Executive Summary

Q2 2025 delivered an adjusted EPS of $0.71, a beat versus Wall Street consensus of $0.68, and operating revenue of $1.84B vs consensus $1.70B, reaffirming FY25 adjusted EPS guidance of $3.54–$3.60 toward the high end * *. Consensus values retrieved from S&P Global.
Management announced an agreement with a new data center expected to add up to 1 GW of load growth, expanding long-term demand visibility and supporting incremental capacity investments .
Favourable weather, constructive rate relief, and strong execution were key positive drivers; elevated O&M (vegetation management) and a planned DIG outage were headwinds, partially mitigated by a storm expense deferral approved by the commission .
Financing progress de-risked equity needs and maintained solid IG ratings; strong appetite for tax credit transfers supports liquidity and capex execution .

What Went Well and What Went Wrong

What Went Well

Reaffirmed FY25 adjusted EPS guidance ($3.54–$3.60) and 6–8% LT growth, with confidence toward the high end: “we are on track to deliver on our earnings guidance” .
Signed agreement with a large data center, “expected to add up to 1 gigawatt of load growth,” expanding growth runway and economic benefits for Michigan .
Weather tailwind and rate relief: Q2 favourable weather contributed ~$0.32/share vs prior year; rate outcomes added ~$0.09/share YTD, underpinning delivery against plan .

What Went Wrong

Higher O&M from vegetation management aligned with reliability roadmap caused a ~$0.04/share drag vs 2024; slightly lower non-weather sales volumes also weighed on results .
Planned outage at Dearborn Industrial Generation (DIG) reduced first-half contribution; normalization is expected in 2H .
Parent financing/taxes among other items added conservatism for the remainder of the year (estimated -$0.14 to -$0.20/share variance), necessitating continued productivity and cost controls .

Financial Results

Consolidated Revenues and EPS (GAAP and Adjusted)

Metric	Q2 2024	Q1 2025	Q2 2025
Operating Revenue ($USD Billions)	$1.61	$2.45	$1.84
Diluted EPS (GAAP) ($)	$0.65	$1.01	$0.66
Adjusted EPS ($)	$0.66	$1.02	$0.71

Profitability and Cash Flow Metrics

Metric	Q2 2024	Q1 2025	Q2 2025
EBITDA Margin %	37.15%*	37.76%*	35.47%*
EBIT Margin %	20.16%*	21.90%*	19.80%*
Net Income Margin %	12.32%*	12.42%*	10.94%*
Cash from Operations ($USD Millions)	$707*	$1,000	$414*
Capital Expenditure ($USD Millions)	$(681)*	$(888)	$(884)*

Values marked with * retrieved from S&P Global.

Actual vs Estimates (Q2 2025)

Metric	S&P Global Consensus	Actual
Adjusted/Primary EPS ($)	$0.68*	$0.71
Revenue ($USD Billions)	$1.70*	$1.84

Values marked with * retrieved from S&P Global.

GAAP to Non-GAAP Reconciliation (EPS Focus)

Item	Q2 2024	Q2 2025
GAAP Diluted EPS ($)	$0.65	$0.66
Reconciling Items ($/share): Other exclusions; Tax impact; State tax policy change	$0.01; (*) ; -	$0.01; (*) ; $0.04
Adjusted EPS ($)	$0.66	$0.71

(*) Less than $0.01 per share .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EPS	FY 2025	$3.54–$3.60 (raised from $3.52–$3.58 on 2/6/25)	$3.54–$3.60; confidence toward high end	Maintained
LT Adjusted EPS Growth	Multi-year	6–8%	6–8%; confidence toward high end	Maintained
Annual Dividend Per Share	CY 2025	$2.17 (19th consecutive increase)	Quarterly dividend of $0.5425 payable Aug 29, 2025	Maintained trajectory
Utility Capital Plan	2025–2029	$17B prior plan	$20B (up $3B), ~8.5% rate base CAGR to $39.4B by 2029	Raised
Tax Credit Transfers	5-year plan	>$500M prior plan	~$700M planned transfers over five years	Raised

No revenue, margin, opex, or tax rate guidance was provided beyond EPS trajectory.

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4’24 and Q1’25)	Current Period (Q2’25)	Trend
Data center load growth	Pipeline grew to 9 GW; ~65% data centers; tariff filing underway	Agreement reached with a large data center, up to 1 GW; early ramp in 2029–2030	Strengthening
Reliability & storms	Liberty audit supports investments; push for storm recovery mechanism	Historic storm costs deferred; vegetation mgmt spend elevated; audit validates deferral	Improving framework
Tariffs & supply chain	Minimal exposure; majority domestic sourcing; diversification	~$250k tariff impact to date; ~90% domestic supply chain; active vendor risk sharing	Well managed
Financing & liquidity	Hybrids and tax credit transfers; IG ratings affirmed	40 equity contracts (~$350M); strong tax credit market; Moody’s reaffirmed in May	De-risked
Renewable plan & IRP	REP filed; IRP in 2026 to address capacity, storage, gas	IRP early view adds ~$5B+ capacity/storage; developers pulling projects forward	Expanding
Regulatory environment	Constructive outcomes; frequent settlements; annual cadence	New commissioner; supportive staff positions; gas case comfortable to adjudication	Stable/constructive

Management Commentary

“We are on track to deliver on our earnings guidance and key operational objectives for the year” .
“We have reached an agreement with a new data center… expected to add up to 1 gigawatt of load growth” .
Weather impact: “favorable weather in the second quarter… provided an aggregate benefit of $0.32 per share of positive variance” .
On IRP and capacity: “model points to additional storage and gas capacity… our first cut looks like an additional $5 billion of opportunity outside the five-year plan” .
On storm deferral: “service restoration expense deferral granted by the commission in June” enabling a regulatory asset .

Q&A Highlights

Data center ramp: Early megawatts appear in 2029–2030; flexibility to serve with renewables, storage PPAs (FCM), and planned gas capacity buildouts .
Gas rate case: Staff supportive of ~80% of revised ask and ~95% of capital; open to settlement but comfortable with adjudication .
Financing: ~~40 equity contracts (~~$350M) executed; robust tax credit transfer appetite; ~$700M planned tax credit transfers over five years .
Tariffs: Minimal impact (~$250k) to date; ~90% domestic supply chain; risk-sharing terms with vendors .

Estimates Context

EPS beat: Adjusted/Primary EPS $0.71 vs S&P consensus $0.68* .
Revenue beat: $1.84B vs S&P consensus $1.70B* .
Implication: Street likely to revise FY25 run-rate assumptions modestly higher given weather tailwind, rate relief, and normalization at DIG in 2H; O&M trajectory (vegetation management) and storm deferral support margin resilience . Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

Solid beat and reaffirmed FY25 guidance toward the high end; positive variance drivers include weather, rate relief, and execution, with O&M headwinds manageable via deferral and productivity .
Structural demand catalyst: 1 GW data center agreement plus a 9 GW pipeline suggest multi-year load growth (2–3% LT sales growth), supporting capacity/storage investment and rate base expansion .
Upcoming regulatory events (REP decision by mid-September; electric order U-21816; gas order U-21806 timeline) are catalysts for clarity on investment recovery and reliability roadmap pacing .
Financing flexibility: Equity needs de-risked; robust tax credit transferability program and IG ratings support; watch policy evolution on transferability and developer behaviour (projects pulled forward) .
Near-term trading: Positive narrative around beats and data center load; watch 2H normalization (DIG) and O&M/vegetation management spend vs productivity offsets .
Medium-term thesis: Rate base CAGR ~8.5% to 2029 with $20B utility capex and potential $25B+ out-of-plan opportunities (distribution, renewables, IRP storage/gas), underpinning 6–8% LT EPS growth .
Risk checks: Weather normalization, regulatory cadence (annual rate cases), and tariff/supply chain exposures appear well mitigated; continue monitoring storm mechanisms and any changes to federal credits .

S&P Global data disclaimer: Values marked with * in tables were retrieved from S&P Global.

CMS ENERGY CORP (CMS)·Q2 2025 Earnings Summary