IDACORP (IDA) Q4 2025 earnings review
Record Earnings Amidst a Capex Supercycle
IDACORP closed 2025 with $5.90 EPS, hitting the top end of guidance and marking its 18th consecutive year of growth. Q4 Net Income rose 15% YoY, aided significantly by rate increases ($11.3M impact) and a sharp, albeit likely temporary, drop in O&M expenses. The narrative has shifted aggressively toward infrastructure execution: the company initiated 2026 guidance with a midpoint of $6.35 EPS (up ~7.6%) but flagged a massive step-up in Capital Expenditures to ~$1.4B—a ~30% jump from 2025 levels. While the organic growth engine (customer count +2.3%) is humming, the sheer scale of spending and rising operational costs in the 2026 outlook introduce execution risk.
🐂 Bull Case
The 2026 guidance assumes using *less* than $30M of Additional Accumulated Deferred Investment Tax Credits (ADITC), down from $40.3M in 2025. Relying less on regulatory support mechanisms to hit higher earnings targets indicates strong underlying organic profitability.
The load forecast is underpinned by tangible large-scale projects, specifically Micron's expansion and data center demand. Management notes the pipeline exceeds the all-time peak load of 3,800 MW, providing visibility well into the 2030s.
🐻 Bear Case
While Q4 benefited from a $12.9M drop in O&M, the 2026 guidance forecasts O&M expenses jumping to $525-$535M (up ~12% from $471M in 2025). This reversal suggests inflationary pressures and maintenance costs are accelerating, eating into margins.
To fund the massive capital plan ($1.3B - $1.5B in 2026 alone), IDA requires substantial external capital. With interest rates volatile and equity issuance needed (dilution risk), the cost of capital remains a key headwind.
⚖️ Verdict: 🟢
Bullish. IDACORP combines the stability of a regulated utility with the growth profile of a tech-adjacent industrial play. The ability to guide for ~7.6% EPS growth while reducing reliance on tax credit buffers is a strong signal of health, though the rising O&M bill bears watching.
Key Themes
Capex Explosion: Doubling Down
The capital investment story is accelerating aggressively. 2026 Capital Expenditures are guided to $1.3B–$1.5B, significantly higher than the $1.08B spent in 2025. This supports the 5-year plan to double the rate base, driven by the Boardman-to-Hemingway transmission line and new generation assets. While this drives future earnings via rate base growth, it puts near-term pressure on free cash flow.
Operational Expense Volatility
There is a stark disconnect between Q4 results and forward guidance regarding expenses. In 25Q4, O&M expenses *decreased* $12.9M due to lower labor/thermal costs. However, 2026 guidance projects O&M to surge to $525-$535M (vs $471M actual in 2025). This implies the Q4 cost savings were transient anomalies, and the company is facing a ~12% structural step-up in operating costs next year.
Regulatory & Rate Relief
Rate cases are doing the heavy lifting for revenue growth. In Q4, retail revenues per MWh (net of adjustments) added $11.3M to operating income, primarily due to the Idaho base rate increase effective Jan 1, 2025. With a 10.4% ROE requested in pending filings and constructive outcomes in recent settlements, regulatory lag is being effectively managed.
Usage Headwinds (Weather)
Despite customer growth, usage per customer was a drag in Q4 (-$4.9M impact), driven by warmer winter weather reducing heating demand. Residential usage per customer dropped significantly. While weather is uncontrollable, it highlights the reliance on industrial load growth to offset residential weather sensitivity.
Declining Reliance on ADITC
IDACORP's unique regulatory mechanism allows it to use Additional Accumulated Deferred Investment Tax Credits (ADITC) to smooth earnings. In 2025, they used $40.3M. For 2026, they guide to using less than $30M. Reducing dependence on this 'earnings buffer' while still guiding for 7%+ EPS growth validates the strength of the core business operations.
Other KPIs
Stable. Added ~15,000 customers in the last 12 months. While residential growth faces headwinds from interest rates, the industrial pipeline remains the primary thesis for long-term acceleration.
Accelerating. Pricing power is evident as rate adjustments flow through to the bottom line, more than offsetting the -$4.9M drag from lower usage per customer.
Stable. Marginally up from $594.4M in FY24. However, with CapEx guiding toward $1.4B, the gap between Operating Cash Flow and Capital Investment is widening, necessitating the $100M+ equity issuance seen in the ATM program.
Guidance
Accelerating. The midpoint ($6.35) implies 7.6% YoY growth from FY25's $5.90. This is a continuation of the strong trend and aligns with the company's long-term growth targets.
Accelerating significantly. This range represents a 20-38% increase over FY25 actuals ($1,083M). It confirms the company has entered a capital-intensive execution phase.
Accelerating (Negative). This guidance is a massive jump from FY25 actuals of $471M. It implies severe cost pressure that was masked by the Q4 dip.
Decelerating. The midpoint (6.5M) is lower than the 7.0M MWh achieved in 2025. This suggests a reversion to mean or conservative water assumptions, which could pressure power supply costs.
Key Questions
O&M Cost Explosion
Q4 O&M expenses dropped $12.9M, yet 2026 guidance implies a ~$60M annual increase (+12%). What specific line items (labor, wildfire mitigation, insurance) are driving this massive step-up, and is this the new baseline growth rate for expenses?
Equity Financing Cadence
With the gap between Operating Cash Flow (~$600M) and guided CapEx (~$1.4B) widening to $800M, how much of this deficit will be funded via the remaining ATM program versus new long-term debt in a volatile rate environment?
Industrial Load Timing
The guidance assumes robust growth, but large projects like Micron's fab are complex. What buffers are built into the 2026 outlook if major industrial load energization is delayed by 2-3 quarters?