tapebrief
PEG · Q2 2025

PEG · Q3 2025 Earnings

Bullish

Public Service Enterprise Group

Reported November 3, 2025

30-second summary

PSEG narrowed FY2025 non-GAAP EPS guidance to $4.00–$4.06 (from $3.94–$4.06), raising the floor $0.06, and lifted the 2025–2029 capital plan to $22.5–26B from $21–24B — both funded without new equity or asset sales. Revenue grew 22.1% YoY to $3.23B, non-GAAP EPS was $1.13, and the mature data-center application bucket ticked from 2,600 MW to 2,800 MW while the broader large-load pipeline reached 11 GW. The story is now less about whether load materializes and more about which policy mechanism (BPU auction, RFP, IRP) converts it — a question that will not be answered until the new New Jersey administration is seated.

Headline numbers

EPS

Q3 FY2025

$1.13

Revenue

Q3 FY2025

$3.23B

+22.1% YoY

Operating margin

Q3 FY2025

26.5%

Key financials

Q3 FY2025
MetricQ3 FY2025YoYQ2 FY2025QoQ
Revenue$3.23B+22.1%$2.81B+15.0%
EPS$1.13—$0.77+46.8%
Operating margin26.5%—29.1%-260bps

Guidance

PSEG raised FY2025 EPS guidance to the upper half of the range ($4.00-$4.06) and significantly increased its five-year capital spending outlook to $22.5-$26B (vs. $21-$24B), reflecting strong 9-month execution and expanded investment opportunities.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Changes to prior guidance

MetricPeriodPrior guideNew guideΔResult
Non-GAAP Operating Earnings Per Share
FY2025
$3.94 to $4.06$4.00 to $4.06Low end raised $0.06 (from $3.94 to $4.00); high end reaffirmedRaised
Five-Year Capital Spending Program
FY2025
$21 to $24 billion$22.5 to $26 billionLow end raised $1.5B; high end raised $2.0B (tightened range upward)Raised

Reaffirmed unchanged this quarter: Non-GAAP Operating Earnings Growth (5-Year CAGR) (5% to 7%)

Other KPIs

Q3 FY2025
SegmentQ3 FY2025
Nuclear Generation (Q3)7.9 TWh
Hope Creek Continuous Operating Days499 days
Regulated Investment (Q3)$1.0 billion
Electric Customers2.4 million
Natural Gas Customers1.9 million
Operating Margin26.5%
FY2025 Non-GAAP EPS Guidance (Narrowed)$4.00 to $4.06
5-Year Capital Spending Program$22.5 to $26.0 billion

Management tone

Cautious confidence → growth-story selling → policy-tailwind harvest → defensive policy advocacy.

Three quarters of progression are visible in PSEG's positioning on supply-demand imbalance. In Q2, management treated PJM tightness as "becoming more acute" — a regional concern with regulatory implications. This quarter it has escalated to "The need for investment and leadership has never been more evident than now, with the significant and growing supply demand imbalance in New Jersey and the entire PGM region." That is not utility-speak; it is lobbying language aimed at an incoming New Jersey governor. The shift signals management believes the policy window is closing and that the company's growth thesis depends on extracting commitments from whichever administration takes office.

The nuclear-as-strategic-asset narrative has moved another step forward. Q2 reframed nuclear from defensive baseload to PTC-protected cash generator with uprate optionality. This quarter management introduced explicit multi-year contracting intent: "as this kind of baseload carbon-free dispatchable power continues to increase in scarcity value...including the potential to contract our nuclear output under multi-year agreements." The "scarcity value" framing is new and material — it is how management is preparing the market to value contracted nuclear output above merchant-curve marks.

The capital plan and balance-sheet message hardened. Last quarter the five-year program was $21–24B and the equity-free funding line read as guidance reassurance. This quarter the program is $22.5–26B — a $1.5–2B raise at both ends — and the equity-free language was repeated verbatim. Raising capex by ~10% without changing the funding posture is the loudest signal in the print: management is telling the buy-side that incremental investment opportunities are real, dilution risk is not, and the EPS CAGR can absorb the larger base.

Hedging language increased modestly versus Q2. Phrases like "This assumes other supply-related costs remain the same" and "it will take a while before we see the ultimate impact of the rulemaking" appeared more frequently than the Q2 call's tone. Management is selling the long-term story confidently but flagging that the near-term path runs through New Jersey politics they don't control.

Recurring themes management leaned on this quarter:

Supply-demand imbalance and resource adequacy crisis in New Jersey/PGM regionNuclear fleet optimization and 'scarcity value' of carbon-free baseload powerRate case benefits flowing through and capital investment executionPolicy engagement with incoming New Jersey administrationBalance sheet strength enabling growth without equity dilutionLong-term earnings growth reaffirmed at 5-7% CAGR through 2029

Risks management surfaced:

Significant and growing supply-demand imbalance that 'will adversely impact both reliability and affordability for customers in the future if not addressed'Capacity market cost pressures and customer bill impactsInterest rate headwinds on higher debt levelsWeather variability and economic sales variancesRegulatory and political uncertainty with incoming New Jersey administration

Q&A highlights

Shar Peruzza · Wells Fargo

Election impact on data center deals in New Jersey, pressure points at Artificial Island, and timeline updates on key projects.

Management expects to work with both sides post-election with proven track record. Data center opportunities haven't slowed; some projects moved in queue. Smaller deals expected without major announcements. Management will provide grid capacity and transmission/distribution details in February.

11 gigawatt large load pipeline growingTEAC meeting tomorrow with additional load identified for Kenilworth supplemental projectSmaller data center deals expected, not hyperscaleGrid capacity exists based on current topology; policy decisions needed on new generation and solar/batteries impact

Jeremy Tenet · J.P. Morgan

Differences in data center conversations between New Jersey and Pennsylvania; types of supply constructs PEG would support (regulated vs. unregulated generation).

Pennsylvania shows more forward-leaning appetite with bigger-scale deals due to incentives; New Jersey deals smaller but sizable interest persists. Willing to help state via regulated gas generation, large-scale solar, regulated storage, and nuclear (site/services only, no capital). Both candidates backing all-of-above strategy.

Pennsylvania has more incentives enabling larger-scale data center dealsNew Jersey deals smaller but ongoing interestWill not deploy own capital for new nuclear; willing to provide site, O&M, security, spent fuel storageRegulated gas, solar, and storage all potential components of solution

Bill Apicelli · UBS

Urgency and mechanism for securing supply (lame duck vs. new administration); framework for evaluating regulated generation needs and procurement (RFP vs. auction).

Both lame duck and 2026 possible; management prefers faster action for both affordability and economic development. Could use BPU auction or RFP. Must first answer four foundational questions: load definition, reliability targets, emissions profiles, and affordability definition (CPI framework). Full integrated resource plan needed.

Headroom in system currently being used upFour critical questions: load supply, reliability targets, emissions standards, affordability definitionBPU auction or RFP are potential mechanismsIntegrated resource plan is fundamental to moving forward

David Arcara · Morgan Stanley

Mature data center applications count; managing affordability concerns across T&D rate outlook and utility capex planning.

Mature applications increased from 2,600 to 2,800. Affordability managed through flat O&M, efficient AMI implementation, regulator partnerships (e.g., gas asset depreciable life extension). Resource adequacy driving supply need. Both governor candidates recognize need for more supply; solutions differ but outcome is inevitable.

Mature data center applications: 2,600 to 2,800O&M held relatively flat over longer periodAffordability is both affordability and reliability issueMore supply needed for state to continue growth

Anthony Crudell · Mizuho

Do both governor candidates understand supply vs. wires investment differences and PGM impact? Can wires and generation both win simultaneously given affordability backdrop?

Both candidates understand the difference and that customer gets one bill; focus on integrated resource plan essential. Company sees win-win opportunity for both segments if optimized; nuclear holding helps state conversations, union alignment. Shareholder value optimization pursued daily across both assets.

Both candidates understand supply vs. wires distinctionCustomer receives single bill, necessitating integrated approachIntegrated resource plan critical regardless of outcomeNuclear helps state positioning and union alignment

Answers to last quarter's watch list

Mature large-load applications conversion — Mature bucket moved from 2,600 MW to 2,800 MW (+200 MW, +7.7% QoQ) while the total pipeline grew from 9.4 GW to 11 GW. Maturation continues but is being outpaced by top-of-funnel growth, exactly the "becoming top-heavy" pattern flagged. No contract conversions disclosed; management deferred specifics to the February capital update. Status: Continue monitoring
Multi-year NJ generation contract — No contract announced; management explicitly tied the timeline to the new administration and the need for an integrated resource plan to define load, reliability, emissions, and affordability before a procurement mechanism (BPU auction or RFP) can be selected. The Q2 year-end aspiration has effectively slipped into 2026. Status: Resolved negatively
Hope Creek fall refueling outage execution — Hope Creek logged 499 continuous operating days entering the outage. The refueling is in flight; no O&M cost disclosure or 2026 output guidance update was provided. Status: Continue monitoring
PJM 2027/2028 capacity auction and BGS feathering — December 2025 capacity auction not yet held at the time of this print. Management cited a FERC-approved price collar as a structural cap that will limit June 2026 customer-bill impact regardless of the auction outcome — partial vindication of the Q2 "near-flat" bet, with the collar doing more of the work than feathering math. Status: Continue monitoring
FY2025 EPS landing within $3.94–$4.06 — Resolved: guide narrowed to $4.00–$4.06, raising the floor $0.06 and signaling upper-half delivery. 9-month non-GAAP EPS of $3.40 ($1.50 Q1 + $0.77 Q2 + $1.13 Q3) implies Q4 of $0.60–$0.66 to hit the new range. Status: Resolved positively

What to watch into next quarter

February 2026 capital update: management explicitly punted granular grid, transmission, and customer-segment disclosure to the Q4 print. Watch whether the $22.5–26B five-year envelope tightens further upward and whether contracted load from the mature 2,800 MW bucket is disclosed as a separate line.

NJ gubernatorial transition and IRP signals: watch the first 60 days of the new administration for any commitment to commission an integrated resource plan and whether BPU auction vs. RFP language emerges as the preferred procurement mechanism.

December 2025 PJM capacity auction clear: management is betting the FERC price collar caps bill impact regardless of clearing price. A clear materially above the collar would test that claim against actual June 2026 BGS rates.

Nuclear multi-year contracting: management introduced the concept this quarter. Watch for a first announced multi-year offtake (counterparty type, term, pricing structure) on the Q4 call or in interim disclosure.

Mature application conversion ratio: 2,800 MW mature against an 11 GW pipeline. Watch whether Q4 discloses any signed service agreements or interconnection commitments that move load from "mature application" to "contracted" — the conversion gap is the single biggest gating item for 2027+ earnings upside.

Sources

  1. PSEG Q3 2025 press release, SEC Form 8-K Exhibit 99: https://www.sec.gov/Archives/edgar/data/788784/000119312525261789/d36283dex99.htm
  2. Q3 2025 earnings call Q&A and prepared remarks (as referenced in tone and Q&A extractions)
  3. Tapebrief PEG Q2-2025 brief (prior quarter watch list and trend baseline)

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