NorthWestern Energy Group (NWE 2.47%), a regulated energy company serving customers across Montana, South Dakota, and Nebraska, released its second quarter results on July 30, 2025. The key news from the report was a strong beat on both adjusted earnings per share and revenue versus Wall Street expectations. Adjusted EPS reached $0.40 in Q2 2025, above the $0.38 consensus estimate, while revenue of $342.7 million topped projections by $6.1 million. However, these results still marked significant declines compared to the prior year, reflecting regulatory timing and higher costs. Overall, the quarter showed progress on regulatory and operational fronts, but underlying profitability was sharply lower compared to the prior-year period.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (Non-GAAP) | $0.40 | $0.38 | $0.53 | (24.5 %) |
| Revenue (GAAP) | $342.7 million | $336.56 million | $319.9 million | 7.1% |
| Utility Margin (Non-GAAP) | $267.4 million | $243.4 million | 9.9 % | |
| Operating Income (GAAP) | $60.8 million | $61.6 million | (1.3%) | |
| Net Income (GAAP) | $21.2 million | $31.7 million | (33.1 % decrease) |
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Strategic Focus
NorthWestern Energy Group is a regulated electricity and natural gas utility, supplying energy and related services to roughly 842,000 customers following a recent acquisition. It operates electric transmission and distribution networks, natural gas pipelines, and power generation facilities, primarily across Montana, South Dakota, and Nebraska.
The company’s business is anchored by five pillars: regulatory compliance, environmental sustainability, infrastructure and resource management, a diverse customer base, and competitive positioning. Most of its earnings come from state-approved utility rates, making close coordination with regulators essential. Recent years have brought a strong focus on cleaner energy—including efforts to reach Net Zero emissions by 2050—and large infrastructure investments to expand and modernize the grid.
Quarter in Review: Major Developments and Results
During the quarter, NorthWestern Energy Group reported revenue growth driven by rate changes, with electric segment revenue increased 7.5% year-over-year and gas segment revenue increased 7.7% year-over-year. Utility margin (non-GAAP) increased 9.9% in Q2 2025, representing the difference between utility operating revenues and recoverable costs (excluding depreciation, taxes, and other expenses). However, that growth was not enough to offset higher expenses, with net income and adjusted EPS both dropped more than 20% compared to Q2 2024.
Operating expenses excluding fuel rose 13.6% in Q2 2025, with the biggest increases coming from property taxes (GAAP, up $11.9 million in Q2 2025), depreciation, insurance (mainly for wildfire risk), and electric generation maintenance. Interest expenses (GAAP) climbed to $36.3 million from $31.9 million year over year in Q2 2025. The company noted that unfavorable weather reduced customer energy usage, cutting into earnings—as leadership said, “lower retail natural gas and electric usage primarily driven by weather,”
On the regulatory front, management finalized partial settlements in Montana for electricity rates and a full settlement for natural gas rates. The Montana Public Service Commission is expected to issue a final decision in early fourth quarter. $3.5 million in interim base rate revenues is being held as of June 30, 2025, subject to refund based on the outcome. New legislation in Montana gives the company protection against strict wildfire-related liabilities if it follows its approved mitigation plan, lowering legal risks and future insurance costs.
The company completed its $36.5 million acquisition of Hope Utilities’ Energy West Montana natural gas distribution business on July 1, 2025, adding over 33,000 customers. It also filed new letters of intent with major data center developers for added electric demand. Three data center projects now represent potential incremental load growth of up to 900 megawatts by 2030.—a scale that could drive substantial future investment in power generation and transmission infrastructure.
Business Drivers, Products, and Competitive Dynamics
The electric segment, NorthWestern’s largest business, supplies electricity from both renewable and thermal sources across regulated utility territories. The natural gas segment delivers natural gas for heating and industry. Both segments operate under state-set rate structures, which can lag behind real-time costs—a dynamic seen this quarter when timing of regulatory approvals held back revenue increases.
Despite stable overall customer numbers, commercial and industrial demand fell due to weather, but expansion of service territories and customer growth helped offset declines. The addition of the Energy West assets further diversified the customer mix. Prospective contracts with data center operators, if finalized, will affect both the demand outlook and infrastructure investment plans.
Looking Ahead: Guidance and Dividend Policy
Management reaffirmed its full-year 2025 adjusted non-GAAP EPS guidance of $3.53 to $3.65 per share, which suggests earnings will be higher in the second half as more favorable rate structures take effect. The company also confirmed long-term annual EPS growth expectations of 4–6 %. A $2.7 billion capital investment plan for 2025–2029 is in place supports these growth and infrastructure goals.
It pledged to keep its dividend payout between 60 % and 70 % of earnings. The company has not issued new guidance on annual revenue or free cash flow, but highlighted regulatory outcomes and cost pressures as sources of future earnings volatility.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
