NW Natural Holdings — Second Quarter 2026 Earnings Summary

Financial Performance

• Reported net income of $600 thousand ($0.01 per share) for the second quarter of 2026, compared to a net loss of $2.5 million ($0.06 per share) in the same period in 2025.
• Year-to-date net income was $98.089 million ($2.33 per share) for the six months ended June 30, 2026, compared to $85.416 million ($2.11 per share) in 2025.
• Adjusted net income for the second quarter was $600 thousand ($0.01 per share), unchanged from $315 thousand ($0.01 per share) in 2025.
• Year-to-date adjusted net income was $98.089 million ($2.33 per share) for 2026, compared to $92.118 million ($2.28 per share) in 2025.
• Operating revenues were $243.552 million for the second quarter of 2026, up from $236.194 million in 2025.
• Year-to-date operating revenues were $733.955 million for 2026, compared to $730.478 million in 2025.
• Total operating expenses were $210.395 million for the second quarter of 2026, up from $208.983 million in 2025.
• Year-to-date total operating expenses were $537.930 million for 2026, compared to $548.913 million in 2025.
• Cash provided by operating activities was $225.848 million for the first six months of 2026, down from $281.770 million in 2025.
• Capital expenditures were $234.950 million for the first six months of 2026, compared to $222.664 million in 2025.
• Cash used by investing activities was $234.976 million for the first six months of 2026, compared to $555.887 million in 2025.
• Cash used by financing activities was $2.105 million for the first six months of 2026, compared to cash provided of $332.799 million in 2025.
• Total assets were $6.442 billion as of June 30, 2026, compared to $5.787 billion in 2025.
• Long-term debt was $2.377 billion as of June 30, 2026, compared to $2.087 billion in 2025.
• Total equity was $1.559 billion as of June 30, 2026, compared to $1.459 billion in 2025.
• Common stock equity percentage was 37.3% as of June 30, 2026, compared to 38.0% in 2025.
• Long-term debt percentage was 56.8% as of June 30, 2026, compared to 54.2% in 2025.

Guidance and Future Outlook

• Full-year 2026 EPS is expected to be in the upper half of the guidance range of $2.95 – $3.15.
• Rate base growth is expected to be 6% – 8% through 2030, driven by planned capital expenditures of $2.6 – $2.9 billion from 2026 – 2030.
• Long-term EPS growth rate target is 4% – 6%, with potential to increase to 5% – 7% with the MX3 gas storage project.
• 2026 capital expenditures guidance is $500 – $550 million, compared to $467 million in 2025.
• Long-term customer growth target is 2.0% – 3.0%.
• Guidance assumes continued customer growth, average weather conditions, and no significant changes in regulatory policies or laws.

Business Segments and Product Lines

• NW Natural: Net income was $3.933 million ($0.09 per share) for the second quarter of 2026, down from $4.924 million ($0.12 per share) in 2025. Year-to-date net income was $97.682 million ($2.32 per share), up from $95.963 million ($2.37 per share) in 2025. Results were impacted by higher margin from new Oregon rates (effective Oct. 31, 2025) offset by increased O&M, depreciation, and financing costs.
• SiEnergy: Net income was $2.056 million ($0.05 per share) for the second quarter of 2026, up from $1.014 million ($0.03 per share) in 2025. Year-to-date net income was $11.146 million ($0.27 per share), up from $6.519 million ($0.16 per share) in 2025. Growth was driven by customer growth, Texas House Bill 4384 benefits, and full-quarter earnings from the Pines acquisition (June 2, 2025).
• NWN Water: Net income was $2.272 million ($0.05 per share) for the second quarter of 2026, down from $2.833 million ($0.07 per share) in 2025. Year-to-date net income was $3.703 million ($0.09 per share), down from $4.521 million ($0.11 per share) in 2025. Results reflected higher O&M expenses for growth offset by rate increases and customer growth.
• Other: Net loss was $7.661 million ($0.18 per share) for the second quarter of 2026, compared to a loss of $11.271 million ($0.28 per share) in 2025. Year-to-date net loss was $14.442 million ($0.35 per share), compared to $21.587 million ($0.53 per share) in 2025. The decrease in loss was primarily due to lower acquisition and business development expenses.
• Added nearly 18,000 gas and water utility connections over the 12 months ended June 30, 2026, for a growth rate of 1.9%.
• Total meters at period end were 987,115 (NW Natural: 809,917; SiEnergy: 95,904; NWN Water: 81,294).

Market and Competitive Landscape

• The company serves nearly one million customers across seven states.
• NW Natural is the long-standing natural gas utility serving the Pacific Northwest.
• SiEnergy is a fast-growing natural gas utility serving key Texas markets.
• NWN Water is an expanding water and wastewater utility.
• The company consistently leads the industry in J.D. Power customer satisfaction.

Risks and Challenges

• Forward-looking statements are subject to inherent uncertainties, risks, and changes in circumstances, including legal, regulatory, and legislative risks.
• Financial, macroeconomic, and geopolitical risks may impact results.
• Growth and strategic risks, operational risks, and business continuity/technology risks are factors.
• Environmental risks and risks related to water and renewables businesses are noted.
• Regulatory proceedings, rate case execution, and potential changes in laws or regulations could materially impact results.
• The MX3 gas storage project in-service date and capital expenditure requirements are subject to approval and timing uncertainties.

Management Commentary and Tone

• Justin Palfreyman, President and CEO, stated results exceeded expectations and reflected strong execution.
• Management cited consistent performance and strong first-half results, combined with increased visibility, as support for the upper-half EPS guidance.
• The tone indicates confidence that the company's strategy positions it to deliver safe, reliable, and affordable service while creating long-term value.

Other Key Points

• Received a Washington Utilities and Transportation Commission order approving a multi-party settlement in the general rate case, increasing the annual revenue requirement by $20.1 million in the first year (beginning Aug. 1, 2026), $7.5 million in the second year, and $7.4 million in the third year.
• Filed a multi-party settlement in the Oregon Alternative Rate Mechanism (ARM) docket, providing a $13.0 million increase to the annual revenue requirement (down from an original request of $15.6 million), with new rates expected to be effective Oct. 31, 2026.
• Invested $235 million in gas and water systems in the first six months of 2026 to support reliability and resiliency.
• Declared a quarterly dividend of $0.4925 per share, payable Aug. 14, 2026, to shareholders of record on July 31, 2026. The current indicated annual dividend rate is $1.97 per share.
• Acquired Pines on June 2, 2025, and SiEnergy on Jan. 7, 2025.
• Segment reporting was recast as of Q1 2026 to include gas storage and business activities previously in the "Other" segment into the "NW Natural" segment.