CMSA — CMS Energy Corporation 5.6% JRSUB NT 78

CMS Energy Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics:

• Adjusted earnings per share (EPS) for Q1 2026 stood at $1.13, reflecting a favorable comparison to Q1 2025.
• Adjusted net income was reported at $346 million.
• The company reaffirmed its full-year EPS guidance of $3.83 to $3.90, with confidence leaning towards the higher end of the range.
• Long-term adjusted EPS growth is projected at 6% to 8%.

2. Strategic Updates and Business Highlights:

• The Michigan Public Service Commission approved over 65% of CMS Energy's request in its recent electric rate case, maintaining a 9.9% return on equity (ROE).
• The company emphasized its focus on customer affordability, noting that Michigan electric bills are among the lowest in the nation.
• CMS Energy is actively pursuing a growth scenario in its upcoming renewable energy plan, which anticipates significant capital opportunities tied to new customer loads, particularly from data centers and manufacturing.
• The company signed contracts for approximately 110 megawatts of new load in Q1, surpassing last year's total of 100 megawatts.

3. Forward Guidance and Outlook:

• CMS Energy remains confident in its financial objectives and operational strategies, with a focus on maintaining affordability for customers while investing over $24 billion in its five-year capital plan.
• The company plans to file its electric rate case in June and anticipates a positive outcome for its pending gas rate case.
• The growth of data centers is expected to contribute positively to the company’s financials, potentially reducing average customer rates by 2% annually for each gigawatt of new load.

4. Bad News, Challenges, or Points of Concern:

• A significant ice storm in March negatively impacted costs, resulting in a $0.05 per share adverse variance.
• Moody’s has placed the utility on a negative outlook due to concerns regarding the size of the capital investment plan relative to the timing of cost recovery, prompting CMS Energy to explore countermeasures.
• The company faces uncertainties in the regulatory environment, particularly in an election year, which may affect the cadence of regulatory filings.

5. Notable Q&A Insights:

• Management expressed optimism about the data center pipeline, indicating a strong interest and progress in negotiations, but refrained from commenting on specific M&A activities.
• The company is committed to maintaining affordability and is actively engaging with policymakers to align on energy strategies that benefit both the business and the community.
• There is an acknowledgment that while data centers are a significant growth opportunity, the company is also focused on diversifying its growth pipeline with other industrial and manufacturing opportunities.
• The management reiterated that any large-load conversions would likely increase capital intensity and, consequently, equity needs, highlighting the dynamic nature of their capital planning in response to growth opportunities.