OGS Q2 2026 Earnings Call Summary

Adjusted EPS: $0.82 for Q2 2026, up 52% from $0.54 in Q2 2025.
GAAP EPS: $0.74, compared to $0.53 in the prior year, a nearly 40% increase.
Adjusted Net Income: $52.1 million, up from $32.7 million year-over-year.
O&M Expenses: Increased by 6.6% year-over-year, moderating from a larger increase in Q1.
Dividend: Declared at $0.68 per share, unchanged from the previous quarter.

The company is focusing on disciplined investments to strengthen its delivery system while maintaining flat average customer bills year-over-year.
Growth opportunities are expanding, particularly in serving large load customers, driven by demand from gas-fired generation, data centers, and advanced manufacturing.
Completed $188 million in capital projects this quarter, with ongoing projects expected to generate approximately $15 million in incremental annual revenue.
Successful capacity release program has generated $2.8 million in revenue year-to-date, with an additional $1.2 million expected.

The company expects to achieve adjusted earnings within the upper half of its 2026 guidance range of $306 million to $314 million, translating to adjusted EPS of $4.89 to $4.95.
Confidence in achieving this guidance is bolstered by new rates taking effect and ongoing customer growth, along with benefits from legislative developments in Texas and Kansas.

O&M expenses are expected to remain elevated due to increased line locating activity and fuel costs, although a significant reduction in O&M growth is anticipated in the second half of the year.
The impact of warm weather on gas consumption may create fluctuations in future performance metrics.
The company has no full rate cases planned until 2027, which could limit revenue growth in the interim.

Management discussed the potential for shifting capital allocation strategies due to improved regulatory constructs, emphasizing a focus on system integrity spending.
The dividend growth policy remains at 1%-2% annually, with discussions ongoing about future growth rates in light of improving cash flow metrics.
There is a mix of long-term projects that have been in development and new opportunities that are emerging quickly, particularly in Texas.
The company is not currently pursuing hedging strategies for commercial paper due to cost and complexity considerations, despite potential rising rates.
Management expressed confidence in the upper half of the adjusted EPS guidance, citing solid project execution and cost discipline as key factors.

OGS — ONE Gas, Inc.