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    Earnings call· Dec 2025(Q4 FY25)

    EVERSOURCE ENERGY Q4 FY25 earnings call ES

    Feb 13, 2026 Source

    Executive summary

    Eversource Energy Q4 FY25 — Strong Operational Performance and Strategic Clarity

    Eversource Energy delivered strong operational and financial results in Q4 FY25, meeting its non-GAAP EPS commitments and advancing critical infrastructure investments. The company is focused on strategic execution, including resolving offshore wind commitments, the potential Aquarion sale, and storm cost securitization, to achieve earnings growth towards the upper half of its long-term EPS range by 2028, despite anticipated moderate growth in 2026.

    Highlights

    5

    • Delivered non-GAAP earnings per share of $4.76 for full year 2025, meeting commitments.

    • Increased dividends by 5.2% to $3.01 per share in 2025.

    • Achieved top decile performance for MBI and SAIDI reliability metrics, with electric customers experiencing outages only once in nearly 2 years.

    • Improved FFO-to-debt ratio by over 400 basis points at Moody's and 300 basis points at S&P in 2025.

    • Advanced grid modernization and AMI program, installing over 100,000 smart meters in Massachusetts.

    Concerns

    4

    • GAAP results for 2025 included a net loss of $75 million or $0.20 per share related to an increase in liability for future obligations to Global Infrastructure Partners.

    • 2026 EPS growth expected to be more moderate due to timing of key regulatory outcomes, including the Aquarion sale and storm cost recoveries.

    • NSTAR Gas settlement included a $12.2 million charge as part of the Attorney General's settlement agreement in December 2025.

    • A pension and other cost settlement will result in a onetime bill credit for NSTAR Electric customers of approximately $20 million in 2026.

    Guidance & targets

    3
    CategoryTargetConfidence
    Adjusted EPS
    $4.80 to $4.95
    high materiality
    High
    Long-term EPS growth rate
    5% to 7%
    high materiality
    High
    Long-term EPS growth rate
    towards the upper half of 5% to 7%
    high materiality
    High

    Segment performance

    4
    SegmentRevenueYoYQoQMargin
    Electric Transmission
    Improved results were driven by continued investments in our electric transmission system to address service reliability and demand growth.
    Earnings per share 2025: $2.09Earnings per share 2024: $2.03
    		————
    Electric Distribution
    Higher results were due primarily to increased revenues from base distribution rate increases for Eversource's Massachusetts and New Hampshire businesses, partially offset by higher O&M, interest costs, depreciation and property taxes.
    Earnings per share 2025: $1.80Earnings per share 2024: $1.77
    		————
    Natural Gas Distribution
    Improved earnings results were due to base distribution rate increases at Eversource's natural gas businesses, and continued investment in our gas system to replace aging infrastructure with a focus on safety. These higher revenues were partially offset by higher O&M, which included a $12.2 million charge as part of NSTAR Gas' settlement agreement with the Attorney General's Office in December of 2025 as well as higher depreciation, interest and property tax expense.
    Earnings per share 2025: $0.97Earnings per share 2024: $0.81
    		————
    Eversource Parent and Other
    GAAP results include the impact from offshore wind divestiture and the potential Aquarion sale. Non-GAAP loss was primarily driven by increased interest costs offset by the benefit from a settlement with the Massachusetts Attorney General for the recovery of previously incurred EGMA integration costs as approved by the DPU and to a lower effective tax rate.
    GAAP loss per share 2025: $0.42GAAP loss per share 2024: $2.46Non-GAAP loss per share 2025: $0.22Non-GAAP loss per share 2024: $0.16
    		————

    Operational metrics

    29
    Non-GAAP EPS
    $4.76vs $4.57 in 2024
    FY25

    Met the revised non-GAAP earnings guidance range of $4.72 to $4.80 for 2025.

    Dividends per share
    $3.015.2% increase
    FY25

    Paid to shareholders.

    Capital investments
    $4 billion
    2025

    Successfully deployed.

    Smart meter installations
    100,000
    2025

    Significant milestone in the Advanced Metering Infrastructure (AMI) program.

    Deferred storm cost
    $2 billion
    current

    Continuing to engage with policymakers on storm cost proceedings.

    FFO to debt
    over 400 basis pointsimprovement
    2025

    Improvement over the last 12 months ending September 30, 2025.

    FFO to debt
    300 basis pointsimprovement
    2025

    Improvement for 2025.

    NSTAR Electric PBR rate adjustment
    $55 millionincrease
    annual

    Implemented on January 1, 2026, as part of PBR rate adjustments.

    NSTAR Gas PBR rate adjustment
    $10 millionincrease
    annual

    Effective November 1, 2025, as part of PBR rate adjustments.

    EGMA integration costs recovery
    $82 million
    total

    Approved for recovery as part of a settlement agreement, to be implemented in the next EGMA rate case.

    NSTAR Electric customer bill credit
    $20 million
    2026

    Impact recognized in Q4 2025.

    NSTAR Gas base rate increase
    $45 millionincrease
    annual

    Resulted from the NSTAR Gas rate base roll-in settlement, effective 2026.

    NSTAR Gas customer credit
    $12.2 million
    2026

    Impact recognized in Q4 2025.

    Aquarion Water preliminary rate request
    $88 million
    annual

    Submitted notice of intent to PURA, necessary to support the system long term if the Aquarion sale is not approved.

    Total cash needs
    $34.5 billion to $35 billion
    5-year period (2026-2030)

    Overall funding requirement for infrastructure investments and dividends.

    Incremental debt and other financing solutions
    $8.5 billion to $9 billion
    5-year period (2026-2030)

    Expected to cover remaining cash needs after cash flow from operations.

    Equity content from alternative financing
    $1.3 billion to $2.5 billion
    5-year period (2026-2030)

    Expected from alternative financing solutions.

    Storm cost securitization proceeds
    up to $1.5 billion
    Q3 2027

    Anticipated after PURA decision on storm prudency.

    Equity issuances
    $800 million to $1.1 billion
    5-year period (2026-2030)

    Remaining cash needs, not impacted by Aquarion sales.

    ITC credits remaining
    $500 million
    future years

    Associated with tax equity ownership, will allow the company to be a non-cash taxpayer at the federal level for several years.

    GAAP EPS
    $4.56vs $2.27 in 2024
    FY25

    Includes a net loss of $75 million or $0.20 per share related to GIP liability.

    GAAP EPS
    $1.12vs $0.20 in Q4 2024
    Q4 FY25

    For the quarter.

    Non-GAAP EPS
    $1.12vs $1.01 in Q4 2024
    Q4 FY25

    For the quarter.

    GAAP net loss (offshore wind divestiture)
    $2.30 per share
    FY24

    Related to the divestiture of offshore wind investment recognized in Q3 2024.

    Electric distribution capital increase
    $696 million
    overlapping period (2026-2029)

    Largest driver of the $1.5 billion increase in the capital investment plan for the overlapping period.

    Natural gas distribution capital increase
    $523 million
    overlapping period (2026-2029)

    Next driver of the increase in the capital investment plan for the overlapping period.

    Transmission plan capital increase
    $233 million
    overlapping period (2026-2029)

    Increase for the overlapping period.

    Technology and facilities capital
    $1.2 billionincreased by $75 million
    5-year period (2026-2030)

    Includes cybersecurity investments and AI tools.

    NSTAR Electric transmission rate base
    nearly $8 billion
    by 2030

    Projected to be the largest transmission rate base in the service territory.

    Industry KPIs

    2
    MetricValueDetails
    Ffo to debtover 400 basis points (Moody's); 300 basis points (S&P)%
    Regulatory rate base growth8.3%%

    Deals & partnerships

    2
    PURA (Connecticut Public Utilities Regulatory Authority)DivestitureProceeds of $1.6 billion (equity portion) assumed in financing plan

    Eversource reached an agreement to sell Aquarion Water Company. The Superior Court overturned PURA's initial denial and remanded the transaction. Eversource submitted notice of intent to file a rate case for Aquarion seeking $88 million in additional revenues if the sale does not occur.

    Global Infrastructure Partners (GIP)Divestiture

    Divestiture of South Fork Wind and Revolution Wind projects, closed September 30, 2024. Eversource completed the construction of the onshore substation for Revolution Wind. Revolution Wind is 87% complete, with first power expected in weeks and Commercial Operation Date (COD) targeted for H2 2026. No direct liability to Orsted, only to GIP.

    Capital programs

    3
    5-year Capital Investment Planunderway$26.5 billion
    Funding: Cash flows from operations ($24.2B-$24.7B), incremental debt and other financing solutions ($8.5B-$9B), equity issuances ($800M-$1.1B), storm cost securitization (up to $1.5B)
    Start: 2026

    Benefit: Continued safe and reliable service, support load growth, address clean energy objectives, 8.3% rate base growth (2024-2030)

    Represents a $2.3 billion increase from the prior 5-year plan and a $1.5 billion increase from 2026 through 2029 (overlapping period). Does not include Aquarion Water, which would amount to an additional $1.3 billion over this 5-year period. Majority of increase aimed at electric and natural gas distribution investments (aging infrastructure, multiyear projects like electric sector modernization plan, underground cable modernization program, state safety regulations).

    Cambridge Underground Substationunderway$1.8 billion
    Start: January 2025

    Benefit: Strengthening the electric system that serves one of the fastest-growing and most energy-intensive areas of the region.

    Largest underground substation in the nation. Construction continues to progress very well.

    Massachusetts Advanced Metering Infrastructure (AMI) Programunderway
    Spent to date: Over 100,000 smart meters installed

    Benefit: Upgrade more than 1.5 million meters statewide and deliver more modern tools with greater functionality that will benefit customers.

    Over $300 million remaining for the AMI program in Massachusetts.

    Risks & headwinds

    5
    Timing of key regulatory outcomes2026

    2026 EPS guidance of $4.80 to $4.95, with a more moderate growth rate.

    Mitigation: These are viewed as transitory headwinds, with clear upside expected in 2027 and beyond from improved regulatory outcomes and completion of financing opportunities.

    Aquarion Water Company Sale UncertaintyPURA decision expected March 25, 2026.

    If sale does not occur, it impacts the need for alternative financing solutions (reduces $1.6 billion equity portion from sale).

    Mitigation: Submitted notice of intent to file a rate case for Aquarion seeking $88 million in additional revenues if the sale does not occur, to ensure continued system investments.

    Storm Cost Recovery DelaysPURA decision expected July 2026, securitization in Q3 2027.

    Securitization proceeds of up to $1.5 billion expected in Q3 2027, impacting FFO to debt metrics and cash collection.

    Mitigation: Securitization vehicle is in place to enable timely cash collection and reduce near-term bill impacts for customers.

    Increased Interest Costs2026

    Partially offsets positive drivers in 2026 EPS guidance.

    Mitigation: Focus on financial discipline, strong balance sheet, and efficient funding of the business.

    Share Dilution2026

    Partially offsets positive drivers in 2026 EPS guidance.

    Mitigation: Equity issuances of $800 million to $1.1 billion planned over 5 years, with alternative financing solutions to manage overall financing needs.

    Q&A highlights

    8

    Could the Aquarion sale and storm cost recoveries eliminate some straight equity needs and potentially make the 5-7% EPS growth target accretive, given the base assumption is already at the higher end?

    John Moreira clarified that the $0.8B-$1.1B common equity issuance is not impacted by the Aquarion sale. The flexibility lies in debt and alternative financing. Storm cost recoveries are expected in Q3 2027, so junior subordinated notes are still planned. An Aquarion sale would reduce the need for alternative financing solutions and improve the growth rate for outer years.

    “Where we have the lever to push and pull, if Aquarion happens, then the alternative financing solutions will be pulled back. So I would view it this way. With an Aquarion deal closing in a timely fashion, it moves our growth rate for the outer years to a much better start.”

    asked by Shar Pourreza · answered by John Moreira

    2 min read6 chapters

    Detailed Narrative

    01

    Operational Excellence and Reliability

    Eversource maintained high service reliability and responded effectively to weather events in 2025, achieving top decile performance in MBI and SAIDI metrics, with electric customers experiencing outages only once in nearly 2 years. The company successfully deployed over $4 billion in capital investments, focusing on grid modernization, customer energy efficiency, and decarbonization goals.

    02

    Advanced Metering Infrastructure (AMI) Progress

    The AMI program reached a significant milestone with over 100,000 smart meter installations in Massachusetts, part of a multiyear effort to upgrade over 1.5 million meters statewide. The company is also pursuing AMI implementation in Connecticut, pending regulatory clarity, with discussions scheduled for the following week to establish a lawful application of the prudent standard for investment recovery.

    03

    Regulatory Engagement and Affordability

    Eversource engaged collaboratively with state policymakers and regulators, securing constructive decisions for infrastructure needs and cost recovery. This included a rate relief plan in Massachusetts, partly state-funded, to smooth bill impacts for customers during peak winter usage. The company also expects a decision on its Connecticut storm cost prudency review in July, which would enable securitization.

    04

    Balance Sheet Strengthening and Financing Strategy

    The company significantly improved its FFO-to-debt ratio by over 400 basis points at Moody's and 300 basis points at S&P in 2025, aiming to maintain a 100-basis-point cushion over downgrade thresholds. A comprehensive 5-year financing plan of $27.8 billion for infrastructure investments and dividends is outlined, with cash flows funding nearly 70% and the remainder from debt, alternative financing solutions (junior subordinated notes, minority interest sale), and equity issuances.

    05

    Strategic Clarity on Key Overhangs

    Eversource is nearing resolution on several strategic items, including the Revolution Wind project (expected first power in weeks, Commercial Operation Date targeted for H2 2026), the Aquarion Water Company sale (PURA decision expected March 25), and storm cost recovery (PURA decision in July, securitization in Q3 2027). These resolutions are expected to provide significant clarity and drive future earnings growth.

    06

    Capital Investment Plan Expansion

    The updated 5-year capital investment plan (2026-2030) totals $26.5 billion, representing a $2.3 billion increase from the prior plan. The majority of this increase is directed towards electric and natural gas distribution investments for aging infrastructure, grid modernization, and safety regulations, with a focus on supporting load growth and clean energy objectives.

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