NextEra Energy Earnings Call Signals Long-Term Growth

NextEra Energy Inc. ((NEE)) has held its Q4 earnings call. Read on for the main highlights of the call.

NextEra Energy Projects Robust Growth Despite Financing and Regulatory Headwinds

NextEra Energy’s latest earnings call struck a distinctly upbeat tone, with management emphasizing strong 2025 results, accelerating clean‑energy growth, and favorable regulatory outcomes in Florida. Executives framed higher financing costs, wind resource variability, and regulatory delays in PJM and large‑load approvals as manageable, near‑term challenges rather than structural threats. Record origination, a deep project backlog, and major investments in storage, transmission, and innovation underpinned a confident long‑term earnings growth story.

Strong earnings momentum and ambitious long‑term growth targets

The company reported adjusted earnings per share of $3.71 for 2025, more than 8% higher than 2024, underscoring continued earnings momentum across the portfolio. Management reaffirmed 2026 adjusted EPS guidance of $3.92–$4.02 and explicitly said they are targeting the high end of that range. Looking further out, NextEra is anchoring its long‑term plan on an 8%‑plus compound annual growth rate in adjusted EPS through 2032, and again from 2032 to 2035, off the 2025 base. For investors, this frames a rare combination of visible near‑term expansion and a long runway of targeted double‑digit‑style total return potential when dividends are included.

FPL’s regulatory settlement supports growth and rate stability

Florida Power & Light (FPL), the regulated utility arm, secured a new four‑year rate agreement that effectively stretches through the end of the decade. The deal includes a midpoint allowed return on equity of 10.95% (within a 9.95%–11.95% band) and an equity ratio of 59%, along with a rate‑stabilization mechanism that enhances earnings visibility. FPL emphasized that typical residential bills are more than 30% below the national average and are expected to rise about 2% annually from 2025 to 2029—slower than assumed inflation near 3%. That combination of constructive regulation and customer affordability creates a powerful base for steady regulated earnings and capital deployment.

Robust FPL investment cycle and operational outperformance

FPL’s capital program remains aggressive, with roughly $8.9 billion invested in 2025, including about $2.1 billion in the fourth quarter alone. Regulatory capital employed grew around 8.1%, supported by more than 90,000 new customers added in 2025 and weather‑normalized retail sales up 1.7% year‑over‑year. Management highlighted FPL’s non‑fuel operating and maintenance costs as more than 71% lower than the industry average, underscoring its reputation as a cost leader. This combination of robust demand growth, heavy capital spending, and exceptional cost efficiency enhances the utility’s ability to earn its allowed returns while keeping bills relatively low.

Energy Resources delivers record origination and deep backlog

NextEra Energy Resources, the competitive renewables and infrastructure arm, posted another record year in project origination. In 2025, the business added about 13.5 GW to its backlog, including a record quarter with 3.6 GW of new deals. Over the past three years, origination totals roughly 35 GW, and the current backlog stands at about 30 GW even after placing 3.6 GW into service since the prior call. Management framed this as evidence of durable demand for clean energy solutions from utilities, corporates, and large‑load customers, despite macro and regulatory noise.

Rapid build‑out of clean generation and explosive storage growth

On the execution front, Energy Resources placed approximately 7.2 GW of projects into commercial operations since last year, while FPL and Energy Resources together brought about 8.7 GW of new generation and storage online in 2025. Battery storage is emerging as a centerpiece of the growth story: more than 2 GW of storage capacity went into service in 2025, a roughly 220% increase versus 2024. Storage now represents nearly one‑third of the 30 GW backlog, and management disclosed a 95 GW pipeline of standalone and co‑located storage projects, with the potential for that pipeline to double over time. This positions NextEra to benefit from rising grid‑balancing needs and the growing role of storage in decarbonization.

Transmission and gas infrastructure emerges as a second growth pillar

NextEra Energy Transmission is gaining scale rapidly, with about $8 billion of total regulated and secured capital and roughly $5 billion of new projects secured since 2023. A major near‑term catalyst is PJM’s recommendation for a high‑voltage line estimated at roughly $1.7 billion, positioning the business for sizable regulated returns if the project proceeds as planned. Looking ahead, Energy Resources expects combined electric and gas transmission to reach about $20 billion of regulated and invested capital by 2032, implying around 20% annual growth from the 2025 base. This expanding infrastructure platform offers a complementary earnings stream less exposed to commodity or resource variability.

Strengthened supply chain and gas‑fired market positioning

Management stressed that the company has moved early to secure its supply chain in an increasingly competitive market. NextEra has locked in solar panel supply sufficient to meet development expectations through 2029 and secured a domestic battery supply over the same horizon, reducing exposure to global logistics and trade volatility. On the thermal side, the company has secured gas turbine slots with GE Vernova to support roughly 4 GW of gas‑fired projects, ensuring it can meet reliability needs as renewables penetration increases. The completed acquisition of Symmetry Energy Solutions, which operates across 34 states, broadens NextEra’s natural gas supply and trading capabilities, bolstering its position in customer supply and gas infrastructure.

Partnerships and AI‑driven innovation initiatives

In a sign of how digital and energy strategies are converging, NextEra announced a strategic technology partnership with Google Cloud to accelerate an enterprise‑wide AI transformation initiative dubbed “Rewire.” The collaboration aims to build AI‑first products and tools across the business, with the first wave expected to focus on AI‑enhanced field operations and grid resilience. Early deployments are slated to roll out in the near term, with management viewing AI as a lever to further improve reliability, reduce costs, and optimize capital deployment across its growing fleet and network.

Higher financing costs pressure earnings but remain manageable

Despite the strong growth narrative, higher interest rates weighed on results, particularly at Energy Resources and at the corporate level. Management quantified “other impacts” that reduced Energy Resources results by $0.30 per share year‑over‑year, including roughly $0.17 per share from higher financing costs tied to borrowing for new investments. Corporate & Other adjusted EPS fell by about $0.12 year‑over‑year, primarily due to higher interest costs as well. While these headwinds are meaningful, the company emphasized that they are being offset by strong contributions from new investments and that the balance sheet remains positioned to support its long‑term growth plan.

Existing asset performance and wind resource soft spots

Earnings from existing clean‑energy assets slipped modestly, with contributions decreasing about $0.04 per share compared with the prior year. Management attributed this to the absence of earnings from a minority sale of pipeline assets completed in 2024, as well as weaker wind resource, which can periodically reduce output and revenue from wind farms. While such variability is an inherent feature of renewables, the company highlighted that its diversification across assets, technologies, and regions helps contain the impact, and that new investments are more than compensating for these headwinds.

PJM regulatory uncertainty clouds timing of new investments

The company was candid about the uncertainty surrounding PJM, the large mid‑Atlantic and Midwest power market. Management underscored that meaningful new investment in the region depends on regulatory and market clarity, including ongoing reforms and capacity market outcomes that have not yet been resolved. Stakeholder pushback, including local concerns in Pennsylvania, is adding timing and execution risk for new projects and auctions. While NextEra sees considerable long‑term opportunity in PJM transmission and generation, it signaled that capital deployment there will be disciplined and contingent on improved visibility.

Legislative noise delays large‑load data center conversions

FPL’s large‑load tariff and substantial interest from hyperscale customers—more than 20 GW of potential demand, with about 9 GW in advanced discussions—represent a major commercial opportunity, particularly in an era of AI‑driven data center growth. However, two pieces of Florida legislation related to issues such as water and municipal approvals are prompting some customers to pause final decisions. This is creating timing risk in converting robust interest into executed contracts. Management presented this as a deferral rather than a loss of demand, but investors should expect some lumpiness in the pace at which data center loads are signed and built.

Pipeline and gas infrastructure earnings variability

Within its gas pipeline and infrastructure segment, NextEra reported near‑term declines in adjusted EBITDA compared with the prior year, driven in part by changes in proportionate ownership following asset divestitures such as the Explorer pipeline. These shifts have created a modest reduction in the segment’s near‑term earnings contribution. Management framed the moves as portfolio optimization rather than a strategic retreat, with capital being recycled into higher‑growth or more strategic opportunities, including transmission and clean‑energy projects.

SMRs as a longer‑term, unmodeled upside

Management reiterated its interest in small modular reactors (SMRs), highlighting roughly 6 GW of potential co‑location opportunities across the portfolio. However, executives were clear that SMRs are not included in the company’s base plan or long‑term financial guidance. Any eventual SMR development would require appropriate commercial risk‑sharing and additional support from partners or government. For now, SMRs are positioned as a potential upside option rather than a near‑term growth driver, giving the company flexibility if the technology and policy environment become more favorable.

Guidance underscores durable growth, capital deployment and dividend visibility

NextEra’s guidance reinforced its image as a long‑duration growth story in the utility and clean‑energy space. The company is building off a 2025 adjusted EPS base of $3.71, with a targeted 8%‑plus CAGR through 2032 and the same growth ambition through 2035, and 2026 EPS guided to $3.92–$4.02 with a bias to the top end. Dividend growth is projected at roughly 10% annually through 2026 from a 2024 base, then about 6% per year from year‑end 2026 through 2028, signaling continued shareholder returns alongside reinvestment. FPL expects $90–$100 billion of investment through 2032, supported by a 10.95% allowed ROE midpoint, an 11.7% reported ROE for the 12 months ended December 31, 2025, and robust customer and sales growth, with typical bills still more than 30% below the national average. Non‑fuel O&M over 71% below industry averages and substantial rate‑stabilization reserves add further cushion. At Energy Resources, management highlighted a 13% full‑year adjusted earnings increase, 8.7 GW of new capacity placed into service in 2025, a 30 GW backlog with storage as a growing share, a 95 GW storage pipeline, over 20 GW of gas‑fired development prospects, nuclear recontracting opportunities, and a transmission and gas network expected to reach about $20 billion of capital by 2032 at ~20% CAGR. Corporate operating cash flow is projected to grow at more than 14% annually over three years and over 9% over five years, underscoring the company’s confidence in funding its plan.

In sum, NextEra Energy’s call painted the picture of a company navigating higher rates and regulatory complexity while still expanding its earnings base, asset footprint, and dividend profile. FPL’s constructive regulatory setup and affordability metrics, Energy Resources’ record origination and storage build‑out, and fast‑growing transmission and infrastructure platforms all support the company’s long‑term growth narrative. While investors must weigh headwinds from financing costs, wind resource variability, and timing risks in PJM and large‑load deals, management’s tone and detailed guidance suggested that the positives meaningfully outweigh the negatives, keeping NextEra firmly positioned as a core name for investors seeking exposure to regulated utilities and large‑scale clean‑energy growth.