Southwest Gas Holdings (SWX) Q4 2025 earnings summary

Executive summary

• Completed the full separation and disposition of Centuri, generating $1.35 billion in net proceeds, repaying all holding company debt, and transitioning to a fully regulated natural gas business, which strengthened the balance sheet and unlocked capital for core operations reinvestment.

• Achieved strong 2025 financial performance, with adjusted EPS from continuing operations of $3.65, adjusted net income of $283.9 million, and utility net income of $300 million, all exceeding guidance.

• Announced CEO succession, with Justin Brown appointed as the next CEO effective May 8, 2026, ensuring leadership continuity.

• S&P upgraded credit ratings to BBB+ for both SWX and Southwest Gas in September 2025, reflecting improved credit strength.

• Board approved a 4% increase in the annual dividend to $2.58 per share for 2026, with a commitment to continued annual increases.

Financial highlights

• Adjusted earnings per diluted share from continuing operations rose 19% year-over-year to $3.65 in 2025.

• Adjusted net income increased to $283.9 million in 2025, exceeding guidance by $9 million and up $22.8 million year-over-year.

• Operating margin improved by nearly $120 million, driven by $95.2 million in rate relief and $11.5 million from customer growth.

• O&M expenses increased by 1.9% or $16.8 million, mainly due to higher labor and cloud computing costs.

• Depreciation and amortization rose $27.6 million, reflecting ongoing infrastructure investment.

Outlook and guidance

• 2026 adjusted EPS guidance set at $4.17–$4.32 per share, with a five-year adjusted EPS CAGR targeted at 12%–14% through 2030.

• Capital expenditures projected at $1.25 billion in 2026 and $6.3 billion through 2030, supporting a 5-year rate base CAGR of 9.5%–11.5%.

• Five-year capital plan allocates 73% to SWG and 27% to Great Basin, with $325 million for the Great Basin Expansion Project in 2026.

• Management expects continued annual dividend increases, with potential for larger increases post-2028.