PINNACLE WEST CAPITAL CORP Q3 FY2025 earnings call

Key Points

• Ted Geisler highlighted strong Q3 operational and financial performance, successful navigation of summer season with Palo Verde Generating Station at 100% capacity factor, weather-normalized sales growth of 5.4% and residential sales growth of 4.3%. Arizona's economic momentum with SEMICON West in Phoenix, Maricopa County as top for economic development, TSMC and Amkor investments. Plans for Desert Sun Power Plant (2 phases) and transmission investments underway.
• Andrew Cooper discussed Q3 financial results, raised 2025 EPS guidance to $4.90-$5.10 from $4.40-$4.60, narrowed 2025 customer growth guidance to 2%-2.5%, updated long-term sales growth range to 5%-7% through 2030, projected 2026 EPS $4.55-$4.75, and outlined capital/financing strategy with rate base growth expected 7%-9% through 2028.

No detailed breakdown of product segments by revenue contribution provided in the transcript.

Guidance Points

• Raised 2025 EPS guidance to $4.90 to $5.10 per share from $4.40 to $4.60 per share.
• 2026 EPS guidance set at $4.55 to $4.75 per share.
• Narrowed 2025 customer growth guidance to the high end of 2% to 2.5% for the year.
• Extended long-term sales growth range to 5% to 7% through 2030, up from prior 4% to 6%.
• Rate base growth expected to be 7% to 9% through 2028, an increase from prior 6% to 8% through 2027.

Q: Julien Dumoulin-Smith asked about gas build visibility, subscription progress, and transmission bump in 2026.

A: Theodore Geisler discussed the gas build pipeline expected in service in 2029, active subscription dialogue for Tranche 1 aligning with Desert Sun Phase 2, and Andrew Cooper noted transmission bump reflects investment trend.\nQ: Fei She asked about equity dilution, transmission CapEx post 2028, and rate base growth extension.

A: Andrew Cooper explained equity need mitigation through rate case and large load subscriptions, transmission CapEx post 2028 involves strategic projects, and rate base growth confidence extends with ongoing projects.\nQ: Alex (for Shar Pourreza) asked about growth rate outlook and megawatt pipeline.

A: Andrew Cooper discussed rate case impact on growth outlook, and Theodore Geisler outlined robust megawatt pipeline with 4.5 gigawatts of committed customers across sectors.\nQ: Travis Miller asked about 2026 guidance and 4.5 gigawatts of committed customers.

A: Theodore Geisler explained 2026 guidance not assuming rate case outcome, and 4.5 gigawatts includes diversified sectors like industrial and data centers.\nQ: Stephen D’Ambrisi asked about year-over-year sales growth impact on EPS.

A: Andrew Cooper noted year-to-year variability in large load customers' ramp rates contributing to EPS difference from sales growth.