tapebrief
SRE · Q2 2025
Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

SRE · Q3 2025 Earnings

Sempra

Reported November 5, 2025

30-second summary

Sempra delivered Q3 FY2025 non-GAAP EPS of $1.11 on revenue of $3.15B (+13.5% YoY) and reaffirmed both FY2025 ($4.30–$4.70) and FY2026 ($4.80–$5.30) EPS guidance, still pointing to the high end or above of the 7–9% long-term CAGR. The bigger news is structural: Port Arthur LNG Phase 2 reached FID, Oncor's 2026–2030 base capital plan is now guided to a 30%+ increase versus the prior 2025–2029 plan, and Sempra announced a 45% equity sale of Sempra Infrastructure Partners to KKR for $10B — taking Sempra's ownership to 25% — with the active large C&I interconnection queue at Oncor up 60% YoY to 600+ requests against a 210 GW data-center pipeline. Three of last quarter's six watch items resolved positively this print; the KKR/SI transaction has tightened to a Q2–Q3 2026 close window.

Headline numbers

EPS

Q3 FY2025

$1.11

Revenue

Q3 FY2025

$3.15B

+13.5% YoY

Key financials

Q3 FY2025
MetricQ3 FY2025YoYQ2 FY2025QoQ
Revenue$3.15B+13.5%$3.00B+5.0%
EPS$1.11—$0.89+24.7%

Guidance

Sempra reaffirmed FY2025 and FY2026 EPS guidance ranges with no changes, citing strong YTD financial results and progress on capital initiatives including Port Arthur LNG Phase 2 FID and 30%+ Oncor capex expansion.

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

Reaffirmed unchanged this quarter: Adjusted EPS (FY2025) ($4.30 to $4.70), EPS Guidance ($4.80 to $5.30), Long-term EPS CAGR (2025-2029) (7% to 9%)

Segment KPIs

Q3 FY2025
SegmentQ3 FY2025YoY
Natural gas utilities$1.363B+14.1%
Electric utilities$1.26B+17.9%
Energy-related businesses$0.528B+3.1%

Other KPIs

Q3 FY2025
SegmentQ3 FY2025
Oncor electric deliveries50,761 million kWhs
Oncor total customer meters4,100 thousand
Oncor active large C&I interconnection queue600+ requests (60% YoY increase)
Oncor data center pipeline210 GW
SDG&E total gas customer meters7,126 thousand
SDG&E total electric customer meters1,545 thousand
Sempra Infrastructure projects in development6 major projects including Port Arthur LNG Phase 2
Oncor expected capex increase30%+ increase in 2026-2030 base capital plan vs 2025-2029

Management tone

Texas as one of several opportunities → Texas as the primary capital focus → Texas as the funded commitment.

Texas has moved from "leaning in" to "all in," with the balance sheet pre-positioned. Last quarter management called the $12B incremental Texas capex "probably conservative" while still describing it as upside. This quarter the framing is harder: a 30%+ increase to Oncor's base 2026–2030 plan is in the guide itself, and management explicitly linked the capital recycling program to Texas funding — "The key takeaway is we've made a commitment to back Texas...with our board of directors, we launched a capital recycling program because we wanted to load our balance sheet so we were in a position to officially fund the growth we're seeing in the future." This signals the board has pre-approved the bet rather than evaluating it quarter by quarter.

Port Arthur Phase 2 went from "FID expected 2025" to FID landed. Two quarters ago Phase 2 had permits and an SPA; last quarter management was talking about "momentum"; this quarter it is done. That is the cleanest commitment-to-execution arc Sempra has shown on a major LNG project in years, and it removes the largest single binary on the SI story heading into the KKR close.

The SI/KKR transaction has tightened from concept to defined sale. This quarter Sempra announced a 45% equity sale of SI Partners to KKR for $10B — reducing Sempra's stake to 25% — with a Q2–Q3 2026 close window and quantified +$0.20 average annual EPS accretion 2027–2031. Management described it as "a major catalyst in unlocking Sempra Infrastructure's franchise value." The language has moved from defensive deleveraging tool to offensive value-unlock.

The data center load story shifted from inquiry-volume bragging to executed-collateral disclosure. Last quarter the headline number was 186 GW of interconnection demand against a 38 GW high-confidence 2031 load forecast. This quarter that gap was partially closed with concrete numbers: ~19 GW signed under interim FEAs and ~$2.7B of collateral posted. The hedge — "it's not clear how ERCOT will view these interim FEAs" and acknowledgement that SB 6 rulemaking "may alter the criteria" — is the only meaningful caveat in an otherwise assertive deck.

California is now explicitly subordinated. Management's frame that California is "a very good complement because it allows Encore to have its principal shareholder have a strong balance sheet" reverses the historic pitch. California is the cash engine; Texas is the growth engine. The market has been valuing it this way for some time; management is now articulating it that way too.

Recurring themes management leaned on this quarter:

Texas transmission expansion as underappreciated growth driverCapital efficiency improvements through unified tracker mechanism at EncoreBalance sheet fortress strategy to fund growth without near-term equityDe-risking California regulatory environment (SB 254 wildfire fund)SEMPRA Infrastructure strategic repositioning and monetizationData center and large industrial load acceleration in Texas

Risks management surfaced:

Regulatory lag risk at Encore (partially addressed by UTM)ERCOT approval and SB 6 rulemaking uncertainty around interim FEA processExecution risk on accelerated Permian transmission completion by 2030Supply chain and equipment availability for historic capital deploymentCalifornia wildfire fund adequacy and future contingent contributions

Answers to last quarter's watch list

Port Arthur LNG Phase 2 FID — Resolved. Reached final investment decision this quarter, exactly within the 2025 window management had committed to.
Resolved positively
KKR / Sempra Infrastructure transaction terms — Resolved on headline terms. 45% equity sale to KKR for $10B announced, taking Sempra to a 25% stake; close window Q2–Q3 2026; +$0.20 average annual EPS accretion over five years starting 2027 quantified. Implied SI valuation beyond the $10B headline and tax leakage (transcript indicates ~20%) remain open.
Continue monitoring
Oncor incremental capital plan revision — Resolved. Oncor's 2026–2030 base capital plan now guided to a 30%+ increase vs. the prior 2025–2029 plan, with the roll-forward base plus upside larger than Sempra's current consolidated five-year envelope.
Resolved positively
Oncor base rate case — Not addressed in the press release; final order still expected Q1 2026 per prior cadence.
Continue monitoring
Data center interconnection conversion — Resolved with new disclosure framework. Data center pipeline disclosed at 210 GW (vs. 186 GW last quarter); active large C&I queue 600+ (+60% YoY); ~19 GW signed under interim FEA process with ~$2.7B of collateral posted. Encore's high-confidence 2031 load figure stands at ~39 GW.
Resolved positively
ECA LNG Phase 1 mechanical completion — Not called out on the print. Last guidance was spring 2026 substantial completion; no slippage flagged.
Continue monitoring

What to watch into next quarter

Oncor 2026–2030 capital plan dollar disclosure — management guided a 30%+ increase but did not put a dollar figure on the new base. Watch for the explicit number on the Q4 print and any update to the consolidated Sempra five-year plan that exceeds the current ~$56B envelope.

SI Partners / KKR transaction parameters — implied SI valuation beyond the $10B headline, tax leakage (transcript indicates ~20%), use of proceeds, regulatory approvals, and any pre-close milestones ahead of the Q2–Q3 2026 target. A slip past Q3 2026 would compress the +$0.20 EPS accretion runway starting 2027.

Oncor base rate case final order — expected Q1 2026. Watch ROE outcome, capital structure, and any disallowances; this sets the return economics on the 30%+ capex expansion.

ERCOT / SB 6 interim FEA disposition — management flagged this as the cleanest near-term regulatory risk. Watch whether the ~19 GW signed and ~$2.7B collateral count is reaffirmed or restructured once SB 6 rulemaking lands.

2027 EPS guidance initiation — with FY2026 reaffirmed at $4.80–$5.30 and the long-term CAGR pointed to the high end of 7–9%, the next pull-through datapoint is when management starts framing 2027 EPS dollars rather than CAGR percentages.

Equity issuance discipline — management is positioning the balance sheet as fortress-funded for Texas without near-term equity. Any equity announcement before the SI Partners close would undercut that framing.

Sources

  1. Sempra Q3 FY2025 Earnings Release (Form 8-K Ex. 99.1), filed 2025-11-05 — https://www.sec.gov/Archives/edgar/data/1032208/000103220825000062/ex99_1x20250930xearningsta.htm
  2. Tapebrief Q2 FY2025 SRE brief (internal, for prior-quarter framing and watch list)

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