Financial Data and Key Metrics Changes - First quarter revenues declined by 1.4% year over year to $487.6 million, within guidance range [17] - Adjusted EBITDA margin on total revenues expanded by 10 basis points to 11.3% [6][21] - Non-GAAP EPS increased by 9.6% year over year to $1.90, significantly ahead of revenue comparisons [22] Business Line Data and Key Metrics Changes - Revenues from commercial clients increased by 22.1% year over year, accounting for 29.5% of total revenues [6][18] - Revenues from commercial energy clients rose by 21% year over year, driven by energy efficiency and customer engagement programs [5][7] - Revenues from state and local government clients remained stable year on year, with disaster management revenues experiencing lower pass-through revenues [10][11] - Revenues from international government clients increased by 7.2% in the first quarter [12] Market Data and Key Metrics Changes - Revenues from federal clients declined by 12.6% compared to the previous year, impacted by contract funding curtailments [14] - Approximately $115 million of estimated 2025 revenues have been affected by stop work orders and contract terminations [15] Company Strategy and Development Direction - The company expects revenues from commercial energy, state and local, and international government clients to grow at least 15% in aggregate for the year [29] - The company plans to maintain adjusted EBITDA margins similar to 2024 levels despite revenue challenges [15][30] - Focus on organic growth initiatives and strategic acquisitions in targeted markets, particularly in energy [26][74] Management's Comments on Operating Environment and Future Outlook - The federal government business environment remains fluid, with expectations of continued activity but not significantly more impactful than Q1 [33] - The company is optimistic about growth prospects in commercial energy and disaster recovery despite challenges in federal contracts [10][12][29] - Management believes that the diversified business model will help navigate through challenging conditions and position for growth in 2026 [16][30] Other Important Information - Backlog at the end of the first quarter was $3.4 billion, with $1.9 billion funded [23] - The company repurchased 313,000 shares for an aggregate purchase price of $35 million [25] Q&A Session Summary Question: Guidance on federal business impact - Management expects Q2 and Q3 to have similar impacts as Q1, with no significant increase in federal business impact [33] Question: Update on contract terminations - The figure for contract terminations has increased to approximately $375 million [35] Question: Contribution of Applied Energy Group to revenues - Specific revenue contributions from Applied Energy Group were not disclosed, but integration and performance are satisfactory [36] Question: Outlook for IT modernization business - IT modernization is expected to decline by 5% to 10% due to delays in awards, but opportunities are anticipated in the second half of the year [42][68] Question: Growth outlook for disaster recovery business - The disaster recovery business is expected to grow, supported by a robust pipeline of opportunities [60] Question: Acquisition strategy - Future acquisitions are likely to focus on the energy sector, with smaller tuck-in acquisitions being more probable [74]

Financial Data and Key Metrics Changes - PSEG reported net income of $1.18 per share for Q1 2025, up from $1.06 per share in 2024, while non-GAAP operating earnings increased to $1.43 per share from $1.31 per share in the previous year [12][13] - Overall results benefited from regulatory recovery and seasonal gas revenues, with a notable increase in nuclear generation performance [5][6] Business Line Data and Key Metrics Changes - PSE&G's net income and non-GAAP operating earnings for Q1 2025 were $546 million, compared to $488 million in 2024, driven by new electric and gas distribution rates [13][14] - The distribution margin increased by $0.20 per share, reflecting the impact of the rate case and recovery of energy efficiency investments [14] - PSEG Power reported net income of $43 million, slightly down from $44 million in Q1 2024, but non-GAAP operating earnings rose to $172 million from $169 million [17] Market Data and Key Metrics Changes - The Basic Generation Service (BGS) default rate is set to increase residential electric bills by 17% starting June 1, largely due to auction results and true-up for prior years [7][8] - PSEG's combined electric and gas bill remains competitive compared to other utilities in New Jersey, with high reliability metrics and customer satisfaction rankings [8][9] Company Strategy and Development Direction - PSEG's capital investment plan for 2025 focuses on infrastructure replacement and modernization, with a five-year capital spending program of $21 billion to $24 billion [11][16] - The company is rolling out the second phase of its Clean Energy Future Energy Efficiency II program to help customers save energy and reduce carbon emissions [9][16] - PSEG is open to potential legislation allowing regulated utilities to build and own new generation, actively engaging with policymakers [10][30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by rising energy prices and the need for new generation supply to address resource adequacy [8][10] - The company reiterated its full-year non-GAAP operating earnings guidance of $3.94 to $4.06 per share, reflecting a 9% increase from 2024 results [11][22] - Management emphasized the importance of maintaining affordability for customers amid rising costs and ongoing discussions with the Board of Public Utilities [54][56] Other Important Information - PSEG has total available liquidity of $4.6 billion, including $900 million in cash, following significant bond market access [19][20] - The company is focused on maintaining a low level of variable rate debt, representing approximately 7% of total debt [20] Q&A Session Summary Question: Timeline for large load interconnection and resource adequacy in New Jersey - Management indicated that interconnections are happening at different stages, with ongoing discussions about resource adequacy in New Jersey [26][28] Question: Views on FERC settlement process - Management expressed a preference for a settlement process to address industry needs and ensure non-discriminatory treatment among customer classes [32][34] Question: Demand perspective from large load customers - Management noted continued demand for power, particularly nuclear, despite market fluctuations and ongoing discussions [42][43] Question: Strategy for managing affordability concerns - Management highlighted efforts to provide customer assistance programs and promote energy efficiency to mitigate affordability challenges [56][90] Question: Status of commercial agreements related to nuclear capacity - Management confirmed that discussions are ongoing and not contingent on the FERC process, with continued interest from large load customers [60][61] Question: Potential capacity price outcomes and customer bill growth - Management anticipated that capacity prices would remain stable, with no significant increases expected for customers in the near term [75][80] Question: Offshore wind impacts on transmission planning - Management stated that there are no direct impacts from offshore wind developments, but emphasized the need for accurate planning to address future resource adequacy [82]