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ARTESIAN RESOURCES CORP (ARTNA)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid EPS and net income growth: diluted EPS was $0.61 vs $0.52 YoY, and net income rose 18.1% to $6.3M, driven by higher water sales, wastewater customer growth, and SLPP revenue .
  • EPS beat Wall Street consensus by $0.05 ($0.61 vs $0.56*) while revenue modestly missed ($28.55M actual vs $29.00M* consensus); coverage remains light with only one estimate for each metric* .
  • Management highlighted rate relief progress (temporary 1.22% increase effective June 3, 2025) and a new 4-year electric supply contract at ~25% higher rates, with an estimated $0.5M annual expense headwind .
  • Dividend maintained at $0.3074 per quarter ($1.2296 annualized) and paid August 25, 2025; continuity underscores commitment to shareholder returns .

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

What Went Well and What Went Wrong

What Went Well

  • EPS and net income growth: diluted EPS up 17.3% YoY to $0.61; net income up 18.1% to $6.3M, supported by water sales, wastewater customer additions, and SLPP rate-driven uplift .
  • Revenue growth: total revenues increased 4.1% YoY to $28.55M; water sales rose 2.6%, other utility (wastewater) +10.7%, non-utility (SLPP) +12.3% .
  • Management confidence and infrastructure investment: $26.3M invested YTD across water/wastewater projects; proactive PFAS mitigation initiatives and infrastructure renewal positioning for future compliance and resilience .
    • “Our proactive work to address PFAS through targeted removal initiatives…positions us to meet future regulatory standards…” — CEO Nicki Taylor .
    • “Our increased earnings this quarter reflects not only higher water sales but also the continued growth of our wastewater customer base and revenues generated by our Service Line Protection Plan offerings.” — CEO Nicki Taylor .

What Went Wrong

  • Revenue vs consensus: slight top-line shortfall ($28.55M actual vs $29.00M* consensus), indicating modest variance against expectations* .
  • Rising energy costs: new electric supply contract at ~25% higher rate from May 2025 expected to add ~$0.5M annually to expense, pressuring margins .
  • Tax and property expense headwinds: state/federal taxes +11.2% YoY; property/other taxes +5.2% YoY, reflecting higher pre-tax income, new county rates, and larger taxable plant base .

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

Financial Results

Headline Financials vs Prior Periods and Consensus

MetricQ2 2024Q4 2024Q1 2025Q2 2025Q2 2025 Consensus
Revenue ($USD Millions)$27.416 $26.850 $25.886 $28.549 $29.000*
Net Income ($USD Millions)$5.325 $3.845 $5.435 $6.290 N/A
Diluted EPS ($)$0.52 $0.37 $0.53 $0.61 $0.56*

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

Profitability and Margins

MetricQ2 2024Q4 2024Q1 2025Q2 2025
EBITDA ($USD Millions)$12.567*$10.428*$10.754*$13.432*
EBITDA Margin (%)45.84%*38.84%*41.54%*47.05%*
EBIT Margin (%)33.35%*25.98%*28.58%*35.09%*
Net Income Margin (%)19.42%*14.32%*21.00%*22.03%*

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

Segment Revenue Breakdown

Segment Revenue ($USD Millions)Q2 2024Q1 2025Q2 2025
Water sales$22.501 $20.687 $23.083
Other utility (incl. wastewater)$3.288 $3.358 $3.639
Non-utility (SLPP, etc.)$1.627 $1.841 $1.827
Total operating revenues$27.416 $25.886 $28.549

KPIs and Operating Items

KPI / Operating ItemQ2 2024Q2 2025
AFUDC ($USD Thousands)367 619
Utility operating expenses ($USD Thousands)12,179 12,505
Non-utility operating expenses ($USD Thousands)1,145 1,009
State & federal income taxes ($USD Thousands)1,945 2,163
Property & other taxes ($USD Thousands)1,524 1,603
Dividend per share (quarterly) ($)N/A0.3074

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Delaware water rates (revenue relief)2025 filingNone disclosedRequested +10.75% (~$9.4M annualized); temporary +1.22% effective Jun 3, 2025Announced/requested
Electric supply costMay 2025–May 2029Prior contractNew 4-year supply at ~25% higher rate; ~+$0.5M estimated annual expenseIncreased costs
DividendMay–Aug 2025Prior rateIncreased 2% to $0.3074 (May 27); maintained $0.3074 payable Aug 25Maintained/increased

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
Energy costsRising costs pressuring margins; set stage for rate recovery New contract ~25% above prior; ~$0.5M annual expense increase Headwind intensifying
Regulatory rate filingsCFO: ongoing investment and rising costs necessitate timely filings ; DEPSC filing for +10.75% revenue, temporary +1.22% proposed Temporary +1.22% put into effect Jun 3; broader case ongoing Progressing toward relief
PFAS/water qualityManaging increased costs to meet stringent standards Proactive PFAS removal initiatives to meet future standards Ongoing compliance effort
Customer growth (wastewater)Increase in wastewater customers supporting other utility revenue Continued growth in wastewater customer base Positive trajectory
AFUDC/construction activityQ4 AFUDC lower YoY AFUDC up with higher long-term construction activity Increasing with capex cycle

Note: No Q2 2025 earnings call transcript was available in company documents for review; themes reflect press releases and 8-K content.

Management Commentary

  • Strategy and growth: “Our increased earnings this quarter reflects not only higher water sales but also the continued growth of our wastewater customer base and revenues generated by our Service Line Protection Plan offerings.” — Nicki Taylor, Chair, President & CEO .
  • Infrastructure and PFAS: “Our proactive work to address PFAS through targeted removal initiatives…positions us to meet future regulatory standards…These investments are not only essential for compliance, but…ensure the long-term sustainability and resilience of our operations.” — Nicki Taylor .
  • Margin pressures and rate recovery: “On-going needed investments in infrastructure and rising costs, such as for energy and water treatment, continue to pressure our operating margins. … expected to necessitate timely filing for and recovery of needed investments…” — CFO David Spacht .

Q&A Highlights

  • No Q2 2025 earnings call transcript was identified in company filings or press materials; Q&A details were not available for analysis in this period.

Estimates Context

  • EPS: $0.61 actual vs $0.56* consensus; a beat of $0.05 per share (1 estimate*) .
  • Revenue: $28.55M actual vs $29.00M* consensus; a miss of $0.45M (1 estimate*) .
  • Coverage remains limited (one estimate each*), which can amplify apparent beats/misses.

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

Actual vs Consensus Table

MetricQ2 2025 ActualQ2 2025 Consensus# of Estimates
Diluted EPS ($)0.61 0.56*1*
Revenue ($USD Millions)28.549 29.000*1*

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

Key Takeaways for Investors

  • EPS beat and margin expansion underpin the quarter; EBITDA margin improved sequentially and YoY amid revenue growth and cost discipline (supported by SLPP and wastewater) .
  • Top-line modestly missed consensus amid limited analyst coverage*, but water sales, wastewater, and SLPP revenue categories showed healthy YoY growth .
  • Regulatory progress (temporary rate increase) and ongoing rate case should help offset rising energy and PFAS-related costs over time; near-term energy cost headwinds (~$0.5M annually) are credible and visible .
  • AFUDC and construction activity increased, reflecting a robust capex program; YTD capex reached $26.3M by Q2, supporting long-term asset base and service resilience .
  • Dividend continuity (131st consecutive payment; $0.3074 quarterly) reinforces defensive, income-oriented attributes .
  • Watch DEPSC proceedings and timing of permanent rates: success would be a catalyst for margin normalization; delays could prolong cost pressure .
  • Near-term trading: EPS beat vs consensus* and dividend support are positives; revenue variance and energy cost headwinds may temper momentum until regulatory outcomes are clearer.

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