Southwest Gas Holdings (SWX) Q4 2024 earnings summary

Executive summary

• Achieved record annual operating margin, 8.1% utility ROE, and over 8% return on equity for the second consecutive year in 2024, with utility net income $18 million above guidance high end.

• GAAP net income reached $261 million for 2024, a $19 million year-over-year increase, exceeding guidance.

• Added 41,000 new meter sets in 2024, reflecting strong customer growth driven by economic activity and in-migration.

• Advanced regulatory strategy with approvals and filings in NV, AZ, CA, and Great Basin, and completed Centuri IPO as part of separation strategy.

• Maintained a strong investment grade balance sheet, ending 2024 with over $360 million in cash and no equity issuances during the year.

Financial highlights

• 2024 utility operating margin increased by $72.5 million year-over-year, driven by $66 million in rate relief and $12 million from customer growth.

• Full-year 2024 utility net income was $18 million above the high end of the expected range, with adjusted diluted EPS at $3.16.

• O&M costs remained nearly flat per customer, with a modest 2% increase year-over-year, below inflation.

• Finished 2024 with over $360 million in cash and more than $1 billion in consolidated liquidity.

• S&P FFO/Debt improved to 17.1% in 2024 from 14.4% in 2023, with no new planned SWG debt issuance in 2025.

Outlook and guidance

• 2025 utility net income guidance is $265–$275 million, with CapEx of approximately $880 million.

• Five-year CapEx forecast totals $4.3 billion from 2025–2029, with rate base and net income CAGR of 6%-8%.

• Capital plan for 2025–2029 funded by internal cash, modest equity, and debt, targeting a 50/50 capital structure.

• Regulatory strategy and flat O&M per customer trend expected to support growth.

• Limited capital markets needs expected through 2025, with less than $100 million equity issuance planned, pending Centuri exit.