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TXNM ENERGY INC (TXNM)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue rose to $502.4M, up 2.9% year over year from $488.1M and up 4.1% sequentially from $482.8M .
  • Ongoing diluted EPS was $0.25 versus $0.60 in Q2 2024 and $0.19 in Q1 2025; GAAP diluted EPS was $0.22 versus $0.53 in Q2 2024 and $0.10 in Q1 2025 .
  • Versus Wall Street consensus (S&P Global), revenue modestly beat ($502.4M vs $493.9M), while EPS materially missed (ongoing EPS $0.25 vs consensus $0.41); 6 EPS estimates and 1 revenue estimate were counted (Values retrieved from S&P Global) .
  • Management withdrew 2025 ongoing EPS guidance due to the pending Blackstone Infrastructure acquisition closing in H2 2026; dividend maintained at $0.4075 per quarter (declared July 25) .

What Went Well and What Went Wrong

What Went Well

  • Regulatory momentum: PNM’s unopposed rate stipulation approved; $105M revenue increase phased in (50% effective July 1, 2025; remainder April 1, 2026) .
  • TNMP recovery and growth: 2025 DCRF approved, recovering $176M of rate base; additional TCOS/DCRF filings in July seek another $115M combined rate base .
  • Strategic path: CEO Don Tarry highlighted “constructive regulatory outcomes… and potential opportunities through our partnership with Blackstone Infrastructure” .

What Went Wrong

  • EPS compression: Ongoing EPS fell to $0.25 from $0.60 YoY; dilution from $600M equity issuance (including $400M to Blackstone affiliates) and higher interest/depreciation weighed on results .
  • Cost headwinds: Elevated insurance premiums, plant outage timing, increased depreciation, property tax, and energy storage demand charges pressured PNM; TNMP faced depreciation/interest costs from new investments .
  • Guidance uncertainty: Company is “not affirming previously issued earnings guidance for 2025 and does not plan to issue revised guidance during the pending transaction” .

Financial Results

Consolidated Performance vs prior periods and estimates

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$488.1 $482.8 $502.4
GAAP Diluted EPS ($)$0.53 $0.10 $0.22
Ongoing Diluted EPS ($)$0.60 $0.19 $0.25
Operating Income ($USD Millions)$105.7 $71.9 $72.7
Net Earnings Attributable to TXNM ($USD Millions)$48.0 $8.9 $21.6
EBIT Margin %*21.75*14.84*14.43*
Net Income Margin %*9.84*1.85*4.29*

Values marked with * retrieved from S&P Global.

Wall Street consensus vs actual (S&P Global)

MetricConsensusActualSurprise
Primary EPS Consensus Mean ($)0.41130.25Miss (−0.1613)
Revenue Consensus Mean ($USD)493.9M502.4MBeat (+$8.5M)
Primary EPS - # of Estimates6——
Revenue - # of Estimates1——

Values retrieved from S&P Global.

Segment EPS breakdown

SegmentGAAP Diluted EPS Q2 2024GAAP Diluted EPS Q2 2025Ongoing Diluted EPS Q2 2024Ongoing Diluted EPS Q2 2025
PNM$0.34 $0.25 $0.41 $0.12
TNMP$0.33 $0.22 $0.33 $0.27
Corporate & Other($0.14) ($0.25) ($0.14) ($0.14)
Consolidated$0.53 $0.22 $0.60 $0.25

Selected KPIs

KPIQ2 2024Q1 2025Q2 2025
Gains on Investment Securities ($USD Millions)$0.6 ($1.2) $23.6
Interest Charges ($USD Millions)$55.8 $53.8 $72.0
Taxes Other Than Income Taxes ($USD Millions)$24.1 $26.4 $28.3
Depreciation & Amortization ($USD Millions)$94.4 $104.6 $105.2
Average Diluted Shares Outstanding (units)90,552,082 93,179,447 96,196,269

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Ongoing EPSFY 2025$2.74–$2.84 (affirmed on May 9, 2025) Not affirming; no revised guidance during pending transaction Withdrawn
Dividend per shareQuarterly$0.4075 (declared May 9, 2025) $0.4075 declared July 25, 2025; payable Aug 22, 2025 Maintained
Transaction timeline (M&A)CloseN/AH2 2026 expected closing, subject to approvals New timeline disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q2 2025)Trend
Regulatory outcomesQ3 2024: PNM grid modernization approved; TNMP resiliency plan filed . Q1 2025: PNM rate case stipulation progressing; TNMP DCRF/TCOS recovery .PNM rate stipulation approved; $105M revenue increase phased in; TNMP DCRF approved ($176M rate base) and additional filings ($115M) .Improving regulatory visibility and recovery .
Load/weather impactsQ3 2024: Load growth offset by lower weather impacts . Q1 2025: Higher retail load offset by lower weather usage .PNM/TNMP saw lower weather-related usage offsetting higher retail load .Mixed; weather headwinds persist .
Costs and capexQ3 2024: New depreciation rates and investment-driven depreciation . Q1 2025: Higher depreciation, property tax, interest expense .Continued higher depreciation, property tax, interest expense; energy storage demand charges added late 2024 .Cost pressure sustained amid investment cycle .
M&A/Capital structureQ1 2025: Announced intent to affirm guidance; later transaction announced (May 19) .Equity issuance ($600M); $400M to Blackstone affiliates; guidance withdrawn; closing expected H2 2026 .Strategic transition; guidance paused pending deal .
Resource additionsQ3 2024: Resource approvals and RFPs in NM .PNM 2028 Resource Application stipulation approved: +450MW solar + storage in 2028 .Accelerating resource buildout .

Management Commentary

  • “During the second quarter, we achieved constructive regulatory outcomes with significant benefits for our customers, including an unopposed rate stipulation at PNM. We are excited about the potential opportunities through our partnership with Blackstone Infrastructure…” — Don Tarry, President & CEO .
  • “We are excited to form this long-term partnership with Blackstone Infrastructure to build upon these successes.” — Pat Collawn, Chair & CEO (acquisition announcement) .
  • “We are long-term investors who back industry-leading companies… focused on being great long-term partners...” — Sean Klimczak, Global Head, Blackstone Infrastructure .

Q&A Highlights

  • Management communications focused on regulatory approvals (PNM rate case, TNMP DCRF), equity financing tied to the pending Blackstone transaction, and resource additions slated for 2028 .
  • No guidance update provided during the pending transaction; the company reiterated it will not affirm 2025 guidance or issue revised guidance until post-transaction .
  • Emphasis on maintaining local operations and workforce commitments under the proposed transaction framework .

Estimates Context

  • EPS miss: Primary EPS consensus $0.4113 vs actual ongoing EPS $0.25; 6 EPS estimates (Values retrieved from S&P Global).
  • Revenue beat: Consensus $493.9M vs actual $502.4M; 1 revenue estimate (Values retrieved from S&P Global).
  • Expect near-term estimate resets reflecting dilution from equity issuance, higher interest/expense loads, and guidance withdrawal pending transaction close .

Key Takeaways for Investors

  • Revenue resilience but earnings pressure: Modest top-line growth amid cost headwinds and dilution led to EPS compression; ongoing EPS $0.25 vs $0.60 YoY .
  • Regulatory catalysts: PNM rate increase phased in (50% July 1, 2025; remainder April 1, 2026) and TNMP DCRF recovery support medium-term earnings visibility .
  • Transaction overhang: Guidance withdrawn; closing targeted for H2 2026 with $61.25/share cash consideration; equity already issued impacts per-share metrics .
  • Investment cycle continues: Higher depreciation, property tax, interest expense and storage demand charges reflect ongoing infrastructure buildout; focus on long-term returns .
  • Dividend maintained: $0.4075 quarterly payout reaffirmed; income profile intact pending transaction .
  • Near-term trading lens: Expect sensitivity to regulatory milestones, transaction progression, and cost trajectories (insurance, interest, depreciation) .
  • Medium-term thesis: Improved regulated recovery mechanisms (NMPRC/PUCT approvals) and resource additions (450MW in 2028) underpin rate base growth; deal close would crystallize value at set consideration .