Entergy Corporation Q3 FY2025 earnings call

• Strong financial results with adjusted EPS of $1.53. - Maintained first quartile Net Promoter Score for utility residential service. - Customer-focused initiatives: Superpower Mississippi with $300M investment to harden grid; digital LIHEAP platform received Silver Best Practices Award. - New customer projects: Google's data center in West Memphis, AVAIO investment in Entergy Mississippi service area. - ERAS process for interconnection with 9 interconnection requests submitted; system and subsidiaries hit new peak loads. - Project progress: Orange County Advanced Power Station commissioning underway; Vicksburg Advanced Power Station groundbreaking; Louisiana baseload generation RFP selections. - Resilience investments: ~$580M invested in approved resilience work; Entergy Texas awarded $200M grant for resilience projects. - Regulatory approvals: Louisiana PSC approved Meta settlement, Bogalusa West Solar project; Arkansas PSC approved Generating Arkansas Jobs Act rider; Texas PUC approved Legend combined cycle power station and transmission projects.

Adjusted earnings per share was $1.53. Weather-adjusted sales for the quarter increased approximately 4.5%, with industrial sales being the largest contributor at over 7% growth. Earnings contribution from sales growth was positive despite milder weather. Nuclear tax credits earned in 2024 were monetized, netting more than $535 million after transaction costs.

• Adjusted EPS guidance narrowed, raising the bottom by $0.10 due to higher-than-planned revenue and other planning updates. - Capital plan of $41 billion for 2026-2029, with equity associated at $4.4 billion. - Added 4.5 gigawatts of power island equipment for potential new customers; visibility through 2029 with long-term EPS growth over 8%. - 45% of equity need for 2026-2029 already contracted.

Q: On the updated CapEx plan and 4.5 gigawatts of power island equipment, is there incremental CapEx needs for regulatory approval and upside?

A: Kimberly Fontan said the $41 billion includes capital for forecasted load, and 4.5 incremental gigawatts support potential additional customers; supplemental capital may be needed if pipeline customers reach agreement.

Q: On longer-term EPS growth outlook beyond 2030, do you see opportunity to guide?

A: Kimberly Fontan said good visibility through 2029, and if additional customers are landed, visibility will be provided, with long-term opportunity beyond that period.

Q: Do customers have agnostic resource mix preference, and push for renewable components?

A: Kimberly Fontan said they talk to customers about all supply types, have renewable pipeline based on customer needs, and it's an all-of-the-above approach; Drew Marsh added they are building gas generation and working on carbon capture with RFPs and FEED studies.

Q: On 4.5 gigawatts of power equipment timing and if it's a stepping stone for additional equipment?

A: Andrew Marsh said the 6 units for 4.5 gigawatts support commercial operations in 2031-2032; if there's continued growth, they may seek additional turbine access, and there are other potential generation sources like new nuclear, solar, and system upgrades.

Q: On Meta's data center in Louisiana service territory and its reflection in pipeline?

A: Andrew Marsh said only the signed ESA announced a year ago is in the outlook; they don't comment on specific customer opportunities without a signed ESA.

Q: On regulatory proceedings to accommodate growth beyond formula rate plans?

A: Andrew Marsh said it depends on jurisdiction; Mississippi has laws for large economic development projects, Arkansas has the Generating Arkansas Jobs Act for expedited process, and they use existing processes in various jurisdictions.

Q: On renewable commitments for hyperscalers as upside to plan?

A: Andrew Marsh said there are potential renewable commitments associated with hyperscaler deployments, like solar with Google and Meta, and they aim to land some of these projects for their own capital deployment.

Q: On 4.5 gigawatts incremental power equipment tie to ERAS queue and labor challenges?

A: Andrew Marsh said the 4.5 gigawatts isn't tied to the ERAS queue, which is for nearer-term projects; labor is a challenge with increasing costs for combined cycle projects, but they're working through it with EPCs.

Q: On data centers building on-site power generation and Arkansas rate case preview?

A: Andrew Marsh said they build generation close to customers to manage transmission costs, and customers prefer not to put capital into generating stations; on Arkansas rate case, the team is still working on it and will lay out benefits of large new customers for existing customers in the case.