Executive Summary

Q1 2025 delivered modest beats vs consensus: Adjusted EPS of $1.02 vs $1.01* and revenue of $2.45B vs $2.30B*, with reaffirmed FY25 adjusted EPS guidance of $3.54–$3.60 and continued bias to the high end . EPS outperformance was driven primarily by a return to normal winter weather versus mild conditions in 1Q24; offsets included higher O&M tied to reliability programs and timing at NorthStar/DIG .
Constructive Michigan regulatory outcomes continue: March electric rate order, pending gas case with staff’s position viewed as a “constructive starting position,” and an ex parte filing for a deferred accounting order for what management called the costliest storm in company history (~$100M O&M) .
Balance sheet and funding plan are intact: $1B hybrid (junior subordinated) notes issued at 6.5% bolstered 2025 funding flexibility; consolidated investment-grade profile reaffirmed, with FFO/debt mid-teens targeted .
Load growth and data center momentum building: Pipeline expanded to ~9 GW with ~65% data centers; data center tariff filed to protect existing customers and support commercial arrangements; management sees upward pressure on load assumptions in upcoming REP/IRP .

Values marked with * are from S&P Global consensus estimates.

What Went Well and What Went Wrong

What Went Well
- “Normal” winter boosted earnings versus a mild Q1 2024, contributing ~$0.26/share of favorable variance; rate relief net of investments added ~$0.07/share .
- Constructive regulation: March electric rate order supporting reliability investments; gas case staff testimony seen as constructive; management remains confident in further constructive outcomes .
- Economic development and data centers: Pipeline grew to ~9 GW (≈65% data centers) after state sales/use tax changes; one large data center accelerated its ramp by almost a year .
What Went Wrong
- Extreme storms: Late Mar/early Apr system was the “costliest” in company history at roughly $100M O&M; CMS filed for deferred accounting but did not bake approval into guidance, necessitating cost countermeasures .
- Elevated O&M from reliability roadmap (vegetation management, restoration) pressured year-to-date variance by ~$0.05/share; NorthStar/DIG timing effects also pressured YoY variance .
- Tariff/IRA uncertainty remains an overhang, though CMS highlighted mitigants (domestic sourcing ~90%, flexible cap allocation, safe-harboring) and supportive MI energy law .

Financial Results

Headline Quarterly Trend (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD Millions)	$1,743*	$1,989*	$2,447
Operating Income ($USD Millions)	$409*	$467*	$494
Net Income to Common ($USD Millions)	$253*	$265*	$302
Diluted EPS (Reported) ($)	$0.84*	$0.88*	$1.01
Net Income Margin (%)	14.5%*	13.3%*	12.4%*

Values marked with * are from S&P Global.

Q1 2025 vs Estimates (S&P Global)

Metric	Consensus*	Actual	Surprise
Revenue ($USD Billions)	$2.3048*	$2.447	+$0.142B
Adjusted EPS ($)	$1.008*	$1.02	+$0.01

Values marked with * are from S&P Global.

Q1 2025 vs Q1 2024 (YoY)

Metric	Q1 2024	Q1 2025
Revenue ($USD Millions)	$2,176	$2,447
Operating Income ($USD Millions)	$412	$494
Net Income to Common ($USD Millions)	$285	$302
Diluted EPS (Reported) ($)	$0.96	$1.01
Adjusted EPS ($)	$0.97	$1.02

KPIs

KPI	Q1 2024	Q1 2025
Cash from Operations ($USD Millions)	$956	$1,000
Net Cash Used in Investing ($USD Millions)	$(637)	$(918)
Cash & Equivalents ($USD Millions)	$861 (end of period)	$526 (end of period)
Total Debt & Finance Leases ex. securitization ($USD Millions)	$15,866 (12/31/24)	$16,308 (3/31/25)

Note: Adjusted EPS reconciliation added $0.01 in Q1 2025 (restructuring/business optimization), similar to Q1 2024 .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS	FY 2025	$3.54–$3.60 (raised on Q4 call)	Reaffirmed $3.54–$3.60; confidence toward high end	Maintained
LT Adjusted EPS Growth	Multi‑year	6%–8%, “toward the high end”	Reaffirmed 6%–8%, continued bias to high end	Maintained
Annualized DPS	Ongoing	$2.06 (prior $0.515/qtr)	$2.17 (raised to $0.5425/qtr on Feb 6, 2025)	Raised
Utility Capital Plan	2025–2029	Prior plan implied +$3B lower	$20B, up $3B vs prior plan	Raised
Rate Base Growth	2024–2029	n/a	~8.5%/yr CAGR to $39.4B by 2029	New detail/emphasis

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Regulatory outcomes	Expect constructive electric order by March; staff “constructive starting position”; advocating storm tracker; frequent settlements on gas	Constructive March electric order; gas case staff viewed constructive; ex parte deferred accounting filing for historic storm	Improving clarity, constructive bias
Reliability & storms	Liberty audit supports proactive investments; cost efficiencies reduced restoration cost per interruption	Costliest storm (~$100M O&M); seeking deferral; cost offsets via CE Way, hiring limits, vendor reductions	Elevated costs but proactive mitigations
Data centers & load	Pipeline 6+ GW (60% manufacturing) with supportive MI law; filed GPD rate and exploring special rate structure	Pipeline ~9 GW (~65% data centers); one ramp accelerated; data center tariff filed; seeking settlements; upward pressure on load in REP/IRP	Strengthening
IRA/tariffs	Emphasized flexibility (own vs PPA, FCM) and domestic sourcing; low probability of full repeal	~90% domestic sourcing; safe-harboring; flexible cap allocation (shift to utility if needed)	Managed risk
NorthStar/DIG	DIG bilateral capacity pricing strengthening (5–6 handles vs $3–3.5 historical); planned outage in 2025	Timing impact at DIG a headwind in Q1 comps; two solar projects progressing; DIG remains main contributor over 5 years	Mixed near term; supportive medium term
Financing & credit	2025 plan contemplated ATMs; hybrids optional; investment-grade affirmed	Issued $1B 6.5% hybrid; ~$700M parent and ~$1.1B opco financings to go; rating affirmation and metrics focus	Solid access/liquidity

Management Commentary

“Results from the first quarter show we are on track to deliver operationally and financially for 2025.” – Garrick Rochow, CEO .
“We experienced a relatively normal winter…$0.26 per share of favorable variance…[and] $0.07 per share [from] rate relief net of investment-related expenses.” – Rejji Hayes, CFO .
“This storm was the costliest in our company’s history at roughly $100 million of O&M…we have sought a deferred accounting order…we have not presupposed approval.” – Rejji Hayes .
“Pipeline has grown to 9 gigawatts. With more of that shift, about 65% toward data centers…data center tariff…is the next logical step…protects our existing customers.” – Garrick Rochow .
“During the quarter, we issued $1 billion of junior subordinated notes…with a 6.5% coupon…tightest credit spread achieved for a hybrid and reset…” – Rejji Hayes .

Q&A Highlights

Storm cost deferral: First time seeking an accounting order of this type outside a rate case; timeline at commission discretion; management not assuming approval in guidance .
Gas rate case: Management is open to settlement; sees staff’s position as constructive; will push on ROE in rebuttal; confident in constructive outcome .
NorthStar/DIG: Renewable cap (~$2.5B gross over 5 years) with equity-light funding via sell-downs; if IRA transferability weakens, will raise hurdle rates or reallocate capital to utility .
Financing flexibility: Post-hybrid, ~$(0.7)B parent and ~$1.1B opco financing needs remain; multiple options under evaluation; goal to maintain mid-teens FFO/debt .
Data center tariff/commercialization: Tariff clarity could catalyze larger commitments; CMS avoids bespoke special contracts to limit long-term risk .

Estimates Context

Q1 2025 Adjusted EPS: $1.02 vs consensus $1.01* (beat ~$0.01).
Q1 2025 Revenue: $2.447B vs consensus $2.305B* (beat ~$$142M).
Estimate depth: 12 EPS contributors; 4 revenue contributors*.
Implication: Weather normalization and rate relief supported a modest beat; FY guide maintained with high-end bias as offsets (storm O&M) are addressed by cost controls and potential deferral.

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

Key Takeaways for Investors

Modest beat with reaffirmed FY guide, underpinned by normal weather and rate relief; management still guides “toward the high end” despite storm headwinds .
Regulatory cadence remains a catalyst: gas rate case (targeted order around Aug), data center tariff outcome, and REP ruling by mid‑September could support higher load and capex visibility .
Storm cost treatment is a swing factor: Approval of deferred accounting would reduce 2025 cost pressure and preserve upside from CE Way recurring savings .
Data center momentum is real: expanded 9 GW pipeline with tariff path designed to protect legacy customers; potential for load-driven upside in REP/IRP .
Funding secured, balance sheet intact: $1B hybrid reduces equity optics; ample levers (hybrids, tax credit transfers, ATM) to fund $20B 2025–2029 plan while targeting mid‑teens FFO/debt .
NorthStar/DIG remains accretive medium term: near‑term outage/timing headwinds should abate as bilateral pricing stays robust and new solar CODs come online .
Trading lens: Near-term catalysts include storm deferral decision, gas case settlement/order, and data center tariff clarity; constructive outcomes could support multiple and estimate revisions toward the top end of the range.

All company financial and management commentary citations: **[811156_0001104659-25-038300_tm2513034d1_ex99-1.htm:1]** **[811156_0001104659-25-038300_tm2513034d1_ex99-1.htm:2]** **[811156_0001104659-25-038300_tm2513034d1_ex99-1.htm:3]** **[811156_0001104659-25-038300_tm2513034d1_ex99-1.htm:4]** **[811156_0001104659-25-038300_tm2513034d1_ex99-2.htm:0]** **[811156_0001104659-25-038300_tm2513034d1_ex99-2.htm:1]** **[811156_0001104659-25-038300_tm2513034d1_ex99-2.htm:3]** **[811156_20250424DE71576:0]** **[811156_20250424DE71576:1]** **[811156_20250424DE71576:2]** **[811156_20250206DE13455:0]** **[811156_CMS_3422955_1]** **[811156_CMS_3422955_2]** **[811156_CMS_3422955_3]** **[811156_CMS_3422955_4]** **[811156_CMS_3422955_6]** **[811156_CMS_3422955_7]** **[811156_CMS_3422955_8]** **[811156_CMS_3422955_11]** **[811156_CMS_3422955_12]** **[811156_CMS_3422955_14]** **[811156_CMS_3422955_15]** **[811156_1969470_3]** **[811156_CMS_3405041_4]** **[811156_CMS_3405041_6]** **[811156_CMS_3405041_16]** **[811156_CMS_3405041_17]** **[811156_CMS_3405041_18]**. 
Values marked with * are retrieved from S&P Global.

CMS ENERGY CORP (CMS)·Q1 2025 Earnings Summary