Financial Data and Key Metrics Changes - The company reported adjusted earnings of $1.77 per share for Q1 fiscal 2026, an increase from $1.34 per share a year ago, reflecting strong execution in the gas utility business and contributions from marketing and midstream segments [4][10] - Adjusted earnings for the quarter totaled $108 million, compared to $81 million in the previous year, with gas utilities earning $104 million, up over 33% [10][11] - The company reaffirmed its 2026 adjusted EPS guidance of $5.25-$5.45 per share and 2027 guidance of $5.65-$5.85 per share, indicating confidence in its financial performance [5][12] Business Line Data and Key Metrics Changes - Gas utilities segment earnings increased by $26 million year-over-year, driven by new rates in Missouri and higher margins in Alabama, despite lower volumetric margins and increased O&M depreciation and interest expenses [10][11] - Gas marketing segment earnings rose to $4.5 million, an increase of $2.3 million due to enhanced portfolio optimization opportunities [10] - Midstream segment earnings reached $12.7 million, up nearly $1 million from the previous year, attributed to additional capacity at Spire Storage [11] Market Data and Key Metrics Changes - The company experienced significant demand for natural gas during Winter Storm Fern, delivering natural gas equivalent to 31 gigawatts of electric generation capacity [3] - The company’s capital expenditures for the quarter were $230 million, primarily directed towards gas utility operations, with expectations of $809 million in CapEx for 2026 [8][9] Company Strategy and Development Direction - The company is focused on executing its ten-year capital plan of $11.2 billion, primarily targeting utility investments, while maintaining a disciplined approach to capital deployment [6][9] - The company aims to achieve constructive regulatory outcomes and is preparing for a future test year Missouri rate case [16] - The ongoing evaluation of the potential sale of natural gas storage assets reflects the company's strategy to simplify its portfolio [8][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the portfolio and the disciplined approach to capital deployment, reaffirming long-term adjusted EPS growth targets of 5%-7% [5][12] - The integration planning for the Tennessee acquisition is underway, with a focus on ensuring seamless continuity for customers and employees [8][39] - Management highlighted the importance of customer affordability and cost management as central to the company's strategy [4][16] Other Important Information - The company issued $900 million of junior subordinated notes and entered into a master note purchase agreement for $825 million of senior notes to fund the Tennessee acquisition [7][15] - The merger of the STL and MoGas pipelines was completed on January 1, 2026, which will operate as the Spire MoGas pipeline [13] Q&A Session Summary Question: How did the marketing segment perform during the gas market volatility in January? - Management indicated satisfaction with the operational performance and confirmed that customer obligations were met during the volatility [18][19] Question: Can you provide an update on the storage asset sales process? - Management noted that the evaluation process is taking longer than expected but remains optimistic about achieving the right value for the assets [24][25][46] Question: What are the expectations for equity issuance related to the Tennessee acquisition? - Management stated that an announcement regarding the storage evaluation is expected later this quarter, and they are covered with a bridge loan if needed [32][26] Question: What is the regulatory strategy and timeline for Missouri? - Management anticipates filing the next rate case after the fiscal year-end, likely in the October-November timeframe [56]

Core Insights - Natural gas prices fell from an 8-month high due to a mixed weather forecast in the US, which may reduce heating demand [1] - Increased US natural gas production is a bearish factor for prices, with the EIA raising its 2025 production forecast by 1.0% to 107.67 billion cubic feet per day (bcf/day) [2] - Active US natural gas rigs reached a 2-year high, indicating strong production levels [2][6] Production and Demand - US dry gas production was reported at 110.8 bcf/day, reflecting a year-over-year increase of 10.4% [3] - Lower-48 state gas demand was 86.9 bcf/day, up 6.1% year-over-year [3] - Estimated LNG net flows to US export terminals were 17.8 bcf/day, a 5.1% increase week-over-week [3] Electricity Output and Inventory - US electricity output rose by 0.05% year-over-year to 73,730 GWh for the week ending November 1, supporting gas prices [4] - The EIA's upcoming report is expected to show a nat-gas inventory increase of 34 bcf, close to the five-year average [4] - As of October 31, nat-gas inventories were up 0.4% year-over-year and 4.3% above the five-year seasonal average, indicating adequate supplies [5] Rig Count and Market Trends - The number of active US nat-gas drilling rigs increased by 3 to a 2.25-year high of 128 rigs [6] - The rise in gas rigs from a 4.5-year low of 94 rigs in September 2024 suggests a recovery in drilling activity [6]

Joining us now is Melius Researchers head of energy and power research James West. James, thank you very much for joining us. >> Thanks for having me, Ryan.>> Well, do you think we first off, can we make that kind of power. >> So, I think we're going to be seeing fencing starts here on power generation. I mean, we didn't have power growth in this country for 20 years, and now we're having this dramatic surge in growth.And power is the table stakes, as I mentioned in the note, uh to AI. If you don't have ele ...

Financial Data and Key Metrics Changes - The company reported consolidated revenues of $615 million in Q2 2025, slightly up from $614 million in Q2 2024 and $552 million in Q1 2025 [14] - Gross margin before depreciation and amortization was $175 million, representing 29% of revenue, compared to $173 million (28%) in Q2 2024 and $161 million (29%) in Q1 2025 [14] - Adjusted EBITDA reached a record $130 million, up from $122 million in Q2 2024 and $113 million in Q1 2025 [15] - Free cash flow was a use of cash of $39 million in Q2 2025, compared to a use of cash of $4 million in Q2 2024 and a source of cash of $85 million in Q1 2025 [16] Business Line Data and Key Metrics Changes - Energy infrastructure and aftermarket services contributed 65% of gross margin before depreciation and amortization in Q2 2025 [5] - The energy infrastructure business generated a gross margin before D&A of $86 million, compared to $77 million in Q2 2024 and $86 million in Q1 2025 [15] - Aftermarket services gross margin before D&A was 23% in the quarter, benefiting from strong customer maintenance programs [10] Market Data and Key Metrics Changes - The U.S. contract compression business maintained utilization above 90% for the past fourteen quarters, with a backlog of $1.2 billion at the end of Q2 2025 [6][11] - The international energy infrastructure business is supported by approximately $1.3 billion of contracted revenue with an average contract term of about five years [10] Company Strategy and Development Direction - The company aims to enhance profitability of core operations and maximize free cash flow to strengthen its financial position and provide direct shareholder returns [12] - Capital expenditures for 2025 are expected to approximate $120 million, with $60 million earmarked for growth initiatives primarily in the U.S. contract compression business [20] - The company is focused on leveraging its leading position in core operating countries to capitalize on expected increases in natural gas and produced water volumes [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals driving growth, including global energy security and increasing demand for natural gas [23] - The leadership transition is ongoing, with a comprehensive search for a permanent CEO in progress [12] Other Important Information - The company returned $18 million to shareholders in Q2 2025 through dividends and share repurchases [21] - The bank adjusted net debt to EBITDA ratio was approximately 1.3 times at the end of Q2 2025, down from 2.2 times at the end of Q2 2024 [18] Q&A Session Summary Question: What is driving the tightness in utilization in U.S. contract compression? - Management noted a favorable supply-demand balance in the U.S. contract compression market, supported by disciplined actions from major competitors and increasing natural gas production [27] Question: Can you elaborate on the expansion of the North American manufacturing facility? - The company has acquired additional land adjacent to its U.S. facility in Houston to maintain optionality for future growth, despite having sufficient capacity currently [36][38] Question: What are the expectations for CapEx in 2026 and beyond? - The company plans to continue strategic investments in the U.S. contract compression fleet, with a focus on aligning with customer planning cycles and supply chain realities [41] Question: How do you view your time to market for new compression compared to competitors? - Management believes their vertically integrated model provides a competitive advantage in time to market compared to competitors using third-party manufacturers [43] Question: What is the outlook for G&A expenses moving forward? - Management expects G&A expenses to remain at a favorable level due to synergies from integration and ongoing efforts to simplify the business [50]