Evergy (EVRG) Q4 2025 earnings review
Stagnant 2025 Gives Way to Aggressive 2026 Breakout
Evergy delivered a mixed FY25, with Adjusted EPS of $3.83 essentially flat (+0.5%) against FY24's $3.81, dampening results with mild weather and rising depreciation costs. However, the narrative shifted dramatically to future growth. Management unveiled a massive $21.6 billion capital plan (2026-2030) and raised its long-term EPS growth target to 6-8%+, fueled by recently approved Large Load Power Service (LLPS) tariffs. With 2026 guidance midpoint set at $4.24, the company projects an immediate double-digit earnings acceleration.
🐂 Bull Case
The approval of LLPS tariffs in both Kansas and Missouri during Q4 is a game-changer. It de-risks the capital spend required for data centers by ensuring new large customers pay a premium, shielding existing ratepayers.
Management raised the long-term EPS growth target from 4-6% to 6-8%+. The 2026 guidance floor ($4.14) is significantly higher than 2025 results ($3.83), signaling high confidence in immediate accretion from new rate structures.
🐻 Bear Case
Operational realities weighed on 2025. Higher depreciation, amortization, and interest expenses largely offset revenue gains. With a $21.6B capital plan, financing costs will remain a significant headwind.
2025 results were hurt by milder-than-normal weather. Despite mitigation efforts, the utility remains highly exposed to volume fluctuations driven by temperature, which masked underlying load growth.
⚖️ Verdict: 🟢
Bullish. While FY25 execution was uninspiring due to weather, the regulatory approvals for large load tariffs and the confident hike in long-term growth targets (backed by signed agreements) fundamentally improve the investment thesis.
Key Themes
Large Load Power Service (LLPS) Tariffs Approved
Accelerating. The critical regulatory hurdle for the data center thesis has been cleared. In Q4, Evergy received approval for LLPS tariffs in Kansas and Missouri. This framework allows the company to sign electric service agreements (two new large projects announced) with premium rates, directly enabling the revised 6-8%+ growth target.
Capital Investment Surge
Accelerating. Evergy introduced a 2026-2030 capital plan of $21.6 billion. This is a massive increase in investment intensity compared to the prior $17.5 billion (2025-2029) plan. This spend will drive rate base growth, necessary to support the 10GW+ data center pipeline mentioned in previous quarters.
Interest and Depreciation Headwinds
Stable Negative. FY25 Adjusted earnings were flat despite regulated investment recovery. The primary offsets were higher depreciation/amortization and interest expense. As the company ramps capex to $21.6B, the burden of financing and depreciating these assets will continue to pressure net margins unless offset by significant load growth.
Weather Volatility
Negative. Milder weather in 2025 was a primary reason for the stagnant EPS growth ($3.83 vs $3.81). Q2 and Q3 specifically suffered from below-normal cooling degree days. The company's inability to fully mitigate weather impacts remains a risk factor for quarterly consistency.
Operational Realignment Costs
Stable. The company incurred costs related to 'executive operations team realignment' in Q4 2024 ($2.5M) but did not report similar realignment costs in Q4 2025, suggesting the organizational restructuring phase may be stabilizing. However, early-stage clean energy investment losses persisted ($19.9M in Q4 25).
Other KPIs
Accelerating. Up 20% YoY from $0.35 in Q4 2024. This strong finish to the year was driven by new rates and demand, helping salvage the full-year performance which was otherwise flat.
Decelerating. Down 2% from $873.5 million in FY 2024. While Adjusted EPS rose slightly due to exclusions (investment losses), the GAAP bottom line contracted, highlighting the cost pressures on the core business.
Stable. Declared for Q1 2026. This represents a ~4% increase over the $0.6675 paid in 2025, consistent with the previous lower-growth framework, though likely to accelerate if the 6-8% earnings target is realized.
Guidance
Accelerating. The midpoint of $4.24 implies a 10.7% increase over 2025 actuals ($3.83). This is a major breakout from the ~0.5% growth seen this year, driven by the onset of new rate structures and large load contributions.
Accelerating. Raised from the prior 4-6% target. Management explicitly stated they expect growth to exceed 8% beginning in 2028. This backend-weighted acceleration aligns with the construction timelines of the new data center customers.
Key Questions
Equity Financing for $21.6B Plan
With the capital plan jumping to $21.6B, what is the specific equity issuance plan (ATM vs. block) for 2026-2027, and how much of the new load cash flow offsets the previously guided $600M/year equity need?
Weather Mitigation Efficacy
Given 2025 performance was dragged down by weather despite 'cost mitigation actions,' what structural changes or hedging strategies are being considered to reduce earnings volatility from mild seasons?
Large Customer Ramp Schedule
Regarding the two new large customer projects signed: what is the specific MW ramp schedule for 2026 vs 2027, and how much of the 2026 guidance bump is volume-driven vs. rate-base driven?