The following management’s discussion and analysis of financial condition and results of operations should be read in conjunction with our audited Consolidated Financial Statements included elsewhere in this annual report. The Consolidated Financial Statements included elsewhere in this annual report have been prepared in accordance with IFRS Accounting Standards. This annual report contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including, without limitation, those set forth in “Item 3.D. Risk Factors.” In the following discussion, references to increases or decreases in any period are made by comparison with the corresponding prior period, except as the context otherwise indicates. All financial information for the years ended December 31, 2025, 2024, and 2023 was prepared on a consolidated basis. 66 Table of Contents A. Operating Results As of December 31, 2025, we operated water and sewage systems in the State of São Paulo, including in the city of São Paulo, Brazil’s largest city. Our operations extended into a total of 375 municipalities, or 58% of all municipalities in the state. We also provided water services on a wholesale basis to two municipalities located in the São Paulo metropolitan region in which we did not operate water distribution systems. Our capital expenditure program is our most significant liquidity and capital resource requirement. Since December 11, 2023, we have provided water and sewage services in Olímpia through our wholly-owned subsidiary Sabesp Olímpia S.A. As a result, we began presenting our financial information on a consolidated basis starting with our 2023 Consolidated Financial Statements. Prior to that date, we did not have any subsidiaries whose results we consolidated on a line-by-line basis. Factors Affecting our Results of Operations General Factors Affecting our Business Our results of operations and financial condition are generally affected by our ability to raise tariffs, control costs and improve productivity, general economic conditions in Brazil and abroad, climate conditions, impacts of regulation for sanitation services, global and local catastrophes and health epidemics, and extreme weather events. In the event of a significant devaluation of the real in relation to the U.S. dollar or other currencies, our ability to meet our foreign currency-denominated obligations could be adversely affected because our tariff revenue and other sources of income are denominated solely in reais. In addition, as we have debt denominated in foreign currencies, any significant devaluation of the real will increase our financial expenses as a result of foreign exchange losses that we must record. Accordingly, a devaluation of the real may adversely affect us and the market price of our common shares or ADSs. In December 2023, our Board of Directors approved our Hedging Policy, which is available on our website but is not incorporated herein. During the year ended December 31, 2025, we entered into derivative instruments (plain vanilla swaps), with expiration dates ranging from 2030 to 2048, to fully protect us against a devaluation of the real against the U.S. dollar, the Yen, and the Euro. For more information with respect to our foreign currency risk, see Note 5.1(a) to our 2025 Consolidated Financial Statements. Effects of Tariff Increases Our results of operations and financial condition are dependent on tariff increases for our water and sewage services. Since the enactment of the Basic Sanitation Law in 2007, regulatory agencies are responsible for setting, adjusting and reviewing tariffs, taking into consideration, among other factors: • anti-inflation measures enacted by the federal government from time to time; • impacts of health epidemics such as COVID-19; and • when necessary, the readjustment to maintain the original balance between each party’s obligation and economic gain (equilíbrio econômico-financeiro) under the agreement. Readjustment of our tariffs continues to be set annually and depends on the parameters established by the Basic Sanitation Law, the URAE-1 Concession Agreement and ARSESP, except for Olímpia, which is regulated by ARES-PCJ under the terms of the Olímpia Concession Agreement. The guidelines also establish procedural steps and the terms for annual adjustments. The annual adjustments must be announced 30 days prior to the effective date of the new tariffs. For more information, see “Item 4.B. Business Overview — Tariffs.” Since our Privatization, a distinction exists between the equilibrium tariff calculated by ARSESP and the tariff applied to consumers. As a result, tariff increases perceived by users may be lower than the underlying economic adjustments, with the difference covered by the FAUSP, a mechanism designed to smooth tariff implementation and reduce volatility. 67 Table of Contents The following table sets forth, for the years indicated, the percentage increase in our tariffs as compared to three inflation indexes: Year ended December 31, 2025 2024 2023 Increase in average tariff(1) 6.47 % 6.45 % 9.56 % Inflation – IPC – FIPE 3.83 % 4.68 % 3.15 % Inflation – IPCA 4.26 % 4.83 % 4.62 % Inflation – IGP-M (1.05) % 6.54 % (3.18) % (1) See “Item 4.B. Business Overview — Tariffs” for additional information on tariff increases. On April 6, 2023, ARSESP published Resolution No. 1,394/2023 related to the Extraordinary Tariff Review and Resolution No. 1,395/2023, which presented the new tariffs and authorized us to apply a total tariff readjustment of 9.5609% to our current tariffs. This tariff adjustment became effective on May 10, 2023. On April 8, 2024, ARSESP published Resolution No. 1,514, which authorized a total tariff readjustment of 6.4469% to our tariffs, which was in force between May 10, 2024 and July 22, 2024. From July 23, 2024, with the commencement of Concession Agreement No. 01/2024, the new tariffs published by ARSESP came into effect through Resolution No. 1,539/2024, including discounts on the tariffs in force at the time as authorized by the Government of the State of São Paulo. On December 1, 2025, ARSESP published Resolution No. 1,748/2025 which approved the equilibrium tariff related to the 1st Tariff Readjustment and Resolution No. 1,749/2025, which presented the new tariffs and authorized us to apply a total tariff readjustment of 6.47% to our current tariffs. This tariff adjustment became effective on January 1, 2026. Effects of Brazilian Economic Conditions As a company with all of its operations in Brazil, our results of operations and financial condition are affected by general economic conditions in Brazil, particularly by the level of economic activity and the inflation rate. For example, the general performance of the Brazilian economy may affect our cost of capital, and inflation may affect our costs and margins. The Brazilian economic environment has been characterized by significant variations in economic growth rates. However, as our services are viewed as essential, our sales revenue demonstrates relative stability under normal conditions. General Economic Conditions In 2023, Brazilian GDP increased 2.9% compared to 2022. Brazil’s trade surplus in 2023 was US$98.8 billion and at year-end the country had US$355.0 billion in currency reserves. The average unemployment rate in Brazil in 2023 was 7.8%. In 2024, Brazilian GDP increased 3.4% compared to 2023. Brazil’s trade surplus for the year ended December 31, 2024 was US$74.6 billion and at year-end the country had US$329.7 billion in currency reserves. The average unemployment rate in Brazil for the year ended December 31, 2024 was 6.6%. In 2025, Brazilian GDP increased approximately 2.5% compared to 2024, as estimated based on the IBC-BR economic activity index published by the Central Bank of Brazil. Brazil’s trade surplus for the year ended December 31, 2025 was US$60.0 billion and at year-end the country had US$358.2 billion in currency reserves. The average unemployment rate in Brazil for the year ended December 31, 2025 was 5.1%. Interest Rates As a monetary policy instrument of the federal government, the Selic rate influences the behavior of other interest rates in the country, including rates related to indebtedness denominated in local currency. The Selic rate was 13.75% in the first half of 2023, decreased to 10.50% in August 2024, and was gradually increased thereafter. As of the date of this annual report., the Selic rate is 14.75%. Inflation Inflation affects our financial performance by increasing our tariffs, costs of services rendered, and operating expenses. Part of our real-denominated debt is directly indexed to account for the effects of inflation. Additionally, we are exposed to the mismatch between the inflation adjustment indices of our loans and financing and those of our receivables. 68 Table of Contents Inflation adjustments derive from collections from or payments to third parties, as contractually required by law or court decision, and are recognized on an accrual basis. Inflation adjustments included in these agreements and decisions are not considered embedded derivatives, as they are deemed to be inflation adjustments for our purposes. See Notes 5.1, 17 and 32 of our 2025 Consolidated Financial Statements for the impacts of inflation adjustments on our financial performance and debt. Currency Exchange Rates We had total foreign currency-denominated indebtedness of R$10,632.3 million as of December 31, 2025, of which R$371.7 million relates to the current portion of our long-term foreign currency-denominated obligations. As of December 31, 2025, we have fully hedged our currency exposure, including interest payments. The following table shows the fluctuation of the real against the U.S. dollar, the period-end exchange rates, and the average exchange rates as of or for the years indicated: Year ended December 31, 2025 2024 2023 (in reais, except percentages) Depreciation (appreciation) of the real versus U.S. dollar(1) (11.1) % 27.9 % (7.21) % Period-end exchange rate – US$1.00 5.5024 6.1923 4.8413 Average exchange rate – US$1.00(2) 5.5855 5.3890 4.9953 (1) Represents the comparison with period-end exchange rate. Source: Central Bank. (2) Represents the average for period indicated. The following table shows the fluctuation of the real against the Yen, the period-end exchange rates, and the average exchange rates as of or for the years indicated: Year ended December 31 2025 2024 2023 (in reais, except percentages) Depreciation (appreciation) of the real versus Yen (1) (11.0)% 15.3% (13.52)% Period-end exchange rate – ¥1.00 0.0351 0.0395 0.0342 Average exchange rate – ¥1.0 (2) 0.0374 0.0356 0.0356 (1) Represents the comparison with period-end exchange rate. Source: Central Bank. (2) Represents the average for period indicated. The following table shows the fluctuation of the real against the Euro, the period-end exchange rates, and the average exchange rates as of or for the years indicated Year ended December 31 2025 2024 2023 (in reais, except percentages) Depreciation (appreciation) of the real versus Euro (1) 0.51% 20.27% (3.91)% Period-end exchange rate – €1.00 6.4692 6.4363 5.3516 Average exchange rate – €1.0 (2) 6.3095 5.8340 5.4023 (1) Represents the comparison with period-end exchange rate. Source: Central Bank. (2) Represents the average for period indicated. In the years ended December 31, 2025, 2024, and 2023, we did not enter into any forward exchange transactions. During the year ended December 31, 2025, we entered into derivative instruments (plain vanilla swaps), with expiration dates ranging from 2030 to 2048, to fully protect us against a devaluation of the real against the U.S. dollar, the Yen, and the Euro. For more information on exchange rates, see “Item 3.D. Risk Factors — Risks Relating to Brazil — Exchange rate instability and developments and the perception of risk in other countries, especially in the United States and in emerging market countries, may adversely affect us, our foreign currency denominated debt and the market price of our common shares or ADSs and our ability to service our foreign currency denominated obligations,” “Item 5.B. Liquidity and Capital Resources—Indebtedness Financing—Financial Covenants,” and Note 5.1 of our 2025 Consolidated Financial Statements. 69 Table of Contents Effects of Extreme Weather Events In February 2023, there were torrential rains on the northern coast of the State of São Paulo, especially in the municipality of São Sebastião, where we operate. Within 24 hours, 683mm of rain fell in the municipality of São Sebastião. As a result, our water treatment plants in the region were damaged and the water supply was interrupted for a few days due to the inability to store water immediately and a lack of electricity. If similar incidents, or incidents that involve the interruption of power supplies to our facilities, occur in the future or become more frequent, these events may have a material adverse effect on our results of operations and financial condition. Extreme events such as heat waves and torrential storms can interrupt the electricity supply at our water pumping and treatment plants due to trees falling on electricity distribution networks, which could prevent the treatment of water and potentially its supply to our customers. In addition, torrential rain destabilizes the soil and can damage our water distribution networks. In 2025, the Southeast region of Brazil, where we operate, experienced one of the driest periods of the past decade. This extreme climatic event adversely affected the storage levels of our water sources. In coordination with the federal regulator, the National Water and Basic Sanitation Agency (Agência Nacional de Águas — “ANA”), and the state regulator ARSESP (Agência Reguladora de Serviços Públicos do Estado de São Paulo) we have been conducting daily monitoring of the reservoirs comprising the Integrated Metropolitan System (“SIM”). The SIM, established following the 2014–2015 water crisis, consists of seven interconnected production systems, providing operational flexibility by allowing multiple supply alternatives across São Paulo and the broader Metropolitan Region (RMSP). The monitoring framework adopted by the State Government of São Paulo is structured into seven response tiers, determined by reservoir levels. Each tier establishes the degree of required hydrological protection measures, including public awareness initiatives and nighttime demand management protocols intended to reduce network losses during low consumption periods. As of February 2026, the SIM was operating under Tier 3 — classified as a cautionary scenario — which entails extended nighttime demand management (10 hours) and reinforced communication efforts regarding the efficient use of water. Considering the existing structure of the SIM, which enables the transfer of treated water between producing systems, we are able to implement measures to re-establish and maintain regularity in the distribution of water to our customers. Since the 2014–2015 water crisis, we have consistently invested in expanding the SIM’s streamflow capacity. Between 2015 and 2025, system capacity increased by 14.2 m³/s through interconnection projects and the development of the São Lourenço production system. Additional resilience investments scheduled for 2026–2030, totaling R$5.9 billion, are expected to add a further 12.8 m³/s to system capacity, including 5.8 m³/s anticipated by 2027. We remain focused on diversifying supply sources, enhancing system integration, and strengthening overall water security resilience. However, if similar extreme weather events occur in the future or become more frequent, these events could have an adverse effect on our operating results and financial condition. For more information, see “Item 3.D. Risk Factors — Risks Relating to Environmental Matters and Physical and Climate Transition Risks — Droughts, such as the 2014 – 2015 water crisis, can cause a material impact on consumption habits and, consequently, on our business, financial condition or results of operations.” Critical Accounting Estimates and Judgments We make estimates and judgments concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. For information on our critical accounting estimates and judgments, see Note 6 to our 2025 Consolidated Financial Statements. 70 Table of Contents Certain Transactions with our previous Controlling Shareholder Reimbursement due from the State Reimbursement due from the State of São Paulo for pensions paid represents supplementary pensions (G0) that we pay, on behalf of the State of São Paulo, to former employees of state-owned companies which merged to form our company. These amounts must be reimbursed to us by the State of São Paulo, as the primary obligor. In November 2008, we entered into the third amendment to the agreement with the State of São Paulo relating to payments of pension benefits made by us on its behalf. The State of São Paulo acknowledged that it owed us an outstanding balance of R$915.3 million as of September 30, 2008, relating to payments of pension benefits made by us on its behalf. We provisionally accepted, but it is not recognized in our books, the reservoirs in the Alto Tietê production system as partial payment in the amount of R$696.3 million, subject to the transfer of the property rights of these reservoirs to us. See Note 11 to our 2025 Consolidated Financial Statements included in this annual report and “Item 7. Major Shareholders and Related Party Transactions.” On March 18, 2015, we, the State of São Paulo and DAEE, with the intervention of the Department of Sanitation and Water Resources, executed an agreement for R$1,012.3 million, consisting of R$696.3 million in principal amount and R$316.0 million in monetary adjustment of the principal through February 2015. As of December 31, 2025 and 2024, the amounts not recognized related to pension benefits paid by us on behalf of the State of São Paulo totaled R$1,808.6 million and R$1,685.5 million, respectively. As a result, we also recognized the obligation related to pension benefits, maintained with the beneficiaries and pensioners of G0. As of December 31, 2025 and 2024, the pension benefit obligations of G0 totaled R$2,140.2 million and R$1,931.1 million, respectively. For detailed information on the pension benefit obligations refer to Note 25 to our 2025 Consolidated Financial Statements included in this annual report. Accounts Receivable from the State of São Paulo for Water and Sewage Services Rendered Certain of these accounts receivable have been overdue for a long period. We have entered into agreements with the State of São Paulo with respect to these accounts receivable. For more information on these agreements, see Note 11 to our 2025 Consolidated Financial Statements included in this annual report. Results of Operations The following table sets forth, for the years indicated, certain items from our income statements of operations, each expressed as a percentage of operating revenue: (in million of R$, except percentages) Year ended December 31, 2025 2024 2023 Operating revenue 38,092.1 100.0 % 36,145.5 100.0 % 25,572.1 100.0% Operating costs (23,991.7) (63.0) % (16,603.1) (45.9) % (16,051.9) (62.8) % Gross profit 14,100.4 37.0 % 19,542.4 54.1 % 9,520.2 37.2 % Selling expenses (743.3) (2.0) % (917.6) (2.5) % (984.1) (3.8) % Allowance for doubtful accounts (62.1) (0.2) % (557.8) (1.5) % (652.9) (2.6) % Administrative expenses (1,018.3) (2.7) % (2,311.4) (6.4) % (1,597.5) (6.2) % Other operating income (expenses), net 274.7 0.7 % (280.5) (0.8) % 27.9 0.1 % Equity accounting 48.2 0.1 % 35.3 0.1 % 32.4 0.1 % Profit from operations before financial income (expenses) 12,599.6 33.1 % 15,510.5 42.9 % 6,346.0 24.8 % Financial income/(expenses), net (897.8) (2.4) % (1,867.7) (5.2) % (1,592.0) (6.2) % Profit before income tax and social contribution 11,701.9 30.7 % 13,642.8 37.7 % 4,754.0 18.6 % Income tax and social contribution taxes (current and deferred) (3,239.8) (8.5) % (4,063.2) (11.2) % (1,230.5) (4.8) % Profit for the year 8,462.1 22.2 % 9,579.6 26.5 % 3,523.5 13.8 % 71 Table of Contents Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 Operating revenue Operating revenue for the year ended December 31, 2025 increased by R$1,946.6 million, or 5.4%, to R$38,092.1 million from R$36,145.5 million in the year ended December 31, 2024. Operating revenue, excluding construction revenue, the impact of interest rate adjustments on the bifurcated financial asset using the IPCA index, for the year ended December 31, 2025 increased by R$487.2 million, or 2.2%, to R$22,213.0 million in the year ended December 31, 2025 from R$21,725.8 million in the year ended December 31, 2024. Construction revenue was R$14,437.4 million for the year ended December 31, 2025 compared to R$6,225.9 million in the year ended December 31, 2024. The main factors that led to the increase were: • 3.3% in net price: 2.3% carry over and 1.0% due to removal of discounts for large clients; • 1.9% in billed volume: New units (+1.6%) and increased consumption (+0.3%); • (0.8%) in mix: growth in units with access to subsidized rates; • (2.1%) FAUSP: in 2024 FAUSP began only in the 2nd half and the rate review occurred in August 2025. Operating costs Our operating costs increased by R$7,388.6 million, or 44.5%, to R$23,991.7 million for the year ended December 31, 2025 from R$16,603.1 million in the year ended December 31, 2024. As a percentage of operating revenue, operating costs increased to 63.0% for the year ended December 31, 2025 from 45.9% in the year ended December 31, 2024. The increase in operating cost was mainly due to: • an increase of R$8,351.5 million in construction costs due to higher investments in 2025; • an increase of R$225.7 million in costs with services, mainly due to environmental compensation and IT investments and, partially offset by, • a decrease of R$456.3 million in general expenses, mainly because we had anticipated contributions to municipal sanitation funds in 2024 pursuant to the Concession Agreement for URAE-1; • a decrease of R$222.4 million in costs with salaries, payroll charges and benefits and pension plan obligations, mainly due to the 11% decrease in the average number of employees – as a result of the Incentivized Dismissal Program (“PDI”). Gross Profit As a result of the factors discussed above, gross profit decreased by R$5,442.0 million, or 27.8%, to R$14,100.4 million for the year ended December 31, 2025 from R$19,542.4 million in the year ended December 31, 2024. As a percentage of operating revenue, our gross profit margin decreased to 37.0% for the year ended December 31, 2025 from 54.1% in the year ended December 31, 2024, mainly due to a decrease of the financial asset of the concession operating revenue by R$7,474.9 million. For further information about our financial asset net revenue, see Note 15 to our 2025 Consolidated Financial Statements. Selling Expenses Selling expenses decreased by R$174.3 million, or 19.0%, to R$743.3 million for the year ended December 31, 2025 from R$917.6 million in the year ended December 31, 2024. As a percentage of operating revenue, selling expenses were 2.0% for the year ended December 31, 2025 compared to 2.5% for the year ended December 31, 2024. The main reasons for the decrease in selling expenses were: • a decrease of R$96.5 million with general expenses; 72 Table of Contents • a decrease of R$72.1 million in costs with salaries, payroll charges and benefits and pension plan obligations, mainly due to the decrease in the average number of employees; Allowance for Doubtful Accounts Our allowance for doubtful accounts decreased by R$495.7 million, or 88.9%, to R$62.1 million for the year ended December 31, 2025 from R$557.8 million in the year ended December 31, 2024, mainly due to a reversal of expected credit loss provisions (PECLD) due to the recognition of court-ordered payments (precatórios) to São Paulo City Hall. Administrative Expenses Administrative expenses decreased by R$1,293.1 million, or 55.9%, to R$1,018.3 million for the year ended December 31, 2025 from R$2,311.4 million in the year ended December 31, 2024. The main reasons for the decrease in administrative expenses were: • a decrease of R$823.2 million with general expenses, due to settlements resulting from judicial proceedings; and • a decrease of R$258.1 million with other expenses (general supplies, outsources services, electricity, depreciation and amortization and tax expenses), due to the agreement entered into between SABESP and AAPS (Sabesp’s Association of Retirees and Pensioners); • a decrease of R$211.9 million in costs with salaries, payroll charges and benefits and pension plan obligations, mainly due to the decrease in the average number of employees. The agreement entered into between us and AAPS, regarding financial compensation for 60 months for the VIVEST health plan operator regarding the migration of retirees, former employees, pensioners, and dependents between health plans is recorded in this line. For more information, see Note 31 to our 2025 Consolidated Financial Statements included in this annual report. Other Operating Income (Expenses), Net Other operating income (expenses), net, was the income of R$274.7 million for the year ended December 31, 2025 compared to expense of R$280.5 million in the year ended December 31, 2024, a variation of R$555.2 million. Other operating income consists of gains and losses from sales of property, plant and equipment, sale of contracts awarded in public bids, right to sell electricity, indemnities and reimbursement of expenses, fines and collaterals, property leases, reuse of water, PURA projects and services, net of COFINS and PIS. Other operating expenses consist mainly of derecognition of concessions assets due to obsolescence, discontinued construction works, unproductive wells, projects considered economically unfeasible, losses on property, plant and equipment and recognition and reversal of estimated losses with asset indemnification. In 2025, the result was impacted by the recognition of extemporaneous tax credits of R$368.5 million. Financial Income/(Expenses), Net The financial income/(expenses), net, decreased by R$969.9 million, resulting in a net expense of R$897.8 million for the year ended December 31, 2025, compared to a net expense of R$1,867.7 million in the year ended December 31, 2024. As a percentage of operating revenue, the net financial income/(expenses), net, represented 2.4% for the year ended December 31, 2025, compared to 5.2% in the year ended December 31, 2024. This decrease was mainly due to an extemporaneous effect recognized in 2025, recorded in the inflation adjustments – gains line item, related to the recognition of R$1.5 billion in monetary restatement of registered warrants. Profit before income tax and social contribution As a result of the factors discussed above, profit before income tax and social contribution decreased by R$1,940.9 million, to R$11,701.9 million for the year ended December 31, 2025 from R$13,642.8 million in the year ended December 31, 2024. As a percentage of operating revenue, our profit before income tax and social contribution decreased to 30.7% for the year ended December 31, 2025 compared to 37.7% in the year ended December 31, 2024. 73 Table of Contents Income and Social Contribution Taxes (Current and Deferred) Income and social contribution taxes (current and deferred) expense decreased by R$823.4 million, or 20.3%, to R$3,239.8 million for the year ended December 31, 2025, compared to R$4,063.2 million for the year ended December 31, 2024. This decrease mainly reflects the effect of the financial asset recognized in 2024, resulting from the contract with URAE-1, which continued to impact the year-over-year comparison. Profit for the year As a result of the factors discussed above, our profit decreased by R$1,117.5 million, or 11.7%, to R$8,462.1 million for the year ended December 31, 2025 from R$9,579.6 million in the year ended December 31, 2024. As a percentage of operating revenue, our profit for the year decreased to 22.2% for the year ended December 31, 2025, from 26.5% in the year ended December 31, 2024. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 For a discussion of our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023, see “Item 5. Operating and Financial Review and Prospects — A. Results of Operations — Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 of our annual report on Form 20-F for the year ended December 31, 2024, filed with the SEC on April 30, 2025. 74 Table of Contents B. Liquidity and Capital Resources Capital Sources In order to satisfy our liquidity and capital requirements, we have primarily relied on cash provided by operating activities, long-term financings from multilateral and development banks and capital markets debts. As of December 31, 2025, we had R$4,663.2 million in cash and cash equivalents. The outstanding current indebtedness was R$5,092.8 million as of December 31, 2025, of which R$371.7 million was denominated in foreign currency. Long-term indebtedness was R$35,049.5 million as of December 31, 2025, of which R$10,260.6 million consisted of foreign currency. Management expects that we will have sufficient funds to meet our commitments and not compromise our planned investments, given the works we carried out to improve our water security and to reduce defaults, as well as the cash we generated from operations and the availability of credit lines for investments. In order to finance the constant investment needs in our infrastructure, we use third party funds to complement our own resources. We believe that we currently have sufficient sources of funds to implement our short- and medium-term strategy. Cash Flows Year ended December 31, 2025 2024 HA (%) (in millions of R$, except %) Net cash generated from operating activities 8,361.1 7,404.6 12.9% Net cash used in investment activities (15,703.6) (9,975.6) 57.4% Net cash generated from financing activities 10,323.1 3,415.2 202.3% Increase in cash and cash equivalents in the year 2,980.6 844.1 253.1 % Net Cash Generated from Operating Activities Net cash generated from operating activities is the single largest source of our liquidity and capital resources, and we expect that it will continue to be so in the future. Our net cash generated from operating activities was R$8,361.1 million and R$7,404.6 million for the years ended December 31, 2025 and 2024, respectively. The main driver of our cash flow from operating activities relates to our cash collections from customers, which is due to the nature of our business and to the fact that we are expanding our infrastructure. There was an increase in net cash generated from operating activities in the year ended December 31, 2025 of 12.9%. Net Cash Used in Investing Activities Net cash used in investing activities was R$15,703.6 million and R$9,975.6 million for the years ended December 31, 2025 and 2024, respectively. The main driver of our net cash outflow for investing activities relates to purchases of intangible assets, as required under our concession agreements, which is due to the fact that we are expanding our infrastructure and service coverage. There was an increase in net cash used in investing activities for the year ended December 31, 2025 of 57.4%. Net Cash Generated from Financing Activities Our net cash generated from financing activities was R$10,323.1 million for the year ended December 31, 2025, compared to R$3,415.2 million for the year ended December 31, 2024. The main driver of our cash flows from financing activities relates to the proceeds and repayments of loans generated to finance purchases of intangible assets related to our concession agreements, in order to support the expansion of our services and our payment of interest on capital. For the year ended December 31, 2025, (i) our funding increased by R$11,465.3 million compared to 2024 and (ii) our amortization increased by R$2,049.6 million compared to the year ended December 31, 2024. In addition, payment of interest on capital increased by R$1,434.9 million compared to the year ended December 31, 2024. 75 Table of Contents Financial Indebtedness Our total financial indebtedness (borrowings and financing – current and non-current) increased by 58.9%, from R$25,258.3 million as of December 31, 2024 to R$40,142.3 million as of December 31, 2025. In addition, during the same period, our total indebtedness denominated in foreign currency increased by 216.8%, from R$3,356.4 million as of December 31, 2024 to R$10,632.3 million as of December 31, 2025. As of December 31, 2025, we had R$35,049.5 million in long-term indebtedness outstanding (excluding the current indebtedness), of which R$10,260.6 million consisted of foreign currency, long-term debt. We had outstanding current indebtedness of R$5,092.8 million as of December 31, 2025. As of December 31, 2025, R$371.7 million of this current portion of long-term indebtedness was denominated in foreign currency. As of December 31, 2025, our S&P domestic rating was “brAAA” and our S&P global rating was “BB”. Our Moody’s national rating was “AAA.br” as of December 31, 2025, while our Fitch national rating was “AAA(bra)” and our Fitch global ratings were “BB+” (foreign currency) and “BB+” (local currency), as of the same date. Pursuant to these agreements, cash received from operations is required to pass through designated accounts. In the event of a default under the relevant agreement, such cash and future cash flows that are required to be deposited in such accounts become restricted and are subject to security interests in favor of the relevant creditor. As of December 31, 2025, a substantial portion of our monthly cash flows from operations was subject to these liens. As of that date, the total amount of our secured debt, including indebtedness benefiting from these liens, was R$6,217.9 million (R$6,096.6 million of principal and R$121.3 million related to interest and charges). For more information, see “—Indebtedness Financing—Financial Covenants—Local currency denominated indebtedness” and Note 17 to our 2025 Consolidated Financial Statements included in this annual report. The following table sets forth information on our indebtedness outstanding as of December 31, 2025: Current Noncurrent Total Final Maturity Interest Rates(1) (in R$ thousands) Denominated in local currency: Debentures 2,764,582 17,282,427 20,047,009 2026 – 2040 CDI+ 0,00% to 1.80% IPCA + 3,20% to 9.2860% 1,60% to 2.25% Brazilian Federal Savings Bank (CEF) 134,275 1,495,481 1,629,756 2025 – 2042 TR + 5% to 9.5% Brazilian National Bank for Economic and Social Development (BNDES) 259,341 564,501 823,842 2026-2035 TJLP + 1.72% to 2.18% Inter-American Development Bank (IDB) 307,349 2,680,484 2,987,833 2034 – 2036 CDI+ 0.50% CDI+ 2.70% CDI+ 20.86% International Finance Corporation (IFC) 64,450 2,645,882 2,710,332 2032 – 2034 CDI+0.3735% a 2% Leases (Concession) 84,214 110,214 194,428 2035 IPCA + 7.73% a 10.12% Leases (Others) 72,440 9,627 82,067 2042 9.74% a 15.24% Other 616 328 944 2035 3.00% Interest 1,033,884 - 1,033,884 - - Total denominated in local currency 4,721,151 24,788,944 29,510,095 Denominated in foreign currency: Inter-American Development Bank (IDB) 56,573 973,833 1,030,406 2023 – 2044 SOFR + 0.85% to 1.20% International Bank for Reconstruction and Development (IBRD) 33,453 1,112,127 1,145,580 2048 SOFR + 0.74% and 1.84% JICA 150,779 1,965,688 2,116,467 2029 – 2037 0.01% - 2.5% International Finance Corporation (IFC) - 3,380,431 3,380,431 2030 SOFR + 1.80% EURIBOR + 1.85% Blue Bonds - 2,828,508 2,828,508 2030 5.62% Interest 130,860 - 130,860 - - Total denominated in foreign currency 371,665 10,260,587 10,632,252 Total borrowings and financing 5,092,816 35,049,531 40,142,347 (1) TR was 0.1742% per month as of December 31, 2025; CDI stands for Interbank Deposit Rate (Certificado de Depósitos Interbancários - “CDI”), which was 14.89% per annum as of December 31, 2025; IGP-M was -1.05% per annum as of December 31, 2025; “TJLP” stands for Long-term Interest Rate (Taxa de Juros a Longo Prazo), published quarterly by the Central Bank, which was 9.07% per annum as of December 31, 2025; EURIBOR was 2.123% medium rate of 6 months for the year ended December 31, 2025; and SOFR was 4.01064% medium rate of 90 days for the year ended December 31, 2025. 76 Table of Contents The following table shows the maturity profile of our debt, as of December 31, 2025, for the period indicated: (in R$ million) 2026 2027 2028 2029 2030 After 2031 Total Borrowings and financing 5,092.8 2,259.5 1,794.5 4,172.6 7,336.5 19,486.6 40,142.3 As of December 31, 2025, R$7,056.5 million of our foreign currency denominated indebtedness, net of transaction costs, was denominated in U.S. dollars, R$1,450.5 million was denominated in Euros and R$2,125.3 million was denominated in Japanese Yen. During the year ended December 31, 2025, we entered into derivative instruments (plain vanilla swaps), with expiration dates ranging from 2030 to 2048, to fully protect us against a devaluation of the real against the U.S. dollar, the Yen, and the Euro. For more information regarding foreign currency risk and all derivatives financial instruments, see Notes 5.1(a) and 19, respectively, to our 2025 Consolidated Financial Statements included in this annual report. Our borrowings from multilateral institutions and government agencies, such as the IDB, IBRD, and JICA, are federally guaranteed, with a counter-guarantee from the State of São Paulo. For more information on the terms of these loan agreements, see “Item 7.B. Related Party Transactions—Government Guarantees of Financing.” As of December 31, 2025, our domestic debt totaled R$29,510.1 million, primarily comprising real-denominated loans from federal and state-owned banks like CEF and BNDES, alongside debentures issued between February 2018 and October 2025, and financial leasing. Financial Covenants We are subject to financial covenants under the agreements evidencing or governing our outstanding indebtedness. Indebtedness Foreign currency denominated indebtedness With respect to our indebtedness denominated in U.S. dollars, we are subject to financial covenants, including limitations on our ability to incur debt. For example: The financial covenants in our loan No. 1212 from the IDB require: • our tariff revenues must be sufficient to cover the operational expenses of our system, including administrative, operating and maintenance expenses, and depreciation; • our tariff revenues must provide a return of not less than 7% on the balance sheet value of our property, plant, and equipment, taking into account concession-related assets; and • during project execution, the balance of our short-term borrowings must not exceed 8.5% of our total equity. This loan agreement contains an early maturity clause in the event of non-compliance on our part of any obligation stipulated therein or in other contracts with the bank relating to the financing of the above-mentioned projects. We are a party to hedging agreements that cover of our debt denominated in foreign currencies. In any case, any significant devaluation of the real will affect the total portion of our debt denominated in foreign currencies when measured in reais. As a result, the net debt in reais will be affected, with consequent impact on the ratio between net debt to adjusted EBITDA, as calculated in accordance with the provisions of our loan agreements. 77 Table of Contents As of December 31, 2025, and 2024, we had met all the financial covenants of these loans and financing agreements. Local currency denominated indebtedness With respect to our outstanding indebtedness denominated in reais, we are subject to financial covenants. The financial covenants in our loans with IDB Invest and IFC require: • our debt service coverage ratio must be greater than or equal to 2.35:1.00; and • our ratio of net debt to adjusted EBITDA must be less than 3.50:1.00. The loan agreements with IDB Invest and IFC contain cross-default and cross-acceleration clauses, and early maturity clauses. The covenant clauses apply to all of our indebtedness with BNDES, which totaled R$823.8 million as of December 31, 2025. In summary, the BNDES financings specify two bands for the ratios of adjusted net debt / adjusted EBITDA, adjusted EBITDA / adjusted financial expenses, and other onerous debt / adjusted EBITDA. The financings also specify a collateral mechanism by which we assign a portion of our tariff payment receivables to BNDES in order to provide a partial guarantee of the amounts due under the financings. Under this mechanism, each month we must ensure that a portion of the tariff payments which we receive are deposited on a daily basis into a blocked collateral account, before being released to a regular movements account later in the day provided that BNDES has not notified the bank that we are in default. If the ratio of adjusted EBITDA / adjusted financial expenses is equal to or higher than 3.50, the ratio of adjusted net debt / adjusted EBITDA equal to or lower than 3.00, and the other onerous debt / adjusted EBITDA equal to or lower than 1.00, the amount that must pass through this blocked collateral account is R$361.7 million per month. If one of the three ratios mentioned above is not met in any two or more quarters, consecutive or not, within a twelve-month period, yet remain within the following band of ratios: adjusted EBITDA / adjusted financial expenses lower than 3.50 but equal to or higher than 2.80, adjusted net debt / adjusted EBITDA equal to or lower than 3.80 but higher than 3.00, and other onerous debt / adjusted EBITDA equal to or lower than 1.30 but higher than 1.00, the amount that must pass through the blocked collateral account is automatically increased by 20%. The current covenant clauses are: A. Maintenance of the following ratios, calculated quarterly and relative to amounts accumulated over the last 12 months at the time of disclosure of reviewed quarterly Consolidated Financial Statements or audited annual Consolidated Financial Statements: • adjusted EBITDA / adjusted financial expenses equal to or higher than 3.50; • adjusted net debt / adjusted EBITDA equal to or lower than 3.00; and • other onerous debt / adjusted EBITDA equal to or lower than 1.00 (where “other onerous debt” is equal to the sum of (i) social security liabilities and health care plans, (ii) installment payments of tax debt and (iii) installment payments of debt with electricity providers). B. If any one of the ratios specified in A. above is not met in any two or more quarters, consecutive or not, within a twelve-month period, we shall be deemed to be in non-compliance with the first band ratios and must, as a result, automatically increase the amount passing through the blocked collateral account by 20%, provided that the following second band ratios are met: • adjusted EBITDA / adjusted financial expenses lower than 3.50 but equal to or higher than 2.80; 78 Table of Contents • adjusted net debt / adjusted EBITDA equal to or lower than 3.80 but higher than 3.00; and • other onerous debt / adjusted EBITDA equal to or lower than 1.30 but higher than 1.00. C. If any one of the second band ratios specified in B. above is not met for any one quarter, or if we are required to but fail to ensure that the increased monthly amount specified in B. above passes through the blocked collateral account, then we shall be deemed to be in non-compliance with its ratio covenants, in which case BNDES may at its discretion: • require us to provide additional financial guarantees within a deadline specified by BNDES, which may not be less than 30 days; • suspend the release of funds; and/or • declare the financings to be immediately due and payable. Additionally, since 2018, we are subject to financial covenants under the new financing agreements executed with CEF. These financial covenants require us to maintain the following financial indexes, calculated for the past 12 months on a quarterly basis: • adjusted EBITDA / adjusted financial expenses, equal to or greater than 2.80; • adjusted net debt / adjusted EBITDA, equal to or lower than 3.80; • other onerous debt / adjusted EBITDA equal to or lower than 1.30. These agreements provide that disbursements may be suspended if any of these covenants are not being complied with. In the event of non-compliance with the terms of these agreements, CEF may request the anticipated payment of the entire loan. The agreements with CEF also contain a cross-default clause and an early maturity clause. In the event of non-compliance with the terms of the contract, the CEF can request the anticipated payment of part or all of the loan. See Note 17 to our 2025 Consolidated Financial Statements included in this annual report. The table below shows the more restrictive covenants ratios and our financial covenants ratios as of December 31, 2025. The twenty-second, twenty-third, twenty-fourth, twenty-sixth, twenty-seventh, twenty-eighth, twenty-ninth, thirtieth, thirty-first, 32nd and 33rd debenture issuances require us to maintain an adjusted EBITDA/paid financial expenses ratio equal to or higher than 1.5:1.0 and an adjusted net debt/adjusted EBITDA ratio equal to or lower than 3.50:1.0. These issuances have a cross-acceleration clause. Restrictive Ratios Adjusted EBITDA / adjusted financial expenses Equal to or higher than 2.80:1.00 EBITDA/paid financial expenses Equal to or higher than 2.35:1.00 Adjusted net debt / adjusted EBITDA Equal to or lower than 3.80:1.00 Net debt/adjusted EBITDA Equal to or lower than 3.50:1.0 Other onerous debt(1)/ adjusted EBITDA Equal to or lower than 1.30:1.00 (1) “other onerous debt” corresponds to the sum of social security liabilities, health care plan, installment payment of tax debts and installment payment of debts with the electricity supplier. As of December 31, 2025 and 2024, we complied with all the covenants of our loans and financing agreements. 79 Table of Contents Recent Developments Offering and Sale of Debentures On February 10, 2026, we completed our 38th issuance of simple, non-convertible, unsecured debentures, with an aggregate principal amount of R$6,292.1 million, in five series, including: (i) a first series with an aggregate principal amount of R$1,635.7 million, bearing interest at 6.2907% p.a., maturing in February 2036; (ii) a second series with an aggregate principal amount of R$1,364.7 million, bearing interest at 6.3507% p.a., maturing in February 2038; (iii) a third series with an aggregate principal amount of R$1,291.7 million, bearing interest at 6.2467% p.a., maturing in February 2041; (iv) a fourth series with an aggregate principal amount of R$1,000.0 million, bearing interest at CDI index plus a spread of 0.64% p.a.; and (v) a fifth series with an aggregate principal amount of R$1,000.0 million, bearing interest at CDI index plus a spread of 0.72% p.a. These debentures were offered and sold in Brazil exclusively to professional investors (investidores profissionais), as defined under applicable CVM regulations. US$1,500 Million Loan Agreement and US$1,350 Million Blue Bond Issuance On January 26, 2026, we entered into a loan agreement with the Inter-American Investment Corporation, consisting of (i) a senior unsecured loan in an aggregate principal amount of US$150.0 million, issued in a single tranche and maturing in 2038 (the “Term Loan A”), and (ii) a blue unsecured loan in an aggregate principal amount of US$1,350.0 million, issued in two tranches maturing in 2031 and 2036, respectively (the “Term Loan B” and, together with the Term Loan A, the “Loans”). The Term Loan B serves as the underlying asset for the issuance of two series of blue senior secured notes by Nova Securitisation S.À.R.L, including a US$850.0 million in aggregate principal amount of 5.750% blue senior secured notes due 2031, and a US$500.0 million in aggregate principal amount of 6.500% blue senior secured notes due 2036 (“Blue Bonds”). The Blue Bonds are listed on the Euro MTF Market of the Luxembourg Stock Exchange. The Blue Bonds were offered solely to qualified institutional buyers in the United States under Rule 144A and to eligible purchasers in other jurisdictions (excluding Brazil and the U.S.) under Regulation S of the U.S. Securities Act of 1933, as amended. The offering and sale of the Blue Bond were completed on February 3, 2026. We intend to use the net proceeds from the Loans and the Blue Bonds for projects supporting our universalization targets for basic sanitation in the Brazilian state of São Paulo, including construction and upgrading of sewage treatment facilities and expansion of collection systems. Capital Requirements We have, and expect to continue having, substantial liquidity and capital resource requirements. These requirements include debt-service obligations, capital expenditures to maintain, improve and expand our water and sewage systems, and dividend payments and other distributions to our shareholders, including the State of São Paulo. Capital Expenditures Historically, we have funded and plan to continue funding our capital expenditures with funds generated by operations and with long-term financing from international and national multilateral agencies and development banks. We generally include in our capital expenditure program for the following year the amount of investment that was not realized in the previous year. For the year ended December 31, 2025, we recorded R$15.2 billion to improve and expand our water and sewage system and to protect our water sources in order to meet the growing demand for water and sewage services in the State of São Paulo. We have budgeted investments in the amount of approximately R$70 billion from 2024 through 2029. For more information, see “Item 4.A. History and Development of the Company—Main Focus of our Capital Expenditure Program.” 80 Table of Contents Dividend Distributions We are required by our bylaws to make dividend distributions, which can be made as payments of interest on shareholders’ equity in an amount equal to or greater than 25% of the amounts available for distribution. In addition, our dividend policy, which was approved at the annual shareholders’ meeting held on July 22, 2024, establishes that this percentage was maintained until 2025. After 2025, it may be increased to 100% in 2030, provided we reach the Universalization Targets. We declared dividends of R$2,381.6 million, R$2,549.8 million and R$984.5 million in the years ended December 31, 2025, 2024 and 2023, respectively. The Basic Sanitation Law prohibits the distribution of profits and dividends from the Concessionaire that fails to comply with the targets and schedules set out in the respective Contracts. For more information, see “Item 3.D. Risks Relating to Our Common Shares and ADSs—We may not always be in a position to pay dividends or interest on shareholders’ equity and ADSs.” Judicial payment orders (precatório) As of December 31, 2025, we have judicial payment orders issued in our favor in the inflation adjusted amount of R$ 814.3 million, which are not recognized in our 2025 Consolidated Financial Statements because of the difficulty to obtain a reasonable estimate to measure such assets, due to the uncertainties related to the beginning and the end of the payments. Judicial payment orders are recognized upon the beginning of their receipt or when they are traded. For more information on judicial payment orders, see Note 10 to our 2025 Consolidated Financial Statements included in this annual report. Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 For a discussion of our liquidity and capital resources for the year ended December 31, 2024 compared to the year ended December 31, 2023, see “Item 5. Operating and Financial Review and Prospects — B. Liquidity and Capital Resources” of our annual report on Form 20-F for the year ended December 31, 2024, filed with the SEC on April 30, 2025. Off-Balance Sheet Arrangements We had no off-balance sheet arrangements as of December 31, 2025, except for the unrecorded contractual commitments described in the table below. Tabular Disclosure of Contractual Obligations 81 Table of Contents Our debt obligations and other contractual obligations as of December 31, 2025 were: Less than 1 year 1-3 years 3-5 years More than 5 years Total (in millions of reais) Borrowings and financing 5,092.8 4,053.9 11,509.0 19,486.6 40,142.3 Interest on borrowings and financing(1) 3,497.1 7,363.3 6,334.3 7,613.3 24,808.0 Trade payables and contractors 2,400.0 - - - 2,400.0 Services payable 2,772.4 - - - 2,772.4 Public-Private Partnership - PPP 239.1 478.1 478.1 2,130.4 3,325.7 Interest Public-Private Partnership - PPP 230.6 514.9 590.6 3,311.8 4,647.9 Contractual obligations(2) 19,289.4 12,201.4 3,441.4 4,101.3 39,033.4 Total 33,521.4 24,611.6 22,353.4 36,643.4 117,129.7 (1) Estimated interest payments on loans and financing were determined considering the interest rates as of December 31, 2025. However, our loans and financing are subject to variable interest indexation and foreign exchange fluctuations, and these estimated interest payments may differ significantly from payments actually made. The debt agreements have cross-default clauses. (2) The unrecorded contractual commitments are the future obligations of investments and expenses as set out in Note 34 to our 2025 Consolidated Financial Statements. We believe that we can meet the maturity schedule through a combination of funds generated by operations, the net proceeds of new issuances of debt securities in the Brazilian and international capital markets and additional borrowings from domestic and foreign lenders. Our borrowings are not affected by seasonality. For information concerning the interest rates on our indebtedness outstanding as of December 31, 2025, see Note 17 to our 2025 Consolidated Financial Statements, included elsewhere in this annual report. C. Research and Development, Patents and Licenses, Etc. Research and innovation The advancement of research and technological development is part of our strategic guidelines, and aims to implement innovation in operations, processes and services. Such efforts seek to increase organizational efficiency, reflecting in greater customer satisfaction, improved quality of life, environmental sustainability and competitiveness, with improved productivity and quality of our processes and services. Our strategic innovation process involves the creation of new business models, new ways of meeting the needs of consumers, new organizational processes, new ways of competing and cooperating in the business environment and improvements to service delivery, while at the same time promoting protection of the environment and public health. We won the Valor Inovação Brasil 2024 award, winning first place in the “Infrastructure” segment, which also incorporates the sanitation sector. The award is promoted by the newspaper Valor Econômico and Strategy&, which is PwC’s strategic consultancy. The award evaluates the innovative renewal of organizations in four major blocks: planning, execution, results and recognition. Our third place in 2022, second place in 2023 and first place in 2024, shows our role in innovation in the sanitation sector. In addition, considering the general ranking of the 150 most innovative companies in Brazil in all 25 mapped segments, we were ranked 11th in the same award. 82 Table of Contents We set up a Corporate “Research, Technological Development and Innovation” Program, which allows us to differentiate the financial resources spent specifically for this purpose within our budget structure. For the year ended December 31, 2025, we allocated R$76.8 million to Research, Development and Innovation (“RD&I”) projects solely through the corporate innovation area. These resources are a differential in our results and indicate our capacity for innovation and pioneering, which can bring fiscal, tariff and financial advantages. We carry out several actions for the implementation of innovative technological solutions systematically throughout our company. These solutions are aimed at improving construction and operational processes for water and wastewater systems, water and wastewater treatment solutions, asset control and management, renewable energy generation processes, energy efficiency, user relationship technologies, circular economy projects, waste reduction or reuse methods, among others. Some may even represent new business opportunities. In addition, we have submitted several innovation projects to the Brazilian Ministry of Science and Technology, requesting tax benefits provided for in certain Brazilian laws such as the “Lei do Bem” (Federal Law nº 11.196/2005). For the 2023 calendar year, 100% of our claims for RD&I expenditures were approved by that Ministry, totaling approximately R$66.2 million, which represents a tax credit of more than R$18.0 million for the company. Currently under review are our reimbursement requests for the 2024 calendar year, submitted in September 2025, totaling approximately R$79.4 million in R&D expenses, which, if totally approved, will represent a tax credit of over R$21.6 million, expanding the mechanisms for financial incentives for innovation. In addition, based on programs already in place in the power and gas sectors, we maintain a portfolio of prioritized projects with ARSESP (regulatory agency) in its Quadrennial Research and Technological Development Program for Innovation in Basic Sanitation Services (PD&I Program), which requires the application of the 0.05% of revenue to RD&I projects. Accordingly, the first cycle of the program, covering the tariff cycle 2021-2025, is in its final phase of completion. ARSESP has extended this first cycle of the program to include 2025. The total financial amount approved in the PD&I Program has surpassed R$41.0 million, to be applied in 14 projects approved by ARSESP to be carried out by the end of the cycle, in order to meet the goal of the current cycle, of which approximately R$14.8 million were executed in 2025.In line with business planning, the structuring of RD&I actions is based on the concept of a circular economy; that is, focused on the intelligence of nature, the circular process opposes the traditional linear production process. As part of this concept, residues are inputs to produce new products and new cycles. We have highlighted below certain RD&I projects that use the concept of a circular economy, which strongly supports resource recovery, as part of the processes for the water and sewage treatment. The sequential implementation of integrated actions for liquid, solid and gaseous sewage treatment phases at the sewage treatment plant in the municipality of Franca aims to optimize processes and transform the site into a resource recovery plant. Since 2018, a biogas upgrade project in this sewage treatment plant has been producing biomethane for vehicle use. This sewage treatment plant treats an average of 500 liters per second of sewage and produces around 2,500 m³ of biogas per day. The upgrade system can produce biomethane to replace 1,500 liters of common gas daily. The biomethane currently supplies part of our Franca fleet. As a result of the tests carried out, we are studying the replication of the technology in other large-scale sewage treatment plants located in the São Paulo metropolitan region and in the countryside of the State of São Paulo. In the same plant, we developed and are operating a sludge dryer based on solar radiation. The project also provides for other actions under development , such as the use of energy from hydraulic sources, as well as other beneficial applications of biogas such as the thermal sludge drying system currently being implemented. At the Barueri city sewage treatment plant, we implemented a plasma gasification system for the processing of sludge generated. At the end of the process, this system generates inert vitreous residue with a drastic reduction in its volume, with a potential for reuse as raw material in construction, meaning it does not need to be disposed of in landfills. In 2024, we concluded the installation of a pilot thermal sludge treatment plant using pyrolysis. In 2025, we performed operational tests to evaluate the potential of byproducts generated, such as biocarbon, pyrolytic oil and synthesis gas. In another ongoing project, results of the studies conducted under the Support Program for Research in Partnership for Technological Innovation (PITE-SABESP/FAPESP) in collaboration with UNESP and EMBRAPA were presented. These studies focused on transforming sludge waste from Water Treatment Plants into raw materials for civil engineering and agriculture, adding value to this byproduct. 83 Table of Contents As a component of our partnership with FAPESP, financial resources are invested equally to subsidize and support the development of basic and applied research projects under the Support Program for Research in Partnership for Technological Innovation for research projects in academic or research institutions, whose themes originated from the demands pointed out by the operational areas. This partnership has already resulted in 19 projects with different universities, such as: USP, Technological Institute of Aeronautics, UNIFESP, National Institute for Space Research and UNESP. The partnership provides for a non-refundable financing of R$50.0 million, divided equally between us and FAPESP. Projects from the first and second collaborative calls led to the filing of seven national patent applications before the INPI, three of which were granted, and also two international patent applications under the PCT system before the World Intellectual Property Organization, of which one was granted, and two software registration requests. The 12 projects selected in the third call for proposal, two have already been completed and another ten are currently in the development phase. Another innovative project that we have implemented is the Pinheiros River Oxygenation System. This project is being developed alongside other sanitation programs in Rio Pinheiros. The project consists of the implementation of an innovative oxygenation technology called SDOx. This technology, unlike conventional aeration technologies, has the potential to transfer a greater amount of oxygen to the water, through a supersaturated solution and its dispersion in the water. The goal of this project is to enhance the natural self-purification process by artificially increasing the oxygen levels in the water and to verify the technical-economic feasibility of the technology, with a view to replicating it. The project is in its fourth year of operation, with satisfactory results in terms of the gradual increase in oxygen concentration in the upper channel of the river. With the water quality data obtained with the project, a study is carried out by CETESB to assess the improvement in air quality around the Pinheiros River has shown a connection between the improvement in air quality and the improvement in the river’s water quality, as a result of the sanitation actions implemented in the Pinheiros River basin. Furthermore, in 2025 an innovative technology called water passive intake was implemented, consisting of a filter with flow control and backwashing with compressed air. This improvement aims to prevent shutdown events that were caused by the large amount of debris contained in the river water. A new department was created in 2024 with the purpose of expanding operations to rural areas and informal urban settlements. In 2025 this department structured guidelines and a portfolio of unconventional solutions to meet the targets set in the new concession agreement, moving towards universal access. Open Innovation We invest in the development and implementation of initiatives as part of our open innovation concept, a concept embedded in our actions. This concept generates ideas, thoughts, processes, prospect for solutions, shares needs, and exchanges knowledge and research with the participation of internal and external segments of our company. These contributions span a diverse range of sectors, enabling us to harness innovative solutions and technologies to enhance our processes, products and services. With this, we seek innovative solutions from the productive sectors of the market, including startups, for the development of solutions. Specifically, we encourage startups to take on challenges and propose validated solutions for a wide array of problems. Their goal is to achieve scalability and acceleration, ultimately creating a positive impact on their new products and businesses. This proactive approach aims to stimulate the sanitation market and potentially lead to the development of solutions that cater to our specific needs. We also perform tests on innovative solutions that arise in response to market demands, at various stages of development, to evaluate their suitability for application within our operations. These collaborative technological initiatives not only enable us to propose technology-driven enhancements to our processes and services but also afford external companies in the market an opportunity to rigorously trial their solutions in real sanitation environments. This provides a platform for assessing the effectiveness of their solutions and, when necessary, identifying areas for improvement. 84 Table of Contents A new internal innovation platform is under development, with the goal of capturing and developing innovative ideas and projects in a simplified, participatory way, open to all company employees. Through this open innovation program, we are laying the groundwork for an innovative ecosystem within the sanitation sector. New actions implemented by SABESP in 2025 to accelerate its initiatives to encourage and promote innovation: 1) Contracting specialized innovation services through the signing of two contracts focused on the Execution of Specialized Innovation Services, encompassing the implementation of 50 open innovation initiatives or the development of prototypes of solutions based on artificial intelligence. It also includes conducting SABESP's Innovation Diagnosis and promoting structured engagement actions, such as hackathons, bootcamps, and talk series, fostering a culture of innovation among employees and partners. 2) Implementation of the SABESP Innovation Hub: This space was implemented in the São José dos Campos, Parque de Inovação Tecnológica “PIT” (Technological Innovation Park), a strategic environment dedicated to the development of innovative technologies focused on the universalization of sanitation, operational efficiency, and continuous process improvement. We also publish the DAE Magazine a continuous-flow engineering journal produced by a dedicated team of opinion leaders that had released over 250 editions since its inaugural edition. This journal was ranked as “B1” category publication in the Qualis/CAPES system. Through the dissemination of technical and scientific articles covering topics related to basic and environmental sanitation, DAE Magazine’s objective is to foster and propagate advancements in processes, innovations and technological breakthroughs. D. Trend Information We expect to continue operating in a competitive and regulated environment, which may place pressure on our profitability and on the performance of our assets. The following list sets out what we believe to be the most important trends, uncertainties, and events that are reasonably likely to continue to have a material effect on our revenues, income from continuing operations, profitability, liquidity, and capital resources, or that may cause reported financial information to be not necessarily indicative of future operating results or financial condition: • Following the consummation of our privatization in July 2024, investment levels and capital expenditure activities increased significantly throughout 2024 and 2025, primarily in connection with the advancement of universalization targets under the Concession Agreement for URAE-1. We invested approximately R$10.6 billion in the period following privatization, with a substantial acceleration in 2025, including approximately R$6.5 billion invested in the first half of 2025 alone. These investments support the advancement of the universalization targets, which we expect to meet by 2029, but also create exposure to uncertainties such as pressure on supply chains, higher construction costs, and the need to operate in areas with complex engineering challenges, including informal settlements and rural zones. These factors may materially affect our cost structure, timelines, and capital requirements. For further information, see “Item 3.D. Risk Factors — Risks Relating to the Regulatory Environment — We are exposed to risks associated with the Concession Agreement for URAE-1, which may materially impact our financial condition and operating results.” • The New Legal Framework continues to introduce significant regulatory requirements, including stricter oversight, progressive universalization metrics, and potential tariff implications. ANA’s Reference Standard No. 08/2024, which became effective in May 2024, establishes clearer responsibilities for service providers, mandates quality standards, and reinforces the need for progressive expansion of service coverage. While these regulations aim to harmonize rules nationwide, they also create uncertainties regarding compliance costs, competitive dynamics, and the potential need to seek the restoration of economic and financial equilibrium under our concession agreements, particularly as municipalities formalize regionalized service structures under the New Legal Framework for Basic Sanitation. • Our operations remain exposed to droughts, storms, and other extreme weather conditions that may disrupt production, energy supply, and service continuity. In 2025, we experienced one of the driest periods in the Southeast region of Brazil in the past decade, adversely affecting the storage levels of our water sources. More broadly, torrential rainfall events and severe storms have increasingly caused interruptions due to impacts on energy distribution infrastructure, reducing production capacity and increasing operational risk. 85 Table of Contents These risks may adversely affect water availability for abstraction, treatment, and distribution, and may have a material adverse effect on our financial condition and results of operations. For more information, see “Item 3.D. Risk Factors — Risks Relating to Environmental Matters and Physical and Climate Transition Risks — Extreme weather conditions and climate change may have a material adverse impact on our business, financial condition or results of operations” and “Item 3.D. Risk Factors — Risks Relating to Environmental Matters and Physical and Climate Transition Risks — Droughts, such as the 2014 – 2015 water crisis, can cause a material impact on consumption habits and, consequently, on our business, financial condition or results of operations.” In addition to the information set out above, see “Cautionary Statements About Forward-Looking Statements” for further information related to our forward-looking statements, and “Item 3.D. Risk Factors” for a description of certain factors that could affect our industry and our own performance in the future. E. Critical Accounting Estimates The disclosures related to judgements and estimates can be found in Note 6 to our 2025 Consolidated Financial Statements, which are included elsewhere in this annual report.