NWN Posts Q3 Loss, But 9-Month Income Jumps 64% on Revenue Growth

Ticker: NWN · Form: 10-Q · Filed: 2025-11-05T00:00:00.000Z

Sentiment: mixed

Topics: Utilities, Natural Gas, Earnings Report, Capital Expenditures, Acquisitions, Debt, Regulatory Assets

Related Tickers: NWN

TL;DR

**NWN's Q3 loss is a blip; the 9-month income surge and aggressive capital deployment signal a strong long-term play, but watch that rising debt.**

AI Summary

Northwest Natural Holding Co (NWN) reported a net loss of $29.89 million for the three months ended September 30, 2025, a slight increase from the $27.17 million net loss in the same period of 2024. However, for the nine months ended September 30, 2025, the company achieved a net income of $55.53 million, a significant improvement from $33.87 million in 2024, representing a 63.9% increase. Operating revenues for the three months increased to $164.73 million from $136.93 million year-over-year, and for the nine months, revenues rose to $895.21 million from $782.12 million, an increase of 14.5%. Key business changes include a substantial increase in capital expenditures, which rose to $332.65 million for the nine months ended September 30, 2025, from $294.26 million in the prior year, and acquisitions, net of cash acquired, surged to $331.33 million from $28.82 million. Interest expense, net, also significantly increased to $90.32 million for the nine-month period, up from $58.90 million in 2024, reflecting higher borrowing costs. The company's strategic outlook appears focused on growth through capital investments and acquisitions, despite the short-term quarterly loss. Total assets increased to $5.85 billion at September 30, 2025, from $4.94 billion at September 30, 2024.

Why It Matters

For investors, NWN's significant 63.9% increase in nine-month net income to $55.53 million, despite a quarterly loss, signals underlying operational strength and effective long-term strategy. The substantial rise in capital expenditures to $332.65 million and acquisitions to $331.33 million indicates aggressive expansion, which could drive future growth but also increases financial leverage, as evidenced by the higher interest expense of $90.32 million. This growth strategy positions NWN competitively in the utility sector, potentially expanding its customer base and infrastructure, but also exposes it to integration risks and market fluctuations. Employees and customers could see benefits from an expanded and modernized infrastructure, while the broader market will watch how NWN manages its increased debt load in a rising interest rate environment.

Risk Assessment

Risk Level: medium — The risk level is medium due to a significant increase in long-term debt, which rose to $2.13 billion at September 30, 2025, from $1.56 billion at September 30, 2024, representing a 36.5% increase. This is coupled with a substantial rise in interest expense, net, to $90.32 million for the nine months ended September 30, 2025, from $58.90 million in the prior year, indicating higher borrowing costs and increased financial leverage. While the company is investing heavily in capital expenditures and acquisitions, these investments introduce integration and execution risks.

Analyst Insight

Investors should closely monitor NWN's debt management strategies and the profitability of its recent acquisitions and capital expenditures. While the nine-month income growth is positive, the rising interest expense and increased leverage warrant caution. Consider holding NWN if you believe in its long-term growth strategy, but be prepared for potential volatility due to increased financial risk.

Financial Highlights

revenue
$895.21M
total Assets
$5.85B
total Debt
$2.13B
net Income
$55.53M
eps
$1.37
cash Position
$32.20M
revenue Growth
+14.5%

Revenue Breakdown

SegmentRevenueGrowth
NWN Gas Utility$895.21M+14.5%

Key Numbers

Key Players & Entities

FAQ

What were Northwest Natural Holding Co's operating revenues for the nine months ended September 30, 2025?

Northwest Natural Holding Co reported operating revenues of $895.21 million for the nine months ended September 30, 2025, an increase from $782.12 million in the same period of 2024.

How did Northwest Natural Holding Co's net income change for the nine months ended September 30, 2025?

For the nine months ended September 30, 2025, Northwest Natural Holding Co's net income was $55.53 million, a significant increase from $33.87 million in the prior year, representing a 63.9% rise.

What was the net loss for Northwest Natural Holding Co in the third quarter of 2025?

Northwest Natural Holding Co reported a net loss of $29.89 million for the three months ended September 30, 2025, compared to a net loss of $27.17 million in the third quarter of 2024.

What were Northwest Natural Holding Co's capital expenditures for the nine months ended September 30, 2025?

Capital expenditures for Northwest Natural Holding Co totaled $332.65 million for the nine months ended September 30, 2025, up from $294.26 million in the same period of 2024.

How much long-term debt did Northwest Natural Holding Co have at September 30, 2025?

At September 30, 2025, Northwest Natural Holding Co's long-term debt stood at $2.13 billion, an increase from $1.56 billion at September 30, 2024.

What was the interest expense for Northwest Natural Holding Co for the nine months ended September 30, 2025?

Northwest Natural Holding Co's net interest expense for the nine months ended September 30, 2025, was $90.32 million, a notable increase from $58.90 million in the corresponding period of 2024.

What is the primary business of Northwest Natural Holding Co?

Northwest Natural Holding Co is primarily involved in natural gas distribution, as indicated by its subsidiary Northwest Natural Gas Company and the nature of its operating revenues and cost of gas.

What are the key risks highlighted in Northwest Natural Holding Co's 10-Q filing?

The filing highlights risks related to economic conditions, including inflation and interest rates, capital markets access, climate change initiatives, regulatory outcomes, and geopolitical factors, as detailed in the 'Cautionary Note Regarding Forward-Looking Statements' section.

How many shares of common stock were outstanding for Northwest Natural Holding Company at October 24, 2025?

At October 24, 2025, there were 41,507,042 shares of Northwest Natural Holding Company's Common Stock outstanding.

Did Northwest Natural Holding Co engage in significant acquisitions during the nine months ended September 30, 2025?

Yes, Northwest Natural Holding Co reported acquisitions, net of cash acquired, of $331.33 million for the nine months ended September 30, 2025, a substantial increase from $28.82 million in the prior year.

Risk Factors

Industry Context

Northwest Natural Holding Co operates in the regulated natural gas distribution sector, serving customers in Oregon and southwest Washington. The industry is characterized by significant capital investment in infrastructure, reliance on regulatory approvals for rates, and increasing focus on environmental sustainability and decarbonization initiatives. Competition primarily comes from other energy providers and the ongoing shift towards alternative energy sources.

Regulatory Implications

The company's operations are heavily influenced by state and federal regulatory bodies, which approve rates, capital expenditures, and environmental compliance standards. Changes in these regulations, particularly concerning environmental policies and recovery of infrastructure investments, can materially impact financial performance and strategic planning.

What Investors Should Do

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Glossary

SiEnergy Gas Utility
A regulated natural gas distribution utility acquired by Northwest Natural Holding Company on January 7, 2025. (Its acquisition significantly contributed to the increase in operating revenues and assets for the nine-month period of 2025.)
Regulatory Assets
Costs that have been incurred by the company but are expected to be recovered from customers in the future through rates, recognized as assets on the balance sheet. (These represent a significant portion of the company's assets and are subject to regulatory approval for recovery.)
Accrued unbilled revenue
Revenue that has been earned by providing services but has not yet been billed to customers. (Indicates revenue earned but not yet recognized on the income statement, impacting working capital.)
Derivative instruments
Financial contracts whose value is derived from an underlying asset, index, or rate, often used for hedging purposes (e.g., interest rate swaps). (Changes in the value of these instruments, particularly interest rate swaps, can affect comprehensive income.)
Renewable natural gas
Natural gas produced from organic waste sources, such as landfills or agricultural waste, which is chemically similar to conventional natural gas. (Represents a strategic growth area for the company as it diversifies its energy sources and addresses decarbonization efforts.)

Year-Over-Year Comparison

Northwest Natural Holding Co. has demonstrated significant revenue growth, with operating revenues for the nine months ended September 30, 2025, increasing by 14.5% to $895.21 million compared to the prior year. This growth is supported by a substantial increase in capital expenditures and a major acquisition. However, this expansion has come with increased financial leverage, as long-term debt rose by 36.5% and interest expenses surged by over 50% year-over-year, impacting quarterly profitability with a net loss of $29.89 million in Q3 2025, though year-to-date net income improved significantly by 63.9% to $55.53 million.

Filing Stats: 4,366 words · 17 min read · ~15 pages · Grade level 20 · Accepted 2025-11-05 13:34:22

Filing Documents

Forward-Looking Statements

Forward-Looking Statements 3 Item 1. Unaudited Financial Statements: Consolidated Statements of Comprehensive Income of Northwest Natural Holding Company for the three and nine months ended September 30, 2025 and 2024 5 Consolidated Balance Sheets of Northwest Natural Holding Company at September 30, 2025 and 2024 and December 31, 2024 6 Consolidated Statements of Shareholders' Equity of Northwest Natural Holding Company for the three and nine months ended September 30, 2025 and 2024 8 Consolidated Statements of Cash Flows of Northwest Natural Holding Company for the nine months ended September 30, 2025 and 2024 9 Consolidated Statements of Comprehensive Income of Northwest Natural Gas Company for the three and nine months ended September 30, 2025 and 2024 10 Consolidated Balance Sheets of Northwest Natural Gas Company at September 30, 2025 and 2024 and December 31, 2024 11 Consolidated Statements of Shareholder's Equity of Northwest Natural Gas Company for the three and nine months ended September 30, 2025 and 2024 13 Consolidated Statements of Cash Flows of Northwest Natural Gas Company for the nine months ended September 30, 2025 and 2024 14 Notes to Unaudited Consolidated Financial Statements 15 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 51 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 77 Item 4.

Controls and Procedures

Controls and Procedures 77

OTHER INFORMATION

PART II. OTHER INFORMATION Item 1.

Legal Proceedings

Legal Proceedings 78 Item 1A.

Risk Factors

Risk Factors 78 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 78 Item 5. Other Information 78 Item 6. Exhibits 82

Signatures

Signatures 86

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This report contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995, which are subject to the safe harbors created by such Act. Forward-looking statements can be identified by words such as anticipates, assumes, may, intends, plans, projects, seeks, should, believes, estimates, expects, will, could, and similar references (including the negatives thereof) to future periods, although not all forward-looking statements contain these words. Examples of forward-looking statements include, but are not limited to, statements regarding the following: plans, projections and predictions; objectives, goals, visions or strategies; assumptions, generalizations and estimates; ongoing continuation of past practices or patterns; future events or performance; trends; risks; uncertainties; timing and cyclicality; economic conditions, including impacts of inflation, interest rates, recessionary risk, the imposition and/or announcement of tariffs imposed on the import of certain goods into the U.S. from various countries and general economic uncertainty; earnings and dividends; capital expenditures and allocation; capital markets or access to capital; capital or organizational structure; matters related to climate change and our role in decarbonization or a lower-carbon future; renewable natural gas, environmental attributes related thereto, and hydrogen; our strategy to reduce greenhouse gas emissions and the efficacy of communicating that strategy to shareholders, investors, stakeholders and communities; potential impacts of the federal budget or debt ceiling matters, including the current U.S. federal government shutdown; the policies and priorities of the current presidential administration and U.S. Congress; growth; customer rates; labor relations and workforce succession; commodity costs; desirability and cost

CONSOLIDATED FINANCIAL STATEMENTS

ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS NORTHWEST NATURAL HOLDING COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) Three Months Ended September 30, Nine Months Ended September 30, In thousands, except per share data 2025 2024 2025 2024 Operating revenues $ 164,728 $ 136,934 $ 895,206 $ 782,118 Operating expenses: Cost of gas 39,428 38,902 276,922 287,589 Operations and maintenance 76,785 63,940 239,533 202,504 Environmental remediation 1,247 1,151 9,796 9,226 General taxes 12,066 10,886 39,913 38,207 Revenue taxes 5,669 5,275 33,357 32,730 Depreciation 40,510 34,552 122,545 101,412 Other operating expenses 1,446 1,560 3,998 4,249 Total operating expenses 177,151 156,266 726,064 675,917 Income (loss) from operations ( 12,423 ) ( 19,332 ) 169,142 106,201 Other income (expense), net 929 930 ( 1,747 ) ( 198 ) Interest expense, net 30,435 19,060 90,321 58,902 Income (loss) before income taxes ( 41,929 ) ( 37,462 ) 77,074 47,101 Income tax (benefit) expense ( 12,039 ) ( 10,295 ) 21,548 13,232 Net income (loss) ( 29,890 ) ( 27,167 ) 55,526 33,869 Other comprehensive income (loss): Change in employee benefit plan liability, net of taxes of $ — and $ 58 for three months ended and $ — and $ 9 for the nine months ended September 30, 2025 and 2024, respectively — ( 58 ) — ( 192 ) Amortization of non-qualified employee benefit plan liability, net of taxes $( 1 ) and $ 54 for the three months ended and $ 49 and $ 155 for the nine months ended September 30, 2025 and 2024, respectively 200 153 549 432 Unrealized (loss) gain on interest rate swaps, net of taxes $ 14 and $ 279 for the three months ended and $ 62 and $ 133 for the nine months ended September 30, 2025 and 2024, respectively ( 40 ) ( 775 ) ( 171 ) ( 371 ) Comprehensive income (loss) $ ( 29,730 ) $ ( 27,847 ) $ 55,904 $ 33,738 Average common shares outstanding: Basic 41,184 38,394 40,640 38,356 Diluted 41,184 38,394 40,718 38,412 Earnings (loss) per share of comm

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 1. ORGANIZATION AND PRINCIPLES OF CONSOLIDATION The accompanying consolidated financial statements represent the respective, consolidated financial results of Northwest Natural Holding Company (NW Holdings) and Northwest Natural Gas Company (NW Natural) and all respective companies that each registrant directly or indirectly controls, either through majority ownership or otherwise. This is a combined report of NW Holdings and NW Natural, which includes separate consolidated financial statements for each registrant. NW Natural's regulated natural gas distribution activities are reported in the NWN Gas Utility reportable segment, which was previously referred to as the natural gas distribution (NGD) segment prior to 2025. The NWN Gas Utility segment serves residential, commercial, and industrial customers in Oregon and southwest Washington. SiEnergy Operating, LLC (SiEnergy Gas Utility or SiEnergy), which was acquired January 7, 2025, owns SiEnergy Gas, LLC, which is a regulated natural gas distribution utility, and ser

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