Xcel Energy Inc. (XEL) Earnings

Management highlights

### Capital Investment and Project Execution - Invested $3 billion in Q2 2026, bringing year-to-date total capital investment to over $6 billion across the company's 8 operating states, focused on generation, transmission, and distribution infrastructure. - Achieved commercial operation for Group 2 of the Colorado Power Pathway, started construction on a 150-mile 345 kV transmission project in the Upper Midwest, and brought phase 3 of the SHRCO solar facility online, bringing its total capacity to 710 megawatts (one of the largest utility-scale solar facilities in the U.S.). - An independent monitor approved SPS selection of 2,600 megawatts of new company-owned generation (70% of the total recommended portfolio) representing $6 billion in new investment in Texas and New Mexico, giving management line of sight to over $70 billion in total planned five-year investments outlined in November 2025. - Xcel Energy is the largest builder of new high voltage transmission in the U.S. and one of the largest renewable generation providers for utility customers. Management's execution strategy is built on long-term strategic partnerships with tier 1 EPC and supply chain vendors, centralized standardized project governance to drive capital efficiency and reduce execution risk, and workforce development investments with trade schools and universities to build skilled project teams. ### Regulatory and Customer Affordability Progress - Reached settlements or final commission decisions in six active rate cases, with all outcomes keeping long-term customer bill growth at or below inflation and maintaining total customer energy bills among the lowest in the U.S. Settlements include Colorado electric and natural gas cases, New Mexico electric, and Minnesota natural gas, with final commission decisions received for Minnesota electric and a South Dakota electric settlement. - Expanded energy assistance programs for low-income and vulnerable customers: Colorado settlements will nearly double program size and participation, while the recent Minnesota electric rate case significantly expanded program accessibility and funding. - Filed integrated customer program plans in Colorado and Minnesota that bundle voluntary customer programs into a single coordinated plan to simplify customer access to rebates and efficiency options. - Received approval for a large load tariff in Minnesota, and has filed new large load tariffs in Colorado and Wisconsin, designed to protect and lower bills for existing customers while enabling new large load growth. ### Clean Energy and Sustainability Progress - Released the 2026 Sustainability Report this quarter, documenting that over the past two decades, Xcel Energy has cut carbon emissions by nearly 60%, reduced water use by over 35%, and enabled nearly 14,000 megawatts of wind and solar capacity on its system, all while maintaining system reliability and keeping customer bills among the lowest in the country. - Remains committed to leading the energy transition with a focus on reliability, affordability, sustainability, and customer value.

Guidance

- Management reaffirms the 2026 ongoing EPS guidance range of $4.04 to $4.16 per share, maintaining the original range with no upward or downward revision. - Reaffirms long-term earnings growth guidance of 6-8+ percent, with an expected 9+ percent average annual EPS growth through 2030. - Management maintains 2026 full-year weather-adjusted electric sales growth guidance of 3%. - Management notes there is $10+ billion in incremental investment opportunity beyond the base five-year capital plan, driven by additional generation RFP wins, transmission expansion, and data center load growth, with much of this incremental investment expected to be realized by the end of 2030.

Segment performance

Xcel Energy does not break out earnings by separate product segments in this earnings call. Overall corporate financial results for Q2 2026 are: earnings per share of $0.93, compared to $0.75 per share in Q2 2025. Key earnings drivers for the quarter were: higher electric revenues from non-fuel riders and sales growth adding $0.17 per share, higher APDC adding $0.08 per share, lower depreciation and amortization adding $0.08 per share, and positive returns in venture capital portfolios adding a net $0.03 per share. Offsetting these gains, higher interest expense reduced earnings by $0.12 per share, and common equity financing impacts reduced earnings by $0.06 per share. Year-to-date 2026, weather-adjusted electric sales increased 2.1%, driven by energy sector growth at SPS and manufacturing growth across all operating subsidiaries. Xcel Energy has already addressed approximately 85%, or $6 billion, of the $7 billion total base five-year equity requirement for its capital plan.

Risks & headwinds

- No material new operational failures or unexpected risks were explicitly discussed on the call. Management noted that wildfire risk is elevated in Colorado in 2026 due to low winter snowpack and ongoing drought conditions, but outlined comprehensive mitigation efforts (AI-enabled fire detection cameras, expanded weather monitoring, targeted public safety power shutoffs, and system hardening) that have been successfully executed to reduce risk to communities. - Large load tariffs may face stakeholder pushback in some jurisdictions, though management noted the Minnesota approval was constructive, and it has crafted filings in other states that balance customer protections with developer needs to reduce this risk. - All forward-looking investment and earnings outcomes are subject to regulatory approval timing and outcomes for rate cases, large load tariffs, and generation projects, which can change projected investment timing and returns.

Analyst Q&A

• Q: Analyst asks if the new $6 billion in incremental SPS investment, which brings total line-of-sight upside CapEx to over $10 billion, changes management's prior 9%+ EPS growth target through 2030, given the projected uplift to rate-based growth. /

  A: Management confirms the $10+ billion in line-of-sight upside is mostly generation development won through competitive RFPs, leveraging Xcel Energy's low-cost execution capability to deliver customer value. Some of this investment will flow into the early 2030s, so timing dampens the immediate impact on growth. Management maintains the 9%+ average EPS growth target through 2030, and will update full five-year projections in Q3 when rolling out the new 2027-2031 plan. The team emphasized that the consistent pipeline of projects has created strategic long-term partnerships with EPC vendors that drive design and labor efficiency, keeping projects on time and on budget, which supports sustained long-term growth.

• Q: Analyst asks for an update on Xcel Energy's wildfire mitigation efforts and regulatory planning in Colorado, given elevated 2026 wildfire risk and upcoming 2027 state legislation related to wildfire standards of care. /

  A: Management confirms 2026 drought and low snowpack have created challenging wildfire conditions, but the company has executed a four-pillar mitigation plan successfully: 1) expanded situational awareness with 50 new AI detection cameras and 300 new weather stations that benefit the entire state; 2) proactive public safety power shutoffs to reduce risk during high wind conditions; 3) broad system hardening including pole replacements, upgraded insulators, and system segmentation; 4) targeted customer communication to protect vulnerable users and critical infrastructure. Xcel Energy will focus on 2027 state wildfire legislation, and will file a new three-year wildfire mitigation plan with the Colorado Public Utilities Commission in early 2027 incorporating lessons learned from the 2026 season.

• Q: Analyst asks about the project size mix for Xcel Energy's planned 1 gigawatt of new data center load in 2026 and 3 gigawatts in 2027. /

  A: Management notes the high-probability data center pipeline includes projects of all sizes, from 10-20 megawatt urban facilities to 1,000 megawatt hyperscale campuses across the Upper Midwest and Southwest. Hyperscalers are primarily focused on large-scale campuses for efficiency benefits, so most of the expected near-term load is expected to come from larger projects, but smaller projects will also contribute. Management remains confident in hitting the 2026 and 2027 targets, and notes that each gigawatt of data center load drives additional incremental renewable and transmission investment to meet demand.

• Q: Analyst asks if Xcel Energy plans to develop new nuclear power generation, given growing peer interest and federal incentives, and asks about potential pushback on large load tariff terms. /

  A: Management stated that while it supports national policy to advance new nuclear as a critical carbon-free resource, Xcel Energy will not be an early adopter of new nuclear builds, as the company has abundant low-cost wind and solar resources to meet its mid-century carbon-free targets. For large load tariffs, management noted the recent Minnesota approval was constructive after working collaboratively with hyperscalers, and upcoming filings in Wisconsin and Texas are crafted to balance customer protections with developer needs, and do not include overly restrictive credit and collateral requirements seen in other regions, so the company expects successful approval.