NiSource Reports Strong Q4 2025 Earnings: Key Highlights and Future Outlook

In its fourth quarter earnings call for 2025, NiSource demonstrated robust financial performance and strategic growth initiatives, showcasing a disciplined approach to capital management and a proactive regulatory strategy. The company's adjusted earnings per share (EPS) reached $0.51, marking a year-over-year increase, while its total annual adjusted EPS stood at $1.90. With significant investments in infrastructure and a landmark agreement with Amazon, NiSource is well-positioned to continue delivering value to its customers and shareholders.

Financial Performance

NiSource's financial results for the fourth quarter of 2025 are a testament to the company's effective management and operational efficiency. Key metrics include:

• Adjusted EPS: $0.51 for Q4 2025, compared to $0.49 in Q4 2024.
• Full Year Adjusted EPS: $1.90, up from $1.75 in 2024, reflecting a growth of 8.57%.
• Funds from Operations (FFO) to Debt: 16.1%, exceeding the targeted range of 14-16%.
• Weather Impact: Severe weather conditions contributed approximately 70 basis points to FFO for the full year, with expectations that a portion of the costs will be passed back to customers in 2026.

Management's disciplined capital allocation strategy, coupled with constructive regulatory execution, has positioned the company for sustained growth. The reported results underscore NiSource's commitment to operational excellence and financial stability, aligning with their strategic goals.

Strategic Initiatives

In 2025, NiSource executed several key strategic initiatives that are expected to drive long-term growth:

• Amazon Agreement: The company anticipates $1 billion in value to be returned to NIPSCO customers through a groundbreaking agreement with Amazon, translating to an estimated $7 to $9 reduction per customer per month over a 15-year period.
• Infrastructure Investment: NiSource plans to invest approximately $28 billion over the next five years to modernize its electric and gas infrastructure, ensuring safety and reliability.
• Regulatory Advancements: Achievements in regulatory environments across Pennsylvania, Ohio, and Indiana are expected to mitigate bill impacts and enhance customer affordability. For instance, in Pennsylvania, the implementation of a weather normalization mechanism has prevented significant bill spikes.
• Data Center Development: The company is progressing on its data center initiative, evidenced by securing zoning approvals for five parcels in Jasper County, Indiana. This initiative aims to support the growing demand for energy in the data center sector, with ongoing negotiations for 1-3 GW of new capacity.

These initiatives reflect NiSource's commitment to enhancing customer value while fostering economic growth within its service territories.

Future Outlook

Looking ahead, NiSource's management remains optimistic about the company's trajectory. Key aspects of the future outlook include:

• 2026 Guidance: The company reaffirmed its consolidated adjusted EPS guidance for 2026, projecting a range of $2.02 to $2.07, which reflects an 8% increase from 2025.
• Capital Expenditure Plans: NiSource's capital plan includes $21 billion for base utility investments, focusing on grid modernization and safety improvements. Additionally, approximately $6-7 billion is allocated for the Amazon project through 2032.
• Dividend Growth: The board approved a 7.1% increase in dividends for 2026, aligning with the company's commitment to maintaining a payout ratio of 55-65% of earnings.
• Regulatory Environment: NiSource anticipates continued constructive engagement with regulatory bodies, particularly in Indiana, where recent legislative changes are expected to enhance recovery timelines and reduce regulatory lag.

Management's proactive approach to capital allocation and regulatory engagement positions NiSource favorably in an evolving market landscape. The company's diversified operations across electric and gas utilities allow it to adapt to changing policies and customer needs effectively.

Conclusion

In summary, NiSource's fourth quarter earnings call highlighted strong financial performance, strategic initiatives aimed at enhancing customer value, and a positive outlook for the future. The company's disciplined capital management, robust regulatory strategy, and significant investments in infrastructure underscore its commitment to operational excellence and long-term shareholder value. As NiSource continues to execute on its strategic goals, the company is poised for sustained growth in the coming years, making it an attractive option for investors looking to capitalize on the evolving energy landscape. Investors should monitor developments closely as NiSource navigates its ambitious capital plan and regulatory engagements to maximize returns and support economic development.