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XCEL ENERGY INC (XEL)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 EPS of $0.75 beat S&P Global consensus $0.65; revenue of $3.287B beat $3.210B, driven by higher recovery of infrastructure investments, sales growth and higher AFUDC; headwinds were higher interest, O&M and depreciation (EPS drivers: +$0.29 electric rev, +$0.05 gas rev, +$0.07 AFUDC; offsets: -$0.04 interest, -$0.03 depreciation, -$0.02 O&M) . Consensus figures from S&P Global estimates (see table and note).
  • 2025 EPS guidance reaffirmed at $3.75–$3.85; key assumptions updated: capital rider revenue increased to $255–$265M (from $200–$210M), O&M growth to ~4% (from ~3%), interest expense trimmed to $160–$170M (from $165–$175M) .
  • Management highlighted an additional $15B+ capex pipeline (on top of the $45B base plan) to meet growth and reliability, including ~5.2 GW proposed in TX/NM and large regional transmission projects; data-center pipeline at ~1.1 GW contracted/under construction with goal of ~2.5 GW by 2030 .
  • Regulatory/wildfire updates constructive: Colorado CPUC verbally approved $1.9B wildfire plan (written decision expected Q3), Texas approved ~$495M SPS resiliency plan; Marshall Fire trial slated Sep–Nov; Smokehouse cumulative liability estimate held at the low end at $290M, well below ~$500M insurance coverage (insurance remaining noted) .
  • Near-term catalysts: Q3 capital plan roll-forward (including incremental capex integration), Colorado resource plan (Phase I) decision expected fall 2025, SPS CCN filings in 2H25, Marshall Fire trial commencement late Q3 .

What Went Well and What Went Wrong

  • What Went Well

    • Strong EPS/revenue beat versus consensus; EPS +39% y/y to $0.75 on higher recovery of infrastructure investments and sales growth; weather-normalized electric sales +3.5% . Consensus figures from S&P Global (see Estimates Context).
    • Capex growth visibility: “we now believe that we're likely to need an additional $15 billion of capital investment” on top of $45B base plan; portfolio for SPS includes ~5.2 GW by 2030 with ~4.5 GW company-owned .
    • Regulatory momentum: CO wildfire plan settlement verbally approved; TX SPS resiliency plan approved (~$495M); both support system resiliency, with securitization contemplated in CO to mitigate bill impacts .

  • What Went Wrong

    • Cost headwinds persist: higher interest (-$0.04), depreciation (-$0.03), and O&M (-$0.02) diluted EPS despite revenue uplift; interest pressure reflects higher debt and rates .
    • Legal overhangs: Marshall Fire trial scheduled for late Q3; while management disputes causation, the potential exists for damages beyond insurance limits if adverse outcomes occur .
    • Continued O&M inflation and nuclear generation costs noted; O&M growth assumption raised to ~4% for 2025 (from ~3%) .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Revenue ($USD Billions)$3.120 $3.906 $3.287
Net Income ($USD Millions)$464 $483 $444
Diluted EPS ($)$0.81 $0.84 $0.75
Operating Income ($USD Millions)$347 $677 $577
Total Operating Expenses ($USD Millions)$2,773 $3,229 $2,710
EBITDA Margin %——40.6%*
Gross Profit Margin %——46.4%*
  • Values retrieved from S&P Global.

Versus Estimates (S&P Global)

Metric (Q2 2025)ConsensusActualDirection
EPS ($)0.645*0.75 Beat
Revenue ($USD Billions)3.210*3.287 Beat
  • Values retrieved from S&P Global.

Segment EPS contribution (diluted EPS)

SegmentQ2 2024Q2 2025
PSCo$0.21 $0.26
NSP-Minnesota$0.24 $0.32
SPS$0.16 $0.17
NSP-Wisconsin$0.04 $0.05
WYCO (Equity method)$0.01 $0.01
Regulated Utility subtotal$0.66 $0.81
Xcel Inc. and Other($0.12) ($0.06)
GAAP/ongoing EPS$0.54 $0.75

KPI detail

KPIQ4 2024Q1 2025Q2 2025
Weather-normalized total retail electric sales YoY+3.3% +0.7% +3.5%
AFUDC — equity ($USD Millions)$49 $48 $69
Interest charges & financing costs ($USD Millions)$297 $309 $322
O&M expenses ($USD Millions)$618 $686 $675
Depreciation & amortization ($USD Millions)$702 $728 $722

Non-GAAP note: GAAP equals ongoing in Q2 and Q1 (no adjustments) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Ongoing EPSFY 2025$3.75–$3.85 $3.75–$3.85 Maintained
Capital rider revenue (net of PTCs)FY 2025$200–$210M $255–$265M Raised
O&M expense growthFY 2025~3% ~4% Raised
Interest expense (net of AFUDC - debt)FY 2025$165–$175M $160–$170M Lowered
Depreciation expenseFY 2025$210–$220M $210–$220M Maintained
Property taxesFY 2025$45–$55M $45–$55M Maintained
AFUDC — equityFY 2025$110–$120M $110–$120M Maintained
WN retail electric sales growthFY 2025~3% ~3% Maintained
WN firm natural gas sales growthFY 2025~1% ~1% Maintained
Dividend per share (quarterly)Q4 2025 pay$0.57 (declared) $0.57 (payable Oct 20, 2025) Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24, Q1’25)Current Period (Q2’25)Trend
Capex pipeline & grid buildBase plan $45B 2025–2029; large transmission and renewables base plan; possible $10B+ incremental outside plan “Likely to need an additional $15B+” across generation/transmission; formal five-year roll-forward in Q3 Up
Data centers/AI-driven loadSuper-large load tariff ordered in MN; demand growth highlighted ~1.1 GW under construction/contract; aiming ~2.5 GW by 2030; robust 7+ GW pipeline; ESAs progressing Up
Wildfire mitigation & resiliencyCO WMP filed; TX SPS SRP filed; decisions expected 2025 CO WMP settlement verbally approved; TX SPS SRP approved (~$495M); securitization path in CO Constructive
Policy/tax credits (OBBB)IRA benefits/credit transferability part of planning Management sees lower corp taxes, accelerated depreciation, and credit transferability as customer-beneficial; continuing to safe-harbor and start physical work Supportive
Legal (Smokehouse/Marshall)Smokehouse loss estimate raised to $290M; Marshall trial set for 9/2025 Smokehouse settlements ongoing; estimate maintained at low end ($290M); Marshall trial to begin late Sep; settlement discussions possible Ongoing risk
Financing/equityForward equity in 2024; ATM ongoing >$1B equity via ATM in Q2; balanced 60/40 D/E funding approach; potential use of mandatories/converts Neutral
Supply chain/turbine procurement—19 gas turbine reservation slots; 9 earmarked for SPS portfolio; aims to de-risk timelines Proactive

Management Commentary

  • “We delivered strong earnings of $0.75 per share… invested $2.6 billion in resilient and reliable energy infrastructure… We remain confident in our ability to deliver on our earnings guidance for the 21st year in a row” — Bob Frenzel, CEO .
  • “We now believe that we're likely to need an additional $15 billion of capital investment… including nearly 5,200 megawatts of generation and storage… over 4,500 megawatts is expected to be company-owned” .
  • “We have about 1.1 gigawatts of data centers under construction and under contract… ultimately hitting about 2.5 [GW] by the 2030 timeframe” .
  • “Colorado PUC approved our unanimous settlement for our $1.9 billion wildfire mitigation plan… [and] Texas Commission approved our $500 million system resiliency plan” .

Q&A Highlights

  • Incremental capex timing and inclusion: SPS RFP certificates targeted 1H26; transmission largely 2026–2030; full base plan update in Q3 .
  • Turbine procurement: 19 reservation slots secured; ~9 needed for SPS resource plan; aims to ensure on-time delivery amid national demand .
  • Equity funding: Issued >$1B via ATM in Q2; base plan equity need roughly 40% of incremental capital; will consider mandatories/converts as needed .
  • Data center contracting: Multiple ESAs in advanced stages across MN, WI, CO; new TX opportunity emerged; goal to contract toll-based plan by year-end .
  • Marshall Fire: Court-ordered mediation concluded, but discussions can continue; company maintains equipment did not cause second ignition; trial slated late Sep–Nov .

Estimates Context

  • Q2 2025: EPS $0.75 vs $0.645 consensus; revenue $3.287B vs $3.210B — both beats, aided by higher recovery of infrastructure investments, sales growth, and higher AFUDC; offsets from interest, depreciation and O&M . Consensus values from S&P Global estimates.
  • Prior quarters: Q1 2025 EPS $0.84 vs $0.919 consensus; revenue $3.906B vs $3.932B — modest misses, with O&M, depreciation and interest pressure cited . Q4 2024 EPS $0.81 vs $0.875; revenue $3.120B vs $3.774B — revenue shortfall driven by lower fuel/gas costs and PTCs flowed back to customers (earnings-neutral) . Consensus values from S&P Global estimates.

Key Operating Drivers and Detail (Q2 2025)

  • Sales: Weather-normalized total retail electric sales +3.5% YoY; strong SPS & PSCo C&I growth; residential growth across most jurisdictions .
  • Revenue drivers: Electric +$219M YoY (non-fuel riders +$58M, sales/demand +$62M, MN/ND rate outcomes +$23M; weather -$32M); Gas +$41M YoY (CO rate outcomes +$15M; recovery of higher gas cost +$18M) .
  • Cost drivers: O&M +$13M YoY; D&A +$19M YoY; interest charges +$30M YoY .
  • AFUDC: Equity and debt AFUDC increased $42M QoQ YoY in Q2; AFUDC-equity in 2Q at $69M .

Other Q2 Press Releases

  • Dividend: Board declared $0.57 quarterly dividend, payable Oct 20, 2025 (record date Sep 15, 2025) .
  • TX/NM portfolio: Announced 17 projects adding 5,168 MW nameplate by 2030 (3,200 MW dispatchable/storage; 1,968 MW wind/solar), to meet >40% expected demand growth by 2030; will seek approvals 2H25 .

Key Takeaways for Investors

  • Quality beat with reaffirmed FY25 EPS guide; mix of regulated recovery and sales growth overcame interest/O&M headwinds; positive estimate momentum into 2H likely if execution continues .
  • Structural growth story accelerating: $15B+ incremental capex pipeline on top of $45B base, with multi-GW generation/transmission additions and a growing data-center demand book underpinning mid-to-high range LT EPS CAGR aspirations .
  • Regulatory backdrop constructive in CO and TX on wildfire/resiliency, supporting timely recovery and bill mitigation (e.g., securitization) .
  • Watch financing cadence: significant ATM issuance in Q2; management targeting balanced 60/40 debt/equity; potential additional equity tools if pipeline accelerates .
  • Legal overhang manageable near-term (Smokehouse claims tracking below insurance), but Marshall trial introduces headline risk Sep–Nov; monitor for settlement/filing updates .
  • Catalysts: Q3 capital plan roll-forward (rate base/EPS bridge), Colorado resource plan decision (fall), SPS CCN filings (2H25), data-center ESA signings, Marshall trial .
  • Trading setup: Regulated growth plus near-term beats and capex visibility may support multiple stabilization; headline/legal outcomes and funding mix details will drive near-term sentiment.

Notes:

  • All consensus figures (EPS, revenue) are from S&P Global; see tables where consensus values are marked with an asterisk.
  • EBITDA Margin % and Gross Profit Margin % are from S&P Global; values marked with an asterisk.