California Water Service’s Q4 Net Income Drops, $517M Infrastructure Capex Hits Record
California Water Service’s fourth-quarter net income dropped to $11.5 million ($0.19 per share) from $19.7 million ($0.33) due to exceptionally wet December driven by a broad West Coast storm. Full-year revenue grew 5.4% to $1.0B and non-GAAP net income edged up 1% to $128.2M alongside record $517M infrastructure investment.
1. Financial Results
In Q4 2025, California Water Service reported net income of $11.5 million ($0.19 per share) versus $19.7 million ($0.33) a year earlier, while full-year non-GAAP net income rose 1% to $128.2 million from $126.8 million in 2024. Full-year operating revenue increased 5.4% to $1.0 billion compared with $949.3 million on a non-GAAP basis.
2. Weather and Regulatory Impact
Management attributed the Q4 earnings decline to an exceptionally wet and cold December driven by a broad atmospheric river event, which reduced consumption by $14.6 million in the quarter and $12.7 million for the year. Tariff rate changes and other regulatory items added $0.48 per share to EPS, partially offsetting a $0.59 per share hit from lower weather-driven demand.
3. Capital Investment and PFAS Spending
The company invested a record $517 million in infrastructure during 2025, including $152.3 million in the fourth quarter, a 19.8% increase over 2024. PFAS compliance spending totaled $20 million in 2025, with $50 million to $70 million expected in 2026 and treatment installations largely completed by end-2027.
4. Acquisitions and Financing
California Water Service ended 2025 with $51.8 million in unrestricted cash, $45.6 million in restricted cash and $470 million available on bank credit lines, following a $370 million long-term debt issuance in October 2025. The company agreed to acquire $109 million of rate base in Nevada and Oregon and to become sole owner of seven Texas utilities, subject to regulatory approval.