PSEG Reports Strong Q3 2025 Earnings, Raises Guidance Amidst Data Center Demand

PSEG Exceeds Q3 2025 Earnings Expectations, Narrows Guidance

Public Service Enterprise Group (PSEG) (PEG) announced strong financial results for the third quarter of 2025, reporting a net income of $1.24 per share, a significant increase from $1.04 per share in Q3 2024. This performance surpassed market expectations, which had forecasted an earnings per share (EPS) of $1.03. The company's non-GAAP operating earnings also saw a notable rise, reaching $1.13 per share for Q3 2025, compared to $0.90 per share in the prior year period. This growth was primarily attributed to the implementation of new electric and gas base distribution rates, effective October 2024, and enhanced returns on capital investments.

Following these results, PSEG has narrowed its full-year 2025 non-GAAP operating earnings guidance to the upper half of its previously stated range, now projecting $4.00 to $4.06 per share, an adjustment from the earlier $3.94 to $4.06 per share.

Detailed Financial Performance and Capital Investments

For the third quarter of 2025, PSEG's net income stood at $622 million, compared to $520 million in Q3 2024. The corresponding non-GAAP operating earnings were $565 million. The substantial improvement reflects the full impact of the October 2024 rate case settlement and higher power pricing. The utility segment, PSE&G, specifically reported a net income of $515 million for Q3 2025, up from $379 million in Q3 2024.

In terms of capital deployment, PSEG invested approximately $1 billion in regulated projects during Q3 2025, contributing to a total of $2.7 billion for the first nine months of the year. This aligns with its ambitious $3.8 billion full-year regulated capital plan. The company also reaffirmed its robust Five-Year Capital Investment Outlook, projecting expenditures between $22.5 billion and $26 billion for the period of 2025 through 2029, a plan that is expected to be executed without the need for new equity issuance or asset sales.

Strategic Growth Drivers: Data Centers and Nuclear Energy

A significant driver of PSEG's strategic outlook is the accelerating demand from data centers and edge computing. The company reported a substantial increase in data center load pipeline inquiries, which have risen to 11.5 gigawatts, with nearly all of this demand attributed to data center requirements. Mature data center applications within PSEG's service territory also grew from 2,600 megawatts to 2,800 megawatts, indicating ongoing incremental activity.

Management highlighted the ongoing legislative and regulatory processes in New Jersey, particularly concerning generation adequacy, with load growth from data center projects emerging as a central business driver. PSEG is actively collaborating with policymakers to address resource adequacy, including supporting proposed legislation aimed at promoting competition for new in-state generation. Furthermore, the company detailed initiatives targeting operational improvements and capacity growth within its nuclear fleet, including a recent transition in Hope Creek's nuclear refueling cycle and ongoing upgrades at Salem.

These strategic focuses underpin PSEG's reaffirmed long-term non-GAAP EPS growth target of 5%-7% compound annual growth through 2029, supported by its significant capital spending program and the nuclear Production Tax Credit (PTC) environment.

Market Reaction and Broader Implications

The strong Q3 2025 earnings and positive outlook for PSEG have generated a bullish sentiment around the company's stock. The results underscore the positive impact of regulated rate adjustments and strategic investments in critical infrastructure. For investors, PSEG's performance signals the potential for stable returns within the utility sector, particularly as demand for reliable and robust power infrastructure grows to support energy-intensive industries like data centers.

PSEG's proactive engagement with policymakers to balance affordability and reliability, coupled with its substantial capital expenditure plan, positions it favorably within a sector facing increasing demands and evolving regulatory landscapes. The emphasis on nuclear power also highlights a broader industry trend towards diverse and carbon-free energy sources.

Outlook and Key Factors to Monitor

Looking ahead, PSEG's reaffirmed long-term EPS growth target of 5%-7% through 2029 remains a key indicator for future performance. Investors will closely monitor the company's ability to execute its ambitious $22.5 billion to $26 billion capital investment plan effectively and without the need for additional equity. The trajectory of data center load growth and PSEG's capacity to meet this escalating demand will be crucial for sustaining its growth momentum.

Continued legislative and regulatory developments in New Jersey regarding generation adequacy will also be critical, particularly as the region grapples with a supply-demand imbalance that could impact reliability and affordability. PSEG's efforts to contract its nuclear output under multi-year agreements and pursue additional utility investments to address growing customer demand will be important factors to watch in the coming quarters.