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PG&E Corp (PCG)·Q3 2025 Earnings Summary

Executive Summary

  • Strong quarter with non-GAAP core EPS of $0.50, above S&P Global consensus of ~$0.43; GAAP EPS was $0.37. Revenue was $6.25B, modestly below the ~$6.41B consensus; guidance narrowed to 2025 non-GAAP core EPS of $1.49–$1.51 and initiated 2026 at $1.62–$1.66 .
  • Operational execution remained robust: 97 miles undergrounded in Q3, milestone of 1,000 cumulative miles; residential electric bills reduced ~2.1% in September; Calistoga hybrid hydrogen/battery microgrid entered commercial operation .
  • Strategic positioning improved: Fitch moved parent toward investment grade; management reiterated no new equity needed through 2030 and target 20% dividend payout by 2028 .
  • Near-term stock catalysts: SB 254 Phase 2 wildfire-policy recommendations due April 1, 2026; 2026 cost of capital proposed decision expected November 2025; ongoing credit upgrades and dividend trajectory .

What Went Well and What Went Wrong

What Went Well

  • EPS beat and guidance clarity: Non-GAAP core EPS $0.50 vs S&P consensus ~$0.43; 2025 guidance narrowed, 2026 initiated; management remains confident in at least 9% annual EPS growth through 2030 .
  • Safety and resiliency execution: “Our system has never been safer from wildfire risk” with 1,000 miles undergrounded and commercial operation of Calistoga’s ultra-long-duration microgrid to support PSPS resilience .
  • Affordability progress: September residential electric rates cut ~2.1% and bills expected to decline again in 2026; management targets bills flat to down by 2027 via O&M savings, beneficial load, and financing efficiency .

What Went Wrong

  • Revenue miss vs consensus and cost headwinds: Revenue $6.25B vs S&P consensus ~$6.41B; increased wildfire-related costs and Wildfire Fund expense pressured GAAP results .
  • ROE and dilution: Lower authorized ROE (10.28% vs 2024’s 10.7%) and 2024 equity issuance dilution weighed on GAAP EPS and year-over-year comps .
  • Ongoing regulatory/litigation items: SB 901 securitization charges and investigation remedies (e.g., Zogg fire settlement) continued to affect non-core items and narrative risk .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Total Operating Revenues ($USD Billions)$5.941 $5.898 $6.250
Electric Revenues ($USD Billions)$4.538 $4.414 $4.755
Natural Gas Revenues ($USD Billions)$1.403 $1.484 $1.495
GAAP Diluted EPS ($)$0.27 $0.24 $0.37
Non-GAAP Core EPS ($)$0.37 $0.31 $0.50
Operating Income ($USD Billions)$1.029 $1.096 $1.209
Adjusted EBITDA ($USD Billions)$2.367 $2.362 $2.706
EBITDA Margin (%)39.8% 40.1% 43.3%

Segment breakdown:

Segment RevenueQ3 2024Q2 2025Q3 2025
Electric ($USD Billions)$4.538 $4.414 $4.755
Natural Gas ($USD Billions)$1.403 $1.484 $1.495
Total ($USD Billions)$5.941 $5.898 $6.250

Estimates vs actual:

MetricS&P ConsensusActual
Q3 2025 Primary EPS ($)0.426*0.50*
Q3 2025 Revenue ($USD Billions)6.411*6.250*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Non-GAAP Core EPSFY 2025$1.48–$1.52 $1.49–$1.51 Narrowed (raised low end, lowered high end)
Non-GAAP Core EPSFY 2026—$1.62–$1.66 Initiated
EPS Growth (non-GAAP core)2027–2030At least 9% annually (long-term reiterated) At least 9% annually Reaffirmed
Dividend Payout RatioBy 2028—Target 20% New/affirmed medium-term target
O&M Non-fuel ReductionFY 2025On track ≥2% On track ≥2% Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q3 2025)Trend
Wildfire policy (SB 254, AB 1054)Expect constructive 2025 outcome; fund durability, disallowance cap preserved; holistic reforms discussed SB 254 Phase 2 timeline: abstracts Nov 3, submissions Dec 12, agencies Jan 30, CEA report Apr 1, 2026 Building toward 2026 reforms
UndergroundingPlan to file 10-year proposal; cost declines; bridge strategy ~300 miles/year 1,000 miles milestone; 97 miles in Q3; CPUC guidance expected; focus on highest-risk areas Accelerating, cost improving
O&M efficiencyTrack record: >2% annual reductions; hundreds of projects; Lean playbook $0.05 EPS tailwind in Q3; confident ≥2% 2025 Sustained execution
Affordability/billsBills down in 2025; path to flat/down 2027; DOE loan, IG credit as levers 2.1% residential rate cut in Sept; expect 2026 decline; 2027 flat to down Improving trajectory
Data center loadPipeline grew to 10 GW; “Goldilocks” projects; 1.4 GW final engineering ~9.6 GW pipeline; 1.6 GW final engineering; several projects in-service in 2026 Robust, moving to construction
Credit/rating & financingUtility IG upgrade; parent IG in focus; plan conservatively; avoid equity Fitch move toward parent IG; FFO/debt mid-teens targeted; no new equity through 2030 Improving credit profile
Technology/AI sensors>10,000 sensors deployed; detect faults; shorten outages +8,500 sensors in 2025; AI-enabled monitoring Scaling tech layer
Microgrids/resilienceCMEP/MIP support; remote grids; PSPS execution Calistoga hybrid hydrogen/battery microgrid commercial First-of-kind deployment

Management Commentary

  • CEO tone on safety and affordability: “Our system has never been safer from wildfire risk, and we continue to stabilize our customers’ bills. Residential electric rates are down in 2025 and expected to go down further in 2026.” — Patti Poppe .
  • CFO on financing/returns: “Our plan is built not to require new common equity through 2030…targeting a dividend payout ratio of 20% by 2028 and maintaining that level through 2030.” — Carolyn Burke .
  • CEO on undergrounding strategy: “Undergrounding remains the most affordable and effective way…in our highest risk areas…we hit a key milestone of 1,000 miles underground and done that at a 25% lower cost than when we started.” — Patti Poppe .

Q&A Highlights

  • SB 254 process/timeline and transparency: management outlined key milestones and acknowledged uncertain public disclosure by the CEA during the process .
  • Undergrounding policy decision: CPUC agenda timing noted; continued advocacy for undergrounding in highest-risk miles and bridge strategy if timing lags .
  • Credit upgrades: Fitch has moved toward investment grade at parent; agencies focus on regulatory signals; all financial metrics meet IG criteria .
  • O&M target: confidence in meeting/exceeding 2% non-fuel reduction; Lean and tech (AI) driving inspection and vegetation management efficiencies .
  • Data center pipeline attrition and capital plan: ~1.6 GW in final engineering, majority online by 2030; capital plan can be bigger, better (affordability), or longer; preference for latter two .

Estimates Context

  • Q3 EPS beat: S&P Global consensus ~$0.426 vs actual non-GAAP core EPS $0.50; revenue miss: consensus ~$6.411B vs actual $6.250B.*
  • FY 2025 EPS consensus ~$1.499 aligns with narrowed guidance midpoint; estimate counts: Q3 EPS (10), revenue (3).*
  • Implication: Expect upward estimate revisions for EPS near-term given beat and narrowed annual range; revenue estimates may remain cautious given wildfire-related cost optics and ROE headwinds.*

Values retrieved from S&P Global.*

KPIs and Operating Metrics

KPIQ3 2025Prior Quarter/PeriodNotes
Miles undergrounded completed97 32 in Q2 2025 Cumulative now 1,000 miles
Strengthened/covered lines installed58 miles 103 miles in Q2 2025 High wildfire-risk areas
New electric customer connections3,100+ 3,300+ in Q2 2025 Beneficial load driver
New EV charging ports connected3,800+ 2,000+ in Q2 2025 Load growth
Calistoga microgrid293 MWh, 8.5 MW peak, 48+ hours islanding; commercial operation —Hybrid hydrogen + battery
Data center pipeline~9.6 GW total; 1.6 GW final engineering 10 GW (June) Several projects in-service 2026
Rate action~2.1% residential rate reduction (Sept) Bills down in 2025 vs 2024 Expect decrease in 2026
Safety outcomeYTD CPUC-reportable ignitions down >35% vs 2024; on track for third year of zero structures destroyed under high-risk conditions —Multi-layer mitigation

Key Takeaways for Investors

  • EPS momentum despite regulatory headwinds: Non-GAAP core EPS beat and guidance tightening indicate execution; 2026 guide supports multi-year growth .
  • Revenue caution vs estimates is manageable: Miss driven by mix and non-core items; core profitability and EBITDA improved quarter-over-quarter .
  • Policy path a core catalyst: SB 254 Phase 2 outcomes and 2026 cost of capital decision are pivotal to valuation, credit upgrades, and financing costs .
  • Affordability narrative turning: Realized rate cut and 2026 decline expectations bolster regulatory goodwill; beneficial load (data centers) can reduce bills while expanding rate base .
  • Capex and financing discipline: No new equity through 2030; dividend payout target of 20% by 2028 offers yield trajectory without compromising growth .
  • Safety de-risks equity story: Undergrounding scale-up and microgrid deployment strengthen wildfire risk mitigation and support fund/liability frameworks .
  • Trading implications: Near-term upside skewed to EPS/credit catalysts; headline risk persists around wildfire cost recovery and litigation/non-core items — position sizing should consider regulatory calendar and credit actions .