Southern (NYSE:SO) executives used the company’s fourth-quarter 2025 earnings call to highlight a year of adjusted results at the top end of guidance, accelerating demand growth led by large-load customers such as data centers, and a materially larger capital plan aimed at meeting projected load while emphasizing rate stability and credit quality.
2025 results and key drivers
Chief Financial Officer David Poroch reported adjusted earnings per share of $4.30 for 2025, which he said landed at the top of the company’s guidance range and represented 6% growth versus the prior year. Poroch said the 2025 outcome marked the 11th consecutive year Southern delivered adjusted earnings “at the top of or above” its annual guidance range.
Sales trends: broad-based growth and data center usage
Poroch said weather-normalized total retail electricity sales rose 1.7% in 2025 compared to 2024, calling the result substantially higher than the company’s recent history. Georgia Power’s weather-normalized sales grew 2.5%, he added.
Management emphasized growth across customer classes, with particular strength in commercial demand tied to large-load customers. Commercial sales were “particularly strong,” Poroch said, led by increased usage from existing and new large-load data center customers that were up 17% year over year for the second year in a row.
Poroch also cited continued customer growth, including 39,000 new residential electric customers and 25,000 new customers across the company’s natural gas distribution businesses. Industrial sales increased 1.4%, with gains in four of the company’s largest industrial segments: primary metals, lumber, paper, and transportation.
Growth pipeline and contracting approach
Chairman, President and CEO Chris Womack said economic development activity across Southern’s service territories remains robust. He noted that over the past year more than 120 companies decided to locate new facilities or expand operations in Southern’s electric and gas territories, projects expected to support more than 21,000 new jobs. Womack cited announcements spanning data centers and industries such as manufacturing, automotive, aerospace, and metals, including familiar names like General Electric, US Steel, Duracell, and Mercedes-Benz.
Poroch provided updated sales forecasts and large-load pipeline metrics:
- Southern projects at least 3% retail electric sales growth in 2026 across its three electric operating companies.
- From 2026 through 2030, management projects average annual electricity sales growth of 10%, which it said is 2 percentage points higher than prior long-term sales projections.
- Georgia Power’s total retail electric sales growth is projected to be approximately 13% over the same period.
- The company’s large-load pipeline has increased to over 75 GW.
- Southern reported 26 signed contracts representing 10 GW of fully contracted electric service agreements, up 2 GW from the prior quarter and 4 GW from a year earlier.
Those signed projects include load ramps totaling 8 GW by the end of the company’s five-year planning horizon, ultimately ramping to 10 GW beyond 2030, Poroch said. In addition to signed contracts, he said the company is in late-stage discussions for another 10 GW of load, with 3 GW working through final reviews and “highly likely” to progress to executed contracts in the near term.
On the call, management clarified in Q&A that the 3 GW described as highly likely is already baked into the forecast presented, alongside the 10 GW of signed contracts. Executives also said sales growth and associated revenues are expected to accelerate into 2027 and expand more meaningfully in 2028, based on the timing of load ramps in the company’s risk-adjusted forecast.
Poroch said the company’s regulatory frameworks allow bilaterally negotiated contracts for large-load customers rather than standard tariffs, which management believes provides flexibility to price contracts to more than cover incremental costs. He said data center contracts carry minimum terms of at least 15 years, with some extending longer, and include minimum bill provisions designed to cover at least 100% of annual incremental cost to serve, as well as termination payment protections and collateral requirements.
Poroch said Georgia Power quantified at least approximately $1.7 billion of customer benefits expected to help lower cost to serve existing customers from 2029 through 2031, which he said was directly attributable to the company’s approach to contracting and serving new large-load customers. He also noted Georgia Power made filings for storm and fuel cost recoveries that, if approved, would lower rates for customers starting in the summer.
Capital plan expansion, financing, and updated EPS guidance
Poroch said Southern’s base capital investment forecast is $81 billion over the next five years, with 95% directed to state-regulated utilities. The plan is an $18 billion, or approximately 30%, increase from the forecast a year earlier, driven largely by new generation facilities announced or approved in 2025 and incremental investments tied to Georgia’s approved integrated resource plan, including uprates at existing natural gas and nuclear facilities and hydro modernization.
Through 2030, the company expects to invest roughly $42 billion—more than half of the five-year capital plan—to serve projected growth via new generation, enhancements to existing generation, and expansions of transmission and interstate pipeline systems. Poroch said the plan supports projected long-term state-regulated average annual rate base growth of approximately 9%, up 2% from a year ago.
Executives also emphasized that the base capital plan does not include “placeholders” or investments still subject to regulatory processes, and said there are additional potential capital opportunities beyond the base plan. In Q&A, management offered a “rough rule of thumb” that investors could estimate about $2 billion for a gigawatt of incremental generation, while noting projects would be subject to review and processes.
On financing, Poroch said preserving investment-grade credit ratings remains a priority. He highlighted actions in 2025 to proactively address $9 billion of equity needs, including $4 billion of equity through the company’s ATM program with forward contracts settling through 2026 and $2 billion of equity units via a mandatory convertible settling in shares in 2028. He said the company projects an additional need for equity or equity equivalents of approximately $2 billion through 2030.
Poroch reiterated Southern’s dividend history—dividends paid for 78 consecutive years at or above the prior year and increases in each of the last 24 years—and said the company projects continued modest dividend increases in coming years, with an aim of lowering the payout ratio into the low- to mid-60% range later in the forecast horizon. In Q&A, management said that once the payout ratio trends toward roughly the 60% range, the company could revisit the pace of dividend growth, subject to board approval.
For 2026, Southern issued adjusted EPS guidance of $4.50 to $4.60, with an estimated $1.20 for the first quarter. The company also provided initial annual guidance ranges for 2027 and 2028: $4.85 to $4.95 for 2027 and $5.25 to $5.45 for 2028. Longer term, Poroch said the company expects adjusted earnings to grow approximately 7% to 8% from the 2028 guidance range, equating to an average annual adjusted earnings growth profile of 8% from the 2026 guidance midpoint to 2030.
Southern Power and operational execution
Womack also discussed Southern Power, the company’s competitive power business. He said the portfolio totals more than 13 GW across 55 generating facilities in 15 states and is largely contracted under long-term agreements with creditworthy counterparties, with management stating it does not take meaningful commodity risk. Executives pointed to potential upside as contracts on Southern Power’s natural gas fleet begin to come up for renewal in the early 2030s. Poroch said market demand for capacity has increased pricing “roughly 2-3 times” higher than where many assets are currently contracted, and in Q&A cited market examples around $20 to $25 per kilowatt-month. Management also discussed late-stage discussions regarding uprates of up to an additional 700 MW on Southern Power’s legacy natural gas fleet, as well as evaluation of new gas generation opportunities at existing plant sites, emphasizing that Southern Power’s risk profile would not change and that development would require long-term contracts with creditworthy counterparties.
Womack closed by stressing execution capabilities for a large-scale buildout, noting early EPC agreements and supply chain preparations. He referenced Winter Storm Fern in January, when the system served the second-highest winter peak load of over 39,000 MW, and cited operational tools including AI-based crew pre-positioning and self-healing networks. Womack also said Southern was recognized as the number one electric and gas utility on Fortune’s most admired companies list for 2026.
About Southern (NYSE:SO)
Southern Company (NYSE: SO) is an Atlanta-based energy holding company that provides electric and gas utility services and owns power generation assets across the United States. Founded in 1945, the company operates a portfolio of regulated electric utilities and affiliated businesses that generate, transmit and distribute electricity to residential, commercial and industrial customers.
Southern’s principal regulated electric subsidiaries include Georgia Power, Alabama Power and Mississippi Power, which serve large portions of the southeastern United States.
