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    NWE
    Earnings call· Jun 2026(Q2 FY26)

    NorthWestern Energy Group Q2 FY26 earnings call NWE

    Jul 30, 2026 Source

    Executive summary

    NorthWestern Energy Group Q2 FY26 — Merger Approval Pending, Data Center Progress, and Reaffirmed Guidance

    NorthWestern Energy Group reported solid Q2 FY26 non-GAAP EPS, driven by improved margins and new rates, while reaffirming its full-year guidance and long-term growth targets. The company continues to advance its merger with Black Hills, securing multiple regulatory approvals and anticipating a Montana PSC decision in Q4. Significant progress is also being made on data center opportunities, with two key projects targeting ESAs by year-end, alongside ongoing efforts to address transmission needs and manage incremental Colstrip costs.

    Highlights

    5

    • Reported non-GAAP diluted EPS of $0.50, reflecting a $0.10 increase from Q2 2025.

    • Affirmed 2026 earnings guidance range of $3.68 to $3.83.

    • Affirmed long-term rate base and EPS growth rate targets of 4% to 6%.

    • Secured merger approvals from the Nebraska PSC, South Dakota PUC, and FERC for the Black Hills transaction.

    • Multi-year capital plan of $3.2 billion from 2026 through 2030 remains on track and unchanged.

    Concerns

    5

    • GAAP diluted EPS of $0.40 was impacted by merger-related costs, incremental Colstrip ownership, and weather.

    • Incremental full-serve Colstrip ownership resulted in a $0.12 impact on Q2 GAAP EPS and $0.05 of unrecovered operating expenses on adjusted EPS.

    • The SEBI data center project's Energy Service Agreement (ESA) is delayed beyond year-end due to land procurement issues.

    • A sales tax issue on equipment purchases in South Dakota continues to be a hurdle for large-load customers.

    • The company faces public pushback and misinformation regarding data centers in some communities, requiring enhanced communication.

    Guidance & targets

    6
    CategoryTargetConfidence
    2026 Adjusted EPS
    $3.68 to $3.83
    high materiality
    High
    Long-term Rate Base Growth Rate
    4% to 6%
    high materiality
    High
    Long-term EPS Growth Rate
    4% to 6%
    high materiality
    High
    Multi-year Capital Plan
    $3.2 billion
    high materiality
    High
    Quarterly Dividend Per Share
    $0.67
    medium materiality
    High
    Combined EPS Growth Rate (post-merger)
    5% to 7%
    high materiality
    Medium

    Operational metrics

    11
    Adjusted EPS
    $0.50$0.10 increase from 2025
    Q2 FY26

    Reflects a $0.10 increase from 2025. Includes $0.04 of merger costs and $0.05 of operating expenses from Colstrip that were not recovered as adjustments.

    GAAP EPS
    $0.40
    Q2 FY26

    Includes merger-related costs, costs related to incremental Colstrip ownership and weather impacts.

    Adjusted EPS
    $1.81versus $1.62
    YTD FY26

    Compared to $1.62 in the prior period. Q1 had an unseasonably warm winter, reflecting a significant adjustment to adjust out that weather impact.

    GAAP EPS
    $1.43versus $1.60
    YTD FY26

    Compared to $1.60 in the prior period.

    Weather Impact on EPS
    $0.01unfavorable versus normal
    Q2 FY26

    Weather was unfavorable by $0.01 versus normal.

    Merger Costs Impact on EPS
    $0.04
    Q2 FY26

    Merger costs included in Q2 adjusted EPS.

    Colstrip Operating Expenses Impact on EPS
    $0.05not recovered
    Q2 FY26

    Operating expenses from Colstrip that were not recovered, included in Q2 adjusted EPS.

    Incremental Colstrip Ownership Impact on GAAP EPS
    $0.12
    Q2 FY26

    Impact from incremental full-serve ownership of Colstrip on GAAP EPS.

    Dividend Yield
    approximate 4%
    Current

    Part of the stand-alone value proposition.

    Total Return
    8% to 10%
    Current

    Achievable with 4% dividend yield and 4%-6% EPS growth.

    Total Return
    greater than 10%
    Future

    Achievable with EPS growth above 6% from data center and other large load opportunities.

    Industry KPIs

    6
    MetricValueDetails
    Adjusted operating EPS$0.50USD
    Multi year capital plan$3.2 billionUSD
    Dividend per share growth$0.67USD
    Regulatory rate base growth4% to 6%%
    Allowed ROE equity layer rate cases—
    Combined electric gas framework mandates—

    Orderbook & backlog

    3
    Quantica Data Center1.1 GWQ2 FY26

    Focus is on 1.1 GW for initial phase; expected ESA by year-end 2026.

    Atlas Data Center0.5 GWQ2 FY26

    Expected ESA by year-end 2026.

    SEBI Data Center0.5 GWQ2 FY26

    ESA delayed beyond year-end 2026 due to land procurement issues.

    Deals & partnerships

    1
    Black Hills CorporationMerger of two utility companies to create a larger, more competitive entity.

    Received approvals from Nebraska PSC, South Dakota PUC, and FERC. Awaiting final order from Montana Public Service Commission. Integration planning is underway.

    Capital programs

    1
    Multi-year Capital Planon track$3.2 billion
    Start: 2026

    Benefit: Essential investments to meet customers' needs

    Plan remains on track and unchanged. Does not include any incremental investment that may be driven by additional opportunities related to regional transmission growth or serving large loads.

    Risks & headwinds

    5
    Unrecovered Colstrip Operating ExpensesQ2 FY26, ongoing until rate review

    $0.05 per share impact on Q2 adjusted EPS

    Mitigation: Plan to file a rate review to put the asset into base rates; PCCAM tariff waiver docket progressing through Q4 2026/early 2027.

    Data Center Project Delays (SEBI)Current, ongoing

    SEBI ESA delayed beyond year-end

    Mitigation: Working with SEBI on land procurement items.

    Sales Tax Issue in South Dakota for Large LoadsOngoing

    Hurdle for large-load customers

    Mitigation: Hopeful for resolution in upcoming legislative session.

    Public Pushback on Data CentersOngoing industry issue

    Moratorium discussions, ballot petitions, misinformation

    Mitigation: Need for better communication and collaboration with communities; commitment to ensure data centers pay their own way.

    Regulatory Uncertainty (Montana PSC Merger Approval)Decision expected mid-October to mid-November 2026

    Awaiting final order from Montana PSC

    Mitigation: Actively engaged in integration planning to be prepared for closing; cautious optimism for approval.

    What to watch in Q3 FY26

    5

    Montana PSC Merger Approval Decision

    Mid-October to mid-November 2026
    CurrentFinal briefing completed, awaiting order
    TargetApproval decision

    Why it matters

    Crucial for the merger with Black Hills Corporation to proceed, impacting future EPS growth and strategic direction.

    Speaking of the decision and waiting on a decision from the Montana Public Service Commission, we note on this slide that that's in the fourth quarter. I think people understand from the timing that is in front of the commission that we believe that upon our filing our briefing in mid-July that we would see a decision sometime in 90 days to -- it can extend another 30 days. So 90 to 120 days, we should see a decision. That should mean a decision sometime between mid-October and mid-November.

    Q&A highlights

    6

    What is the probability of realizing the full 7.2 GW interconnection request for Quantica, given the disclosed 1.1 GW for Phase 1?

    Brian Bird stated that the company is focused on the 1.1 GW for Quantica and that success at lower gigawatt levels is needed before discussing larger scales. He deferred to Quantica to discuss their long-term build-out plans.

    “I think we all need to have success at these lower gigawatt levels. And if we're ultimately in an ESA perspective, and we're moving forward with Quantica, we'll let them talk about their relative success and how to ultimately build up to that level. But as we sit here today, we're focused on the 1.1 gig.”

    asked by Aidan Kelly · answered by Brian Bird

    2 min read6 chapters

    Detailed Narrative

    01

    Merger Progress and Outlook

    The merger with Black Hills Corporation is progressing, with approvals secured from Nebraska PSC, South Dakota PUC, and FERC during Q2. The final briefing for the Montana PSC hearing is complete, and a decision is anticipated between mid-October and mid-November 2026. Management expressed cautious optimism and is actively engaged in integration planning to ensure a smooth transition and realize cost savings for customers post-approval.

    02

    Data Center Development

    NorthWestern Energy continues to pursue data center opportunities in Montana and South Dakota. While development agreements are in place, the SEBI project faces delays due to land procurement issues, pushing its expected Energy Service Agreement (ESA) beyond year-end. Quantica and Atlas ESAs are still targeted by year-end. The company has filed a Large New Load tariff in Montana to protect existing customers and is addressing sales tax issues in South Dakota to facilitate large-load growth.

    03

    Colstrip Ownership and Cost Recovery

    The incremental full-serve ownership of Colstrip assets impacted Q2 GAAP EPS by $0.12 and resulted in $0.05 of unrecovered operating expenses on an adjusted basis. Management's action plan involves filing a future rate review to incorporate these assets into base rates for better cost recovery, while a PCCAM tariff waiver docket is expected to conclude in Q4 2026 or early 2027.

    04

    Capital Plan and Growth Opportunities

    The $3.2 billion capital plan for 2026-2030 remains unchanged, focusing on essential investments. This plan does not yet incorporate potential incremental investments from regional transmission growth or large-load opportunities, which the company is actively pursuing. These additional opportunities could drive EPS growth above the current 6% long-term target.

    05

    Industry Challenges and Community Engagement

    The utility industry, including NorthWestern Energy, faces increasing public pushback and misinformation regarding large-scale projects like data centers. Management acknowledges the need for better communication and collaboration with communities to demonstrate the benefits of such developments and ensure that large loads pay their own way, avoiding higher costs for existing customers.

    06

    Q2 Financial Performance

    The company reported GAAP diluted EPS of $0.40 and non-GAAP diluted EPS of $0.50 for Q2 FY26. The adjusted results reflect improved margins from new rates in Montana and growth in transmission revenues, partially offset by higher operating costs, depreciation, and interest expense. Weather impact🌐 for Q2 was minimal at an unfavorable $0.01 per share, a contrast to the significant weather adjustment in Q1.

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