Evergy, Inc. (EVRG) | The Buildout — AI Infrastructure
The Verdict
Evergy is a regulated electric utility holding company serving Kansas and Missouri through three integrated utilities. Its role in the AI infrastructure buildout is indirect: it supplies the firm power, transmission, and distribution that hyperscaler and data center customers need, and its Large Load Power Service tariff converts that demand into long-term, minimum-bill contracts.
| Market Cap | — |
| Revenue (TTM) | $6.0B |
| Revenue Growth | +2.4% |
| EBITDA Margin (TTM) | 45.5% |
| Net Debt | $15.9B |
| Earnings Beats | 3 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Five signed data-center ESAs total ~2.5 GW of steady-state peak load; including non-LLPS customers, signed large-customer load is ~3 GW.
- ESA contracts span 16–17 years and carry minimum monthly bill provisions, with LLPS demand rates 15%–20% above existing industrial customers.
- The Q1 2026 10-Q discloses $8.7 billion of remaining performance obligations across 10- to 17-year large-load contracts.
- Retail load growth CAGR was raised to 7%–8% through 2030 and rate base CAGR to ~12%.
- The Missouri Metro rate case request was reduced by $25 million, about 15%, because of data center load.
What We’re Watching
- Management says it is highly confident it will execute at least one more ESA in 2026; details are expected on the November Q3 call.
- Missouri West residential rates may increase above inflation over the next five years as new generation comes online.
- Tier 2 advanced discussions narrowed from 1.5–3 GW to 1–2 GW between Q1 and Q2, without explanation in the source.
- The equity plan calls for $700–900 million of issuance per year from 2026 through 2029, on top of convertible-related dilution.
The thesis is strengthening: the signed contract base, raised guidance metrics, and an ESA delivered ahead of plan support a data-center-led growth trajectory. The open question is whether regulatory approvals and the generation buildout can convert the 2.0–2.5 GW expansion bucket and wider pipeline into rate base without an affordability backlash.
Earnings
Evergy's Q2 2026 earnings release centered on EPS and demand. GAAP EPS was $0.91, up from $0.74 a year earlier; adjusted EPS was $0.88, up from $0.82. Weather-normalized demand grew 1.8%, with commercial demand up 4% and industrial demand up 6.2%.
| Metric | Q1 FY2026 | Q4 FY2025 | Q1 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $1.4B | $1.3B | $1.4B | +5.5% |
| Gross margin | 67.5% | 24.6% | 29.0% | +3850bps |
| EBITDA | $624M | $532M | $590M | +5.7% |
| EPS | $0.64 | $0.36 | $0.54 | +19.4% |
| Adjusted EPS (non-GAAP) | $0.88 | $0.69 | $0.82 | +7.3% |
It sounds like you are hearing what we want you to hear, which is confidence that not only can we exceed 8% in those out years, but trending towards the math you just described.— W. Bryan Buckler, Chief Financial Officer, May 7, 2026
Management tone: Management's tone shifted from expecting at least one more ESA to saying it is highly confident, and it pointed to specific regulatory milestones and turbine reservations beyond announced ESAs. The Q2 call was execution-focused, with management directly acknowledging Missouri West affordability pressure rather than deflecting it.
Management Guidance
Management reaffirmed 2026 adjusted EPS guidance of $4.14–$4.34, midpoint $4.24, and long-term adjusted EPS growth of 6%–8%+ through 2030, with annual growth expected to exceed 8% beginning in 2028. It initiated Q3 2026 adjusted EPS sub-guidance of 50%–53% of the $4.24 midpoint. Retail load growth CAGR is guided to 7%–8% through 2030, rate base CAGR to ~12%, and FFO/debt to 14%–15% in 2026–2028.
Trajectory
Reported revenue remains highly seasonal but is trending higher: Q1 FY2026 operating revenues were $1,443.7 million, up from $1,374.5 million in Q1 FY2025, and TTM revenue reached $5,994.7 million with trailing revenue growth of 2.4% year over year. The code-computed signals show revenue trajectory accelerating and gross margin expanding, while operating and EBITDA margins compress as depreciation and interest rise. The driver is the regulated model: new rates, large-load ramp, and investment recovery are additive, while higher O&M, depreciation, and financing costs offset.
The Model
The model projects FY+1 revenue of $6,350 million and EBITDA of $2,953 million, a 46.5% EBITDA margin. For FY+2, it projects $6,900 million of revenue and $3,278 million of EBITDA, a 47.5% margin. The near-term is anchored by the $8.7 billion remaining performance obligation and roughly 3 GW of signed large load; FY+2 reflects continued ramp of signed ESAs and the resource buildout.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $5.9B | $6.3B | $6.9B |
| YoY Growth | — | +7.3% | +8.7% |
| EBITDA | $2.7B | $3.0B | $3.3B |
| EBITDA Margin | 45.5% | 46.5% | 47.5% |
Projections are the median of 5 independent model runs. The model’s revenue sits 4.4% above analyst consensus.
Management reaffirmed 2026 adjusted EPS guidance of $4.14–$4.34, midpoint $4.24, and long-term adjusted EPS growth of 6%–8%+ through 2030, with annual growth expected to exceed 8% beginning in 2028. It initiated Q3 2026 adjusted EPS sub-guidance of 50%–53% of the $4.24 midpoint. Retail load growth CAGR is guided to 7%–8% through 2030, rate base CAGR to ~12%, and FFO/debt to 14%–15% in 2026–2028.
What Could Go Right — and Wrong
- Executing the additional 2026 ESA and converting the 2.0–2.5 GW expansion bucket at existing sites would extend load growth and require incremental capex.
- A favorable Missouri Metro rate case and on-time Kansas predetermination and Missouri CCN approvals would clear the path for the >5 GW generation buildout.
- The Metro data center affordability benefit growing beyond the initial $25 million, about 15% reduction at true-up would strengthen the regulatory case.
- Formal guidance moving toward the outer-year math management endorsed in Q&A—above 8% annually beginning 2028—would make the growth path more visible.
- Expansion opportunities moving into the five-year plan would convert optional upside into base-plan rate base.
- A delay or failure on the sixth ESA would break the "highly confident" commitment and momentum language.
- An adverse Metro rate case order or CCN rejection, especially with hearings beginning October 5, 2026, would slow generation additions.
- A large-customer delay or credit event at one of the five data center ESAs would test concentration risk.
- Cost inflation or turbine supply-chain failure could lift incremental capital above the ~$1 billion IRP estimate and pressure affordability.
- Missouri West residential rates above inflation for five years may fuel political resistance.
Looking Ahead
The next 12 months are scheduled around regulatory milestones and the sixth ESA. Management plans to provide details on additional ESA progress on the November Q3 call, expects Missouri CCN and Kansas predetermination filings through the balance of 2026, and targets new Missouri Metro rates around January 1, 2027, with a capital plan update in February 2027.
- September 15, 2026Mullin Creek #2 staff report — Staff report due for the 440 MW gas turbine CCN.
- September 22, 2026Mullin Creek settlement conference — Settlement outcome or progression to hearings.
- September 23, 2026Metro rate case settlement conferences — Settlement or schedule progress in Missouri Metro rate case.
- October 5, 2026Metro rate case hearings — Hearing outcome for Missouri Metro rate case.
- October 19, 2026Mullin Creek #2 hearings — Hearing outcome and CCN approval timing.
- November 2026Q3 call ESA update — Management expects more details on additional ESA progress.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $5.8B | $5.9B | $6.0B | +1.7% |
| Gross Margin | 31.6% | 31.5% | 41.5% | 5bps |
| EBITDA | $2.6B | $2.7B | $20.8B | +3.1% |
| EBITDA Margin | 44.9% | 45.5% | 45.5% | +62bps |
| Net Income | $874M | $856M | $882M | -2.0% |
| Free Cash Flow | −$353M | −$752M | −$2.7B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)41.5%
- EBITDA Margin (TTM)45.5%
- Net Margin (TTM)14.7%
- ROIC4.6%
- FCF Conversion-40.2%
- SBC / Revenue0.3%
The Company
Evergy is a public utility holding company whose wholly-owned regulated electric utilities generate, transmit, distribute, and sell electricity in Kansas and Missouri, serving approximately 1.7 million customers. It matters to the AI buildout because data center developers and hyperscalers need firm, schedulable power; Evergy's Large Load Power Service tariff converts that demand into long-term electric service agreements and regulated generation and transmission investment.
The company manages three utility subsidiaries—Evergy Kansas Central, Evergy Metro, and Evergy Missouri West—but reports a single consolidated segment. The supplied 10-K extract lists coal units at Jeffrey Energy Center at 2,183 MW, La Cygne at 1,426 MW, Iatan at 1,271 MW, Hawthorn at 562 MW, and Lawrence Energy Center at 488 MW, and references Wolf Creek nuclear in risk disclosures. The system is materially seasonal: about one-third of retail revenues arrive in the third quarter.
Business Segments
Competitive Landscape
The source frames Evergy's competitive constraint as regulatory speed, grid interconnection, and supply-chain readiness rather than lack of customer demand. Its signed large-load position is smaller than some peer utilities such as Duke, but the pace of signings and the expansion pipeline are accelerating.
- Duke Energy (DUK)Named as a peer utility with a larger signed data center ESA position: 2.7 GW in one quarter, 7.6 GW cumulative.
- American Electric Power (AEP)Named as a peer utility whose contracted load increased to 63 GW by 2030 and secured more than 10 GW of gas turbine capacity.
- Constellation Energy (CEG)Named as a peer where demand remains strong but some customers are pausing for regulatory clarity.
Supply Chain
Evergy sits downstream in the data-center power value chain as the regulated utility delivering firm power, transmission, and distribution to large-load customers. The record names Google, Meta, Digital Realty, Beale, and Panasonic as customers; no upstream supplier is shown acknowledging Evergy by name.
More on EVRG: Earnings recap