Oct 27, 2026 earnings call — Quadvest acquisition and guidance update
Company closed Quadvest acquisition and narrowed standalone 2026 adjusted diluted EPS guidance to $3.10-$3.16 per share.
Revenue $0.3B (est $0.3B) · EPS $1.04 (est $1.06)
Key quotes
"Before I ask Ann to discuss our financial results in more detail, for those people on this call that do not yet know, I am very excited to announce that we closed on the purchase of Houston, Texas-based Quadvest at the beginning of this month."
"A proposed decision is anticipated in mid-December, and a final decision is slated for late January."
"Our narrowed standalone 2026 adjusted diluted EPS guidance range of $3.10-$3.16 preserves the $3.13 midpoint."
Analyst Q&A 5
Texas rate case timing and CapEx
Q (Andrew Kadavy · Wells Fargo): Why did the Texas GRC filing move from early 2027 to H1 2027? Also, which states drive the lower 2026 CapEx and why?
A: Management said the filing timing shifted because the timing of acquisitions changed and the company needs more documentation to file a robust case; they closed Quadvest on 10/1 and expect to close Cibolo on 11/2. They said the lower 2026 CapEx is primarily in Texas because more CapEx was developer-funded and the company-funded spending will shift later in the five-year plan.
"We originally said early 2027, and we were expecting a mid-2026 close for those Texas acquisitions." — Bruce Hauk (COO)
2027 dilution drivers and CA water projects
Q (Ross Fowler · BofA): What will drive 2027 dilution toward the high or low end of the 10%-20% range? Any update on California water supply and timing?
A: They said timing matters — a full year of Quadvest operations and a full year of stepped-up depreciation will increase dilution next year. On California water supply, management said progress is being made, partners are being lined up, and the next step is the pilot project that will start next year; they cautioned this is a medium- to long-term effort.
"So timing has a lot to do with it, and we will have a full year of Quadvest operations as well as the dilution in our results for next year." — Ann Kelly (CFO)
Connecticut settlement and Quadvest depreciation
Q (Angie Storozynski · Seaport Research Partners): Why was there no settlement in Connecticut, and what is the depreciation impact from Quadvest starting in Q4?
A: Management declined to discuss settlement talks and said only that a proposed decision is anticipated in mid-December with a final decision in January and rates effective February 2027. They also said because they follow regulatory accounting, any depreciation in the fourth quarter becomes a regulatory asset and the depreciation impact is really seen starting next year.
"As it relates to settlement discussions, we are not able to discuss anything regarding that." — Bruce Hauk (COO)
Texas rate case approach and housing risk
Q (Alex Kania · BTIG): How will you balance fair market rate base and affordability in the Texas rate case? Also, any views on growth sensitivity from the interest rate and housing environment?
A: They said affordability is a major focus and they will seek an affordability tariff and ratepayer assistance in Texas, while also highlighting investments in Hill Country resiliency and water supply and bringing the acquisitions into rate base. On growth risks, they said interest rates and the housing market are risks but noted resilience in the Houston market and that they try to stagger rate cases across jurisdictions.
"We have been looking at affordability for a long time, and we are proud of the fact that all of our rates across our entire jurisdiction are lower than 1% as a percent of median household income." — Bruce Hauk (COO)
Regulatory approach and financing outlook
Q (Davis Sunderland · Baird): Will the tougher regulatory pushback change your long-term approach, and what is your financing plan given the later Quadvest close?
A: Management said they try to stagger rate cases but sometimes timing of investments forces filings; they emphasized the Hill Country investments improve supply and reduce risk. On financing, they said they raised $700 million in equity earlier this year which gave flexibility on the timing of debt issuance and allowed them to draw down the forward more than originally anticipated to help fund the acquisition.
"What that did is it really provided us with the flexibility in terms of the timing of when to issue debt for the transaction." — Ann Kelly (CFO)