AES Ohio's Q3 Net Income Jumps 35% on Strong Revenue Growth

TL;DR

**AES Ohio's Q3 numbers are solid, but the year-to-date dip in net income means investors should watch for consistent profitability going forward, despite strong parent support.**

AI Summary

DAYTON POWER & LIGHT CO (AES Ohio) reported a significant increase in revenue for the three months ended September 30, 2025, reaching $292.7 million, up from $225.4 million in the same period of 2024, representing a 29.8% increase. Net income also rose to $16.9 million for the quarter, compared to $12.5 million in Q3 2024, a 35.2% improvement. However, for the nine months ended September 30, 2025, net income decreased to $33.1 million from $37.0 million in the prior year, a 10.6% decline, despite revenue increasing to $772.4 million from $656.6 million (17.6% increase). Operating income for the nine-month period increased to $95.0 million from $72.7 million. The company received a substantial equity contribution of $150.0 million from its parent, AES Ohio Holdings, Inc., during the nine months ended September 30, 2025, and issued $375.0 million in long-term debt. Cash and cash equivalents significantly increased to $78.7 million as of September 30, 2025, from $24.6 million at December 31, 2024. Capital expenditures for the nine-month period were $256.1 million, a decrease from $449.6 million in the prior year.

Why It Matters

AES Ohio's robust Q3 performance, with a 29.8% revenue increase and 35.2% net income jump, signals strong operational execution in its utility segment. This positive trend, however, contrasts with a 10.6% decline in year-to-date net income, suggesting some volatility or one-off factors earlier in the year. For investors, the $150 million equity injection from AES Ohio Holdings, Inc. and $375 million in new long-term debt indicate continued investment in infrastructure, likely related to its Smart Grid initiatives, which could enhance long-term stability and competitive positioning against other regional utilities. Employees and customers benefit from these investments in grid modernization and reliability, while the broader market sees a stable utility player continuing to invest in its service territory.

Risk Assessment

Risk Level: medium — The company's risk level is medium due to its significant debt issuance of $375.0 million and increased interest expense of $43.0 million for the nine months ended September 30, 2025, up from $34.7 million in 2024. While the parent company provided a $150.0 million equity contribution, the substantial increase in debt and interest costs, coupled with a year-to-date net income decline of 10.6%, indicates potential financial pressure despite strong quarterly revenue growth.

Analyst Insight

Investors should monitor AES Ohio's ability to translate increased revenue into sustained net income growth, especially given the rise in interest expense and new debt. Focus on future regulatory approvals for rate recovery, such as the Distribution Investment Rider (DIR) and Proactive Reliability Optimization Rider (PRO), as these will be crucial for offsetting capital expenditures and debt service costs.

Financial Highlights

revenue

$772.4M

operating Margin

12.3%

total Assets

$3,531.9M

total Debt

$1,384.4M

net Income

$33.1M

cash Position

$78.7M

revenue Growth

+17.6%

Revenue Breakdown

Key Numbers

• $292.7M — Q3 2025 Revenue (Increased from $225.4M in Q3 2024, a 29.8% rise.)
• $16.9M — Q3 2025 Net Income (Increased from $12.5M in Q3 2024, a 35.2% rise.)
• $33.1M — YTD 2025 Net Income (Decreased from $37.0M in YTD 2024, a 10.6% decline.)
• $772.4M — YTD 2025 Revenue (Increased from $656.6M in YTD 2024, a 17.6% rise.)
• $150.0M — Equity Contribution from Parent (Received during the nine months ended September 30, 2025.)
• $375.0M — Long-term Debt Issued (Issued during the nine months ended September 30, 2025.)
• $78.7M — Cash and Cash Equivalents (As of September 30, 2025, up from $24.6M at December 31, 2024.)
• $256.1M — YTD 2025 Capital Expenditures (Decreased from $449.6M in YTD 2024.)
• $43.0M — YTD 2025 Interest Expense, net (Increased from $34.7M in YTD 2024.)
• 41,172,173 — Common Stock Shares Outstanding (As of November 4, 2025, unchanged from January 1, 2025.)

Key Players & Entities

• DAYTON POWER & LIGHT CO (company) — registrant and principal indirect subsidiary of DPL
• AES Ohio Holdings, Inc. (company) — owner of all outstanding common stock of The Dayton Power and Light Company
• Public Utilities Commission of Ohio (regulator) — approves utility rates and plans
• AES Corporation (company) — ultimate parent company of DPL
• Bank of New York Mellon (company) — Trustee for DP&L's First and Refunding Mortgage
• PJM Interconnection, LLC (company) — Regional Transmission Organization
• AES US Services, LLC (company) — shared services affiliate
• Ohio Air Quality Development Authority (regulator) — environmental regulatory body
• Ohio Valley Electric Corporation (company) — electric generating company with DP&L equity interest
• U.S. Environmental Protection Agency (regulator) — regulates air and water quality

FAQ

Risk Factors

• Regulatory Rate Adjustments [high — regulatory]: The company's financial performance is significantly influenced by regulatory decisions regarding rate adjustments. Delays or unfavorable outcomes in rate cases can impact revenue and profitability. For instance, the company is subject to various regulatory proceedings that could affect its ability to recover costs and earn a fair return on its investments.
• Interest Rate Fluctuations [medium — financial]: The company's interest expense, net, increased to $43.0 million for the nine months ended September 30, 2025, from $34.7 million in the prior year. This increase is partly due to higher interest rates on its debt, which can affect profitability and cash flow. The issuance of $375.0 million in long-term debt in 2025 also exposes the company to interest rate risk.
• Capital Expenditure Management [medium — operational]: Capital expenditures for the nine-month period decreased to $256.1 million from $449.6 million in the prior year. While this can improve short-term cash flow, significant underinvestment could lead to future operational issues or a need for larger capital outlays later. Managing these expenditures effectively is crucial for maintaining infrastructure and meeting future demand.
• Parent Company Equity Contribution [medium — financial]: The company received a substantial equity contribution of $150.0 million from its parent, AES Ohio Holdings, Inc., during the nine months ended September 30, 2025. While this bolsters liquidity and strengthens the balance sheet, it may indicate underlying financial needs or strategic capital allocation decisions by the parent entity.
• Energy Market Volatility [medium — market]: Net purchased power costs increased to $290.9 million for the nine months ended September 30, 2025, from $242.8 million in the prior year. Fluctuations in energy commodity prices and market conditions can significantly impact operating costs and profitability, requiring effective hedging and procurement strategies.

Industry Context

Dayton Power & Light Co. operates within the regulated electric utility sector, characterized by significant capital intensity and a strong reliance on regulatory approvals for rate setting and cost recovery. The industry is facing evolving challenges including grid modernization, renewable energy integration, and increasing customer expectations for reliability and sustainability. Competition primarily comes from other utilities in adjacent service territories or through alternative energy providers, though direct competition for core services is limited due to the nature of regulated monopolies.

Regulatory Implications

The company's operations are heavily influenced by the Public Utilities Commission of Ohio (PUCO). Regulatory decisions on rate cases, environmental compliance, and capital investments are critical. Changes in regulatory policy or unfavorable outcomes in rate proceedings can significantly impact financial performance and the ability to recover costs, as seen in the ongoing need for rate adjustments to cover operational and capital expenses.

What Investors Should Do

1. Monitor regulatory filings and PUCO decisions closely.
2. Analyze the impact of increased debt and interest expense.
3. Evaluate the sustainability of revenue growth drivers.
4. Assess the rationale behind the reduced capital expenditures.

Key Dates

• 2025-09-30: End of Nine-Month Period — Reporting period for the 10-Q, showing year-to-date financial performance and position.
• 2025-09-30: Equity Contribution Received — $150.0 million equity injection from parent strengthens liquidity and capital structure.
• 2025-09-30: Long-term Debt Issued — $375.0 million in new long-term debt was issued, impacting the company's leverage and future interest expenses.
• 2025-09-30: Cash and Cash Equivalents at Period End — Increased to $78.7 million from $24.6 million at year-end 2024, indicating improved liquidity.
• 2025-11-04: Common Stock Shares Outstanding — 41,172,173 shares outstanding, unchanged from the beginning of the year, indicating no new equity issuance or significant buybacks.

Glossary

Net purchased power

The cost of electricity purchased from wholesale markets to serve customer demand, minus any electricity sold to the wholesale market. (A significant operating expense for an electric utility, directly impacted by energy market prices and demand.)

Regulatory assets, current

Costs that have been incurred but are not yet recognized as expenses in the income statement, and are expected to be recovered from customers in the near future through approved rates. (Represents costs that the company expects to recover through future customer charges, impacting current assets and future revenue recognition.)

Regulatory assets, non-current

Similar to current regulatory assets, but these are costs expected to be recovered over a longer period. (Reflects long-term investments or costs that are subject to regulatory approval for recovery, impacting the company's long-term asset base.)

Regulatory liabilities, current

Amounts collected from customers that are not yet recognized as revenue, typically related to future costs or refunds, expected to be settled in the near term. (Represents obligations to customers or future expenses that have been collected in advance, impacting current liabilities.)

Operating income

Profitability from a company's core business operations before accounting for interest expenses, taxes, and other non-operating income or expenses. (Key indicator of the company's operational efficiency and profitability from its primary utility services.)

Net comprehensive income

Includes net income plus or minus other comprehensive income (OCI) items, such as unrealized gains or losses on certain investments or pension adjustments. (Provides a broader view of the company's overall change in equity during a period, beyond just net income.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Dayton Power & Light Co. has seen a substantial revenue increase of 17.6% to $772.4 million, driven by higher rates and customer growth. However, net income has declined by 10.6% to $33.1 million, despite operating income rising to $95.0 million, indicating increased pressure from higher interest expenses and taxes. The company's liquidity has significantly improved, with cash and cash equivalents more than tripling to $78.7 million, partly supported by a $150.0 million equity contribution from its parent. Conversely, capital expenditures have been reduced by nearly half, suggesting a shift in investment strategy or a focus on cash preservation.

Key Financial Figures

• $0.01 — tion Shares Outstanding Common Stock, $0.01 par value 41,172,173 2 AES Ohio Fo
• $350.0 million — as AES Ohio AES Ohio Credit Agreement $350.0 million AES Ohio Amended and Restated Credit Ag
• $47.0 million — s. The annual revenue limit for 2025 is $47.0 million. DPL DPL LLC and its consolidated subs
• $7.5 million — eferral cap. The annual deferral cap is $7.5 million in 2025. PUCO Public Utilities Commis

Filing Documents

• dpl-20250930.htm (10-Q) — 1274KB
• aesohio10qex31a20250930q3.htm (EX-31.A) — 10KB
• aesohio10qex31b20250930q3.htm (EX-31.B) — 10KB
• aesohio10qex32a20250930q3.htm (EX-32.A) — 6KB
• aesohio10qex32b20250930q3.htm (EX-32.B) — 6KB
• dpl-20250930_g1.jpg (GRAPHIC) — 402KB
• dpl-20250930_g2.jpg (GRAPHIC) — 104KB
• dpl-20250930_g3.jpg (GRAPHIC) — 94KB
• 0000027430-25-000021.txt ( ) — 8394KB
• dpl-20250930.xsd (EX-101.SCH) — 54KB
• dpl-20250930_cal.xml (EX-101.CAL) — 74KB
• dpl-20250930_def.xml (EX-101.DEF) — 579KB
• dpl-20250930_lab.xml (EX-101.LAB) — 552KB
• dpl-20250930_pre.xml (EX-101.PRE) — 603KB
• dpl-20250930_htm.xml (XML) — 749KB

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1 FINANCIAL STATEMENTS Condensed Statements of Operations 10 Condensed Statements of Comprehensive Income 11 Condensed Balance Sheets 12 Condensed Statements of Cash Flows 13 Condensed Statements of Shareholder's Equity 14 Notes to Unaudited Condensed Financial Statements 15 Note 1 . Overview and Summary of Significant Accounting Policies 15 Note 2 . Regulatory Matters 19 Note 3 . Fair Value 20 Note 4 . Debt 22 Note 5 . Income Taxes 23 Note 6 . Benefit Plans 23 Note 7 . Shareholder's Equity 24 Note 8 . Commitments and Contingencies 24 Note 9 . Business Segments 25 Note 10 . Revenue 25

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 27

ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 27 Executive Summary 27 Results of Operations 29 Key Trends and Uncertainties 34 Capital Resources and Liquidity 38 Critical Accounting Policies and Estimates 41

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 42

ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 42

CONTROLS AND PROCEDURES 42

ITEM 4 CONTROLS AND PROCEDURES 42

: OTHER INFORMATION

PART II: OTHER INFORMATION

LEGAL PROCEEDINGS 43

ITEM 1 LEGAL PROCEEDINGS 43

RISK FACTORS 43

ITEM 1A RISK FACTORS 43

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 43

ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 43

DEFAULTS UPON SENIOR SECURITIES 43

ITEM 3 DEFAULTS UPON SENIOR SECURITIES 43

MINE SAFETY DISCLOSURES 43

ITEM 4 MINE SAFETY DISCLOSURES 43

OTHER INFORMATION 43

ITEM 5 OTHER INFORMATION 43

EXHIBITS 44

ITEM 6 EXHIBITS 44 SIGNATURES 45 3 Table of Contents AES Ohio Form 10-Q for the Quarterly Period ended September 30, 2025 GLOSSARY OF TERMS The following select terms, abbreviations or acronyms are used in this Form 10-Q: Term Definition AES The AES Corporation - a global power company and the ultimate parent company of DPL AES Ohio The Dayton Power and Light Company, which does business as AES Ohio AES Ohio Credit Agreement $350.0 million AES Ohio Amended and Restated Credit Agreement, dated as of March 25, 2025 AES Ohio Generation AES Ohio Generation, LLC - a wholly-owned subsidiary of DPL, which previously operated EGUs and made wholesale sales AFUDC Allowance for Funds Used During Construction AOCI Accumulated Other Comprehensive Income AOCL Accumulated Other Comprehensive Loss ASC Accounting Standards Codification ASU Accounting Standards Update CAA U.S. Clean Air Act - the congressional act that directs the EPA's regulation of stationary and mobile sources of air pollution to protect air quality and stratospheric ozone CCR Coal Combustion Residuals - which consists of bottom ash, fly ash, boiler slag and flue gas desulfurization materials generated from burning coal CDPQ Caisse de dpt et placement du Qubec CRES Competitive Retail Electric Service CWA U.S. Clean Water Act DIR Distribution Investment Rider - established in the ESP 4 to recover certain distribution capital investments placed in service beginning June 30, 2020, for three years, and subject to increasing annual revenue limits and other terms. The annual revenue limit for 2025 is $47.0 million. DPL DPL LLC and its consolidated subsidiaries. On April 3, 2025, DPL Inc. converted its form of business organization from an Ohio corporation to an Ohio limited liability company (the "Conversion"). Upon the Conversion, DPL Inc. changed its name to DPL LLC. DP&L The Dayton Power and Light Company - the principal indirect subsidiary of DPL and a public utility that delive

: FINANCIAL INFORMATION

PART I: FINANCIAL INFORMATION This report includes the filing of DP&L. Throughout this report, the terms "the Company", "we," "us," "our" and "ours" are used to refer to DP&L, respectively and altogether, unless the context indicates otherwise.

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS 8 Table of Contents

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 9 Table of Contents AES Ohio Condensed Statements of Operations (Unaudited) Three months ended Nine months ended September 30, September 30, $ in millions 2025 2024 2025 2024 REVENUE $ 292.7 $ 225.4 $ 772.4 $ 656.6 OPERATING COSTS AND EXPENSES: Net purchased power 113.6 84.1 290.9 242.8 Operation and maintenance 70.4 66.3 199.1 187.8 Depreciation and amortization 29.4 25.2 87.2 68.0 Taxes other than income taxes 36.3 28.1 100.2 84.2 Loss on asset disposal — — — 1.1 Total operating costs and expenses 249.7 203.7 677.4 583.9 OPERATING INCOME 43.0 21.7 95.0 72.7 OTHER INCOME / (EXPENSE), NET: Interest expense, net ( 14.6 ) ( 11.8 ) ( 43.0 ) ( 34.7 ) Other income / (expense), net ( 0.6 ) 0.7 ( 2.3 ) 3.2 Total other expense, net ( 15.2 ) ( 11.1 ) ( 45.3 ) ( 31.5 ) INCOME BEFORE INCOME TAX 27.8 10.6 49.7 41.2 Income tax expense / (benefit) 10.9 ( 1.9 ) 16.6 4.2 NET INCOME $ 16.9 $ 12.5 $ 33.1 $ 37.0 See Notes to Condensed Financial Statements. 10 Table of Contents AES Ohio Condensed Statements of Comprehensive Income (Unaudited) Three months ended Nine months ended September 30, September 30, $ in millions 2025 2024 2025 2024 NET INCOME $ 16.9 $ 12.5 $ 33.1 $ 37.0 Unfunded pension and other postretirement activity: Reclassification to earnings, net of income tax effect of $( 0.2 ), $( 0.2 ), $( 0.4 ) and $( 0.4 ) for each respective period 0.5 0.4 1.5 1.2 Other comprehensive income 0.5 0.4 1.5 1.2 NET COMPREHENSIVE INCOME $ 17.4 $ 12.9 $ 34.6 $ 38.2 See Notes to Condensed Financial Statements. 11 Table of Contents AES Ohio Condensed Balance Sheets (Unaudited) $ in millions September 30, 2025 December 31, 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 78.7 $ 24.6 Accounts receivable, net of allowance for credit losses of $ 8.9 and $ 6.1 , respectively (Note 1) 143.6 106.6 Inventories 75.6 69.0 Taxes applicable to subsequent years 33.9 137.1 Regulatory assets, current 77.

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