Essential Utilities, Inc. Q1 FY2026 earnings call

1. Merger update: Kentucky Public Service Commission approved the merger request, first regulatory green light; shareholders approved the transaction in February with 95% vote. 2. Quarter results: GAAP earnings per share $0.79 including ~$0.04 merger-related costs; 2026 overall confident of 5%-7% annual growth in earnings per share. 3. Capital investment: Invested $269 million in water, wastewater, and natural gas infrastructure this quarter, on track to make $1.7 billion in critical improvements by year end. 4. Acquisition: Closed Greenville Water acquisition in March; pipeline of potential water and wastewater municipal acquisitions stands at ~400 thousand customers. 5. Operational updates: Water quality, safety, gas leaks etc. on track; water division 12 out of 15 operational metrics green, gas division 13 out of 16 metrics green; installing Intellis gas meters, target to install at least 80 thousand more this year.

Reaffirming 5%-7% multiyear earnings per share guidance through 2027 using adjusted 2024 earnings per share of $1.97 as base; includes acquisitions expected to close this year but not DELCORA; focus on keeping balance sheet strong, improving cash position, growing dividend with payout ratio 60-65%.

Q: Paul Zimbardo asks about thoughts on Pennsylvania affordability headlines, governor’s letter impact on rate case.

A: Aligned with governor on affordability, ongoing conversations with governor’s team, proceeding with filed rate case as is, working on water case with new info.

Q: Paul Zimbardo asks about adjusted EPS excluding merger charges.

A: Adjustment is just merger-related expenses like bank fees, legal fees, etc.

Q: Travis Miller asks about conversations with governor’s office on merger, impact on merger review, and merger impact on municipality discussions.

A: Ongoing dialogue but not specifics on merger, governor likely lets Commission adjudicate, no inhibition on pursuing municipalities, business as usual.

Q: Davis B Sunderland asks about back half of year for merger regulatory process, Q2 shaping, capital.

A: Regulatory process proceeding normally, expect to settle with parties, use past quarterly percentage ranges for earnings shaping, did $500 million debt offering, will raise equity opportune using ATM program.