Entergy Corporation (ETR) | The Buildout — AI Infrastructure
The Verdict
Entergy is an integrated electric utility operating in Arkansas, Louisiana, Mississippi, and Texas. It owns and operates power plants and delivers electricity to retail and large industrial customers. In the AI infrastructure buildout, Entergy is not a chip, cloud, or data-center company; it supplies the electricity and builds the generation, transmission, and storage assets that data centers require.
| Market Cap | — |
| Revenue (TTM) | $13.5B |
| Revenue Growth | +9.5% |
| EBITDA Margin (TTM) | 40.7% |
| Net Debt | $30.8B |
| Earnings Beats | 6 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- $57 billion four-year customer-centric capital plan, up $14 billion in one quarter, driven primarily by a signed Meta agreement.
- 2029 adjusted EPS outlook raised $0.50 to $6.40; 2030 adjusted EPS growth previewed at approximately 12%.
- Industrial sales grew 15% in Q1 2026, and management raised the industrial CAGR through 2029 to ~16%.
- Plan contains only signed data centers, booked at minimum bill levels; pipeline remains 7–12 GW outside the plan.
- Fair Share Plus quantified at $7 billion of estimated customer benefits, including $2 billion from the new Meta agreement.
What We’re Watching
- LPSC decision on Meta assets targeted for the December 2026 B&E meeting; approval or conditions will set the plan's largest regulatory gate.
- Cottonwood acquisition went unmentioned on the Q1 2026 call; LPSC decision requested by end of 2026 remains unresolved.
- Equity need rose to $6.6 billion, with $4.7 billion still to be sourced; May 2026 forward offering followed 'no equity until 2027' language.
- Execution on 7 combined-cycle units with 2030–2031 in-service dates; cost and schedule risk remain.
The thesis is strengthening: a signed Meta ESA lifted the capital plan, sales outlooks, and EPS outlook, and the company formalized Fair Share Plus. But the new plan is substantially tied to one customer and one industry, and the next critical gate is regulatory approval of the Meta assets in December 2026.
Earnings Beat
For Q2 2026, total operating revenue was $3,523.6 million, with gross margin at 29.8% and EBITDA of $1,506.2 million, or 42.7% of revenue. The company reported Q2 2026 EPS of $1.03 on both as-reported and adjusted bases and affirmed guidance and outlooks.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $3.5B | $3.2B | $3.3B | +5.9% |
| Gross margin | 29.8% | 68.7% | 46.9% | -1710bps |
| EBITDA | $1.5B | $1.1B | $1.5B | +2.5% |
| EPS | $1.05 | $0.84 | $1.06 | −1.2% |
Entergy is executing a differentiated growth strategy, delivering strong, sustainable results.. This update makes our already strong growth profile stand out even more.— Kimberly Fontan, Chief Financial Officer, 2026-04-29
Management tone: Management's tone on the Q1 2026 call shifted from the prior 'success is continuing' framing to a more specific, expansion-oriented posture, treating the Meta agreement as validation of the differentiated growth strategy.
Management Guidance
On the Q1 2026 call, management affirmed 2026 adjusted EPS guidance, raised the retail sales CAGR through 2029 to ~8.5% and the industrial CAGR to ~16%, raised the 2027 adjusted EPS outlook by $0.20, and raised the 2029 adjusted EPS outlook by $0.50 to $6.40. At the July 29, 2026 Q2 results, guidance and outlooks were affirmed.
Trajectory
Q1 2026 total operating revenue rose 12% year over year to $3,187.6 million; industrial billed revenue rose 20.7% to $934.4 million, while residential volumes fell 8.3% on weather. The weather swing made the earnings contribution from sales growth roughly neutral, as a prior-year benefit became a current-year drag. Q2 2026 revenue rose to $3,523.6 million and adjusted EPS was $1.03. The trajectory is driven by signed electric service agreements and the capital plan step-up rather than by near-term margin expansion.
The Model
The model projects FY+1 revenue of $14,500 million and EBITDA of $6,264 million, a 43.2% margin, rising to FY+2 revenue of $16,200 million and EBITDA of $7,096 million, a 43.8% margin. The near-term projection is anchored by signed data center and industrial agreements plus the $57 billion four-year capital plan. The FY+2 step-up reflects the larger planned generation, transmission, and storage build moving into service.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $12.9B | $14.5B | $16.2B |
| YoY Growth | — | +12.0% | +11.7% |
| EBITDA | $5.7B | $6.3B | $7.1B |
| EBITDA Margin | 43.7% | 43.2% | 43.8% |
Projections are the median of 5 independent model runs. The model’s revenue sits 6.2% above analyst consensus.
On the Q1 2026 call, management affirmed 2026 adjusted EPS guidance, raised the retail sales CAGR through 2029 to ~8.5% and the industrial CAGR to ~16%, raised the 2027 adjusted EPS outlook by $0.20, and raised the 2029 adjusted EPS outlook by $0.50 to $6.40. At the July 29, 2026 Q2 results, guidance and outlooks were affirmed.
What Could Go Right — and Wrong
- LPSC approves the Meta asset filing with manageable conditions, locking in the largest generation increment in the plan.
- The 7–12 GW data center pipeline converts into additional signed ESAs across Arkansas, Mississippi, and Louisiana.
- Transmission, 2.5 GW of renewables, and River Bend nuclear upgrade investments in the Meta filing get added to the capital plan.
- The seven combined-cycle units are delivered on schedule in 2030–2031, and Orange County is fully online late summer 2026.
- Fair Share Plus keeps customer-benefit support while minimum bills protect revenue during data center ramps.
- A hyperscaler slows or delays its buildout, and signed loads ramp only at minimum bill levels rather than full capacity.
- The 7-CCCT build suffers cost overruns or schedule slippage, testing regulatory tolerance and customer affordability.
- LPSC denies or materially conditions the Meta asset filing, removing the plan's largest generation increment.
- The data center pipeline stalls and the 7–12 GW remains unsigned while shifting to other regions or self-generation.
- Equity and hybrid financing needs become harder to source on reasonable terms as construction spending rises.
Looking Ahead
The next 12 months combine near-term project completions with major regulatory decisions. Orange County Advanced Power Station is expected fully online late summer 2026, the Waterford 3 uprate is expected later in 2026, and the Mississippi securitization filing is due by October 5, 2026. The pivotal event is the LPSC decision on the Meta asset filing targeted for the December 2026 B&E meeting.
- Late summer 2026Orange County fully online — Tests execution of a large gas plant reaching commercial operation.
- Oct 5, 2026Mississippi securitization filing — Tests storm-cost recovery; commission decision expected within 60 days.
- Later in 2026Waterford 3 uprate — Tests addition of 45 MW of clean nuclear capacity.
- December 2026LPSC decision on Meta assets — Tests approval of the largest generation increment in the plan.
- End of 2026Cottonwood acquisition decision — Tests capacity bridge close and follow-through from Q4 2025.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $11.9B | $12.9B | $13.5B | +9.0% |
| Gross Margin | 48.0% | 38.9% | 38.9% | 915bps |
| EBITDA | $5.1B | $5.7B | $39.4B | +11.2% |
| EBITDA Margin | 42.9% | 43.7% | 40.7% | +86bps |
| Net Income | $1.1B | $1.8B | $1.8B | +67.1% |
| Free Cash Flow | −$1.5B | −$2.7B | −$21.2B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)38.9%
- EBITDA Margin (TTM)40.7%
- Net Margin (TTM)13.5%
- ROIC4.8%
- FCF Conversion-57.3%
- SBC / Revenue-0.2%
The Company
Entergy is an integrated electric utility serving approximately 3.1 million Utility customers in Arkansas, Louisiana, Mississippi, and Texas. It owns and operates power plants with about 25,000 MW of electric generating capacity, and its single Utility segment includes generation, transmission, distribution, and sale of electric power. After the July 2025 sale of its natural gas local distribution businesses, it is essentially a pure electric utility. In the AI infrastructure buildout, the relevant product is delivered electricity and grid capacity, not chips or compute.
The company operates through five regulated operating companies—Entergy Arkansas at 5,542 MW, Entergy Louisiana at 10,853 MW, Entergy Mississippi at 3,031 MW, Entergy New Orleans at 669 MW, and Entergy Texas at 3,275 MW—plus System Energy/Grand Gulf nuclear at 1,251 MW. It builds and owns generation, transmission, distribution, and storage assets, recovering costs through formula rate plans, riders, and rate cases.
Business Segments
Competitive Landscape
Entergy's competitive position rests on its regulated franchise territory rather than a market share contest. The source also notes that other utilities such as AEP are competing for the same kind of data center load, with AEP adding contracted load to 63 GW by 2030 and raising its five-year plan to $78 billion.
- AEPNamed in the source as a peer read; increased contracted load to 63 GW by 2030 and raised its five-year plan to $78 billion, illustrating competitive pressure for data center load.
Supply Chain
Entergy sits between upstream fuel, equipment, and EPC suppliers and downstream large electricity customers. It builds and operates regulated generation, transmission, and distribution assets, turning signed electric service agreements into delivered power.