Edison International (EIX) | The Buildout — AI Infrastructure
The Verdict
Edison International is the parent of Southern California Edison, an investor-owned public utility that supplies and delivers electricity across roughly 50,000 square miles of southern California. SCE owns and operates the transmission, distribution, and some generation and storage assets that carry power to a fixed, franchised customer base. For the AI buildout, EIX sits at the downstream, regulated end: it sells no AI products and books no disclosed AI revenue. Data centers in its territory are listed as electricity customers, but the company discloses no data-center pipeline or hyperscaler contract. Its role is to deliver power to loads that locate in its territory; the source's criticality read calls a failure to deliver temporarily constraining for Southern California data centers but not material to the national buildout.
| Market Cap | — |
| Revenue (TTM) | $19.4B |
| Revenue Growth | +10.7% |
| EBITDA Margin (TTM) | 40.3% |
| Net Debt | $43.3B |
| Earnings Beats | 6 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- 2026 core EPS guidance of $5.90–$6.20 was reaffirmed on both the Q1 and Q2 2026 calls, with the 2027 target of $6.25–$6.65 and long-term 5%–7% core EPS growth also reaffirmed.
- The $38B–$41B 2026–2030 capital plan was reaffirmed unchanged, funded by SCE rate base growth of about 7% from 2025 to 2030.
- Management reaffirmed no need for new common equity through 2030, and FFO-to-debt is guided within 15%–17%.
- The Woolsey Fire securitization completed in late July 2026, generating approximately $2 billion in proceeds used to recover claims and retire related debt.
- SCE contracted about 900 MW of energy storage in 2025, bringing the total to roughly 9,200 MW owned or under contract — described in the evidence as one of the largest storage portfolios in the nation.
What We’re Watching
- California wildfire legislation: as of the Q2 call, four weeks remained, no language had been seen, and management flagged a possible partial answer or work left for 2027.
- Credit standing: the S&P utility rating sits at BBB-, which management described as leaving 'nowhere to go in investment grade.'
- Eaton Fire liability: over 30,000 claims filed, only two subrogation settlements at about $0.55 on the dollar, and no GAAP low-end estimate; the property-damage statute of limitations runs to January 2028.
- Next-cycle growth: the RAMP (filed May 2026, about $2.5B) and the eventual 2029–2032 GRC must be authorized at a level that sustains about 7% rate base growth past 2028.
Near-term results are intact: earnings are on the guided track, guidance was reaffirmed across the ladder, and the capital plan is funded without equity through 2030. But the forward case has narrowed to one conditional variable — the California wildfire legislative outcome and the cost of capital it sets. Management has itself tied future capital deployment to that decision, saying it would avoid 'negative NPV decisions' if the cost of equity changed dramatically. The open question is whether the 2026 session delivers a financeable framework, and what specifically gets re-scoped in the capital plan if it does not.
Earnings Beat
In the second quarter of 2026, EIX reported revenue of $4,357 million. Net income was $535 million; as-adjusted core earnings were $592 million, or $1.54 per share, versus core earnings of $374 million, or $0.97 per share a year earlier. Year-to-date core EPS, the utility's key earnings metric, reached $2.97. Management reaffirmed full-year 2026 core EPS guidance of $5.90–$6.20 and resisted extrapolating the strong first half.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $4.4B | $4.1B | $4.5B | −4.1% |
| Gross margin | 49.3% | 76.4% | 39.8% | +950bps |
| EBITDA | $1.9B | $1.9B | $1.6B | +20.3% |
| EPS | $1.38 | $1.47 | $1.03 | +33.7% |
| Core EPS | $1.54 | $1.42 | $0.97 | +58.8% |
if you look at just the S&P ratings, it is BBB- for the utility. So there is nowhere to go in investment grade.— Aaron Moss, Chief Financial Officer, 2026-07-30
Management tone: Management's tone shifted between the two calls. Q1 2026 was framed as a 'cleaner regulatory slate' with forward-leaning commentary, including an on-record rebuttal of election-year rate rhetoric. Q2 2026 moved toward contingency: the legislative outcome was framed as a near-term uncertainty, credit-risk language sharpened to the stated S&P utility rating of BBB-, and management explicitly attached future capital deployment to the cost of equity. Guidance itself was reaffirmed, and management declined to extrapolate the strong first half, saying 'two quarters does not make a year.'
Management Guidance
On both calls management reaffirmed 2026 core EPS guidance of $5.90–$6.20, the 2027 target of $6.25–$6.65, the 2028 and 2030 targets, and long-term core EPS growth of 5%–7%. It reaffirmed the $38B–$41B 2026–2030 capital plan, SCE rate base growth of about 7%, an FFO-to-debt framework of 15%–17%, and a plan to issue no new common equity through 2030. Management also reaffirmed the AMI 2.0 filing of approximately $3.1 billion of capital through 2033, about $1.5 billion by 2030, with about half in the current capital forecast.
Trajectory
Quarterly revenue in reported figures have been lumpy — $5,750 million in Q3 FY2025, $5,213 million in Q4 FY2025, $4,103 million in Q1 FY2026, and $4,357 million in Q2 FY2026 — a pattern the spine labels a decelerating revenue trajectory. For a rate-regulated utility, these swings track authorized rates, pass-through costs, and volumes more than any product cycle. The real earnings lever is rate base, which management guides at about 7% growth from 2025 to 2030 behind the capital plan. The spine shows gross margin roughly stable, down 70 basis points, while EBITDA margin expanded, up 430 basis points.
The Model
The model projects FY+1 revenue of $19,600 million and EBITDA of $7,958 million, a 40.6% margin. For FY+2 it projects revenue of $20,450 million and EBITDA of $8,446 million, a 41.3% margin. The near-term anchor is rate base compounding at about 7% behind the reaffirmed capital plan, with no new common equity through 2030. The out-year depends on the RAMP filed in May 2026 (about $2.5B), the eventual 2029–2032 GRC, and whether a financeable wildfire framework keeps the cost of capital in check.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $19.3B | $19.6B | $20.4B |
| YoY Growth | — | +1.5% | +4.3% |
| EBITDA | $8.5B | $8.0B | $8.4B |
| EBITDA Margin | 43.9% | 40.6% | 41.3% |
Projections are the median of 5 independent model runs. The model’s revenue sits 3.1% above analyst consensus.
On both calls management reaffirmed 2026 core EPS guidance of $5.90–$6.20, the 2027 target of $6.25–$6.65, the 2028 and 2030 targets, and long-term core EPS growth of 5%–7%. It reaffirmed the $38B–$41B 2026–2030 capital plan, SCE rate base growth of about 7%, an FFO-to-debt framework of 15%–17%, and a plan to issue no new common equity through 2030. Management also reaffirmed the AMI 2.0 filing of approximately $3.1 billion of capital through 2033, about $1.5 billion by 2030, with about half in the current capital forecast.
What Could Go Right — and Wrong
- A comprehensive, financeable framework out of Sacramento, which management says would help maintain access to lower-cost capital and continued infrastructure investment.
- A quantified, contracted data-center or large-load pipeline in SCE's territory, which would add the demand mechanism the AI story currently lacks.
- AI productivity gains scaling into measurable O&M or capital-efficiency savings — the 20%–30% faster designs, about 20% faster permits, and the ~$25M unbilled-revenue item — and showing up in guidance.
- The RAMP and the eventual 2029–2032 GRC authorized at a level that sustains about 7% rate base growth past 2028.
- An Eaton Fire liability figure that resolves below worst case, helped by the WRCP fast-pay program, subrogation recoveries, and the CEA prefunding mechanism.
- The 2026 legislative session closes without a credit-supportive wildfire framework, which management says could lead to credit rating impacts for California utilities.
- A downgrade with the S&P utility rating already at BBB-, where management sees 'nowhere to go in investment grade' and the next step is non-investment-grade.
- An Eaton Fire liability estimate that comes in high; over 30,000 claims are filed, only two subrogation settlements are done at about $0.55 on the dollar, and no GAAP low-end estimate exists yet.
- A capital plan re-scoped on the explicit 'negative NPV' condition, slowing the rate base engine that drives the 5%–7% earnings algorithm.
- Persistent input constraints — transformers, labor, and permitting — that slow the capital program, where AI productivity is a hoped-for offset but unproven at scale.
Looking Ahead
Over the next twelve months the pivotal event is the California wildfire legislative outcome in the 2026 session, which management ties to its cost of capital and future capital deployment. The RAMP filed in May 2026 (about $2.5B) begins to inform the next GRC; the AMI 2.0 decision follows the July 2026 intervenor-comment window; and the Eaton Fire liability remains without a GAAP low-end estimate as the property-damage statute runs to January 2028. Q3 2026 results will test delivery against the reaffirmed $5.90–$6.20 guide, with the RAMP's ~$8B–$9B 2029 capex reference and the LA County Fire Department report still undated.
- 2026California wildfire legislation — No language seen as of the Q2 call, four weeks out; tests the cost of capital.
- Sept 1, 2026CFO Rigatti retirement — Maria Rigatti retires after Aaron Moss took the CFO role July 3.
- 2026Third storage unit online — 225 MW utility-owned storage expected in-service.
- 2027Next GRC undergrounding — 190-mile base scenario; decisions come 'closer next year.'
- January 2028Eaton statute closes — Three-year property-damage statute of limitations closes.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $17.6B | $19.3B | $19.4B | +9.8% |
| Gross Margin | 41.3% | 32.1% | 39.9% | 915bps |
| EBITDA | $5.9B | $8.5B | $7.8B | +44.4% |
| EBITDA Margin | 33.3% | 43.9% | 40.3% | +1,054bps |
| Net Income | $1.5B | $4.6B | $3.8B | +208.8% |
| Free Cash Flow | −$693M | −$715M | −$389M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)39.9%
- EBITDA Margin (TTM)40.3%
- Net Margin (TTM)19.8%
- ROIC5.8%
- FCF Conversion-5.0%
- SBC / Revenue0.0%
The Company
Edison International is the parent holding company of Southern California Edison, a California public utility that supplies and delivers electricity to an approximately 50,000 square-mile area of southern California. SCE operates the wires and some of the generation and storage that move power to residential, commercial, and other customers in a fixed, franchised territory. The company is an AI adopter, not a supplier: it sells no AI product and books no disclosed AI revenue. Data centers in its territory are listed as electricity customers in the wiring record, but EIX does not disclose a data-center pipeline or a hyperscaler contract.
EIX operates as a rate-regulated utility under the California Public Utilities Commission general rate case framework, with a 2025 GRC decision that management says gives visibility through 2028. Its physical footprint, per the FY2025 10-K, includes about 13,000 circuit-miles of transmission lines from 55 kV to 500 kV and about 80 transmission substations, roughly 38,000 circuit-miles of overhead and 32,000 circuit-miles of underground distribution lines with about 730 distribution substations, and interests in generation and storage with about 7,000 MW of net physical capacity, of which SCE's pro-rata share is about 3,500 MW. The company has narrowed toward a pure-play utility: Trio, its only non-utility segment, was sold to X-energy, disclosed in Q2 2026 Q&A. The Q1 2026 10-Q already states SCE is the single reportable segment.
Business Segments
Competitive Landscape
The evidence describes SCE as a regulated wires-and-generation utility operating in a franchised service territory, with rates set by the California Public Utilities Commission under a general rate case framework. The intel file's wiring record names LADWP, PG&E, and Sempra as competitors; PG&E is also listed as a competitor in 'Electric utility services for data centers.' The material does not describe a sole-source position for EIX, and no competitor is discussed at length in the calls or SEC filings.
- LADWPNamed in the intel file's wiring record; not discussed.
- PG&ENamed as a competitor and also listed as a competitor in 'Electric utility services for data centers.'
- SempraNamed in the intel file's wiring record; not discussed.
Supply Chain
EIX sits downstream in the electricity chain, buying fuel transport, grid equipment, meters, and renewable power and selling regulated electricity to franchised customers. Its flagged single-source dependency is SoCalGas, the primary intrastate pipeline transportation provider to SCE's gas-fueled generation.
More on EIX: Earnings recap