XEL — Xcel Energy Inc.

Xcel Energy Q1 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Ongoing Earnings: Xcel Energy reported ongoing earnings of $0.91 per share, up from $0.84 in Q1 2025.
• GAAP Earnings: Reported GAAP earnings were $0.89 per share.
• Earnings Drivers: Higher electric revenues from rate case outcomes and sales growth contributed positively, while increased interest charges and higher depreciation negatively impacted earnings.
• Weather Impact: A warm winter reduced earnings by $0.09 per share due to lower electric and natural gas sales.
• Regulatory Outcomes: Settlements in North Dakota and South Dakota rate cases resulted in revenue increases of $27 million and $26 million, respectively.

2. Strategic Updates and Business Highlights

• Capital Investment: Xcel invested over $3 billion in infrastructure in Q1, part of a $14 billion capital investment plan for 2026, the largest in the company's history.
• Data Center Agreements: A significant contract with Google for a new data center includes commitments for 1,900 megawatts of renewable generation, projected to save customers between $1 billion to $1.5 billion over the contract term.
• Joint Development Agreement: A partnership with NextEra Energy aims to co-develop generation and storage to support data center growth, targeting 2 gigawatts of capacity.
• Infrastructure Needs: Xcel identified at least $7 billion of incremental investment opportunities beyond its base plan, driven by growing energy demands and additional data center loads.

3. Forward Guidance and Outlook

• 2026 EPS Guidance: Xcel reaffirmed its ongoing EPS guidance for 2026 in the range of $4.04 to $4.16 per share.
• Long-Term Growth: The company expects 6% to 8% long-term earnings growth and 9% EPS growth on average through 2030.
• Regulatory Filings: Upcoming filings in Colorado, Texas, New Mexico, and Wisconsin aim to secure large customer loads while protecting existing customers.

4. Bad News, Challenges, or Points of Concern

• Regulatory Disallowance: An additional $41 million disallowance of replacement power costs related to the Prairie Island outage resulted in a $37 million charge.
• Weather-Related Risks: The warm winter negatively affected sales, highlighting vulnerability to weather fluctuations.
• Execution Risks: The company acknowledged potential supply chain constraints and labor shortages as challenges in executing its extensive capital plans.
• Rate Case Lag: Structural lag in earned returns remains a concern, particularly in Colorado, where there is a 50-plus basis points lag in returns.

5. Notable Q&A Insights

• Regulatory Settlements: Management expressed confidence in reaching constructive settlements in ongoing rate cases, particularly in Colorado, where a history of successful settlements was noted.
• Data Center Load Growth: The company is actively engaging with hyperscalers and expects to secure 6 gigawatts of data center load by the end of 2027, with significant benefits for existing customers.
• Equity Financing: Xcel has proactively secured 50% of its equity needs for its 5-year plan within the first quarter, indicating strong financial management.
• Wildfire Preparedness: Management highlighted improvements in operational readiness for wildfire season, emphasizing community engagement and situational awareness.

Overall, Xcel Energy demonstrated strong financial performance in Q1 2026, with significant strategic initiatives aimed at expanding its infrastructure and securing large customer loads, while also addressing challenges related to regulatory outcomes and execution risks.