PSEG(PEG) - 2025 Q2 - Quarterly Results

PSEG Announces Second Quarter 2025 Results PSEG reported strong financial results for Q2 and H1 2025, maintaining full-year guidance and highlighting operational successes and strategic developments 1.1 Financial Highlights PSEG reported strong financial performance for both the second quarter and first half of 2025, with significant increases in Net Income and Non-GAAP Operating Earnings, driven by operational efficiencies and strategic investments 1.1.1 Second Quarter Comparative Results Second quarter 2025 results show substantial growth in Net Income and Non-GAAP Operating Earnings per share compared to 2024 | Metric | 2025 ($ millions) | 2024 ($ millions) | Change ($ millions) | Change (%) | 2025 EPS | 2024 EPS | Change (EPS) | Change (EPS %) | | :---------------------- | :---------------- | :---------------- | :------------------ | :--------- | :------- | :------- | :----------- | :------------- | | Net Income | $585 | $434 | $151 | 34.8% | $1.17 | $0.87 | $0.30 | 34.5% | | Non-GAAP Operating Earnings | $384 | $313 | $71 | 22.7% | $0.77 | $0.63 | $0.14 | 22.2% | | Average Shares Outstanding (Diluted) | 500 | 500 | 0 | 0.0% | | | | | 1.1.2 Six Months Ended June 30 Comparative Results Year-to-date June 30, 2025, results demonstrate significant increases in Net Income and Non-GAAP Operating Earnings | Metric | 2025 ($ millions) | 2024 ($ millions) | Change ($ millions) | Change (%) | 2025 EPS | 2024 EPS | Change (EPS) | Change (EPS %) | | :---------------------- | :---------------- | :---------------- | :------------------ | :--------- | :------- | :------- | :----------- | :------------- | | Net Income | $1,174 | $966 | $208 | 21.5% | $2.35 | $1.93 | $0.42 | 21.8% | | Non-GAAP Operating Earnings | $1,102 | $970 | $132 | 13.6% | $2.20 | $1.94 | $0.26 | 13.4% | | Average Shares Outstanding (Diluted) | 500 | 500 | 0 | 0.0% | | | | | 1.2 Management Commentary & Outlook CEO Ralph LaRossa expressed confidence in achieving full-year 2025 non-GAAP Operating Earnings guidance, supported by new distribution rates and nuclear plant optimization efforts. The company also highlighted successful operational management during peak demand and new customer relief initiatives 1.2.1 CEO Statement on Performance and Guidance PSEG reaffirms its 2025 Non-GAAP Operating Earnings guidance and outlines strategic investment and nuclear optimization plans - PSEG maintains its 2025 Non-GAAP Operating Earnings guidance of $3.94 - $4.06 per share, representing a 9% increase at the midpoint over 2024 results[1][5] - The company is on track to execute its full-year, $3.8 billion regulated investment program[6] - PSEG aims to grow its existing 5% to 7% compound annual growth outlook for non-GAAP Operating Earnings over the 2025 to 2029 period[6] - An upcoming refueling outage at the Hope Creek nuclear unit will extend its fuel cycle from 18 to 24 months, optimizing plants for reliable, carbon-free power[5][6] 1.2.2 Operational Highlights and Customer Initiatives PSEG successfully managed peak summer demand and implemented customer relief initiatives to support residential users - PSEG successfully operated through three consecutive days of 100°F temperatures, setting a summer peak load of 10,229 MW on June 24th, the highest since 2013[7] - Infrastructure and storm restoration efforts proved beneficial during intense storms, validating investments in system reliability[7] - PSE&G implemented a Summer Relief Initiative, providing residential customers with deferred billing during high usage months (no interest), extended shut-off protections for income-qualified customers, and suspended electric re-connect fees through September 30[7] 1.3 Other Key Developments Recent PJM capacity auction results for 2026/2027 indicate a higher capacity price with a near-flat impact on customer bills, while federal tax legislation provided favorable terms for nuclear production tax credits and bonus depreciation 1.3.1 PJM Auction Results PJM's latest capacity auction for 2026/2027 resulted in a higher price, with minimal impact on customer bills, amidst resource adequacy concerns - PJM's latest auction results priced capacity at $329 per megawatt-day (MW-day) for the 2026/2027 energy year[8] - The latest PJM capacity price is anticipated to have a near-flat impact on customer electric bills in New Jersey for 2026/2027, assuming other supply-related costs remain constant[8] - Resource adequacy challenges are becoming more acute in New Jersey and across the PJM region due to growing demand and slow response from new generation[8] 1.3.2 Federal Tax Legislation Impact Federal tax legislation provides favorable terms for nuclear production tax credits and extends bonus depreciation - Federal tax legislation preserved the downside price protection of the nuclear production tax credit (PTC) and its availability for nuclear capacity expansions, supporting the planned power uprate at Salem[9][10] - The legislation also permanently extends 100% bonus depreciation to qualified business property[10] Segment Performance Analysis Analysis of PSE&G and PSEG Power & Other segments reveals improved financial performance driven by rate adjustments, load growth, and nuclear operations 2.1 PSE&G Segment Results PSE&G's financial performance improved in Q2 and YTD 2025, benefiting from new electric and gas base rates. The segment is also experiencing significant load growth inquiries, particularly from data centers, which could help spread fixed costs 2.1.1 Financial Performance PSE&G reported increased Net Income and Non-GAAP Operating Earnings for Q2 and YTD 2025, supported by new base rates | Metric | 2Q 2025 ($ millions) | 2Q 2024 ($ millions) | Change ($ millions) | Change (%) | YTD 2025 ($ millions) | YTD 2024 ($ millions) | Change ($ millions) | Change (%) | | :---------------------------------- | :------------------- | :------------------- | :------------------ | :--------- | :-------------------- | :-------------------- | :------------------ | :--------- | | PSE&G Net Income/Non-GAAP Operating Earnings | $332 | $302 | $30 | 9.9% | $878 | $790 | $88 | 11.1% | - PSE&G's Q2 2025 results reflect new electric and gas base rates in effect following the October 2024 distribution rate case settlement, partly offset by higher expenses and the timing of taxes[12] 2.1.2 Operational Developments & Load Growth PSE&G is experiencing substantial load growth inquiries, primarily from data centers, which is expected to benefit customer bills - PSE&G observed significant increases in large load inquiries for new service connections, growing to over 9,400 megawatts as of June 30, 2025, up from 6,400 MW at the end of March, largely driven by data center customers[13] - The engineering assessment response averages about four months, supporting New Jersey's economic development[13] - Conversion of these large load prospects into new utility customers helps lower existing customer bills by spreading fixed costs over a larger user base[13] 2.2 PSEG Power & Other Segment Results PSEG Power & Other reported substantial increases in Net Income and Non-GAAP Operating Earnings, driven by higher nuclear output and favorable capacity auction results. Future results will be influenced by a scheduled nuclear outage and the conclusion of zero emission certificates 2.2.1 Financial Performance PSEG Power & Other achieved significant increases in Net Income and Non-GAAP Operating Earnings for Q2 and YTD 2025 | Metric | 2Q 2025 ($ millions) | 2Q 2024 ($ millions) | Change ($ millions) | Change (%) | YTD 2025 ($ millions) | YTD 2024 ($ millions) | Change ($ millions) | Change (%) | | :---------------------------------- | :------------------- | :------------------- | :------------------ | :--------- | :-------------------- | :-------------------- | :------------------ | :--------- | | PSEG Power & Other Net Income | $253 | $132 | $121 | 91.7% | $296 | $176 | $120 | 68.2% | | PSEG Power & Other Non-GAAP Operating Earnings | $52 | $11 | $41 | 372.7% | $224 | $180 | $44 | 24.4% | 2.2.2 Nuclear Operations & Capacity Auctions Nuclear generation increased in Q2 2025, and PSEG Nuclear secured favorable capacity prices in the 2026/2027 PJM auction - PSEG Nuclear generated approximately 7.5 terawatt hours (TWh) of energy during Q2 2025, up 0.5 TWh (7.1%) over Q2 2024, reflecting the 2024 spring refueling outage at Hope Creek[14] - PSEG Nuclear cleared approximately 3,500 MW of its eligible nuclear capacity in the 2026/2027 PJM base residual auction, priced at $329/MW-day, an increase from approximately $270/MW-day for the 2025/2026 auction[15] - Second half 2025 results for PSEG Power & Other will be impacted by the scheduled Hope Creek outage and the completion of the three-year zero emission certificate award (ended May 31), offset by higher capacity revenues from the 2025/2026 auction[16] Company Information & Disclosures This section provides an overview of PSEG, explains non-GAAP financial measures, outlines forward-looking statements and risk factors, and directs to investor resources 3.1 About PSEG Public Service Enterprise Group (PSEG) is a regulated infrastructure company operating New Jersey's largest utility and owning carbon-free nuclear power generation, committed to a vision of cleaner, safer, and more reliable energy - PSEG is a predominantly regulated infrastructure company, operating New Jersey's largest transmission and distribution utility, serving approximately 2.4 million electric and 1.9 million natural gas customers[17] - PSEG owns an independent fleet of 3,758 MW of carbon-free, baseload nuclear power generating units in NJ and PA[17] - Guided by its 'Powering Progress' vision, PSEG aims to power a future where people use less energy, and it's cleaner, safer, and delivered more reliably[17] - PSEG is a member of the S&P 500 Index and has been named to the Dow Jones Sustainability North America Index for 17 consecutive years[17] 3.2 Non-GAAP Financial Measures Explanation PSEG utilizes non-GAAP Operating Earnings to provide a consistent measure of financial performance, excluding volatile items like NDT and MTM adjustments, while emphasizing that it complements GAAP Net Income - Management uses non-GAAP Operating Earnings as a consistent measure for comparing PSEG's financial performance to previous results, excluding the impact of gains (losses) associated with the Nuclear Decommissioning Trust (NDT), Mark-to-Market (MTM) accounting, and other material infrequent items[18] - The presentation of non-GAAP Operating Earnings is intended to complement and should not be considered an alternative to GAAP Net Income[19] - PSEG is unable to reconcile forward-looking non-GAAP Operating Earnings guidance to GAAP measures due to the inherent difficulty in forecasting and quantifying volatile MTM and NDT gains (losses)[20] 3.3 Forward-Looking Statements & Risk Factors The report includes forward-looking statements that are subject to various risks and uncertainties, such as regulatory challenges, climate change impacts, operational disruptions, and market fluctuations, which could materially affect actual results - The report contains forward-looking statements regarding future performance, revenues, earnings, strategies, and prospects, which are subject to risks and uncertainties that could cause actual results to differ materially[21] - Key risk factors include: inability to successfully develop or obtain regulatory approval for projects; physical, financial, and transition risks related to climate change; equipment failures, cyberattacks, or other disruptions; supply chain disruptions; and changes in state and federal legislation and regulations[21][25] - Readers are cautioned not to place undue reliance on these forward-looking statements, and PSEG disclaims any obligation to update them unless required by applicable securities laws[22] 3.4 Investor Relations Information PSEG encourages investors to visit its corporate Investor Relations website for important updates and to sign up for email alerts - PSEG and PSE&G release important information via postings on their corporate Investor Relations website at https://investor.pseg.com[24](index=24&type=chunk) - Investors and other interested parties are encouraged to visit the Investor Relations website to review new postings and sign up for automatic email alerts[24] Detailed Financial Statements & Operational Data This section provides detailed consolidated statements of operations, capitalization, cash flows, retail sales, weather data, nuclear generation, and statistical measures 4.1 Consolidating Statements of Operations PSEG's consolidated statements of operations for both the second quarter and six months ended June 30, 2025, demonstrate significant growth in operating revenues, operating income, and net income compared to the prior year periods 4.1.1 Three Months Ended June 30 Consolidated operating revenues and net income significantly increased for the three months ended June 30, 2025 | Metric ($ millions) | 2Q 2025 | 2Q 2024 | Change ($ millions) | Change (%) | | :-------------------------- | :------ | :------ | :------------------ | :--------- | | OPERATING REVENUES | $2,805 | $2,423 | $382 | 15.8% | | OPERATING INCOME | $817 | $582 | $235 | 40.4% | | NET INCOME | $585 | $434 | $151 | 34.8% | | OPERATING EARNINGS (non-GAAP) | $384 | $313 | $71 | 22.7% | 4.1.2 Six Months Ended June 30 Consolidated operating revenues and net income showed strong growth for the six months ended June 30, 2025 | Metric ($ millions) | YTD 2025 | YTD 2024 | Change ($ millions) | Change (%) | | :-------------------------- | :------- | :------- | :------------------ | :--------- | | OPERATING REVENUES | $6,027 | $5,183 | $844 | 16.3% | | OPERATING INCOME | $1,614 | $1,267 | $347 | 27.4% | | NET INCOME | $1,174 | $966 | $208 | 21.5% | | OPERATING EARNINGS (non-GAAP) | $1,102 | $970 | $132 | 13.6% | 4.2 Capitalization Schedule PSEG's total capitalization increased as of June 30, 2025, primarily driven by an increase in long-term debt and retained earnings, despite a reduction in commercial paper and loans | Metric ($ millions) | June 30, 2025 | December 31, 2024 | Change ($ millions) | Change (%) | | :-------------------------- | :------------ | :------------------ | :------------------ | :--------- | | Commercial Paper and Loans | $650 | $1,593 | $(943) | -59.2% | | Long-Term Debt | $22,639 | $21,114 | $1,525 | 7.2% | | Total Debt | $23,289 | $22,707 | $582 | 2.6% | | Total Stockholders' Equity | $16,671 | $16,114 | $557 | 3.5% | | Total Capitalization | $39,960 | $38,821 | $1,139 | 2.9% | 4.3 Condensed Consolidated Statements of Cash Flows For the first half of 2025, PSEG experienced a substantial increase in net cash provided by operating activities, while investing activities remained a net use of cash, and financing activities shifted to a net use | Metric ($ millions) | YTD 2025 | YTD 2024 | Change ($ millions) | Change (%) | | :------------------------------------------ | :------- | :------- | :------------------ | :--------- | | Net Cash Provided By (Used In) Operating Activities | $1,527 | $1,143 | $384 | 33.6% | | Net Cash Provided By (Used In) Investing Activities | $(1,388) | $(1,612) | $224 | -13.9% | | Net Cash Provided By (Used In) Financing Activities | $(78) | $515 | $(593) | -115.1% | | Net Change in Cash, Cash Equivalents and Restricted Cash | $61 | $46 | $15 | 32.6% | | Cash, Cash Equivalents and Restricted Cash at End of Period | $215 | $145 | $70 | 48.3% | 4.4 PSE&G Retail Sales & Weather Data PSE&G's electric sales saw a slight decline in Q2 and YTD 2025, while total gas sales increased significantly, particularly non-firm C&I sales. Weather data indicated milder conditions for Q2 but varied year-to-date 4.4.1 Electric Sales PSE&G's electric sales experienced a slight decrease across residential and commercial & industrial sectors in Q2 and YTD 2025 | Sales (million kWh) | 2Q 2025 | Change vs. 2024 (2Q) | YTD 2025 | Change vs. 2024 (YTD) | | :------------------- | :------ | :------------------- | :------- | :-------------------- | | Residential | 3,142 | (7%) | 6,432 | (0%) | | Commercial & Industrial | 6,252 | (2%) | 12,830 | (1%) | | Other | 61 | (14%) | 162 | (5%) | | Total | 9,455 | (4%) | 19,424 | (1%) | 4.4.2 Gas Sold and Transported Total gas sales and transported volumes increased significantly in Q2 and YTD 2025, driven by non-firm C&I sales | Sales (million therms) | 2Q 2025 | Change vs. 2024 (2Q) | YTD 2025 | Change vs. 2024 (YTD) | | :---------------------- | :------ | :------------------- | :------- | :-------------------- | | Total Firm Sales | 356 | (1%) | 1,598 | 9% | | Non-Firm Sales (C&I) | 346 | 81% | 476 | 30% | | Total Sales | 702 | 28% | 2,074 | 14% | 4.4.3 Weather Data Weather data for Q2 2025 showed fewer THI Hours and Degree Days compared to the prior year | Metric | 2Q 2025 | Change vs. 2024 (2Q) | YTD 2025 | Change vs. 2024 (YTD) | | :------------------ | :------ | :------------------- | :------- | :-------------------- | | THI Hours - Actual | 5,043 | (14%) | 5,121 | (13%) | | Degree Days - Actual | 373 | (7%) | 2,749 | 9% | 4.5 Nuclear Generation Measures PSEG's total nuclear generation increased in both Q2 and YTD 2025, primarily due to higher output from New Jersey nuclear units, reflecting the absence of a refueling outage in the current quarter | GWh Breakdown | 2Q 2025 | 2Q 2024 | Change (GWh) | Change (%) | YTD 2025 | YTD 2024 | Change (GWh) | Change (%) | | :-------------- | :------ | :------ | :----------- | :--------- | :------- | :------- | :----------- | :--------- | | Nuclear - NJ | 4,670 | 4,178 | 492 | 11.8% | 10,134 | 9,515 | 619 | 6.5% | | Nuclear - PA | 2,841 | 2,829 | 12 | 0.4% | 5,732 | 5,692 | 40 | 0.7% | | Total | 7,511 | 7,007 | 504 | 7.1% | 15,866 | 15,207 | 659 | 4.3% | 4.6 Statistical Measures PSEG's statistical measures as of June 30, 2025, show stable diluted shares outstanding, an increase in stock price and dividends per share, and an improved market price relative to book value | Metric | YTD 2025 | YTD 2024 | Change | Change (%) | | :------------------------------------ | :------- | :------- | :------- | :--------- | | Weighted Average Common Shares Outstanding (Diluted, millions) | 500 | 500 | 0 | 0.0% | | Stock Price at End of Period | $84.18 | $73.70 | $10.48 | 14.2% | | Dividends Paid per Share of Common Stock | $1.26 | $1.20 | $0.06 | 5.0% | | Dividend Yield | 3.0% | 3.3% | -0.3% | -9.1% | | Book Value per Common Share | $33.43 | $31.79 | $1.64 | 5.2% | | Market Price as a Percent of Book Value | 252% | 232% | 20% | 8.6% | 4.7 Non-GAAP Operating Earnings Reconciliations Reconciliations for both consolidated and PSEG Power & Other segments detail the adjustments made from Net Income to Non-GAAP Operating Earnings, primarily driven by pre-tax gains/losses on Nuclear Decommissioning Trust funds and Mark-to-Market activities 4.7.1 Consolidated Operating Earnings Reconciliation Consolidated reconciliation details adjustments from Net Income to Non-GAAP Operating Earnings, primarily for NDT and MTM activities | Reconciling Items ($ millions) | 2Q 2025 | 2Q 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------------------- | :------ | :------ | :------- | :------- | | Net Income | $585 | $434 | $1,174 | $966 | | (Gain) Loss on Nuclear Decommissioning Trust (NDT) Fund Related Activity, pre-tax | (108) | (13) | (120) | (108) | | (Gain) Loss on Mark-to-Market (MTM), pre-tax | (190) | (159) | (2) | 99 | | Income Taxes related to Operating Earnings (non-GAAP) reconciling items | 97 | 51 | 50 | 17 | | Operating Earnings (non-GAAP) | $384 | $313 | $1,102 | $970 | 4.7.2 PSEG Power & Other Operating Earnings Reconciliation PSEG Power & Other reconciliation outlines adjustments from Net Income to Non-GAAP Operating Earnings, mainly for NDT and MTM | Reconciling Items ($ millions) | 2Q 2025 | 2Q 2024 | YTD 2025 | YTD 2024 | | :-------------------------------------------------- | :------ | :------ | :------- | :------- | | Net Income | $253 | $132 | $296 | $176 | | (Gain) Loss on NDT Fund Related Activity, pre-tax | (108) | (13) | (120) | (108) | | (Gain) Loss on MTM, pre-tax | (190) | (159) | (2) | 99 | | Income Taxes related to Operating Earnings (non-GAAP) reconciling items | 97 | 51 | 50 | 17 | | Operating Earnings (non-GAAP) | $52 | $11 | $224 | $180 |