Earnings Recap — Q2 FY2026
CY Q3 2026 · Reported July 30, 2026 · Beat 5 of last 7 quarters
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Southern Company's record large load contracting and accelerating data center load underscore the scale of AI-driven power demand in the Southeast. The company's vertically integrated model and proactive generation procurement position it to capture significant incremental capital investment, supporting the broader AI infrastructure buildout. The OpenAI contract with demand response highlights innovative grid flexibility that could become a template for future hyperscaler agreements.
Southern Company reported Q2 adjusted EPS of $1.13, beating estimates by $0.13, driven by customer growth, higher usage, AFUDC, and tax benefits. The company signed 6 GW of new large load contracts, including a 3.2 GW 25-year agreement with OpenAI in Georgia, bringing total contracted large load to over 17 GW. Data center load surpassed 1.2 GW, up 55% YoY, and weather-normal retail sales grew 2.3% in the first half. Management sourced $700M of ATM equity, reducing remaining equity needs to $1.1B through 2030. They also noted $14B of economic development announcements in the quarter, the second-highest ever.
Management raised full-year 2026 adjusted EPS guidance to near or at the top of the $4.50–$4.60 range, with Q3 estimate of $1.50. They reaffirmed long-term EPS growth trajectory toward the top half of the 7%–8% range from 2028. The company expects continued momentum from large load contracting, with an additional 8 GW in late-stage development (3 GW near-term) and a prospective pipeline above 75 GW. They highlighted ongoing RFPs in Alabama and Georgia for incremental generation, which could add substantial capital investment beyond the current $81B plan. Management emphasized rate stability through 2029 in Georgia and Alabama, and reiterated a path to 17% FFO-to-debt by 2029 with proactive equity management. They also noted potential upside from Southern Power recontracting and FERC-regulated pipeline investments.
“In just the last quarter, there were three projects across the state of Alabama, Alabama Power added approximately 3 GW, while Georgia Power signed a 3.2 GW 25-year contract for electric service with OpenAI at its recently announced site near Savannah, Georgia.”
on Large load contract wins
“Our large load contracting structure helps ensure investors and customers are protected while providing meaningful savings for existing customers.”
on Contract protections
“We are probably about 1 GW or 2 away from if you will, selling out the capacity. That we had approved in Georgia last year.”
on Capacity utilization
How does the incremental sales revenue and visibility from the new contracts impact your ability to extend or stay out further on the regulatory front?
Management noted the success gives flexibility to provide rate stability and optionality in regulatory proceedings. They are about 1-2 GW away from selling out approved capacity in Georgia, and the contracts provide durability toward future goals.
On Southern Power, existing tolling agreements are rolling off. How are you thinking about repurposing capacity towards hyperscalers, and would that be captured in the 75 GW pipeline?
Management confirmed they are in discussions with creditworthy counterparties to recontract at higher prices as contracts expire, seeing upside opportunities that contribute to long-term plan durability. These opportunities are separate from the 75 GW pipeline.
Did the ongoing RFPs already contemplate the recent load pipeline progression, and is there potential for incremental generation beyond the current RFPs?
Management said the RFPs are based on conservative load forecasts and do not include placeholders. The newly signed contracts, including OpenAI, push Georgia beyond approved capacity by ~1 GW, and the RFP outcomes are not yet in the capital plan, implying upside.