XCEL ENERGY (XEL)·Q4 2025 Earnings Summary
Xcel Energy Hits 21-Year Guidance Streak as Data Center Demand Surges
February 5, 2026 · by Fintool AI Agent
Xcel Energy delivered Q4 2025 ongoing EPS of $0.96, matching analyst expectations, while full-year ongoing earnings of $3.80 per share marked an 8.6% improvement over 2024's $3.50 . The company extended its industry-leading track record to 21 consecutive years of meeting or exceeding earnings guidance. Despite a 5.5% revenue miss—primarily due to timing of fuel cost pass-throughs—shares rose 2.4% after-hours as management highlighted a new large data center customer and two strategic partnership announcements .
Did Xcel Energy Beat Earnings?
The quarter's ongoing EPS of $0.96 was up from $0.81 in Q4 2024, representing an 18.5% year-over-year improvement . Revenue of $3.56 billion compared to $3.12 billion in the prior year (+14.1%), but fell short of expectations largely due to timing differences in fuel and purchased power cost recoveries, which flow through as both revenue and expense .
For full-year 2025, ongoing EPS of $3.80 compared favorably to 2024's $3.50, with key drivers including:
- Higher infrastructure investment recovery: +$1.27 EPS contribution from electric revenues
- AFUDC growth: +$0.27 from increased allowance for funds used during construction
- Natural gas revenues: +$0.29 from rate outcomes and fuel recovery
Offsetting factors included higher interest charges (-$0.28), depreciation (-$0.28), and O&M expenses (-$0.25) .
Ask Fintool AI AgentHow Did the Stock React?
*Values retrieved from S&P Global
Despite the revenue miss, shares responded positively as investors focused on:
- 21st consecutive year of meeting guidance—one of the best track records in the utility industry
- New data center customer announcement—adding to growing demand pipeline
- Two strategic alliances with development and supply chain partners to accelerate data center development
What Did Management Guide?
Xcel Energy reaffirmed 2026 ongoing EPS guidance of $4.04 to $4.16 per share, representing 6-10% growth from 2025's $3.80 base .
Key 2026 Guidance Assumptions :
- Weather-normalized retail electric sales growth: ~3%
- Weather-normalized natural gas sales growth: ~1%
- Capital rider revenue increase: $535-545 million
- O&M expense growth: ~3%
- Depreciation increase: $350-360 million
- Interest expense increase (net of AFUDC-debt): $300-310 million
- AFUDC-equity increase: $140-150 million
Long-Term Objectives :
- EPS growth: 6-8%+ annually (from $3.80 base)
- Dividend growth: 4-6% annually
- Dividend payout ratio: 45-55%
- Credit ratings: Maintain senior secured debt in A range
What Changed From Last Quarter?
Improved vs. Q3 2025:
- Regulatory progress: North Dakota settlement reached at 9.8% ROE; Wisconsin rates approved at 9.8% ROE
- Wildfire resolution: Marshall Fire litigation substantially settled ($640M), with nearly all plaintiffs paid
- Data center momentum: New large customer announced, following previous data center wins
Headwinds continuing:
- Interest expense: Increased $213 million for the full year due to higher debt levels and rates
- O&M costs: Up $192 million, driven by benefits, wildfire mitigation, and insurance
- Smokehouse Creek Fire: Texas Attorney General lawsuit filed in December; $430M in total estimated losses
What Are the New Strategic Partnerships?
Xcel announced two landmark partnerships to accelerate infrastructure buildout and data center development:
GE Vernova Alliance (signed February 2026) :
- Supports wind, natural gas generation, transmission and distribution projects through the 2030s
- Provides supply chain certainty for critical components
- Bidding several GW of wind projects with GE Vernova turbines
- Purchasing 5 additional natural gas turbines beyond existing commitments
- Joint technology collaboration on system performance and integration
NextEra Energy MOU (signed February 2026) :
- Co-develop generation and transmission for data center projects and hubs
- Fully regulated ownership structure with mix of PPAs, BOTs, and self-build
- Partner across entire data center lifecycle from planning to operation
- Explores emerging generation and grid-facing technologies
- Accelerates speed to market with benefits flowing to all customers
How Big Is the Data Center Opportunity?
Xcel Energy doubled its data center contracted capacity target from 3 GW to 6 GW by end of 2027 :
Current contracted projects :
- 200 MW: Online 2026, full ramp 2027
- 250 MW: Online 2026, full ramp 2035
- 250 MW: Online, full ramp 2035
- 600 MW: Online 2026, full ramp 2029
New data center announced on call: Large facility in Upper Midwest, bringing total contracted capacity over 2 GW .
Capital intensity: Every 1 GW data center assuming balanced generation could require $6-8 billion of investment .
Sales growth implications: The 6 GW target (vs. prior 3 GW) creates upward pressure on the 5% long-term sales growth forecast. Management expects most sales impact in 2029-2030 with continued ramp into the 2030s .
What's the $60 Billion Capital Plan?
Xcel Energy's 2026-2030 capital expenditure plan totals $60 billion, a significant infrastructure investment focused on clean energy transition and grid modernization :
Funding sources :
- Cash from operations: $30.2B (50%)
- New debt: $22.8B (38%)
- Equity issuances: $7.0B (12%)
The plan excludes potential incremental generation from the Colorado Near-Term Procurement RFP and future MISO/SPP transmission projects .
Rate Base Growth: The $60B capital plan drives an 11% rate base CAGR from 2025-2030 .
2026 Debt Financing Plan :
Credit Metrics Guidance (2026-2030) :
- FFO/Debt: ~16-17%
- Debt/EBITDA: 5.0-5.9x
- Equity Ratio: 40-42%
- HoldCo Debt/Total Debt: 22-24%
Ask Fintool AI AgentKey Rate Cases and Regulatory Updates
Xcel Energy has multiple rate proceedings in progress across its service territories:
The Minnesota rate case is the largest pending proceeding, with the Department of Commerce recommending a 9.25% ROE versus Xcel's requested 10.3% .
Wildfire Litigation Update
Marshall Fire (Colorado) :
- Settlement agreements reached for $640 million
- Nearly all plaintiffs paid; final documentation executed
- Remaining liability: $5 million
- Insurance receivables: $353 million
Smokehouse Creek Fire (Texas) :
- Total estimated losses: $430 million (low-end estimate, updated)
- Settlements committed: $382 million
- Claims progress: 222 of 287 submitted claims resolved
- Mediation progress: 79 of 83 potential claims presented for mediation settled
- Litigation: 22 of 47 complaints settled or dismissed
- Insurance coverage: ~$500 million
- Remaining claims: ~100 outstanding (down from 420+ total)
What Did the CEO Say?
"In 2025, Xcel Energy delivered on our earnings guidance for the 21st year in a row—one of the best track records in the industry. We placed in service critical infrastructure to serve our customers, including Phase 2 of our Sherco Solar facility, the conversion of our Harrington coal plant to natural gas, and the first two segments of our Colorado Power Pathway."
— Bob Frenzel, Chairman, President and CEO
"As we look forward into 2026, we recently announced another large data center customer. We also announced two strategic alliances with industry-leading development and supply chain partners to help ensure we have the right resources to deliver critical system investments affordably, accelerate data center development for the benefit of all of our customers, and drive innovation."
— Bob Frenzel, Chairman, President and CEO
"By engaging early with leading developers like NextEra, we can better anticipate system needs for new data centers, streamline development timelines, advance innovative grid technologies, and continue to provide the network benefits that data centers bring to all of our customers. With this agreement, we now expect to have 6 GW of total data center capacity contracted by the end of 2027."
— Bob Frenzel, Chairman, President and CEO
Q&A Highlights
On the NextEra Partnership :
"We do think there'll be increased clock speed as we think through combining the best sales team, the best development teams, the best analytical teams in the country to deliver solutions for a very sophisticated customer set... It's not an exclusive arrangement, but we expect to do a lot of work through this agreement, and it's not fuel-type limited." — Bob Frenzel, CEO
On Colorado Large Load Tariff :
- Filing expected early Q2 2026
- Once approved, will bring forward data centers with packaged generation to demonstrate customer benefit
On $10B+ CapEx Pipeline Upside :
- Low-end only; significant upside potential from:
- Colorado near-term RFP (commission reviewing in tranches)
- SPS RFP (1,500-3,000 MW nameplate, bids received January 2026)
- Minnesota RFP (4,100 MW renewables, filing later in 2026)
- Data center generation buildout
On Colorado ROE Improvement :
- Colorado saw "significant under-earnings" in 2025
- Electric and gas rate cases filed late 2025, decisions expected late Q3 2026
- "Significant ROE improvement" expected in 2027 as rate cases annualize
On SPP Transmission Award :
- New 765 kV transmission line awarded this week
- $1.5 billion additional investment over base five-year plan
- COD by end of 2030
- First 765 kV lines in SPP; Xcel awarded 20% of all approved ultra-high voltage transmission in the country
On Winter Storm FERN Performance :
- Grid performed "exceptionally well" during January 2026 storm
- Exported generation when system needed it most, providing grid stability
- Record-setting conditions managed with proactive fuel management
Forward Estimates
*Values retrieved from S&P Global
The consensus FY 2026 EPS estimate of approximately $4.00 falls within management's guided range of $4.04-$4.16 .
Ask Fintool AI AgentWhy Is Customer Affordability Key to the Thesis?
Xcel Energy maintains one of the lowest customer bill structures in the utility industry, providing headroom for rate increases to fund capital investments :
Share of Wallet by State :
- Colorado: 1.0% (#1 of 50 states)
- North Dakota: 1.2% (#3 of 50)
- Michigan: 1.3% (#4 of 50)
- Minnesota: 1.3% (#5 of 50)
Management emphasized that the five-year capital plan keeps long-term customer bill growth at inflation .
Key Takeaways
- Reliable execution continues: 21st consecutive year meeting guidance—rare consistency in any sector
- Data center target doubled: Now targeting 6 GW contracted by end of 2027 (up from 3 GW), with >20 GW total pipeline
- Strategic partnerships accelerating: GE Vernova and NextEra alliances provide supply chain certainty and development speed
- New transmission awarded: $1.5B 765 kV line in SPP added to pipeline this week
- Clean energy transition: $60B capital plan driving 11% rate base CAGR through 2030
- Affordability buffer: Customer bills 28% below national average provides regulatory headroom
- Wildfire progress: Smokehouse Creek claims 75%+ resolved; Marshall Fire substantially settled
- Colorado ROE improvement ahead: Significant under-earnings in 2025 to reverse in 2027 as rate cases annualize
Related: Xcel Energy Company Profile | Q3 2025 Earnings | Earnings Transcript