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ARTESIAN RESOURCES CORP (ARTNA)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered solid top- and bottom-line growth: revenue $25.9M (+5.5% YoY) and diluted EPS $0.53 (+23%) on net income of $5.4M, driven by higher consumption, a 1.66% DSIC in Delaware, and customer growth .
  • Results exceeded S&P Global consensus: EPS $0.53 vs $0.35* and revenue $25.9M vs $25.0M*, a clear fundamental beat despite seasonal revenue moderation vs Q4.
  • Regulatory actions set the near-term narrative: filed for a 10.75% incremental base-rate increase (annualized ~$9.4M), plus a 1.22% temporary rate request effective June 3; signed a new electric supply contract with ~25% higher rates, implying ~$0.5M annual cost headwind from May 2025 .
  • Capital deployment continued: $10.4M capex in Q1 to upgrade mains, storage, metering and wastewater facilities; dividend raised 2% to $0.3074 quarterly (annualized $1.2296), the 130th consecutive dividend .
  • Stock reaction catalysts: visible EPS/revenue beat, dividend increase, and the outcome/timing of Delaware PSC rate relief to offset PFAS treatment and energy inflation .

Note: Values with an asterisk (*) are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Delivered YoY growth with operating leverage: revenue +5.5% YoY to $25.9M; diluted EPS +23% to $0.53, supported by consumption gains, DSIC, and customer adds .
  • Cost control outpaced revenue growth: operating expenses ex-D&A and income taxes rose 3.1% vs 5.5% revenue growth; utility Opex +3.1% despite higher purchased power and water, as supply/treatment and payroll/benefits declined .
  • Management tone constructive: “Our strong financial results for the quarter are the result of our commitment to superior service… and continued focus on managing increasing cost pressures associated with meeting more stringent water quality standards,” said President & CEO Nicki Taylor .

What Went Wrong

  • Energy inflation headwind: new electric supply contract effective May 2025 raises rates ~25% and adds ~$0.5M annual expense; management explicitly cited this and PFAS treatment costs as drivers for rate relief .
  • Need for base-rate increase underscores margin pressure: filed to reset DSIC to 0.0% and embed investments/operating costs in base rates (10.75% incremental), highlighting rising cost structure and continued capex needs .
  • Seasonal revenue moderation vs Q4 and lower margin vs Q3 peak: Q1 revenue $25.9M vs Q4 $26.9M and Q3 $29.1M; EBITDA margin was below Q3 peak though improved vs Q4 at 41.5%* (Q4: 38.8%, Q3: 48.8%) .

Note: Values with an asterisk (*) are retrieved from S&P Global.

Financial Results

Headline P&L vs prior quarters

MetricQ3 2024Q4 2024Q1 2025
Revenue ($M)$29.142 $26.850 $25.886
Operating Income ($M)$8.590 $5.645 $5.546
Net Income ($M)$6.813 $3.845 $5.435
Diluted EPS ($)$0.66 $0.37 $0.53

Profitability metrics

MetricQ3 2024Q4 2024Q1 2025
EBITDA ($M)$14.233*$10.428*$10.754*
EBITDA Margin %48.84%*38.84%*41.54%*
EBIT Margin %37.56%*25.98%*28.58%*
Net Income Margin %23.38%*14.32%*21.00%*

Note: Values with an asterisk (*) are retrieved from S&P Global.

Revenue composition (Q1 2025 vs prior year)

Revenue Component ($M)Q1 2024Q1 2025
Water sales$19.825 $20.687
Other utility operating revenue$3.015 $3.358
Non-utility revenue$1.704 $1.841
Total Revenue$24.544 $25.886

Drivers: water sales +4.3% from higher consumption, 1.66% DSIC effective Jan 1, 2025, and customer growth; other utility +11.4% on wastewater growth; non-utility +8.0% on SLPP .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Delaware base-rate case (incremental increase)Annualized upon approvalN/A+10.75% (~$9.4M) requested; DSIC 1.66% resets to 0.0% at implementationRaised (rate relief filing)
Temporary rate increaseEffective June 3, 2025 (proposed)N/A+1.22% temporary increase (~$1.2M annual) petitionedNew (pending DEPSC approval)
Electric supply costsMay 2025–May 2029N/ANew supply contract: +25% rate; +$0.5M annual expenseHeadwind
Dividend per share (quarterly)Payable May 27, 2025N/A$0.3074; annualized $1.2296Raised 2%

Notes: Company does not provide explicit revenue/EPS guidance; outlook framed via rate relief and cost trajectory (energy, PFAS treatment) .

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was available in our library; themes below draw from company press releases for Q3 2024, Q4 2024, and Q1 2025.

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Regulatory/rateDEPSC rate case resolved in 2024; revenues benefited from rate action Year-end commentary: ongoing investments require timely recovery in rates Filed to increase base rates +10.75%; temporary +1.22% petitioned Increasing focus on rate recovery
Energy costsPurchased power rising; part of Opex increase Cited energy as a pressure on margins New electric contract +25% rates; +~$0.5M annual expense Worsening headwind
PFAS complianceProactive investment; ahead of regulations Continued investment to meet stringent standards PFAS treatment costs cited as driver of rate relief Sustained investment need
Weather/consumptionDrier weather boosted consumption YoY N/AHigher consumption aided Q1 water sales Neutral-to-positive demand
Customer growthAdded customers supported water/wastewater revenues Customer growth noted in 2024 Continued growth supporting water and wastewater revenues Positive
Capex/infrastructure$30.9M YTD capex through Q3; mains, metering, wastewater $45.9M 2024 capex $10.4M Q1 2025 capex for water/wastewater infrastructure Continued execution

Management Commentary

  • “Our strong financial results for the quarter are the result of our commitment to superior service to all customers and continued focus on managing increasing cost pressures associated with meeting more stringent water quality standards.” — Nicki Taylor, President & CEO .
  • “Although we are reporting strong first quarter results, the significant increase in electric supply costs… and increased costs to treat for PFAS… compel the request for rate relief.” — Nicki Taylor .
  • “Our 2024 financial results benefitted from settlement… However, on-going needed investments in infrastructure and rising costs… continue to pressure our operating margins. The continued provision of reliable service… is expected to necessitate timely filing for and recovery of needed investments… in rates.” — CFO David Spacht (year-end context) .

Q&A Highlights

  • No Q1 2025 earnings call transcript was found; therefore, no Q&A details or analyst follow-ups were available after comprehensive searches of filings and press releases [ListDocuments showed no transcript; see 18, 19, 17, 24, 27, 43].

Estimates Context

MetricQ1 2025 ActualQ1 2025 S&P Global Consensus# of Estimates
Revenue ($M)$25.886 $25.000*1*
Diluted EPS ($)$0.53 $0.35*1*
  • Result: Revenue and EPS both beat consensus; magnitude of EPS beat: +$0.18; revenue beat: +$0.886M.
    Note: Values with an asterisk (*) are retrieved from S&P Global.

KPIs and Balance Sheet Highlights

KPIQ1 2025Prior Period/Context
Capex ($M)$10.4 (Q1 2025) Ongoing upgrades to mains, storage tanks, metering, wastewater facilities
AFUDC ($M)$0.566 (Q1 2025) $0.285 (Q1 2024)
DSIC (Delaware)1.66% effective Jan 1, 2025 Resets to 0.0% upon new base rates
Proposed temporary rate+1.22% effective June 3, 2025 (petitioned) ~$1.2M annual revenue uplift
Base-rate filing+10.75% incremental (~$9.4M annual) Supports PFAS treatment, energy, labor/benefits, capex
Electric supply costs+25% rate from May 2025; +$0.5M annual expense Applies to water and wastewater subsidiaries
Utility plant, net ($M)$756.688 (Mar 31, 2025) $747.186 (Dec 31, 2024)
Dividend$0.3074 quarterly; $1.2296 annualized 130th consecutive dividend

Clear Implications

  • Near-term estimate revisions: Street likely raises near-term EPS on the Q1 beat, but may temper out-year margins pending DEPSC rate relief to offset the ~$0.5M annual energy headwind and PFAS costs .
  • Regulatory cadence is pivotal: Approval timing and ultimate size of base-rate relief (and any interim temporary rates) will drive visibility on 2H25/2026 margins and free cash flow .
  • Dividend signal: Continued 2% semi-annual increases underscore management’s confidence in rate recovery and stable cash flows despite cost inflation .

Financial Tables (Detail)

Operating detail (select line items)

Metric ($M)Q3 2024Q4 2024Q1 2025
Water sales$24.092 $21.661 $20.687
Other utility operating revenue$3.358 $3.467 $3.358
Non-utility revenue$1.692 $1.722 $1.841
Utility operating expenses$12.125 $13.535 $12.324
Depreciation & amortization$3.287 $3.452 $3.357
Property & other taxes$1.572 $1.615 $1.686
State & federal income taxes$2.355 $1.334 $1.851
Interest charges$2.193 $2.245 $2.166

Seasonality context (quarterly)

  • Q3 typically strongest on consumption; Q1/Q4 shoulder quarters show lower revenue vs Q3; DSIC and base-rate actions help smooth YoY comps .

Key Takeaways for Investors

  • Q1 beat on both EPS and revenue vs S&P Global consensus; operating disciplines + DSIC and demand supported results despite cost pressures .
  • Energy/PFAS costs are the swing factors; management has already petitioned for both temporary and base-rate relief to offset these headwinds .
  • Expect rate-case milestones (temporary rates and final order) to be key catalysts for the stock; approval magnitude/timing directly impacts margin trajectory and FCF.
  • Dividend growth (2% increase) and continued capex underscore a regulated compounder profile; regulatory execution will determine pacing of EPS/dividend growth .
  • EBITDA margin improved vs Q4 (41.5%* vs 38.8%) and remains below Q3 seasonal peak; watch for consumption and weather into Q2–Q3 and any interim rate relief to sustain margins.
  • Balance sheet/investment: utility plant rose to $756.7M at 3/31/25; AFUDC increased, reflecting elevated construction activity that should enter rate base over time .
  • Setup: constructive near-term with the beat and dividend increase; medium-term hinges on DEPSC outcomes and pass-through of energy/PFAS costs to preserve margins and ROE .

Note: Values with an asterisk (*) are retrieved from S&P Global.