Add the water, grits, and kosher salt to a medium saucepan set over medium heat.
Bring the mixture to a boil and then reduce the heat to medium-low just to keep the grits at a gentle simmer.
Cover and cook for 20-22 minutes, or until the water has been absorbed and the grits are tender. (Make sure to stir the grits a few times throughout cooking so they don’t burn on the bottom.)
Remove the grits from the heat and add the cream cheese, cheddar cheese, and butter. Stir until the cheeses have fully melted.
Season with additional salt (and freshly ground black pepper, if using) to taste. Serve immediately or store any leftovers in an airtight container in the fridge for up to three days.
Heat a nonstick skillet over medium heat and grease it with nonstick cooking spray (or 1 teaspoon of butter). Crack the eggs into the pan (or as many as will fit) and cover with a lid. Cook for 2-3 minutes, or just until the whites have set. Serve with grits.
Cream cheese will incorporate more smoothly if softened ahead of time.
You can use pepper jack cheese or another cheese, if you prefer. Freshly shredded cheese will be more flavorful and easier to incorporate than pre-shredded.
If you’re using these grits for something like Shrimp & Grits, feel free to swap the water for chicken stock (personal preference, but I do not recommend that substitution for breakfast).