PCG · Q4 2025 Earnings
BullishPG&E Corporation
Reported February 12, 2026
30-second summary
PG&E raised the low end of FY26 non-GAAP core EPS to $1.64–$1.66 (midpoint $1.65, implying ~10% growth), lowered the customer-bill inflation ceiling from 2–4% to 0–3%, and disclosed that the data-center final-engineering pipeline more than doubled QoQ to 3.6 GW (from 1.6 GW). The Q3 narrative — securing wildfire backstops and extending the capex runway — has now hardened into a public commitment: "0% increase in our bills is in sight," anchored by O&M savings widened to 2–4% and rate-reducing load that is no longer aspirational. The legislative overhang is not gone (SB 254 Phase 2 hits the April 1 CEA milestone), but management is operating as if the back end of the algorithm is increasingly funded by operating levers rather than legislative ones.
Headline numbers
EPS
Q4 FY2025
$0.36
Key financials
Q4 FY2025| Metric | Q4 FY2025 | YoY | Q3 FY2025 | QoQ |
|---|---|---|---|---|
| EPS | $0.36 | — | $0.50 | -28.0% |
Guidance
Company raised FY2026 EPS guidance low-end by 2 cents and tightened range, while reaffirming long-term 9%+ growth and introducing narrower customer bill inflation targets (0-3% vs prior 2-4%).
Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.
New guidance
| Metric | Period | Guide | YoY |
|---|---|---|---|
| Customer Bill Inflation Target | FY2026 | 0-3% | — |
| Non-fuel O&M Savings Target | FY2026 | 2% to 4% | — |
Changes to prior guidance
| Metric | Period | Prior guide | New guide | Δ | Result |
|---|---|---|---|---|---|
| Non-GAAP Core EPS | FY2026 | $1.62 to $1.66 | $1.64 to $1.66 | +$0.02 at low end; range tightened from $0.04 to $0.02 | Raised |
Segment KPIs
Q4 FY2025| Segment | Q4 FY2025 | YoY |
|---|---|---|
| Electric | $18.318B | +2.8% |
| Natural gas | $6.617B | +0.1% |
Other KPIs
Q4 FY2025| Segment | Q4 FY2025 |
|---|---|
| Operating margin | 19.0% |
| Non-fuel O&M cost reduction YoY | 2.5% |
| Cumulative 4-year O&M savings | $700+ million |
| Data center projects in final engineering | 3.6 GW |
| Electric system reliability improvement YoY | +19% |
| Natural gas customer reliability | 99%+ |
| Powerlines undergrounded since 2021 | 1,210+ miles |
| Major wildfires caused by Utility equipment | 0 (3rd consecutive year) |
Management tone
Narrative arc: Securing the wildfire backstop (Q2) → Validating the model and extending the runway (Q3) → Amplifying the affordability commitment and pulling forward upside (Q4).
The "simple affordable model" has been promoted from a framework to a declared outcome. In Q3 management was guiding bills "flat to down by 2027"; this quarter the language is "You heard me, 0% increase in our bills is in sight" and the customer-bill ceiling has been formally lowered from 4% to 3%. Two quarters ago, affordability was a legislative ask answered by data-center load. This quarter, it is the headline KPI the company is publicly underwriting, with O&M savings and load growth presented as the dual enablers. The cost of missing on either now compounds.
The data-center thesis has gone from "operating assumption" (Q3) to "near-term ramp." Q3 disclosed 1.6 GW in final engineering with "95% online by 2030"; this quarter it's 3.6 GW in final engineering with ~1.8 GW expected online by 2030 (up from 1.5 GW). Management quote: "since our third quarter update, we've seen significant growth in projects moving into the final engineering stage, which now stands at almost 3.6 gigawatts. That's up two gigawatts, more than doubling from last quarter." The 2–4% load growth band that supports the 0–3% bill target now has a much firmer base — meaning the affordability commitment is being defended with pipeline evidence rather than with expected conversion.
Capital allocation discipline has moved from contingent to enforced. In Q3, Burke offered three uses for incremental data-center capex with "make the plan better" as the preferred option. This quarter, with the $5B upside conversation still on the table, the framing has tightened: option 1 (a larger plan) is now explicitly "least likely given our valuation," and the $73B envelope is being held. Management quote: "profits and customer savings go hand in hand." The signal is that incremental load is being redirected to affordability and growth duration rather than to bigger capex, which protects the no-new-equity-through-2030 commitment.
The wildfire-fund legislative posture has moved from "feeling positive momentum" (Q3) to a defined milestone with explicit downside playbook. The April 1 CEA report is now framed as "the beginning of the legislative process," not the end. More notably, Poppe explicitly said that if Phase 2 stalls, "all aspects of capital allocation plan will be on the table" — language that did not appear in Q3. This is the first quarter where management has put dividend policy and capex pace publicly into the same sentence as legislative outcomes.
CEO continuity has been removed as a tail risk. Poppe's five-year contract extension through 2030 was disclosed this quarter, aligning her tenure with the back end of the ≥9% growth algorithm. Combined with the no-new-equity-through-2030 commitment, the company is now offering investors a fully-named, fully-funded plan through the end of the decade.
Recurring themes management leaned on this quarter:
Risks management surfaced:
Q&A highlights
Nicholas Campanella · Barclays
Reflection on CEA process progress, and likelihood of legislative resolution in June versus September given summer recesses and historical timelines.
Management emphasized the importance of getting the legislative process right rather than rushing it. They stated the CEA is on track with their stated timeline and is focused on actionable, viable, and durable solutions. Key criteria for management include risk reduction, recovery outcomes, affordability, and maintaining investability. If progress stalls, all aspects of the capital allocation plan will be on the table.
Steve Fleischman · Wolf Research
Assessment of CPUC's recent viewpoints on the current regulatory model and their influence on the legislature, and validation of higher growth visibility from data center projects.
Management noted CPUC's support for a whole society approach and appreciation for their acknowledgment that the current model is regressive. On data centers, management confirmed 3.6 gigawatts in final engineering with ~1.8 GW now expected online by 2030 (up from 1.5 GW previously), supporting 2-4% load growth with 4% more likely toward the back end of the five-year plan.
Marcella Petipran · Wells Fargo
Timeline for data center ramp beyond 2026 and clarification on whether final engineering stage projects are incorporated into 0-3% bill growth and CapEx guidance.
Management clarified that load growth is part of the 0-3% bill growth target, with ~50% of 3.6 GW data center capacity online by 2030. They emphasized multiple levers to drive affordability including O&M reductions, supply cost improvements, and load growth, and indicated the company is pushing toward the zero end of the 0-3% range.
Julian DeMolin Smith · Jefferies
Timing and utilization of the identified $5 billion in upside capital, how to think about upside to the $73 billion CapEx plan, financing approach, and post-April 1st legislative milestones.
Management outlined three options for the $5 billion upside: increase total CapEx (least likely given valuation), make the plan better through affordability improvements like accelerating new load projects, or extend the growth runway. They prefer option two (making plan better) while maintaining the $73 billion envelope. On financing, they prioritize avoiding equity issuance at low valuations and maintaining mid-teens FFO-to-debt. No specific post-April milestones were identified beyond ongoing legislative conversations.
Greg Orrell · UVS
Expected outcomes from the Kincaid and Dixie cost recovery proceedings including timing and recovery amounts.
Management detailed recovery requests from the Weill Fund for Dixie and Kincaid fires: $674 million in claims, $1.6 billion in WEMA costs (the insurance donut hole), and $314 million in SEMA costs. They emphasized the company had valid safety certificates for both events and believe the facts support their prudency case.
Answers to last quarter's watch list
What to watch into next quarter
April 1 CEA report content — watch whether the recommendations include actionable mechanisms on inverse condemnation, claims framework, or fund replenishment. A report framed as a "starting point" with no specific reform mechanisms would push the legislative timeline toward September and re-open the "all aspects on the table" capital-allocation language.
Moody's rating action — Q3 telegraphed a Q1 timing window. Any agency move before Phase 2 clarity would be a meaningful upside surprise; absence of action by Q2 reporting would push the IG-restoration story further out.
Kincaid/Dixie cost recovery (~$2.6B total) — track CPUC procedural movement on the $674M Wildfire Fund, $1.6B WEMA, and $314M SEMA recovery requests. Any partial denial would test the prudency narrative tied to valid safety certificates.
FY26 EPS trajectory vs $1.65 midpoint — with the low end raised to $1.64 in Q4, watch whether the Q1 print delivers a tightened range or an explicit bias toward the high end. A first-half "bias toward the midpoint" telegraph (as in Q2 FY25) would be a soft signal worth flagging.
Data-center pipeline progression beyond 3.6 GW — Q3 to Q4 added 2.0 GW to final engineering. Any flat-to-down quarter on final-engineering MW would test the 4% back-end load-growth assumption that underpins the 0% bill scenario.
2027 GRC procedural progress — management staked the flat-to-down 2025-vs-2027 bill outcome on the GRC being "approved as filed." Watch for intervenor positions, scoping rulings, and PD timing.
Sources
- PG&E Corporation Q4 2025 Press Release, filed with SEC: https://www.sec.gov/Archives/edgar/data/1004980/000100498026000008/pge-q42025pressrelease.htm
- PG&E Corporation Q4 2025 Earnings Call commentary (management remarks and Q&A)
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