8-K: Evergy Q2 2025 Earnings: EPS Down, Guidance Reaffirmed

Evergy reported lower second quarter 2025 GAAP and Adjusted EPS compared to 2024, but reaffirmed its full-year 2025 adjusted EPS guidance and long-term growth targets.

Summary

• Second quarter 2025 GAAP earnings were $171.3 million, or $0.74 per share, down from $207.0 million, or $0.90 per share, in Q2 2024.
• Second quarter 2025 Adjusted earnings (non-GAAP) were $191.1 million, or $0.82 per share, down from $207.0 million, or $0.90 per share, in Q2 2024.
• Year-to-date June 30, 2025 GAAP EPS was $1.28, compared to $1.43 in 2024.
• Year-to-date June 30, 2025 Adjusted EPS (non-GAAP) was $1.37, compared to $1.44 in 2024.
• The company declared a quarterly dividend of $0.6675 per share, payable on September 19, 2025, to shareholders of record as of August 22, 2025.
• Evergy reaffirmed its 2025 Adjusted EPS (non-GAAP) guidance range of $3.92 to $4.12.
• The long-term Adjusted EPS (non-GAAP) annual growth target of 4% to 6% through 2029 was reaffirmed, based on the 2025 guidance midpoint of $4.02.
• Adjusted EPS growth is expected in the upper half of the 4% to 6% range beginning in 2026.

Sentiment

Score: 6

Explanation: While Q2 earnings were down, the reaffirmation of full-year guidance and long-term growth targets, coupled with positive regulatory and project development news (Kansas Central rate case settlement, new natural gas and solar project approvals), suggests a stable outlook despite short-term headwinds. The company is managing challenges and progressing on strategic initiatives.

Positives

• Reaffirmed 2025 Adjusted EPS guidance range of $3.92 to $4.12, indicating confidence in meeting annual targets despite Q2 decline.
• Reaffirmed long-term Adjusted EPS annual growth target of 4% to 6% through 2029, projecting consistent future performance.
• Announced a unanimous settlement agreement in the Kansas Central rate case, which, if approved, is expected to deliver a constructive outcome.
• Received approval for new natural gas and solar projects in Kansas and Missouri, supporting future energy supply and strategic growth.
• Experienced increases in revenue from the recovery of regulated investments.
• Observed growth in weather-normalized electricity demand.
• Declared a stable quarterly dividend of $0.6675 per share.

Negatives

• Second quarter 2025 GAAP EPS decreased to $0.74 from $0.90 in Q2 2024.
• Second quarter 2025 Adjusted EPS (non-GAAP) decreased to $0.82 from $0.90 in Q2 2024.
• Adjusted earnings per share were negatively impacted by milder weather, resulting in a 26% decrease in cooling degree days.
• Higher operations and maintenance expense contributed to the decrease in earnings.
• An increase in interest and depreciation expenses negatively impacted financial results.
• Incurred losses from non-regulated investments in early-stage clean energy and energy solution companies, totaling $25.4 million pre-tax in Q2 2025 and $29.0 million pre-tax year-to-date June 30, 2025.

Risks

• Economic and weather conditions and their impact on sales, prices, and costs.
• Significant changes in the demand for electricity.
• Changes in business strategy or operations, including meeting demand requirements of existing and future customers.
• Impact of federal, state, and local political, legislative, judicial, and regulatory actions or developments, including deregulation, re-regulation, securitization, and restructuring of the electric utility industry.
• Changes in U.S. trade policies (including tariffs and other trade measures) and responses from other countries.
• Ability to build or acquire generation and transmission facilities to meet future electricity demand.
• Ability to control costs, avoid cost and schedule overruns during project development, construction, and operation due to challenges such as changes in labor costs, availability and productivity, contractor/vendor management, subcontractor performance, shortages, delays, increased costs or inconsistent quality of equipment, materials, and labor, and increased financing costs.
• Decisions of regulators regarding customer rates and the prudency of operational decisions like capital expenditures and asset retirements.
• Changes in applicable laws, regulations, rules, principles, or practices, or their interpretations, governing tax, accounting, and environmental matters.
• Development, adoption, and use of artificial intelligence by Evergy and its third-party vendors.
• Impact of climate change, including increased frequency and severity of significant weather events.
• Risks relating to potential wildfires, including costs of litigation, potential regulatory penalties, and damages in excess of insurance liability coverage.
• Extent to which counterparties are willing to do business with, finance, or purchase energy from Evergy due to its operation of coal-fired generation.
• Prices and availability of electricity and natural gas in wholesale markets.
• Market perception of the energy industry and Evergy.
• Impact of future pandemic health events on sales, results of operations, financial position, liquidity, cash flows, and operational issues like supply chain and employee/supplier availability.
• Changes in energy trading markets, including retroactive repricing of transactions by regional transmission organizations (RTO) and independent system operators.
• Financial market conditions and performance, disruptions in the banking industry, including volatility in interest rates and credit spreads, availability and cost of capital, and effects on derivatives and hedges, nuclear decommissioning trust, and pension plan assets and costs.
• Impairments of long-lived assets or goodwill.
• Credit ratings.
• Inflation rates.
• Effectiveness of risk management policies and procedures and the ability of counterparties to satisfy their contractual commitments.
• Impact of physical and cybersecurity breaches, criminal activity, terrorist attacks, acts of war, and other disruptions to Evergy's facilities or information technology infrastructure or those of third-party service providers.
• Impact of geopolitical conflicts on the global energy market, including the ability to contract for non-Russian sourced uranium.
• Ability to carry out marketing and sales plans.
• Cost, availability, quality, and timely provision of equipment, supplies, labor, and fuel.
• Ability to achieve generation goals and the occurrence and duration of planned and unplanned generation outages.
• Ability to manage generation, transmission, and distribution development plans and transmission joint ventures.
• Inherent risks associated with the ownership and operation of a nuclear facility, including environmental, health, safety, regulatory, and financial risks.
• Workforce risks, including attracting and retaining qualified personnel, maintaining satisfactory relationships with labor unions, and managing costs of wages, retirement, health care, and other benefits.
• Disruption, costs, and uncertainties caused by or related to the actions of individuals or entities, such as activist shareholders or special interest groups, that seek to influence Evergy's strategic plan, financial results, or operations.
• Impact of changing expectations and demands of customers, regulators, investors, and stakeholders, including differing views on environmental, social, and governance concerns.
• Possibility that strategic initiatives, including mergers, acquisitions, joint ventures, and divestitures, and long-term financial plans, may not create the value they are expected to achieve in a timely manner or at all.
• Difficulties in maintaining relationships with customers, employees, contractors, regulators, or suppliers.
• Outcome of litigation involving Evergy.

Future Outlook

Evergy reaffirmed its 2025 adjusted EPS guidance range of $3.92 to $4.12 and its long-term adjusted EPS annual growth target of 4% to 6% through 2029, based on the 2025 guidance midpoint of $4.02. The company expects adjusted EPS growth to be in the upper half of the 4% to 6% range beginning in 2026.

Management Comments

• "After a solid second quarter, we are reaffirming our 2025 adjusted EPS guidance range and remain laser-focused on delivering against our financial targets while delivering affordable and reliable electric service to our 1.7 million customers."
• "I am pleased with the progress we have made in several areas in 2025. In July, we announced a unanimous settlement agreement in our Kansas Central rate case which, if approved by the Kansas Corporation Commission (KCC), will deliver a constructive outcome for our Kansas Central customers."
• "We also received approval for new natural gas and solar projects in Kansas and Missouri. These positive results demonstrate strong stakeholder alignment as we work to advance economic development and provide affordable, reliable and sustainable power to the communities we serve."

Industry Context

Evergy operates as a regulated electric utility serving 1.7 million customers in Kansas and Missouri. The company's focus on recovering regulated investments, pursuing new natural gas and solar projects, and achieving a rate case settlement aligns with broader utility industry trends of infrastructure modernization, energy transition (balancing traditional and renewable sources), and navigating regulatory frameworks to ensure cost recovery and service reliability. The impact of weather on electricity demand, as noted by the 26% decrease in cooling degree days, is a common operational factor for utilities.

Comparison to Industry Standards

• The filing does not provide specific comparable companies, projects, or results to benchmark Evergy's performance against global industry standards. The information focuses solely on Evergy's internal performance and guidance.

Legal Proceedings

• The company's forward-looking statements acknowledge risks related to the "outcome of litigation involving the Evergy Companies," but no specific new or ongoing legal proceedings are detailed in this filing.

Stakeholder Impact

• Shareholders: Quarterly dividend declared ($0.6675 per share) and reaffirmation of 2025 EPS guidance and long-term growth targets provide clarity on future returns, despite lower Q2 EPS.
• Customers (1.7 million in Kansas and Missouri): The company's mission focuses on delivering affordable and reliable electric service, and the Kansas Central rate case settlement aims for a "constructive outcome" for customers. Approval of new natural gas and solar projects supports future energy supply.
• Employees: Headquartered in Kansas City, employees are active members of the communities served. Stable company performance generally benefits employees.
• Regulators (Kansas Corporation Commission): Active engagement through the rate case settlement and project approvals demonstrates ongoing regulatory interaction.

Next Steps

• Kansas Corporation Commission (KCC) approval of the Kansas Central rate case settlement agreement.
• Company management to host a conference call on August 7, 2025, at 9:00 a.m. ET (8:00 a.m. CT) with the investment community.
• Quarterly dividend payable on September 19, 2025.
• Company to file its quarterly report on Form 10-Q for the period ended June 30, 2025.

Key Dates

Recommendation

While the second quarter saw a decline in GAAP and Adjusted EPS due to milder weather and increased costs, Evergy's reaffirmation of its full-year 2025 adjusted EPS guidance and long-term growth targets provides stability. The positive developments, such as the Kansas Central rate case settlement and approvals for new natural gas and solar projects, indicate progress on strategic initiatives and regulatory relationships. The company is a regulated utility with a stable dividend, making it a defensive play. The current results suggest the company is on track to meet its annual targets despite quarterly fluctuations, warranting a "Hold" as there are no strong catalysts for significant upside or downside based solely on this filing.

Keywords

Evergy, EVRG, Utility, Energy, Electric, Kansas, Missouri, Earnings, Financial Results, Q2 2025, EPS, Dividend, Guidance, Rate Case, Renewable Energy, Natural Gas, Solar, Power Generation, Grid, Infrastructure, Regulated Utility