Executive Summary

Revenue beat, EPS in line: Q3 revenue of $6.01B exceeded consensus ($5.57B*), while operating EPS of $1.80 was essentially in line with consensus ($1.805*). EBITDA also topped expectations ($2.44B actual vs $2.36B*), driven by strong commercial/industrial load and transmission investment . Values retrieved from S&P Global.
Capital plan and LT growth raised: AEP unveiled a $72B five-year capital plan and increased long-term operating EPS growth to 7–9% through 2030; rate base expected to compound ~10% to $128B by 2030 .
FY25 guidance maintained, upper half: Reaffirmed 2025 operating EPS of $5.75–$5.95 and guided to upper half; introduced FY26 operating EPS of $6.15–$6.45 (~8% y/y at midpoint) .
Dividend raised and financing de-risked: Quarterly dividend increased to $0.95; financing plan targets FFO/debt of 14–15% with modest growth equity (~$5.9B) back-end loaded, supported by a DOE loan guarantee for 5,000 miles of transmission upgrades .

What Went Well and What Went Wrong

What Went Well
- “We are extremely excited to announce our new increased long-term operating earnings growth rate of 7% to 9%…driven by one of the largest capital plans in the industry, $72 billion.” — CEO Bill Fehrman .
- Commercial/industrial load acceleration (nearly 8% rolling 12 months) supported transmission and rate outcomes; year-to-date operating EPS up $0.40 to $4.78 .
- Strong legislative/regulatory progress (OH HB15 forward-looking test year; TX HB5247 unified tracker; OK SB998 deferral) to reduce lag and improve earned ROEs .
What Went Wrong
- Operating EPS decreased y/y in Q3 (1.80 vs 1.85) partially due to the prior-year sale of the distributed resources business in Generation & Marketing .
- Transmission Holdco operating earnings down y/y in Q3 (199.9 vs 214.7) and GAAP down (199.9 vs 214.7), reflecting segment mix and prior-year items .
- Continued O&M and depreciation headwinds from system improvements and higher capital investment; interest expense pressure noted by CFO .

Financial Results

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD Millions)	$5,420.1	$5,086.9	$6,010.4
GAAP EPS ($)	$1.80	$2.29	$1.82
Operating EPS ($)	$1.85	$1.43	$1.80

Segment Operating Earnings ($USD Millions)	Q3 2024	Q3 2025
Vertically Integrated Utilities	$572.4	$573.5
Transmission & Distribution Utilities	$245.2	$259.1
AEP Transmission Holdco	$214.7	$199.9
Generation & Marketing	$99.2	$48.4
All Other	$(146.1)	$(118.0)
Total Operating Earnings	$985.4	$962.9

Selected KPIs (kWh, Millions) – Vertically Integrated	Q3 2024	Q3 2025	YoY
Residential	8,959	8,842	(1.3%)
Commercial	6,910	7,355	6.4%
Industrial	8,562	8,552	(0.1%)
Total Retail	25,043	25,348	1.2%
Wholesale	3,559	4,217	18.5%

Selected KPIs (kWh, Millions) – T&D Utilities	Q3 2024	Q3 2025	YoY
Residential	8,206	8,256	0.6%
Commercial	9,671	12,610	30.4%
Industrial	6,725	7,009	4.2%
Total Retail	24,815	28,084	13.2%
Wholesale	504	552	9.5%

Q3 2025 Actual vs Consensus	Consensus*	Actual	Surprise
Revenue ($USD)	$5.569B*	$6.010B	+$0.44B (Beat)
Operating EPS ($)	$1.805*	$1.80	$(0.005) (Inline/Miss)
EBITDA ($USD)	$2.359B*	$2.435B*	+$0.076B (Beat)

Values retrieved from S&P Global.
Note: Operating EPS treated as “Primary EPS” in consensus.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Operating EPS	FY 2025	$5.75–$5.95	$5.75–$5.95 (upper half)	Maintained; guided upper half
GAAP EPS (Indicative)	FY 2025	$6.57–$6.77	$6.58–$6.78	Maintained/slightly higher
Operating EPS	FY 2026	N/A	$6.15–$6.45	New
LT Operating EPS Growth	2026–2030	6–8%	7–9%; ~9% CAGR expected	Raised
Rate Base CAGR	Through 2030	N/A	~10% to $128B	New disclosure
Capital Plan	2026–2030	~$70B expected	$72B confirmed	Raised
Dividend	Quarterly	$0.93 (implied prior)	$0.95 (+$0.02)	Raised
FFO/Debt Target	Plan horizon	14–15% target reiterated	14–15%; currently S&P 15.7%, Moody’s above 13% threshold	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
AI/Data Centers & C&I Load	500+ interconnection requests; >20 GW contracted; commercial +12.3% y/y; taker-pay contracts	28 GW contracted (+4 GW since July); ~2 GW data center load came online in Q3; ~80% data processors; LOA/ESA mix clarified	Accelerating, more contracted load
Regulatory/Lag	OH HB15, TX HB5247, OK SB998 constructive; shift to forward-looking test years; unified tracker	Continued progress across states; focus on earned ROE to ~9.5% by 2030	Improving recovery mechanisms
Transmission Investment	Texas 765 kV line awarded; PJM RTEP/Valley Link; >50% of 2026 op earnings from transmission	765 kV scale and supply secured; transmission rate base >$50B by 2030	Upside, core earnings engine
Generation Strategy	IRPs in multiple states; acquisitions (Green Country, Oregon CCGT)	Additional filings (I&M up to 4.1 GW; PSO ~1.3 GW); balanced gas/renewables	Building capacity for reliability
Affordability	Emphasis on tariffs to protect existing customers	Residential rate increase forecast ~3.5%/yr to 2030; DOE loan lowers bill impacts	Managed bill trajectory
Financing & Equity	$2.82B transco minority; $2.3B forward equity; equity needs completed through 2029 for $54B plan	$5.9B growth equity planned; >80% back-half; ATM in 2026 (~$1B)	Flexible, back-end issuance
Behind-the-meter (Bloom)	Grandfathered 2 Ohio projects; optionality on remaining 900 MW	Continuing customer discussions; update expected around EEI	Active but measured
SMR Exploration	Early site permits in IN/VA	Requires capital protections; regulatory support needed	Evaluative phase

Management Commentary

“We are pleased to share that AEP reported third quarter 2025 operating earnings of $1.80 per share or $963 million… [and] our 2026 operating earnings guidance range of $6.15 to $6.45 per share.” — CEO Bill Fehrman .
“Our $72 billion five-year capital plan…drives a five-year rate-based CAGR of 10%…nearly 90% of investment recovered through reduced lag mechanisms.” — CFO Trevor Mihalik .
“Texas House Bill 5247…eliminating regulatory lag…supports increased capital investment in AEP Texas.” — CFO Trevor Mihalik .
“We forecast residential customer rates to increase…~3.5% annually…below the five-year average inflation rate of over 4%.” — CEO Bill Fehrman .

Q&A Highlights

Earnings growth cadence and equity: Peak capex ~$17B in 2027–2028 drives EPS step-up; equity needs are modest and back-end weighted with ATM in 2026 and potential block later; no asset sales planned .
LOA vs ESA confidence: LOAs outside Texas included; ESA more binding; 28 GW supported by financial commitments; conservative forecast drawn from 190 GW interest .
Dividend policy: Board raised DPS by ~2%; payout targeted at 50–60% given robust capex plan .
Transmission opportunities: PJM open window included in plan; transmission rate base to exceed $50B by 2030; more projects anticipated .
Earned ROE trajectory: Target ~9.5% by 2030; improvements across states; West Virginia remains a focus with reconsideration filing .

Estimates Context

Q3 2025 results vs consensus: Revenue beat ($6.01B vs $5.57B*), EPS inline/marginal miss ($1.80 vs $1.805*), EBITDA beat ($2.435B* vs $2.359B*). Segment strength and commercial load growth supported revenue/EBITDA; Operating EPS impacted by prior-year business sale and investment-related costs . Values retrieved from S&P Global.

Metric	Consensus*	Actual
Primary EPS ($)	1.805*	1.80
Revenue ($USD Billions)	5.569*	6.010
EBITDA ($USD Billions)	2.359*	2.435*

Forward consensus (next quarters) suggests typical seasonal EPS/revenue patterns with Q4 softness and re-acceleration in Q1/Q2, consistent with AEP’s guidance cadence (FY26 EPS $6.15–$6.45) . Values retrieved from S&P Global.

Key Takeaways for Investors

Revenue/EBITDA beat underscores demand strength from data centers and industrials; transmission remains the primary earnings lever into 2026–2030 .
Stock catalysts: Raised LT EPS growth (7–9%), formalized $72B plan, and new FY26 EPS guide should support estimate revisions and multiple stability .
Near-term setup: FY25 operating EPS in upper half; dividend increase signals confidence while preserving balance sheet for capex .
Risk monitor: Regulatory outcomes (e.g., West Virginia ROE/capital structure) and execution on generation filings; O&M/depreciation pressure as investments ramp .
Financing comfort: FFO/debt targets re-affirmed; growth equity back-end loaded, minimizing near-term dilution; DOE loan lowers customer costs and supports regulatory goodwill .
Watch load conversion: Continued conversion from LOA to ESA and timing of PJM/ERCOT projects; management messaging indicates conservative forecasting and potential upside .
Trading angle: Revenue/EBITDA beats with steadied EPS, plus upgraded LT growth narrative, favors a constructive near-term view; sensitivity to legislative/regulatory developments and capex execution pace.

Additional source materials referenced:

Q3 2025 press release and 8-K: revenue/EPS/segment data, guidance, capital plan .
Q3 2025 earnings call: strategy, financing, load growth details, ROE trajectory .
Q2 and Q1 2025 press releases/8-Ks: prior quarter baselines and guidance context .
Dividend increase and DOE loan guarantee press releases .

Values retrieved from S&P Global for consensus and EBITDA figures (*).

AMERICAN ELECTRIC POWER CO INC (AEP)·Q3 2025 Earnings Summary