NISOURCE INC. (NI) Q3 2025 Earnings Summary

Executive Summary

• Q3 2025 adjusted EPS was $0.19 versus $0.20 last year, with GAAP EPS at $0.20; management reaffirmed the upper half of 2025 adjusted EPS guidance ($1.85–$1.89) and introduced 2026 consolidated adjusted EPS guidance of $2.02–$2.07 .
• NiSource refreshed its plan: five-year consolidated CapEx raised to $28.0B (vs prior ~$19.4B); base plan EPS CAGR of 6%–8% extended to 2026–2030; consolidated EPS CAGR of 8%–9% introduced for 2026–2033, underpinned by data‑center investments through GenCo .
• A special contract for a large investment‑grade data center customer was executed; GenCo will build two 1,300 MW CCGT plants and 400 MW battery storage, with ~$6–$7B total capital investment and ~$1B bill savings flowback to NIPSCO retail customers over the contract life .
• Financing plan emphasizes maintaining FFO/debt of 14%–16%; Blackstone to contribute $1.5B (19.9% stake) to GenCo; NiSource expects ~$300–$500M annual ATM equity issuance to support the plan .

What Went Well and What Went Wrong

What Went Well

• Secured IURC approval of the GenCo model and executed a data center special contract, enabling speed-to-market, affordability protections, and a diversified earnings profile; management emphasized ~$1B flowback benefits for existing customers .
• Introduced long-term growth outlook: consolidated EPS CAGR 8%–9% through 2033, with GenCo adding $0.10–$0.15/share in 2030 and $0.25–$0.45/share by 2033; CFO: “returns… forecasted to achieve a rate of return greater than NIPSCO’s regulated rate of return” .
• Operational excellence and AI initiatives improved productivity (>20% uplift) and support flat O&M over the life of the plan; CEO: “Our AI work management intelligence… delivers sustained field productivity uplifts of over 20%” .

What Went Wrong

• Adjusted EPS declined year-over-year to $0.19 (from $0.20), with headwinds from higher depreciation on new assets, increased long-term debt balances, and higher operating expenses .
• Margin dynamics: net income margin % was modestly lower in Q3 vs Q2 despite stronger EBITDA margin %; O&M spending and depreciation tempered bottom-line leverage (see Financial Results) *.
• Continued uncertainty around coal retirements and regulatory timelines could affect resource planning and capital timing (Scháhfer retirement plan unchanged for end‑2025 while state/federal developments are monitored) .

Financial Results

EPS and Revenue vs Prior Year and Prior Quarter

Note: Revenue values from S&P Global include document citations in the GetFinancials result.

Margins

Values marked with * retrieved from S&P Global.

Estimates vs Actual (Wall Street consensus — S&P Global)

Values retrieved from S&P Global.

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We are reaffirming the upper half of our 2025 adjusted EPS guidance of $1.85 to $1.89. We’re also announcing 2026 consolidated EPS guidance of $2.02 to $2.07.” — Lloyd Yates .
• “Under this agreement, GenCo will construct two combined cycle gas turbine power plants, each with a nominal output of 1,300 megawatts and 400 megawatts of battery storage capacity… total capital investment of approximately $6 billion to $7 billion.” — Michael Luhrs .
• “This arrangement will allow for approximately $1 billion to be passed back to our existing NIPSCO electric customers, creating bill savings over the contract life.” — Michael Luhrs .
• “The returns generated are forecasted to achieve a rate of return greater than NIPSCO’s regulated rate of return… accretive to NiSource’s earnings per share forecast in all years of the plan.” — Sean Anderson .
• “We remain committed to 14% to 16% FFO to debt in all years of the plan… Blackstone has committed $1.5 billion in equity.” — Sean Anderson .

Q&A Highlights

• Contract economics and EPS contribution: GenCo adds $0.10–$0.15/share in 2030 and $0.25–$0.45/share by 2033; contribution depends on customer technology choice, construction timelines, and ramp rate .
• Credit quality: Management actively engaged rating agencies; downgrade threshold at 13%; planning maintains 14%–16% FFO/debt, with adequate cushion .
• Affordability and flowback: Special contract ensures NIPSCO retail customers are not financially responsible; ~$1B flowback to customers; incremental savings scale with additional large-load customers .
• EPC execution: Joint venture with Quanta and Zachry for CCGT; separate EPC with Quanta for batteries; structure designed to scale subsequent projects .
• Cash flow phasing: Fixed-rate structure prioritizes cash flows to aid construction; potential customer ramp acceleration could pull forward earnings beyond current forecast .

Estimates Context

• EPS: Adjusted EPS of $0.19 was modestly below consensus normalized/primary EPS of $0.1963 for Q3 2025 (≈$0.006 miss)*.
• Revenue: Actual revenue materially exceeded consensus ($1,273.1M vs $972.5M)*.
• Coverage depth: 10 EPS estimates and 3 revenue estimates for the quarter*.

Values retrieved from S&P Global.

Key Takeaways for Investors

• The Q3 print was steady; the story is about structural growth: GenCo approval plus signed data center contract expands the five-year CapEx by ~45% and lifts long-term consolidated EPS growth to 8%–9% .
• The special contract de-risks affordability and provides ~$1B flowback, a regulatory-friendly design that should ease approvals and public optics in Indiana .
• Financing is diversified with Blackstone’s $1.5B NCI and disciplined ATM use; management is focused on minimizing dilution while keeping FFO/debt in the 14%–16% range .
• Near-term EPS cadence remains anchored by constructive regulation and AI-driven O&M discipline; expect adjusted EPS to land in the upper half of 2025 guidance and step to $2.02–$2.07 in 2026 .
• Watch the ramp: CCGT and battery timelines and potential acceleration of customer demand are the swing factors for EPS contribution (2030–2033), with upside if additional 1–3 GW negotiations close .
• Policy tailwinds and flexible regulatory mechanisms (HB 1007 as alternative path) reduce execution risk on large-load projects; ongoing coal-retirement assessments maintain reliability focus .
• Tactical implication: narrative catalysts include IURC special contract approval (expected H1 2026), EPC mobilization milestones, and additional customer signings; these would support estimate revisions higher, particularly on revenue and out-year EPS .

Notes:
- Revenue and margin metrics are primarily from S&P Global; margins marked with * indicate values retrieved from S&P Global.
- All company statements, guidance, and qualitative details are cited from the Q3 2025 press release, 8‑K, and earnings call transcripts.

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