0001628280-26-031364
SEC filingDouble-digit revenue and earnings growth in Q1 2026, driven by CPUC-approved rate increases and higher contracted services activity, with management noting rising external financing needs for capital programs.
Consolidated revenue for the first quarter of 2026 was $169.2 million, a 14.3% increase from $148.0 million in the prior year. The growth was primarily attributable to CPUC-approved rate increases at both the water and electric utilities, as well as higher construction activity in the contracted services segment. The increase in other operation expenses at the electric segment was primarily due to higher operation-related outside service costs. Additionally, an increase in construction activities and management fees from economic price adjustments contributed to revenue growth.
Net cash provided by operating activities was $71.6 million, up from $45.1 million in the prior year, driven by rate surcharges and favorable working capital timing. Capital expenditures totaled $49.1 million, resulting in free cash flow of $22.6 million. Management expects capital expenditures to increase in future periods to support the ongoing infrastructure investment program at the regulated utilities. As the capital investment program continues to grow, AWR and its subsidiaries anticipate they will need to access external financing more often. Management believes that AWR’s and GSWC’s sound capital structures and strong credit ratings, combined with financial discipline, will enable access to debt and equity markets.
AWR anticipates that interest expense will increase in future periods due to the need for additional external capital to fund construction programs at its regulated utilities and if market interest rates increase. Overall debt levels are expected to increase to fund capital expenditures. External financing may also be needed to cover costs incurred in connection with capital investments that are not covered in rates due to delays in obtaining approval of general rate cases by the CPUC. GSWC and BVES plan to continue seeking recovery of their operating and supply costs and receive reasonable returns on invested capital.