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    DUK
    Earnings call· Jun 2026(Q2 FY26)

    Duke Energy Q2 FY26 earnings call DUK

    Aug 4, 2026 Source

    Executive summary

    Duke Energy Q2 FY26 — Strong EPS, Large Load Growth, and Regulatory Progress

    Duke Energy delivered strong Q2 FY26 results, driven by customer growth and infrastructure investments, with adjusted EPS reaching $1.43. The company is making significant progress in securing large load electric service agreements, with 7.8 GW already contracted and a 15.4 GW pipeline expected to convert by H1 2027, potentially adding $5B-$10B to the 5-year capital plan. Regulatory settlements in North Carolina and ongoing efforts to manage costs and ensure customer affordability underpin the company's strategy, though new nuclear development remains contingent on securing financial risk protections.

    Highlights

    5

    • Reported EPS of $1.38 and Adjusted EPS of $1.43, up from $1.25 in prior year.

    • Secured 7.8 GW of electric service agreements (ESAs) with data center customers.

    • Reached a comprehensive settlement in the North Carolina DEC rate case, including a 9.8% ROE and 53% equity capital structure.

    • Increased quarterly dividend payment by 2%, marking over 20 years of consecutive annual increases.

    • On track to achieve FFO to debt target of 14.5% for the year, with a longer-term target of 15%.

    Concerns

    3

    • Negotiations for large load ESAs are taking longer due to complexity.

    • Affordability concerns in Indiana, with ongoing hearings and focus on customer protection.

    • New nuclear projects require additional financial protections to offset construction and supply chain risks, delaying decision-making.

    Guidance & targets

    8
    CategoryTargetConfidence
    Full-year 2026 Adjusted EPS
    $6.55 to $6.80
    high materiality
    High
    Long-term EPS growth rate
    5% to 7% EPS growth
    high materiality
    High
    EPS guidance range expectation
    earn in the top half of the range
    high materiality
    High
    FFO to debt target
    14.5%
    medium materiality
    High
    Longer-term FFO to debt target
    15%
    medium materiality
    High
    Large load pipeline conversion
    remainder of the 15.4 gigawatt pipeline to be converted to ESAs
    high materiality
    High
    Capital plan upside from large loads
    $5 billion to $10 billion of upside
    high materiality
    Medium
    New capacity additions
    15 gigawatts of capacity
    high materiality
    High

    Segment performance

    3
    SegmentRevenueYoYQoQMargin
    Electric Utilities and Infrastructure
    EPS contribution, partially offset by higher depreciation expense and higher interest expense.
    Driven by continued customer growthInfrastructure investments to reliably serve our growing jurisdictions
    		———up $0.15
    Gas Utilities and Infrastructure
    EPS contribution, consistent with expectations in the shoulder quarter.
    		———largely flat year-over-year
    Other segment
    EPS contribution.
    Primarily due to the expected benefit of lower interest expense resulting from the Tennessee and Florida transaction proceedsReduced holding company financing needsHigher market returns
    		———up $0.03

    Operational metrics

    15
    Adjusted EPS
    $1.43compared with $1.25 for both reported and adjusted earnings per share in the prior year
    Q2 FY26

    Reported and adjusted earnings per share for the quarter.

    Reported EPS
    $1.38compared with $1.25 for both reported and adjusted earnings per share in the prior year
    Q2 FY26

    Reported earnings per share for the quarter.

    FFO to debt target
    14.5%
    FY26

    On track to achieve for the year.

    FFO to debt target
    15%
    Longer term

    Expected to reach as additional proceeds from DEF minority interest investment are received.

    Quarterly dividend payment increase
    2%
    July

    Increased quarterly dividend payment, marking over 20 years of consecutive annual dividend increases.

    Equity issued via ATM program
    $600 million
    YTD

    Priced under the ATM program so far this year, proactively locking in attractive pricing.

    Generation capacity additions target
    15 gigawatts
    By 2031

    On track to add, reflecting additions from the latest 10-year site plan in Florida.

    Gas generation under construction
    approximately 5 gigawatts
    Current

    Gas portfolio has this amount under construction.

    Gas generation advancing through development
    2.5 gigawatts
    Current

    Additional gas generation advancing through development.

    Gas turbines secured
    26increasing the number of gas turbines available under our frame Mark agreement with GE Renova
    Current

    Increased number of gas turbines to align with the next phase of build in the IRPs.

    Nuclear uprates
    about 300 megawatts
    Current

    Uprates being done to current nuclear units.

    Nuclear license extensions
    20 years
    Future

    Extending licenses to 80 years life for existing nuclear units.

    Economic development investment wins
    $5 billion
    H1 FY26

    Secured economic development wins representing this amount of investment.

    Economic development jobs supported
    9,000
    H1 FY26

    Economic development wins supported this many jobs across service territories.

    Non-generation O&M per customer ranking
    third
    2025

    Ranked third amongst electric industry peers for non-generation O&M per customer.

    Industry KPIs

    3
    MetricValueDetails
    Ffo to debt14.5%%
    New gas generation builds upgrades5GW
    Contracted large load capacity esas loas7.8GW

    Orderbook & backlog

    2
    Contracted large-load capacity (ESAs)7.8 gigawattsQ2 FY26

    secured with data center customers

    Large-load pipeline15.4 gigawattsQ2 FY26

    remainder expected to be converted to ESAs by the first half of 2027

    Deals & partnerships

    3
    North Carolina Public staff and other intervenersComprehensive settlement for DEC rate case

    Agreement demonstrates commitment to cost-effectively serve customers while supporting investments for reliability and generation fleet modernization.

    IntervenorsDiscussions to reach a substantially similar settlement framework for the DEP rate case

    Hearing scheduled for August 11. If approved, revised customer rates expected to remain below national average.

    GE RenovaAgreement for gas turbines

    Increased number of gas turbines available to 26 to align with next phase of build in IRPs. First turbine delivered to Person County combined cycle site in July, second later this year.

    Capital programs

    2
    Regulated Capital Planunderway
    Period spend: more than $1 billion per month

    Executing on the industry's largest regulated capital plan.

    5-year Capital Plan Upside (large load driven)announced$5 billion to $10 billion

    Benefit: additional generation and transmission needs

    Potential incremental capital investment within the current 5-year plan, particularly in Indiana and Florida, contingent on large load contract signings.

    Risks & headwinds

    4
    Large Load Negotiation ComplexityCurrent

    very complicated transactions

    Mitigation: continue to work through that; focused on executing getting those large loads signed to ERAs

    New Nuclear Financial and Construction RiskLong-term

    first-of-a-kind in supply chain risks

    Mitigation: additional financial protections are needed before we would propose a new nuclear project; working with government officials, state officials, hyperscalers and other stakeholders to see what can be done to offset the risk

    Affordability Concerns (Indiana)Current

    a lot of rhetoric in the state around affordability

    Mitigation: share the commission as well as the governor's focus on affordability; collaborate with the commission and other intervening parties as we go through the affordability report

    Tax Credit Flowback ShiftLate 2020s to early 2030s

    earning the tax credits kind of late in the '20s. So 2028, 2029, we about hit parity on the nuclear PTCs

    Mitigation: the earnings power on the investments we're making will more than offset that. So the cash generation continues to grow, and it's durable well into the late 30s.

    What to watch in Q3 FY26

    5

    Large Load ESA Conversion

    H1 2027
    Current7.8 GW secured, 15.4 GW pipeline remaining
    TargetRemainder of 15.4 GW pipeline converted to ESAs

    Why it matters

    Conversion of the large load pipeline is critical for realizing the $5B-$10B capital plan upside and supporting long-term EPS growth.

    We're looking at landing all of that 15 gigawatts by the first half of next year, and we're on track to do that.

    Q&A highlights

    7

    Given the additional CapEx potential ($5B-$10B) and 15 GW in late-stage large load, will Duke consider raising its 5-7% EPS CAGR or providing an out-of-cycle update like peers?

    Management has high confidence in the 5-7% EPS CAGR, especially the top half starting in 2028. They acknowledge the dynamic environment and complex negotiations for large loads. They typically update guidance in Q4 but would do so sooner if material changes occur, emphasizing current focus on executing and signing ESAs.

    “We'll continue to evaluate where we need to be on our earnings per share growth rate, and we typically update that in the fourth quarter. But if anything changes materially, like we did last year, we'll update you on that as we see fit.”

    asked by Shahriar Pourreza · answered by Harry Sideris

    2 min read5 chapters

    Detailed Narrative

    01

    Regulatory Progress and Affordability Focus

    Duke Energy reached a comprehensive settlement in its North Carolina DEC rate case, securing a 9.8% ROE and 53% equity capital structure, with an earnings sharing mechanism up to 10.3%. Discussions are ongoing for the DEP rate case, with orders expected by mid-November. The company emphasizes affordability, pursuing strategies like accelerated tax credit flowback for a Florida battery project and applying for DOE loans to reduce interest costs, aiming to keep customer rates below the national average.

    02

    Large Load Strategy and Customer Protection

    The company has secured 7.8 GW of electric service agreements (ESAs) with data center customers, with a total pipeline of 15.4 GW expected to convert by H1 2027. The "Customer Protection Plus" commitment ensures large users cover their service costs, delivering billions in benefits for existing customers. This growth is expected to drive $5B-$10B of upside to the current 5-year capital plan, primarily in Indiana and Florida, to support additional generation and transmission.

    03

    Generation Build-Out and Execution

    Duke Energy is on track to add 15 GW of capacity by 2031, reflecting additions from its latest 10-year site plan in Florida. This includes 5 GW of gas generation under construction and an additional 2.5 GW in development. The company leverages programmatic EPC contracts and standardized materials to ensure efficient execution, with AI tools monitoring construction progress to meet deadlines and budgets.

    04

    Nuclear Fleet Optimization and New Nuclear Evaluation

    As the operator of the largest regulated nuclear fleet in the U.S., Duke Energy is maximizing existing assets through 300 MW of uprates and license extensions to 80 years for two plants, with a third SLR application planned by year-end. While evaluating new nuclear options, the company will not proceed without additional financial protections to mitigate first-of-a-kind and supply chain risks, ensuring investor and customer protection during construction.

    05

    Financial Performance and Capital Allocation

    The company reported strong Q2 FY26 adjusted EPS of $1.43, driven by customer growth and infrastructure investments. It is on track to achieve a 14.5% FFO to debt target for the year, with a long-term goal of 15%. Duke Energy proactively manages equity funding through its ATM program, having priced $600M year-to-date, and increased its quarterly dividend by 2%, marking over two decades of consecutive annual increases.

    AI-generated summary of the company’s earnings call. Not investment advice.