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: $4.56, compared to $2.27 in 2024, which included significant losses from divestitures.
• Quarterly Non-GAAP EPS: $1.12 for Q4 2025, compared to $1.01 in Q4 2024.
• Dividends: Increased by 5.2% to $3.01 per share.
• FFO-to-Debt Ratio: Improved by over 400 basis points at Moody's.

2. Strategic Updates and Business Highlights

• Operational Performance: Achieved top decile performance in service reliability metrics (MBI and SAIDI).
• Capital Investments: Over $4 billion deployed in 2025, focusing on grid modernization and customer energy efficiency.
• Regulatory Engagement: Positive outcomes in rate adjustments and cost recovery mechanisms, including a rate relief plan for Massachusetts customers.
• Infrastructure Projects: Groundbreaking on a $1.8 billion underground substation in Cambridge; completion of the onshore substation for the Revolution Wind project, which is 87% complete.
• Recognition: Named one of America's most responsible companies by Newsweek for the seventh consecutive year.

3. Forward Guidance and Outlook

• 2026 EPS Guidance: Projected in the range of $4.80 to $4.95, with growth expected to be moderate due to timing of regulatory outcomes.
• Long-Term Growth Target: Aiming for 5% to 7% EPS growth by 2028, with expectations to achieve the upper half of this range based on improved regulatory outcomes and infrastructure investments.
• 5-Year Capital Investment Plan: Updated to $26.5 billion, an increase of $2.3 billion, primarily for electric and natural gas distribution.

4. Bad News, Challenges, or Points of Concern

• Aquarion Sale Uncertainty: The pending sale of Aquarion Water Company remains uncertain, with regulatory challenges impacting potential financing needs.
• Storm Cost Recovery: Awaiting a decision from PURA on storm cost prudency, which could affect cash flow and financial metrics.
• Increased Costs: Higher O&M expenses, interest costs, and depreciation impacting earnings, particularly in the natural gas distribution segment.
• Regulatory Risks: Ongoing regulatory proceedings and the need for constructive engagement with policymakers to address affordability and reliability concerns.

5. Notable Q&A Insights

• Aquarion Sale Impact: Approval of the Aquarion sale could reduce the need for equity financing, potentially enhancing growth rates.
• Revolution Wind Project: First power expected soon, with commercial operation date targeted for the second half of 2026; clarity around liabilities to Orsted was provided.
• Financing Strategy: Discussion on alternative financing options, including junior subordinated debt, to maintain balance sheet strength regardless of the Aquarion sale outcome.
• Regulatory Engagement: Emphasis on the importance of regulatory clarity for future investments and operational strategies.

Overall, Eversource Energy demonstrated solid financial performance in 2025, with a focus on strategic infrastructure investments and regulatory engagement, while navigating challenges related to regulatory approvals and operational costs. The outlook remains cautiously optimistic with a strong emphasis on long-term growth and stability.