ES — Eversource Energy

Eversource Energy (ES) Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Full-Year Non-GAAP EPS: $4.76, up from $4.57 in 2024.
• GAAP EPS: $4.05, compared to $2.27 in 2024, which included a net loss of $0.20 per share due to obligations related to offshore wind projects.
• Quarterly Non-GAAP EPS: $1.12, compared to $1.01 in Q4 2024.
• Dividends: Increased to $3.01 per share, reflecting a 5.2% growth.
• FFO-to-Debt Ratio: Improved by over 400 basis points at Moody's, indicating stronger cash flow relative to debt.

2. Strategic Updates and Business Highlights

• Operational Performance: Achieved top decile performance in reliability metrics (MAIFI and SAIDI), with customers experiencing outages only once every two years on average.
• Capital Investments: Deployed over $4 billion in capital, focusing on grid modernization, energy efficiency programs, and infrastructure resilience.
• Regulatory Engagement: Successfully navigated several regulatory proceedings, including rate adjustments and cost recovery mechanisms, particularly in Massachusetts.
• Aquarion Water Company: Continued efforts to sell the company, with a court ruling favoring Eversource, allowing the process to move forward.
• Revolution Wind Project: Expected to achieve first power soon, with construction nearing completion.

3. Forward Guidance and Outlook

• 2026 EPS Guidance: Projected between $4.80 and $4.95, reflecting moderate growth due to timing of regulatory outcomes and ongoing challenges.
• Long-Term Growth Target: Aiming for 5% to 7% EPS growth by 2028, with expectations for improved regulatory outcomes and capital investments to drive future earnings.
• Five-Year Capital Investment Plan: Set at $26.5 billion, with a focus on electric and natural gas distribution to address aging infrastructure and support clean energy goals.

4. Bad News, Challenges, or Points of Concern

• Aquarion Sale Uncertainty: The outcome of the sale remains uncertain, which could impact financing needs and overall strategy.
• Storm Cost Recovery: Pending decisions on storm cost prudency could affect cash flow and financial metrics.
• Increased Costs: Higher O&M expenses, depreciation, and property taxes are anticipated due to increased investments, which may pressure margins.
• Regulatory Environment: Navigating a changing regulatory landscape poses ongoing challenges, particularly in Connecticut.

5. Notable Q&A Insights

• Financing Flexibility: Management indicated that the need for equity financing is not directly impacted by the Aquarion sale, but alternative financing solutions may be adjusted based on the sale's outcome.
• Revolution Wind Liabilities: Clarified that liabilities related to the Revolution Wind project are primarily with Global Infrastructure Partners, not Ørsted, and that the completion of construction is crucial for resolving these liabilities.
• Minority Interest Sale: Discussed potential structures for minority interest sales as a financing option, though specifics are still under consideration.
• Regulatory Approvals: Anticipated clarity on AMI investments and other regulatory matters in Connecticut, with meetings scheduled to discuss prudence standards.

Overall, Eversource Energy demonstrated solid financial performance in 2025 while outlining a strategic path forward, albeit with some regulatory and operational challenges that could impact future growth.