CMSD — CMS Energy Corporation 5.875% Junior Subordinated Notes due 2079

CMS Energy Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Adjusted Earnings Per Share (EPS): Reported at $1.13 for Q1 2026, an improvement compared to the same period in 2025.
• Adjusted Net Income: $346 million for the quarter.
• Full-Year EPS Guidance: Reaffirmed at $3.83 to $3.90, with confidence towards the high end of the range.
• Long-Term Growth Target: Continued guidance for 6% to 8% adjusted EPS growth.

2. Strategic Updates and Business Highlights

• Regulatory Success: Over 65% of the electric rate case request was approved, maintaining a 9.9% return on equity (ROE).
• Customer Investments: Focused on enhancing grid reliability and resiliency, with significant capital investments planned.
• Growth in Load: Signed contracts for approximately 110 megawatts of new load in Q1 2026, exceeding last year's figures.
• Data Center Interest: Strong progress in attracting data centers, with ongoing negotiations and community engagement.
• Affordability Commitment: Electric bills remain among the lowest in the nation, with ongoing efforts to reduce costs for customers.

3. Forward Guidance and Outlook

• Capital Investment: Planning to invest over $24 billion in the next five years, with additional opportunities linked to new large loads.
• Rate Case Cadence: Electric rate case filing scheduled for June 2026, with a gas case expected in September-October 2026.
• Weather Impact: Anticipated normal weather conditions could lead to a $0.23 per share negative variance for the remainder of the year.

4. Bad News, Challenges, or Points of Concern

• Storm Impact: A significant ice storm in March negatively affected costs, contributing to a $0.05 per share variance.
• Moody’s Credit Outlook: The utility received a negative outlook from Moody’s due to the size of the capital investment plan relative to cost recovery timing.
• Regulatory Environment: Uncertainty in state legislation during an election year may limit policy progress that could benefit the utility.

5. Notable Q&A Insights

• Data Center Developments: The pipeline for data centers is robust, with potential for significant load growth that could defer electric rate case filings.
• Equity Financing Strategy: Executed equity forward contracts to address financing needs, with plans to issue approximately $700 million in equity throughout 2026.
• Affordability Discussions: Management emphasized the importance of maintaining affordability amidst growth, engaging with policymakers to align on solutions.
• NorthStar Assets: No current plans for M&A or splitting NorthStar, with focus on utility-like returns from ongoing projects.

Overall, CMS Energy demonstrated strong financial performance in Q1 2026, with positive regulatory outcomes and a commitment to customer affordability, despite facing challenges such as weather impacts and credit outlook concerns. The company remains optimistic about future growth opportunities, particularly in data centers and large load contracts.