ENTERGY CORP /DE/ Q1 FY2025 earnings call

• Financial results: Adjusted earnings per share of $0.82 for the quarter, on track for 2025 guidance. • Industrial sales growth: Robust with new customer announcements like Hyundai Motor Group, CF Industries, and Woodside. Data center pipeline remains in 5 to 10 gigawatt range. • Project progress: Orange County Advanced Power Station ~70% complete, Delta Blues advanced power station on schedule, nuclear refueling outages at River Bend and Waterford 3, and exploring capacity upgrades. • Regulatory updates: Entergy Louisiana approved capital investment recovery from Hurricane Francine, LPSC approved West Bank transmission project, and various filings and approvals in Louisiana and Texas. • Legislative matters: Arkansas and Texas legislatures passed laws to support infrastructure growth and recovery. • Tariffs: Impact on capital expenditures estimated at ~1% of $37 billion 4-year plan, manageable with supply strategies. • Leadership changes: COO Pete Norgeot retiring, Kimberly Cook-Nelson moving to COO, and John Dinelli as Chief Nuclear Officer.

No detailed breakdown of product segments' financial performance in absolute terms and revenue contribution % provided in the transcript.

• Affirmed adjusted EPS guidance for 2025, with first quarter results keeping them on track. • Second quarter O&M expected to be roughly $0.05 higher than last year due to planned power generation spending. • Confident in delivering on guidance and outlooks, with a strong start to the year and solid plan for growing customer base.

• Tariffs could impact capital expenditures, but management believes impacts are manageable with supply strategies. • Regulatory and legislative uncertainties that could affect project timelines and recoveries.

Q: Just as we're thinking about the Arkansas generation build, do you feel the state is now fully competitive on the data center front in terms of providing turnkey interconnection? Have there been any inbound thus far? Or do you need any further rate design improvement?

A: Drew Marsh states they feel Arkansas is fully competitive, talking to potential customers with interest, working down that path.

Q: Just wanted to look at the sales a little bit here. I think that your residential customer count might have been up just under 1% quarter-over-quarter. And your weather normalized sales, if I'm seeing this right, residential went up about 4.5%. Just wondering if you could talk a bit more about drivers there?

A: Kimberly Fontan says to not focus too much on quarter-over-quarter specifics, expects residential sales to be about 1% for the full year, overall sales about 5.5%, with strong sales over the year but quarter-over-quarter volatility.

Q: I was wondering if you could maybe just give -- maybe an update or a profile of your system as you're looking at some of these large load customers in the pipeline, how quickly can you offer them service to connect in -- time to power has been a focus among that cohort. So curious just what the latest is in terms of how quickly you can accommodate new large load customers?

A: Drew Marsh says they have positions in queues, but queues are full, with opportunities for customers in 2028 and 2029 timeframe.

Q: I guess, just on the sales guide for '25, you took it down a little bit. Just any -- I know it's still really good, but just any explanation for that?

A: Kimberly Fontan says it's about line of sight on the year, industrials ramps varying, still at 5.5% strong sales but clarity on how it comes in.

Q: So a couple of questions on the, I guess, the generation portfolio, how you think about that. I was curious to hear your thoughts on what would make -- what kind of market signal would make you take a closer look at nuclear and maybe bring those opportunities forward? And also, some of your peers are discussing how building gas plants take some -- really long time, right? And how -- what are you seeing and how fast can you basically build a gas plant right now?

A: Drew Marsh talks about nuclear opportunities, working on early site permit in Mississippi, and combined cycles with queue positions allowing build in 2028 and 2029 timeframe.

Q: I have two related questions, particularly to Louisiana. How does the Woodside FID decision impact the availability of power time to market for new potential data center customers in your service territory? And then related, given the macro uncertainty, any color you can share around GDP sensitivity to your load or customer activity in your plan and how that could impact the large load customer conversations?

A: Kimberly Fontan says large traditional customers are in probability weighted pipeline, data centers are binary, and Drew Marsh mentions data centers look past near-term macro effects, focusing on long-term investments.

Q: Just a couple of quick questions on transferability. I appreciate you gave us some numbers, but what's the impact to your FFO to debt metric if transferability were to sunset?

A: Kimberly Fontan says they would be above threshold, and could use mechanisms like safe harboring or tax equity partnership.

Q: If I could first just elaborate on the slight reduction to the load growth forecast. First, just to clarify, you're saying it's about the pace of new customers ramping, not about usage from existing customers. Is that right?

A: Kimberly Fontan confirms it's about pace of new customers ramping, not usage from existing customers.

Q: High-level question here with all the large load conversation and the potential need for new generation, transmission, et cetera, have you changed any of your strategic conversations when you're thinking about contracting with these customers, i.e. going from maybe shorter-term types of contracts to longer-term offtake types of contracts or fixed price types of contracts. Just wondering if you could -- if there's been any change there in your strategy?

A: Andrew Marsh says strategy hasn't changed much, using existing structures and frameworks adapted for current environment, keeping existing customers in good spot while adding new ones.

Q: A specific one on the Louisiana new customer. Finally, is there a precedent either in Louisiana or other states you serve or other states you've researched for a decision like this? Is there any kind of precedent ruling you've seen?

A: Andrew Marsh says components are standard, existing high factor load-serving tariff in Louisiana used for new customer, no new precedent ruling but components are standard.