Entergy Q1 Earnings Call Highlights

Key Points

• Entergy struck a major electric service agreement with Meta for a North Louisiana data center that it says delivers a $2 billion “fair‑share” value (part of a $7 billion customer‑benefit estimate) and includes Meta commitments of $140M for energy efficiency and a $120M matched Power to Care contribution.
• The company boosted its demand and investment outlook, now forecasting about 8.5% compound annual retail sales growth through 2029 (with 16% industrial growth) and raising its four‑year customer‑centric capital plan to $57 billion (up $14 billion).
• To fund the plan Entergy expects $6.6 billion of equity (with ~$1.9 billion already contracted), targets FFO/debt at or above 15% for Moody’s, and raised its 2029 adjusted EPS outlook to $6.40 (up $0.50).

Entergy NYSE: ETR reported first-quarter adjusted earnings per share (EPS) of $0.86 and used its earnings call to detail a major new electric service agreement (ESA) with Meta, a higher long-term retail sales outlook, and a significantly expanded capital plan tied largely to serving new large-load customers.

First-quarter results and sales trends

Chair and CEO Drew Marsh described the quarter as “productive,” citing “strong financial results” and continued momentum in customer growth. CFO Kimberly Fontan said the quarter’s results were “straightforward,” with adjusted EPS of $0.86 driven primarily by the effects of customer-related investments. She said those included “regulatory actions net of higher depreciation expense, taxes other than income taxes, and interest expense from financing capital expenditures.” The increase was “partially offset by a higher share count from settling equity forwards,” Fontan added.

On load, Fontan said industrial sales growth was “very strong at 15%” as new and expansion projects continued to ramp. Overall retail sales increased 6% in the quarter. However, she said the earnings contribution from retail sales growth was “essentially neutral” because higher industrial revenue was offset by weather effects, including “positive weather in the first quarter of last year.”

Meta ESA and the “Fair Share Plus” framework

Marsh said Entergy has worked for several years with stakeholders to recruit data centers while “protecting and benefiting existing customers,” and that it formalized that approach with the launch of its Fair Share Plus pledge. Marsh described the pledge as a set of guiding principles intended to ensure data centers pay their “fair share” for the power they consume, plus additional benefits for customers and communities. He said it aligns with the White House’s Ratepayer Protection Pledge.

Marsh outlined the “fair share” elements as including minimum bills and contract lengths to cover incremental costs, termination provisions to protect existing customers from unneeded costs, clean energy terms, and strong credit terms. He also said “fair share” includes data centers covering their portion of fixed costs already borne by customers today. Marsh said this is the source of the estimated $7 billion of customer benefits the company has highlighted.

Marsh said the “plus” component includes community benefits such as jobs, workforce development, additional support for schools and nonprofits, and multiplier effects from new business activity. He also cited “a stronger electric system with reliability and resilience benefits,” lower average fuel costs from more efficient generation, and specific customer benefits such as low-income or energy-efficiency support.

In late March, Entergy announced a new ESA with Meta for another data center in North Louisiana. Marsh said the fair-share value from the Meta agreement alone is expected to be $2 billion, and is included in the previously cited $7 billion of benefits. He also cited Meta commitments over the next 20 years of $140 million for energy efficiency programs and $60 million for Entergy’s Power to Care program, with Entergy Louisiana matching Power to Care funding, bringing the increase to $120 million. Marsh said that represents a “5x annual increase for 2025 levels” aimed at improving outcomes for vulnerable customers.

Following execution of the agreement, Marsh said Entergy Louisiana filed an application with the Louisiana Public Service Commission seeking approval for assets needed to serve the new Meta data center, including seven new combined-cycle units, transmission infrastructure, and battery storage facilities. Marsh said costs of the proposed facilities would be covered by payments from Meta “whether from their tariff or other contributions,” while “all customers will realize reliability and resilience benefits and lower fuel costs from these investments.”

Marsh also said Entergy agreed to pursue an additional 2.5 gigawatts of renewables and to further investigate carbon capture and storage (CCS), nuclear upgrades, and new nuclear to support Meta’s clean energy goals. The Louisiana commission affirmed Entergy’s request falls under its new Louisiana Lightning Initiative, and directed that the procedural schedule should support a decision at the December B&E meeting, Marsh said.

Updated outlooks: higher sales growth and a larger capital plan

Fontan said the Meta contract prompted Entergy to refresh its outlooks. The company now expects approximately 8.5% compound annual retail sales growth through 2029, driven by 16% industrial growth. Fontan said data centers remain a significant driver, alongside growth from “a variety of traditional Gulf South industries,” including LNG, industrial gases, petrochemicals, agricultural chemicals, and primary metals.

Fontan emphasized that Entergy only adds hyperscale data centers to its plan after signing an ESA and includes them at minimum bill levels, calling it a “conservative approach” designed to ensure forecasted revenue is dependable. During Q&A, Marsh added that non-data center projects are probability weighted, while “the data centers only go in whenever we have a signed ESA.”

Entergy’s customer-centric four-year capital plan increased to $57 billion, up $14 billion from the prior quarter. Fontan said the increase reflects investment needs from the new customer agreement, primarily seven new combined-cycle combustion turbines (CCCTs) and battery storage projects. She said all seven CCCTs have in-service dates in 2030 and 2031, meaning not all of their capital spending falls inside the four-year window.

Fontan said the company made a “conservative assumption” not to include certain transmission investments in the filing as it works through financing options. She also said the plan does not yet include renewables or Riverbend nuclear upgrade investments discussed in the filing, which would be added as projects are firmed up. In response to analyst questions, management acknowledged that the total capital associated with the Meta agreement extends beyond what is currently reflected in the four-year plan.

On broader customer activity, Marsh said Entergy has signed ESAs totaling over 1,000 megawatts so far this year outside the Meta agreement. He characterized them as spanning industries such as steel and petrochemicals, with many “less than 20 megawatts” that add up in aggregate. Management said customer growth beyond data centers remains robust across its operating companies.

Marsh said that after agreements signed to date, including Meta, Entergy still has a pipeline of 7 GW to 12 GW of potential data center customers “that are not in our plan.” Fontan said the Meta agreement would have moved through the backlog and that new interest has continued to refresh the pipeline.

Financing, credit metrics, and other regulatory items

Fontan said the equity associated with the four-year plan is now $6.6 billion, at the low end of the company’s 10% to 15% equity target range for the plan. She said Entergy has sold forward contracts through its at-the-market (ATM) program and a block transaction executed last March, with agreements in place covering about 30% of the four-year need. With $1.9 billion already contracted, Fontan said $4.7 billion remains to be sourced and is not expected to be needed until late 2027 through 2029. She also said the forecast includes $3 billion of parent-level hybrid instruments.

On credit, Fontan said Entergy’s plan reflects funds from operations (FFO) to debt “at or above 15% for Moody’s metric throughout the period,” providing capacity to manage business events. When asked about construction-period pressure from the Meta buildout, Fontan said the structure and regulatory mechanisms support metrics during the heavy construction period.

Fontan also discussed storm cost securitization in Mississippi following an ice storm earlier in the year. She said recent legislation provides a path to securitize storm costs estimated around $200 million, which she said will lower overall costs for customers. Entergy expects to submit a filing by October 5, with a commission decision expected within 60 days of the filing.

Looking ahead, Fontan said Entergy affirmed its 2026 adjusted EPS guidance and updated its longer-term outlooks. She said the adjusted EPS outlook for next year is now $0.20 higher, and by 2029 the increase grows to $0.50, bringing 2029 adjusted EPS to $6.40. She said the company will extend its full outlook to 2030 at its Investor Day in June, and previewed that year-over-year adjusted EPS growth from 2028 to 2029 was 12%, with “approximately the same” expected for 2030.

About Entergy NYSE: ETR

Entergy Corporation NYSE: ETR is an integrated energy company headquartered in New Orleans, Louisiana, that generates, transmits and distributes electricity. The company's operations combine regulated utility services with competitive power production, supplying retail electricity to residential, commercial and industrial customers while also participating in wholesale energy markets. Entergy's generation fleet includes nuclear, natural gas, hydropower and other resources, and it operates a network of transmission and distribution assets to deliver power to end users.

Entergy conducts its regulated utility business through state-based operating subsidiaries that serve customers across parts of Arkansas, Louisiana, Mississippi and southeast Texas.

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