Asking if the 3 GW of near-term load would be served entirely by new gas generation and the associated CapEx implications.

Chris Womack stated that the company would continue its "all-of-the-above" strategy, including gas, battery energy storage, and other resources to meet growth opportunities. “It continues to support our all-of-the-above strategy. Clearly, I mean, I think there's -- as we talked about in our plan, there's a lot of gas in the plan, but you're going to continue to see battery energy storage, I mean some of the opportunities that we have. I mean, we'll look at all the resources in terms of how we meet this growth opportunity going forward from an all-in above approach.”

Clarifying if the 3 GW of highly likely contracts are already included in the current capital plan and if they contribute to the potential upside commentary.

David Poroch confirmed that the 3 GW contracts are "baked into our forecast today" and are near-term, with load ramps extending beyond the current planning horizon. He clarified that the current plan includes the 10 GW signed contracts plus these 3 GW, but not anything beyond that. “Yes, Steve, those contracts, I mean, they're very near term, and they're working through our counterparties' approval process, Board approvals, all that. So we see those contracts being signed imminently, and they are baked into our forecast today.”

Inquiring about the scope of potential CapEx increases from Alabama Power and Georgia Power RFPs for future generation needs, especially in light of the growing large load pipeline, and how to estimate the cost per GW.

David Poroch noted that the portfolio opportunities are growing across all three electric companies. He suggested a rough rule of thumb of "$2 billion for a gig of incremental generation" for estimating future CapEx. “if you think about a rough rule of thumb, I would think you could probably maybe estimate $2 billion for a gig of incremental generation. I think that's kind of what we're seeing in the marketplace and what our expectations might be.”

Southern Company (SO) Q4 FY25 earnings call: guidance and Q&A

Earnings call· Dec 2025 (Q4 FY25)· Utilities· Feb 19, 2026

Source: earnings call transcript

Executive summary

Southern Company Q4 FY25 — Strengthened Outlook Driven by Robust Large Load Growth

Southern Company delivered strong Q4 FY25 results, achieving the top end of its adjusted EPS guidance, driven by robust retail sales growth, particularly from large load customers. The company significantly strengthened its long-term outlook, raising EPS growth expectations and increasing its capital investment plan to serve accelerating demand. Management emphasized a disciplined approach to contracting and financing, aiming for rate stability and credit quality amidst unprecedented growth opportunities.

Highlights

Achieved adjusted EPS of $4.30 for 2025, at the very top of guidance range, representing 6% growth from prior year.
Weather-normalized total retail electricity sales for 2025 were up 1.7% year-over-year, more than double the cumulative growth over the last decade.
Commercial sales, led by data centers, were up 17% year-over-year for the second year in a row.
Long-term adjusted EPS growth target increased to 8% from 2026 midpoint to 2030, with 8-9% growth expected from 2026-2028.
Total large load pipeline increased to over 75 GW, with 26 signed contracts representing 10 GW of fully contracted electric service agreements.

Concerns

Higher operations and maintenance expenses, depreciation and amortization, and interest costs partially offset positive drivers in 2025.

Guidance & targets

Category	Target	Timeline	Confidence
Adjusted EPS	$4.50 to $4.60 per share high materiality	Full-year 2026 · FY26	High
Adjusted EPS	$1.20 medium materiality	Q1 · FY26	High
Adjusted EPS Growth Rate	8% to 9% high materiality	2026 through 2028 · FY26-FY28	High
Adjusted EPS	$4.85 to $4.95 high materiality	Full-year 2027 · FY27	High
Adjusted EPS	$5.25 and $5.45 high materiality	Full-year 2028 · FY28	High
Adjusted EPS Growth Rate	7% to 8% high materiality	Longer term beyond 2028	High
Average Annual Adjusted EPS Growth	8% high materiality	2026 to 2030 · FY26-FY30	High
Retail Electric Sales Growth	at least 3% medium materiality	Full-year 2026 · FY26	High
Annual Electricity Sales Growth	10% high materiality	2026 through 2030 · FY26-FY30	High
Georgia Power Retail Electric Sales Growth	approximately 13% medium materiality	2026 through 2030 · FY26-FY30	High
Commercial Sales Growth	roughly 20% annually medium materiality	through the end of the decade · FY30	High
State-Regulated Average Annual Rate Base Growth	approximately 9% high materiality	Long-term	High
Remaining Equity or Equity Equivalents Need	approximately $2 billion medium materiality	through 2030 · FY30	High
FFO to Debt	approximately 17% high materiality	by 2029 · FY29	High
Equity or Equity Equivalents for Incremental Capital	approximately 40% medium materiality	Future incremental capital investment	High
Dividend Payout Ratio	low to mid-60% range medium materiality	Latter portion of forecast horizon	Medium
Dividend Growth Pace	potentially increasing the rate medium materiality	After payout ratio reaches target	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Southern Company Gas (LDCs) The 4 state-regulated LDCs have continued to work constructively to make significant investments in safety-related pipeline replacements and other modernization efforts, which have combined to triple their authorized rate base since the acquisition while increasing customer value. Authorized rate base: tripled since acquisition	—	—	—	—
Southern Power Southern Power's portfolio has over 13 gigawatts of capacity across 55 generating facilities in 15 states, including over 7 gigawatts of natural gas generation in the Southeast. Substantially all its assets are under long-term contracts with creditworthy counterparties, and we don't take meaningful commodity risk in these contracts. Total capacity: over 13 GWNumber of generating facilities: 55States of operation: 15Natural gas generation in Southeast: over 7 GW	—	—	—	—

SO operating KPIs by quarter

SO operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Sep 2025 Q3 FY25	This call Dec 2025 Q4 FY25	Change vs prior quarter
Customers	9M The tremendous value inherent in our 3 electric utilities and 4 natural gas distribution utilities is a function of our continuous focus on our 9 million customers, our constructive regulatory environments with orderly processes and service territories with strong long-term fundamentals. Source: earnings call transcript	9M+ Our state-regulated electric and gas utilities continue to provide long-term value to the more than 9 million customers across the Southeast and beyond with reliable and affordable energy. Source: earnings call transcript	9M I'm incredibly proud of the way Southern Company's electric and gas teams safely performed under these harsh conditions for our 9 million customers. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Total large load pipeline over 75 GW Q4 FY25

Fully contracted electric service agreements 10 GW Q4 FY25

2 GW higher than last quarter; 4 GW higher than a year ago

Represents 26 signed contracts, nearly all under construction. Load ramps totaling 8 GW by end of 5-year planning horizon, ultimately ramping to 10 GW beyond 2030.

Late-stage discussions for load 10 GW Q4 FY25

3 GW of which are working through final reviews and are highly likely to progress to an executed contract in the near term.

Deals & partnerships

Southern Company Acquisition

Acquisition of what is now called Southern Company Gas, marking its 10-year anniversary this summer.

Capital programs

Base Capital Investment Plan underway $81 billion

Represents an $18 billion or approximately 30% increase from forecast 1 year ago. 95% is at state-regulated utilities. Main drivers are new generation facilities, existing infrastructure investments (uprates for gas/nuclear, hydro modernization). Roughly $42 billion (over half) expected to be invested through 2030.

Risks & headwinds

Higher operating costs 2025

Higher operations and maintenance expenses, depreciation and amortization, and interest costs

Data center siting and zoning concerns Ongoing

Legislation introduced on moratoriums or other regulations

Mitigation:Company emphasizes benefits to existing customers, community involvement of data center partners, and continued project advancement across states.

Q&A highlights

Inquiring about the confidence in the new 7-8% long-term EPS growth rate beyond 2028, especially considering Southern Power repricing opportunities, and what factors could lead to higher or lower outcomes.

Management expressed high confidence in the updated outlook, citing the execution around 10 GW of signed projects, 3 GW in final stages, 7 GW in late stages, and a 75 GW pipeline. They highlighted economic expansion, 120 new companies, 21,000 jobs, and 17% year-over-year data center growth. David Poroch added that they aim for the top end of the range and see opportunities for upside.

“we put guidance expectations out there, and they're a target for us to go get. And we'd be pretty disappointed if we didn't achieve near the top end of that. Now 2028 is a long way out, but we do see opportunities out there that provide upside and there's potential to be higher.”

asked by Nicholas Campanella · answered by David Poroch

3 min read 7 chapters

Detailed narrative

Economic Development and Customer Growth

Southern Company's service territories experienced robust economic development in 2025, with over 120 companies establishing or expanding operations, creating more than 21,000 new jobs. This growth spans manufacturing, automotive, aerospace, and metals industries, alongside significant investments from hyperscalers. The company's vertically integrated model in Alabama, Georgia, and Mississippi Power allows for comprehensive service delivery, supporting this expansion while ensuring regulatory stability and customer benefits.

Large Load Strategy and Contracts

The company's large load pipeline has expanded to over 75 GW, with 26 signed contracts representing 10 GW of fully contracted electric service agreements, an increase of 2 GW from last quarter. These projects, mostly under construction, include load ramps totaling 8 GW by the end of the 5-year planning horizon, ultimately reaching 10 GW beyond 2030.

An additional 10 GW are in late-stage discussions, with 3 GW highly likely to be executed soon. The regulatory framework allows for bilaterally negotiated contracts with minimum terms of at least 15 years, including take-or-pay structures covering 100% of incremental costs and significant collateral requirements to protect existing customers and investors.

Southern Power Opportunities

Southern Power, with its 13 GW capacity across 55 facilities, presents significant growth opportunities. Contracts on its natural gas fleet, particularly from the early to mid-2030s, are expected to reprice at 2-3x higher rates due to increased market demand, with approximately 1,000 MW available for remarketing by 2030.

Additionally, Southern Power is in late-stage discussions to uprate its legacy natural gas fleet by up to 700 MW and is exploring new natural gas generation at existing sites and other markets to serve large load customers, all while maintaining its creditworthy counterparty, long-term contract model.

Accelerated Capital Investment Plan

Southern Company's base capital investment forecast for the next 5 years is $81 billion, a $18 billion (30%) increase from a year ago, with 95% allocated to state-regulated utilities. This plan is driven by new generation facilities and approved Integrated Resource Plans, including uprates for existing natural gas and nuclear facilities and hydroelectric dam modernization.

Roughly $42 billion, over half the total plan, is dedicated to serving projected growth through new generation and transmission expansions through 2030. The plan does not include placeholders for potential capital investments subject to regulatory processes or Southern Power opportunities.

Proactive Financing Strategy and Credit Metrics

The company's updated financing plan supports its capital investments and aims to preserve strong investment-grade credit ratings. In 2025, Southern Company proactively addressed $9 billion of equity needs, including $4 billion through ATM forward contracts settling through 2026 and $2 billion from mandatory convertible equity units settling in 2028.

A remaining need of approximately $2 billion in equity or equivalents is projected through 2030. The company targets maintaining FFO to debt of roughly 15% through 2027, improving to approximately 17% by 2029, and plans to finance incremental capital with 40% equity.

Constructive Regulatory Framework and Customer Benefits

The company's regulatory frameworks in its electric jurisdictions allow for bilaterally negotiated contracts for large load customers, ensuring appropriate pricing to cover incremental costs and benefit existing customers. Georgia Power and Alabama Power implemented multiyear rate stabilization agreements, and Georgia Power quantified approximately $1.7 billion in benefits from 2029-2031 for existing customers due to its large load contracting approach.

Recent filings for storm and fuel cost recoveries in Georgia Power are expected to collectively lower rates for customers starting this summer, demonstrating the mutual benefits of this strategy.

Operational Excellence and Innovation

Southern Company emphasizes operational excellence, leveraging experience from large construction projects like Plant Vogtle Units 3 and 4. The company has secured labor and equipment through early EPC agreements and reservation payments for upcoming projects. Its teams demonstrated exceptional performance during extreme weather events like Winter Storm Fern, serving a peak electric load of over 39,000 MW.

Innovations such as AI tools for crew prepositioning and self-healing networks enhance reliability and accelerate restoration efforts, contributing to the company's recognition as the #1 electric and gas utility in Fortune Magazine's Most Admired Companies for 2026.

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