Executive Summary / Key Takeaways

• Accelerated Growth Trajectory: Entergy is experiencing unprecedented industrial and data center load growth in its Gulf South service territory, driving a robust capital plan of $41 billion through 2029 and an adjusted EPS compound annual growth rate projected to be greater than 8% through 2029.
• Strategic Capital Deployment: The company is making significant, customer-driven investments in modern generation (including efficient natural gas and renewables), resilient transmission, and grid hardening, securing critical equipment and leveraging expedited regulatory processes to meet rapidly increasing demand.
• Differentiated Technology & Operational Excellence: Entergy's diverse generation portfolio, particularly its nuclear fleet and hydrogen-capable natural gas plants, combined with advanced grid resilience initiatives and R&D in carbon capture and new nuclear, provides a competitive edge in delivering reliable, cleaner energy.
• Proactive Regulatory & Stakeholder Engagement: Constructive regulatory frameworks and strong local partnerships are crucial, enabling timely cost recovery, supporting economic development, and ensuring affordability for existing customers through mechanisms like minimum bills and infrastructure riders.
• Strengthening Financial Position: Despite substantial capital outlays, Entergy maintains a strong balance sheet, with FFO to debt metrics exceeding rating agency thresholds and a significant portion of its equity needs already contracted, ensuring financial flexibility to fund its ambitious growth.

Powering the Gulf South's Future: A Foundation of Growth and Resilience

Entergy Corporation, established in 1913 and headquartered in New Orleans, Louisiana, stands as a vertically integrated electric utility deeply embedded in the economic fabric of the Gulf South. The company's long history is characterized by its commitment to powering industrial growth across Arkansas, Louisiana, Mississippi, and Texas. This foundational strength is more critical than ever as the industry faces transformative trends, including the surge in demand from artificial intelligence (AI) and data centers, broad electrification, and the reshoring of manufacturing. These macro forces are driving unprecedented load growth and necessitating substantial infrastructure investments across the utility sector.

Entergy's overarching strategy is to be the "premier utility," a vision centered on prioritizing customer needs, fostering robust economic development, and enhancing the reliability and resilience of its energy system. This strategy is underpinned by its unique vertically integrated model, which enables the provision of comprehensive technical solutions, from generation to transmission and distribution. The company leverages strong local relationships and strategic vendor partnerships to rapidly meet the complex demands of new, large-scale customers while safeguarding the interests and affordability for its existing 3 million utility customers.

In a competitive landscape featuring major players like Southern Company (SO), Duke Energy (DUK), NextEra Energy (NEE), and American Electric Power (AEP), Entergy differentiates itself through its deep regional expertise and a balanced, diverse generation portfolio. While competitors like NextEra Energy lead in renewable development, Entergy's significant nuclear fleet provides a crucial baseload reliability that is less susceptible to intermittency, offering a stable energy output vital for industrial and data center operations. Its strong local presence and established regulatory relationships also provide a competitive advantage in navigating complex project approvals and ensuring cost recovery, a factor that can be a vulnerability for companies with less integrated regional ties.

Technological Edge: A Diverse and Evolving Energy Portfolio

Entergy's technological differentiation is rooted in its diverse generation mix and forward-looking infrastructure investments. The company operates a robust fleet of nuclear, natural gas, coal, and hydro power sources, with a strategic pivot towards expanding solar and battery storage capabilities. Its nuclear assets, including ANO 1 & 2, River Bend, Waterford 3, and Grand Gulf, are cornerstones of reliable baseload power. Recent operational enhancements at Waterford 3, involving the replacement of low-pressure turbine rotors during its June 2025 refueling outage, are projected to increase the unit's capacity by an estimated 40 megawatts by fall 2026. Similar planned turbine rod replacements at ANO 1 in fall 2025 are designed to facilitate future capacity upgrades, with potential total nuclear capacity upgrades across the fleet reaching approximately 275 megawatts.

The company's commitment to modern, efficient natural gas generation is evident in projects like the Orange County Advanced Power Station in Texas, the Delta Blues facility in Mississippi, and the recently approved Legend and Lone Star Power Stations in Texas, all of which are hydrogen-capable and configured for future carbon capture and sequestration (CCS). Entergy is actively pursuing CCS, with a FEED (Front-End Engineering Design) study underway at its Lake Charles Power Station, aiming for a decision in 2025. This strategic intent positions Entergy to meet evolving environmental standards and customer demands for cleaner energy, even as it develops new gas generation to meet immediate load growth.

In renewables, Entergy is rapidly expanding its footprint. The Arkansas Cypress Solar facility, a planned 600 MW solar photovoltaic array with a 350 MW battery energy storage system, is set to support a Google (GOOGL) data center. The Bogalusa West Solar facility (200 MW) in Louisiana was recently approved through an accelerated process. Entergy has also secured approximately 75% of the critical equipment for its owned solar projects, demonstrating proactive supply chain management.

Beyond generation, Entergy is making substantial investments in grid modernization and resilience. Initiatives like "Superpower Mississippi," a $300 million investment to harden the grid and reduce outages by half within five years, and the Texas Future Ready Resiliency Plan, which secured a $200 million grant for hardening over 8,000 distribution poles and 16 transmission lines, highlight a focus on operational robustness. New 500 kV and 230 kV transmission lines, such as the Southeast Texas Area Reliability Project (SETEX) and the Cypress to Legend line, are designed to improve reliability and resilience by creating redundant loops that can automatically divert power during outages.

Entergy's R&D efforts extend to leveraging AI for operational efficiency. The company is experimenting with cameras and information systems on planes, drones, and helicopters to gather data for AI-driven damage assessment and optimized field team deployment, aiming to improve storm response and daily operations. This technological roadmap, from nuclear upgrades to CCS-ready gas plants, extensive renewables, and a hardened, intelligent grid, forms a critical competitive moat, enabling Entergy to deliver reliable, affordable, and increasingly cleaner energy to its rapidly growing customer base.

Financial Momentum and Strategic Capital Deployment

Entergy's financial performance in 2025 reflects the accelerating impact of its strategic investments and robust customer growth. For the third quarter of 2025, the company reported adjusted earnings per share (EPS) of $1.53. This strong performance was primarily driven by significant sales growth and the earnings contributions from new investments, partially offset by higher operational and maintenance (O&M) expenses and an increased share count from equity forward settlements.

Across the first nine months of 2025, Entergy's net income attributable to the corporation reached $1.52 billion, a substantial increase from $769.14 million in the same period of 2024. The Utility segment, which constitutes the vast majority of Entergy's business, saw its operating revenues climb to $9.94 billion for the nine months ended September 30, 2025, up from $9.08 billion in the prior year. This revenue growth was fueled by a 4.5% increase in weather-adjusted sales in Q3 2025, with industrial sales surging by over 7% due to new and expanding customers in sectors like primary metals, chlor-alkali, and industrial gases.

Profitability metrics underscore the company's operational effectiveness, with a trailing twelve-month (TTM) Gross Profit Margin of 44.05%, Operating Profit Margin of 26.04%, and EBITDA Margin of 48.50%. While the TTM Net Profit Margin stands at 14.28%, the significant capital expenditures required for growth have resulted in a TTM Free Cash Flow of -$1.48 billion. However, this is a direct consequence of the company's aggressive investment cycle, which is expected to yield long-term returns.

Entergy's liquidity and capital structure are being carefully managed to support this growth. As of September 30, 2025, the debt to capital ratio was 64.30%, with a net debt to net capital ratio (excluding securitization bonds) of 62.90%. The company maintains a $3 billion credit facility and a $2 billion commercial paper program to ensure financial flexibility. Proactive equity management includes the issuance of approximately $4.40 billion of equity through 2029, with $1.90 billion already contracted through forward sale agreements, including $806 million settled in May 2025 and an additional $332 million in October 2025. These actions are designed to maintain strong credit metrics, with FFO to debt expected to remain above rating agency thresholds and target 15% over the outlook period.

The company's capital plan for 2026 through 2029 totals $41 billion for the Utility segment, reflecting a substantial commitment to infrastructure development. This includes $12 billion in 2026, $11 billion in 2027, $10 billion in 2028, and $8 billion in 2029. These investments span generation projects (including new gas and renewables), transmission upgrades, and distribution system enhancements, all geared towards modernizing the grid, supporting customer growth, and improving resilience.

Driving Growth Through Proactive Engagement and Innovation

Entergy's growth narrative is compelling, driven by a robust pipeline of new customers and strategic regulatory engagement. The data center pipeline alone has expanded from 7 to 12 gigawatts, representing active conversations with customers expected to finalize agreements within the next one to two years. This is in addition to significant new industrial customers, including Hyundai Motor Group (HYMTF)'s $5.8 billion Hyundai Steel facility, CF Industries (CF)' $4 billion low-carbon blue ammonia plant, and Woodside (WDS)'s $17.5 billion LNG facility, all expected to come online between 2028 and 2029. Sempra (SRE)'s final investment decision for Phase 2 of its Port Arthur LNG project and AVAIO's data center investment in Mississippi further underscore the region's attractiveness.

The regulatory environment is proving increasingly supportive of Entergy's growth initiatives. Arkansas's "Generating Arkansas Jobs Act" rider, approved in October 2025, allows for the recovery of financing costs during construction of economic development-related generation and transmission investments outside the traditional formula rate plan's 4% cap. This legislation also streamlines the certification process and permits the recovery of carrying costs on construction work in progress (CWIP), directly lowering costs for customers. Similarly, Texas legislation has accelerated storm securitization processes and introduced a capacity cost recovery rider for MISO-related costs, which Entergy Texas plans to file for in 2026. The Public Utility Commission of Texas (PUCT) also approved a $200 million grant from the Texas Energy Fund for Entergy Texas's resilience projects.

Operational excellence is critical to executing this growth. The Orange County Advanced Power Station in Texas is approximately 70% complete and on track for an in-service date by summer 2026. Other major generation projects, such as the Delta Blues Advanced Power Station in Mississippi and the recently approved Legend and Lone Star Power Stations in Texas, are also progressing on schedule. Entergy has proactively secured critical long-lead-time equipment, including over 19 gigawatts of power island equipment capacity (with 8 gigawatts reserved for additional growth opportunities) and 90% of materials for planned transmission projects through 2030. The FERC-approved MISO Expedited Resource Addition Study (ERAS) process is also facilitating faster interconnection for new generation, with Entergy expecting its first project approvals by the end of 2025.

Mitigating Risks and Enhancing Resilience

While Entergy's growth story is compelling, it operates within an environment subject to various risks. Supply chain disruptions and tariffs, for instance, are estimated to impact approximately 1% of the company's $37 billion 4-year capital plan, primarily affecting the later stages of the forecast period. Entergy is actively mitigating these by diversifying supply sources and implementing robust cost management strategies. The company also faces regulatory and operating challenges associated with its participation in MISO markets, including the allocation of transmission upgrade costs and potential delays in new generation interconnections.

The threat of climate change and extreme weather events, such as hurricanes and heat waves, remains a significant concern in the Gulf South. Entergy is addressing this through its accelerated resilience plans, having invested approximately $580 million in approved resilience work, completing 32 line hardening projects, and fortifying 10 substations. The expedited storm securitization processes implemented in Louisiana and Texas are crucial for faster cost recovery, reducing carrying costs for customers, and bolstering the company's creditworthiness, which in turn supports lower capital costs.

Labor availability and increasing construction costs for combined cycle projects present ongoing challenges, but Entergy is leveraging long-standing relationships with EPC partners and utilizing standardized designs to manage these pressures. The company's vertically integrated model and deep regional relationships are key competitive advantages in this regard, enabling it to secure resources and navigate local complexities more effectively than less established players.

Uncertainty surrounding the U.S. Treasury and IRS guidance on nuclear production tax credits (PTCs) for Section 45U of the Inflation Reduction Act is another area of focus. While Entergy recorded $571.20 million in nuclear PTCs for 2024 and monetized $400.20 million in September 2025, the long-term value and regulatory treatment of these credits remain subject to final guidance. Despite these risks, Entergy's proactive risk management, coupled with its strong financial health and strategic investments, positions it to continue its growth trajectory.

Conclusion

Entergy Corporation is at a pivotal juncture, transforming into a premier utility by capitalizing on the profound energy demands of the evolving industrial landscape, particularly the burgeoning data center and AI sectors in the Gulf South. The company's strategic vision, underpinned by a robust $41 billion capital plan through 2029, is driving significant investments in a diverse and technologically advanced energy portfolio. This includes highly efficient, hydrogen-capable natural gas plants, expanding renewable energy sources, and critical grid resilience projects, all designed to deliver reliable, affordable, and increasingly cleaner power.

Entergy's ability to secure critical equipment, foster constructive regulatory relationships, and engage proactively with stakeholders provides a distinct competitive advantage in a rapidly changing industry. The company's commitment to operational excellence and its forward-looking approach to technological innovation, from carbon capture to exploring new nuclear options, reinforce its long-term growth thesis. With a projected adjusted EPS CAGR greater than 8% through 2029 and a strengthening financial position, Entergy is well-positioned to convert its unique growth opportunities into sustained value for its customers, communities, and shareholders.