The purpose of the study is to investigate the influence of digitalization on a specific water utility company in Batangas, with a focus on business performance, innovation capabilities, and knowledge management. The study is inspired by the need for the water utility industry to transition from conventional to digitally driven operations to meet industry demands and improve overall efficiency. The study addresses the need to embrace digitalization for sustainable water management. To assess the influence of digitalization on the company, the study employs a quantitative, descriptive, causal research design with Likert scale to measure the variables in the questionnaires. The research framework considers the connections between digitalization, business performance, innovation capabilities, and knowledge management. The study used a simple random sampling strategy to select 115 respondents from the water utility. Mean and standard deviation is used to describe the level of perception of the employee with the given variables while linear regression is used to evaluate the hypotheses. The study found out that all relationships are statistically significant between digitalization and innovation capabilities, knowledge management, business performance, and mediation analyses show partial mediation. Thus, the study recommends prioritizing digital transformation through tools like smart meters, employee training, and knowledge management to improve efficiency and address challenges like water scarcity.