XELLL — Xcel Energy Inc. 6.25% Junior Subordinated Notes, Series due 2085

Xcel Energy Q2 2026 Earnings Call Summary

1. Key Financial Results and Metrics

• Earnings Per Share (EPS): Xcel Energy reported strong Q2 2026 earnings of $0.93 per share, up from $0.75 per share in Q2 2025.
• Revenue Drivers: Key contributors to earnings included:
  • Higher electric revenues (+$0.17 per share) due to nonfuel riders and sales growth.
  • Increased Allowance for Funds Used During Construction (AFUDC) (+$0.08 per share).
  • Lower depreciation and amortization (+$0.08 per share).
  • Positive returns from venture capital portfolios (+$0.03 per share).
• Sales Growth: Weather-adjusted electric sales increased by 2.1% year-to-date, with a forecast of 3% growth for the full year.

2. Strategic Updates and Business Highlights

• Capital Investments: Xcel invested $3 billion in Q2 and over $6 billion year-to-date in generation, transmission, and distribution infrastructure across eight states.
• Major Projects:
  • Achieved commercial operations of Group 2 of the Colorado Power Pathway.
  • Began construction on a 150-mile 345 kV transmission project in the Upper Midwest.
  • Expanded the Sherco solar facility to a total capacity of 710 megawatts.
• Regulatory Success: Advanced settlements in six active rate cases while maintaining low long-term bill growth relative to inflation.
• Customer Programs: Expanded energy assistance programs in Colorado and Minnesota to support vulnerable communities.
• Sustainability: Released a sustainability report highlighting a 60% reduction in carbon emissions over the past two decades.

3. Forward Guidance and Outlook

• 2026 EPS Guidance: Reaffirmed ongoing EPS guidance range of $4.04 to $4.16.
• Long-term Growth: Confident in delivering 6% to 8% long-term earnings growth, with expectations of 9%+ EPS growth on average through 2030.
• Investment Opportunities: Identified $10+ billion in incremental investment opportunities beyond the base plan, particularly in renewable generation and data centers.

4. Challenges and Points of Concern

• Interest Expense: Increased interest expenses reduced earnings by $0.12 per share.
• Equity Financing Impact: Financing costs associated with infrastructure investments led to a $0.06 per share decrease in earnings.
• Weather Impact: Negative weather conditions in Q1 2026 affected overall performance, although this was offset by other positive factors in Q2.

5. Notable Q&A Insights

• Rate Base Growth: Discussions indicated a potential 250 basis point uplift in rate base growth, with ongoing assessments of how this aligns with EPS growth.
• Data Center Demand: Xcel expects to secure an additional 4 gigawatts of data center load by the end of 2027, with a strong pipeline of projects.
• Regulatory Confidence: Management expressed confidence in achieving favorable regulatory outcomes, with a focus on public interest in settlements.
• Wildfire Mitigation: Xcel is actively enhancing wildfire mitigation efforts in Colorado, including installing AI-enabled cameras and weather stations to improve situational awareness.
• Nuclear Energy Stance: Xcel remains cautious about new nuclear projects, focusing instead on existing renewable resources to meet future energy demands.

Overall, Xcel Energy demonstrated robust financial performance and strategic execution in Q2 2026, while also addressing regulatory, operational, and environmental challenges.