Hawaiian Electric Industries Q3 2025 Earnings Report

Hawaiian Electric Industries EPS Results

• Actual EPS: $0.19
• Consensus EPS: -$0.20
• Beat/Miss: Beat by +$0.39
• One Year Ago EPS: N/A

Hawaiian Electric Industries Revenue Results

• Actual Revenue: $790.61 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Hawaiian Electric Industries Announcement Details

• Quarter: Q3 2025
• Date: 11/7/2025
• Time: After Market Closes
• Conference Call Date: Friday, November 7, 2025
• Conference Call Time: 4:30PM ET

Hawaiian Electric Industries (NYSE:HE) is a diversified holding company operating in the energy and financial services sectors in the state of Hawaii. Its principal subsidiary, Hawaiian Electric Company, provides generation, transmission, distribution and customer service to the island of Oahu, while its Maui Electric and Hawaii Electric Light Company subsidiaries serve Maui, Molokai, Lanai and Hawaii Island. The roots of the electric utility business trace back to 1891 when service first commenced in Honolulu.

Through its subsidiary Hawaii Gas, HEI extends its energy portfolio to include the distribution of natural gas and propane, supporting residential, commercial and industrial customers across the islands. The combined electric and gas operations are focused on advancing Hawaii’s clean energy objectives, with growing investments in solar, wind and battery storage projects to enhance grid reliability and reduce greenhouse gas emissions.

In addition to its energy operations, HEI owns American Savings Bank, one of the largest locally based financial institutions in Hawaii. The bank offers a broad range of deposit accounts, lending solutions, mortgage products and wealth management services, catering to both individual consumers and businesses throughout the Hawaiian Islands.

Headquartered in Honolulu, HEI is overseen by a board of directors and senior leadership team dedicated to community engagement, sustainability and dependable service delivery. The company plays a key role in Hawaii’s economy, supporting statewide initiatives for energy innovation and economic growth.

Hawaiian Electric Industries Q3 2025 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: PUC directed Hawaiian Electric to collaborate with PBR working-group parties and submit an alternative rebasing proposal by January 7, 2026; if not approved, the company will file a 2027 test-year rate case in the second half of 2026, which could delay the next multi-year rate period.
• Negative Sentiment: The Maui wildfire settlement is progressing toward final court approval with a hearing set for January 8, 2026; the first payment is expected no sooner than early 2026 and $479 million is held in a restricted subsidiary, with future payments to be financed by debt and/or equity.
• Positive Sentiment: HEI says it has accelerated its wildfire safety program—fully deploying planned weather stations and AI-assisted high-definition cameras, adding an in-house meteorologist and a watch office—and is seeking PUC approval of the strategy to reduce operational risk.
• Positive Sentiment: The company strengthened liquidity and market access by completing a $500 million unsecured debt offering in September, increasing combined credit capacity by $225 million, and reporting substantial additional available liquidity at both the utility and holding company levels.
• Neutral Sentiment: Capital spending is expected to rise materially—about $400M in 2025, $550M–$700M in 2026 and roughly $1.8B–$2.4B for 2026–2028—subject to PUC approvals and regulatory outcomes that will affect timing and recoverability.

Presentation

[Operator]

Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the 2025 earnings conference 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 you would like to ask a question during that time, simply press star and then the number one on your telephone keypad. I would now like to turn the call over to Mateo Garcia, Director of Investor Relations. Sir, please go ahead.

[Mateo Garcia, Director of Investor Relations at HEI]

Welcome, everyone, to HEI's third quarter 2025 earnings call. Joining me today are Scott Seu, HEI President and CEO; Scott DeGhetto, HEI Executive Vice President and CFO; Shelee Kimura, Hawaiian Electric President and CEO; and other members of senior management. Our earnings release and our presentation for this call are available in the Investor Relations section of our website. As a reminder, forward-looking statements will be made on today's call. Factors that could cause actual results to differ materially from expectations can be found in our presentation, our SEC filings, and in the Investor Relations section of our website. Today's presentation also includes references to non-GAAP financial measures, including those referred to as core items. You should refer to the information contained in the slides accompanying today's presentation for definitional information and reconciliations of historical non-GAAP measures to the closest GAAP financial measure.

[Mateo Garcia, Director of Investor Relations at HEI]

We will take questions from institutional investors at the end of this call. Individual investors and others can reach out to Investor Relations. Now, Scott Seu will begin with his remarks.

[Scott Seu, President and CEO at HEI]

Aloha kākou. Welcome, everyone. For today's call, I'll start with an update on our continued progress on initiatives to improve our company's financial strength and resilience. I'll also touch on the ongoing implementation of our wildfire safety strategy and update you on the tort litigation settlement. Scott DeGhetto will walk through our financial results, and then we'll open it up for questions. In the third quarter, we continued to take actions to ensure that we're best positioned to serve the communities in which we operate for the long term. We had a successful quarter progressing the initiatives we've talked about for much of the last two years: implementing wildfire safety improvements, advancing the Maui wildfire tort litigation toward final court approval, and laying the groundwork for a successful second multi-year rate period under our performance-based regulation, or PBR, framework.

[Scott Seu, President and CEO at HEI]

We also improved our liquidity and financial flexibility through evolving credit facilities, which Scott DeGhetto will discuss. In February, and as we had requested, the PUC issued an order establishing that Hawaiian Electric's target revenues should be rebased ahead of the second PBR multi-year rate period set to begin on January 1, 2027, and that a general rate case type proceeding is the most efficient means for doing so. In August, we requested PUC approval to pursue an alternative non-rate case process to rebase rates. The innovative process would involve collaboration with the existing PBR working group parties to develop a rebasing proposal for the PUC's review and approval, and it would avoid the time, cost, and resource burden typically required for a formal rate case proceeding. If successful, the process could result in rebased rates before the next multi-year rate period begins.

[Scott Seu, President and CEO at HEI]

We also made this proposal in recognition of the multiple resource-intensive processes that the PUC and other interested parties are and will be undertaking related to the newly enacted Act 258. These include a wildfire recovery fund study due by the end of 2025, securitization financing, and a rulemaking process to determine utility liability limits for catastrophic wildfire claims. In late September, the PUC granted our request, directing us to collaborate with the PBR working group parties to develop a rebasing proposal by January 7, 2026. If this process does not result in an approved rebasing proposal, Hawaiian Electric will file a 2027 test year rate case sometime in the second half of 2026. In that scenario, the PUC will determine whether the start of the next multi-year rate period will be pushed out beyond January 2027.

[Scott Seu, President and CEO at HEI]

Turning to slide four, we continue to see progress toward implementation of the Maui wildfire tort litigation settlement agreement. The process to obtain final court approval is advancing, with the parties working through remaining administrative steps required for the settlement to take effect. These include final approval of the class settlement agreement and a formal dismissal of the subrogation insurer claims. We expect the court to hold a hearing on January 8, 2026, to consider final approval of the class settlement agreement. Last week, we filed a summary judgment request to dismiss the subrogation insurer claims. In sum, the settlement is on track and progressing as expected, and we still anticipate that our first payment will be due no sooner than early 2026. Turning to slide five, we continue strengthening our utility operational risk profile, which we believe has greatly improved since the 2023 Maui wildfires.

[Scott Seu, President and CEO at HEI]

In the third quarter, we advanced implementation of the enhanced wildfire safety measures outlined in our wildfire safety strategy. We fully deployed all weather stations and AI-assisted high-definition video cameras outlined in our strategy ahead of schedule. For the first time, the utility now has its own in-house meteorologist, part of the utility's newly created watch office, that will help us better predict and prepare for potential dangers from severe weather events. These are just a few examples of the many advancements we've made to help ensure the safety of our communities. We'll continue to make these kinds of critical investments, as laid out in our wildfire safety strategy, which is currently under review by the PUC. As we discussed last quarter, recently enacted legislation allows for securitization to finance these investments, ensuring these safety improvements can be implemented at a lower cost to customers.

[Scott Seu, President and CEO at HEI]

In summary, we continue making significant progress toward resolving the wildfire tort litigation, improving our operational risk profile, and laying the foundation for a strong long-term outlook. I'll now turn the call over to Scott DeGhetto.

[Scott DeGhetto, EVP and CFO at HEI]

Thank you, Scott. I'll start with our financial results for the quarter on slide six. In the third quarter, we generated net income of $30.7 million or $0.18 per share. Quarter's results include $4.5 million for pre-tax Maui wildfire-related expenses, net of insurance recoveries and deferrals. Approximately $3.6 million of these expenses was recorded at the utility. Excluding these items, which we refer to as non-core, consolidated core net income was $32.8 million for the quarter or $0.19 per share. This compares to core income from continuing operations of $32.7 million or $0.29 per share in the third quarter of 2024. Utility core net income for the quarter was $39.6 million, compared to $43.7 million in the third quarter of 2024.

[Scott DeGhetto, EVP and CFO at HEI]

The decrease was driven by lower tax benefits from R&D tax credits, higher legal and consulting costs, which were deferred in 2024, and higher wildfire mitigation program expenses. Holding company core net loss was $6.8 million, compared to $10.9 million in the third quarter of 2024. The lower core net loss was driven by lower interest expense due to the lower debt balance following the April debt retirement and higher interest income from holding company cash being held on the balance sheet, primarily to make the first settlement payment. Turning to the next slide, I'll provide a few key updates on our liquidity and settlement financing plans. As of the end of the third quarter, the holding company and the utility had approximately $40 million and $504 million of unrestricted cash on hand, respectively.

[Scott DeGhetto, EVP and CFO at HEI]

In addition, the holding company has approximately $519 million in combined liquidity available under its ATM program and credit facility capacity. The utility also has approximately $544 million of liquidity available under its accounts receivable facility and credit facility capacity. In September, we completed a successful $500 million unsecured debt offering at Hawaiian Electric, while also increasing our credit facility capacity at HEI and Hawaiian Electric by a combined $225 million. Proceeds from the Hawaiian Electric debt issuance will be used to finance CapEx and pay down debt. Both September transactions not only enhance enterprise-wide liquidity but also show our readily available access to capital markets. Consistent with last quarter, the Hawaiian Electric's board of directors approved a $10 million quarterly dividend to HEI for the third quarter of 2025.

[Scott DeGhetto, EVP and CFO at HEI]

Turning to our funding expectations for the tort litigation settlement, $479 million continues to be held in a subsidiary created for addressing the first payment. This is included in restricted cash on the balance sheet until we make the first payment, still expected not sooner than early 2026. We expect to fund the second settlement payment with debt and/or convertible debt and expect that payments thereafter will be funded with a mix of debt and equity depending on market conditions. Turning to the next slide, CapEx is projected to increase significantly in the coming years compared to historical levels. The higher CapEx will support key strategic objectives of reducing wildfire risk, increasing reliability and resilience, and repowering firm generation. We expect to fund the higher spend primarily with retained earnings and proceeds from our recent debt issuance.

[Scott DeGhetto, EVP and CFO at HEI]

As Scott Seu mentioned, we are working through the rate rebasing process with the PUC and PBR working group parties. We are also awaiting PUC approval of our utility wildfire safety strategy. In October, we filed an application to increase the total cost for the Wai'a Repowering Project, and the application remains subject to PUC approval. The results of these regulatory proceedings will impact our capital expenditure forecast. With those caveats, we are expecting 2025 CapEx to be approximately $400 million. We expect 2026 CapEx of $550 million-$700 million. Of this total, CapEx recovered under the Annual Revenue Adjustment Mechanism, or ARA, is expected to be $350 million-$400 million. EPRM recovered CapEx is expected to add roughly $150 million-$200 million. Wildfire and resilience CapEx, which we are planning to finance via securitization, is expected to be approximately $50 million-$100 million.

[Scott DeGhetto, EVP and CFO at HEI]

We expect 2027 and 2028 CapEx to increase further, driven by the Wai'a Repowering Project, the Wildfire Safety Strategy, and the Army privatization project. Roughly $1.8 billion-$2.4 billion in total CapEx is expected over the next three years from 2026 to 2028. This level of spend is subject to additional PUC approvals and further resource adequacy initiatives and analysis. At that, let's open up the call to questions.

[Operator]

At this time, if you would like to ask a question, press star, then the number one on your telephone keypad. To withdraw your question, simply press star one again. We kindly ask that you limit your questions to one and one follow-up for today's call. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of Julien Dumoulin-Smith with Jefferies. Please go ahead.

[James Ward, Analyst at Jefferies]

Hi, guys. It's James Ward on, actually, for Julian. How are you?

[Scott Seu, President and CEO at HEI]

Good. Hi, James.

[James Ward, Analyst at Jefferies]

Hi. How should we think about the revenue requirement and timing under the alternative rebasing filing, the January 7 filing? What are the key elements that you're looking to align with the PBR phase six modifications and so on? Just that revenue requirement and timing.

[Scott Seu, President and CEO at HEI]

Let me address the timing first, and then I'll perhaps ask either Scott or one of our utility team to comment on some of our goals for the rebasing process. As I mentioned, we requested the PUC approval to enter into this alternative rebasing process. The discussions with the PBR parties are underway. The proposal for rebasing is due to the PUC on January 7, 2026. Should that be successful, we would go from there. If the proposal is not successful, at that point later on in the year, we would consider filing for a 2027 test year rate case. That is just a high level in terms of what the timing is. Maybe I can defer to perhaps Joe Viola, who is our Senior Vice President at Hawaiian Electric Company, head of overseeing regulatory affairs.

[Joe Viola, SVP at HEI]

Hi, James. Again, yeah, Joe Viola here. In terms of what we're shooting for for the rebasing process, really the way I think to think about that is we're setting a new starting point for the second multi-year rate plan. We want to put ourselves in a position that we have new target revenues that would allow us with efficient performance to begin to earn our authorized ROE. At the same time, we'll be developing potential changes to the next multi-year rate plan. We call that MRP2, scheduled currently to begin in 2027. Working on setting a new starting point and then at the same time have changes to the PBR framework that can make it successful during MRP2.

[James Ward, Analyst at Jefferies]

Gotcha. Gotcha. Thank you for that. Both of you. Very much appreciated. Given that utility dividends have resumed, albeit in a small amount, but what's the sustainable cadence of utility to hold co-dividends through the settlement years? And what are the gating criteria?

[Scott DeGhetto, EVP and CFO at HEI]

It's Scott DeGhetto. What we have been doing, and I think you're aware of this, is the utility dividend to the holding company, at least over the past year or two, has been set based on what the needs are up at the holding company. I don't see that changing for the foreseeable future.

[James Ward, Analyst at Jefferies]

Gotcha. Okay. Just checking. That is very helpful. The last one for me, really appreciate the CapEx guidance, which, as you mentioned, was a goal for you guys on the Q2 call. Well done, and thank you for that. As we look forward, how do you think about earnings guidance and ultimately, of course, EPS, which will have to include the financing element there? Could we see EPS guidance in the Q4 call, or is that not something we should put expectations on? Thank you. I will back it up to you.

[Scott DeGhetto, EVP and CFO at HEI]

Yeah. Too soon to say. Again, we really have been looking at reinstituting earnings guidance, but we really do not want to do that until we get through the final settlement approval process and put that behind us. There is a possibility that it could be at that particular point, but I would not count on it. It just all depends on when the final settlement will be approved, and then we will take a look at how the business is performing on a steady-state basis and get back to you. Now, keep in mind, going into the rate rebasing process, right, it is going to be hard for us to give guidance. We might be able to do it for a few quarters, but again, going into that process, we will not know the outcome of that process.

[Scott DeGhetto, EVP and CFO at HEI]

What we do not want to do is give you guys guidance and then have to go back on that guidance or change it dramatically.

[James Ward, Analyst at Jefferies]

Got it. That totally makes sense. Thank you for clarifying.

[Scott DeGhetto, EVP and CFO at HEI]

Thanks.

[Operator]

Your next question comes from the line of Nicholas Campanella with Barclays. Please go ahead.

[Michael Brown, Analyst at Barclays]

This is Michael Brown on for Nicholas Campanella. All right. Can you provide an update on the sale of the remaining portion of the bank?

[Scott Seu, President and CEO at HEI]

You're talking about the remaining or 9.9% ownership of American Savings?

[Michael Brown, Analyst at Barclays]

Yes.

[Scott DeGhetto, EVP and CFO at HEI]

Yeah. We are always looking at what is going on in the market. As we have said on previous calls, we do intend to monetize that stake. We have not really given a timeframe on it. I would say certainly, I should not say certainly, but probably in the next six months or so, we would probably look again pretty hard at that and see what it looks like. We are not committing to a specific timeline at this point.

[Michael Brown, Analyst at Barclays]

Next question for me. What are the expectations of the commission's report on the wildfire fund going into the new legislative window?

[Scott Seu, President and CEO at HEI]

Yeah. The Public Utilities Commission, they have been working on the study that is due to be submitted to the Hawai'i State Legislature 20 days before the next legislative session starts. That is on track. They have been working on information gathering, collecting stakeholder input. As far as we know, they are on track to submit that report.

[Michael Brown, Analyst at Barclays]

With the report, do you anticipate movement in 2026 on any key legislation?

[Scott Seu, President and CEO at HEI]

I don't want to get ahead of the PUC. I'm not quite sure what will be in that report and whether they will recommend that legislation is needed next year. Too soon to say.

[Michael Brown, Analyst at Barclays]

Okay. Thank you. I appreciate that. That's the end of my question.

[Scott Seu, President and CEO at HEI]

All right. Thanks, Michael.

[Scott DeGhetto, EVP and CFO at HEI]

Thanks.

[Operator]

That concludes our question and answer session. I will now turn the call back over to Scott Seu for closing remarks.

[Scott Seu, President and CEO at HEI]

I just want to thank all of our shareholders. A lot of our shareholders are our neighbors here in Hawai'i. Again, thank you, Mahalo, for your continued investment in HEI. We are also very thankful to those of you who supported our successful debt issuance in September. We just really greatly appreciate your support as we continue to help our communities move forward to a sustainable future. Thank you, Mahalo, everybody.

[Operator]

Ladies and gentlemen, this concludes today's call. Thank you all for joining. You may now disconnect.

Participants

Analysts

• Scott DeGhetto, EVP and CFO at HEI
• Mateo Garcia, Director of Investor Relations at HEI
• Scott Seu, President and CEO at HEI
• James Ward, Analyst at Jefferies
• Joe Viola, SVP at HEI
• Michael Brown, Analyst at Barclays