Artesian Resources Corporation — Q2 2026 Earnings Summary

Financial Performance

• Diluted net income per share increased 4.9% to $0.64 for Q2 2026, compared to $0.61 in Q2 2025.
• Net income for the three months ended June 30, 2026, was $6.6 million, a 4.5% increase ($0.3 million) from the same period in 2025.
• Total revenues for Q2 2026 were $30.7 million, an increase of $2.1 million (7.4%) compared to Q2 2025.
• Water sales revenue increased $1.3 million (5.8%) in Q2 2026.
• Other utility operating revenue increased approximately $0.6 million (16.0%) in Q2 2026.
• Non-utility operating revenue increased approximately $0.2 million (10.2%) in Q2 2026.
• Operating expenses, excluding depreciation and income taxes, increased $1.2 million (7.6%) in Q2 2026.
• Utility operating expenses increased $0.9 million (7.4%) in Q2 2026, driven by payroll, benefits, supply, treatment, and administrative costs.
• Non-utility operating expenses increased $0.3 million (28.1%) in Q2 2026, primarily due to plumbing repair costs for Service Line Protection Plans.
• Depreciation and amortization expense increased $0.1 million (3.1%) in Q2 2026.
• Federal and state income tax expense increased $0.1 million (4.6%) in Q2 2026.
• Other income decreased $0.3 million in Q2 2026 due to lower allowance for funds used during construction (AFUDC).
• Interest charges increased $0.2 million in Q2 2026 due to higher borrowing levels on promissory notes.
• Diluted net income per share increased 6.1% to $1.21 for the six months ended June 30, 2026, compared to $1.14 in 2025.
• Net income for the six months ended June 30, 2026, was $12.5 million, a 6.7% increase ($0.8 million) from the same period in 2025.
• Total revenues for the six months ended June 30, 2026, were $58.4 million, an increase of $4.0 million (7.4%) compared to the same period in 2025.
• Water sales revenue increased $2.9 million (6.5%) year-to-date 2026.
• Other utility operating revenue increased approximately $0.8 million (11.3%) year-to-date 2026.
• Non-utility operating revenue increased approximately $0.4 million (9.9%) year-to-date 2026.
• Operating expenses, excluding depreciation and income taxes, increased $2.0 million (6.6%) year-to-date 2026.
• Utility operating expenses increased $1.8 million (7.1%) year-to-date 2026.
• Non-utility operating expenses increased $0.4 million (17.6%) year-to-date 2026.
• Depreciation and amortization expense increased $0.2 million (3.0%) year-to-date 2026.
• Federal and state income tax expense increased $0.3 million (7.6%) year-to-date 2026.
• Other income decreased $0.5 million year-to-date 2026 due to lower AFUDC.
• Interest charges increased $0.3 million year-to-date 2026 due to higher borrowing levels on promissory notes and lines of credit.

Business Segments and Product Lines

• Water sales revenue growth was driven by temporary rate increases permitted under Delaware law and an increase in the number of customers served.
• Other utility operating revenue growth was driven by increased industrial wastewater treatment services and additional residential and commercial wastewater customers.
• Non-utility operating revenue growth was driven by increased fees for the Service Line Protection Plan (SLP Plan) effective January 1, 2026, and an increase in participating customers.
• The company reported a 6.6% increase in wastewater customers over the past 12 months.
• Capital expenditures of $25.9 million were invested in the first six months of 2026 in water and wastewater infrastructure projects.
• Infrastructure investments included installation of new mains, services, and hydrants; rehabilitation of aging infrastructure; upgrading meter reading equipment; installation of wastewater force mains; upgrading pumping and treatment stations; PFAS treatment upgrades; and construction of new wastewater treatment plants.

Management Commentary and Tone

• Nicki Taylor, Chair, President and CEO, stated that solid financial results reflect continued growth across service territories.
• Management emphasized the unique responsibility of delivering safe drinking water, protecting the environment, and complying with evolving federal and state regulations.
• The capital program is focused on supporting long-term community needs by addressing aging infrastructure, enhancing system resiliency, and meeting regulatory obligations.

Other Key Points

• Artesian Resources Corporation operates as a holding company for subsidiaries offering water and wastewater services on the Delmarva Peninsula.
• Artesian Water Company is the principal subsidiary, described as the oldest and largest regulated water utility on the Delmarva Peninsula, providing service since 1905.
• Permanent water rates are pending determination by the Delaware Public Service Commission (DEPSC).
• The company is currently filing before the Delaware Public Service Commission regarding the recovery of investments in water utility plant and increased operating costs.
• Forward-looking statements include expectations regarding infrastructure investments, growth strategy, and ability to comply with future regulatory standards.
• Risks mentioned include changes in weather, contractual obligations, government policies, timing and results of rate requests, failure to receive regulatory approval, and changes in economic and market conditions.