American Water Works (AWK) FY2025 results: revenue $5.1 billion, up 9.7% on the year

American Water has a history dating back to 1886 and describes itself as the largest and most geographically diverse publicly-traded water and wastewater utility company in the United States, measured by both the size of its business and the population it serves. It is a holding company originally incorporated in Delaware in 1936, employing approximately 7,000 people who provide drinking water, wastewater and other related services to approximately 14 million people in 24 states. The majority of the business runs through regulated utilities that provide water and wastewater services, presented as one reportable segment, the Regulated Businesses, with other businesses serving the U.S. government on military installations and serving municipalities reported outside it.

The Regulated Businesses

The company owns utilities that provide water and wastewater services to residential, commercial, industrial, public authority, fire service and sale for resale customers. Those utilities operate in 14 states with 3.6 million active customers in their water and wastewater networks, and they are regulated by state public utility commissions, with environmental, health and safety, water quality and water accountability matters regulated by federal, state and local governments.

The filing presents its five largest states separately. Pennsylvania has 814 thousand customers, 22.8 percent of the total, New Jersey 750 thousand at 21.0 percent, Missouri 510 thousand at 14.3 percent, Illinois 376 thousand at 10.5 percent and California 196 thousand at 5.5 percent, together 2,646 thousand or 74.1 percent. The remaining 926 thousand sit across Georgia, Hawaii, Indiana, Iowa, Kentucky, Maryland, Tennessee, Virginia and West Virginia. Of the 3,572 thousand total, 3,242 thousand are water customers and 330 thousand wastewater.

Residential customers make up a substantial portion of the base in every state. The rest are commercial customers such as food and beverage providers, commercial property developers and energy suppliers; fire service customers, where water is supplied through the distribution systems to public fire hydrants and to private fire suppression systems in buildings; industrial customers such as large-scale manufacturers, mining and production operations; public authorities such as government buildings, schools and universities; and other utilities and community water and wastewater systems taking bulk contracts to supply water or treat wastewater for their own customers.

The vast majority of regulated water customers are metered and billed typically monthly, with meter reading ranging from mechanical registers recorded by hand to electronic registers that transmit consumption data to proximity devices or by radio frequency to mobile or fixed network collectors. Wastewater customers are billed either a flat rate or on their water consumption.

What it owns, and what it does not

The Regulated Businesses generally own the physical assets used to store, pump, treat and deliver water and to collect, treat, transport and recycle wastewater. Typically the company does not own the water itself. The water it treats and delivers is held in public trust and allocated to it through contracts, permits and allocation rights granted by federal, state or multi-state agencies, or through ownership of water rights under local law. Supply comes from surface water sources such as reservoirs, lakes, rivers and streams, from groundwater sources such as wells and aquifers, and from water purchased from third-party suppliers. The filing says the level of treatment applied varies significantly depending upon the quality of the water source, with surface water sources typically requiring significant treatment while groundwater sources often require chemical treatment only.

For supply planning the company uses models to determine safe yields under different rainfall and drought conditions, and monitors surface and groundwater levels routinely in an effort to predict and mitigate supply capacity deficits through demand management and additional supply development. In California, where the state has previously had multi-year droughts, it uses numerous groundwater wells in multiple aquifers along with long-term purchase agreements with regional suppliers. One named long-term project there is the Monterey Peninsula Water Supply Project, which includes building a desalination plant and wells to supply it, purchasing water from a groundwater replenishment project, and an expanded aquifer storage and recovery programme, intended among other things to fulfil an obligation to eliminate unauthorised diversions from the Carmel River under state orders.

What it plans to spend

The filing says the company plans to invest between $46 billion and $48 billion over the next 10 years for capital improvements to the Regulated Businesses' water and wastewater infrastructure, including acquisitions, largely for pipe replacement and upgrading aging treatment facilities. It has moved its pipe renewal rate from what was a 250-year replacement cycle in 2009 to less than a 150-year cycle on average over the last five years, and the filing says it anticipates reaching better than a 100-year replacement rate within the next decade, which it describes as generally viewed in the industry as a minimum benchmark for a long-term sustainable rate. The filing says that from 2026 to 2030 its capital investment in treatment plants, storage tanks and other key above-ground facilities is expected to increase.

The military business

The Military Services Group operates on 18 military installations under 50-year contracts with the U.S. government as part of its Utilities Privatization Program. The contracts generally cover the operation and maintenance of each installation's water and wastewater systems plus a capital programme focused on asset replacement and, in some cases, system expansion. Assets assumed when a contract is awarded are replaced either through a discrete set of projects in the first five years or through a long-term recapitalisation programme over the life of the contract, both traditionally funded from the contract fee. Where new assets are needed to support an installation's mission, construction has been funded by the government through separate modifications to the contract.

The proposed merger

On 26 October 2025 the parent company agreed to combine with Essential in a stock-for-stock transaction, and the filing says Essential's shareholders will receive 0.305 shares of American Water common stock for each eligible Essential share. Essential would become a wholly owned subsidiary, and American Water would keep its name and stay headquartered in Camden, New Jersey. Completion is subject to customary conditions, and the filing says the company currently estimates closing will occur by the end of the first quarter of 2027.

From American Water Works' annual report on Form 10-K for the year ended 31 December 2025. The filing

Written from the 10-K filed 18 February 2026: read the full 10-K.