Entergy Corporation (ETR) Earnings

Management highlights

### Strategic Growth and Data Center Development - The company’s customer-centric growth strategy is driven by strong macro demand, with technology (hyperscale data centers) as the largest contributor to demand growth in the 5-year plan, paired with robust demand from traditional industrial segments. - The company has 7 to 12 gigawatts of hyperscale data center potential in its pipeline, plus 3 to 5 gigawatts of interest from traditional industrial segments, with project interest growing further following the recent Investor Day. - The Fair Share Plus pledge requires data centers to pay full cost to serve and their fair share of fixed costs, delivering an expected $7 billion in customer bill benefits to date, plus additional economic development, community support, and grid resilience improvements for host communities. - Louisiana’s recent executive order requires all new data centers to meet customer benefit, grid resilience, and transparency standards to qualify for state sales tax exemptions, aligned with EnterG’s Fair Share Plus pledge, with Meta’s Richland Parish investment held out as a compliant model. ### Grid Resilience and Reliability - Two minor tropical storms impacted the service area year-to-date, with nominal restoration costs and no need for special cost recovery, reflecting strong preparation efforts. - The St. Bernard Parish, Louisiana resilience project will upgrade or replace approximately 640 distribution and transmission poles engineered to withstand 150 mph wind speeds as part of the Phase I Accelerated Resilience Program. - The self-healing network program now serves over 500,000 customers via 400 operational networks, avoiding more than 700,000 customer interruptions and 80 million outage minutes since 2021. - The company plans to file for a smaller intermediate Phase 1A accelerated resilience program in Q3 2026 to continue improvements, retain workforce continuity, and manage customer affordability between the current program and the next full phase. - EnterG Texas closed on a $200 million Texas Energy Fund grant (no customer cost) for resilience upgrades, bringing the total accelerated resilience plan to $337 million. ### Nuclear Operations - Riverbend Station marked 40 years of providing clean, reliable power to Louisiana. - EnterG’s nuclear team won 4 top Nuclear Energy Institute Innovative Practice Awards this year, with innovations expected to deliver operational and affordability benefits that can be scaled across the company’s nuclear fleet. - A first-of-a-kind reactor vessel head replacement was completed ahead of schedule during the recent ANO refueling outage, supporting the plant’s long-term operations. ### Regulatory Updates - Entergy Texas updated its Distribution Cost Recovery Factor and secured approval for its first capacity cost recovery rider, aligned with modernized 2025 state legislation matching other jurisdictions’ frameworks. - Entergy Arkansas implemented new rates for the Generating Arkansas Jobs Act rider supporting large in-state investments, and filed a 2025 FRP historical netting adjustment that delivers a customer rate reduction offsetting part of the base rate case impact (expected to be less than 1% for residential customers). - Entergy Mississippi’s 2025 annual FRP filing was approved with no rate change; Entergy Louisiana and Entergy New Orleans filed annual FRPs (expected to take effect in September 2026) and requested FRP extensions (1 year for Louisiana, 4 years for New Orleans). ### Community and Economic Development - The four-state Gulf South service corridor is experiencing a strong manufacturing and construction boom, with GDP, non-farm payrolls at 20-year highs, and population growth reversing prior declines in Louisiana and Mississippi. - Data center investments have delivered tangible local benefits, including up to $50,000 teacher bonuses in Richland Parish, Louisiana from expanded tax revenue. - EnterG was named a Civic 50 honoree and the utilities sector leader for its commitment to employee volunteerism and community engagement.

Guidance

- Management affirms the 2026 adjusted EPS guidance and all outlooks through 2030 initially presented at Investor Day, and confirms the company remains firmly on track to meet 2026 targets and long-term 2026 guidance. - Q3 2026 other operating and maintenance (O&M) expense is expected to be approximately 5 to 10 cents higher year-over-year, driven by rider-recovered expenses offset by impacts of the prior year LDC sale. - Assuming normal weather in Q3, management expects the majority of 2026 year-over-year earnings growth to be realized in the fourth quarter due to annual flex spending timing. - Approximately 60% of the 5-year equity capital plan is already contracted, covering capital needs through 2028, with the equity plan unchanged from Investor Day.

Segment performance

The transcript does not break out separate financial performance and revenue contribution percentages for distinct product segments. It notes that overall adjusted earnings per share for the quarter was $1.03, slightly lower year-over-year due to normal weather compared to warmer weather in the prior year quarter. Excluding weather impacts, retail sales grew, driven by 10% industrial sales growth from ramp-up of new and expanded customer projects.

Risks & headwinds

- New nuclear deployment carries customer and balance sheet risk that must be fully mitigated before project launch, and the company is still working through risk allocation frameworks with stakeholders, with no firm timeline for deployment. - Local opposition (nimbyism) to data center development has emerged in pockets, including a current data center moratorium in New Orleans, which could cause project delays if stakeholder concerns are not resolved. - The Cottonwood Acquisition has timing misalignment: the full plant must be acquired at the start of 2027, ahead of full ramp-up of non-data center industrial load growth, creating potential near-term customer bill impact that the company is working to mitigate with stakeholders. - Actual results could differ materially from forward-looking statements due to a range of unforeseen factors, as disclosed in the company’s SEC filings and earnings materials.

Analyst Q&A

• Q: The analyst asks if EnterG is participating in Louisiana’s advanced nuclear deployment efforts supported by the DOE, what progress has been made on the three core requirements (state regulatory approval, federal backing, hyperscaler demand), and when an announcement might be expected. /

  A: EnterG is in active discussions with the state about new nuclear and welcomes the DOE moving the project to the next phase of development. The company’s top priority is protecting customers and maintaining the strength of operating company balance sheets from new nuclear risk. Progress is ongoing, but the company is not far enough along to commit to a firm launch timeline, which will be determined by customer-led risk mitigation milestones.

• Q: The analyst asks for an update on data center development opportunity in Mississippi, given positive stakeholder reception, and the size of the total data center opportunity in Louisiana. /

  A: EnterG has robust ongoing discussions with multiple potential data center customers in Mississippi, beyond the already announced AWS and Avio investments, and the state embraces the customer and community benefits of these projects. For Louisiana, while existing customers like Meta have expressed interest in further expansion, the overall opportunity pipeline remains very active, but the current 7 to 12 gigawatts pipeline estimate is unchanged for now.

• Q: The analyst asks if there has been an increase in data center project interest since Investor Day, and whether there are alternative structures for the Cottonwood Acquisition to reduce customer bill impacts. /

  A: Increased interest is concentrated in EnterG’s existing operating jurisdictions, and while the growth in indications of interest is significant, most are still early-stage and not formal proposals, so the probability-weighted 7 to 12 gigawatt pipeline estimate remains unchanged. Cottonwood is the most economic option to meet near-term industrial load growth in Louisiana, as new generation would be far more costly and not available until the next decade. The company is working with stakeholders to mitigate near-term customer impact from the required early acquisition timing and is confident a solution will be reached through the regulatory process.

• Q: The analyst asks how EnterG is addressing local opposition to data centers (nimbyism) across its footprint, and whether this risk could lead to project delays, cancellations, or relocations. /

  A: Pockets of concern have emerged, including a current moratorium in New Orleans, but this is typical for new large infrastructure projects. EnterG works directly with local stakeholders to address concerns and highlight shared benefits, and most communities seek out data center investment for the tax and economic opportunities. The company expects to resolve the New Orleans moratorium through collaborative engagement, and opposition risk is currently managed through proactive outreach.