Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported August 5, 2026 · Beat 2 of last 5 quarters
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Black Hills is a key utility enabler for AI data center growth in Wyoming, with a >3 GW pipeline and a 1.8 GW project in advanced negotiations. The company's ability to serve hyperscale demand with minimal incremental capital initially, but with potential for significant generation and transmission investment as load scales, positions it as a direct beneficiary of the AI infrastructure buildout. The pending merger with Northwestern Energy would expand its footprint and balance sheet to fund further growth.
Black Hills reported Q2 adjusted EPS of $0.54, up from $0.38 a year ago, driven by $0.21 of new rates and rider recovery and $0.04 of O&M savings, partially offset by higher financing and depreciation costs. The company reaffirmed its FY2026 guidance and maintained its credit metrics. The 99 MW Lange II generation project remains on schedule for Q4 service, with the final transformer delivered. The 1.8 GW data center project advanced with the generation reservation agreement extended, and the company filed for a new transmission cost adjustment mechanism in Wyoming. Regulatory progress included a Kansas rate approval, ongoing Arkansas and South Dakota reviews, and a new Colorado Electric rate request.
Management reaffirmed FY2026 adjusted EPS guidance of $4.25–$4.45, representing 6% growth at the midpoint, and expressed confidence in delivering in the upper half of the 4–6% long-term growth target. They expect the 1.8 GW data center project to reach definitive agreements during Q3, with the generation reservation agreement extended through August 31 and up to $377 million in customer advances. The merger with Northwestern Energy is on track to close in H2 2026, with Montana approval expected by mid-October (or mid-November with extension). Management highlighted continued regulatory cadence (3–4 rate reviews per year) and expects the new LCT-CAM tariff to be effective January 2027. They also noted potential upside from Microsoft's recently announced acquisition of more than 3,000 acres in Cheyenne for future expansion and other exploratory projects.
“We are in advanced negotiations for a series of commercial agreements that would support a diversified portfolio of resources to reliably serve this customer's needs.”
on 1.8 GW data center project
“We have seen no delay because of the Crusoe exit in summary.”
on Crusoe exit impact
“We are on track to achieve our earnings guidance for the year.”
on Guidance reaffirmation
Does Crusoe exiting have any implications for the status of your negotiations? Any impact on the customer that made those cash deposits? Do you see Crusoe exiting as slowing down the process, accelerating it, or not having much impact overall?
Linden Evans: The exit of Crusoe has not had any impact on the negotiations. We have been negotiating with the hyperscale end user from day one. Negotiations are on track, and we aim to finalize agreements by the end of the quarter. If not, it simply means we are continuing to get the right agreements in place. No delay because of the Crusoe exit.
You mentioned a 75-megawatt data center opportunity expected in the third quarter. Is that unrelated? Is it a different customer? Could that lead to a broader deal?
Linden Evans: That 75 megawatts is a different customer from the 1.8-gigawatt project. It is part of our 2.5-gigawatt pipeline. That particular project is advancing nicely, so we brought it forward this quarter.
On Montana, could you elaborate on the status and timing of the settlement and overall approval?
Linden Evans: We achieved settlements with about five parties, including the consumer advocate. The two entities we did not settle with had a strong environmental perspective. The settlements provide a map for the commission to approve the merger. Briefs were filed by July 13, triggering a 90-day timeline, with a possible 30-day extension. We expect a decision by mid-October, or mid-November at the latest.