BRYN MAWR, PA — Essential Utilities reported solid third-quarter results and outlined a sweeping slate of investments, acquisitions, and long-term growth plans that signal one of the most expansive strategic shifts in the company’s history. The utility posted net income of $92.1 million, or $0.33 per share, up from $69.4 million, or $0.25 per share, a year earlier — growth driven largely by rate increases across both its water and natural gas businesses.
Revenues rose 9.6% to $477 million, with gains in both operating segments offset partly by higher depreciation, interest expense, and operations and maintenance costs. Through the first nine months of 2025, the company earned $483.7 million, or $1.73 per share, compared to $410.6 million, or $1.50 per share over the same period last year.
Chairman and CEO Christopher Franklin said both divisions continue to fuel consistent performance. He highlighted a newly announced data-center partnership in Western Pennsylvania as evidence of the company’s broader innovation push. “We are demonstrating our advanced capability to innovate so we can meet evolving customer and community needs,” Franklin said.
Strong Operating Performance in Water and Gas
The company’s regulated water segment generated $364.1 million in quarterly revenue, up 8.8% from a year ago. Rate increases and wastewater operations drove most of the gains, though costs rose due to employee-related expenses, production costs, and the absence of a prior-year bad-debt credit.
The natural gas business posted $108.5 million in revenue, a 12.1% increase. Operating expenses declined slightly, helped by lower materials, legal, and outside-services costs, though labor and benefits crept higher.
Major Capital Investments and Data-Center Expansion
Essential invested $983 million during the first nine months of the year and expects to reach $1.4 billion to $1.5 billion in regulated infrastructure spending for 2025. Over the 2025–2029 period, the company plans roughly $7.8 billion in capital investments to modernize water and gas systems, upgrade IT, replace aging pipelines, and complete more than 300 PFAS-related projects.
A high-profile data-center development in Greene County represents one of the company’s most significant diversification efforts. Through a partnership with International Electric Power III, Essential plans to design, build, and operate an 18-million-gallon-per-day water treatment plant to support data-center cooling and power operations, while its Peoples subsidiary will provide natural-gas services. The project is expected to come online in 2029.
Aggressive Acquisition Strategy
Essential continues to pursue growth through acquisitions, having added more than 136,000 customers since 2015 and invested more than $548 million in rate base expansion. Year-to-date in 2025, the utility has completed acquisitions serving roughly 10,300 customers for about $58 million.
Four pending purchases — including a $276.5 million agreement to acquire DELCORA — would add more than 200,000 customers across Pennsylvania and Texas. The company is also evaluating a pipeline of municipal opportunities representing roughly 400,000 additional customer equivalents.
Major Merger on the Horizon
On October 27, Essential announced a definitive agreement to merge with American Water Works Company in an all-stock, tax-free deal expected to create one of the nation’s largest regulated water and wastewater utilities. The combined entity would have a pro forma market capitalization near $40 billion and an enterprise value around $63 billion. The deal is expected to close by the end of the first quarter of 2027 pending regulatory and shareholder approvals.
Earnings Guidance and Rate Activity
The company expects 2025 GAAP earnings per share to exceed its prior guidance range of $2.07 to $2.11, driven by non-recurring benefits, and reaffirmed its long-term earnings growth target of 5% to 7% annually through 2027. Rate awards totaling $92.6 million for water and $8.9 million for natural gas have already been approved across several states, with additional cases pending for more than $99 million in potential incremental revenue.
The board declared a quarterly dividend of $0.3426 per share, marking 80 consecutive years of dividend payments and 35 increases over the past 34 years.
Essential also reiterated its commitment to major environmental goals, including a 60% reduction in Scope 1 and 2 greenhouse-gas emissions by 2035 and ensuring finished water meets forthcoming federal PFAS standards.
A Utility Positioned for Transformation
With accelerating infrastructure investment, expanded data-center activity, a robust acquisition pipeline, and a pending merger that could reshape the nation’s water-utility landscape, Essential Utilities is positioning itself for significant long-term growth — even as it continues to deliver steady quarterly performance.
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