Executive Summary

Q1 2025 topped expectations: revenue $3.15B and diluted EPS $2.27 vs S&P Global consensus of $2.81B and $2.18, respectively; EPS and revenue beats were driven by colder winter (vs 2024), rate-based growth in Wisconsin, and higher retail electric usage, while O&M and D&A were headwinds . Estimates marked with * below are from S&P Global.
Guidance reaffirmed: FY25 EPS $5.17–$5.27; management also guided Q2 EPS to $0.63–$0.69 and reiterated 6.5%–7% LT EPS CAGR .
Demand growth narrative strengthened: Microsoft data center Phase 1 progressing; WEC forecasts 1.8 GW 5-year demand growth in SE Wisconsin and highlighted the proposed Cloverleaf campus (initially ~1 GW, potentially larger) as incremental to plan .
Regulatory/commercial catalysts: Proposed Very Large Customer (VLC) tariff in Wisconsin with fixed ROE 10.48% and 57% equity layer to align large-load cost responsibility; Illinois pipeline safety modernization decision enables ramp toward >$500M annual gas capex by 2028 .
Capital execution: Darien Solar (225 MW) in service; closed 90% of Hardin III Solar for ~$406M; capex plan remains $28B over five years with equity funding of $700–$800M in 2025 via ATM/DRIP .

What Went Well and What Went Wrong

What Went Well
- Strong beat vs consensus: Q1 EPS $2.27 vs $2.18*; revenue $3.15B vs $2.81B* . Weather, rate-based growth, and higher retail deliveries contributed to the upside .
- Demand backdrop: “We have confidence in our 5-year forecast of 1.8 gigawatts of demand growth in Southeastern Wisconsin” (CEO) . MSFT project momentum and early-stage Cloverleaf campus support medium-term growth .
- Renewables execution: Darien Solar (225 MW) placed in service; 90% of Hardin III Solar (250 MW) acquired for ~$406M, enhancing PTC-driven earnings at Infrastructure segment .
What Went Wrong
- Cost inflation/O&M ramp: Day-to-day O&M expected to grow 8%–10% YoY in 2025 due to vegetation management and assets entering service, pressuring margins despite revenue growth .
- Tariff/headwind watch: Management estimates 2%–3% exposure of the $28B capex plan to tariffs, with batteries/solar components the most sensitive; mitigation via contracting and onshoring in progress .
- Fuel/tax/other items: Earnings drivers included offsets from higher D&A/interest and timing of fuel expense; EBITDA slightly missed consensus despite top-line beat (actual $1.309B vs $1.333B*), pointing to cost/other items [GetEstimates Q1 2025].

Financial Results

Headline vs. consensus (Q1 2025)

Metric	Q1 2025 Actual	Q1 2025 Consensus*	Surprise
Revenue ($B)	$3.150	$2.809*	+$0.341B / +12.1%
Diluted EPS ($)	$2.27	$2.18*	+$0.09 / +4.1%
EBITDA ($B)	$1.309	$1.333*	-$0.024B / -1.8%

Note: EBITDA actual derived from cash flow/income statement tables in press materials . Consensus values marked * are from S&P Global.

Performance vs prior periods

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($B)	$1.864	$2.284	$3.149
Operating Income ($B)	$0.384	$0.591	$0.938
Net Income to Common ($B)	$0.240	$0.454	$0.724
Diluted EPS ($)	$0.76 GAAP; $0.82 adj.	$1.43	$2.27
Operating Margin (%)	20.6% (0.384/1.864)	25.9% (0.591/2.284)	29.8% (0.938/3.149)
Net Income Margin (%)	12.9% (0.240/1.864)	19.9% (0.454/2.284)	23.0% (0.724/3.149)

KPIs and volumes

KPI (YoY unless noted)	Q1 2025
WI Natural Gas Deliveries (ex-power gen)	+15.5%; weather-normal: -0.5%
Retail Electricity Deliveries (ex-iron ore)	+2.9%
Small C&I Electricity	+2.1%
Large C&I Electricity (ex-iron ore)	+1.1%
Residential Electricity	+5.5%
Retail Electricity (weather-normal)	+0.7%

EPS bridge (Q1 2025 vs Q1 2024; per share impact)

Driver	YoY EPS Impact
Utility operations (incl. weather, rate growth, taxes)	+$0.28; weather +$0.18 (vs 2024), rate-based +$0.20, tax/other +$0.04; O&M/D&A/fuel timing -$0.14
ATC (equity income)	+$0.02
Energy Infrastructure (PTCs, new assets)	+$0.05
Corporate & Other (interest, tax timing)	-$0.03
Share dilution	-$0.02 (equity issuance)

Segment/regulatory execution highlights

Darien Solar (225 MW) in service, ~$427M investment .
Closed 90% of Hardin III Solar (~250 MW) in Feb for ~$406M .
No active rate cases; Wisconsin VLC tariff proposal filed (10.48% ROE, 57% equity ratio) targeting ≥500 MW new-load customers with 20–30 year terms, designed to avoid cost shifts .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EPS (diluted)	FY 2025	$5.17–$5.27	$5.17–$5.27	Maintained
EPS (diluted)	Q2 2025	n/a	$0.63–$0.69	New intra-year guide
LT EPS CAGR	Multi-year	6.5%–7.0%	6.5%–7.0%	Maintained
Dividend per share (quarterly)	Q2 2025	$0.8925	$0.8925 (declared 4/17)	Maintained
VLC tariff parameters (WI)	N/A	n/a	10.48% ROE; 57% equity ratio	New proposal

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Data center demand (MSFT, Cloverleaf)	1.8 GW 5-yr demand; MSFT land expanding; Cloverleaf announced; growth across sectors	MSFT Phase 1 progressing; 1.8 GW forecast reiterated; Cloverleaf initial ~1 GW with upside; load incremental to plan	Strengthening pipeline; upside optionality
Tariffs/supply chain	Tariff exposure being watched; manageable; mix of renewables/gas; LNG expansion	Estimated 2%–3% plan exposure; batteries/solar most sensitive; mitigation via suppliers/contracts	Manageable headwind; active mitigation
IRA credits/transferability	PTCs support utility/infrastructure growth	Actively safe-harboring; ~$200M/yr PTC transfers; majority from in-service assets; repeal impact limited if prospective	Policy risk monitored; base case intact
Illinois gas modernization	Options under review; staff favored “Option 3” ~$7.2B LT; near-term plan minimal	Decision lifts pause; ramp to “a little over $500M/yr” by 2028; rate case cadence to recover spend	Clearer path; capex ramps from 2026–2028
Wisconsin regulation	2025–26 order maintained 9.8% ROE, 53% equity layer; quiet rate calendar	VLC tariff proposed (10.48% ROE, 57% equity); multiple project approvals pending in 2025	Constructive, busy docket outside rate cases
Coal retirements/gas conversion	Oak Creek retirements and gas additions outlined	Testing coal-to-gas blends; planning gas conversions by 2029; battery additions progressing	Transition advancing on plan
Equity financing	2025 equity $700–$800M expected	Reaffirmed; ~$140M issued Q1; timing sensitive to market/cash needs	On track

Management Commentary

“We remain laser-focused on reliability, financial discipline and customer satisfaction, and we're on track to deliver another year of strong results” .
“We have confidence in our 5-year forecast of 1.8 gigawatts of demand growth in Southeastern Wisconsin” .
“As filed, the [VLC] tariffs provide for a fixed return on equity of 10.48% and an equity ratio of 57%...designed so that no cost to serve these very large customers would be subsidized by or shifted to other customers” .
“Weather positively impacted quarter-over-quarter earnings by approximately $0.18...Rate-based growth contributed $0.20 more to earnings” .
“We expect [Illinois pipeline program] to ramp up over '26 and '27...to a little over $500 million a year going forward [by 2028]” .

Q&A Highlights

Capacity and generation build: WEC is actively planning CTs/RICE conversions and additional generation to meet data center and broader load growth; decisions expected on gas filings by mid-year; coal-to-gas conversions targeted by 2029 .
Microsoft/Cloverleaf momentum: MSFT reiterated demand supporting the 1.8 GW outlook; Cloverleaf marketing underway with potential buyers; likely a mix of gas and renewables; timing details to come with Q3 capex refresh .
Equity cadence: 2025 issuance of $700–$800M via ATM/DRIP remains likely; pacing depends on market conditions and cash needs .
IRA/transferability: Safe-harboring projects to preserve PTCs through at least 2029; historical ~$200M/yr PTC transfers; potential repeal likely limited to future projects and would raise customer costs for new utility renewables .
Tariffs: Exposure estimated at 2%–3% of the $28B plan; solar/batteries most exposed; regulatory mechanisms and supplier strategies to mitigate cost increases .

Estimates Context

Q1 2025 vs consensus: EPS $2.27 vs $2.18*, revenue $3.150B vs $2.809B*, EBITDA $1.309B vs $1.333B*; EPS/revenue beat, slight EBITDA miss likely on O&M/D&A and fuel timing [GetEstimates Q1 2025] .
FY path: FY25 consensus EPS 5.23* vs reiterated guide 5.17–5.27 suggests Street near the midpoint; Q2 guide $0.63–$0.69 could recalibrate quarterly phasing [GetEstimates FY 2025].

Values marked * are retrieved from S&P Global.

Key Takeaways for Investors

Fundamentals: Strong start with EPS/revenue beats and reaffirmed FY guide; weather normalization still modestly favorable, but underlying demand (0.7% weather-normal electric growth) is building .
Growth pipeline: Data center load (MSFT) and Cloverleaf provide multi-year upside to electric sales and capex; watch Q3 plan refresh for inclusion and timing .
Regulatory construct: VLC tariff design (10.48% ROE/57% equity) and active project dockets in Wisconsin support timely recovery and growth; Illinois modernization offers scalable gas capex ramp from 2026–2028 .
Cost vigilance: O&M/D&A increases persist with asset additions and vegetation management; EBITDA miss vs consensus underscores need to monitor execution on cost trajectory [GetEstimates Q1 2025].
Financing: 2025 equity raise ($700–$800M) remains on track; dilution manageable within LT 6.5%–7% EPS CAGR framework .
Capital deployment: Renewables and dispatchable gas both advancing; first battery installation slated this month; watch tariff impacts on battery/solar procurement and regulatory pass-through .
Near-term trading setup: Positive revision risk near term (Q1 beat, Q2 guide provided), with potential catalysts from Wisconsin project approvals and tariff clarity; medium-term upside tied to data center load inclusion in capex plan .

Appendix: Source documents

Q1 2025 8-K 2.02 earnings release, financials, and guidance .
Q1 2025 earnings call transcript (prepared remarks and Q&A) –.
Dividend press release (4/17/25) .
2024 results press release (includes Q4 2024) .
Q3 2024 8-K 2.02 (trend context) .

S&P Global consensus estimates were used for comparisons where marked with *.

WEC ENERGY GROUP, INC. (WEC)·Q1 2025 Earnings Summary