Earnings call transcript: Entergy’s Q2 2025 earnings beat expectations

Entergy Corporation reported its second-quarter earnings for 2025, showcasing a stronger-than-expected performance. The company posted an adjusted earnings per share (EPS) of $1.05, surpassing the forecasted $0.97, marking an 8.09% surprise. However, revenue fell short of expectations, coming in at 3.02 billion dollars against a forecast of 3.24 billion dollars, a 6.79% miss. Following the earnings release, Entergy’s stock rose by 2.84% in pre-market trading, reflecting investor optimism despite the revenue shortfall. According to InvestingPro data, the company has demonstrated strong momentum with a 56.67% return over the past year and maintains a GOOD overall financial health score.

Key Takeaways

• Entergy’s adjusted EPS outperformed expectations with an 8.09% surprise.
• Revenue missed forecasts by 6.79%, totaling 3.02 billion dollars.
• Pre-market stock price increased by 2.84%, indicating positive investor sentiment.
• The company affirmed its 2025 EPS guidance and raised its outlook for 2026-2028.
• Entergy’s strong liquidity and strategic investments in renewables highlight future growth potential.

Company Performance

Entergy demonstrated robust performance in the second quarter of 2025, driven by strong industrial sales growth of nearly 12% and a 4.5% increase in weather-adjusted retail sales. The company’s strategic focus on renewable energy and infrastructure improvements is positioning it well against industry trends, as it continues to expand its generation capacity with significant investments in solar and battery storage.

Financial Highlights

• Revenue: 3.02 billion dollars, down from the forecasted 3.24 billion dollars.
• Earnings per share: $1.05, exceeding the forecast of $0.97.
• Recognized 570 million dollars in nuclear production tax credits.
• Maintained strong liquidity with 2.3 billion dollars in unsettled equity forwards.

Earnings vs. Forecast

Entergy’s actual EPS of $1.05 exceeded the forecast of $0.97 by 8.09%, marking a positive surprise for investors. However, the revenue fell short by 6.79%, which may raise concerns about future revenue streams. This earnings beat contrasts with previous quarters where revenue and EPS aligned more closely with forecasts.

Market Reaction

Following the earnings announcement, Entergy’s stock price increased by 2.84% in pre-market trading, reaching $89.98. This positive movement reflects investor confidence, despite the revenue miss. The stock is trading near its 52-week high of $91.46, suggesting strong market sentiment. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading above its Fair Value, with a low beta of 0.57 indicating relatively stable price movements. InvestingPro subscribers have access to 10+ additional exclusive insights about Entergy’s valuation and market position.

Outlook & Guidance

Entergy affirmed its 2025 adjusted EPS guidance and increased its outlook for 2026-2028. The company expects a 13% growth rate in industrial sales over the next four years and is focusing on enhancing grid resilience and customer service. Entergy’s expanded capital plan of 40 billion dollars over four years underscores its commitment to meeting customer expectations and driving future growth. With a market capitalization of $39 billion and a track record of maintaining dividend payments for 38 consecutive years, Entergy demonstrates strong financial stability. InvestingPro’s comprehensive research report provides detailed analysis of Entergy’s growth strategy and financial outlook, available exclusively to subscribers.

Executive Commentary

CEO Drew Marsh emphasized the company’s strategic direction, stating, "We aspire to be the premier utility and to create sustainable value for each of our key stakeholders." He also highlighted the increased capital plan as a driver for raising future outlooks, adding, "We are raising our outlooks driven by our higher capital plan to meet customer expectations."

Risks and Challenges

• Potential supply chain disruptions impacting new generation projects.
• Regulatory challenges in storm recovery mechanisms.
• Managing equipment costs for planned gas generation projects.
• Economic pressures affecting industrial customer demand.
• Competition from other utility providers in expanding markets.

Q&A

During the earnings call, analysts inquired about potential new customers in Arkansas, nuclear project financing, and regulatory discussions on storm recovery. Entergy is exploring state and federal support for nuclear projects and is actively managing equipment costs for new gas generation initiatives.

Full transcript - Entergy Corporation (ETR) Q2 2025:

Greg, Conference Operator: Good morning. My name is Greg, and I will be your conference operator today. At this time, I would like to welcome everyone to Entergy’s Second Quarter twenty twenty five Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question and answer session.

: Thank you.

Greg, Conference Operator: I will now turn the call over to Liz Hunter, Vice President of Investor Relations for Entergy Corporation. Liz?

Liz Hunter, Vice President of Investor Relations, Entergy Corporation: Good morning. Thank you, Greg, and thanks to everyone for joining this morning. We will begin today with comments from Entergy’s Chair and CEO, Drew Marsh and then Kimberly Fontan, our CFO, will review results. In today’s call, management will make certain forward looking statements. Actual results could differ materially from these forward looking statements due to a number of factors, which are set forth in our earnings release, our slide presentation and our SEC filings.

Entergy does not assume any obligation to update these forward looking statements. Management will also discuss non GAAP financial information. Reconciliations to the applicable GAAP measures are included in today’s press release and slide presentation, both of which can be found on the Investor Relations section of our website. And now, I will turn the call over to Drew.

Drew Marsh, Chair and CEO, Entergy Corporation: Thank you, Liz, and good morning, everyone. Today, we are reporting second quarter adjusted earnings per share of 1.05 Our progress through the first half of the year keeps us firmly on track to achieve 2025 results in line with our guidance. We are raising our outlooks driven by our higher capital plan to meet customer expectations. We aspire to be the premier utility and to create sustainable value for each of our key stakeholders, our customers, employees, communities, and owners. Our customers are listed first, so I’ll start there.

We have over 3,000,000 customers, and most of them are residential. For the first time since we began tracking Net Promoter Score, we achieved a result that ranks in the first quartile for utility residential service over the past twelve months across our enterprise and using J. D. Power data. We’re not first quartile in every jurisdiction or in every category.

Still, we are excited about our progress, and we are energized by the opportunity ahead to further improve our service to our customers. Our industrial growth opportunities remain robust. We continue to work with state and local leaders to attract businesses to our service area with our economic development model driven by our vertically integrated customer focused electric company of welcoming communities and the economic advantages of the Gulf South. We provide one stop shop technical solutions while we bring key parties together to rapidly meet the needs of new customers. At the same time, we ensure strong protections for our existing 3,000,000 customers and maintain our credit.

Today, we are pleased to announce that we have secured significant new growth in Arkansas that will bring benefits to existing customers as well as communities in the state itself. With this addition, we expect our four year industrial sales growth rate to be approximately 13%. Consistent with our practice, we aren’t commenting further on specifics or customers, although we anticipate making regulatory filings soon, which will include additional details. We are updating our four year capital plan to $40,000,000,000 which will enable us to reserve increased load and grow our renewable portfolio across our jurisdictions. As a point of reference, we have signed roughly eight gigawatts of electric service agreements since the beginning of last year.

As a result, our four year capital plan includes significant investment for customer driven generation, including approximately three gigawatts of solar, 1.4 gigawatts of battery storage, and eight gigawatts of highly efficient gas units. Some of these resources are planned to come online beyond our four year plan period. During the last quarter, we disclosed that we entered into an exclusivity agreement for power island equipment, including 15 combined cycle combustion turbines and two simple cycle combustion turbines. That is in addition to the Orange County, Delta Blues, and Legend projects. Collectively, these turbines provide 15 gigawatts of capacity.

That leaves seven gigawatts for future customer growth needs with deliveries for commercial operations between 2029 and 2031. Our strategy to use standardized equipment and designs helps us effectively manage cost and schedule for our customers. Our customer pipeline continues to be robust, including our data center pipeline, which remains in the five to 10 gigawatt range, and significant interest remains in our traditional industrial segments as well. Our economic development model attracts large new customers that contribute to our communities, growing jobs, and tax base. They also share in costs that would otherwise be covered by existing customers.

The economic impact of these projects on our communities is substantial and yet another sign to existing customers and potential customers that great things are happening in Entergy’s service area. While we’ve made progress on our customer service, storms create moments of matter. We spoke to you in our Analyst Day last summer about our plans to better manage storms. One year removed from that conversation and in the heart of storm season, take a moment to review our progress. To start, we are executing phase one of our accelerated resilience program.

We have more than 2,000,000,000 approved, mostly in Entergy Louisiana. Today, we’ve invested roughly 400,000,000, and that includes energizing nine new substations designed to sustain both flooding and hurricane force winds, stalling over 8,000 hardened poles while another 10,000 pole upgrades are in process, which is on top of the average annual run rate of 75,000 poles replaced system wide. And in the coastal region of Texas, we’ve rebuilt two short transmission lines to harden standards. Earlier this month, Entergy Texas submitted its application for the Texas Energy Fund to support $200,000,000 of resilience projects. We expect to complete about 30% of our phase one projects by year end.

As a reminder, we prioritize projects with the highest benefits, so these earlier projects will have a relatively higher impact. We plan to file later this year for the next phase of Accelerated Resilience to support continued progress. In addition to our accelerated resilience program, new transmission investments built to today’s more stringent standards also improve the resilience of our grid. For example, we have several large 500 kV transmission projects in front of regulators in Louisiana and Texas that will provide resilience benefits while also supporting growth. The Mount Olive to Sarepta line in North Louisiana, a line along the West Bank Of The Mississippi River in Louisiana through a growing industrial corridor, the Southeast Texas Area Reliability Project or CTEX, and the Cypress to Legend line that will support strong growth in the Port Arthur area.

These projects and the Babble to Weber line in Louisiana to be filed later this year, total 460 miles and will represent about 20% of our 500 kV system once completed. These projects will also loop existing transmission lines such that in the event occur if an event occurs at any point on the loop, power will be automatically diverted in another direction, avoiding customer outages. Altogether, we are planning $8,000,000,000 of transmission investment in our four year capital plan, including $5,600,000,000 reviewed through MITOs MTEP process. In addition to system improvements, we ensure that we are prepared for storms through planning, drills, and vegetation maintenance. Technology is also part of the journey, and we’ve been experimenting with cameras and information systems on planes and drones and soon helicopters that fly power lines to gather data with a plan to ultimately feed AI, more quickly assess damage, and optimize the productivity of our teams on the ground.

Capital deployment is critical, but it takes more than that to be premier. To that end, our power delivery team is launching PD Strong, short for Power Delivery Strong, to transform our power delivery team. This includes everything from work management and capability building to behaviors and culture, all with an eye towards better serving our customers every day, but especially in moments that matter like storms. Our regulators are also supporting our storm response improvement efforts. In addition to approving resilience investment, Louisiana and Texas implemented new processes to expedite storm securitization, allowing operating companies to request recovery based on estimated storm costs and accelerated commission timelines for decisions.

Those commissions, of course, retain their authority to determine the prudence of utility storm costs, and estimated cost would be trued up to actual costs once available. Louisiana’s expedited process for 2025 storm costs includes a commitment to review the storm cost related financing order request at the subsequent commission meeting after the utility’s filing. Accelerating storm cost recovery reduces carrying costs for our customers and supports the operating company’s credit, which also keeps the cost for capital lower for our customers. This new process also gives confidence to vendors and mutual assistance partners that support storm recovery. Finally, as we deploy our capital plan throughout our service area, a smaller and smaller percentage of our infrastructure is exposed to storms along the coast, reducing our relative financial risk, which benefits our customers as well as our owners.

These actions continue to build on our improved balance sheet and strong liquidity. We have made good progress over the last year reducing storm risk through accelerated resilience, hardening of our grid, financial readiness, and regulatory changes to improve outcomes for customers, and we have more plans for improvement still ahead. Meanwhile, we stand ready to respond for anything that comes our way. We have some other operational achievements that I’d like to also highlight. On July 1, we completed the sale of our gas LDC businesses to Delta Utilities.

The transition for customers was smooth because of the hard work and planning by many employees, including those who have moved to Delta Utilities. We are extremely grateful for their efforts. The sale of that business allows us to focus on our core electric business. Safe and effective nuclear operations also remain a cornerstone for all stakeholders. This year, Waterford three and Graham Gulf are proudly celebrating forty years of operations.

The Waterford three refueling outage wrapped up in June on time and on budget. Work included replacement of all three low pressure turbines, which will improve reliability and pave the way to increase the capacity of the unit by an estimated 40 megawatts in the 2026. We’ve already filed the upgrade request with the LPSC. Additionally, planned turbine rotor replacements in A N 01 in the fall of this year will set us up for future upgrades there. We continue to engage with customers, regulators, vendors, and others regarding new nuclear, though we don’t have any updates to report at this time.

Turning to regulatory. We are making progress on important matters to meet customers’ growing needs and drive improved customer outcomes. In early July, we reached a stipulated settlement with the Louisiana Public Service Commission staff and a number of parties recommending approval of our request to invest in assets to support adding Meta’s transformational Hyperion data center to our system. The hearing was held in mid July, and we presented extensive evidence on the significant benefits to our customers and communities from making these investments as well as through bringing Meta online as a customer. These benefits are in addition to the transformative benefits that Meta will create through its billions of dollars in invest of investment in Louisiana and the high paying good quality jobs it will provide.

The procedural schedule supports commission decision no later than October. The Mississippi Public Service Commission approved Entergy Mississippi’s formula rate plan settlement, which does not result in a rate change. Also, Entergy Louisiana and Entergy New Orleans filed their annual formula rate plans, and new rates are expected in September. Entergy Arkansas filed its annual formula rate plan with new rates expected to be in place at the beginning of next year. This is the tenth and final projected year in the current cycle.

And in February 26, we will file a base rate case, will include a proposal for a new formula rate plan tariff. At federal level, FERC approved MISO’s expedited resource addition study or ERA’s proposal last week. We appreciate FERC’s work to temporarily temporarily facilitate customer growth across MISO, and we all work together to improve MISO’s existing queue processes. Last quarter, we covered Arkansas legislation that allows for a rider to support investment for economic development. This quarter, the Texas legislature passed, and the governor signed three bills that provide benefits to our customers and communities.

One accelerates storm securitization, which I mentioned earlier. Another allows rider recover rider recovery, of MISO related capacity costs that are currently included in base rates. The rider may be filed annually beginning in 2026. The third is a wildfire bill that provides a potential path to improve wildfire liability. While our likelihood of experiencing wildfires is lower than in other parts of the state, we take the risk seriously and intend to use the new tools that are available.

Finally, our communities are a key stakeholder, and actively supporting them beyond economic development is an important part of our strategy. Entergy has once again been named a top 50 most community minded company and the leader in the utility sector by the Civic 50, an initiative of Points of Light. In 2024, our employees and retirees contributed more than 122,000 volunteer hours across our service area valued at over $4,000,000. Before I wrap up, I’d like to highlight that Louis Roth has been elected to our board of directors. A Louisiana native, Louis brings extensive investment experience from his years of work at Barrow Hanley, historically one of our largest active investors.

At Barrow Hanley, he worked as their lead equity portfolio manager and also served on the executive committee. Combined with his prior work experience, Lewis’ tremendous familiarity with utilities as well as industrial companies, many of which are part of our customer base. We are very excited to have Lewis join our board. It’s been an exciting quarter and continue to make progress on creating value for our customers, communities, employees, and owners. Our teams are working very hard to foster community and economic growth and customer growth in our state while also delivering on commitments made to improve resilience and reliability.

I’ll now turn the call over to Kimberly who will review our financial results for the quarter.

: Thank you, Drew. Good morning, everyone. Today, I will review our financial results for the quarter, our capital plan update and our guidance and outlook. I will also cover effects from the final budget reconciliation bill. Starting with earnings, our adjusted EPS for the quarter was 1.5 This result keeps us firmly on track for our guidance for the year.

Adjusted EPS is shown on Slide five. Primary drivers were the net effect of investments made for our customers, higher retail sales volume and higher other income. These increases were partially offset by higher other O and M consistent with the estimate we provided last quarter and higher MISO capacity cost at Entergy Texas, which are currently recovered in base rates. New legislation allows those costs to be recovered through a rider beginning in 2026. Earnings contribution from retail sales volume was positive despite weather being milder than second quarter of last year.

Weather adjusted retail sales growth for the quarter was very strong at four and a half percent. Industrial sales were the largest contributor with close to 12% growth, primarily from new and expansion customers that continue to ramp up their operations. Slide six summarizes our credit ratings and affirms that our credit metric outlooks remain better than agency thresholds. Over the past several years, we have strengthened our balance sheet to support our operations and the growth opportunity before us. Our liquidity as of June 30 is very strong, including $2,300,000,000 of unsettled equity forwards, which are available if needed.

Turning to tax credits. With the passage of the most recent budget reconciliation bill, we now have better clarity on renewable tax credits, and we have adjusted our cash flow forecast accordingly. Our forecast includes updates to the timing of monetization of investment tax credits associated with projects that we expect to safe harbor. The changes include shifting our expected tax credits out one year. We now have approximately $175,000,000 of cash benefit in 2028 and additional cash benefits beyond our outlook period.

We continue to monitor for treasury guidance that could affect these cash flows. As you may recall, we previously had not included the cash benefits from nuclear PTCs in our forecast. However, based on our current analysis, in the quarter, we recorded nuclear tax credits of approximately $570,000,000 across our five nuclear units. We treated the recognition of these credits as an uncertain tax position, pending either guidance from the treasury department on the calculation or final determination on audit. We expect to monetize the nuclear PTCs and receive the cash benefit later this year.

We are working with our regulators on how and over what time period we provide this benefit to customers. As you can see from the chart on slide seven, the nuclear PTCs are highly dependent on the average revenue per megawatt hour, which includes both capacity and energy revenues, and therefore, we are not counting on these credits for future years in our outlooks. Our credit outlooks provided include these changes, and our estimated Moody’s metric continues to grow to 15% over the forecast period. As Drew noted and as shown on slide eight, we are increasing our four year capital plan by $3,000,000,000, including new renewables and battery storage to meet customer needs. We’re also providing updates on retail sales growth, rate base, credit metrics, and operating cash flow, as well as operating company capital plans in the appendix of our presentation.

As you can see on slide nine, our equity needs are unchanged despite the higher capital investment. Higher operating cash flow, monetization of nuclear PTCs and utilization of Arkansas’ new infrastructure rider, allows us to maintain our financial metrics and current equity needs. As a reminder, we’ve contracted approximately two thirds of our equity needs through 2028. In the second quarter, we settled approximately $800,000,000 of equity forwards or about 15,600,000.0 shares, and we are using those funds to continue to invest for our customers. As shown on slide 10, we are affirming our adjusted EPS guidance and updating our longer term outlooks.

For 2025, we’re firmly on track. Positive year to date results allow us to flex other O and M to manage the business. Looking ahead to the third quarter, we expect other O and M to be roughly 5¢ higher than the third quarter of last year, partly due to the timing of vegetation maintenance and non nuclear plant outages. And we expect Entergy Texas to have higher MISO capacity costs in July and August, totaling approximately 6¢. We remain confident that we will deliver on our 2025 guidance.

Looking past 2025 at our longer term outlooks, we continue to see growth as evidenced by our higher capital plan. Our adjusted EPS for 2026 remains unchanged, and we are increasing 2027 by 5¢ and 2028 by 10¢ while maintaining strong credit metrics throughout the forecast period. Our results in the first half of this year have been solid, and we are once again raising our capital plan to support our growing customer needs. We still have significant opportunities before us, and we remain well positioned to execute and deliver successful outcomes. And now the Entergy team is available for questions.

Greg, Conference Operator: Thanks, Kimberly. And, again, at this time, I would like to remind everyone, in order to ask a question, press star then the number one on your

: you.

Greg, Conference Operator: All right. It looks like our first question today comes from the line of Jeremy Tonet with JPMorgan. Jeremy, please go ahead.

Jeremy Tonet, Analyst, JPMorgan: Hi, good morning.

Drew Marsh, Chair and CEO, Entergy Corporation: Good morning.

Jeremy Tonet, Analyst, JPMorgan: Exciting update there. A lot of interest in this new Arkansas customer and appreciate somewhat limited in what you could say at this point, but just wondering if there’s any color you could share with regards to the industry of the customer or even the ramp? And so it seems like not a lot of, change to sales growth through ’28, but just curious any shades of color you could provide in the post ’28 ramp with that with that might look like.

Drew Marsh, Chair and CEO, Entergy Corporation: Yeah. Well, I think I don’t think we can talk specifically about the customer, or any customers, I guess. It’s it’s yeah. We consistent with where we’ve been, Jeremy, in our previous, announcements, Yeah. We are we are sticking with, you know, the filings, and the filings should be out in the next two to three weeks, is is where we’re aiming, and and that’ll have a lot of the, you know, the kind of detail, I think, that you would be looking forward to that question.

Jeremy Tonet, Analyst, JPMorgan: Got it. Makes sense there. And I just want to pivot, I guess, to the the gas generation, you know, picture that you have there. And I think you referenced seven gigawatts of gas generation available for new load. Is this after the Arkansas project, or some of this be dedicated to Arkansas?

Just trying to understand how that falls out.

Drew Marsh, Chair and CEO, Entergy Corporation: So that is related to projects that we have not announced to date or that you aren’t aware of. So, you know, if you think about the projects that are out there, yeah, we have three projects in Texas, two in Arkansas, three in Louisiana, two in Mississippi. And then I think there’s one more that’s in our capital plan that isn’t publicly announced. So the seven gigawatts would be other projects beyond those, that are not in our capital plan, but are but are out there, and available for us to to serve new customer growth, that we anticipate will be an opportunity for us going forward given our strong pipeline.

Jeremy Tonet, Analyst, JPMorgan: Got it. Makes sense. We’ll wait for more details. Thank you very much.

Drew Marsh, Chair and CEO, Entergy Corporation: Thanks, Jeremy.

Greg, Conference Operator: Thank you, Jeremy. And our next question comes from the line of Nicholas Campanella with Barclays. Nick, please go ahead.

Nicholas Campanella, Analyst, Barclays: Hey, good morning. Thanks for all the updates. A lot of stuff here. So yeah. Just wanted to ask just you talked about Meta a little bit in the prepared remarks.

Have you already started the regulatory approval process for the upsizing of Hyperion to the five gigs like they’ve been talking about, or is that still on the comp?

Drew Marsh, Chair and CEO, Entergy Corporation: We haven’t started any process, and we couldn’t comment on that anyway. You’d have to ask Meta on their exact plans. You know, the the filings that we have are related to the to the previous announcements that we’ve already made starting last fall. So that’s that’s where we sit overall today. We are excited that Meta is talking publicly about, the potential for expansion at that Hyperion site.

That’s one of the reasons why they chose that site. And so we’re excited to hear and not just us. I’m sure Richland Parish is excited to hear that. State of Louisiana is excited to hear that. But, you know, we we don’t have anything else to say about the potential for expansion today.

Nicholas Campanella, Analyst, Barclays: Okay. No. I appreciate that. Thank you. And then just on the new nuclear side, outside of the up rates, you know, I know you said no major updates, but just has the conversation pulled back a little, or where where would you kinda put that now or frame that now if you had to kinda mark to market it?

And, like, what is the ideal framework in your mind if you were to kind of move forward with this? Are you, expecting a hyperscaler or a large load customer to take on construction risks before this could be transferred to rate base? Or just how do you kind of think about the ability to grow this generation while keeping the risk profile acceptable to, the various constituents? Thanks.

Drew Marsh, Chair and CEO, Entergy Corporation: So that’s a great question, Nick. I mean, the way that we’re thinking about it is that our operating companies aren’t big enough to take on the kind of risk that that, you know, may occur during construction of the nuclear units. And so we are looking for ways to to manage that risk. It could be in part from the customers, but the customers don’t wanna take on a whole lot of uncertainty either. So we’re we’re working through that.

You know, there’s a potential for state or vendor or federal support to help with the the risk profile there. There’s even, some conversations that we’ve been a part of about, sovereign funds and others, you know, picking up some of those risks. But that’s yeah. You get the idea that you need a really large balance sheet, in order to make that happen. And there are people that are thinking about it, and so we’re working through those conversations, but it’s taken a while to to put it all together.

Julien Dumoulin Smith, Analyst: Understood. Thank you so much.

Drew Marsh, Chair and CEO, Entergy Corporation: Thank you.

Greg, Conference Operator: Thanks, Nick. And our next question comes from the line of Julien Dumoulin Smith. Julien, please go ahead.

Julien Dumoulin Smith, Analyst: Hey, thanks, Robert. Thank you, team. Nicely done again. Maybe to follow-up on the earlier question Jeremy was kind of posing to you. I mean, it seems like you have these 15 combined cycles and two CTs secured with with deposits, it seems, versus what’s in the plan.

Maybe to press a little bit further, there’s there’s upside outside of the plan that you’re alluding to, but it seems like you guys have made tangible actions. So if you can elaborate maybe as best you understand and see it from your customers, the timing and magnitude of some of these opportunities. It does seem as if you’re certainly advanced, and I appreciate why it would be advanced considering the commercial needs of your customers to act decisively. But I’d I’d love to hear how you think about this coming together, if you will.

Drew Marsh, Chair and CEO, Entergy Corporation: Well, I mean, the timing of that would be such that we would have plans online with that additional I mean, the eight gigawatts of of it of the 15 is very clear. That’s in our capital plan. You can see that. The additional seven gigawatts would be for COD between ’29 and ’31, and that’s consistent with the disclosures that we’d previously made. The turbine deliveries themselves would be a little bit before that, and then the plants would come online, you know, nine to twelve months after the turbine deliveries.

So that’s that sort of gives you a framework for what we’re talking about. So you could see incremental capital should all this stuff come together as we are are aiming for near the back end of our forecast period.

Julien Dumoulin Smith, Analyst: Excellent. And and just to reconcile, and I know you guys are updating here on the the nuclear PTC benefits and that seems to go hand in glove with some of the updates you’re providing here. How do you think about that fitting into the financing plan? If you can speak to it, not just in terms of what you’re recognizing here with the $570,000,000 but writ large across the opportunity of the PTCs, how that fits into you know, the the pie chart that you show about equity needs.

: Yeah. Good morning, Jolene. It’s it’s Kimberly. As you know, we have worked to use a variety of ways in order to manage the equity that we need. And as we add capital, we would look to do the same thing.

So we’ve done that through incrementing cash flows, through mechanisms that, for example, throw cash out during construction that actually save cost from for customers over the longer run, but also support our credit in that period. We’ve done that with customer support as they ramp up, and there are a variety of ways that we’ve done that. But we will continue to look to do that and manage our equity needs, but we’ll evaluate each of the finances as we add capital and see what we need to do there. Our plan does continue for what we have here to target that same 10 to 15% run rate that we’ve had for the last couple of years.

Steve Fleishman, Analyst, Wolfe Research: Got it. Yep.

Julien Dumoulin Smith, Analyst: Understood. Alright. Well, I’ll look. I’ll leave it there. Nicely done.

Congrats again. Incredible. Looking forward to more.

Drew Marsh, Chair and CEO, Entergy Corporation: Excellent. Thanks, Julien.

Greg, Conference Operator: Yes. Thank you, Julien. And our next question comes from the line of Bill Apicelli with UBS. Bill, please go ahead.

: Hi. Good morning. Just following up on that equity needs question. I mean, as we think through the updates today and the CapEx increase with no additional equity, I mean, how much additional headroom would you say you have before you would need to contemplate issuing equity in terms of, like, the capital the CapEx upside?

: Yeah. Good morning, Bill. Again, I would we have assumed in the base plan that run rate that I referenced about 10 to 15%. And and any additional capital that we would increment, we would look at what that means relative to the cash flows that’s thrown off, any other mechanisms, and then what that equity need is. So I think about it less as, you know, what specific room and more about that’s the framework and how we think about our equity, and we’ll continue to think about it that way.

: Okay. And then and then on the, you know, the tariff structure in Arkansas, for the new large load customer, Marie, maybe you could speak to that, the structure of that relative to other customers and the tariffs work in Louisiana. Maybe just any color there in terms of, you know, you spoke to the the favorable mechanisms in Arkansas.

: Yeah. We won’t speak specifically to customers. But as it relates to the infrastructure rider, that may be what you’re asking about. They Arkansas legislation did issue, legislation around a new infrastructure rider that provides for timely recovery of large transmission and generation. It provides for good credit support during the period, and it also enables Arkansas to continue to grow from an economic development perspective beyond its 4% cap.

So really nice mechanism there for all parties as we as we think about how to use that.

: Okay. Great. And and then just on the you mentioned on nuclear, but specific to the up rates, just remind us if there’s anything in the plan for that, and and what would be the magnitude of terms of megawatts or CapEx opportunity associated with the upgrades?

: Yeah. The Waterford upgrade is not significant capital dollars, and those capital are you can assume those are in the forecast.

: Okay. But anything be you know, in terms of beyond that, I mean, what is sort of the opportunity set that’s that’s out there?

: Yeah. As we said, each of those upgrades needs to stand alone from a business case perspective. And to the extent that they are some are more expensive than others and to the extent that there are significant capital investments. If the decision is made to move forward, there could be some incremental capital there.

Drew Marsh, Chair and CEO, Entergy Corporation: Yeah. And add to that, Bill, that we are talking with potential customers about, those upgrades, and so we would be looking for customer support, for them, as we go forward, at the same time.

: Alright. Great. Thanks very much.

David Arcaro, Analyst, Morgan Stanley: Thank you.

Greg, Conference Operator: Thank you, Bill. And our next question comes from the line of David Arcaro from Morgan Stanley. David, please go ahead.

David Arcaro, Analyst, Morgan Stanley: Hey, thanks so much. Good morning. I was wondering if you could elaborate on what boosted the cash flow, the operating cash flow outlook, cumulatively through 2028. Was that all the Arkansas rider and the, nuclear PTC, one year of that?

: Yes, David. Those are the primary drivers is riders or mechanisms that enable good credit support in the construction period, and then obviously the large, nuclear credits that were earned in ’24 and we expect to monetize this year. Those are the the two primary drivers.

David Arcaro, Analyst, Morgan Stanley: Okay. Great. Thanks. And then, maybe just looking ahead a little bit in Arkansas as you think about the next rate case filing, would you anticipate major changes at this point in terms of what you’d be requesting for the next kind of iteration of formula rate plans? Any reflection on the current plan and how it’s worked?

And if anything major needs to

Drew Marsh, Chair and CEO, Entergy Corporation: be changed looking ahead? Thanks. Yeah. So we are, you know, we are starting to gear up for that. I don’t think we’re in a spot to to start talking about it just yet.

The teams are thinking through, you know, what our needs are going to be moving forward. But I will say, you know, generally, you know, formula rate plan that we have in Arkansas has been pretty successful. And so we’ve been yeah. And then these latest, legislative changes that, support economic growth, have really helped us out in ways that weren’t really contemplated in the original order. But I think those are the those are probably the starting points for us.

A pretty good mechanism to begin with is forward looking. And then the component that we’ve recently added through legislation to support economic development within the state. So but more to come on that one.

David Arcaro, Analyst, Morgan Stanley: Okay. Understood. Thank you.

Drew Marsh, Chair and CEO, Entergy Corporation: Thank you.

Greg, Conference Operator: Thanks, David. And our next question comes from the line of Ross Fowler with Bank of America. Ross, please go ahead.

David Arcaro, Analyst, Morgan Stanley: Good morning, Drew. Good morning, Kim.

Julien Dumoulin Smith, Analyst: Drew, you highlighted a lot of

David Arcaro, Analyst, Morgan Stanley: transmission CapEx in the plan, and that’s moving through that MISO MTAB process. Can you remind us what the next phase of that process is? And would we get updates on that? Kind of some color around what the CapEx upside could be there?

Drew Marsh, Chair and CEO, Entergy Corporation: Well, the next submittal will be this fall, and so we probably have, some updates on what we put in at that point. I think there’s there’s probably an approval coming up, but I don’t have that timing off the top of my head, from previous, from previous, filings. But, our next submittal would probably be this fall.

David Arcaro, Analyst, Morgan Stanley: K. Perfect. And then following on to Nick’s earlier question a little bit, the meta approval process in Louisiana, you’re expecting that decision to come in October. As we look to not necessarily Hyperion, although that would be great if that’s out there, but as you look to other large loan opportunities in the state, Can you kind of just contextualize, give us some color around what were, from your perspective, the main intervener concerns through that process?

Drew Marsh, Chair and CEO, Entergy Corporation: Yeah. The main intervener concerns are are the the traditional ones. Right? What are the impacts on customer bills, and are there gonna be reliability impacts or resilience impacts associated with that? You know, when we look at, the meta project, and I and I made these comments in my earlier remarks, you know, we see strong benefits for existing customers, that come from a number of different places.

First of all, just from a cost perspective, you know, these are standard tariffs, so they’re picking up a big chunk of costs that our existing customers would always already otherwise pick up, you know, costs associated with storms, costs associated with some of the MTEP transmission that I was talking about, costs associated with overheads. Those things are going to be helpful for our existing customers. And then the other thing that I wanted to make sure that that that we were pointing out, was the resilience benefits, that come from the, the building of these new assets. You know, particularly, you know, we talked about the CTECs, and the Babbel to Weber lines. That’s a 500 kV system that basically is gonna come from the North Side Of Baton Rouge across Louisiana into Texas and then basically down into the North Side Of Houston, the Conroe area.

And that, is a big line, 500 k v, so it can carry a lot of capacity. It’s gonna be built to modern standards. It’s going to loop all the transmission that’s along the coast, that’s traditionally been, you know, pretty, exposed to hurricanes, and will give a a very it’ll create a very robust grid, for our customers along the Gulf Coast. So we’re excited to get that, and it’s a really big benefit for our existing customers. But those are the those are the kinds of questions that, you know, our customers been asking, in in in the regulatory processes, pretty much across the board.

David Arcaro, Analyst, Morgan Stanley: K. Thanks, Drew, for that. Really appreciate it. Other thing. Okay.

Go just add one

Drew Marsh, Chair and CEO, Entergy Corporation: one more thing to that, Ross. The you know, in our various regulatory approval processes, no one is disputing the need for new capacity or really the need for new transmission. The in the transmission space, you know, the converse the risk or it’s not even a risk. The conversation is around, what’s the best route to pick? That’s where the that’s what most of the conversation has been about.

In the generation space, it’s about who is actually picking up the cost and what are the benefits associated with that investment. So, you know, there’s there is strong agreement that these assets are needed. It’s more of a question around, yeah, how we’re gonna manage them, where they’re go. Those are the those are the primary questions.

David Arcaro, Analyst, Morgan Stanley: But more about the how and the where than the than the what we need.

Drew Marsh, Chair and CEO, Entergy Corporation: Yes.

David Arcaro, Analyst, Morgan Stanley: Thank you. Very much appreciate it. Thank you.

Greg, Conference Operator: All right. Thank you, Ross. And our next question comes from the line of Steve Fleishman with Wolfe Research. Steve, please go ahead.

Steve Fleishman, Analyst, Wolfe Research: Yes. Hey, good morning. Thanks for the updates. So just could you Drew, you went quickly through the changes on the storm recovery, and I guess, particularly the Louisiana. Could could you just kind of go through that again quick?

And and also just is it something that the, you know, rating agencies have said anything on in terms of kind of further risk reduction?

Drew Marsh, Chair and CEO, Entergy Corporation: I’ll defer the question about rating agencies to Kimberly. But the in terms of the things that that in Louisiana, so I think it was maybe last month of the month before, there was an order from the bench that did not go through a regular process. We have a we have a a request out there for regular through sort of regular order to consider a long term solution for more rapid securitization. But from the bench to get it in front of 2025, they created a mechanism that would allow us to recover our securitization costs more quickly. And the mechanism, will allow us to submit, estimated costs, for securitization, in, prior to, or in a meeting, make a filing, and then the filing would be considered by the commission at the subsequent meeting.

So very fast turnaround is what the expectation is. And and the point of that is to create benefits for customers because that reduces the carrying costs for our customers because the full weighted average cost of capital would not be, the carrying cost anymore. It would be the securitization rate, which, of course, is a triple a rate, which is gonna be a much lower rate. And then, the other benefits, that I mentioned, were the potential for a lower cost of capital because the agencies should see that as very positive. And then lastly, you know, we have a lot of vendors, you know, particularly for a large storm, that may be concerned about, the credit worthiness of the company.

But this should give them a lot of confidence, that the company is gonna be able to stand behind, whatever the storm costs are. So I’ll turn it over to Kimberly. She can comment about the credit piece.

: Yeah. As we talked to the rating agencies about the improvements in the financial space regarding storms, they view that as very positive in the ability to return that cash quicker, much quicker than what we have had previously. So positive outlook there.

Drew Marsh, Chair and CEO, Entergy Corporation: That’s also help us with our credit metrics too. Because, you know, as you know, Steve, historically, when we’ve had a very long time between the time of the storm and the time of the securitization, you know, our credit metrics will dip, and this should shorten that quite a bit.

Steve Fleishman, Analyst, Wolfe Research: Great. And then one other question just on the gas build. I mean, you’re probably going to be the largest builder of new gas plants late this decade. So just aside in addition to the turbines that you’ve locked up, how are you feeling about the EPC and and just overall ability to get all these projects done on time and budget?

Drew Marsh, Chair and CEO, Entergy Corporation: Yeah. That’s a great that’s a great question, Steve. So we’ve been working hard to be prepared for that, a couple of things that we’ve done, certainly, we have strong relationships with EPCs, and we have a lot of actual working experience with them given the building that we did have done recently with the j Wayne Leonard plant, Lake Charles plant, the Montgomery County plant. And, of course, the Orange County project is under construction right now, expected to be online, hopefully, next spring, certainly before next summer. And, so we have a lot of good existing relationships.

We have a lot of working experience on getting this stuff built and online, so we’re leveraging that. We are also utilizing a simpler standard design. So we’re using you know, we were building two on one stations. We simplified it to one on one. We’re using Mitsubishi’s larger turbines, which allows us to do that.

So there are probably more projects, but they’re easier to build. And so we expect to as we go through, we expect to learn more, and pick up speed and find ways to lower cost, at the same time. And then the last piece I’ll mention is, you know, we are working hard through the supply chain. So we have access to other critical equipment, you know, things like transformers, large high voltage breakers, and other piece of equipment that are critical for us to maintain our timelines. So we have line of sight on all of that.

The things that we don’t have 100% locked up generally are available to us in in many different ways. So we have confidence that we’ll be able to get that done. So those are those are just a few of the things that we’re thinking about. But, you know, we we have confidence that we can manage through making all this happen.

Steve Fleishman, Analyst, Wolfe Research: Great. Thank you.

Drew Marsh, Chair and CEO, Entergy Corporation: Thank you.

Greg, Conference Operator: Thank you, Steve. And our next question comes from the line of Sophie Karp with KeyBanc Capital Markets. Sophie, please go ahead.

0: Hi, good morning. Thank you for taking my question and congrats on a great update here. My question is about store I guess, how storms and data center customers are going to coexist in your territory. And clearly, that doesn’t seem to be a huge concern for them because customers are willing to, you know, come into your territory. But is there an incremental opportunity for you to address here?

Because presumably they would need, very low level power. Right? Maybe. Or are they interruptible? Maybe.

Like, how how do you think about it? How do your customers think about that? Is there an incremental opportunity for storm hardening or some backup, generation that you might be providing for them?

Drew Marsh, Chair and CEO, Entergy Corporation: Thanks. Thanks, Sophie, and good morning to you as well. Yeah. It’s a great question. I think the the customers themselves start by locating further away from the coast.

So where where these data center customers are showing up And, you know, we have two examples at this point, Meta and Amazon in Mississippi. They’re further away from the coast. So, you know, the the Meta project is in Northeast Louisiana, and, the Amazon projects on the North Side Of Jackson, Mississippi, you know, on in two locations. And so they are they are further away from the coast. And then, of course, we’re building a generation to support them, which is further away from the coast as well, along with, some of these 500 KB lines that we’re talking about, which are further away from the coast.

I gave you the example of the the CTECs and the Babble to Weber line. Those are further away from the coast. So that’s really the the strategy right now. It’s to to use modern and more, you know, I guess, modernized equipment that is built to the more stringent standards that we have for storms and and wind loadings and things like that, and to build it just simply further away from the coast where the risk is gonna be reduced.

0: Got it. Thank you. That’s all for me. Thank you.

Greg, Conference Operator: All right. Thank you, Sophie. And our next question comes from the line of Anthony Cradell with Mizuho. Anthony, please go ahead.

1: Hey, good morning, Drew. I just have a follow-up from Nick’s question, probably very easy. I think Nick had asked about like a new nuclear deal and you mentioned the importance of a bigger balance sheet. You threw out maybe a state solution, a federal solution or maybe the hyperscale or even sovereign wealth. If you had to pick of those options or the options you spoke about, which one’s in the lead or which one do you think is more likely to go ahead with a new nuclear deal?

Like, what builds the next nuclear plant in your jurisdictions?

Drew Marsh, Chair and CEO, Entergy Corporation: You know, I I wish I knew I could give you a good answer for that. We are talking with with, all of the above on that stuff. But, yeah, I do not have, one that I would lean on at this point. We’re looking for one of them to come through for us is is basically the the conversations that we’re having. But they’re they’re we’re, you know, we’re stretching the boundaries in order to see if we can find somebody that can step up to help us with that particular risk, by bringing in other, you know, kinds of of folks that have the kind of balance sheet that we would need to make sure that this happens.

But we haven’t cracked the nut yet. So I don’t have a good answer for you, Anthony. We’re still working on it.

1: Great. That’s all I had. Nice quarter. Thanks for taking my question.

Drew Marsh, Chair and CEO, Entergy Corporation: Thank you.

Greg, Conference Operator: Yes. Thank you. And our next question comes from the line of Angie Storozynski from Seaport Research Partners. Angie, please go ahead.

2: Thank you. So I have two questions. One about, residential sales being weak, weather normal weather normalized residential sales being weak this quarter and basically flattish year to date despite some uptick in the customer account count. And I’m just wondering if, you know, we’re seeing this from other companies as well. You know, the the residential sales typically have a higher margin.

And so I’m just asking, you know, is it a weakening economy? Do you incorporate that in your future earnings trajectory? And then secondly, just wondering, we’re seeing this inflation in the cost of newbuild for gas plants. You have this you know, basically, you know, framework of an agreement for the equipment, supplier for the equipment supplier, and I’m just wondering how you’re managing the cost and its reflection in any future data center deals. Thank you.

: Good morning, Angie. I’ll start with your residential sales question. You may recall in the first quarter, our residential sales were really strong. And when we saw that, we looked at how those came out over the course of the year, and what you’ve seen is a little bit of of that coming back a little softer in the second quarter. But over the full year, we’re about flat.

So I think you’re just seeing some volatility in the data, not a real pattern. Nothing that we have baked in or expect to see over the long term. So you’re just seeing some some some variances month over month, that isn’t that isn’t an indicator of an overall weakness. As it relates to inflation on the cost of new build, we certainly have continued to work to manage the cost of increases related to, all of our all of our investments. We have a lot of continuous improvement efforts both on the capital and on the O and M side to try to manage those cost.

And we have mechanisms within various contracts that enable us to manage those costs. It depends by customer, but, obviously, we are very focused on affordability for our customers and working to manage the overall cost, and we continue to be quite competitive on our new build cost relative to what you’re seeing as sort of the industry estimates.

2: Great. And just one one quick follow-up. I’m just looking at the rerating of your stock and how it should have impacted your dilution math and your growth rate. And I’m just wondering if you’ve already captured it in this updated plan for the EPS growth, the fact that you’re basically issuing equity at a at a much higher price than likely initially anticipated.

: Well, Angie, as you know, we’ve sold forward into 2027. So we’ve got what we what our forward contracts are assumed and then what we need in ’27 and ’28. We have a price assumption. But certainly to the extent that the price moves in a positive direction, that’s helpful relative to dilution on an ongoing basis.

Liz Hunter, Vice President of Investor Relations, Entergy Corporation: Great. Thank you.

Greg, Conference Operator: Alright. Thank you, Angie. And our final question today comes from the line of Paul Patterson with Glenrock Associates. Paul, please go ahead. Hey.

Drew Marsh, Chair and CEO, Entergy Corporation: Good morning, Paul.

3: Good morning. Just following up on your comments about safe harboring and and the way the bill is currently constructed. And just on the July 7 executive order, have you guys had any sense as to what we might see coming out of that? And if you have, could you share it with us? And also, what how do you how do you think about any potential changes that the executive order might cause?

How are you guys managing that, or how are you how are you thinking about that in terms of going forward and interactivity?

: We’re certainly engaged, Paul, with our with our industry partners and and other other companies around understanding what could come out, but I don’t have any specific insights that I can share on that. As far as safe harboring, we have worked within the existing rules to do the what we need on the projects in order to safe harbor those. If the executive order and the outcome of that changes that, we’ll obviously need to make adjustments, but we’ll have to see what those are specifically. But we’ve been working for the last couple of months to make sure that we could meet as much of our renewables could be safe harbored as possible under the rules that we have, and we continue to to watch for what else may change there. And we’ll adjust as we need to, Paul.

3: Okay. Great. Thanks a lot.

Drew Marsh, Chair and CEO, Entergy Corporation: Thank you.

Greg, Conference Operator: Thank you, Paul. And that does conclude our Q and A session today. So at this time, I will turn the call back over to Liz. Liz?

Liz Hunter, Vice President of Investor Relations, Entergy Corporation: Thank you, Greg, and thanks to everyone for participating this morning. Our quarterly report on Form 10 Q is due to the SEC on August 11 and provides more details and disclosures about our financial statements. Events that occur prior to the date of our 10 Q filing that provide additional evidence of conditions that existed at the date of the balance sheet would be reflected in our financial statements in accordance with generally accepted accounting principles. Also, as a reminder, we maintain a web page as part of Entergy’s investor relations website called regulatory and other information, which provides key updates of regulatory proceedings and important milestones on our strategic execution. While some of this information may be considered material information, you should not rely exclusively on this page for all relevant company information.

And this concludes our call. Thank you very much.

Greg, Conference Operator: Thanks, Liz. And again, this concludes today’s conference call. You may now disconnect.

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