H2O America提交截至2026年9月30日季度的10-Q：第三季度营收增长、净利润和摊薄每股收益下降

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________________________________ 

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2026

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to

Commission file number 001-8966

H2O AMERICA

(Exact name of registrant as specified in its charter)

(408) 279-7800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ☒  No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

        Large accelerated filer  ☒                Non-accelerated filer  ☐    

        Accelerated filer  ☐                Smaller reporting company  ☐

                                Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐   No  x

As of October 21, 2026, there were 48,318,991 shares of the registrant’s Common Stock outstanding.

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FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Some of these forward-looking statements can be identified by the use of forward-looking words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “projects,” “strategy,” or “anticipates,” or the negative of those words or other comparable terminology. These forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions that are difficult to predict.

The accuracy of such statements is subject to a number of risks, uncertainties and assumptions including, but not limited to, the following factors:

•the risks associated with the recently completed acquisition of substantially all of the assets of the regulated water and wastewater utility operations of Quadvest, L.P., a Texas limited partnership (“Quadvest Retail”), and substantially all of the assets of the wholesale water and wastewater operations of Quadvest Wholesale, LLC, a Texas limited liability company (“Quadvest Wholesale,” and together with Quadvest Retail, “Quadvest”), including the risk of not successfully integrating Quadvest’s operations and not realizing the projected financial and other benefits of the transactions;

•the effect of water, utility, environmental and other governmental policies and regulations, including regulatory actions concerning rates, authorized return on equity, authorized capital structures, capital expenditures, per- and polyfluoroalkyl substances (“PFAS”) and other decisions;

•changes in demand for water and other services;

•unanticipated weather conditions and changes in seasonality including those affecting water supply and customer usage;

•the effect of the impacts of climate change;

•unexpected costs, charges or expenses;

•our ability to successfully evaluate investments in new business and growth initiatives;

•contamination of our water supplies and damage or failure of our water equipment and infrastructure;

•the risk of work stoppages, strikes and other labor-related actions;

•catastrophic events such as fires, earthquakes, explosions, floods, ice storms, tornadoes, hurricanes, terrorist acts, physical attacks, cyber-attacks, epidemic, or other similar occurrences;

•changes in general economic, political, business and financial market conditions;

•the ability to obtain financing on favorable terms, which can be affected by various factors, including credit ratings, changes in interest rates, compliance with regulatory requirements, compliance with the terms and conditions of our outstanding indebtedness and general market and economic conditions; and

•legislative and general market and economic developments.

These risks, uncertainties and other factors may cause the actual results, performance or achievements of H2O America to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Results for a quarter are not indicative of results for a full year due to seasonality and other factors. In addition, actual results, performance or achievements are subject to other risks and uncertainties that relate more broadly to our overall business, including those more fully described in our filings with the SEC, including our most recent reports on Form 10-K, Form 10-Q and Form 8-K. Forward-looking statements are not guarantees of future performance, and speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by law.

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PART I. FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

H2O America and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

(in thousands, except share and per share data)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

(in thousands, except share and per share data)

a

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H2O America and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(UNAUDITED)

(in thousands, except share and per share data)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H2O America and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)

(in thousands, except share and per share data)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (Continued)

(UNAUDITED)

(in thousands, except share and per share data)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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H2O America and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

(in thousands)

See Accompanying Notes to Unaudited Condensed Consolidated Financial Statements.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2026

Note 1.General

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal, recurring adjustments) necessary for a fair presentation of the results for the interim periods.

The unaudited interim financial information has been prepared in accordance with accounting principles generally accepted in the United States of America and in accordance with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission (“SEC”). The Notes to Consolidated Financial Statements in H2O America’s 2025 Annual Report on Form 10-K, filed with the SEC on February 26, 2026, should be read in conjunction with the accompanying unaudited condensed consolidated financial statements.

H2O America is a holding company that conducts its business through the following wholly owned subsidiaries: San Jose Water Company (“SJWC”), H2O America TX Holdings, Inc., H2O America Land Company, H2O America NE LLC, and National Water Utility Service, LLC (“NWU”). H2O America TX Holdings, Inc. is a holding company for its wholly owned subsidiaries, SJWTX, Inc., doing business as The Texas Water Company (“TWC”), Texas Water Operation Services, LLC (“TWOS”) and Texas Water Resources, LLC (“TWR”). H2O America NE LLC is the holding company for Connecticut Water Service, Inc. (“CTWS”) whose wholly owned subsidiaries are The Connecticut Water Company (“CWC”), The Maine Water Company (“MWC”), New England Water Utility Services, Inc. (“NEWUS”), and Chester Realty, Inc. NWU is the contracting entity for shared services among the H2O America affiliates formed in October 2024. H2O America Risk Solutions, Inc. (“Risk Solutions”), is a captive insurance entity and wholly owned subsidiary of H2O America Inc., established in 2025 to manage certain insurance specific risks of the Company in addition to its use of traditional insurance products provided by its current insurance carriers. H2O America, through its subsidiaries, primarily provides water utility and other related services in California, Connecticut, Maine and Texas. H2O America has business in property management and real estate investment activity conducted by H2O America Land Company and Chester Realty, Inc.

TWC also holds a 25% equity interest in Acequia Water Supply Corporation (“Acequia”). Acequia has been determined to be a variable interest entity within the scope of Accounting Standards Codification (“ASC”) Topic 810—“Consolidation” with TWC as the primary beneficiary. As a result, Acequia has been consolidated with TWC.

Revenue

Water sales are seasonal in nature and influenced by weather conditions. The timing of precipitation and climatic conditions can cause seasonal water consumption by customers to vary significantly. Due to the seasonal nature of the water business, the operating results for interim periods are not indicative of the operating results for a 12-month period. Revenue is generally higher in the warm, dry summer months when water usage and sales are greater, and lower in the winter months when cooler temperatures and increased precipitation curtail water usage resulting in lower sales.

H2O America’s revenue components are as follows:

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H2O AMERICA AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2026

Nonutility Properties

The major components of nonutility properties are as follows: 

Fair Value Measurement

The following instruments are not measured at fair value on H2O America’s condensed consolidated balance sheets as of September 30, 2026, but require disclosure of their fair values: cash and cash equivalents, accounts receivable and accounts payable. The estimated fair value of such instruments as of September 30, 2026 approximates their carrying value as reported on the condensed consolidated balance sheets. There have been no changes in valuation techniques during the three and nine months ended September 30, 2026. The fair value of these instruments would be categorized as Level 2 in the fair value hierarchy, with the exception of cash and cash equivalents, which would be categorized as Level 1.

The fair value of H2O America’s long-term debt was $1,638.4 million and $1,716.6 million as of September 30, 2026 and December 31, 2025, respectively, and was determined using a discounted cash flow analysis, based on the current rates for similar financial instruments of the same duration and creditworthiness of the company. Of the total fair value of long-term debt at September 30, 2026 and December 31, 2025, $1,619.9 million and $1,715.6 million, respectively, would be categorized as Level 2 in the fair value hierarchy and $18.4 million and $1.0 million, respectively, would be categorized as Level 3 in the fair value hierarchy.

Earnings per Share

Basic earnings per share is calculated using income available to common stockholders, divided by the weighted average number of shares outstanding during the period. Diluted earnings per share is calculated using the treasury stock method which comprises income available to common stockholders divided by the weighted average number of shares of common stock including both shares outstanding and shares potentially issuable in connection with restricted common stock awards under H2O America’s long-term incentive plans, and shares potentially issuable under the equity forward purchase agreements granted to investors in the equity offering discussed further in Note 3 “Capitalization” to these condensed consolidated financial statements. For the three months ended September 30, 2026 and 2025, 2,083 and 4,954 anti-dilutive restricted common stock units were excluded from the diluted earnings per share calculation, respectively. For the nine months ended September 30, 2026 and 2025, 1,644 and 38,734 anti-dilutive restricted common stock units were excluded from the diluted earnings per share calculation, respectively.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2026

New Accounting Standards

The recently issued accounting standards that have not yet been adopted by the company as of September 30, 2026 are as follows:

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2026

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2026

Note 2.Regulatory Matters

Regulatory assets and liabilities are comprised of the following:

___________________________________

(a)Consists primarily of temporary income tax differences that are flowed through to customers, which will be recovered in future rates as these temporary differences reverse. The company expects to recover regulatory assets related to plant depreciation income tax temporary differences over the lives of the plant assets, which are between 5 to 100 years.

(b)M-WRAM is described in the following section.

(c)Consists of debt fair value adjustments recognized through purchase accounting for the completed merger with CTWS in 2019.

(d)Includes deferrals of pension and other postretirement benefit expense and cost of accrued benefits for vacation, and group health insurance.

(e)The California Public Utilities Commission (“CPUC”) has authorized water utilities to activate CEMA accounts in order to track savings and costs related to SJWC’s response to catastrophic events, which includes external labor and materials, increases in bad debt from suspension of shutoffs for non-payment, waived deposits and reconnection fees, and divergence from actual versus authorized usage. The balances primarily relate to expenses associated with SJWC’s response to COVID-19, including bad debt.

(f)Primarily relates to Water Rate Adjustment mechanism (“WRA”). WRA and Water Conservation Memorandum Account (“WCMA”) are described in the following section.

(g)Primarily represents costs associated with SJWC’s CAP.

(h)Reflects primarily SJWC’s Full Cost Balancing Account (“FCBA”), which tracks differences in actual water supply costs compared to amounts assumed in base rates, including applicable changes and variations in costs and quantities that affect the overall mix of the water supply.

(i)Represents legal and related expenses associated with litigation and consensus-building activities related to SJWC’s water rights. The GWRLEMA was re-established in November 2025 to track these costs.

(j)Other includes other balancing and memorandum accounts and regulatory mechanisms, deferred costs for certain information technology activities, asset retirement obligations, tank painting, well reconditioning, rate case expenses and acquisition costs.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2026

(k)Primarily relates to the current portion of SJWC’s M-WRAM and the current portion of CWC’s WRA, deferred well redevelopment, carbon filters and rate case costs.

(l)Represents amounts collected in rates from customers for estimated costs to retire assets at the end of their expected useful lives before the costs are incurred.

(m)On December 22, 2017, the Tax Cuts and Jobs Act of 2017 (the “Tax Act”) was signed into law. The Tax Act included a reduction in the federal income tax rate from 35% to 21%. The rate reduction was effective on January 1, 2018 and resulted in a regulatory liability for the excess deferred income taxes. The benefit of amortization of excess deferred income taxes flows back to the customers under current normalization rules and agreed upon methods with the commissions.

(n)Represents actuarial losses and gains and prior service cost that have not yet been recognized as components of net periodic benefit cost for certain pension and other postretirement benefit plans.

(o)Primarily relates to legal settlements received by SJWC and CWC from ongoing PFAS water contamination litigation against manufacturers which will be used to offset future costs incurred, recorded as Contributions in Aid of Construction (“CIAC”), or returned to customers through future rates. The Water Contamination Litigation Memorandum Account (“WCLMA”) has been established to track net proceeds and costs resulting from water contamination litigation related to SJWC.

(p)Primarily relates to MWC’s accrued tank painting costs.

(q)Generally, not earning a return either by interest on the regulatory asset or as a component of rate base at the allowed rate of return.

SJWC has established balancing accounts for the purpose of tracking the under-collection or over-collection associated with expense changes and the revenue authorized by the CPUC to offset those expense changes. SJWC has been authorized for the use of the FCBA to track water supply costs and energy consumption. The M-WRAM balancing account tracks the difference between the revenue received for actual metered sales through the tiered volumetric rate and the revenue that would have been received with the same actual metered sales if a uniform rate would have been in effect.

SJWC also maintains memorandum accounts to track impacts due to catastrophic events, certain unforeseen water quality expenses related to new federal and state water quality standards, energy efficiency, water conservation, water tariffs, and other approved activities or as directed by the CPUC. The WCLMA allows SJWC to track net proceeds and costs resulting from water contamination litigation. The WCMA allows SJWC to track lost revenue, net of related water costs, associated with reduced sales due to water conservation and associated calls for water use reductions, both mandatory and voluntary. SJWC records the lost revenue captured in the WCMA balancing accounts, including amounts related to a 20-basis point reduction in the authorized return on equity per the terms of the WCMA. Applicable drought surcharges collected are used to offset the revenue losses tracked in the WCMA. All balancing accounts and memorandum accounts not included for recovery or refund in the current general rate case will be reviewed by the CPUC in SJWC’s next general rate case or at the time an individual account balance reaches a threshold of 2% of authorized revenue, whichever occurs first.

CWC has been authorized by the Connecticut Public Utilities Regulatory Authority (“PURA”) to utilize a WRA, a decoupling mechanism, to mitigate risk associated with changes in demand. The WRA is used to reconcile actual water demands with the demands projected in the most recent general rate case and allows the company to implement a surcharge or sur-credit as necessary to recover or refund the revenues approved in the general rate case. The WRA allows the company to defer, as a regulatory asset or liability, the amount by which actual revenues deviate from the revenues allowed in the most recent general rate proceedings.

Note 3.Capitalization

In October 2024, H2O America entered into an equity distribution agreement (the “Equity Distribution Agreement”) with BofA Securities, Inc., J.P. Morgan Securities LLC, RBC Capital Markets, LLC and Wells Fargo Securities, LLC, pursuant to which the Company may offer and sell shares of its common stock, $0.001 par value per share, from time to time in “at-the-market” offerings, having an aggregate gross sales price of up to $200.0 million. The Equity Distribution Agreement replaced the previous agreement that concluded in 2024. For the three and nine months ended September 30, 2026, H2O America did not issue or sell any shares of its common stock under the Equity Distribution Agreement and, accordingly, received no net proceeds therefrom. For the three and nine months ended September 30, 2025, the Company issued and sold 492,859 and 2,076,352 shares of its common stock, respectively, with a weighted average price of $50.27 and $52.47 per share respectively, and received $24.4 million and $108.1 million in net proceeds, respectively, under the Equity Distribution Agreement. Since the inception of the Equity Distribution Agreement, H2O America has issued and sold 2,763,359 shares of common stock at a weighted average price of $52.39 for total net proceeds of $143.0 million, and has $55.2 million of aggregate gross sales price of shares remaining to issue under the Equity Distribution Agreement as of September 30, 2026.

In March 2026, H2O America issued 3,937,654 shares of common stock in an underwritten offering pursuant to an Underwriting Agreement with J.P. Morgan Securities LLC and Wells Fargo Securities LLC, as representatives of several underwriters named in the Underwriting Agreement (the “Offering”). In connection with the Offering, H2O America entered into two-year forward purchase agreements to issue an additional 7,547,170 shares of common stock with an initial forward

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2026

purchase price of $51.28 per share, subject to adjustment based on the overnight bank funding rate and expected dividend amounts due upon settlement through maturity in March 2028. The forward purchase agreements can be settled or net settled for delivery of physical shares or settled for cash at the option of H2O America. In addition, the underwriters in the Offering, through the exercise of a 30-day overallotment option, purchased an additional 1,722,723 shares of common stock at a price of $51.28 per share. Total net proceeds to H2O America for the common stock offering were $290.2 million after deducting the underwriting discounts and before estimated offering expenses payable by H2O America of $1.6 million, which are recognized as a reduction of additional paid-in capital. The forward purchase agreements are indexed to H2O America’s common stock and qualify for equity classification. Accordingly, they are not remeasured for changes in the fair value of the Company’s common stock, and no related gains or losses are recognized in earnings.

During the three and nine months ended September 30, 2026, H2O America settled forward purchase agreements relating to 6,439,308 shares of common stock and received net proceeds of $330.0 million. Upon settlement, the Company issued the related shares of common stock, with the proceeds recognized as increases to common stock and additional paid-in capital. As of September 30, 2026, forward purchase agreements relating to 1,107,862 shares remained outstanding.

Note 4.Lines of Credit and Long-Term Liabilities

H2O America’s contractual obligations and commitments include senior notes, bank term loans, revenue bonds, state revolving fund loans, lines of credit, and other obligations.

Lines of Credit

The weighted average interest rate on short-term borrowings outstanding at September 30, 2026 was 4.67% compared to 4.75% at December 31, 2025.

As of September 30, 2026, the borrowing capacity of the lines of credit was $168.8 million, which excludes a $0.9 million standby letter of credit issued on behalf of H2O America Risk Solutions and guaranteed by H2O America under the Syndicated Credit Agreement.

Long-Term Debt

On November 12, 2025, SJWC entered into a Note Purchase Agreement with certain institutional investors. Under the agreement, SJWC issued an aggregate principal amount of $70.0 million of senior notes in two series consisting of $55.0 million of 5.83% Senior Notes, Series R ("Series R Notes"), and $15.0 million of 5.91% Senior Notes, Series S ("Series S Notes"). The issuance of the Series S Notes was subject to approval by the CPUC which closed on May 14, 2026. The Series S Notes are unsecured obligations of SJWC and are due on November 1, 2055. Interest is payable semi-annually in arrears on May 1st and November 1st of each year, commencing November 1, 2026.

The balance of long-term debt outstanding, net of unamortized debt issuance costs and debt premium and discount, as of September 30, 2026 and December 31, 2025 was $1,881.4 million and $1,866.8 million, respectively. The current portion of long-term debt as of September 30, 2026 and December 31, 2025 was $7.9 million and $23.5 million, respectively.

All of H2O America’s and subsidiaries’ debt and credit agreements contain customary covenants and events of default. As of September 30, 2026, H2O America and its subsidiaries were in compliance with all covenants related to their debt and credit agreements.

Note 5.Income Taxes

Income tax expense was $5.2 million and $5.8 million for the three months ended September 30, 2026 and 2025, respectively. Income tax expense was $12.6 million and $13.9 million for the nine months ended September 30, 2026 and 2025, respectively. The effective consolidated income tax rates were 11% for both the three months ended September 30, 2026 and 2025, and 12% and 14% for the nine months ended September 30, 2026 and 2025, respectively. The lower effective tax rate for the nine months ended September 30, 2026 was primarily due to higher flow through tax benefits.

H2O America had unrecognized tax benefits, before the impact of deductions of state taxes, excluding interest and penalties, of $4.8 million and $4.1 million as of September 30, 2026 and December 31, 2025, respectively.

On July 4, 2025, Public Law No. 119-21, referred to as the One Big Beautiful Bill Act (“OBBBA”), was signed into law. The OBBBA contains several changes to corporate taxation including the extension of key provisions of the 2017 Tax Cuts and Jobs Act. The legislation has multiple effective dates, with certain provisions which were effective in 2025 and others are phased in through tax year 2027. The legislation may be subject to further clarification and the issuance of interpretive guidance. The

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SEPTEMBER 30, 2026

impact of the tax legislation was not material to the provision for income taxes and deferred tax balances for the three and nine months ended September 30, 2026.

Note 6.Commitments and Contingencies

H2O America and its subsidiaries are subject to ordinary routine litigation incidental to its business.

In October 2023, CWC, a subsidiary of H2O America, was named as a defendant in a putative class action lawsuit alleging that the water provided by CWC contained contaminants. The case is currently pending in the State of Connecticut Superior Court. CWC is vigorously defending itself in this lawsuit.

SJWC and CWC are plaintiffs in a lawsuit against manufacturers of certain PFAS compounds for damages, contribution and reimbursement of costs incurred and continuing to be incurred to address the presence of such PFAS compounds in public water supply systems owned and operated by these utility subsidiaries and throughout their respective service areas. The lawsuit is part of a Multi-District Litigation (“MDL”) that commenced on December 7, 2018 in the United States District Court for the District of South Carolina. MWC has also submitted timely claims as a settlement class member.

On February 8, 2024, the MDL court approved settlements involving defendants The Chemours Company, Corteva, Inc., and DuPont de Nemours, Inc. to resolve claims brought in the MDL against them by public water systems, including SJWC and CWC. On March 29, 2024, the MDL court approved a similar settlement involving defendant 3M Company. On November 22, 2024, the MDL court approved settlements involving defendants Tyco Fire Products LP and BASF Corporation. H2O America is entitled to a portion of the settlements and is monitoring and evaluating the ongoing litigation and settlement activity with the PFAS manufacturers for potential impacts to the various claims that these utility subsidiaries have asserted.

For the three and nine months ended September 30, 2026, the Company received cash proceeds of $0.1 million and $11.1 million , respectively, from legal settlements with Tyco Fire Products LP, BASF Corporation, and 3M Company related to PFAS contamination. For the three months ended September 30, 2026, the total proceeds of $0.1 million received were allocated wholly to MWC, a portion of which is payable to contract operators. For the nine months ended September 30, 2026, the total proceeds of $11.1 million were allocated as follows: SJWC received $7.4 million; CWC received $3.5 million; and MWC received $0.2 million, which includes $0.1 million payable to contract operators.

For the three and nine months ended September 30, 2025, the Company received cash proceeds of $14.7 million and $21.2 million, respectively, in connection with a legal settlement with 3M Company related to PFAS contamination. For the three months ended September 30, 2025, the total proceeds of $14.7 million were allocated as follows: SJWC received $10.0 million; CWC received $4.6 million; and MWC received $0.1 million. For the nine months ended September 30, 2025, the total proceeds of $21.2 million were allocated as follows: SJWC received $14.5 million; CWC received $6.5 million; and MWC received $0.2 million, which includes $0.1 million payable to contract operators.

As of September 30, 2026, the Company has received aggregate cash proceeds of $36.2 million from MDL court approved settlements. The proceeds have been allocated as follows: SJWC received $24.4 million; CWC received $11.1 million; and MWC received $0.7 million, which includes $0.5 million payable to contract operators. The proceeds are compensatory in nature and are intended to compensate the Company for costs incurred, or to be incurred, to address the presence of PFAS compounds in public water supply systems or to be refunded to customers through rate reductions, and have been recorded as a regulatory liability subject to regulatory approval.

H2O America is entitled to receive additional cash proceeds from 3M Company in the subsequent seven years, pursuant to the terms of the settlement agreement. The total estimated proceeds to be received during this period are approximately $5.6 million.

H2O America is monitoring and evaluating the ongoing litigation and settlement activity with the PFAS manufacturers for potential impacts to the various claims that these utility subsidiaries have asserted.

Note 7.Benefit Plans

H2O America maintains noncontributory defined benefit pension plans for its eligible employees. SJWC employees hired before March 31, 2008 and CWC and MWC employees hired before January 1, 2009 are entitled to benefits under the pension plans based on the employee’s years of service and compensation. For SJWC employees hired on or after March 31, 2008, benefits are determined using a cash balance formula based upon compensation credits and interest credits for each employee. Starting in 2023, TWC employees are also eligible to participate under SJWC’s cash balance plan. Certain employees hired before March 1, 2012, and covered by a plan merged into the CWC plan in 2013 are also entitled to benefits based on the

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SEPTEMBER 30, 2026

employee’s years of service and compensation. CTWS employees hired on or after January 1, 2009, are entitled to an additional 3.0% of eligible compensation to their company sponsored savings plan. H2O America does not have multi-employer plans.

In addition, senior management hired before March 31, 2008, for SJWC and January 1, 2009 for CWC, are eligible to receive additional retirement benefits under supplemental executive retirement plans and retirement contracts. SJWC’s senior management hired on or after March 31, 2008, are eligible to receive additional retirement benefits under SJWC’s Cash Balance Executive Supplemental Retirement Plan. The supplemental retirement plans and Cash Balance Executive Supplemental Retirement Plan are non-qualified plans in which only senior management and other designated members of management may participate. H2O America also provides health care and life insurance benefits for retired employees under employer-sponsored postretirement benefits that are not pension plans.

The components of net periodic benefit costs for the defined benefit plans and other postretirement benefits are as follows:

In 2026, H2O America expects to make required and discretionary cash contributions of up to $5.8 million to the pension plans and other postretirement benefits. For the three and nine months ended September 30, 2026, H2O America has made $0.7 million and $4.0 million of contributions to such plans.

Note 8.Equity Plans

H2O America’s long-term incentive plan provides employees, non-employee board members or the board of directors of any parent or subsidiary, consultants, and other independent advisors who provide services to the company or subsidiary the opportunity to acquire an equity interest in H2O America. In addition, shares are issued to employees under H2O America’s Employee Stock Purchase Plan (“ESPP”).

As of September 30, 2026, 270,852 shares are issuable upon the vesting of outstanding restricted stock units and deferred restricted stock units and an additional 796,651 shares are available for award issuances under the long-term incentive plans.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2026

A summary of compensation costs charged to income, by award type, and proceeds from the ESPP, are presented below:

Restricted Stock and Deferred Restricted Stock

For the three months ended September 30, 2026, H2O America granted 2,468 restricted stock awards with a weighted average grant date fair value per unit of $58.28, which consisted of 1,480 three-year service-based restricted stock awards and 988 target units of three-year performance-based restricted stock awards. For the nine months ended September 30, 2026, H2O America granted 136,424 restricted stock awards with a weighted average grant date fair value per unit of $49.53, which consisted of 64,128 three-year service-based restricted stock awards and 72,296 target units of three-year performance-based restricted stock awards. Based upon actual attainment relative to the target performance metric, the number of shares issuable can range between 0% to 150% of the target number of shares.

For the three months ended September 30, 2025, H2O America granted 31,771 two-year and three-year service-based restricted stock awards with a weighted average grant date fair value per unit of $45.81 and 18,744 target units of performance-based and market-based restricted stock awards with a weighted average grant date fair value per unit of $51.47. For the nine months ended September 30, 2025, H2O America granted 98,085 one-year, two-year, and three-year service-based restricted stock awards with a weighted average grant date fair value per unit of $46.17 and 76,952 target units of performance-based and market-based restricted stock awards with a weighted average grant date fair value per unit of $51.80. Based upon actual attainment relative to the target performance metric, the number of shares issuable can range between 0% to 150% of the target number of shares for performance-based restricted stock awards and 0% to 200% of the target number for market-based restricted stock awards.

As of September 30, 2026, the total number of outstanding restricted stock awards and deferred restricted stock awards was 297,884 and the total number of shares vested but not issued was 27,032. As of September 30, 2026, unrecognized compensation costs related to restricted and deferred restricted stock plans were $9.6 million. This cost is expected to be recognized over a weighted average period of 1.2 years.

Note 9.Segment Reporting

H2O America’s single reportable segment provides water utility and utility-related services to its customers through H2O America’s subsidiaries, SJWC, CWC, TWC, MWC, and Acequia, which are aggregated and referred to as “Water Utility Services.” Water Utility Services’ activities are water utility operations with both regulated and non-tariffed businesses. Other business activities that do not comprise separately reportable segments primarily include SJWC’s City of Cupertino service concession arrangement operations, property management and investment activity conducted by H2O America Land Company and Chester Realty, Inc., contract water and sewer operations and other water-related services provided by NEWUS and are referred to as “Other Services.”

H2O America’s operating segments have been determined based on information used by the chief operating decision maker. H2O America’s chief operating decision makers (“CODM”) include the Chief Executive Officer and Chair of the Board; the Chief Financial Officer and Treasurer; the President and Chief Operating Officer; and the Vice President and General Counsel. However, ultimate decision-making authority rests with the Chief Executive Officer. The CODM reviews financial information presented on a consolidated basis that is accompanied by certain disaggregated information about operating revenue, expenses, net income, and total assets. The CODM uses net income to assess the financial performance of the segments and allocate resources (including employees, financial, or capital resources) in the budgeting and forecasting process.

Previously, H2O America presented a separate reportable segment for Real Estate Services and also presented a disaggregation of regulated and non-tariffed activities within the Water Utility Services reportable segment. Under the current presentation, the activities of Water Utility Services previously presented as “non-tariffed” are generally presented as “Other Services” along

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2026

with the real estate activity. Certain allocated assets, such as goodwill, revenue and expenses have been included in the reportable segment amounts. Certain corporate costs and expenses are not allocated to Water Utility Services or Other Services and are shown separately to reconcile to the applicable consolidated amounts.

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2026

______________________________

(1)    The “Other Services” category includes the accounts of H2O America Land Company, Chester Realty, Inc., SJWC’s Cupertino service concession arrangement operations, TWOS, TWR, and NEWUS, on a stand-alone basis.

(2)    The “Unallocated Corporate” category includes the accounts of H2O America, H2O America NE LLC, H2O America TX Holdings, Inc., CTWS, NWU, and Risk Solutions on a stand-alone basis.

(3)    Primarily comprised of pension non-service credit (cost) and items of miscellaneous non-operating income (expense).

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2026

H2O America’s assets for the Water Utility Services reportable segment and all other are as follows:

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NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2026

Note 10.Acquisitions

Quadvest acquisition

On July 7, 2025, the Company, and its indirect subsidiary, TWC, entered into an asset purchase agreement (the “Regulated Business APA”) with Quadvest, L.P. (“Quadvest Retail”), pursuant to which, and subject to the terms and conditions set forth therein, Quadvest Retail agreed to sell, and TWC agreed to acquire, substantially all of the assets of Quadvest Retail’s regulated water and wastewater utility operations for a base price of $483.6 million, subject to certain post-closing adjustments.

Concurrently, on July 7, 2025, the Company and its indirect subsidiaries, TWOS and TWC (together with the Company and TWOS, the “Purchasers”), entered into another asset purchase agreement (the “Wholesale Business APA”) with Quadvest Wholesale, LLC (“Quadvest Wholesale”) pursuant to which, TWOS agreed to acquire substantially all of the assets of Quadvest Wholesale’s wholesale water and wastewater operations for a base amount of $56.4 million, subject to certain post-closing adjustments.

On July 9, 2025, TWC filed a request with the Public Utility Commission of Texas (the “PUCT”) to use Fair Market Value (“FMV”) to support its acquisition of Quadvest Retail. On August 7, 2025, the PUCT appointed three appraisers to determine the FMV. In December 2025, TWC received the appraised FMV from the PUCT-appointed appraisers for the assets of Quadvest Retail. In accordance with Texas’ FMV statute, the purchase price of $483.6 million will serve as the ratemaking rate base.

On October 1, 2026, the Company completed the acquisitions of substantially all of the assets of Quadvest Retail’s regulated water and wastewater utility operations and substantially all of the assets of Quadvest Wholesale’s wholesale water and wastewater operations (collectively, the “Quadvest Acquisitions”). The aggregate cash consideration transferred at closing was approximately $542.7 million, consisting of $480.9 million related to Quadvest L.P. and $61.8 million related to Quadvest Wholesale LLC. The acquisitions expanded the Company's regulated and wholesale water and wastewater utility operations within the greater Houston metropolitan area and are expected to provide opportunities for long-term customer growth, operational efficiencies, and geographic expansion within Texas.

The Company determined that both acquisitions represent business combinations under ASC 805, Business Combinations, as the acquired assets include inputs and substantive processes capable of generating outputs. Certain disclosures required by ASC 805 related to these acquisitions have been omitted because the information necessary to complete the required disclosure is not yet available due to the timing of the acquisitions relative to the issuance of these financial statements.

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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

(Dollar amounts in thousands, except per share amounts and where otherwise noted)

The information in this Item 2 should be read in conjunction with the financial information and the notes thereto included in Item 1 of this Form 10-Q and the condensed consolidated financial statements and notes thereto and the related “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in H2O America’s Annual Report on Form 10-K for the year ended December 31, 2025.

This report contains forward-looking statements within the meaning of the federal securities laws relating to future events and future results of H2O America and its subsidiaries that are based on current expectations, estimates, forecasts, and projections about H2O America and its subsidiaries and the industries in which H2O America and its subsidiaries operate and the beliefs and assumptions of the management of H2O America. Actual results may differ materially from those currently anticipated and expressed in such forward-looking statements as a result of a number of factors. For more information about such forward-looking statements, including some of the factors that may affect our actual results, please see our disclosures under “Forward-Looking Statements,” and elsewhere in this Form 10-Q, including Part II, Item 1A under “Risk Factors” as well as the disclosures under Part I, Item 1A in H2O America’s Annual Report on Form 10-K for the year ended December 31, 2025 under “Risk Factors.”

General:

H2O America is a holding company whose primary business involves ownership of public utilities that provide water and wastewater services, including the production, purchase, storage, purification, distribution, wholesale and retail sale of water. The water utility business of H2O America is conducted through the following wholly owned subsidiaries: San Jose Water Company (“SJWC”), The Connecticut Water Company (“CWC”), The Maine Water Company (“MWC”), and SJWTX, Inc. doing business as The Texas Water Company (“TWC”). As of September 30, 2026, these subsidiaries provide water service to approximately 409,000 water and wastewater service connections and serve a combined population of over 1.6 million people in California, Connecticut, Maine and Texas. Water utility services provided by these businesses are subject to regulation by the applicable state public utility commissions. These subsidiaries also engage in non-tariffed operations that are not subject to public utility commission regulation, including contract water and sewer operations, maintenance agreements, and antenna site leases.

Together, SJWC, excluding the City of Cupertino (“Cupertino”) service concession arrangement operations, CWC, MWC and TWC are referred to as “Water Utility Services,” which is our single reportable segment.

Other business activities that are not separately reportable segments are SJWC’s Cupertino service concession arrangement operations, Texas Water Operation Services, LLC (“TWOS”), Texas Water Resources, LLC (“TWR”), New England Water Utility Services, Inc. (“NEWUS”), H2O America Land Company and Chester Realty, Inc. and are collectively referred to as “Other Services.”

Business Strategy for Water Utility Services:

H2O America focuses its business initiatives in three strategic areas:

(1)Investing in regional regulated water utility operations to support the health, safety and quality of life of our customers;

(2)Regional non-tariffed water utility-related services provided in accordance with the guidelines established by applicable state public utility commissions; and

(3)Out-of-region water and utility-related services.

As part of our pursuit of the above three strategic areas, we consider from time to time opportunities to acquire businesses and assets. However, we cannot be certain we will be successful in identifying and consummating any strategic business combinations or acquisitions relating to such opportunities. In addition, the execution of our business strategy will expose us to different risks than those associated with the current utility operations. We expect to incur costs in connection with the execution of this strategy and any integration of an acquired business could involve significant costs, the assumption of certain known and unknown liabilities related to the acquired assets, the diversion of management’s time and resources, the potential for a negative impact on our financial position and operating results, entering markets in which we have no or limited direct prior experience, and the potential loss of key employees of any acquired company. Any strategic combination or acquisition we decide to undertake may also impact our ability to finance our business, affect our compliance with regulatory requirements, and impose additional burdens on our operations. Any businesses we acquire may not achieve sales, customer growth, and projected profitability that would justify the investment. Any difficulties we encounter in the integration process, including the

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integration of controls necessary for internal control and financial reporting, could interfere with our operations, reduce our operating margins, and adversely affect our internal controls. H2O America cannot be certain that any transaction will be successful or that it will not materially harm operating results or our financial condition.

As previously disclosed, on October 1, 2026, H2O America, through its indirect subsidiary, TWC, completed the acquisition of substantially all of the assets of Quadvest, including the assets of Quadvest, L.P. and Quadvest Wholesale LLC. The aggregate cash consideration transferred at closing was approximately $542.7 million, consisting of $480.9 million related to Quadvest L.P. and $61.8 million related to Quadvest Wholesale LLC. Please see Note 10 “Acquisitions” for further discussion. On the completion of these acquisitions, Quadvest brings operational scale, a strong development pipeline, and increased exposure to one of America’s fastest growing regions, Houston, TX. Quadvest brings a strong legacy of local relationships and reliable service. It has been providing water and sewer service in Southeast Texas for nearly 50 years through its operating entities.

Critical Accounting Estimates:

The discussion and analysis of our financial condition and results of operations is based on the accounting estimates used and disclosed in our 2025 consolidated financial statements and accompanying notes that were prepared in accordance with accounting principles generally accepted in the United States of America and included as part of our Annual Report on Form 10-K for the year ended December 31, 2025, that was filed with the Securities and Exchange Commission on February 26, 2026.

Our critical accounting estimates are described in Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2025. Our significant accounting policies are described in the notes to the 2025 consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2025. There have been no changes to critical accounting estimates or significant accounting policies during the three and nine months ended September 30, 2026.

New Accounting Pronouncements:

See Note 1 “General” for a discussion of new accounting pronouncements.

Results of Operations:

Water sales are seasonal in nature and are influenced by weather conditions. The timing of precipitation and climatic conditions can cause seasonal water consumption by customers to vary significantly. Due to the seasonal nature of the water business, the operating results for interim periods are not indicative of the operating results for a 12-month period. Revenue is generally higher in the warm, dry summer months when water usage and sales are greater, and lower in the winter months when cooler temperatures and increased precipitation curtail water usage and sales.

Overview

H2O America’s financial results and highlights include:

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Operating Revenue

H2O America has a single reportable segment, referred to as “Water Utility Services.” All other business activities not separately reportable are included in “Other Services.” Operating revenue for the Water Utility Services reportable segment and Other Services was as follows:

The change in consolidated operating revenue was due to the following factors:

____________________

(1)    Consists of rate increases specifically associated with changes in the water supply costs that are passed through to customers.

(2)    Primarily associated with general rate cases and related annual escalation adjustments, infrastructure surcharges, and cost of capital adjustments.

(3)    Excludes portion attributable to rate increases, which are shown in the rate increase lines above.

Operating Expense

Operating expense is summarized below: