0.001 par value; authorized 70,000,000 shares; issued and outstanding shares 41,839,540 on March 31, 2026 and 36,118,242 on December 31, 2025	$	42	36
Additional paid-in capital	1,248,402		958,188
Retained earnings	584,171		581,080
Accumulated other comprehensive income	1,467		1,467
Total stockholders’ equity	1,834,082		1,540,771
Long-term debt, less current portion	1,865,513		1,866,819
Total capitalization	3,699,595		3,407,590

Current liabilities:
Lines of credit	5		86,834
Current portion of long-term debt	8,628		23,504
Accrued groundwater extraction charges, purchased water and power	27,931		29,321
Accounts payable	62,880		75,427
Accrued interest	22,904		18,241
Accrued payroll	11,608		19,109


Other current liabilities	26,092		20,942
Total current liabilities	160,048		273,378

Deferred income taxes	311,899		307,893
Advances for construction	210,813		201,413
Contributions in aid of construction	342,410		342,697
Postretirement benefit plans	45,849		45,878
Regulatory liabilities, less current portion	556,379		546,797
Other noncurrent liabilities	26,311		23,920
Commitments and contingencies
Total capitalization and liabilities	$	5,353,304	5,149,566


	Common Stock			Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income	Total Stockholders’ Equity
	Number of Shares	Amount
Balances, December 31, 2025	36,118,242	$	36	958,188	581,080	1,467	1,540,771
Net income	—	—		—	19,013	—	19,013

Stock-based compensation	—	—		1,212	(10)	—	1,202
Issuance of restricted and deferred stock units	37,809	—		(616)	—	—	(616)
Employee stock purchase plan	23,112	—		1,023	—	—	1,023
Common stock issuance, net of costs	5,660,377	6		288,595	—	—	288,601
Dividends paid ($0.44 per share)	—	—		—	(15,912)	—	(15,912)
Balances, March 31, 2026	41,839,540	$	42	1,248,402	584,171	1,467	1,834,082


	March 31, 2026		December 31, 2025
	(In thousands)
Land	$	1,394	914

Buildings and improvements	772		769

Subtotal	2,166		1,683
Less: accumulated depreciation and amortization	104		103
Total	$	2,062	1,580


	March 31, 2026		December 31, 2025
	(In thousands)
Regulatory assets:
Income tax temporary differences (a) (p)	$	206,452	204,384
Monterey Water Revenue Adjustment Mechanism (“MWRAM”) (b)	12,173		8,553
Business combinations debt premium (c) (p)	9,136		9,772
Employee benefit costs (d) (p)	3,910		5,823
Catastrophic event memorandum accounts (“CEMA”) (e)	—		127
Revenue adjustment mechanisms (f) (p)	7,401		7,931
Customer Assistance Program (“CAP”) balancing account (g)	3,922		3,696


Water supply costs (h)	—		847
Other (i)	11,394		13,729
Total regulatory assets	254,388		254,862
Less: current regulatory assets (j)	7,848		8,315
Total regulatory assets, less current portion	$	246,540	246,547
Regulatory liabilities:
Cost of removal (k)	402,814		394,391
Future income tax benefits due to customers (l)	82,007		82,285
Unrecognized pensions and other postretirement benefits (m)	30,458		32,996
Per- and Polyfluoroalkyl substances legal settlement proceeds (n)	25,070		24,682
Employee benefit costs (d)	10,046		8,771
Water supply costs (h)	3,515		—

Other (o)	2,469		3,672
Total regulatory liabilities	556,379		546,797

Total regulatory liabilities, less current portion	$	556,379	546,797


	Pension Benefits			Other Benefits
	Three months ended March 31,
	2026		2025	2026		2025
	(In thousands)
Service cost	$	1,706	1,644	$	143	156
Interest cost	3,898		3,901	310		337
Expected return on assets	(5,291)		(4,944)	(282)		(295)
Amortization of actuarial gain	(413)		(458)	(257)		(214)
Amortization of prior service cost	29		—	—		—
Total	$	(71)	143	$	(86)	(16)

SEC Form 10-Q filed by H2O America