SR-PA — Spire Inc.

Summary of Spire's Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Adjusted EPS: $4.44, a 7.5% increase from $4.13 in fiscal 2024.
• Total Revenue: $275.5 million for fiscal 2025, compared to $247.4 million in the prior year.
• Fourth-Quarter Performance: Adjusted loss of $24 million or $0.47 per share, attributed to seasonal business impacts and higher utility operating and maintenance (O&M) expenses.
• Capital Investments: $922 million in fiscal 2025, with 90% directed towards utility infrastructure improvements.

2. Strategic Updates and Business Highlights

• Acquisition of Piedmont Natural Gas: The acquisition is on track to close in 2026, with regulatory approvals progressing. The Hart-Scott-Rodino review was completed, and FERC approved gas supply contracts.
• Leadership Changes: Steve Greenlee appointed as Executive Vice President and COO, bringing over 25 years of utility operations experience.
• Regulatory Success: Positive settlement in Missouri rate case effective October 2025, with ongoing efforts in Alabama for rate stabilization.
• Dividend Increase: 5.1% increase in annual dividend to $3.30 per share, marking the 23rd consecutive year of dividend growth.

3. Forward Guidance and Outlook

• Fiscal 2026 Adjusted EPS Guidance: Expected range of $5.25 to $5.45, excluding the Piedmont acquisition but including a full year of earnings from gas storage facilities.
• Fiscal 2027 Guidance: Projected adjusted EPS of $5.65 to $5.85, incorporating a full year of earnings from Piedmont and excluding storage facilities due to expected sale.
• Long-term Growth Target: Adjusted EPS growth of 5% to 7%, supported by capital investments and regulatory mechanisms.

4. Challenges and Points of Concern

• Higher O&M Expenses: Increased utility O&M expenses impacted fourth-quarter results and are expected to continue, although management aims to keep increases below inflation.
• Regulatory Risks: Future test year rate adjustments in Missouri could introduce uncertainty in earnings for 2028, depending on the regulatory environment and capital recovery.
• Market Conditions: The gas marketing segment faces challenges from higher storage and transportation fees, which could affect profitability.

5. Notable Q&A Insights

• Return on Equity (ROE): Management expects earned ROEs to improve, particularly in Missouri, as they approach allowed returns following the recent rate case.
• Financing Strategy: Plans for a balanced mix of debt and equity financing for the Piedmont acquisition, with minimal common equity issuance anticipated.
• O&M Management: The company is focused on integrating best practices from both utilities to manage O&M costs effectively during the acquisition transition.
• Interest in Storage Sale: Strong interest in the potential sale of gas storage assets, with an announcement expected by year-end, which may impact future financing strategies.

Overall, Spire demonstrated solid financial performance in fiscal 2025, with strategic initiatives aimed at growth and regulatory engagement, although challenges related to expenses and regulatory changes remain.