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SOUTHERN CO (SO)·Q3 2025 Earnings Summary

Executive Summary

  • Southern Company delivered a solid Q3: adjusted EPS of $1.60 vs. $1.43 in Q3’24 and $0.92 in Q2’25, driven by higher utility revenues and customer growth; GAAP EPS was $1.55 vs. $1.40 YoY . Revenue rose 7.5% YoY to $7.82B .
  • Versus S&P Global consensus, EPS beat ($1.60 vs. $1.51*) while revenue was a modest miss ($7.82B vs. $7.92B*) .
  • Management now estimates Q4 adjusted EPS of $0.54 and expects full-year adjusted results at the top of the 2025 guidance range ($4.30) .
  • Strategic and regulatory tailwinds: Georgia PSC approved five new solar PPAs (1,068 MW) in September and earlier extended Georgia Power base rates through at least 2028; management highlighted a “freeze until at least 2029,” suggesting possible extension beyond the PSC’s July decision .
  • Post-quarter financing actions include a $1.75B equity units deal (7.125% distributions) with ~$1.15B used to repurchase convertibles and plans to redeem $1.25B hybrid notes—supporting the path to 17% FFO/debt and credit quality objectives .

What Went Well and What Went Wrong

  • What Went Well

    • Strong adjusted EPS growth (+$0.17 YoY) and double-digit net income growth (+11.5% YoY) on higher utility revenues; Q3 operating revenue +7.5% YoY to $7.82B .
    • Commercial demand strength and data center momentum: weather-normal commercial sales +3.5% YoY in Q3; data center sales up 17% YoY; ~12,000 new electric customers added in Q3 .
    • Constructive regulation and growth pipeline: Georgia PSC approved 1,068 MW of solar PPAs; management cited four large-load contracts (>2 GW) signed in the last two months and a >50 GW potential load pipeline into the mid-2030s .

  • What Went Wrong

    • Weather headwind: milder weather reduced EPS by ~5¢ YoY in Q3 .
    • Higher depreciation and interest expense weighed on results; D&A +$212M and interest +$63M YoY in Q3 .
    • Southern Power earnings pressure: Q3 net income from Southern Power fell to $3M (from $82M), with accelerated depreciation tied to wind repower projects; management expects continued accelerated depreciation through 2027 .

Financial Results

Overall results vs prior year and prior quarter

MetricQ3 2024Q2 2025Q3 2025
Operating Revenues ($USD Billions)$7.274 $6.973 $7.823
Operating Income ($USD Billions)$2.368 $1.764 $2.594
Net Income ($USD Billions)$1.535 $0.880 $1.711
GAAP EPS (Basic) ($)$1.40 $0.80 $1.55
Adjusted EPS ($)$1.43 $0.92 $1.60

Actuals vs S&P Global consensus (Q3 2025)

MetricConsensus (S&P Global)*Actual
Revenue ($USD Billions)$7.9229*$7.823
Primary EPS ($)$1.5089*$1.60
EPS - # of Estimates16*—
Revenue - # of Estimates9*—

Values retrieved from S&P Global.

Segment breakdown (Operating Revenues and Net Income – Q3 YoY)

SegmentOperating Revenues Q3 2024 ($MM)Operating Revenues Q3 2025 ($MM)Net Income Q3 2024 ($MM)Net Income Q3 2025 ($MM)
Alabama Power$2,138 $2,318 $493 $588
Georgia Power$3,472 $3,770 $1,050 $1,248
Mississippi Power$412 $480 $75 $84
Southern Power$600 $613 $82 $3
Southern Company Gas$682 $734 $38 $25
Southern Company (Total)$7,274 $7,823 $1,535 $1,711

Key KPIs

KPI (Q3)20242025Weather-Adjusted YoY
Total Retail kWh Sales YoY+1.1% +1.1% +2.6%
Residential kWh Sales YoY(0.3)% (0.3)% +2.7%
Commercial kWh Sales YoY+2.3% +2.3% +3.5%
Industrial kWh Sales YoY+1.5% +1.5% +1.5%
Regulated Utility Customers (000s)8,865 8,934 —
Data center sales growth—+17% YoY in Q3 —

Why the quarter moved

  • EPS bridge highlights: retail revenue impacts +15¢; weather −5¢; D&A −5¢; interest/other +6¢; net +17¢ adjusted EPS YoY .
  • Operating expenses rose, with D&A +$212M YoY and interest expense +$63M YoY; however, revenue growth and customer additions offset these headwinds .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EPSQ4 2025N/A$0.54 New intra-quarter estimate
Adjusted EPS – FY outcomeFY 2025Guidance range with top at $4.30Expect top of range: $4.30 Maintained; reaffirm top end
Georgia Power base ratesThrough 2028Base rates frozen through at least end-2028 CEO remarks: “freeze… until at least 2029” Potential extension; note discrepancy
DividendQuarterly$0.74/share prior quarter$0.74/share; payable Dec 8, 2025 Maintained

Notes: Georgia PSC’s July action froze base rates through at least 2028; management subsequently referenced “until at least 2029.” Monitor for formal PSC confirmation of any extension beyond 2028 .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Large-load/data centers & demandQ1: revenue +17% YoY; demand growth commentary . Q2: highlighted $9B equity plan tied to $76B capex; load pipeline discussed .Four new large-load contracts (>2 GW in last two months); 7 GW contracted by 2029, ramping to 8 GW in 2030s; >50 GW pipeline mid-2030s; commercial weather-normal sales +3.5% YoY; data center usage +17% YoY .Accelerating pipeline conversion and usage growth
Georgia regulation & resource additionsQ2: Constructive outcomes referenced; base rates frozen through 2028 per PSC .Georgia Power RFP certification tracks 10 GW capacity (5 CCs, 11 BESS); PSC ruling expected late Dec; management confident regardless of PSC election outcome .Advancing approvals for capacity additions
Financing & equityQ2: $9B equity through 2029; proactive approach .Added $1.8B ATM forward equity; ~ $7B of $9B need solidified; reaffirm path to 17% FFO/debt . Post-quarter: $1.75B equity units at 7.125% to fund note repurchases and hybrid redemption .De-risking financing; improving credit cushion
Southern Power contractsLimited prior detail.Early-2030s PPAs repriced at ~3x current tolls in GA RFP; 95% under long-term contracts through 2029; recontracting opportunities near expirations .Positive long-term price resets
Nuclear strategyGeneral industry support.Supportive on national policy, but no near-term new build decision; risk mitigation necessary before committing .Watching policy; not committing capital yet
Gas infrastructureOngoing.Southern Natural Gas South System 4 expansion (~$3B, SO 50% owner) progressing; strong market interest .Project on track

Management Commentary

  • “Southern Company’s robust third quarter performance comes as the momentum around electric demand growth opportunities and interest in our service territories continue to build.” — Chris Womack, CEO .
  • “Our adjusted EPS estimate for the fourth quarter is $0.54 per share, which... would represent full-year adjusted earnings at the top of our 2025 annual guidance range of $4.30.” — David Poroch, CFO .
  • “Across our electric subsidiaries, the total pipeline remains more than 50 gigawatts of potential incremental load by mid-2030s… we now have contracts in place with large load customers representing 7 gigawatts through 2029… ramp to 8 gigawatts in the 2030s.” — CFO .
  • “The minimum bills cover all of our costs, whether or not the meter spins.” — CFO describing GA large-load contract protections .

Q&A Highlights

  • Large-load contracting mechanics: New GA PSC rules helped prioritize higher-credit counterparties; minimum bills designed to ensure full cost recovery even before ramp-up .
  • Financing strategy: ~$1.8B incremental ATM forward equity since Q2; ~$7B of $9B 2025–2029 equity need effectively secured; focus on reaching 17% FFO/debt, preserving investment-grade ratings .
  • Southern Power recontracting: 95% contracted through 2029; GA RFP PPAs for early-2030s priced ~3x current levels—supportive of future earnings as tolls roll .
  • Gas pipeline expansion: South System 4 (~$3B, 50% SO) advancing; expected strong capacity demand .
  • Nuclear: Supportive of federal initiatives but no SO commitment to new builds until risks are mitigated; no near-term Vogtle expansion decision .

Estimates Context

  • Q3 2025 results vs S&P Global consensus: Adjusted EPS $1.60 beat $1.5089*; Revenue $7.823B modestly below $7.9229B* .
  • Coverage depth: 16 EPS estimates and 9 revenue estimates for Q3 2025*.
  • Implications: Expect upward EPS revisions for 2025 to “top of range” and potential upward bias to 2026+ if large-load conversions continue; revenue consensus could modestly adjust for mix/weather normalization .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • EPS quality improving: Adjusted EPS up $0.17 YoY to $1.60 on core utility growth despite weather and cost headwinds; retail revenue and commercial/data center usage were key drivers .
  • Demand super-cycle taking shape in SE: Four new large-load deals (>2 GW) and a >50 GW pipeline provide multi‑year visibility; contracts include minimum-bill protections for cost recovery .
  • Regulatory momentum: Georgia PSC approved 1,068 MW solar PPAs in Sept; base rates frozen through at least 2028 (management references 2029), supporting affordability and planning certainty .
  • Credit/financing de-risking: ~$1.8B ATM forward equity added; post‑quarter $1.75B equity units (7.125% distributions) fund note repurchases and hybrid redemption—supporting the 17% FFO/debt path and reducing near-term refinancing risk .
  • Watch list into year-end: GA PSC decision on 10 GW capacity (late Dec) and pace of additional large-load signings; monitor Southern Power recontracting progress and GA pricing tailwinds .
  • Dividend consistency: $0.74/share declared for December 8; track 2026 long-term plan update (February) for potential EPS rebasing commentary .
  • Trading setup: Near-term catalyst skewed to PSC approvals and further contract announcements; EPS beat vs consensus a positive offset to revenue softness from weather .

Additional Relevant Q3 Press Releases

  • Georgia PSC approves plan to freeze Georgia Power base rates through at least 2028 (July 1, 2025) .
  • Georgia PSC approves five new solar PPAs (1,068 MW) to support CARES program (Sept 5, 2025) .
  • Quarterly dividend of $0.74/share payable Dec 8, 2025 (Oct 20, 2025) .

Appendix: Consolidated Financial Detail (Q3)

  • Revenue mix and expenses: Operating revenues $7.823B; operating expenses $5.229B; D&A $1.422B; net interest expense $755M; net income to SO $1.711B .
  • EPS drivers: Traditional electric +23¢ adjusted EPS YoY; weather −5¢; D&A −5¢; interest/other +6¢ .
  • Non-GAAP adjustments: Accelerated depreciation (wind repower) −$0.07 EPS in Q3; plant under construction credit +$0.02; see footnotes for detail .