AI Takeaway
AWK posted Q1 FY2026 revenue of $1.20B (+6.1% YoY) driven by regulated utility growth, but net income declined 4.4% to $196M amid rising costs and a sharp surge in current liabilities that pressured the balance sheet.
Revenue
$1.2B
++6.08% YoY
EPS (Basic)
$1.00
-4.76% YoY
Operating Income
$391M
++5.39% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
AWK grew total revenue 6.1% YoY to $1.20B in Q1 FY2026 (vs. $1.13B in Q1 FY2025), consistent with the rate-base expansion typical of regulated water utilities. This growth reflects approved rate increases and continued customer additions across its service territories.
Source: Source: 10-Q Income Statement
Operating income rose 5.4% YoY to $391M, with operating margin essentially flat at 32.5% vs. 32.7% in the prior year period. This suggests AWK largely offset cost inflation through revenue increases, though margin compression of ~0.2 percentage points signals modest cost headwinds.
Source: Source: 10-Q Income Statement & Key Ratios
Despite higher operating income, net income fell 4.4% YoY to $196M (vs. $205M), and basic/diluted EPS dropped to $1.00 from $1.05. The divergence between operating income growth and net income decline points to increased interest expense or other non-operating costs, consistent with AWK's capital-intensive infrastructure investment program.
Source: Source: 10-Q Income Statement
2 more insights available
Upgrade to unlockCurrent liabilities surged 68.3% YoY to $4.12B against current assets of only $1.52B, yielding a current ratio of 0.37—well below 1.0. This indicates AWK may need to refinance or roll over significant near-term obligations, exposing it to interest rate and credit market risk. Failure to secure favorable refinancing terms could pressure earnings and cash flow.
Source: Source: 10-Q Balance Sheet
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $1.01 versus the $1.11 analyst consensus — a -9.3% miss for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $1.2B | $1.13B | +6.08% |
Operating Income | $391M | $371M | +5.39% |
Net Income | $196M | $205M | -4.39% |
EPS (Basic) | $1.00 | $1.05 | -4.76% |
EPS (Diluted) | $1.00 | $1.05 | -4.76% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $35.26B | $33.16B | +6.36% |
Current Assets | $1.52B | $1.19B | +27.64% |
Current Liabilities | $4.12B | $2.45B | +68.29% |
Stockholders' Equity | $11.04B | $10.53B | +4.78% |
Cash & Equivalents | $137M | $114M | +20.18% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $305M | $331M | -7.85% |
Investing Cash Flow | $93M | $-568M | +116.37% |
Financing Cash Flow | $-366M | $254M | -244.09% |
D&A | $237M | $216M | +9.72% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 32.5% | 32.7% | -0.21% |
Net Margin | 16.3% | — | — |
ROE | 1.8% | — | — |
ROA | 0.6% | — | — |
Current Ratio | $0.37 | — | — |
AWK reported Q1 FY2026 revenue of $1.20B, up 6.1% YoY, and operating income of $391M (+5.4%), reflecting solid regulated utility growth. However, net income declined 4.4% to $196M and EPS fell to $1.00 from $1.05, as higher below-the-line costs—likely interest expense—offset operational gains.
AWK's net income dropped 4.4% to $196M even though revenue grew 6.1% and operating income rose 5.4%, pointing to increased non-operating costs, most likely higher interest expense on its large debt portfolio. This divergence between operating and net income is a key concern for investors monitoring AWK's bottom-line trajectory.
AWK's liquidity position tightened significantly, with a current ratio of just 0.37 as current liabilities surged 68.3% YoY to $4.12B while current assets grew to only $1.52B. This likely reflects near-term debt maturities or increased short-term borrowings, and investors should monitor how management plans to refinance these obligations.
Operating cash flow declined 7.9% YoY to $305M, while investing cash flow turned sharply positive at $93M compared to -$568M in Q1 FY2025, suggesting asset sales or a timing shift in capital spending. Financing cash flow swung to -$366M from +$254M, indicating net debt repayment or reduced new borrowings during the quarter.
The most pressing risks are the sharp rise in current liabilities (up 68.3% to $4.12B), which creates near-term refinancing risk, and the growing gap between operating income and net income suggesting rising interest costs. Additionally, as a regulated utility, AWK's revenue growth depends on favorable rate case outcomes from state regulators to recover its ongoing infrastructure investment costs.