H2O America 2025 Full-Year 10-K: Key Highlights and Investor Insights

Summary

H2O America (Nasdaq: HTO), formerly known as SJW Group, has released its annual 10-K report for the fiscal year ended December 31, 2025. The company, headquartered in San Jose, California, is a leading water utility holding company operating regulated subsidiaries across multiple states, including California, Connecticut, Maine, and Texas.

Key Highlights for Investors

1. Corporate Developments and Name Change

• In May 2025, SJW Group officially changed its name to H2O America, reflecting its strategic vision and national footprint.
• The company’s ticker symbol remains “HTO” on the Nasdaq Global Select Market.
• As of February 19, 2026, there were 36,164,486 shares of common stock outstanding.
• Public float as of June 30, 2025, was approximately \$1.8 billion based on market capitalization.

2. Strategic Transactions – Quadvest Acquisition

• H2O America is pursuing a significant acquisition of Quadvest, L.P. (a Texas limited partnership) and Quadvest Wholesale, LLC (a Texas limited liability company).
• Shareholder Impact: This transaction is potentially transformational and could materially affect the company’s future results, regulatory profile, and geographic diversification.
• Risks Highlighted: The company cautions that the deal may not close on the anticipated timeline (or at all), is subject to regulatory approval, and that integration risks remain, including realizing projected financial and strategic benefits.

3. Regulatory Environment and Rate Base Details

• H2O America’s subsidiaries operate under regulated rates and capital structures set by state utility commissions.
• Authorized Capital Structure (Debt/Equity) by State:
  • California: 45% debt / 55% equity
  • Connecticut: 47% debt / 53% equity
  • Maine: 42% debt / 58% equity
  • Texas: 49% debt / 51% equity
• Authorized Return on Equity (ROE):
  • California: 9.81%
  • Connecticut: 9.30%
• Estimated Rate Base at Year-End 2025 (in millions):
  • California: \$1,460.8M
  • Connecticut: \$878.2M
  • Maine: \$211.7M
  • Texas: \$148.7M
• Price Sensitivity: Changes to authorized returns or capital structure, or delays in rate cases, can materially impact earnings, cash flow, and share price.

4. Risks and Forward-Looking Statements

• H2O America’s management highlights a number of important risk factors, any of which could materially impact the company’s future performance and share price:
  • Regulatory risk: Changes in water, utility, environmental, and other governmental policies, including rates, ROE, capital expenditures, and PFAS regulation.
  • Climate risk: The effect of climate change and catastrophic events (fires, earthquakes, floods, cyber-attacks, epidemics, etc.) on water supply and operations.
  • Financial risk: The ability to secure financing on favorable terms, changes in interest rates, compliance with debt covenants, and capital markets volatility.
  • Integration risk: Especially regarding the Quadvest acquisition – challenges in regulatory approval and realizing expected synergies.
  • Operational risk: Water supply contamination, infrastructure failures, and unexpected costs or charges.
• Shareholders should be aware: These risks are not exhaustive and are detailed further in the report’s “Risk Factors” and “Management’s Discussion and Analysis” sections.

5. Regulatory Compliance and Financial Reporting

• H2O America is a large accelerated filer, subject to Section 404(b) of Sarbanes-Oxley, and has received an unqualified attestation on its internal controls from its independent auditor.
• The company is not an emerging growth company or a shell company.
• No restatements or material corrections to previously issued financial statements were reported.

6. Investor Takeaways

• The proposed Quadvest acquisition is the most potentially price-sensitive item in this report. If the deal proceeds, it could expand H2O America’s regulated footprint in Texas and boost long-term earnings and diversification. Investors should closely monitor updates on the status of this transaction.
• Regulatory outcomes, including rate cases and ROE decisions in California, Connecticut, Maine, and Texas, remain critical drivers of financial performance.
• Broad market and economic conditions, climate and catastrophic event risks, and water quality issues could all have material impacts on H2O America’s share value.

Conclusion

H2O America’s 2025 10-K underscores the company’s ongoing transformation, regulatory focus, and pursuit of disciplined growth through acquisition. The pending Quadvest deal is particularly noteworthy and could be a catalyst for share price movement, subject to regulatory and integration risks. Shareholders are encouraged to review the full “Risk Factors” and “Management’s Discussion and Analysis” sections for further details.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a solicitation to buy or sell securities. Investors should conduct their own due diligence and consult with professional advisors before making investment decisions. The information was compiled from H2O America’s 2025 10-K and is believed to be accurate as of the publication date, but is subject to change without notice.