Alliant Energy's Q3 2025 Earnings Call: Conflicting Signals on Load Growth, CapEx, and Tax Credit Assumptions

Date of Call: November 7, 2025

Financials Results

• EPS: Q3 ongoing EPS $1.12 per share; 2025 ongoing EPS guidance narrowed to $3.17 - $3.23, trending toward upper half; 2026 guidance $3.36 - $3.46 (represents +6.6% vs 2025 midpoint).

Guidance:

• 2025 ongoing EPS guidance narrowed to $3.17–$3.23, trending toward the upper half.
• 2026 EPS guidance initiated at $3.36–$3.46 (+6.6% vs 2025 midpoint).
• 2026 annual common dividend target $2.14 (up 5.4%); payout target 60–70% but expected at lower end during heavy investment.
• 4-year capex plan increased 17% to $13.4B; rate base + CWIP CAGR ~12% (2025–2029).
• Expect 7%+ CAGR across 2027–2029 (base case), with upside tied to additional data-center load.
• Financing plan: ~$2.4B new common equity (2026–2029; $1.6B remaining), tax-credit monetization and up to $1.1B 2026 debt issuance.

Business Commentary:

* Financial Performance and Earnings Guidance: - Alliant Energy reported ongoing earnings of $1.12 per share for Q3, with over 80% of the midpoint of its 2025 earnings guidance realized. - The company narrowed its 2025 earnings guidance range to $3.17 to $3.23 per share, trending towards the upper half of the range. - This performance was driven by higher revenue requirements from capital investments, positive impacts of temperatures on electric and gas sales, and strong margin performance from temperature-normalized electric sales.

• Capital Expenditure and Load Growth:
• Alliant Energy plans to increase capital expenditures by 17% to $13.4 billion, translating to a projected rate base and investment compound annual growth rate of 12% from 2025 to 2029.
• The company is on track for 50% peak demand growth by 2030, driven by new electric service agreements and data center projects.

• This growth is supported by prioritizing plug-in-ready sites and executing capital plans to deliver project certainty and near-term earnings.

• Dividend and Cash Management:

• Alliant Energy increased its 2026 annual common stock dividend target by 5.4% to $2.14 per share.
• The company is moderating the pace of dividend growth to efficiently fund increased capital expenditure plans, planning to be within the lower end of its 60% to 70% payout range during the period of higher investment opportunities.

• This strategy is supported by expected cash generation from operations and future equity issuances.

• Regulatory and Regulatory Matters:

• Alliant Energy secured approvals for key projects, including data centers and energy storage, emphasizing strong regulatory support.
• The company successfully navigated regulatory environments in both Iowa and Wisconsin, with Iowa's new regulatory construct providing predicted earnings growth certainty.
• Positive regulatory outcomes support the company's strategic initiatives and ability to align with regulatory priorities.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management highlighted 'solid financial and operational performance,' narrowed 2025 guidance and initiated 2026 guidance (+6.6%), raised 4-year capex to $13.4B, completed 175 MW storage and other projects, and projects 50% peak demand growth by 2030 driven by 3 GW contracted data-center demand.

Q&A:

• Question from William Appicelli (UBS Investment Bank): Just a question around -- the color, if you could provide on the ramp on the demand, right, around what that could mean for the trajectory of earnings above that 7% as the load starts to come on to the system?
  Response: Management: The '7-plus' means at least 7–8% EPS growth before upside; timing is lumpy and will determine when upside is realized.

• Question from William Appicelli (UBS Investment Bank): So the 12% rate base growth. So when we just think about backing off of that, it's really the equity dilution. Is there anything else to think about when you walk that back to earnings growth?
  Response: CFO: The 12% combines ~10% rate base plus ~2% QIP; primary drag on EPS is equity dilution, plus conservative interest-rate assumptions and modest regulatory lag.

• Question from William Appicelli (UBS Investment Bank): Specific to Iowa because of the uniqueness of that regulatory framework. I mean, what are the assumptions here in terms of earned returns? Is it just at your authorized across the plan? There is some optionality for you to the upside to retain some of those benefits if you can outperform, right?
  Response: CFO: Assumed we'll earn our authorized return in Iowa electric under the new construct; upside above authorized return would be shared with customers; gas lacks the same construct and will require future rate cases.

• Question from Nicholas Campanella (Barclays): Maybe just your kind of calling out that it seems that this 7-plus is pretty conservative. You're in active negotiations for the 2 to 4 gigawatts of additional load. Can you just give a little bit more color on what stages of those incremental opportunities are, and what your line of sight is to maybe have another kind of signed load contract in 2026?
  Response: CEO: The 2–4 GW are in active negotiations with interconnection studies completed; several opportunities are near-term and should be watched over the next 12 months with potential signings sooner.

• Question from Nicholas Campanella (Barclays): And then just so I'm kind of understanding it correctly, that would then kind of put this growth rate above 8%. Is that the right way to think about it?
  Response: CEO: Yes — incremental load could push growth above the 8% level; it's upside to the base plan.

• Question from Nicholas Campanella (Barclays): Maybe I could also just ask, thank you so much for the financing commentary. What is your FFO to debt going to be at the end of '25? Where do you kind of see it through '26? And then also just you have $300 million of tax credits through '26. Does that continue at that level through 2030? And just understanding if you have to eventually replace that cash flow down the line?
  Response: CFO: Targeting ~50–100 bps cushion in FFO to debt through the plan; tax-credit monetization ~ $1.5–$1.6B over next 4 years with strong counterparty demand and confidence in execution.

• Question from Nicholas Campanella (Barclays): One more, if I could. Just the 12% load growth CAGR is large. And I understand the timing of how you get above this 7% plus could also be related to just the load ramping. So just what's the starting point that's embedded in '26, so we have a base to work off of?
  Response: CFO: 2026 includes only modest production load; production load begins H2 2026 (mainly Q4) and then ramps through 2030 to the full 3 GW contracted demand.

• Question from Julien Dumoulin-Smith (Jefferies): Just a follow-up on the 2 to 4 gigs in the pipeline here. Previously, you've identified something like 1.5 gigawatts of mature opportunities with a high probability of conversion, maybe 85%. Taking out QTS Madison, there's something like 600 to 800 megawatts theoretically still in that bucket, perhaps more. But how would you characterize the probability of conversion over time for the remaining 3 to 3.5 gigs there? And then -- and maybe how fragmented is this pipeline? Is the demand dispersed across Iowa and Wisconsin evenly? Just any commentary you have there.
  Response: CEO: High confidence across the pipeline, focused on plug-ready sites (fiber, land, transmission); many sites in Iowa (more data centers likely there) and opportunities are concentrated where minimal transmission is required.

• Question from Julien Dumoulin-Smith (Jefferies): ... bringing that together with the idea that you've got this really visible above-average growth plan that you could potentially attain with upside here. How should we think about all these factors in the outer years?
  Response: CEO/CFO: Wisconsin's two-year forward test years and Iowa's individual customer rate reduce lag; goal is to minimize rate-case frequency and protect ability to earn authorized returns, supporting outer-year growth visibility beyond 2029.

• Question from Julien Dumoulin-Smith (Jefferies): Understood. So with the certainty you kind of have here in the construct, are you confident that there's a possibility here post '27 into the '28 time frame, you could be considering an 8% plus EPS guide? Is there further upside to the upside you've said here?
  Response: CEO: 8%+ is achievable if data centers come online sooner; timing and transmission/interconnection are key; recent Google acceleration is a positive indicator.

• Question from Aditya Gandhi (Wolfe Research): Just on your 7% to 8% plus commentary, what should we think of as the base for that 7% to 8%? Is that the midpoint of 2026 guidance for now? Is that a good way to think about it?
  Response: CEO: Yes — the base for the 7–8% is the midpoint of 2026 guidance.

• Question from Aditya Gandhi (Wolfe Research): Okay. Great. And then on the 2 to 4 gigawatts of negotiations that you're having, can you give some more color on whether these are expansions of existing facilities or customers you've contracted with? Or are they new customers? And then just how should we think about the cadence of updates going forward? Will you just update your plan in Q3 next year? Or could we see an update potentially before that like you did in Q1 of this year?
  Response: CFO: The 2–4 GW mix includes expansions of existing sites and new sites; counterparties are high-quality hyperscalers/colocators; expect clearer visibility within 12 months and quarterly updates when material progress occurs.

• Question from Aditya Gandhi (Wolfe Research): Great. And just one more, if I may. Could you give us some more color on sort of the agreement that you signed with Google to accelerate the load ramp there? Can you just remind us what the load ramp looked like earlier and what it's looking like right now as you're trying to accelerate it?
  Response: CFO: Google acceleration represents ~300 MW of the 3 GW and moves production load earlier (starting H2 2026) with faster ramp in 2027–28; this acceleration is built into the base plan.

Contradiction Point 1

Load Ramp and Capital Expenditures

It involves differing statements about the magnitude of new load opportunities and the impact on capital expenditures, which are critical for understanding the company's growth trajectory and financial planning.

Are there incremental load opportunities and a new load contract expected in 2026? - Nicholas Campanella (Barclays Bank PLC, Research Division)

2025Q3: We view the 2 to 4 gigawatts of opportunities that are ahead of us as very high quality hyperscaler load. - Lisa Barton(CEO)

Given the $10 billion figure and the unchanged chart, have you already accounted for a significant portion of that? - Andrew Marc Weisel (Scotiabank)

2025Q2: The $10 billion investment in Cedar Rapids is already included in our CapEx plan. - Lisa Barton(CEO)

Contradiction Point 2

Rate Base Growth and Equity Dilution

It involves differing statements about the impacts of load growth on rate base growth and equity dilution, which are crucial for understanding the company's financial strategy and sustainability.

How does the demand ramp impact earnings growth beyond your 7% plan? - William Appicelli (UBS Investment Bank, Research Division)

2025Q3: We now believe that we will be able to grow our earnings at a pace that is closer to 7% to 8% growth. - Lisa Barton(CEO)

Can you elaborate on the timeline for formalizing that? - Julien Dumoulin-Smith (Jefferies)

2025Q2: The 7% growth that we have guided you to is inclusive of 2% load growth and 5% QIP growth. - Lisa Barton(CEO)

Contradiction Point 3

Earnings Growth and Load Growth

It involves differing expectations and explanations of the impact of load growth on earnings growth, which are critical for investor expectations and financial forecasting.

How will the demand ramp impact earnings growth relative to the 7% load growth target? - William Appicelli(UBS Investment Bank, Research Division)

2025Q3: The 7% to 8% growth represents known projects. Timing is important; 50% load growth will be significant, with some lumpiness expected. - Lisa Barton(CEO)

Do you still target a 5% to 7% long-term EPS CAGR? How are you trending toward that plan? - Nicholas Campanella(Barclays)

2025Q1: We're focused on cascading growth over time to strengthen and lengthen growth rates. Our updated investment CAGR is nearly 11%, with potential for growth beyond 2028. - Robert Durian(CFO)

Contradiction Point 4

Load Growth Expectations

It involves changes in expectations for load growth, which directly impacts company revenue projections and investor expectations.

How will the demand ramp affect revenue growth relative to the 7% load growth plan? - William Appicelli(UBS Investment Bank)

2025Q3: 50% load growth will be significant, with some lumpiness expected. - Lisa Barton(CEO)

Can you clarify your positioning within the 5-7% growth range? - Shahriar Pourreza(Guggenheim Partners)

2024Q4: We've seen significant interest in recent quarters from large customers like tech companies, data centers. - Lisa Barton(CEO)

Contradiction Point 5

Tax Credit Assumptions

It involves changes in financial forecasts, specifically regarding tax credit assumptions, which are important for understanding the company's financial strategy.

What is the expected FFO-to-debt ratio, and will tax credits remain at the same level through 2030? - Nicholas Campanella(Barclays Bank PLC)

2025Q3: Tax credits of $1.5 to $1.6 billion are expected over the next 4 years. - Robert Durian(CFO)

What are the equity requirements for incremental capital expenditures, and how is the FFO-to-debt ratio trending? - Nicholas Campanella(Barclays)

2024Q4: We expect to monetize approximately $3.5 billion in tax credits over the next 5 years. - Robert Durian(CFO)