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NN

Northwest Natural Holding Co (NWN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 results were seasonally weak but broadly in line operationally: GAAP EPS was a loss of $0.73 vs. a loss of $0.71 a year ago, while operating revenues rose 20% YoY to $164.7M; management reiterated expectations to finish FY25 above the midpoint of adjusted EPS guidance $2.75–$2.95 .
  • Against S&P Global consensus, EPS beat (−$0.73 vs. −$0.826*), EBITDA beat ($35.6M* vs. $29.3M*), but revenue missed ($164.7M vs. $175.0M*); similar pattern in Q2: EPS beat, revenue missed, EBITDA beat *.
  • Regulatory catalysts: Oregon general rate case order approved with 9.5% ROE; new rates effective Oct 31; multi-year Washington rate case filed (three-year plan) .
  • Strategic growth: SiEnergy continues to hit financial targets and expanded its contracted backlog to >240,000 future meters; water utility growth supported by new Arizona rates and 2024 ICH acquisition .
  • Capital and dividend: YTD capex ~$333M; $185M inaugural SiEnergy bonds; quarterly dividend raised to $0.4925 (70th consecutive annual increase); CFO said equity ATM is done for 2025 with less issuance than initially planned .

What Went Well and What Went Wrong

What Went Well

  • Constructive Oregon outcome and rate implementation: OPUC order increased revenue requirement by $20.7M with 9.5% ROE, ~7.12% WACC; new rates effective Oct 31, 2025—supporting utility margin .
  • Texas growth engine: “SiEnergy posted a sizable increase to its customer backlog and now has signed contracts representing over 240,000 future meters,” with margin and net income trending to plan .
  • Water utility momentum: New Arizona rates and ICH tuck-in drove NWN Water Q3 net income up to $4.7M (from $2.6M), +$2.1M YoY; operating revenues +$3.2M; operating expenses stable .
  • Management tone: “We are expecting full-year 2025 results to be above the midpoint of our adjusted earnings range of $2.75–$2.95,” underscoring execution confidence .

What Went Wrong

  • Higher interest expense weighed on “Other”: Q3 loss in Other widened by $5.8M YoY, primarily from higher interest expense after March 2025 junior subordinated notes; similar headwind YTD .
  • O&M and depreciation inflation: Gas utility O&M +$7.8M YoY; depreciation and general taxes +$6.4M YoY in Q3 due to system investment—partially offsetting margin gains .
  • Revenue vs consensus: Q3 operating revenue of $164.7M missed S&P Global consensus of $175.0M*, although EBITDA and EPS outperformed, pointing to regulatory margin resilience but softer top line vs. models *.

Financial Results

Consolidated results (GAAP/Non-GAAP) and operating metrics

MetricQ3 2024Q2 2025Q3 2025
Operating Revenues ($M)$136.9 $236.2 $164.7
Operating Income (Loss) ($M)$(19.3) $27.2 $(12.4)
Interest Expense, net ($M)$19.1 $30.5 $30.4
Net Income (Loss) ($M)$(27.2) $(2.5) $(29.9)
Diluted EPS (GAAP)$(0.71) $(0.06) $(0.73)
Adjusted EPS$(0.71) $0.01 $(0.73)

Actuals vs S&P Global consensus

MetricQ2 2025 Consensus*Q2 2025 ActualSurpriseQ3 2025 Consensus*Q3 2025 ActualSurprise
EPS$(0.128)*$0.01 +$0.138$(0.826)*$(0.73) +$0.096
Revenue ($M)$252.7*$236.2 −$16.5$175.0*$164.7 −$10.3
EBITDA ($M)$63.4*$77.6*+$14.2$29.3*$35.6*+$6.3
Note: Asterisked values are from S&P Global; EBITDA actuals reflect S&P’s standardized measure rather than company-reported figures.*

Segment net income (loss)

Segment ($M)Q3 2024Q3 2025YoY Change
NWN Gas Utility$(30.4) $(31.0) $(0.6)
SiEnergy Gas Utility—$1.6 +$1.6
NWN Water Utility$2.6 $4.7 +$2.1
Other$0.6 $(5.2) $(5.8)
Consolidated$(27.2) $(29.9) $(2.7)

KPIs and balance sheet highlights

KPIValue
Connections added (LTM)>95,000 across gas and water (10.9% combined growth)
Total meters (end of Q3)971,999 (806,017 NWN Gas; 86,945 SiEnergy; 79,037 Water)
YTD 2025 capital expenditures~$333M invested in gas and water systems
Liquidity~$437M available as of Sep 30, 2025; ATM done for 2025
Dividend$0.4925 per share declared; $1.97 annual rate

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
GAAP EPSFY2025$2.60–$2.80 (Q2 update) $2.59–$2.79 (Q3 update) Slightly lowered due to transaction/business development costs
Adjusted EPS (non-GAAP)FY2025$2.75–$2.95 (reaffirmed) $2.75–$2.95 (reaffirmed; expect above midpoint) Maintained; tone more constructive
CapExFY2025$450–$500M $450–$500M Maintained
Long-term EPS growth2025–20304%–6% CAGR (from 2025 adjusted base) 4%–6% CAGR (reaffirmed) Maintained
DividendOngoing$0.49 quarterly; $1.96 annual (Aug) $0.4925 quarterly; $1.97 annual (Nov) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Oregon GRCExpect new rates Nov 1; pursued constructive outcome Order approved; +$20.7M revenue, 9.5% ROE; effective Oct 31 Positive execution; in rates
Washington GRCNot highlighted in Q1/Q2 releasesFiled multi-year case (Y1 +$25.6M; Y2 +$8.6M; Y3 +$8.3M) New multi-year plan filed
Texas (SiEnergy) growthClosed SiEnergy; signed to acquire Pines/Hughes; backlog ~11–12k at acquisition Backlog now >240k future meters; HB 4384 enables real-time recovery post first rate case Strong acceleration and regulatory tailwind
Water strategyArizona rate progress; ICH acquisition benefits noted 7 rate cases completed YTD; strong Arizona contribution; expanding Texas water via developer model Scaling with constructive rate cadence
Hydrogen/energy transitionNot central in Q1/Q2 releasesHydrogen blending/pilot complete; hub funding uncertain; ready to blend if economical Cautious posture; optionality maintained
Capital & liquidityPlan to issue $65–$75M equity in 2025 (Q1); increased debt for acquisitions ~$437M liquidity; ATM done for 2025, less equity than planned; SiEnergy $185M bonds issued Lower equity needs; diversified debt funding
System reliabilityValue of gas system to meet peak load emphasized (ongoing theme) Mist storage record delivery; gas system delivered 2.5x energy of largest electric utility at peak Reinforced reliability narrative

Management Commentary

  • “We are expecting full-year 2025 results to be above the midpoint of our adjusted earnings range of $2.75–$2.95” — Justin Palfreyman, CEO .
  • “SiEnergy… now has signed contracts representing over 240,000 future meters… a strong signal that developers increasingly want to work with SiEnergy” — CEO .
  • “During our last peak event… our system delivered 2.5 times more energy than the largest electric utility in the region… comparable to about 11 nuclear power units operating at full capacity” — CEO, on system reliability and Mist storage performance .
  • “We have liquidity of approximately $437 million… issued $48 million of equity through our ATM program. At this point, we have satisfied our 2025 ATM issuance needs” — CFO .
  • “Received a constructive order… Oregon general rate case… revenue requirement increased $20.7 million… ROE of 9.5%… new rates… Oct. 31, 2025” — CEO .

Q&A Highlights

  • Equity needs: CFO confirmed the 2025 ATM program is complete, reflecting better cash generation and capital structure planning for capex; no additional equity expected this year .
  • M&A vs organic in Texas/water: CEO emphasized prioritizing organic growth using developer partnerships in TX (gas and water), with tuck-ins considered opportunistically in high-growth markets (TX, AZ, ID) .
  • Regulatory stance: Oregon commission exploring multi-year plans; company engaged as rulemaking proceeds; Washington filed for its first GRC since 2021 with a three-year structure .
  • Hydrogen pilots: Blending tests and methane pyrolysis pilot largely complete; hydrogen hubs uncertain after funding reallocation; NWN ready to blend if clean H2 becomes affordable .

Estimates Context

  • Q3 vs S&P Global consensus: EPS beat by ~$0.10, EBITDA beat by ~$6.3M, but revenue missed by ~$10.3M; similar beats on EPS/EBITDA with revenue misses in Q2 suggest regulatory-driven margin strength despite softer top-line vs models *.
  • Forward setup: Q4 consensus sits at EPS ~$1.36* and revenue ~$419.4M*, implying a typical seasonal step-up; watch for Oregon rate implementation flow-through, Texas growth, and water rate outcomes to calibrate models *.
  • Target price consensus: ~$52.75*; recommendation text not populated in the retrieved dataset.*
    Note: Asterisked values are from S&P Global.

Key Takeaways for Investors

  • Constructive regulatory progress (Oregon order in rates; Washington multi-year filing) and the Oct 31 rate effective date underpin margin durability into the heating season .
  • Pattern of EPS/EBITDA beats vs. revenue misses suggests regulated margin mechanics and cost recovery are outpacing volume/top-line assumptions—supporting near-term estimate resilience *.
  • Texas remains a multi-year growth vector: sizable contracted backlog (>240k meters) plus a favorable HB 4384 recovery framework enhances future earned ROEs post-rate case .
  • Water platform compounding: rate relief (AZ), tuck-ins (ICH), and a developer-led growth model in TX provide diversified, less seasonal earnings streams .
  • Funding mix improved: ~$437M liquidity, inaugural SiEnergy bonds, and completed 2025 ATM (less equity than planned) reduce dilution risk near term .
  • Dividend consistency (70th consecutive year) supports total return; new quarterly rate $0.4925 .
  • Near-term trading factors: confirmation of above-midpoint FY25 adjusted EPS, visible Oregon rate benefits in Q4 results, and any incremental Texas backlog updates could be catalysts .

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

Sources:

  • Q3 2025 press release and 8-K: financials, segments, guidance, Oregon/WA regulatory updates .
  • Q3 2025 additional press release details and financial statements (tables) .
  • Q3 2025 earnings call transcript: management tone, liquidity, Texas backlog, reliability narrative, Q&A .
  • Q2 2025 press release for prior-quarter trend and guidance history .
  • Q1 2025 8-K for earlier-year trend and guidance history .
  • Dividend increase announcement (Oct 9, 2025) .