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Southern Company reported Q3 FY2026 revenue of $8.8 billion, up from $7.8 billion a year earlier. Diluted earnings per share rose to $1.77 from $1.55, while operating margin was 33.9%, compared with 33.2%.
The company’s filing attributed the increase in quarterly net income primarily to higher non-fuel retail electric revenue, partly offset by higher operations and maintenance expenses and taxes other than income taxes. Retail electric revenue rose to $6.6 billion from $5.7 billion, with the filing citing higher contributions from variable demand-driven pricing at Georgia Power and increased sales. Southern said data centers at Georgia Power were a principal driver of higher commercial customer usage.
The filing shows natural gas revenue increased to $773 million from $734 million, with rate increases at Nicor Gas and Atlanta Gas Light contributing. Other electric revenue declined to $229 million from $262 million, primarily because of lower renewable energy program revenue.
For the preceding quarter, Southern’s adjusted EPS was $1.13, above the consensus of $1.01, while revenue of $7.0 billion was below the consensus of $7.4 billion.
| Q3 FY2026 | Q3 FY2025 | Change | |
|---|---|---|---|
| Revenue | $8.8 billion | $7.8 billion | 13.0% |
| Diluted EPS | $1.77 | $1.55 | 14.2% |
| Gross margin | 59.7% | 66.2% | −6.4 percentage points |
| Operating margin | 33.9% | 33.2% | 0.8 percentage points |
| Free cash flow | −$641.0 million | −$838.0 million | — |
| Against the consensus | Reported | Consensus | Result |
|---|---|---|---|
| Adjusted EPS | $1.13 | $1.01 | Beat by 11.9% |
| Revenue | $7.0 billion | $7.4 billion | Missed by 5.18% |
Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.
What management said on the call
On Southern’s most recent available call, for Q2 2026, CEO Chris Womack said demand from data centers and other large customers continued across the Southeast. He said the company’s electric subsidiaries had contracts and large-load agreements for over 17 gigawatts by the mid 2030s. Georgia Power had signed a 3.2 gigawatt, 25-year contract with OpenAI, with service expected to begin in phases in 2028.
Womack said large-load contracts include minimum bills covering the incremental cost of service, termination payments and collateral requirements. Asked about contract protections, CFO David Poroch said the company had about $21 billion of collateral for the whole 17-gigawatt portfolio, correcting an earlier response that had referred to the OpenAI contract.
Poroch said Alabama Power and Georgia Power were seeking proposals for additional generation. If company-owned resources are selected and approved by regulators, he said, the investment would be additional to the existing capital plan. In response to an analyst’s question, Poroch said the open procurement processes were not included in the capital forecast. He also said Southern had sourced an additional $700 million of equity through forward contracts in Q2 and projected a remaining equity need of $1.1 billion by 2030.
Asked about Southern Power, Poroch said the company was discussing expiring contracts and potential upgrades with existing and prospective counterparties, but would not build generation without a customer. For the quarter ahead of that call, Poroch estimated Q3 adjusted EPS of $1.65 per share.
Guidance
On the Q2 call, CFO David Poroch projected full-year 2026 adjusted EPS near or at the top of Southern’s existing $4.50 to $4.60 guidance range. He also reduced the projected remaining equity need by 2030 to $1.1 billion, from the $1.8 billion Southern had projected on its Q1 call.
| Metric | For | Guide | Previous guide | Change |
|---|---|---|---|---|
| EPS, Adjusted | FY2026 | $4.50–$4.60 | — | New |