Executive Summary

Q1 2025 was a clean beat versus Street: diluted EPS from continuing operations of $0.40 vs consensus $0.363*, and revenue of $674.8M vs consensus $653.1M*; strength came from record pipeline earnings (+13.9% YoY) and rate relief plus colder weather at gas distribution .
EPS guidance for FY 2025 was affirmed at $0.88–$0.98; management reiterated long-term targets: 7–8% rate base CAGR, 6–8% EPS CAGR, and a 60–70% payout ratio .
Electric utility earnings fell to $15.0M (from $17.9M) despite a 25.1% surge in retail volumes, as outages and higher O&M costs offset volume gains; data center load under ESAs reached 180 MW online with more to come .
Cash flow from operations improved to $217.5M (+32% YoY), supporting capex and balance sheet flexibility; no 2025 equity needs, but ATM program likely reestablished for 2026+ .
Near-term catalysts: continued rate case progress (WA, MT, WY, ID), pipeline storage expansion (Baker) and Bakken East commercial development; affirmed guidance reduces downside estimate risk .

What Went Well and What Went Wrong

What Went Well

Pipeline segment posted record Q1 earnings of $17.2M (+13.9% YoY), driven by growth projects (Wahpeton, Line Section 27) and strong short-term firm capacity and storage demand .
Natural gas distribution earnings rose 11.5% to $44.7M on broad-based rate relief in WA/MT/SD and colder weather boosting volumes; customer count +1.5% YoY .
Management reaffirmed FY25 EPS guidance and long-term growth framework; “We are well positioned for growth… anticipated capital investment of $3.1 billion over the next five years, 7% to 8% compound annual utility rate base growth… long-term EPS growth rate of 6% to 8%” .

What Went Wrong

Electric utility earnings fell to $15.0M (from $17.9M) despite strong volumes; outages at Coyote Station and Wygen III and higher O&M (contract services, software, insurance, payroll) pressured results .
Lower returns on nonqualified benefit plan investments reduced segment earnings across the portfolio (~$0.01 per share impact for the organization, per CFO) .
Comparability noise from discontinued operations (Everus spin-off Oct 31, 2024) affected YoY net income optics; prior periods restated, with discontinued ops contributing in Q1 2024 .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Operating Revenues ($USD Millions)	$1,050.5	$535.5	$674.8
Operating Income ($USD Millions)	$90.8	$94.5	$112.8
Net Income ($USD Millions)	$64.6	$55.2	$82.0
Diluted EPS (Total) ($)	$0.32	$0.27	$0.40
Diluted EPS – Continuing Ops ($)	$0.31	$0.34	$0.40
Operating Income Margin (%)	8.6% (90.8/1,050.5)	17.6% (94.5/535.5)	16.7% (112.8/674.8)
Net Income Margin (%)	6.2% (64.6/1,050.5)	10.3% (55.2/535.5)	12.2% (82.0/674.8)

Note: Q3 2024 included Everus construction services in continuing operations pre-spin; Q4 2024 and Q1 2025 reflect pure-play regulated energy delivery plus pipeline (Other minimal).

Segment performance – Q1 2025 vs Q1 2024:

Segment	Operating Revenues ($M)	Operating Revenues ($M)	Net Income ($M)	Net Income ($M)
	Q1 2024	Q1 2025	Q1 2024	Q1 2025
Electric	$107.7	$112.4	$17.9	$15.0
Natural Gas Distribution	$459.5	$539.3	$40.1	$44.7
Pipeline	$51.3	$56.7	$15.1	$17.2

Key KPIs – Q1 2025 vs Q1 2024:

KPI	Q1 2024	Q1 2025
Retail Electric Volumes (million kWh)	984.2	1,231.5
Data Center Load Online (MW)	N/A	180 (of 580 MW ESAs)
Avg Cost of Electric Fuel ($/kWh)	$0.031	$0.027
Natural Gas Retail Volumes (MMdk)	51.7	55.4
Avg Cost of Natural Gas ($/dk)	$5.59	$6.33
Pipeline Transportation Volumes (MMdk)	147.6	143.5
Peak Day Delivery (Bcf)	N/A	~1.9
Operating Cash Flow ($M)	$165.1	$217.5

Estimate comparison – Q1 2025:

Metric	Consensus	Actual
Revenue ($USD Millions)	$653.1*	$674.8
Diluted EPS – Continuing Ops ($)	$0.363*	$0.40
# of EPS Estimates	3*	—
# of Revenue Estimates	2*	—

Values with asterisk retrieved from S&P Global.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Diluted EPS (FY)	FY 2025	$0.88–$0.98	$0.88–$0.98	Maintained
Capital Investment (5-year)	2025–2029	~$3.061B (gross)	~$3.064B (net basis)	Maintained (presentation basis differs)
Rate Base Growth (Utility)	LT	7–8% CAGR	7–8% CAGR	Maintained
EPS Growth (LT)	LT	6–8% CAGR	6–8% CAGR	Maintained
Dividend Payout Ratio	LT	60–70%	60–70%	Maintained
Equity Needs	Near-term	No 2025 equity	No 2025 equity; reestablish ATM for future needs	Clarified future access

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Data centers/load strategy	Expanded ESAs in ND; warmer-weather volumes aided electric; customer growth +1.5%	580 MW ESAs signed; 180 MW online; capital-light model benefiting ROE and customers	Expanding load; capital-light approach reiterated
Pipeline expansions	Line Section 28 in service; Wahpeton coming; lateral purchase; strong storage demand	Record Q1 earnings; Baker Storage binding open season; Bakken East non-binding OS complete; phases targeting late 2029/2030	Continued project pipeline; commercial development ongoing
Regulatory/rate relief	SD electric/gas settlements; MT gas case; ND ESA increase	WA multi-year gas case finalized; MT interim; WY gas filing; ID filing anticipated; ND Badger Wind prudence filing	Positive momentum across jurisdictions
Wildfire legislation	Not highlighted	Liability limitation bills passed in WY, ND, MT; plans to formalize mitigation	De-risking via legislation
Tariffs/macro	Not highlighted	Management views tariffs manageable for Bakken East inputs; not derailing projects	Manageable headwind
Customer growth	1.5% YoY in Q3	1.4% combined retail growth; target 1–2% annually	Stable, supportive of rate base growth

Management Commentary

“We are off to a strong start in 2025… income from continuing operations of $82.5 million or $0.40 per share… pipeline and natural gas distribution segments grew earnings by 13.9% and 11.5% respectively” — Nicole Kivisto .
“We continue to see data center opportunities… 580 megawatts of data center load under signed electric service agreements… 180 megawatts currently online” — Nicole Kivisto .
“We are affirming our earnings per share guidance in the range of $0.88 to $0.98… anticipated capital investment of $3.1 billion over the next 5 years, 7% to 8% compound annual utility rate base growth… 6% to 8% long-term EPS growth” — Nicole Kivisto .
“Pipeline segment posted record first quarter earnings… driven by growth projects… customer demand for short-term firm capacity contracts… higher storage-related revenue” — Jason Vollmer .

Q&A Highlights

Data center strategy: Capital-light approach at Ellendale leverages system constraints to deliver accretive ROE while sharing transmission costs; incremental generation considered case-by-case with regulatory/customer impacts in mind .
Electric segment drivers: Volume upside largely from data center being fully online vs last year, but outages (planned at Coyote; unplanned at coal facilities) and higher O&M offset; nonqualified plan returns ~1¢ per share headwind .
ESA sharing band: ND sharing above 10% ROE possible; outcome depends on full-year performance; annual filing determines sharing .
Bakken East: Post-open season engagement focuses on timing, deliverability, route, design, and costs; formal agreements and FERC filing would follow; tariffs on materials seen as plannable, not derailing .
Wildfire legislation: Formalized mitigation plans to limit liability across WY/ND/MT; prevention remains priority .
Capital markets: No 2025 equity; ATM program expected to be reestablished for 2026+ needs; long-term 6–8% EPS growth starting point aligned to adjusted 2024/2025 framework .

Estimates Context

Revenue and EPS exceeded consensus for Q1 2025; Street likely to revise upward segment expectations (pipeline/storage, gas distribution rate relief), while electric O&M and outage commentary may temper utility margin assumptions near-term .
Consensus Q1 2025: Revenue $653.1M*, EPS $0.363*; Actual: Revenue $674.8M, EPS $0.40 . Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

Beat-and-raise narrative solidified by affirmed FY25 EPS guidance and record pipeline profitability; estimate risk skewed positive in pipeline/gas, more balanced in electric given outage/O&M headwinds .
Data center load is becoming a material driver of electric volumes; capital-light ESAs enhance returns without burdening the broader customer base, but monitor ND sharing band disclosures later in the year .
Regulatory cadence is favorable (WA, MT, WY, ID), supporting sustained rate base growth and EPS CAGR targets; watch Idaho filing and MT settlement finalization .
Pipeline growth optionality: Baker storage enhancement (binding OS) and Bakken East (multi-phase, late 2029/2030 targets) can add incremental earnings beyond current 5-year capex plan; tariff risks currently manageable .
Strong operating cash flow (+$217.5M) and no 2025 equity needs underpin capex; ATM program planned to flexibly fund 2026+ equity requirements .
Watch nonqualified plan investment returns as a minor EPS variability source; management quantified Q1 impact (~$0.01/share) .
Medium-term thesis: Pure-play regulated energy plus pipeline with embedded growth drivers (customer additions, rate relief, storage/transport demand) and disciplined capital allocation supports 6–8% LT EPS CAGR and 60–70% payout .

Additional Q1 2025 press releases:

Dividend maintained at $0.13 per share; payable July 1, 2025; record date June 12, 2025 .
Board leadership transition: Darrel T. Anderson elected independent chair; governance continuity highlighted .
Webcast notice: Q1 results released May 8; call replay available .

MDU RESOURCES GROUP INC (MDU)·Q1 2025 Earnings Summary