Southern Q3 2025 Earnings Report

Southern EPS Results

• Actual EPS: $1.60
• Consensus EPS: $1.51
• Beat/Miss: Beat by +$0.09
• One Year Ago EPS: $1.39

Southern Revenue Results

• Actual Revenue: $7.82 billion
• Expected Revenue: $8.04 billion
• Beat/Miss: Missed by -$213.28 million
• YoY Revenue Growth: +7.50%

Southern Announcement Details

• Quarter: Q3 2025
• Date: 10/29/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, October 30, 2025
• Conference Call Time: 1:00PM ET

Southern (NYSE:SO) Company (NYSE: SO) is an Atlanta-based energy holding company that provides electric and gas utility services and owns power generation assets across the United States. Founded in 1945, the company operates a portfolio of regulated electric utilities and affiliated businesses that generate, transmit and distribute electricity to residential, commercial and industrial customers.

Southern’s principal regulated electric subsidiaries include Georgia Power, Alabama Power and Mississippi Power, which serve large portions of the southeastern United States. The company also conducts wholesale and competitive generation through Southern Power and provides natural gas distribution and related services via Southern Company Gas. Its generation mix includes conventional thermal plants, nuclear facilities and a growing fleet of renewable energy projects such as utility-scale solar and wind.

The company is involved in major infrastructure and grid modernization initiatives, including investments in transmission upgrades, distributed energy resources, energy efficiency programs and technologies to support reliability and decarbonization. Southern Company’s operations encompass both regulated utility service and competitive energy businesses, enabling it to serve retail customers, wholesale markets and industrial clients.

Listed on the New York Stock Exchange under the ticker SO, Southern Company is a prominent energy provider in the southeastern U.S. and is actively pursuing strategies to adapt its generation portfolio and grid capabilities to evolving regulatory and market demands related to clean energy and resilience.

Southern Q3 2025 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Adjusted EPS beat — Southern reported Q3 adjusted EPS of $1.60, $0.10 above its prior estimate and guided Q4 to $0.54, which would put full-year adjusted EPS at the top of its $4.30 guidance range.
• Positive Sentiment: Robust customer and load growth — weather-normal retail sales are +1.8% YTD with commercial +3.5% (data centers +17% in Q3), four recent large-customer contracts >2 GW, and a pipeline north of 50 GW by the mid-2030s.
• Positive Sentiment: Financing progress — the company issued $4 billion of long-term debt to satisfy 2025 needs and has priced $1.8 billion of ATM forward equity, securing over $7 billion of its $9 billion equity requirement through 2029 to support credit targets.
• Negative Sentiment: Near-term headwinds and credit risk — results were partially offset by milder weather, higher depreciation/amortization and interest costs, and Moody’s placed the holding company on negative outlook, leaving execution risk on the remaining equity plan and rating metrics.

Presentation

[Operator]

Good afternoon. My name is Diego, and I will be your conference operator today. At this time, I would like to welcome everyone to The Southern Company third quarter 2025 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the call over to Greg MacLeod, Director, Investor Relations. Thank you. Please go ahead, sir.

[Greg MacLeod, Director, Investor Relations at The Southern Company]

Thanks, Diego. Good afternoon and welcome to Southern Company's third quarter 2025.

[Greg MacLeod, Director, Investor Relations at The Southern Company]

This call is now being recorded.

[Greg MacLeod, Director, Investor Relations at The Southern Company]

Joining me today are Chris Womack, Chairman, President, and Chief Executive Officer of Southern Company, and David Poroch, Chief Financial Officer. Let me remind you that we will make forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in our Form 10-K, Form 10-Qs, and subsequent security filings. In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning, as well as the slides for this conference call, which are both available on our Investor Relations website at investor.southerncompany.com. At this time, I'll turn the call over to Chris.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Thank you, Greg. Good afternoon to everyone, and we thank you for joining us for today's update. Southern Company continues to perform exceptionally well. As you can see from the materials that we released this morning, we reported strong adjusted earnings results for the third quarter, meaningfully above the estimate provided last quarter. We expect to deliver on our financial objectives for 2025. I have to say, Southern Company has an incredibly bright future ahead. Our state-regulated electric and gas utilities continue to provide long-term value to the more than 9 million customers across the Southeast and beyond with reliable and affordable energy. The vertically integrated markets in which our electric utilities operate continue to provide transparent and orderly processes and have consistently supported our ability to meet the needs of our growing economies and electric demand while providing premier reliability and resilient service day in and day out.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

We've done all of this while keeping customers' rates more than 10% below the national average. Further, the rate plan extension at Georgia Power, which freezes base rates until at least 2029, excluding the recovery of storm-related costs, is a testament to the benefits of a constructive regulatory framework and our focus on balancing growth and affordability. Customers continue to be at the center of everything we do. Our focus on the customer underpins our disciplined approach to forecasting, pricing, contracting, and deploying resources to serve this once-in-a-generation growth opportunity. We continue to execute on those plans for the benefits of all of our customers. Over the last two months, we have four contracts with large local customers across Georgia and Alabama representing over 2 gigawatts of demand.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Consistent with our approach across Southern Company, these contracts include pricing and terms that are designed to pay for the incremental cost to serve new customer demand while also benefiting and protecting existing customers, helping to ensure growth does not come at the expense of affordability. I'll now turn the call over to David to give an update on our financial performance.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Thanks, Chris. Good afternoon, everyone. For the third quarter of 2025, our adjusted EPS was $1.60 per share, $0.10 above our estimate and $0.17 higher than the third quarter of 2024. The primary drivers for our performance for the quarter compared to last year were continued investment in our state-regulated utilities, along with strong customer growth and increased customer usage. These positive drivers were partially offset by milder-than-normal year-over-year weather, higher depreciation, amortization, and higher interest cost. For the nine months ended September 30, 2025, our adjusted EPS was $3.76 compared to adjusted earnings of $3.56 for the same period in 2024. Year-to-date, revenue grew at our state-regulated electrics, partially influenced by customer growth and higher usage, which has added $0.12 year-over-year. A complete reconciliation of year-over-year earnings is included in the materials we released this morning.

[David P. Poroch, CFO at The Southern Company]

Our adjusted EPS estimate for the fourth quarter is $0.54 per share, which, combined with our year-to-date performance, would represent full-year adjusted earnings at the top of our 2025 annual guidance range of $4.30 per share. Turning now to retail electricity sales, year-to-date, weather-normal retail electricity sales were 1.8% higher compared to the first three quarters of 2024. Year-over-year weather-normal retail electricity sales, which are on pace for the highest annual increase since 2010, excluding the pandemic, demonstrate growth across all three customer classes. In the third quarter alone, the commercial sector grew 3.5% on a weather-normal basis compared to the third quarter of 2024. This growth was driven partially by increased sales to existing and new data centers, which were up 17%.

[David P. Poroch, CFO at The Southern Company]

Weather-normal residential sales also showed strong growth and were 2.7% higher than in the third quarter of 2024, bolstered by the addition of roughly 12,000 new electric customers in the quarter, substantially higher than historical trends. Electricity sales to individual customers also demonstrated continued strength, growing 1.5% in the quarter compared to the prior year. Year-to-date, all of our largest industrial customer segments are up year-over-year, including primary metals, paper, and transportation segments, which were each up 4% or higher through the first three quarters. Economic development activity across our electric service territories remains robust, with 22 companies making announcements to either establish or expand operations in our service territories during the third quarter, generating nearly 5,000 potential new jobs and representing expected capital investments totaling approximately $2.8 billion.

[David P. Poroch, CFO at The Southern Company]

Clearly, between robust customer growth, increasing customer usage in the commercial and industrial segments, and the flourishing economic development activity in our service territories, the economy in the Southeast remains strong and extremely well-positioned. Transitioning to our financing, I'd like to give an update on our activities for the quarter, including the progress made addressing our future equity needs. In the third quarter, we issued $4 billion of long-term debt across Alabama Power, Georgia Power, Southern Company Gas, and Southern Power. The quality and credit strength of our subsidiaries continues to draw robust investor interest. Strong demand for our subsidiary securities ultimately translates into lower interest costs, which will provide benefits to customers and our regulated subsidiaries over the long term.

[David P. Poroch, CFO at The Southern Company]

With these issuances, combined with what we issued in the first half of the year, we have fully satisfied our long-term debt financing needs for 2025 at each of our subsidiaries. On the equity financing front, we continue to be opportunistic in our proactive approach and have made significant progress on our plans to source equity in a disciplined and credit-supportive manner. This approach reflects our steadfast commitment to credit quality, including our strong investment-grade credit ratings across all three major rating agencies. We plan to continue utilizing equity or equity equivalents in support of our path towards 17% FFO to debt within our planning horizon. Recall this long-term credit quality objective is intended to provide cushion to the quantitative credit metric targets provided by the rating agencies.

[David P. Poroch, CFO at The Southern Company]

As a reminder, on our July earnings call, we highlighted a cumulative equity need of $9 billion through 2029 to fund our $76 billion capital investment plan in a credit-supportive manner. Since our last earnings call, we priced in an additional $1.8 billion of equity through forward sales agreements under our At the Market or ATM program. These forward equity contracts contain final settlement dates that extend through mid-2027, with the ability to call sooner if we choose. This progress and flexibility it provides significantly reduces risk in our financing plans. When considering these ATM forward sales, other hybrid security issuances, and past and projected issuances under our internal equity plans, we have solidified over $7 billion of our $9 billion equity need through 2029. We are extremely well-positioned to address the remaining amounts in a shareholder-friendly manner.

[David P. Poroch, CFO at The Southern Company]

Looking ahead and as we continue to take steps to require strong customer protections and credit provisions, our pipeline of large load data centers and manufacturers continues to be robust. Across our electric subsidiaries, the total pipeline remains more than 50 gigawatts of potential incremental load by mid-2030s. Recall that our disciplined approach to forecasting assumes that only a fraction of this load pipeline materializes. As Chris mentioned earlier, in just the last two months, we have four contracts across Southern Company's system that represent over 2 gigawatts of load. As you can see, projects within our pipeline are maturing into executed contracts, which, along with their associated load ramps over the next several years, solidifies a substantial portion of our total forecasted electric sales growth of 8% annually through 2029, including average annual growth at Georgia Power of 12% through the same period.

[David P. Poroch, CFO at The Southern Company]

Across Alabama, Georgia, and Mississippi, we now have contracts in place with large load customers representing 7 gigawatts through 2029, which ultimately ramped to 8 gigawatts in the 2030s, and we are in advanced discussions for several more gigawatts of load. I'll turn the call back over to Chris for further insights into the progress we are making on our plans.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Thank you, David. As David noted, we have made great progress with signing new large load contracts. Just last month, as a part of Georgia Power's ongoing RFP certification proceedings, Georgia Power filed an update to its load forecast. This update forecast continues to project the capacity need consistent with the 10 gigawatts of capacity resources being requested, which include five natural gas combined cycle units and 11 battery energy storage facilities. These proceedings are scheduled to have a final determination by the Commission by the end of this year. Separately, Alabama Power, following approvals from the Alabama Public Service Commission and the Federal Energy Regulatory Commission, has completed the acquisition of the 900-megawatt Lindsay Hill natural gas generating facility to serve projected long-term capacity needs in the state.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

In addition, construction continues on approximately 2.5 gigawatts of new generation in both Georgia and Alabama, which includes three natural gas combustion turbines and seven battery storage facilities, all of which are projected to go online over the next two years. Further, the South System 4 expansion at Southern Natural Gas within our Southern Company Gas subsidiary continues to move forward and will provide a valuable resource in serving the projected growth in our service territories. It is clear that we continue to make great progress executing on our plan as we deliver exceptional value to customers and investors. Consistent with our past practice and representative of our continued discipline, we expect to provide a complete update to our long-term plan during our fourth quarter 2025 earnings call this coming February.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

As always, this update will include refreshes to our five-year capital investment outlook, sales forecast, and financing plans, as well as our 2026 and long-term EPS guidance. Consistent with our comments throughout 2025, as a part of that communication, we expect to provide additional clarity on our long-term earnings trajectory, which, as we've highlighted before, could translate into increasing the base from where our long-term EPS growth starts, which could be potentially as early as 2027. We have delivered exceptional operational and solid financial results through the first three quarters of the year. Just this week, Southern Company was named to Newsweek's World’s Most Trustworthy Companies 2025 list and was the highest-ranked energy company in the United States on that list.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Recognized companies were identified in an independent survey, and our inclusion at the top of this list is a testament to the hard work and unwavering commitment of our employees to uphold our values and operate each day at the highest standards of integrity, transparency, and accountability. We are honored by this recognition, and I am incredibly proud of our team and the execution across all of our businesses. In conclusion, we're extraordinarily well-positioned to finish the year strong. We have the team, we have the experience, and the skill to capture and execute on the exciting opportunities in front of us. We really have a bright and exciting future ahead. Operator, we're now ready to take questions.

[Operator]

Thank you. At this time, we will conduct our question-and-answer session. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. One moment, please, while we pull for questions. Our first question comes from Steven Isaac Fleishman with Wolfe Research. Please state your question.

[David P. Poroch, CFO at The Southern Company]

Hey, Steve.

[David P. Poroch, CFO at The Southern Company]

Hey, Steve. I have no idea how I got on the list for questions because I didn't ask one, but I appreciate that.

[David P. Poroch, CFO at The Southern Company]

I appreciate your voice.

[David P. Poroch, CFO at The Southern Company]

I will say hello and all good. I didn't have any questions.

[David P. Poroch, CFO at The Southern Company]

Thanks, Steve.

[David P. Poroch, CFO at The Southern Company]

Thank you.

[Operator]

Thank you. Your next question comes from Carly S. Davenport with Goldman Sachs. Please state your question.

[Carly S. Davenport, Analyst at Goldman Sachs Group Inc.]

Hey, good afternoon. Thanks so much for taking my question. Maybe to start just on the kind of load growth outlook in Georgia, I guess as you continue to lock in contracts under the new tariff structure there, can you talk a little bit about the reception from customers to the new structure and also how you approach the minimum bill components and ensure cost recovery from investments to support that load?

[David P. Poroch, CFO at The Southern Company]

Yeah, sure. Hey, Carly, thanks. Great question. Like we've talked about, we've moved into a mode working underneath, at least at Georgia, working underneath the Georgia Public Service Commission new rules that came into place in the spring. What we're finding is customers totally get it. They understand that these are long-term commitments that we are making to deploy resources to serve their needs. I think these rules have really helped bring the more credit-quality, more serious counterparties up to the front of the line. We've just made great strides in structuring these contracts. What these contracts, the ones that we've signed now, have brought to the table are great protections for customers and our investors. The minimum bills cover all of our costs, whether or not the meter spins.

[David P. Poroch, CFO at The Southern Company]

Once they hit their ramps and they start moving up, it's just very beneficial for the company and for our customers. We're really happy with the education effort that we've been able to accomplish over the past year. That's kind of the indicator as to why, to some extent, these contracts have taken a minute to get resolved, just because we're taking them along the journey of the structure and the need to be able to protect customers going forward through these contracts.

[Carly S. Davenport, Analyst at Goldman Sachs Group Inc.]

Great. Really helpful. Thank you. Maybe the follow-up just on the Georgia regulatory environment, just with the upcoming certifications and potential for incremental needs on the generation side for approval. How are you thinking about potential impacts from the PSC election and those processes as you think about the longer-term plan?

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Yeah, Carly, let's start with the election question first. Elections in Georgia for the two commission seats will be held next Tuesday. We've had a couple of weeks of early voting. One of the things we talk a lot about in all of our states is that we have an incredibly long history of working constructively with whomever is in those seats. The five seats that are occupied in Georgia have always brought different views and perspectives. We expect that will, in fact, be the same. We'll work with whomever is there. As those positions are filled, they keep the citizens in mind as well as we keep our customers in mind. We have a lot of alignment there. We've always constructively worked with whomever has been elected in those seats. Do you want to take that apart?

[David P. Poroch, CFO at The Southern Company]

Carly, you asked about status and kind of where we are. Recall that in September, Georgia Power filed an updated load forecast and testimony. That load forecast, using the same methodologies as several months ago, discounting forecasted load and risk-adjusting that, supported the need for the whole 10 gigawatts that we're requesting. That process is ongoing. We are going to have staff and other interveners file their testimony in the next couple of weeks, I think. We are scheduled to get a ruling from the commission, I think it's December 19th, latter part of December. All that should be wrapped up, and we'll see the results before year-end.

[Carly S. Davenport, Analyst at Goldman Sachs Group Inc.]

Great. Appreciate all the color. Thank you.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Thank you.

[Operator]

Your next question comes from Julien Patrick Dumoulin-Smith with Jefferies LLC. Please state your question.

[David P. Poroch, CFO at The Southern Company]

Hey, Julian.

[David P. Poroch, CFO at The Southern Company]

Hey. Good afternoon, team. Thank you guys very much for the time. I appreciate it.

[David P. Poroch, CFO at The Southern Company]

Hey, look.

[Julien Patrick Dumoulin-Smith, Analyst at Jefferies LLC]

Hey, absolutely. Chris, can we talk about the rebasing? You used the same language again about as early as 2027. A lot of folks are very curious to understand what the metrics that you're looking at, whether it's operational or regulatory or just frankly incremental. Signed data center deals to get you comfortable to make it more of a firmer timeline for that rebasing. Any thoughts that you'd observe here on how you're thinking about that timeline?

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Julien, I think we said, there's not kind of an exact list. There are a lot of things that we're going to look at to make that decision. How's the economy performing? What's happening with interest rates? Where are we with large load contracts? Just a number of factors that have to go into that consideration to give us the confidence and certainty to make that kind of decision. As we said before, clearly, there's a lot more meat on the bone in terms of where we are and how that decision needs to be made. That's something we'll work through, and we'll give you more clarity on that in our February call for next year.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Excellent. A little bit more of a nitpicky question. The $9 billion of equity you guys talked about here a second ago, in theory, if you were to get this incremental $5 billion, how do you think about that being reflected in that $9 billion?

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

The upside that we discussed in the second quarter call, Julien, you mean?

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Yeah, that's all in there, right?

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Yeah.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Yeah, in the 9.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

No. Actually, the upside, to the extent that the Georgia Public Service Commission approves all of our request, we had talked about that being about another $4 billion of incremental capital. That's likely to be financed kind of in that neighborhood of about 40% equity going forward. Once we get clarity on that, we'll be able to execute on that plan.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

There's a little rounding area there, right, between the 4 and the 5 with gas, I think it is, if I understand.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Yeah.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

To throw in the numbers.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

You're exactly right, Julien. The 4 relates specifically to the remainder at request at the Georgia Public Service Commission. We've talked about opportunities within our FERC-regulated jurisdictions in the gas infrastructure business, and that's about $1 billion. You're exactly on point.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

All right. Awesome, guys. Thank you very much. I'll turn it over there.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Thank you.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Thank you.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Okay, man.

[Operator]

Your next question comes from Shar Pourreza [Analyst, Wells Fargo Securities] Please state your question.

[David P. Poroch, CFO at The Southern Company]

Hey, Shar.

[David P. Poroch, CFO at The Southern Company]

Hey, guys. Hey, Shar. Hey, guys.

[David P. Poroch, CFO at The Southern Company]

Hey, man.

[David P. Poroch, CFO at The Southern Company]

Oh, not too bad. Not too bad. Thanks, Chris. Just real quick, let me shift gears to Southern Power. I mean, obviously, there is a lot of opportunities there, and you've got existing tolling agreements that start to expire. I guess, is there—how do we think about just the assets, the value of the assets, the pricing environment? Have conversations started? Is there opportunities to renegotiate these tolls ahead of the expirations, just given the value of the assets?

[David P. Poroch, CFO at The Southern Company]

Yeah. Like we've talked about, we've got a very large portion of these assets under long-term contracts, about 95% or so through 2029. You're absolutely right. Where those opportunities exist, toward the end of those contracts, we'll start having some conversations to renegotiate those and renew those where appropriate. We're looking at a couple of live data points, right, in the RFP that was recently approved in Georgia. Southern Power, on a competitive bid basis, won two PPAs that go into effect in the early 2030s. Those are repriced about almost three times kind of where they sit today. Assuming that that market holds, we see great opportunity out in the future as those contracts lay off, and then we can renegotiate those and recommit those assets in the future.

[David P. Poroch, CFO at The Southern Company]

Got it. Okay. Perfect. Lastly, obviously, you guys talk about the amount of gas that's needed in the Southeast, just around the SNG pipeline expansion. Any thoughts on timing there? How are the conversations going with the counterparties? Thanks.

[David P. Poroch, CFO at The Southern Company]

The S&G expansion is going well on track. I think we've talked about that being about a $3 billion investment, 100% dollars. We're a 50% owner of that, and that project is going as scheduled. We expect great interest in contracting that capacity. That pipe runs, if you will, through our backyard, and we see that pipe being able to serve our needs as well as a number of other needs around the adjoining states. Looking forward to getting that project taken care of.

[David P. Poroch, CFO at The Southern Company]

Okay. Perfect. Just last, if I could just slip and click one on the equity question. Chris, there's been obviously some pretty healthy transactions that have been done around partial asset sales. Some of your peers have done it. They have been successful. It's been accretive. Just want to get a sense on, have you considered sort of other avenues versus these equity or equity-like instruments? Even can parts of Southern Power be opportunities there? We're just focusing on equity and equity-like.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Shar, we don't comment on kind of speculative transactions or rumors or these broad questions. We're always looking to see who's the best owner of a given asset. That's something that we'll always look around corners and make those kinds of decisions. I think it's a little bit premature. Yeah, that's something that we'll always give deep considerations to. We like our cards. We like the portfolio that we have. There are some things we'll always take a look at.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Perfect. I appreciate it, guys. Thanks so much.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Okay.

[Operator]

Your next question comes from Anthony Christopher Crowdell [Analyst, MIzuho Securities USA LLC] Please state your question.

[Operator]

Hey, good afternoon, team. What's going on?

[David P. Poroch, CFO at The Southern Company]

Hey, a beautiful day.

[David P. Poroch, CFO at The Southern Company]

Not as good as you.

[David P. Poroch, CFO at The Southern Company]

Hey.

[David P. Poroch, CFO at The Southern Company]

Two easy ones, two softballs. You talk about on the fourth quarter call, you're going to give us a capital refresh and, I guess, potentially an update on the EPS CAGR. I think you mentioned that I don't want to put words in your mouth about maybe talking about a base starting in 2027. My question is, do we get 2027 guidance on the fourth quarter call?

[David P. Poroch, CFO at The Southern Company]

Anthony, we've been talking about this opportunity for a good little while. As we've seen this kind of momentum around developing these contracts come to fruition, it is pretty unique. Those contracts that we've talked about are kind of coming into play in the latter part of our planning horizon. We do expect to be able to share some clarity on that. Like Chris talked about, a lot of things are in the mix. As we move forward in getting these contracts taken care of, we'll be able to share what that clarity looks like in February.

[David P. Poroch, CFO at The Southern Company]

Great. Just last question. I apologize if I had the timing wrong. I believe from your last call to this call, I believe Moody's put the holding company on a negative outlook. Your equity needs you had already announced before. Does that negative outlook or maybe change if you have maybe pulling forward or the timing of that remainder $2 billion of equity?

[David P. Poroch, CFO at The Southern Company]

Yeah. No, we've got what we believe is a really good path to get towards 17% FFO to debt. Let's remember, the fundamental belief at Southern Company that a premium equity starts with being a high-quality credit. It's important that we're going to retain these ratings that we have. We look to be able to build cushion toward that 16% threshold, that's our downgrade threshold. Our path is getting closer to 17%, and we see these qualitative factors and quantitative factors improving. Executing on the equity issuances is really encouraging. Bringing these contracts to fruition is encouraging. We're just going to continue to be proactive and disciplined in this approach. We're going to continue to share our progress with the rating agencies to make sure that they're aware of where we're getting or where we're going towards 17% over the planning horizon.

[David P. Poroch, CFO at The Southern Company]

Great. See you guys down at EEI.

[David P. Poroch, CFO at The Southern Company]

Awesome.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Look forward to it.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Thanks.

[Operator]

Your next question comes from Jeremy Tonet [Analyst, JPMorgan Chase & Co.] Please state your question.

[David P. Poroch, CFO at The Southern Company]

Hey, Jeremy.

[David P. Poroch, CFO at The Southern Company]

Hi.

[David P. Poroch, CFO at The Southern Company]

Hey, Jeremy.

[David P. Poroch, CFO at The Southern Company]

Hi. Good morning. Good afternoon. Just one quick question here with regard to nuclear. I think Southern has talked in the past of the importance of nuclear development for the future of the country. We've seen support from the federal government start to move things forward in different parts of the country. I'm just wondering if there's any specific actions out there, support from the federal government or other entities that would make expanding Vogtle or pursuing SMR more attractive to Southern?

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

First of all, let me say I was incredibly excited about the actions that the administration took with Westinghouse and Cameco and Brookfield. In terms of that collaboration, I mean, I think all of those things are very important to bring forth new nuclear in this country. With this incredibly growing demand, I think it's so important that we take the steps necessary to build new units in this country. Between the action taken announced yesterday, a couple of days ago, as well as the president's executive orders on the regulatory side, all those things, I think, are very important and very instrumental in helping support the development of new nuclear in this country. As you look at bringing these new units on, these units could have 60 to 80-year lives. That will take us in, meet the current future demand, but also demand into the next century.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

This is incredibly important to recognize the steps and the leadership role that the government must take to address risk and find ways to help mitigate that risk. I think it's incredibly important and real excited about the steps that are being taken by this administration.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Got it. That's helpful. I'll leave it there. Thanks.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Thank you very much.

[Operator]

Your next question comes from Andrew Marc Weisel with Scotiabank Global Banking and Markets. Please state your question.

[David P. Poroch, CFO at The Southern Company]

Hey, Andrew.

[David P. Poroch, CFO at The Southern Company]

Hey, Andrew.

[David P. Poroch, CFO at The Southern Company]

Hey, everybody. Forgive me, I'm not sure if I heard an answer to that last question. Does all of that federal government activity change your appetite? I appreciate the industry commentary, but what about your appetite?

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Not at this time.

[David P. Poroch, CFO at The Southern Company]

Thank you for clarifying. That wasn't my original question. My original question was on slide nine. I'm interested. You showed the demand from large load customers for 2029 and then the mid-2030s. What strikes me is it's a fairly small change, only one incremental gigawatt of contracted and one additional gigawatt of committed. How much of that would you say is the same projects ramping up their demand versus an incremental project or projects coming online between those years? To what degree would you say the small increase is conservatism or risk adjusting or however you want to call it? It just seems like a fairly small delta relative to the trends in commentary.

[David P. Poroch, CFO at The Southern Company]

Yeah. No, I get where you're coming from. What we wanted to try to display in this chart, so I appreciate your question, is that the entire 7 gigawatts on the 2029 column is included in the 2030 column. What we're trying to reflect there is ramp-up timing, and our expectations and projections based on the contracts that we have, as well as in the committed section, that's reflective of the conversations that we've been having and the modeling that we've been doing through the negotiations. Those ramp-ups do take a minute. Those are projected to kind of be over about a five-year period. It's a little different from contract to contract because, obviously, these are tailor-made contracts, bilateral negotiations, not necessarily at all a unique large load tariff. These are tailor-made and reflect our expectations around the ramp-up.

[David P. Poroch, CFO at The Southern Company]

Okay. Great. Thank you very much.

[Operator]

Thank you. Your next question comes from David Arcaro with Morgan Stanley. Please state your question.

[David P. Poroch, CFO at The Southern Company]

David.

[David P. Poroch, CFO at The Southern Company]

Hey, thanks so much.

[David P. Poroch, CFO at The Southern Company]

Hey.

[David P. Poroch, CFO at The Southern Company]

Good afternoon. Looking at the 10 gigawatt large load contracted or committed numbers by 2029, I guess I was just wondering if there's still a further opportunity to add on more gigawatts there to bring on more large load by the 2029 timeframe, or are you seeing system constraints or limits in terms of absorbing additional data centers in the near term?

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

I think that the ability to bring on more is out there. I mean, the answer to your question is yes, there's more capacity, more opportunity. Yes, we are in advanced discussions and advanced considerations with other large load companies in terms of looking at more possibilities. There are more upside opportunities for the latter part of this decade.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Okay. Got it. I was just wondering if you could characterize just maybe the plan for the next set of RFPs, just looking forward for future generation needs. What years would those be representing in terms of when they come into service? What would you be potentially considering bringing forth those RFPs to take in the bids?

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Sure. Remember that 2025 IRP stipulation allowed for another all-source RFP to begin as early as 2026. At the moment, we don't really have any size or parameters. We're just working through that and assessing our needs. We need to get through the processes in place at the moment, then we'll look to the future. That could be in the early 2030s, maybe 2032-ish. We'll have to wait and see how that plays out, and we'll have more clarity next year. We're really encouraged by the conversations that we've been having, and the momentum continues to build, not just in Georgia, but around the service territories.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Okay. Perfect. That's helpful. Thanks so much.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Sure, David. Thank you.

[Operator]

Your next question comes from Agnieszka Anna Storozynski with Seaport. Please state your question.

[David P. Poroch, CFO at The Southern Company]

Hey, Angie.

[Agnieszka Anna Storozynski, Analyst at Seaport]

Thank you.

[Agnieszka Anna Storozynski, Analyst at Seaport]

Thank you.

[Agnieszka Anna Storozynski, Analyst at Seaport]

How are you guys? Okay. My first question about contract-based gas fired new build. In the past, you guys were saying that you're still waiting to see demand or interest in fully loaded economics for gas fired new build for Southern Power. I'm wondering if we've already achieved at that point, or is it still a waiting period?

[Agnieszka Anna Storozynski, Analyst at Seaport]

For recontracting at Southern Power? I just wanted to make sure.

[Agnieszka Anna Storozynski, Analyst at Seaport]

No, no. It's more like building a brand new combined cycle units for a hyperscaler or whoever under a long-term contract by Southern Power, meeting your return expectations. If you've already.

[Agnieszka Anna Storozynski, Analyst at Seaport]

Oh, yeah. Okay.

[Agnieszka Anna Storozynski, Analyst at Seaport]

Seen offers at levels that you would consider interesting.

[Agnieszka Anna Storozynski, Analyst at Seaport]

We continue to evaluate. I think we've talked about it probably several times in the past, that Southern Power, we run with a pretty high filter. We have high credit quality counterparties, long-term in nature, locking up the capacity. No fuel risk. As we find those opportunities that fit into that box, we'll definitely pursue them. At the moment, we're just still evaluating.

[Agnieszka Anna Storozynski, Analyst at Seaport]

The answer is no. You haven't seen them, or you are still sort of debating if the terms are attractive?

[Agnieszka Anna Storozynski, Analyst at Seaport]

Yeah, we're evaluating and having some conversations around that.

[Agnieszka Anna Storozynski, Analyst at Seaport]

Okay. The second thing, and I know you have answered this question a couple of times already on this call about nuclear new build, we keep hearing, especially from Westinghouse, that they are seeing interest in nuclear new build from large regulated utility operators in the U.S. I know that it could be just preliminary discussions. The Southeast seems to come up quite a bit. I'm looking at the map, there are a few options here. I'm just wondering, is it just, as I said, preliminary discussions, or is it you wouldn't be the first one, seemingly, given what's happening in South Carolina? How should we brace for any potential announcements from you?

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Yeah. I mean, I can't speak for others, but I speak for Southern Company. We are not there yet to make an announcement about a new nuclear plant. As we said many times in the past, we want to make sure that all risks are mitigated before we make that kind of decision. I'm excited about all the activity that's occurring around the country with considerations about new nuclear. Until we find a way to get all the risks mitigated, I mean, that's not a decision that we're going to make. We're going to continue to work with the administration, work with other government agencies to talk about the importance and the role that new nuclear can play in meeting this growing demand. Being perfectly clear, no, we're not in a position to make that decision at this point until we find ways to make sure all risks are mitigated.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Understood. Thank you.

[Operator]

Your next question comes from Paul Fremont with Ladenburg Thalmann. Please state your question.

[David P. Poroch, CFO at The Southern Company]

Hey, Paul.

[David P. Poroch, CFO at The Southern Company]

Hey, Paul.

[David P. Poroch, CFO at The Southern Company]

Hey, thanks for taking my question. First question is, I just want to understand the difference between contracted and committed. Is that just an ESA versus an LOA, or what's the distinction there?

[David P. Poroch, CFO at The Southern Company]

Sure. Let's maybe start with the contract. I mean, that's a signed agreement, hopefully pretty relatively self-explanatory. We've got a commitment to deliver based on the terms and conditions negotiated, and parties have signed off, and we're moving forward. The RFS request for service, that's going through the process that we've described in the past, where you kind of start with an entity looking across the states. Maybe they've selected Georgia. We start having conversations with them. We start getting through. Within the state of Georgia, as an example, they're going to pick Georgia Power versus other providers. That takes us to a new level of conversation. More collateral is posted. The process gets more involved. Engineering studies are happening. The commitment then is, as we're negotiating terms and conditions, pricing, ramp-ups, and other needs, that's kind of like your last phase before you're getting into actually signing a contract.

[David P. Poroch, CFO at The Southern Company]

Committed is very far down the road, and we're working through T's and C's, finalizing engineering studies, and on the verge of signing contracts.

[David P. Poroch, CFO at The Southern Company]

Okay. That's sort of like finalizing agreements. Would you be able to characterize then how many gigawatts would be in advanced stage negotiations? I think some of your peers provide that third layer of breakout.

[David P. Poroch, CFO at The Southern Company]

Yeah. In that bucket, we're probably in the neighborhood, 12-ish gigawatts. I mean, it's fairly dynamic, and it's across the system.

[David P. Poroch, CFO at The Southern Company]

Right. Sort of last question for me. You are targeting or you're guiding to 8% sales growth. What year would you expect to sort of achieve that level of sales growth?

[David P. Poroch, CFO at The Southern Company]

That's in the latter part of the horizon. I think we've talked about 2029 is the target for that. We grow into that over time.

[David P. Poroch, CFO at The Southern Company]

Great. That's it for me. Thank you very much.

[David P. Poroch, CFO at The Southern Company]

Awesome. Thank you.

[Operator]

Your next question comes from Travis Miller with Morningstar. Please state your question.

[David P. Poroch, CFO at The Southern Company]

Hi, guys. Thank you.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Hey, Travis.

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Hey, Travis.

[David P. Poroch, CFO at The Southern Company]

Still keeping with the large load popular topic here. If I run through those numbers that you broke out in terms of projects and gigawatts, it looks like average projects somewhere less than half a gigawatt, maybe 300 to 500 megawatts. I was wondering if that's a fair assessment of what you're seeing out there. What does the extra 50 gigawatts or the next stage look like? We've heard some utilities talking about gigawatt projects, tech companies talking about multiple gigawatt projects. I wonder if you could characterize the current customers and then the next step.

[David P. Poroch, CFO at The Southern Company]

Okay. Yeah. Thank you. I wouldn't do just the straight math. I mean, these are wide-ranging. We've got some on the 100 megawatts of the scale, and then we've got a couple at the north of one, one gigawatt. They are really all over the place. Like we've talked about, each one of these are tailor-made contracts for their own specific needs. I'd suggest resisting the simple math.

[David P. Poroch, CFO at The Southern Company]

Okay. That's helpful there. The 50 gigawatts or the next stage, 40 or so gigawatts incremental, what are you seeing from those coming into the system or requesting?

[David P. Poroch, CFO at The Southern Company]

Yeah. The whole pipeline, as we've talked about, those are in various stages. As we build our forecast, we pretty heavily discount all of that through the various layers, if you will, of the contracting process. Yeah, 50 gigawatts, north of 50 gigawatts, is the universe in which we're evaluating right now. We have talked about a small portion of that coming to fruition as a contract.

[David P. Poroch, CFO at The Southern Company]

Okay. Still the same kind of range in terms of actual project, 100 megawatts to north of a gigawatt?

[David P. Poroch, CFO at The Southern Company]

Yeah, yes. Yeah, exactly.

[David P. Poroch, CFO at The Southern Company]

Okay. Do these tend to be greenfield or brownfield? Are they expansions, whether it's manufacturing or data center, are they expansion projects or greenfield projects typically?

[David P. Poroch, CFO at The Southern Company]

Both. Yeah. It's really all over the place. I mean, we've got industrial customers making announcements that they're expanding their capacity here in our service territories. We've got new businesses relocating or starting up, and the data centers, some are expanding. I think we've mentioned, I think, in our prepared comments that the portfolio of data centers that we're serving today have grown at 17% year over year in the quarter. Really excited about what we're seeing in both the portfolio that we're serving today and the process of contracting and the diversity that those customers are bringing to the system.

[David P. Poroch, CFO at The Southern Company]

Okay, great. Appreciate it.

[David P. Poroch, CFO at The Southern Company]

Sure thing.

[Operator]

Thank you. That will conclude today's question and answer session. Sir, are there any closing remarks?

[Christopher C. Womack, Chairman, President and CEO at The Southern Company]

Let me thank everybody for joining us today on our call. As we said before, we have a bright future, and we're looking forward to what's ahead. Thank you very much, and have a great day.

[Operator]

Thank you, sir. Ladies and gentlemen, this concludes The Southern Company Third Quarter 2025 earnings call. You may now disconnect.

Participants

Executives

• Christopher C. Womack, Chairman, President and CEO
• Greg MacLeod, Director, Investor Relations
• David P. Poroch, CFO

Analysts

• Analyst 2
• Agnieszka Anna Storozynski, Analyst at Seaport
• Carly S. Davenport, Analyst at Goldman Sachs Group Inc.
• Analyst 1
• Julien Patrick Dumoulin-Smith, Analyst at Jefferies LLC
• Company Representative