Southwest Gas Holdings (SWX) Q4 2025 earnings summary

Executive summary

• Completed the full separation of Centuri, generating $1.35 billion in net proceeds, repaying debt, and transitioning to a fully regulated natural gas business with improved credit ratings.

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

• Board approved a 4% increase in annual dividend to $2.58 per share, effective Q2 2026, with ongoing commitment to annual increases.

• Leadership transition announced: Justin Brown appointed CEO effective May 8, with Karen Haller remaining as advisor through year-end.

• Initiated 2026 and forward-looking EPS and rate base guidance, with significant growth expected from the 2028 Great Basin expansion.

Financial highlights

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

• Adjusted net income increased 8.7% to $283.9 million, exceeding guidance by $9 million.

• 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.

• Capital expenditures totaled $855 million in 2025 to support infrastructure and customer growth.

Outlook and guidance

• Initiated 2026 adjusted EPS guidance of $4.17–$4.32 per share.

• Targeting a five-year adjusted EPS CAGR of 12–14% through 2030, with growth front-end loaded through 2028–2029.

• Projected capital expenditures of $1.25 billion in 2026 and $6.3 billion through 2030.

• Five-year rate base CAGR expected at 9.5–11.5%, with utility rate base growth at about 7% annually excluding Great Basin.

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