Full Transcript: Evergy Q2 2026 Earnings Call

Evergy (NASDAQ: EVRG ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. This content is powered APIs. 82 per share a year ago, driven by regulated investments recovery, load growth, and large customer revenues.

24 and expects long-term adjusted EPS growth of 6% to 8% annually through 2030. Major operational highlights include successful storm recovery efforts and strong safety performance, with ongoing grid investments improving reliability metrics. Evergy continues to expand its data center customer base, securing five ESAs totaling 3 gigawatts of load, with expectations to sign at least one more ESA in 2026. 6 billion over five years, with an additional $1 billion for generation resources to support new large customer agreements.

Regulatory updates include ongoing rate cases in Kansas and Missouri and planned applications for new natural gas, solar, and battery storage facilities. Management emphasized the importance of maintaining affordability for customers, with expected rate increases in line with or below inflation, except for Missouri West. Full Transcript Courtney, Operator Good day and thank you for standing by. Welcome to the second quarter 2026 Evergy earnings conference call.

At this time all participants are in a listen-only mode. After the speaker's presentation there will be a question-and-answer session. To ask a question during the session you'll need to press star 11 on your phone. You will then hear an automated message advising your hand is raised.

To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like to now hand the conference over to your first speaker today, Senior Director of Investor Relations, Peter Flynn. Please go ahead.

Peter Flynn, Senior Director of Investor Relations Thank you, Courtney, and good morning, everyone. Welcome to Evergy's second quarter 2026 earnings conference call. com. Today's discussion will include forward-looking information.

Slide 2 and the disclosures in our SEC filings contain a list of some of the factors that could cause future results to differ materially from our expectations. They also include additional information on our non-GAAP financial measures. Joining us on today's call are David Campbell, Chairman and Chief Executive Officer, and Brian Buckler, Executive Vice President and Chief Financial Officer. David will cover second quarter highlights, economic development, our planned resource additions and our regulatory agenda.

Brian will cover our second quarter results, retail sales trends and our financial outlook. Other members of management are with us and will be available during the Q&A portion of the call. I'll now turn the call over to David. David Campbell — Executive Vice President, Strategy, Growth & Business Development Thanks, Pete, and good morning, everyone.

I'll begin on Slide 5 this morning. 82 per share a year ago. Our results were driven primarily by the recovery of regulated investments, load growth and revenues from our large load customers, partially offset by higher operations and maintenance and depreciation expense. 34 per share.

Brian will cover our results in more detail. Safety is a core value within our organization, and I'm also pleased to report that our 2026 safety performance is trending favorably to target. This result reflects the commitment of our employees and the effectiveness of our efforts to drive continuous improvement through training, accountability and operational discipline. We are encouraged by our progress, and it's imperative that we remain disciplined going forward with the goal of sending every employee home safely every day.

I also want to recognize our employees for their relentless efforts to keep the lights on. During a very active Q2 storm season in early June, we experienced back-to-back severe storms that generated straight-line winds of up to 115 mph and multiple tornadoes that caused extensive damage across our service territory, ranging from central and southeastern Kansas through the Kansas City metro area. Despite these challenging conditions, our team safely restored power to more than 300,000 customers over the course of the week following the storms.

We are proud of the extraordinary efforts of our transmission and distribution teams, contractors, call center representatives, and customer service and communications teams, and their hard work, commitment to safety and focus on serving our customers throughout the restoration process. Their dedication reflects the very best of our company, and in fact we had a major storm go through part of our territory today, and they're hard at work again this morning restoring power. In terms of reliability, we have demonstrated solid performance through the first half of the year.

Our outage duration and frequency metrics are tracking well relative to targets, demonstrating the benefits of our continued grid investments and the efforts of our transmission and distribution teams. I'd also like to recognize our generation team for the strong operational performance of the nuclear, fossil and renewable fleet during the first six months of the year. In addition to our confidence in hitting our 2026 earnings guidance, our long-term fundamentals as a company continue to strengthen. That starts with the outstanding work that our employees do every day to deliver safe, reliable power.

Building off of that foundation, our customer and economic development prospects continue to be exceptionally strong, as I'll speak to momentarily. 24. We expect adjusted EPS growth to exceed 8% annually beginning in 2028 and through 2030. Slide 6 summarizes our data center announcements to date.

In aggregate, we have executed ESAs for five data center projects under our LLPS tariffs, securing the strong protections that the tariff requires for current customers. 5 gigawatts. When including the 500 megawatts of steady-state peak load from non-LLPS large customers, such as Panasonic and smaller data centers, the total reaches 3 gigawatts. We continue to make progress towards agreements on expansion projects and are highly confident that we'll execute at least one more ESA in 2026.

We anticipate providing more details in our third quarter call in November. Momentum with our customer pipeline and discussions on new projects is outstanding, and we expect that to continue into 2027. As a reminder, any additional ESAs would represent further upside and/or extension to the remarkable load growth and business expansion created by the 3 gigawatts of large customer ESAs already signed. These economic development wins solidify Kansas and Missouri as premier destinations for data center customers and will empower growth, enable investment and help drive prosperity for our region.

Slide 7 summarizes the progress we've made in converting our large customer pipeline into signed agreements and provides an update on activity further down the queue. Starting in the top row, the 3 GW include the five announced ESAs and large customers that have already commenced operations. This Tier 1 demand enables a transformative growth opportunity for Evergy, supporting our expected 7% to 8% annual retail load growth through 2030. 7 gigawatts of additional projects that have executed ESAs contractually requiring minimum monthly bill provisions spanning 16 to 17 years whether or not the capacity is fully utilized.

Regionally, these will deliver significant benefits, including supporting a leading-edge digital economy, creating jobs and significantly expanding the local tax base, while enabling us to spread systems costs over a broader load profile to maintain affordability for all customers. 5 gigawatts we disclosed last quarter. These expansion opportunities are at or adjacent to our existing customer sites. Future agreements related to these opportunities would require amending load ramps and existing ESAs or new ESAs, and we are working on the transmission and generation solutions to enable them.

And to be clear, our five-year financial plan does not incorporate any impact from these potential expansion projects, which would create upside in the near term and well into the 2030s depending on individual project timing. 0 gigawatts. These customers have acquired land or land rights, signed letters of agreement, and we are actively reviewing transmission and generation capacity solutions. The opportunity from these customers is primarily beyond 2030.

Taken collectively, the Tier 1 expansions and Tier 2 customer opportunities reflect strong momentum with multiple additional projects that would further extend our exceptional earnings and load growth well into the next decade. The remaining pipeline, totaling well over 10 additional gigawatts, highlights robust activity and sustained interest in our region. Serving this load will require working in tandem with our customers to identify creative solutions with our customers who stand ready to move forward as capacity opens, allowing us to prioritize the best-fit projects as the queue evolves.

Slide 8 provides an overview of expected resource additions that will support this load growth. 6 billion over the next five years. Informed by our 2026 IRP preferred plans in Kansas and Missouri, we now expect approximately $1 billion of incremental capital driven by the generation resources needed to serve the customer agreements we have secured. 9 gigawatts of natural gas, nearly 800 megawatts of solar, and 450 megawatts of battery storage.

This resource mix reflects an all-of-the-above approach that supports reliability, affordability and long-term customer needs while positioning Evergy to serve significant economic development across Kansas and Missouri. Of note, additional load beyond the 3 gigawatts signed to date is expected to require incremental generation resource needs and incremental CapEx. As a result, the 2026 IRP planning process involved identifying the most cost-effective plan that reliably serves our customers across uncertain future scenarios.

These natural gas additions, combined with solar and battery storage, are planned in a manner that will allow Evergy to take advantage of best-in-class efficiency and technology and support economic development in our service territory while at the same time helping to advance our strategic objectives of affordability and reliability. Moving to Slide 9, I'll provide a brief update on our regulatory priorities in Kansas and Missouri. On the Kansas side, we have filed notice for an upcoming predetermination application, which is planned to include three generation assets: a new natural gas plant, a solar farm and a battery storage facility.

These new additions are consistent with the 2026 IRP preferred plan. We look forward to sharing more specifics when the application is filed later this year. Pivoting to Missouri, we continue to work through our pending Missouri Metro rate case. The procedural schedule calls for rebuttal testimony by August 11th, surrebuttal and true-up direct testimony on September 10th, settlement conferences commencing September 23rd, and hearings beginning October 5th.

We look forward to working collaboratively with our regulators and our stakeholders to achieve a constructive outcome for our Metro customers. Similar to Kansas, in Missouri we have filed notice for an upcoming Certificate of Convenience and Necessity request, or CCN, related to a new natural gas plant, a solar farm and a battery storage facility. We will share more details once the applications are filed. Separately, we have a pending CCN request for the planned Mullen Creek Number 2 facility, a 440 megawatt simple-cycle gas turbine located in Nottoway County, Missouri.

Staff report is due September 15th, followed by a settlement conference on September 22nd, with hearings beginning October 19th. I'll conclude my remarks on Slide 10, which highlights the core tenets of our strategy. We remain committed to keeping customer rates affordable while making the investments necessary to support reliability, economic development and long-term growth. We have delivered significant improvements in regional rate competitiveness since our company was formed in 2018, and today Evergy's average residential customer rates are below national and below Midwest averages.

Consistent with this ongoing focus, we signed on to the White House's Ratepayer Protection Pledge last week. Our large load tariff framework is well aligned with the principles in the pledge and is designed to ensure that new large customers pay their fair share of the infrastructure and generation costs required to serve them, while at the same time helping to protect affordability for existing customers. This ensures alignment across stakeholders so that we can turn generational investment and growth opportunities into demonstrable benefits for all in our region.

While our capital investment plan is higher than historical levels, it is supported by unprecedented load growth. New large load customers contribute premium revenues that help cover the cost of serving them and the investments required to support growth, while increasing energy sales allow us to spread system costs across a larger base. We expect to see customer rate increases over the next several years being in line with or below inflation for the significant majority of our residential customers.

Missouri West is our smallest utility today, with the lowest rates in our system and some of the lowest rates in the nation, partly because the utility is in need of infrastructure investment, in particular new dispatchable baseload generation. As a result, as new generation plants come online to serve Missouri West, these customers may see rate increases above inflation over the next five years. We still anticipate their rates will remain regionally competitive, and these investments will reduce the reliance on market-provided energy, making rates more stable for our Missouri West customers.

Longer term, as the full benefits from large load customers are realized, we are confident that we can manage residential rates to a level consistent with inflation, and all energy customers will benefit from these infrastructure investments for decades to come. As outlined in our capital plan, we will continue to invest in grid modernization to ensure reliability, as well as grid resiliency, strong customer service and generation availability. Our primary sustainability goal is to execute a cost-effective, all-of-the-above generation strategy as reflected by our planned investments in natural gas, solar and battery storage to support our Kansas and Missouri customers.

We look forward to continuing to advance a mix of resources over the coming years to support growth and prosperity in our states. I will now turn the call over to Brian. Brian Buckler (Executive Vice President and Chief Financial Officer) Thank you, David, thank you, Pete, and good morning, everyone. Let's begin on Slide 12 with a review of our results for the second quarter of 2026.

82 per share, in the second quarter of 2025, as shown on the slide from left to right. The year-over-year drivers are as follows. 10 per share increase for the quarter. We recorded higher revenues this year from the March 2026 start of operations of a large data center and from Panasonic's ramp of operations.

04 benefit to EPS compared to the prior-year quarter. 8%, primarily driven by commercial and industrial demand. We also had a warmer start to the summer, resulting in an increase in cooling degree days compared to prior year, with weather essentially normal in the second quarter compared to the mild weather in Q2 2025. 10 of EPS.

02 of dilution from convertible bonds.