Evergy, Inc. Q4 2025 Earnings Call Summary

Evergy, Inc. Q4 2025 Earnings Call Summary Moby Intelligence Fri, February 20, 2026 at 5:32 AM GMT+8 3 min read In this article:

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Evergy, Inc. Q4 2025 Earnings Call Summary - Moby

Strategic Performance and Market Dynamics

• Management is pivoting to a high-growth phase, raising long-term EPS targets to 6% to 8% plus through 2030, fueled by a 20% increase in total peak system demand from four new data center projects.

• The 2025 financial performance fell short of guidance due to uncontrollable factors, specifically unfavorable weather patterns and weak industrial demand, which management could not fully offset despite cost mitigation efforts.

• The newly approved Large Load Power Service (LLPS) tariffs in Kansas and Missouri serve as the strategic backbone for growth, ensuring new large customers pay a 15% to 20% premium demand rate to protect existing customer affordability.

• Operational excellence was highlighted by achieving the strongest reliability results (SAIDI) in company history. Separately, management noted that data centers help attract high-tech sectors such as advanced manufacturing, healthcare, and finance due to their focus on automation and low latency.

• Strategic positioning is bolstered by a 'all of the above' generation strategy, with 2,200 megawatts of new gas and solar projects approved to meet rising demand and regional reserve requirements.

• Management attributes the region's attractiveness to a 4.9% cumulative rate change since 2017, significantly lower than the 19% regional peer average and 29% inflation over the same period.

Growth Outlook and Capital Strategy

• EPS growth is expected to accelerate to over 8% annually starting in 2028 as data center loads ramp up and large-scale infrastructure investments enter the rate base.

• The $21.6 billion five-year capital plan represents a 24% increase over previous estimates, primarily driven by $3.4 billion in new generation needed for load growth and SPP reserve margins.

• Retail load growth is projected at a 6% CAGR through 2030, a massive shift from the historical 0.5% to 1% range, providing high visibility into future earnings and cash flow.

• Management assumes a 50% to 60% dividend payout ratio target by the latter half of the plan to retain more earnings for capital funding and reduce external equity needs.

• Guidance for 2026 assumes a return to normal weather and a 3% to 4% increase in weather-normalized retail sales, supported by the Panasonic facility and initial data center ramps.

Risk Factors and Structural Adjustments

• Minimum bill provisions in the LLPS tariffs require customers to pay for at least 80% of contracted capacity regardless of actual usage, acting as a critical hedge against load volatility.

• Missouri West customers may face rate increases above inflation over the next five years due to the urgent need for new dispatchable baseload generation infrastructure.

• The financing plan includes $3.3 billion in total common equity needs through 2029, though management currently projects zero equity issuance in 2030 as operational cash flow improves.

• Termination fees for large load customers are structured to cover remaining minimum monthly bills for the full contract term, mitigating the risk of stranded assets if a project is cancelled.

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Q&A Session Insights

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Sustainability of zero equity issuance in 2030 and beyond

• Management clarified that while 2030 currently shows no equity need due to robust FFO growth, this could change if additional 'upside' capital opportunities from the 10GW+ pipeline are realized.

• The 14% FFO-to-debt target is viewed as an average that will strengthen in the final years of the plan as contracted cash flows from data centers reach steady states.

Confidence in 2026 industrial load recovery after 2025 weakness

• Management has already embedded recent industrial weakness into the 2026 model to ensure guidance is conservative and achievable.

• Early 2026 data shows strong performance, and the Panasonic facility is expected to ramp up significantly with two new production lines starting this year.

Timeline and scale of the next large customer agreement

• Management explicitly stated they expect to execute 'at least one more' sizable Large Load Power Service (LLPS) agreement in 2026.

• This potential agreement is not currently included in the 6% to 8% plus growth outlook or the 6% load growth CAGR, representing pure upside to the current plan.

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