Entergy Corporation Q2 FY26 Earnings Analysis

- The company expects strong sales growth, particularly from industrial customers, with a notable 15% industrial sales growth reported in Q1, exceeding the 10% guidance for the year. - Despite the strong start, full-year growth expectations remain consistent with earlier guidance, as volumes may fluctuate but are supported by minimum bills and contract structures. - Long-term growth outlook includes continued ramp-up of large customers like Meta, with significant volumes expected as new assets like CCCTs come online in 2030-2031. - The pipeline remains robust, with 7 to 12 gigawatts of potential data center load not yet included in the plan, indicating further upside beyond current forecasts. - Minimum bill arrangements ensure revenue stability even with gradual customer load ramp-up, securing incremental investments and cushioning against volume variability. - The company plans to provide updated sales forecasts through 2030 at the upcoming Investor Day.

- Entergy updates its adjusted EPS outlook, increasing from prior guidance due to strong retail sales growth, now expected at approximately 8.5% compound annual growth through 2029. - Industrial sales growth is significant, forecasted at 16%, driven by large data centers and traditional Gulf South industries. - Earnings per share increases ratably, with a $0.20 uplift in 2027 and $0.50 in 2029, reaching $6.40 in 2029. - Year-over-year adjusted EPS growth between 2028 and 2029 is expected at 12%, with similar growth anticipated for 2030. - The company continues to affirm its 2026 adjusted EPS guidance, expecting to deliver on it confidently. - New capital investments and major customer agreements, such as Meta, underpin the growth and add earnings accretion potential. - Plans to extend full outlook to 2030 will be presented at the upcoming Investor Day.

- Increased capital plan by $14 billion to about $57 billion due to a new customer agreement (Meta), primarily for 7 new combined cycle combustion turbines (CCCTs) and Battery Storage projects with in-service dates in 2030-2031. - Transmission investments related to these projects are not yet included in the plan as financing options are being worked through. - Additional renewables and River Bend nuclear upgrade investments are expected but not yet firm or included in the current plan. - Beyond the 4-year plan, there is potential for further capital related to renewables and nuclear. - Capital associated with the Meta agreement includes approximately $15 billion, with additional investments outside the 4-year horizon. - Investment in incremental solar (2,500 MW for Meta agreement and 1,500 MW in a previous agreement) and battery projects. - Plans ongoing for data center growth with a 7 to 12 GW pipeline outside the current plan. - Equity needs to support this CapEx are managed proactively, with $6.6 billion planned over 4 years, and no additional equity expected until 2027 or later.

- Entergy's equity associated with the 4-year capital plan is $6.6 billion, targeting 10% to 15% of total capital. - They have proactively contracted about 30% of their 4-year equity needs, with $1.9 billion already contracted, leaving $4.7 billion to be sourced. - Additional equity funding is not expected until late 2027 through 2029; no urgent need for equity until 2027. - The company has successfully used forward contracts and ATM programs, including a block transaction last March, to manage equity needs. - The plan includes $3 billion of hybrid instruments at the parent level. - Financing mechanisms, AFUDC during construction, and pension funding support keeping incremental equity under 20%. - No fundamental structural changes are expected to the equity funding approach despite increased capital expenditures.

- The company maintains a strong pipeline of 7 to 12 gigawatts of data center projects outside of the current plan, indicating ongoing strong demand. - The recent Meta agreement has moved from the pipeline into the formal plan, reducing the backlog accordingly. - Additional gigawatts continue to move through the pipeline, with new agreements signed, keeping the backlog refreshed. - There is approximately 1,000 megawatts of industrial customer interest in various stages, moving toward finalized agreements. - The company is actively securing equipment and working on RFPs to support this backlog. - Equipment outlook remains robust to support incremental growth beyond the current capital plan. - The backlog and pipeline refresh suggest significant upside potential beyond the committed projects.