NextEra Energy's Q3 2025 Earnings Call: Contradictions Emerge on Nuclear Plant Costs, Growth, and Gas Strategy

Date of Call: October 28, 2025

Financials Results

• EPS: Adjusted EPS increased 9.7% YOY; first 9 months +9.3% YOY; Energy Resources adjusted EPS +13% YOY; FPL EPS +$0.08 YOY

Guidance:

• FPL FY2025 capital investments expected $9.3B–$9.8B; 12‑month regulatory ROE ~11.7%.
• Long‑term financial expectations unchanged; management would be disappointed if not near top end of adjusted EPS ranges for 2025–2027.
• Expect average annual operating cash flow growth ≥ adjusted EPS CAGR for 2023–2027.
• Target dividend growth of ~10% per year through at least 2026 (off 2024 base).
• Duane Arnold PPA expected to contribute up to $0.16 of annual adjusted EPS on average over its first 10 years (pending approvals).
• Backlog ~30 GW after adding ~3 GW this quarter; 1.9 GW battery storage origination.

Business Commentary:

• Strong Financial and Operational Performance:
• NextEra Energy reported a 9.7% year-over-year increase in adjusted earnings per share for Q3 2025, with a 9.3% increase for the first 9 months of the year.

• This growth was driven by the strong performance of both FPL and NextEra Energy Resources, coupled with increasing demand for electricity.

• Renewables and Storage Developments:

• NextEra Energy Resources added 3 gigawatts to its backlog in Q3, bringing the total to nearly 30 gigawatts, with 1.9 gigawatts in battery storage alone.

• This expansion was fueled by strong customer demand for ready now capacity solutions and the company's robust development platform.

• Nuclear Generation Restart and Expansion:

• An agreement with Google to recommission the Duane Arnold nuclear plant, with expected operations by Q4 2028, will add 615 megawatts to NextEra's generation capacity.

• This was facilitated by the company's development capabilities, existing generation assets, and collaboration with minority owners.

• Data Center and Large Load Solutions:

• NextEra Energy is well-positioned to serve growing energy demand from data centers and large loads, leveraging its comprehensive capabilities in generation and transmission infrastructure.
• The company's strategy includes providing integrated solutions involving renewables, storage, and gas-fired generation to meet data center load needs.

Sentiment Analysis:

Overall Tone: Positive

• Management: "delivered strong third quarter results with adjusted earnings per share increasing 9.7% year-over-year." Executives repeatedly stated the company is "in really, really good shape," highlighted a ~30 GW backlog, 1.9 GW of battery origination, and a 25‑year PPA with Google to recommission Duane Arnold, all signaling growth confidence and constructive outlook.

Q&A:

• Question from Steven Fleishman (Wolfe Research, LLC): Congrats on the Duane Arnold news. Maybe just on that topic, John, can you give us any sense on what the cost of restart might be and also the buy-in price of the 30% that you're buying in of Duane Arnold?
  Response: No CapEx disclosed on call; plant described as "in good shape" and recommissioning team is the same that did decommissioning; the 30% buyout is an exchange for assuming decommissioning liability funded by existing decommissioning funds.

• Question from Steven Fleishman (Wolfe Research, LLC): It was great to see another 3 gigawatt quarter add, but there was a gigawatt removed from the backlog. Could you maybe just talk about that 1 gigawatt removal and what's driving that?
  Response: 900 MW removed due to conservative re‑timing (650 MW pushed later) and a 250 MW permitting delay to 2026; 1.7 GW placed into service this quarter; management expects those MW to return in 2026–27 and says backlog strength and guidance remain intact.

• Question from Shahriar Pourreza (Wells Fargo Securities, LLC, Research Division): Can you directionally talk about what you're seeing with that plant and how we should view it without going into the numbers?
  Response: Duane Arnold is in good condition, scope of work well defined, and having the decommissioning team lead recommissioning gives high execution confidence; no CapEx disclosed.

• Question from Shahriar Pourreza (Wells Fargo Securities, LLC, Research Division): Given the lack of additional nuclear sites to repower, do you see the next wave of deals moving to CCGTs for Energy Resources? Are you seeing demand there, especially given the partnership you have with GE?
  Response: Yes — NextEra intends to expand in gas‑fired combined‑cycle (citing ~20 GW pipeline), leveraging renewables/storage to serve early load with gas coming later; strong GE relationship supports this pivot.

• Question from Nicholas Campanella (Barclays Bank PLC, Research Division): There's a lot of momentum for AP1000. What's your appetite for participating in something like that? Or should we be focused on SMR and restarts of current large‑scale plants?
  Response: Focus is on restarts and SMRs at current sites (Duane Arnold, Point Beach, Seabrook) and selective greenfield work; management will be disciplined on capital allocation and limit financial exposure.

• Question from Nicholas Campanella (Barclays Bank PLC, Research Division): You've been doing this 6%–8% outlook for a long time—how are you thinking about long‑term growth and will that be a focus at Analyst Day?
  Response: Deferred — management will address long‑term growth philosophy and targets at the December 8 investor conference.

• Question from Julien Dumoulin‑Smith (Jefferies LLC, Research Division): With respect to the gas and contracted gas strategy, what progress have you had and should we expect more hyperscaler announcements like Google to be parlayed into contracted gas?
  Response: Developing data‑center hub strategy: use renewables/storage to secure early interconnects and parlay into later contracted gas builds; competitive positioning strong and more details to be provided in December.

• Question from Julien Dumoulin‑Smith (Jefferies LLC, Research Division): Can you elaborate on Esmeralda and Jackalope and whether they were in your backlog?
  Response: Esmeralda was a development project not in backlog with no spend; Jackalope is delayed while customer discussions continue; company has large pipeline and 1.5x coverage to replace such projects.

• Question from Carly Davenport (Goldman Sachs Group, Inc., Research Division): Many additions this quarter are beyond 2027—does the pull‑forward demand related to tax credits affect 2026–27 or is it strictly 2028+?
  Response: Pull‑forward effects intensify closer to 2030; limited near‑term impact on 2026–27 and management feels current plans for those years are in good shape.

• Question from Carly Davenport (Goldman Sachs Group, Inc., Research Division): The $0.16 of average accretion from Duane Arnold—any color on cadence or year‑to‑year variability?
  Response: Minimal variability year‑to‑year; some movement around nuclear refueling outages, which explains modest fluctuations.

• Question from William Appicelli (UBS Investment Bank, Research Division): Where can origination capacity go from ~3 GW/quarter from a capability and supply‑chain perspective?
  Response: Management believes supply‑chain positioning (batteries, transformers, switchgear) plus balance sheet enables scaling beyond ~3 GW/quarter and to capture market share during pull‑forward periods.

• Question from William Appicelli (UBS Investment Bank, Research Division): At FPL, how is the large‑load growth shaping up—tariff structure and conversations around bringing those customers in?
  Response: Tariffs are pending regulatory decision on Nov 20; FPL is fielding many inquiries and conducting engineering studies—large‑load opportunities likely later this decade.

• Question from David Arcaro (Morgan Stanley, Research Division): How are renewables interacting with data centers—what percentage of power needs are covered and how does storage fit?
  Response: Renewables and storage plus grid upgrades are used to secure initial load interconnects so data centers can start operations quickly; baseload gas or nuclear is planned to follow for full supply.

• Question from David Arcaro (Morgan Stanley, Research Division): What are you seeing in project returns and is there a case for higher returns through year‑end?
  Response: Returns are at or above historical highs due to supply/demand imbalance; recontracting of existing generation will capture higher premiums and sustain attractive returns.

• Question from Nicholas Amicucci (Evercore ISI Institutional Equities, Research Division): How should we think about portfolio evolution by generation source over the balance of this decade into the next?
  Response: Expect diversified growth: FPL retail and large‑load, electric and gas transmission, renewables and rapidly built storage, gas combined cycles, nuclear restarts/SMRs, and recontracting opportunities—positioned for post‑2030 growth.

• Question from Nicholas Amicucci (Evercore ISI Institutional Equities, Research Division): How do you view the nuclear fuel supply chain given Russia exiting enriched uranium capacity in 2028?
  Response: Management is confident—U.S. government and industry focus on supply; NextEra has been disciplined securing long‑term fuel and incorporated assumptions into Duane Arnold economics.

Contradiction Point 1

Duane Arnold Nuclear Plant Condition and Cost Estimates

It involves differing statements about the condition of the Duane Arnold nuclear plant and the cost of its restart, which could impact investors' perceptions of the company's financial commitments and operational capabilities.

What is the cost to restart Duane Arnold and the price for the 30% stake you're acquiring? - Steven Fleishman(Wolfe Research, LLC)

2025Q3: Duane Arnold is in good shape, resembling a 'lock and key' situation where we opened the plant back up. The facility is in great condition, and we're confident in our ability to execute the plan, as we have the same team that decommissioned it leading the recommissioning. - [John Ketchum](CEO)

What is Duane Arnold's position in the 2027–2030 nuclear timeline? What are the cost estimates for restarting Duane Arnold and potential site expansion? - Shahriar Pourreza(Guggenheim Partners)

2024Q4: Duane Arnold's licensing process is ongoing, with active customer discussions. I can't provide cost estimates to maintain negotiating position. Nuclear contributions in the near-term involve recommissioning Palisades and Duane Arnold, long-term opportunities involve small modular reactors. - [John Ketchum](CEO)

Contradiction Point 2

Growth and Regulatory Expectations

It involves differing statements about the company's growth expectations and regulatory outcomes, which are critical for investors assessing the company's operational and financial performance.

How does the company compare its long-term growth to other premium companies? - Nicholas Campanella(Barclays Bank PLC, Research Division)

2025Q3: We will address this in detail at our Analyst Day. Our 6%-8% growth outlook has been consistently met, and we're confident in our future growth prospects. - [John Ketchum](CEO)

Can you discuss the surplus reserve mechanism and expected ROE for FPL in 2025? - Nick Campanella(Barclays)

2024Q4: We expect a surplus reserve mechanism to be utilized again, with positive growth expected. ROEs will be reviewed annually, with a potential upside in 2025. We feel confident about our regulatory case, aiming for customer value and efficiency. - [John Ketchum](CEO)

Contradiction Point 3

Pull-Forward of Demand and Its Impact

It involves differing perspectives on the potential impact of the pull-forward of demand due to the Inflation Reduction Act on the company's growth and development strategies.

How could tax credits accelerate demand in 2026 and 2027? - Carly Davenport (Goldman Sachs Group, Inc., Research Division)

2025Q3: The pull-forward demand increases closer to 2030. We feel good about 2026 and 2027, and we're well-positioned for 2028 and beyond with our FEOC and supply chain capabilities. - [John Ketchum](CEO)

Have you observed signs of pull-forward demand due to the bill and what are your market share expectations? - Steven Isaac Fleishman (Wolfe Research)

2025Q2: Customers are digesting the bill, but we expect natural breakpoints that could create opportunities. Projects might be accelerated into 2027 or '28/29 due to safe harbor provisions, potentially favoring our large development capabilities. - [John Ketchum](CEO)

Contradiction Point 4

Gas-Fired Generation Strategy

It involves differences in the company's strategic approach to gas-fired generation, which could influence the expansion and profitability of this business segment.

What's your interest in participating in AP1000 nuclear projects? - Nicholas Campanella (Barclays Bank PLC, Research Division)

2025Q3: We have a 20-gigawatt pipeline of gas-fired projects, leveraging our development platform. Combined with our renewables and storage capabilities, we're positioned to secure load interconnects and anchor data center build-outs, providing a competitive advantage for gas-fired generation. - [John Ketchum](CEO)

Would you consider selling existing gas assets or building new ones? - Anthony Christopher Crowdell (Mizuho)

2025Q2: We're looking at new build and opportunities in the market. We need to ensure the value makes sense and that we can contract for these assets in the near term. We're exploring both greenfield and existing asset sales. - [Brian Bolster](CEO, NextEra Energy Resources)

Contradiction Point 5

Large Load Growth and Tariff Structure

It involves the company's strategy and approach to accommodating large load growth, which is crucial for investor expectations and business expansion, particularly with respect to hyperscaler customers.

How is FPL addressing large load growth in tariff structure? - William Appicelli (UBS Investment Bank, Research Division)

2025Q3: We have tariffs up for approval that we expect to support large load growth. Hyperscalers are interested in our system, and we're engineering solutions to accommodate their needs. - [Armando Pimentel](CEO of Florida Power & Light Company)

How does gas power's role for hyperscalers balance decarbonization goals and the advantages gas offers? - Jeremy Tonet (JPMorgan)

2025Q1: There's 3 things we shoot for, right. One is achieving the development expectations, I'll call it kind of the status quo plain vanilla business that we advance every quarter. The second is large load, and that kind of falls into 2 camps. One is behind the meter discussions and the second is front of the meter discussions. We continue to see a strong preference by hyperscalers for front of the meter solutions, which means ultimately a 3-way conversation right between us, investor and utilities. - [John Ketchum](Chairman, President and CEO of NextEra Energy)