ATMOS ENERGY CORP (ATO) Q4 2025 Earnings Summary

Executive Summary

Fiscal Q4 2025 EPS and revenue modestly beat S&P Global consensus; EPS was $1.07 vs $1.00 estimate and revenue was $0.737B vs $0.736B estimate, continuing the year’s execution momentum* (Values retrieved from S&P Global).
FY2025 EPS was $7.46, marking the 23rd consecutive year of EPS growth; Board rebased FY2026 EPS guidance to $8.15–$8.35 and raised the quarterly dividend to $1.00 ($4.00 annual) .
Management introduced a refreshed five-year plan to invest $26B (85% safety/reliability), target 13–15% annual rate base growth to ~$42B by FY2030, and recover ~95% of capex within six months under Texas HB 4384 .
Equity capitalization stood at ~60% with ~~$4.9B liquidity; forward ATM equity proceeds (~~$1.6B) fully cover FY2026 equity needs and part of FY2027, supporting balanced funding of ~$16B incremental financing over five years .
Potential stock reaction catalysts: dividend step-up and EPS guidance rebase, accelerated capital recovery from HB 4384, and visible Texas growth/infrastructure projects .

What Went Well and What Went Wrong

What Went Well

Rebased FY2026 EPS guidance ($8.15–$8.35) with a 6–8% CAGR through FY2030 and aligned dividend policy to grow with EPS; indicated FY2030 EPS $10.80–$11.20 .
HB 4384 materially reduces regulatory lag; company expects to recover ~95% of capex within six months and ~99% within 12 months, with ~60% of the impact recognized in Distribution over the plan horizon .
Clear capital plan visibility: $26B over five years (85% safety/reliability), $4.2B capex in FY2026, heavy Texas focus (~80% of spend) to support strong demand and customer growth .

Quote: “We plan to invest $26 billion, with approximately 85% of that planned investment allocated to safety and reliability… We will now begin to recover over 95% of our capital spending within six months” .

What Went Wrong

O&M (ex-VAT) for FY2025 was $874M, slightly above the midpoint of updated guidance, driven by higher employee-related, training, and administrative costs .
APT market commentary underscores volatility (e.g., Waha price swings); management assumes “normal activity” in planning but highlighted need to monitor spreads/throughput .
Q&A suggested investors seeking clarity on HB 4384 run-rate impact; management emphasized rebasing rather than simple annualization of prior quarter impacts .

Data point: “Consolidated O&M, excluding VAT expense, is $874 million… We also experienced higher employee-related costs” .

Financial Results

Quarterly Actuals vs Prior Periods

Metric	Q2 2025	Q3 2025	Q4 2025
Revenue ($USD Billions)	$1.951*	$0.839*	$0.737*
Diluted EPS ($)	$3.03*	$1.16*	$1.07*
EBIT Margin (%)	32.60%*	30.87%*	30.70%*
Net Income Margin (%)	24.89%*	22.23%*	23.71%*

Notes: * Values retrieved from S&P Global.

Actuals vs S&P Global Consensus

Metric	Q2 2025 Actual	Q2 2025 Consensus	Beat/Miss	Q3 2025 Actual	Q3 2025 Consensus	Beat/Miss	Q4 2025 Actual	Q4 2025 Consensus	Beat/Miss
EPS ($)	$3.03*	$2.88*	Beat	$1.16*	$1.15*	Beat	$1.07*	$1.00*	Beat
Revenue ($USD Billions)	$1.951*	$1.812*	Beat	$0.839*	$0.823*	Beat	$0.737*	$0.736*	Beat

Notes: * Values retrieved from S&P Global.

KPIs and Balance Sheet (FY2025 End)

KPI	Value
FY2025 EPS	$7.46
FY2025 Capex	$3.6B
O&M (ex-VAT) FY2025	$874M
Liquidity	~$4.9B
Equity Capitalization	~60%
Rate Base (FY2025 end)	~$21B
Residential Customers Added FY2025	~57,000
Quarterly Dividend (New)	$1.00; Annual $4.00

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EPS (Diluted)	FY2026	N/A (rebase announced)	$8.15–$8.35	Initiated/Rebased
EPS CAGR	FY2026–FY2030	6–8% framework referenced prior	6–8% off FY2026 midpoint; FY2030 EPS $10.80–$11.20	Maintained trajectory
Capex	FY2026	~$3.7B for FY2025 was prior year guide	~$4.2B	Raised vs FY2025 actual
Five-Year Capex	FY2026–FY2030	N/A	$26B; ~85% safety/reliability; ~80% Texas	New plan
Rate Base Growth	FY2026–FY2030	N/A	13–15% annually to ~$42B by FY2030	New plan
O&M (ex-VAT)	FY2026	N/A	$865M–$885M	Initiated
Dividend	FY2026	$0.87 quarterly; $3.48 annual for FY2025	$1.00 quarterly; $4.00 annual	Raised
Capital Recovery (Texas HB 4384)	Ongoing	~90% recovery timing prior planning cadence	~95% within 6 months; 99% within 12 months	Improved lag

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2025)	Previous Mentions (Q3 2025)	Current Period (Q4 2025)	Trend
Texas HB 4384 (lag reduction)	Legislative impact anticipated; eligibility rising to ~80% of total capex; details to be updated in Q4 plan	Expected ~$0.10 EPS uplift in Q4; modeling full-year effect in FY2026	Rebase EPS guidance; ~95% capex recovery within 6 months; ~60% impact in Distribution; 6–8% EPS CAGR	Strengthening / implemented
APT Through-System & Waha	Spreads widened vs Waha; volumes up; normalization expected later	2025 contribution in line with 2024; market volatility; monitoring outlook	Assume normal market; note Waha volatility; 35% of impact flows back to customers	Normalizing with vigilance
Customer Growth/Data Centers	Strong TX growth; industrial adds; APT projects underway	Data center in Abilene; ~30 Bcf annually; inquiries across states	Continued growth across classes; fortifications for DFW/IF-35 corridor	Solid demand momentum
O&M and Compliance	Pull-forward maintenance; higher line locating; balanced spend	FY2025 O&M targeted $860–$880M	FY2025 O&M $874M; FY2026 O&M $865–$885M; focus on safety/monitoring/damage prevention	Elevated but controlled
Funding & Balance Sheet	ATM covers FY2025–26 equity; swap for LT debt	~60% equity; $5.5B liquidity; priced forwards	~60% equity; ~$4.9B liquidity; $1.6B forward equity fully covers FY2026 & part FY2027; ~$16B incremental financing plan	Well-funded plan
Capex & Projects	WA Loop Phase 2; Bethel–Groesbeck progressing	Integrity programs; interconnects	WA Loop Phase 2 and Bethel–Groesbeck nearing completion; integrity inspections ongoing to 2026	On schedule

Management Commentary

“Yesterday, we reported diluted earnings per share of $7.46. This marks the 23rd consecutive year of earnings per share growth. Fiscal 2025 also represents the 41st consecutive year of dividend growth.”
“Following our robust five-year planning process, we plan to invest $26 billion, with approximately 85%… allocated to safety and reliability… With HB 4384, we will recover over 95% of capital spending within six months and 99% within 12 months.”
“We have initiated our fiscal 2026 EPS guidance in the range of $8.15–$8.35… we anticipate EPS growth of 6–8% annually… EPS in fiscal 2030 $10.80–$11.20… Board approved a quarterly dividend of $1.00; indicated annual $4.00.”
“We finished the fiscal year with an equity capitalization of 60% and approximately $4.9B in available liquidity… $1.6B relates to forward equity proceeds… fully satisfies our FY2026 equity needs and a portion of FY2027.”

Q&A Highlights

HB 4384 effect and recovery cadence: Management emphasized rebasing FY2026 and that the plan assumes existing ROEs/capital structures; ~60% of HB 4384 benefit recognized in Distribution; not simply a linear annualization of Q4’s impact .
Capex recovery and growth optimization: Strategy unchanged; investments driven by safety/reliability and fortifications to support TX demand; “we haven’t sped anything up” .
Market conditions (Waha/through-system): Planning assumes normal conditions; noted volatility; 35% of impact flows back to customers in APT rider construct .
Dividend policy: Dividend rebased; intent to grow 6–8% in line with EPS over the five-year plan .
Funding mix: Target ~60% equity capitalization; roughly 50/50 debt/equity over ~$16B incremental financing; ATM program to meet equity needs .

Estimates Context

Q4 2025: EPS $1.07 vs $1.00 consensus; Revenue $0.737B vs $0.736B consensus — broad-based modest beats* (Values retrieved from S&P Global).
Prior quarters underscored consistent execution: Q2 EPS $3.03 vs $2.88; revenue $1.951B vs $1.812B; Q3 EPS $1.16 vs $1.15; revenue $0.839B vs $0.823B* (Values retrieved from S&P Global).
Implications: Street models likely to raise FY2026 EPS for rebase ($8.15–$8.35), incorporate improved lag recovery from HB 4384, and reflect $4.2B FY2026 capex and 13–15% rate base growth trajectory .

Key Takeaways for Investors

Robust fundamentals with structural lag reduction: HB 4384 materially improves capex recovery, supporting the 6–8% EPS CAGR off the FY2026 midpoint .
Dividend rebase to $4.00 annual enhances total return profile and signals confidence in long-term cash generation .
Capital intensity remains elevated but targeted: $26B five-year plan (>85% safety/reliability), focused in Texas where demand and regulatory frameworks are favorable .
Balance sheet and funding visibility: ~60% equity capitalization, ~$4.9B liquidity, and forward ATM equity covering FY2026 and part of FY2027 reduces financing risk .
Watch APT market dynamics (Waha/through-system): Management’s “normal activity” assumption is prudent; monitor spreads/volumes for potential upside/downside to segment contribution .
Regulatory cadence supportive: $146M annualized operating income increases implemented in Distribution since FY2026 began, with continued annual filings and select GRCs planned .
Near-term trading: Dividend step-up and EPS guidance rebase are positive sentiment drivers; any updates on WA Loop and Bethel–Groesbeck in-service timing, plus Texas demand indicators, could provide incremental catalysts .

Notes:

S&P Global disclaimer: All values marked with an asterisk (*) were retrieved from S&P Global.