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    XEL
    Earnings call· Sep 2025(Q3 FY25)

    XCEL ENERGY INC XEL

    Oct 30, 2025 Source

    Executive summary

    Xcel Energy Q3 FY25 — Strong Earnings, Increased Capital Plan, and Long-Term EPS Growth Target

    Xcel Energy reported solid Q3 FY25 ongoing earnings, driven by regulatory outcomes and sales growth, despite higher financing and O&M costs. The company unveiled an expanded $60 billion 5-year capital plan to meet growing demand and clean energy goals, underpinning an updated long-term EPS growth target of 6-8%+ with 9% average growth through 2030. Management also reached a settlement in principle for the Marshall wildfire, while continuing to advance wildfire mitigation and customer affordability initiatives.

    Highlights

    5

    • Delivered solid ongoing earnings of $1.24 per share in Q3 FY25.

    • Reaffirmed 2025 EPS guidance of $3.75 to $3.85 per share, maintaining a 21-year track record.

    • Introduced an updated $60 billion 5-year capital expenditure forecast, driving 11% annualized rate base growth.

    • Initiated 2026 EPS guidance of $4.04 to $4.16 per share, reflecting 8% growth at the midpoint from 2025.

    • Updated long-term EPS growth objective to 6-8%+ with expectations to deliver 9% growth on average through 2030.

    Concerns

    3

    • Incurred a $290 million ($0.36 per share) charge for the Marshall wildfire settlement in Q3 FY25.

    • Higher financing costs decreased Q3 FY25 earnings by $0.15 per share.

    • Higher O&M expenses increased 5% for full year 2025, driven by a $25 million increase in health and benefit costs in Q3.

    Guidance & targets

    9
    CategoryTargetConfidence
    Ongoing EPS
    $3.75 to $3.85 per share
    high materiality
    High
    EPS
    $4.04 to $4.16 per share
    high materiality
    High
    Long-term EPS growth objective
    6% to 8-plus percent
    high materiality
    High
    Average EPS growth
    9% growth on average
    high materiality
    High
    Dividend growth objective
    4% to 6%
    medium materiality
    High
    Dividend payout ratio
    45% to 55%
    medium materiality
    High
    O&M expenses increase
    5%
    medium materiality
    High
    Weather-normalized electric sales growth
    3%
    medium materiality
    High
    Annual sales growth
    5%
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    SPS
    Driven by strength in the oil and gas sector, including electrification in New Mexico.
    C&I load growth: teens type of growth (New Mexico)
    		—8%——
    Other OpCos (Company-wide excluding SPS)
    Includes Meta's new data center in Minnesota energized in Q3, which will continue to scale.
    Residential sales growth: strong across all OpCosC&I load growth: increased in PSCo
    		—4% to 5%——

    Operational metrics

    23
    Ongoing EPS
    $1.24vs. $1.25 in Q3 FY24
    Q3 FY25

    Excludes a $290 million ($0.36 per share) charge for the Marshall wildfire settlement.

    GAAP EPS
    $0.88
    Q3 FY25

    Includes a $290 million ($0.36 per share) charge for the Marshall wildfire settlement.

    Marshall Wildfire Settlement Charge
    $290
    Q3 FY25

    Reflects settlement in principle with plaintiffs. Excluded from ongoing earnings.

    Infrastructure investment
    $3
    Q3 FY25

    Total year-to-date investment is $8 billion.

    Weather-normalized electric sales growth
    2.5%
    Through Q3 FY25

    Driven by strong residential sales growth across all OpCos and increased C&I load in SPS and PSCo.

    O&M expenses increase
    $37relative to 2024
    Q3 FY25

    Largely driven by a $25 million increase in health and benefit costs for the quarter.

    Residential electric bills below national average
    28%
    Past 5 years
    Residential natural gas bills below national average
    12%
    Past 5 years
    Residential electric and natural gas bill growth vs. inflation
    well under the rate of inflation
    Since 2014

    Typical residential Xcel Energy electric and natural gas bill is 14% and 20% lower than in 2014 when adjusted for inflation.

    Steel For Fuel program savings
    $6
    Through 2025
    One Xcel Energy Way Continuous Improvement Program cumulative savings
    $1
    Since 2020
    Customers connected to financial resources
    200,000
    Since 2024
    Data center capacity (original base plan)
    2
    Current

    On track to contract the remainder by end of year.

    Data center capacity (updated total base plan)
    3
    Current

    Additional projects considered high probability and expected to be contracted by 2026.

    Small Coast Creek wildfire claims resolved
    212out of 254 submitted
    Current
    Small Coast Creek wildfire lawsuits settled/dismissed
    21out of 34
    Current
    Small Coast Creek wildfire estimated liability (low end)
    $410
    Current

    Updated from previous estimate. $360 million committed in settlement agreements, with approximately $50 million more estimated.

    Small Coast Creek wildfire insurance coverage
    $500
    Current
    Equity and equity-related content issued/contracted
    $3
    This year

    Between ATM program and 2025 hybrid financing.

    Debt for 2026-2030 capital plan
    $23
    2026-2030

    Part of the updated $60 billion 5-year capital plan.

    Equity content for 2026-2030 capital plan
    $7
    2026-2030

    Part of the updated $60 billion 5-year capital plan. Incremental capital investments would be funded by approximately 40% equity content and 60% debt.

    Natural gas CTs on order (capacity)
    4
    Current

    Will provide natural gas generation to help ensure reliability and affordability.

    Turbines on order
    19
    Current

    Secured to get ahead of elongated lead times (4 years out for turbine market).

    Industry KPIs

    5
    MetricValueDetails
    Ffo to debt17%%
    Retail sales growth2.5%%
    Regulatory rate base growth11%%
    New gas generation builds upgrades3,000MW
    Contracted large load capacity esas loas3GW

    Orderbook & backlog

    1
    Data Center Capacity Pipeline3 GWQ3 FY25

    Up from 2 GW original base plan

    Updated total base plan for data center capacity. Original 2 GW plan on track to be fully contracted by year-end. Additional 1 GW (to reach 3 GW total) considered high probability and expected to be contracted by 2026.

    Deals & partnerships

    4
    Plaintiffs in Marshall wildfire (subrogation insurers, public entity plaintiffs, individual plaintiffs), Qwest Corporation, Teleport Communications AmericaSettlement agreement in principle to resolve all claims asserted by plaintiffs in the Marshall wildfire.$290 million

    Xcel Energy does not admit any fault or wrongdoing and disputes that its equipment caused the second ignition.

    Colorado Energy Office, UCA, commission staffNear-term procurement for 4,000 MW of renewable resources and 500 MW of thermal/firm dispatchable resources.

    Represents a 4.5 GW plan designed to accelerate and take advantage of renewable credits.

    nullAll-source RFP to meet an 870 MW accredited capacity need.
    nullAcquisition of the 375 MW Elk Creek solar storage project.$725 million

    Project is 375 MW.

    Capital programs

    1
    5-year Capital Expenditure Forecastunderway$60 billion
    Spent to date: $8 billion year-to-date FY25
    Funding: Mix of $23 billion debt and $7 billion equity content (2026-2030)
    Start: FY26

    Benefit: 7,500 MW zero-carbon generation, 3,000 MW natural gas generation, 2,000 MW energy storage, 1,500 new high-voltage transmission miles, $5 billion T&D system investment

    Updated plan reflecting annualized rate base growth of approximately 11%. Designed to serve increased energy demand, strengthen T&D systems, provide cleaner energy, and improve safety/reliability. Includes safe harboring of renewable and storage projects.

    Risks & headwinds

    5
    Marshall wildfire liabilityQ3 FY25 (charge), ongoing (resolution)

    $290 million charge in Q3 FY25; estimated total liability (low end) of $410 million, with $360 million committed and $50 million more estimated. $500 million insurance coverage.

    Mitigation: Settlement in principle reached; ongoing wildfire risk reduction efforts, including situational awareness tools, AI-enabled risk modeling, system hardening, and PSPS capabilities.

    Higher financing costsQ3 FY25, ongoing

    Decreased Q3 FY25 earnings by $0.15 per share.

    Mitigation: Maintaining a strong balance sheet and financial discipline; balanced financing strategy with debt and equity to fund accretive growth.

    Increased O&M expensesQ3 FY25, full year FY25

    Increased $37 million in Q3 FY25 relative to 2024, largely due to $25 million in health and benefit costs. Forecasted 5% increase for full year 2025.

    Mitigation: Leveraging AI to bend the cost curve and drive process improvement; 'One Xcel Energy Way' Continuous Improvement Program.

    Elongated lead times for equipment (turbines, transformers)Ongoing, impacting future project timelines

    Turbine market 4 years out; large transformers a few years.

    Mitigation: Proactive ordering (19 turbines on order); strategic supplier relationships; safe harboring strategy for equipment; ensuring top-tier EPC firms are lined up.

    Potential for ROE compression due to elevated CapEx and financing needsNext few years, then catching up later in the forecast period

    11% rate base growth vs. 9% earnings growth over 5 years implies a 200 bps delta.

    Mitigation: Equity plan designed to grow into 17% FFO to debt target; working through regulatory proceedings to improve ROE; conservative ROEs embedded in the plan.

    What to watch in Q4 FY25

    5

    Colorado Near-Term Procurement RFP Decision

    Q1 FY26
    CurrentBids received in October 2025; recommendation filing expected December 2025.
    TargetCommission decision by February 2026.

    Why it matters

    This decision will finalize the portfolio for 4.5 GW of renewable and dispatchable resources, impacting future capital deployment and tax credit capture.

    Bids were received this month, and we expect to file a recommendation in December 2025 with the commission decision by February of 2026.

    Q&A highlights

    7

    Clarification on whether the 9% average EPS growth through 2030 includes 2026, or starts after.

    The 9% average EPS growth through 2030 includes the 2026 guidance, starting from the midpoint of 2025 guidance ($3.80).

    “No, that includes 2026, so 9% over the next 5 years, inclusive of '26 guidance. So that 9% would be based off the midpoint of this year, so $380 million.”

    asked by Nicholas Campanella · answered by Brian Van Abel

    2 min read7 chapters

    Detailed Narrative

    01

    Wildfire Mitigation and Marshall Settlement

    Xcel Energy reached a settlement in principle for the Marshall wildfire, resulting in a $290 million charge. The company emphasized its ongoing investments in wildfire risk reduction, including situational awareness tools, advanced meteorology, AI-enabled risk modeling, system hardening, and proactive operational actions across its states.

    02

    Capital Investment and Rate Base Growth

    The company introduced an updated $60 billion 5-year capital expenditure forecast for 2026-2030, projecting approximately 11% annualized rate base growth. This plan aims to serve increased energy demand, strengthen T&D systems, expand clean energy, and ensure system reliability, including 7,500 MW of zero-carbon generation, 3,000 MW of natural gas generation, and 2,000 MW of energy storage.

    03

    Customer Affordability and Bill Management

    Xcel Energy highlighted its commitment to customer affordability, noting that residential electric and natural gas bills have been significantly below the national average. Initiatives like the "Steel For Fuel" program and "One Xcel Energy Way" have generated billions in savings, while demand-side management programs have avoided the need for numerous power plants.

    04

    Artificial Intelligence Integration

    The company is in the early stages of leveraging AI to improve cost efficiency, customer satisfaction, and operational outcomes. AI is being used for automated analysis of enterprise data, enhancing security and planning, and transforming infrastructure inspection and maintenance through drone-based data collection and automated image analysis, particularly for wildfire risk modeling.

    05

    Data Center Demand and Load Growth

    Xcel Energy is on track to contract the remainder of its original 2 GW base plan for data centers by year-end and has updated its total base plan to include approximately 3 GW of data center capacity. This demand, along with SPS oil and gas electrification and residential growth, is expected to drive 5% annual sales growth in the 2026-2030 capital plan.

    06

    Supply Chain and Project Execution

    Management expressed confidence in its ability to execute the capital plan, citing proactive measures to secure necessary equipment like turbines (19 on order) and main power transformers, which have elongated lead times. The company emphasizes strong supplier relationships and strategic planning to mitigate supply chain challenges🌐 and ensure timely project delivery.

    07

    Regulatory Updates and Rate Case Activity

    Xcel Energy is actively engaged in regulatory processes, including a near-term procurement RFP in Colorado for 4.5 GW of resources, an all-source RFP in SPS for 870 MW accredited capacity, and the verbal approval of NSPW's $725 million acquisition of the 375 MW Elk Creek solar storage project. Upcoming filings include a Minnesota natural gas rate case and Colorado/New Mexico electric rate cases.

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