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- **Strong Operational Performance**: Q3 2025 EPS of $3.39, up $0.02 YoY, driven by 5.4% weather-normalized sales growth and record transmission revenue.
- **Major Projects**: 2,000 MW Desert Sun Power Plant (Phase 1: 2030 in-service) and $6 billion transmission expansion to support 7%-9% rate base growth.
- **Guidance Updates**: 2025 EPS revised to $4.90-$5.10, 2026 EPS of $4.55-$4.75, with customer growth of 1.5%-2.5%.
- **Subscription Model Success**: 1.2 GW subscription discussions underway, aligning generation delivery with customer demand.
- **Regulatory Focus**: Rate case resolution critical for reducing regulatory lag and improving recovery timing.

**【Management Opening Remarks】**
- Amanda Ho welcomed participants and outlined the call's structure, emphasizing operational and financial performance highlights. She noted the availability of slides on the Investor Relations website and reminded participants of the forward-looking statements' risks and uncertainties. The third-quarter 2025 Form 10-Q was filed, and a replay of the call would be available for 30 days.

**【CEO Summary Section】**
- **Operational Excellence**: The company delivered strong performance during a dynamic summer, including record peak days and reliable service despite extreme weather. The Palo Verde Generating Station operated at 100% capacity factor.
- **Economic Growth Drivers**: Arizona's population growth and major employer expansions (e.g., TSMC, Amkor) are driving demand. SEMICON West's first Phoenix hosting highlighted the region's economic momentum.
- **Major Projects**: 
  - **Desert Sun Power Plant**: A 2,000 MW natural gas project in two phases, with Phase 1 targeting 2030 in-service and Phase 2 leveraging a subscription model for new customers.
  - **Transmission Expansion**: $6 billion in FERC-regulated transmission investments to enhance reliability and access to out-of-state generation.
- **Subscription Model**: A commercial construct to align generation capacity delivery with customer ramp rates, protecting affordability while supporting growth.

**【CFO Financial Commentary】**
- **Q3 2025 Results**: EPS of $3.39, up $0.02 YoY, driven by higher transmission revenues and sales growth across all customer classes. Weather-normalized sales growth was 5.4%.
- **Guidance Updates**: 
  - **2025 EPS**: Revised to $4.90-$5.10 (from $4.40-$4.60), reflecting strong sales and transmission performance.
  - **2026 Outlook**: EPS of $4.55-$4.75, with lower weather assumptions and higher financing costs. Customer growth expected at 1.5%-2.5%, and sales growth of 4%-6%.
- **Capital Strategy**: 
  - **Transmission Investment**: $2.6 billion through 2028, supporting rate base growth of 7%-9%.
  - **Equity Needs**: $1 billion-$1.2 billion through 2028, with 85% of 2026 needs priced. Focus on minimizing dilution through rate case outcomes and subscription model cash contributions.
- **O&M Efficiency**: Expecting a slight YoY decrease in 2026, with long-term focus on reducing O&M per MWh.

**【Q&A Key Highlights】**
- **Desert Sun Timeline**: Phase 1 in-service by late 2030, Phase 2 aligned with customer ramp rates. Discussions with 1.2 GW subscription customers ongoing.
- **Transmission Contribution**: 2026 transmission revenue up $0.55 YoY, driven by FERC formula rate and wheeling opportunities.
- **Regulatory Lag Mitigation**: Focus on rate case resolution and subscription model cash inflows to reduce equity needs.
- **Customer Growth**: 35,000 new meter sets in 2025, with 2026 forecast of 1.5%-2.5% growth, supported by advanced manufacturing and data center expansion.
- **Affordability**: Phoenix's low inflation (1.4%) and cost of living advantages attract businesses and residents, supporting long-term growth.


Pinnacle West Capital Corporation (PNW) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

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Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

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Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

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Other Comprehensive Income

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Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

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Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

PNW

PNW fundamentals

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