ATMOS ENERGY CORP (ATO) Q3 2025 Earnings Summary

Executive Summary

Atmos Energy delivered a steady Q3 FY25 with modest beats: EPS $1.16 vs $1.146 consensus and revenue $838.8M vs $823.0M consensus, helped by regulatory outcomes, customer growth, and stable APT throughput; management raised FY25 EPS guidance to $7.35–$7.45 from $7.20–$7.30, citing a ~$0.10 uplift from new Texas legislation (HB 4384) effective June 20, 2025 .*
Year-to-date, EPS reached $6.40 on $1.0B net income; capex YTD $2.6B (≈86% on safety/reliability); equity capitalization ~60% and liquidity ~$5.5B, underscoring a strong balance sheet to fund ~$3.7B FY25 capex .
Regulatory momentum continues: ~$170M in annualized regulatory outcomes implemented in Q3 and $351M YTD (press release cited $321.8M YTD), with ~$229M in progress; timing favors continued 2025–26 earnings visibility .
Long-term algorithm intact: management reiterated 6–8% annual EPS growth and sees improved cash flow benefiting financing flexibility; $1.7B in existing equity forward proceeds largely covers FY25–26 equity needs .
Key near-term stock catalysts: the HB 4384 deferral benefit realization into Q4, the Abilene data center load ramp (APT rider revenue share), and continued rate implementations into FY26 .

What Went Well and What Went Wrong

What Went Well

Guidance lifted again: FY25 EPS guidance raised to $7.35–$7.45 (from $7.20–$7.30 in Q2 and $7.05–$7.25 in Q1), driven by TX legislation benefits, APT through-system expectations for Q4, and improved collections .
Demand and growth: YTD added ~58k new residential customers (~45k in Texas) and 22 new industrial customers (anticipated ~3.4 Bcf annual load when fully operational), reinforcing structural growth in Texas and across LDCs .
Capital and liquidity: ~$5.5B liquidity, $1.7B forward equity capacity pre-funded, recent $500M 10-year notes at 5.2%, and weighted average debt cost ~4.17% with ~17-year average maturity support the capex plan .

Quoted: “Our third quarter results reflect the hard work and dedication… while safely and reliably operating our natural gas distribution, transmission, and storage systems” — Kevin Akers, CEO .

What Went Wrong

O&M inflationary pressures: Consolidated O&M up ~$85M YTD from higher labor, line locate, pipeline inspection, system monitoring, and bad debt; management still targets FY25 O&M ex-bad debt of $860–$880M, implying tighter Q4 control .
APT through-system normalization: After strong 1H, management expects FY25 through-system contribution roughly in line with FY24 and a more “normal” environment for FY26, limiting upside from spreads/volumes .
Data inconsistency on YTD regulatory outcomes: The press release cited $321.8M implemented YTD vs CFO’s $351M on the call; though both signal solid rate momentum, the discrepancy may require follow-up for modeling precision .

Financial Results

Headline Metrics vs Prior Year and Prior Quarter

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD Millions)	$701.5*	$1,950.5*	$838.8*
Net Income ($USD Millions)	$165.6*	$485.6*	$186.4*
Diluted EPS ($)	$1.08*	$3.03*	$1.16*
EBIT Margin (%)	32.15%*	32.60%*	30.87%*
Net Income Margin (%)	23.60%*	24.90%*	22.23%*

Notes:

Q3 2025 EPS $1.16 and revenue $838.8M reflect modest YoY growth from Q3 2024 and seasonally lower results vs the winter-heavy Q2. Margin compression QoQ ties to seasonality and higher O&M.
Values with * are retrieved from S&P Global.

Actuals vs Wall Street Consensus (Q3 2025)

Metric	Consensus	Actual	Surprise
Revenue ($USD Millions)	$823.0*	$838.8*	+$15.8 (+1.9%)
Primary EPS ($)	$1.1457*	$1.16*	+$0.014 (+1.2%)

Consensus from S&P Global; small but positive beats on both lines [Values retrieved from S&P Global].

Segment/Driver Highlights (YTD contributions)

Driver (YTD FY25)	Contribution
Regulatory outcomes (both segments)	+$322M operating income
Distribution customer growth & industrial load	+$22M operating income
APT throughput revenues	+$12.5M revenue, most recognized 1H
Higher contracted APT capacity (tariff)	+$12.5M revenue

KPIs

KPI	Current Detail
Residential customer adds (TTM to 6/30/25)	~58,000 (≈45,000 in Texas)
Industrial customers added (YTD)	22; anticipated annual load ~3.4 Bcf once fully operational
Abilene data center contract	~30 Bcf annual gas expected when fully operational; revenue shared via APT rider (75% benefits LDC customers)
Customer satisfaction (Q3)	97%

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EPS (diluted)	FY 2025	$7.20–$7.30 (Q2)	$7.35–$7.45 (Q3)	Raised
EPS (diluted)	FY 2025	$7.05–$7.25 (Q1)	$7.35–$7.45 (Q3)	Raised (from Q1 baseline)
Capex	FY 2025	≈$3.7B (Q1)	≈$3.7B (Q3)	Maintained
O&M ex bad debt	FY 2025	$860M–$880M (Q2)	$860M–$880M (Q3)	Maintained
Dividend	FY 2025	Indicated annual $3.48; $0.87/qtr declared	$0.87/qtr (Sep 8, 2025 pay date)	Maintained

Management noted HB 4384 is expected to add ~+$0.10 to FY25 EPS (effective from June 20 through fiscal year-end), underpinning the guidance raise .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 FY25)	Current Period (Q3 FY25)	Trend
EPS Guidance	Q1: $7.05–$7.25 reaffirmed ; Q2: raised to $7.20–$7.30	Raised to $7.35–$7.45; ~$0.10 uplift from HB 4384 plus collections and APT expectations	Improving
APT Through-System	Q1: early-quarter spread strength normalized later ; Q2: FY25 “slightly less than FY24,” timing shifted to 1H	FY25 in line with FY24; FY26 expected more “normal”	Normalizing
Regulatory Outcomes	Q1: $152M implemented; $126M in progress	Q3: ~$170M implemented in quarter; $351M YTD (press release cited $321.8M)	Strong cadence
Texas Legislation (HB 4384)	Q2: watched bills; cloud computing & SSI trackers in TX rate cases	HB 4384 allows broader deferrals; ~80% of capex eligible vs ~45% before; ~$0.10 FY25 EPS benefit	Positive
O&M Trajectory	Q1/Q2: elevated O&M; guide $860–$880M ex bad debt	YTD +$85M; Q4 expected ~$10M lower vs prior-year Q4 (ex-bad debt)	Stabilizing
Financing & Liquidity	Q1: $1.5B forwards, balanced equity/debt strategy	~$5.5B liquidity; $1.7B forwards; $500M 10yr at 5.2%; WACD 4.17%	Solid

Management Commentary

Strategy and execution: “Our… employees… safely and reliably [operate] our natural gas distribution, transmission, and storage systems… [benefiting] our customers and the communities we… serve” — Kevin Akers, CEO .
HB 4384 impact: The legislation increases eligible TX deferrals from ~45% to ~80% of total capex, most associated with APT; rules due by February following enactment .
Guidance and long-term outlook: “We have updated our fiscal 2025 EPS guidance to $7.35–$7.45… we believe EPS will continue to grow 6%–8% annually” — Chris Forsythe, CFO .
Cash and funding: “Equity capitalization of 60% and approximately $5.5B of liquidity… $1.7B net proceeds under existing forward sales” .
Demand backdrop: Strong TX employment trends; ~58k residential adds TTM with concentration in Texas; ongoing industrial additions and a contracted Abilene data center load (~30 Bcf/yr) benefiting APT/LDCs via rider sharing .

Q&A Highlights

HB 4384 EPS uplift timing: ~$0.10 reflects impact from June 20 (effective date) through fiscal year-end (≈one quarter), not a full-year run-rate .
Benefit mix by segment: For Q4, roughly two-thirds of the legislative benefit is in Distribution and one-third in APT based on forecasted asset placements .
Through-system trajectory: FY25 in line with FY24; FY26 modeled as more “normal,” contingent on spreads/volumes; management will update in November .
Data center and C&I pipeline: Strong inbound interest across states; Abilene project to generate on-site power with ~30 Bcf/yr; additional clarity expected with five-year plan update .
Financing strategy: Balanced equity/debt; improved operating cash flow contemplated in planning; equity needs largely secured for FY25–26 via forwards .

Estimates Context

Track record:
- Q1 FY25: EPS $2.23 vs $2.211; revenue $1.176B vs $1.350B (EPS beat, revenue miss)*.
- Q2 FY25: EPS $3.03 vs $2.878; revenue $1.950B vs $1.811B (beats on both)*.
- Q3 FY25: EPS $1.16 vs $1.146; revenue $0.839B vs $0.823B (small beats on both)*.
Q3 FY25 estimate detail: EPS consensus based on ~10 estimates; revenue based on ~5 estimates; magnitude of beats (~1–2%) suggests limited model reset solely from results; the guidance raise and HB 4384 are the primary drivers for estimate revisions [Values retrieved from S&P Global].

Estimates Table (Select Quarters)

Metric	Q1 2025 Estimate	Q1 2025 Actual	Q2 2025 Estimate	Q2 2025 Actual	Q3 2025 Estimate	Q3 2025 Actual
Revenue ($USD Millions)	$1,349.8*	$1,176.0*	$1,811.8*	$1,950.5*	$823.0*	$838.8*
EPS ($)	$2.211*	$2.23*	$2.878*	$3.03*	$1.1457*	$1.16*

Values retrieved from S&P Global.

Key Takeaways for Investors

Guidance momentum is intact and now explicitly supported by TX HB 4384; expect Q4 realization of the ~+$0.10 EPS uplift and more detail on FY26/5-year plan in November — a potential positive catalyst .
Regulatory cadence remains robust with substantial rate actions implemented/in progress, underpinning visibility into FY25–26 earnings and rate base growth .
O&M pressures are managed within guidance; Q4 O&M ex-bad debt expected ~-$10M YoY, signaling discipline as capex accelerates .
Demand tailwinds (TX population/employment growth) plus industrial and data center loads reinforce the case for sustained LDC and APT investment and throughput .
Financing risk is contained near term: ample liquidity, pre-arranged equity forwards, manageable debt ladder and cost of debt support capex without stressing the balance sheet .
Model revisions likely skew positive on FY25 EPS (guidance raise) with a wait-and-see stance on FY26 pending through-system normalization and the incremental impact of HB 4384 on deferral timing .
Trading lens: modest beats alone are not catalytic, but the legislative uplift, reiterated 6–8% EPS CAGR, and November plan update create identifiable near-term checkpoints for sentiment .

Additional references and disclosures:

Q3 FY25 press release and 8-K Item 2.02: YTD EPS $6.40; net income $1.0B; capex $2.6B; liquidity $5.5B; FY25 EPS guide $7.35–$7.45; FY25 capex ≈$3.7B; $0.87 quarterly dividend .
Q2 FY25 press release/guidance: EPS raised to $7.20–$7.30; capex ≈$3.7B .
Q1 FY25 press release/guidance: EPS $7.05–$7.25; capex ≈$3.7B .
Dividend declaration: $0.87/share payable Sep 8, 2025 .

Values marked with * are retrieved from S&P Global.