NextEra's Q3 2025 Earnings Call: Contradictions Emerge on Nuclear Projects, Tariff Exposure, and Renewables Strategy

Date of Call: October 28, 2025

Financials Results

• EPS: Adjusted earnings per share increased 9.7% year-over-year (9.3% YTD through 9 months).

Guidance:

• FPL full-year capital investments expected between $9.3B and $9.8B.
• FPL reported ROE for the 12 months ending Sept 2025 ~11.7%.
• Expect backlog additions to enter service over next several years (into 2029); added 3 GW this quarter, backlog nearly 30 GW.
• Company will be disappointed if not at or near top end of adjusted EPS expectation ranges for 2025–2027.
• Expect to grow dividends per share roughly 10% per year through at least 2026.

Business Commentary:

• Strong Financial Performance and Earnings Growth:
• NextEra Energy reported a 9.7% increase in adjusted earnings per share year-over-year for Q3 2025.

• This growth was driven by FPL's regulatory capital employed growth of approximately 8% year-over-year and increased contributions from the company's renewables portfolio.

• Renewable and Storage Expansion:

• Energy Resources reported a 13% increase in adjusted earnings year-over-year, with a significant contribution from renewables and storage projects.

• The addition of 3 gigawatts to the backlog during Q3 and the growth in battery storage origination (1.9 gigawatts) support the expansion strategy.

• Investment in Infrastructure and Capacity:

• NextEra Energy plans to invest approximately $40 billion in new infrastructure over the next four years in Florida, including 5.3 gigawatts in solar, 3.4 gigawatts in battery storage, and a gas peaker plant.

• These investments aim to meet Florida's growing need for power while enhancing reliability and keeping customer bills low.

• Data Center and Large Load Solutions:

• NextEra Energy entered into a 25-year power purchase agreement with Google to recommission the Duane Arnold nuclear plant, supporting Google's data center expansion.
• The agreement marks a significant milestone in NextEra's strategy to serve large load customers and power data center hubs across the country.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted adjusted EPS growth of 9.7% YoY, Energy Resources adding 3 GW to backlog (backlog ~30 GW), announced Google PPA to recommission Duane Arnold (expected up to $0.16 annual adjusted EPS first 10 years), and reaffirmed long-term expectations and dividend growth.

Q&A:

• Question from Steven Fleishman (Wolfe Research): 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; plant is in good shape and recommissioning team is same as decommissioning team; the 30% buyout is in exchange for assuming decommissioning liability and funded by existing decommissioning funds.

• Question from Steven Fleishman (Wolfe Research): 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 timing shift: 650 MW conservatively removed for development reasons (expected back in 2026–27) and 250 MW delayed by permitting; overall backlog remains strong and these moves don't affect the ability to meet financial expectations.

• Question from Shahriar Pourreza (Wells Fargo): Can you directionally talk about what you're seeing with Duane Arnold qualitatively without going into the numbers?
  Response: Extensive diligence completed; scope is well defined, facility is in very good condition, and management is confident in execution though CapEx details will be provided later.

• Question from Shahriar Pourreza (Wells Fargo): 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?
  Response: Yes—NextEra has a ~20 GW combined-cycle pipeline, intends to pivot into gas-fired opportunities where appropriate, and will use renewables/storage as an early-stage bridge while gas is built later.

• Question from Nicholas Campanella (Barclays): What is your appetite for AP1000 versus SMR and restarts of large-scale plants?
  Response: Primary focus is on SMRs and restarts/optimizing existing large plants (Point Beach, Seabrook), with disciplined capital allocation and exploration of greenfield opportunities.

• Question from Nicholas Campanella (Barclays): Thoughts on long-term growth philosophy (6–8% historical) and any changes to consider for Analyst Day?
  Response: Deferred—management said they will address long-term growth details at the December 8 investor conference.

• Question from Julien Dumoulin-Smith (Jefferies): Can you discuss progress on gas/contracted gas strategy and cadence for hyperscaler announcements?
  Response: Pursuing a data-center-hub strategy combining renewables, storage and later-stage gas; many initiatives underway and more detail and cadence will be provided at the December investor event.

• Question from Julien Dumoulin-Smith (Jefferies): On Esmeralda and Jackalope, were they in your backlog and how should we view recent media attention?
  Response: Esmeralda was only a development project (not in backlog, no spend); Jackalope is being extended; neither materially affects the large, diversified pipeline (1.5x coverage).

• Question from Carly Davenport (Goldman Sachs): With many additions beyond 2027, is the tax-credit-driven pull forward strictly 2028+ or any impact in 2026–27?
  Response: Pull forward intensifies approaching 2030; '26–'27 remain in good shape but larger demand and pull-forward effects are expected primarily in 2028+.

• Question from Carly Davenport (Goldman Sachs): The $0.16 of average accretion in the first 10 years from Duane Arnold—any cadence or year-to-year variability?
  Response: $0.16 is an average with limited year-to-year variability; modest fluctuations occur in refueling outage years.

• Question from William Appicelli (UBS): From a capability and supply-chain perspective, where can origination scale beyond ~3 GW per quarter?
  Response: Management believes NextEra's supply chain positioning, balance sheet and scale enable meaningful growth and market-share gains in pull-forward years and to integrate renewables/storage into large-load solutions.

• Question from William Appicelli (UBS): At FPL, how is large-load growth progressing and any color on tariff structure for initial ~3 GW capability?
  Response: Tariffs are pending Florida PSC decision (Nov 20); FPL is conducting engineering studies and engaging customers—large-load opportunities likely later this decade.

• Question from David Arcaro (Morgan Stanley): How are renewables interacting with data centers and typical design (percent renewables, colocation, battery role)?
  Response: Renewables plus battery storage and grid upgrades are used to secure early-stage load interconnects so data centers can come online quickly, with baseload (gas/nuclear) added later as campuses expand.

• Question from David Arcaro (Morgan Stanley): What are you seeing in project returns and is there a case for higher returns through year-end?
  Response: Returns are higher than historically seen due to tight supply/demand; recontracting and strong demand underpin attractive returns going forward.

• Question from Nicholas Amicucci (Evercore ISI): How should we think about the portfolio evolution by generation source over the balance of the decade and into the next?
  Response: NextEra expects multi-source growth—FPL growth and large-load, transmission (NEET), gas (long-haul and laterals), renewables, storage, nuclear/SMRs and customer supply—leveraging a national footprint and large pipeline.

• Question from Nicholas Amicucci (Evercore ISI): How are you viewing the nuclear fuel supply chain given Russia exiting enriched uranium supply in 2028?
  Response: Management is confident—U.S. government and industry focus plus disciplined long-term fuel procurement have been incorporated into planning and the Google PPA assumptions.

Contradiction Point 1

Duane Arnold Project Status

It involves the status and timeline of the Duane Arnold nuclear power plant recommissioning, which impacts the company's energy generation and project strategy.

Can you describe the directional trends at the plant without sharing specific numbers? - Shahriar Pourreza (Wells Fargo Securities, LLC, Research Division)

2025Q3: The facility is in good shape, having spent time diligently assessing it. The team that decommissioned it now leads the recommissioning, which is an advantage. - John Ketchum(President, CEO & Chairman)

What's the status of the nuclear contracts at Duane Arnold and Point Beach? - Julien Patrick Dumoulin-Smith (Jefferies)

2025Q2: Duane Arnold continues to advance with positive on-site reviews and customer discussions. - John W. Ketchum(Chairman, President, CEO)

Contradiction Point 2

Impact of OBBB on Development Opportunities

It involves the company's expectations and strategies related to the One Beautiful Bill (OBBB) and its potential impact on development opportunities, which are crucial for the company's growth.

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

2025Q3: Customers are still digesting the bill's effects. Opportunities for natural pull forward exist due to the planning benefits of being a large developer with safe harbor experience, allowing for accelerated projects. - John Ketchum(President, CEO & Chairman)

How does the OBBB impact the safe harbor start of construction and how does it codify it? What are the latest updates on permitting for federal lands? - Steven Isaac Fleishman (Wolfe Research)

2025Q2: The OBBB provides opportunities for pull forward due to uncertainties around 2027 placed in service and safe harbor for '28 and '29. This favors large developers like NextEra. - John W. Ketchum(Chairman, President, CEO)

Contradiction Point 3

Tariff Exposure and Protection

It involves changes in the company's exposure to tariffs and the strategies employed to mitigate them, which are critical for financial planning and investor expectations.

How has your tariff exposure changed compared to the last call? - Steven Fleishman (Wolfe Research, LLC)

2025Q3: Our exposure to tariffs in the numerator of the adjusted EPS calculation is around $150 million. - John Ketchum(CEO)

How will tariffs affect your business in 2025? - Julien Dumoulin-Smith (Jefferies LLC, Research Division)

2025Q1: Our exposure to tariffs in the numerator of the adjusted EPS calculation is around $150 million. - John Ketchum(CEO)

Contradiction Point 4

Renewables and Large Load Growth

It involves differing perspectives on the growth and demand for renewable energy projects, particularly in relation to large load customers like data centers and hyperscalers.

How will renewables affect data centers in the near term, particularly for your ongoing projects? - David Arcaro (Morgan Stanley, Research Division)

2025Q3: Data centers want immediate load interconnects, often requiring their own generation initially. We can provide renewables and storage solutions, allowing them to hook up quickly. Grid upgrades and partnerships also support this. - John Ketchum(CEO)

Have hyperscalers changed their openness to gas? - Jeremy Tonet (JPMorgan)

2024Q4: Customers seek immediate, cost-effective solutions. Current demand shifts attention toward ready resources like renewables and storage. Discussions include diverse supply options and behind-the-meter considerations. - Rebecca Kujawa(CMO)

Contradiction Point 5

Gas-Fired Generation and Project Timelines

It involves differing perspectives on the timeline and feasibility of developing new gas-fired generation projects.

Will the next wave of deals shift to CCGTs for Energy Resources? - Shahriar Pourreza (Wells Fargo Securities, LLC, Research Division)

2025Q3: We are well-suited for CCGTs due to their development platform and strong balance sheet. The combined cycle side presents attractive opportunities. Collaborations with hyperscalers can leverage renewables and storage, with gas following later. - John Ketchum(CEO)

What is the timeline for gas-fired generation and its potential impact on growth? - Shahriar Pourreza (Guggenheim Partners)

2024Q4: Gas projects face challenges like site development and infrastructure. Expect first projects in 2030, with exceptions in ERCOT. High demand for gas turbines and EPC labor increase costs. - John Ketchum(CEO)