XEL — Xcel Energy Inc.

Xcel Energy Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Ongoing Earnings: Xcel Energy reported ongoing earnings of $0.91 per share, up from $0.84 per share in Q1 2025.
• GAAP Earnings: Reported GAAP earnings were $0.89 per share.
• Earnings Drivers: Higher electric revenues from rate case outcomes, nonfuel riders, and sales growth contributed positively, while increased interest charges and depreciation negatively impacted earnings.
• Weather Impact: The warmest winter on record in Colorado reduced earnings by $0.09 per share due to lower electric and natural gas sales.

2. Strategic Updates and Business Highlights

• Capital Investment: Xcel Energy invested over $3 billion in new infrastructure in Q1 2026, part of a $14 billion capital investment plan for the year, the largest in the company's history.
• Data Center Agreement: A significant contract with Google for a new data center includes 1,900 megawatts of new wind and solar generation, projected to save customers $1 billion to $1.5 billion over 15 years.
• Partnerships: Announced a joint development agreement with NextEra Energy to co-develop generation and storage solutions, targeting 2 gigawatts of capacity.
• Regulatory Progress: Positive developments in rate cases in North Dakota and South Dakota, with expected revenue increases of $27 million and $26 million, respectively.

3. Forward Guidance and Outlook

• Earnings Guidance: Xcel reaffirmed its ongoing EPS guidance for 2026 in the range of $4.04 to $4.16 per share.
• Long-Term Growth: The company expects 6% to 8% long-term earnings growth and 9% EPS growth on average through 2030.
• Incremental Investment Opportunities: Identified at least $7 billion of the anticipated $10 billion incremental investment plan to meet growing infrastructure needs.

4. Challenges and Points of Concern

• Regulatory Risks: The ALJ for the Prairie Island outage case recommended a $41 million disallowance of replacement power costs, resulting in a $37 million charge in Q1.
• Weather Dependency: Ongoing reliance on weather patterns poses risks to sales and earnings, as evidenced by the impact of the warm winter.
• Execution Risks: The company faces challenges related to supply chain constraints and labor availability for its extensive capital projects.
• Interest and Depreciation Costs: Increased interest charges and depreciation from capital investments are expected to continue impacting earnings.

5. Notable Q&A Insights

• Regulatory Settlement Confidence: Management expressed confidence in achieving constructive settlements in ongoing rate cases, particularly in Colorado and Minnesota.
• Data Center Load Benefits: The company highlighted that large data center loads could help close structural lag in earned returns and provide affordability benefits to existing customers.
• Equity Financing: Xcel has proactively addressed over half of its $7 billion equity needs for its 5-year plan, with flexibility in timing future issuances.
• Execution Strategy: The company emphasized its strategic alliances with Tier 1 EPC firms and equipment suppliers to mitigate execution risks and ensure timely project delivery.

Overall, Xcel Energy demonstrated strong financial performance and strategic initiatives aimed at growth and sustainability, while also navigating regulatory challenges and operational risks.