Golden State Water Parent Posts Strong Q3 Earnings, Revenue Up 12.9%

TL;DR

**AWR is crushing it with double-digit revenue and net income growth, making it a solid buy for dividend-focused investors.**

AI Summary

Golden State Water Co (GSWC), a subsidiary of American States Water Company (AWR), reported a robust financial performance for the three and nine months ended September 30, 2025. Total operating revenues for AWR increased by $20.934 million, or 12.9%, to $182.716 million for the three months ended September 30, 2025, compared to $161.782 million in the prior year. For the nine months, total operating revenues rose by $41.434 million, or 9.2%, to $493.795 million from $452.361 million. Net income for AWR saw a significant jump, increasing by $5.333 million, or 14.9%, to $41.167 million for the three months, and by $10.868 million, or 12.0%, to $101.701 million for the nine months. Key business changes include increased water and electric revenues, with water revenues up $8.280 million for the quarter and $29.291 million for the nine months, and electric revenues up $4.292 million for the quarter and $11.314 million for the nine months. Contracted services revenues also increased by $8.362 million for the quarter. Risks highlighted include regulatory challenges with the CPUC regarding cost recovery and customer rate increases, and the impact of climate change on operations. The strategic outlook focuses on continued investment in regulated utility plant, which increased by $146.544 million to $2,849.671 million as of September 30, 2025.

Why It Matters

This filing indicates a healthy financial position for American States Water Company and its subsidiary, Golden State Water Company, which is crucial for investors seeking stable, regulated utility income. The increased revenues and net income suggest effective rate recovery and operational management, despite rising costs. For customers, this could imply continued investment in infrastructure, but also potential for future rate increases to cover costs like climate change mitigation. The competitive context in the utility sector, particularly in California, means GSWC's ability to navigate regulatory hurdles and manage costs is vital for its long-term market position and service reliability.

Risk Assessment

Risk Level: medium — The risk level is medium due to significant regulatory exposure and climate change impacts. The filing explicitly states risks like 'growing opposition to customer rate increases and possible reluctance from the CPUC to pass through all such costs to customers' and 'the impact of climate change and extreme weather events, including droughts, storms, high wind events, wildfires, flash flooding'. These factors could hinder future profitability and cost recovery, despite current strong performance.

Analyst Insight

Investors should consider AWR for its stable utility business and consistent growth, evidenced by a 14.9% increase in net income for the three months ended September 30, 2025. However, they should closely monitor CPUC decisions on rate cases and the company's ability to recover increasing operational costs, especially those related to climate change and water quality regulations.

Financial Highlights

debt To Equity

N/A

revenue

$182.716M

operating Margin

N/A

total Assets

$N/A

total Debt

$N/A

net Income

$41.167M

eps

$N/A

gross Margin

N/A

cash Position

$26.073M

revenue Growth

+12.9%

Revenue Breakdown

Key Numbers

• $182.716M — Total Operating Revenues (Q3 2025) (Increased by 12.9% from $161.782M in Q3 2024)
• $41.167M — Net Income (Q3 2025) (Increased by 14.9% from $35.834M in Q3 2024)
• $493.795M — Total Operating Revenues (9M 2025) (Increased by 9.2% from $452.361M in 9M 2024)
• $101.701M — Net Income (9M 2025) (Increased by 12.0% from $90.833M in 9M 2024)
• $2,849.671M — Regulated Utility Plant (Sept 30, 2025) (Increased by $146.544M from $2,703.127M at Dec 31, 2024)
• 12.9% — Q3 2025 Revenue Growth (Year-over-year increase in total operating revenues for the quarter)
• 14.9% — Q3 2025 Net Income Growth (Year-over-year increase in net income for the quarter)
• 38,714,426 — Common Shares Outstanding (As of November 4, 2025, for American States Water Company)

Key Players & Entities

• Golden State Water Company (company) — subsidiary of American States Water Company
• American States Water Company (company) — parent company and registrant
• California Public Utilities Commission (regulator) — regulates GSWC and BVES
• $182.716 million (dollar_amount) — total operating revenues for three months ended September 30, 2025
• $41.167 million (dollar_amount) — net income for three months ended September 30, 2025
• $493.795 million (dollar_amount) — total operating revenues for nine months ended September 30, 2025
• $101.701 million (dollar_amount) — net income for nine months ended September 30, 2025
• U.S. government (regulator) — contracted services customer for military bases
• New York Stock Exchange (regulator) — exchange where AWR common shares are registered

FAQ

Risk Factors

• CPUC Cost Recovery and Rate Increases [high — regulatory]: The company faces regulatory challenges with the California Public Utilities Commission (CPUC) concerning the recovery of costs and the ability to implement customer rate increases. These regulatory hurdles can impact profitability and the company's ability to invest in infrastructure.
• Climate Change Impact [medium — operational]: Climate change poses a significant operational risk, potentially affecting water availability and infrastructure resilience. The company must adapt its operations to mitigate the impacts of changing weather patterns and environmental conditions.

Industry Context

Golden State Water Company operates within the regulated utility sector, primarily providing water and wastewater services in California. This industry is characterized by significant capital investment in infrastructure, long asset lives, and heavy reliance on regulatory approvals for rate adjustments and cost recovery. The sector is also increasingly influenced by environmental concerns and the need for infrastructure modernization to address climate change impacts.

Regulatory Implications

The company's operations are heavily influenced by the California Public Utilities Commission (CPUC). Key implications include the need for CPUC approval for rate increases to ensure adequate cost recovery for infrastructure investments and operational expenses. Regulatory lag and potential disallowances can significantly impact financial performance and the company's ability to achieve its targeted returns.

What Investors Should Do

1. Monitor CPUC proceedings and rate case outcomes.
2. Assess capital expenditure plans and their impact on regulated utility plant.
3. Evaluate the company's strategy for addressing climate change risks.

Glossary

CPUC

California Public Utilities Commission (The primary regulatory body overseeing utility rates and operations in California, directly impacting GSWC's revenue and cost recovery.)

Regulated utility plant

Assets owned and operated by a utility company that are subject to government regulation, typically including infrastructure like water mains, treatment plants, and power lines. (Represents the core infrastructure investment of GSWC, with a significant increase indicating ongoing capital expenditures.)

Unbilled receivable

Revenue earned but not yet billed to customers, often due to the timing of meter readings and billing cycles. (A component of accounts receivable that reflects revenue recognized but not yet invoiced.)

Contract assets

Represents rights to consideration in exchange for performance obligations that have been satisfied or are partially satisfied, but are not yet unconditional. (Indicates revenue recognized from contracts where the right to payment is conditional on future performance or events.)

Year-Over-Year Comparison

Compared to the prior year, American States Water Company (AWR) demonstrated strong top-line growth, with total operating revenues increasing by 12.9% to $182.716 million for the third quarter and by 9.2% to $493.795 million for the nine months ended September 30, 2025. Net income also saw a substantial rise of 14.9% for the quarter and 12.0% for the nine months, indicating improved profitability. The company continued to invest heavily in its infrastructure, with regulated utility plant growing by $146.544 million. New risks related to climate change are highlighted, alongside ongoing regulatory challenges with the CPUC.

Filing Documents

• awr-20250930.htm (10-Q) — 2482KB
• awr-20250930xex311.htm (EX-31.1) — 15KB
• awr-20250930xex3111.htm (EX-31.1 1) — 15KB
• awr-20250930xex312.htm (EX-31.2) — 16KB
• awr-20250930xex3121.htm (EX-31.2 1) — 16KB
• awr-20250930xex321.htm (EX-32.1) — 7KB
• awr-20250930xex322.htm (EX-32.2) — 8KB
• 0001628280-25-049623.txt ( ) — 9601KB
• awr-20250930.xsd (EX-101.SCH) — 44KB
• awr-20250930_cal.xml (EX-101.CAL) — 87KB
• awr-20250930_def.xml (EX-101.DEF) — 349KB
• awr-20250930_lab.xml (EX-101.LAB) — 587KB
• awr-20250930_pre.xml (EX-101.PRE) — 450KB
• awr-20250930_htm.xml (XML) — 1651KB

Financial Statements

Financial Statements 1 Consolidated Balance Sheets of American States Water Company as of Septem ber 30, 2025 and December 31, 2024 2 Consolidated Statements of Income of American States Water Company for the Three and Nine Months Ended September 30, 2025 and 2024 4 Consolidated Statements of Changes in Common Shareholders ' Equity of American States Water Company for the Nine Months Ended September 30, 2025 5 Consolidated Statements of Changes in Common Shareholders ' Equity of American States Water Company for the Nine Months Ended September 30, 2024 6 Consolidated Statements of Cash Flows of American States Water Company for the Nine Months Ended September 30, 2025 and 2024 7 Balance Sheets of Golden State Water Company as of September 30, 2025 and December 31, 2024 8 10 11 12 13

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 14 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 31 Item 3:

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 60 Item 4:

Controls and Procedures

Controls and Procedures 60 Part II Other Information Item 1:

Legal Proceedings

Legal Proceedings 61 Item 1A:

Risk Factors

Risk Factors 61 Item 2: Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities 61 Item 3: Defaults Upon Senior Securities 61 Item 4: Mine Safety Disclosure 61 Item 5: Other Information 61 Item 6: Exhibits 62

Signatures

Signatures 64 GLOSSARY OF TERMS The following terms and acronyms used in this Form 10-Q are defined below: Term or Acronym Definition AFUDC Allowance for Funds Used During Construction ASUS American States Utility Services, Inc. ATM At-The-Market Offering Program AWR American States Water Company BRRAM Base Revenue Requirement Adjustment Mechanism BSUS Bay State Utility Services LLC BVES Bear Valley Electric Service, Inc. Cal Advocates Public Advocates Office of the California Public Utilities Commission COC Cost of Capital CPUC California Public Utilities Commission DDW Division of Drinking Water ECUS Emerald Coast Utility Services, Inc. EPA Economic Price Adjustment EPS Earnings Per Share ETR Effective Tax Rate Exchange Act Securities Exchange Act of 1934, as amended FBWS Fort Bliss Water Services Company FRUS Fort Riley Utility Services, Inc. GAAP Generally Accepted Accounting Principles in the United States of America GRC General Rate Case GSWC Golden State Water Company ICBA Incremental Cost Balancing Account M-WRAM Monterey-style Water Revenue Adjustment Mechanism MCBA Modified Cost Balancing Account ODUS Old Dominion Utility Services, Inc. ONUS Old North Utility Services, Inc. PFAS Per- and Polyfluoroalkyl Substances PRUS Patuxent River Utility Services LLC PSUS Palmetto State Utility Services, Inc. REA Request for Equitable Adjustment Registrant American States Water Company and Golden State Water Company SEC Securities and Exchange Commission SERP Supplemental Executive Retirement Plan SWRCB State Water Resources Control Board TUS Terrapin Utility Services, Inc. U.S. United States U.S. EPA U.S. Environmental Protection Agency WCCM Water Cost of Capital Mechanism WMP Wildfire Mitigation Plan WRAM Water Revenue Adjustment Mechanism INFORMATION REGARDING FORWARD-LOOKING STATEMENTS This Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Ac

Financial Statements

Item 1. Financial Statements General The basic financial statements included herein have been prepared by Registrant, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, all adjustments consisting of normal recurring items and estimates necessary for a fair statement of results for the interim period have been made. It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto in the latest Annual Report on Form 10-K of American States Water Company and its wholly owned subsidiary, Golden State Water Company. Filing Format American States Water Company ("AWR") is the parent company of Golden State Water Company ("GSWC"), Bear Valley Electric Service, Inc. ("BVES") and American States Utility Services, Inc. and its subsidiaries ("ASUS"). This quarterly report on Form 10-Q is a combined report being filed by two separate Registrants: AWR and GSWC. For more information, please see Note 1 of the Notes to Consolidated Financial Statements and the heading titled "General" in "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations." References in this report to "Registrant" are to AWR and GSWC, collectively, unless otherwise specified. GSWC makes no representations as to the information contained in this report other than with respect to itself. 1 Table of Contents AMERICAN STATES WATER COMPANY CONSOLIDATED BALANCE SHEETS ASSETS (Unaudited) (in thousands) September 30, 2025 December 31, 2024 Property, Plant and Equipment Regulated utility plant, at cost $ 2,849,671 $ 2,703,127 Non-utility property, at cost 49,505 44,697 Total 2,899

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View this 10-Q filing on SEC EDGAR