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SEC filingNorthwest Natural Holding Company delivered higher earnings and margin expansion in Q1 FY2026, driven by regulatory rate relief, even as revenue declined modestly and operating cash flow weakened due to working capital timing.
Q1 FY2026 net income increased 10.9% to $97.5M, and diluted EPS rose to $2.33 — both outpacing revenue growth. This divergence reflects the impact of new Oregon rates effective October 31, 2025, which contributed meaningfully to margin expansion. Operating income grew 5.5% to $162.9M, and the operating margin strengthened to 33.2%, underscoring how rate adjustments directly benefit profitability without requiring volume growth.
Net cash provided by operating activities was $116.1M, down from $179.6M in Q1 FY2025. This reduction is attributable to working capital movements — including inventory and accounts payable timing — not deterioration in earnings quality or cash generation capacity. The company maintains its authorized cost of capital framework for carrying costs and interest recovery, supporting stable financial policy execution.
Capital expenditures totaled $113.7M, up from $102.2M in the prior-year quarter. This reflects sustained commitment to infrastructure integrity, safety, and reliability across gas distribution and water systems. The level of spending remains aligned with long-term capital planning objectives, though specific project timelines or multi-year funding ranges are not quantified in this filing.
The company continues to manage liquidity through established facilities, including the LC Reimbursement Agreement, which supports participation in regulatory programs such as the Washington Climate Commitment Act auctions. Maintaining target capital structure and credit quality remains central to accessing capital markets on favorable terms — a priority reinforced by management commentary on cost of capital and financial discipline.