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Evergy (EVRG) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Utilities· May 7, 2026

Source: earnings call transcript

Executive summary

Evergy Q1 FY26 — Strong Large Load Growth and Reaffirmed EPS Guidance

Evergy reported strong Q1 FY26 adjusted EPS, driven by regulated investments and robust weather-normalized demand, particularly from large load customers. The company reaffirmed its full-year EPS guidance and long-term growth targets, bolstered by a new large customer electric service agreement and amendments to existing contracts. Management emphasized continued focus on customer affordability and reliability while advancing its generation strategy.

Highlights

5

  • Adjusted EPS of $0.69 per share, up from $0.55 per share year-over-year.

  • Signed a fifth large customer electric service agreement (ESA) and favorably amended two others, contributing to a 600 MW cumulative increase in peak demand.

  • Weather-normalized retail demand grew 4.7% in Q1 FY26, with industrial demand up 10.1%.

  • Reaffirmed 2026 adjusted EPS guidance of $4.14 to $4.34 per share and long-term adjusted EPS growth target of 6% to 8% through 2030.

  • Anticipate higher FFO to debt across the 5-year forecast, ranging from 14% to 15% from 2026 to 2028.

Concerns

3

  • Mild winter weather impacted Q1 EPS by approximately $0.06 compared to budget.

  • Higher operations and maintenance expense, increased depreciation, and net interest expense collectively decreased Q1 EPS by $0.10.

  • Missouri West customers may see rate increases above inflation over the next 5 years due to needed infrastructure investment.

Guidance & targets

CategoryTargetConfidence
2026 adjusted EPS guidance range
$4.14 to $4.34 per share
high materiality
High
Long-term adjusted EPS growth target
6% to 8% plus
high materiality
High
Adjusted EPS growth
exceed 8% annually
high materiality
High
Full year load growth expectations
3% to 4%
medium materiality
High
Second quarter adjusted EPS guidance
17% to 19%
medium materiality
High
Retail load growth CAGR
approximately 7% to 8%
high materiality
High
Rate base CAGR
approximately 12%
high materiality
High
FFO to debt
14% to 15%
high materiality
High
Equity issuance plan
$700 million to $900 million per year
high materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Missouri West
Smallest utility with the lowest rates in the system, but in need of infrastructure investment, particularly dispatchable baseload generation. Customers may see rate increases above inflation over the next 5 years, but rates are expected to remain regionally competitive and investments will reduce reliance on market-provided energy.
Sales growth: 10% to 11% per year
—10% to 11%——

Orderbook & backlog

Large customer pipeline (Tier 1) 3 GW Q1 FY26

Includes 5 announced ESAs and large customers already in operation; 1.2 GW already in operation progressing to steady state, 1.7 GW from additional projects with executed ESAs requiring minimum monthly bill payments.

Large customer pipeline (Tier 1 expansion) 1 to 1.5 GW Q1 FY26

Expansion opportunities with existing customers who have signed ESAs; not incorporated into the 5-year financial plan.

Large customer pipeline (Tier 2) 1.5 to 3 GW Q1 FY26

Advanced discussions with multiple new customers who have acquired land or land rights and signed letters of agreement; opportunity primarily beyond 2030.

Large customer pipeline (remaining) >10 GW Q1 FY26

Highlights robust activity and sustained interest in the region; primarily beyond 2030.

Deals & partnerships

Premier developer New Electric Service Agreement (ESA) for a data center project

Fifth ESA for a new data center in Kansas Central service territory. Customer is a large, well-known developer with strong investment-grade credit ratings, working with a hyperscaler offtaker. Takes service under Large Load Power Service (LLPS) tariff.

Two existing large customers Favorable amendment of two previously signed Electric Service Agreements (ESAs)

Refined anticipated load profiles with two large customers, leading to amendments. These amendments accelerate revenue earlier than the previous plan.

Multiple data center projects Executed ESAs for 5 data center projects 16 to 17 years

These 5 ESAs are under LLPS tariffs, securing strong protections for existing customers. They include steady-state peak load of approximately 2.5 GW. LLPS contracts generally span 16 to 17 years long.

Panasonic Electric vehicle battery manufacturing plant

Non-LLPS customer contributing 450 MW of steady-state peak load. Combined with the 5 ESAs, total large load reaches 3 GW.

Capital programs

Multi-year capital investment plan underway $21.6 billion

Base capital investment plan; the IRP preferred plan will represent modest upside to this amount.

Equity financing need underway $3.3 billion
Period spend: $700 million to $900 million
Spent to date: $125 million (2026 YTD)
Funding: ATM program
Start: 2026

Total equity issuance plan from 2026 through 2029; no needs in 2030. For 2026, $125 million already priced, remaining needs addressed via ATM.

Risks & headwinds

Mild winter weather impact on Q1 EPS Q1 FY26

-$0.06 per share

Mitigation:Other revenues and incremental large load margin from amended ESAs are projected to fully offset the Q1 mild weather impact for the full year.

Higher operations and maintenance expense, depreciation, and net interest expense Q1 FY26

-$0.10 per share

Missouri West rate increases next 5 years

above inflation

Mitigation:Investments will reduce reliance on market-provided energy, making rates more stable. The LLPS tariff helps moderate rate increase trajectory by spreading costs over more kilowatt hours. Rates are expected to remain regionally competitive.

What to watch in Q2 FY26

Additional ESA signings

This year (2026)
Current 5 ESAs signed, 1 new announced this quarter
Target At least one additional ESA signed

Why it matters

Further ESA signings represent upside to the financial plan and reinforce long-term growth, impacting capital investment and earnings visibility.

We continue to make progress with other large customers, and we expect at least 1 additional ESA in 2026.

Find out whether EVRG delivers this. Inve re-checks your case every morning.

Q&A highlights

Clarification on the potential for EPS growth to exceed 8% given the 12% rate base CAGR and 250 bps lag, implying higher growth.

Management confirmed the analyst's interpretation, expressing confidence that EPS growth could trend towards the described math, potentially exceeding 8% in the out years.

“I think you interpreted exactly what we were trying to communicate. There's a lot of great momentum... it sounds like you're hearing what we want you to hear, which is confidence that not only can we exceed 8% in those out years, but it's trending towards the math you just described.”

asked by Nicholas Campanella · answered by W. Buckler

2 min read 6 chapters

Detailed narrative

Large Customer Strategy & Economic Development

Evergy continues to excel in bringing economic development to Kansas and Missouri, evidenced by the signing of a fifth large customer electric service agreement (ESA) and favorable amendments to two previously signed contracts. These agreements, primarily for data centers, operate under the Large Load Power Service (LLPS) tariff, ensuring new customers cover their fair share of system costs and contribute to affordability for existing customers. The total steady-state peak load from these 5 ESAs and non-LLPS customers (like Panasonic) now reaches 3 gigawatts.

Large Load Demand Profile & Pipeline

The company's large customer pipeline is robust, with 3 GW from signed ESAs and existing operations (Tier 1), 1 to 1.5 GW of expansion opportunities with existing customers, and 1.5 to 3 GW in advanced discussions (Tier 2). An additional 10+ GW pipeline highlights sustained interest. This growth supports a revised retail load growth CAGR of 7% to 8% through 2030 and provides significant visibility into earnings and cash flow streams, with LLPS contracts generally spanning 16 to 17 years.

Regulatory Priorities & IRPs

Evergy expects to file its 2026 Integrated Resource Plans (IRPs) in Kansas and Missouri in Q2 FY26. These IRPs will reflect higher long-term demand growth, Southwest Power Pool's capacity requirements, federal tax credit changes, and coal plant retirement schedules, informing future generation projects. The Kansas Corporation Commission approved returning deferred nuclear production tax credits to customers over three years, monetizing over $100 million annually.

Missouri Metro Rate Case & Missouri West Rates

The Missouri Metro Rate Case was filed on February 6, with new rates expected around January 1, 2027. Management aims for a constructive settlement. For Missouri West, while rates are currently low, significant infrastructure investment is needed, leading to anticipated rate increases above inflation over the next five years, though remaining regionally competitive. The LLPS tariff helps moderate these increases by spreading costs over a larger sales base.

Affordability, Reliability, and Sustainability

Evergy prioritizes customer affordability, aiming for residential rate increases in line with or below inflation for most customers. Since 2017, overall rates have increased cumulatively by only 5.1%, well below inflation. The company also targets top-tier performance in reliability (SAIDI, SAIFI, grid resiliency) and generation fleet availability. Its sustainability strategy focuses on a cost-effective, all-of-the-above generation mix, including natural gas, energy storage, and solar resources.

Capital Plan & Credit Metrics

The updated large load forecast will modestly increase the 5-year capital investment plan, raising the projected rate base CAGR to approximately 12% from 11.5%. This growth, coupled with the new ESAs and nuclear PTC flowback, is expected to strengthen FFO to debt metrics to 14-15% from 2026-2028, with further strengthening thereafter. The company's equity issuance plan remains unchanged at $700-$900 million annually from 2026-2029.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.