OGE Energy Posts Robust 18% Net Income Jump Amid Revenue Surge

TL;DR

**OGE Energy is powering up, with net income surging 18% – a solid buy for dividend-focused investors.**

AI Summary

OKLAHOMA GAS & ELECTRIC CO (OGE Energy Corp.) reported a strong financial performance for the nine months ended September 30, 2025, with net income increasing by 18.2% to $401.5 million from $339.6 million in the prior year. Operating revenues also saw a significant rise, reaching $2,534.3 million, up 13.9% from $2,224.8 million in the same period of 2024. This growth was primarily driven by a substantial increase in revenues from contracts with customers, which climbed to $2,489.2 million from $2,171.9 million. Fuel, purchased power, and direct transmission expenses increased by 25.4% to $973.6 million, impacting profitability. Despite this, operating income improved by 17.4% to $661.2 million. The company's cash flow from operating activities also increased to $752.3 million from $683.2 million, indicating healthy operational cash generation. Capital expenditures, net of allowance for equity funds, decreased slightly to $752.7 million from $794.3 million, while long-term debt proceeds were $344.4 million, down from $707.9 million in 2024.

Why It Matters

This strong performance by OGE Energy Corp. signals a healthy utility sector, potentially attracting investors seeking stable, dividend-paying stocks. Increased operating revenues and net income suggest effective rate recovery and demand, which could lead to continued investment in infrastructure, benefiting employees and ensuring reliable service for customers. The competitive landscape, particularly with the rise of distributed generation, means OGE's ability to secure timely rate relief is crucial for maintaining its market position and profitability. This filing provides a positive outlook for the company's financial stability and its capacity to manage operational costs and capital investments.

Risk Assessment

Risk Level: medium — While OGE Energy Corp. shows strong financial performance, the significant increase in 'Fuel, purchased power and direct transmission expense' by 25.4% to $973.6 million for the nine months ended September 30, 2025, compared to $776.2 million in 2024, indicates exposure to volatile energy commodity prices. Additionally, 'Interest expense' rose to $209.1 million from $189.3 million, reflecting increased borrowing costs, which could be a concern in a rising interest rate environment.

Analyst Insight

Investors should consider OGE Energy Corp. for its consistent revenue growth and strong net income, but monitor fuel and purchased power costs closely. Evaluate the company's ability to pass these costs through to customers via rate adjustments, as this will be key to sustaining profitability.

Financial Highlights

revenue

$2,534.3M

operating Margin

26.1%

total Assets

$14,257.4M

net Income

$401.5M

eps

$1.99

revenue Growth

+13.9%

Revenue Breakdown

Key Numbers

• $2,534.3M — Operating revenues (Increased by 13.9% for the nine months ended September 30, 2025, from $2,224.8M in 2024.)
• $401.5M — Net income (Increased by 18.2% for the nine months ended September 30, 2025, from $339.6M in 2024.)
• $1.99 — Basic earnings per average common share (Increased from $1.69 for the nine months ended September 30, 2024.)
• $973.6M — Fuel, purchased power and direct transmission expense (Increased by 25.4% for the nine months ended September 30, 2025, from $776.2M in 2024.)
• $752.3M — Net cash provided from operating activities (Increased from $683.2M for the nine months ended September 30, 2024.)
• $752.7M — Capital expenditures (Decreased from $794.3M for the nine months ended September 30, 2024.)
• $209.1M — Interest expense (Increased from $189.3M for the nine months ended September 30, 2024.)
• $1,028.4M — Revenues from contracts with customers (Increased for the three months ended September 30, 2025, from $945.2M in 2024.)
• $231.3M — Net income (Q3) (Increased for the three months ended September 30, 2025, from $218.7M in 2024.)
• $14,257.4M — Total assets (As of September 30, 2025, up from $13,716.0M at December 31, 2024.)

Key Players & Entities

• OKLAHOMA GAS & ELECTRIC CO (company) — Registrant and wholly-owned subsidiary of OGE Energy Corp.
• OGE ENERGY CORP. (company) — Holding company and parent company of OG&E
• New York Stock Exchange (regulator) — Exchange where OGE Energy Corp. Common Stock is registered
• SEC (regulator) — Securities and Exchange Commission
• APSC (regulator) — Arkansas Public Service Commission
• OCC (regulator) — Oklahoma Corporation Commission
• FERC (regulator) — Federal Energy Regulatory Commission
• EPA (regulator) — U.S. Environmental Protection Agency
• Southwest Power Pool (company) — SPP, affecting market pricing mechanisms
• Bloomberg (company) — Financial news organization

FAQ

Risk Factors

• Fuel and Purchased Power Cost Volatility [high — operational]: Fuel, purchased power, and direct transmission expenses increased by 25.4% to $973.6 million for the nine months ended September 30, 2025, from $776.2 million in the prior year. Fluctuations in energy commodity prices can significantly impact operating costs and profitability.
• Regulatory Environment and Rate Cases [high — regulatory]: As a regulated utility, OGE Energy Corp. is subject to extensive regulation by state and federal agencies. Changes in regulatory policies, rate structures, or the outcome of rate cases can materially affect financial performance and the ability to recover costs.
• Interest Expense Increases [medium — financial]: Interest expense rose by 10.5% to $209.1 million for the nine months ended September 30, 2025, from $189.3 million in the prior year. Higher interest rates or increased debt levels could further elevate financing costs.
• Economic Conditions and Demand Fluctuations [medium — market]: The company's revenues are influenced by regional economic conditions and customer demand for electricity. Economic downturns or significant shifts in energy consumption patterns could negatively impact revenue generation.
• Capital Expenditure Requirements [medium — operational]: The company continues to make substantial capital expenditures, totaling $752.7 million for the nine months ended September 30, 2025. Managing these investments effectively and ensuring timely project completion is crucial for future growth and operational efficiency.

Industry Context

Oklahoma Gas & Electric Co. operates in the regulated electric utility sector, characterized by significant capital intensity and a stable, albeit growing, demand for electricity. The industry is increasingly focused on grid modernization, renewable energy integration, and managing the costs associated with fuel and transmission. Competition is generally limited due to the regulated nature of the business, with utilities operating within defined service territories.

Regulatory Implications

As a regulated entity, OGE Energy Corp. is subject to oversight from the Oklahoma Corporation Commission and the Federal Energy Regulatory Commission. Changes in environmental regulations, energy policies, and rate-setting methodologies can significantly impact the company's operational costs, investment decisions, and overall profitability.

What Investors Should Do

1. Monitor fuel and purchased power cost trends.
2. Analyze the impact of capital expenditures on future returns.
3. Evaluate the company's ability to manage interest expense.
4. Assess the outcomes of any ongoing or upcoming rate cases.

Glossary

Allowance for equity funds used during construction

A non-cash accounting credit that represents the cost of equity capital used to finance construction of new utility plant. It is capitalized as part of the cost of the asset. (This item contributes to other income, positively impacting net income, and reflects ongoing investment in new infrastructure.)

Allowance for borrowed funds used during construction

The interest cost incurred on funds borrowed to finance the construction of new utility plant. This interest is capitalized as part of the cost of the asset rather than expensed. (This reduces interest expense by capitalizing a portion of borrowing costs related to construction projects.)

Operating revenues

The total revenue generated from the company's primary business activities, which for an electric utility includes the sale of electricity. (A key indicator of the company's top-line performance and market demand for its services.)

Fuel, purchased power and direct transmission expense

Costs associated with generating electricity (fuel) and purchasing electricity from other sources, as well as the cost of transmitting electricity over the grid. (A significant operating expense for electric utilities, directly impacting profitability. Its increase of 25.4% is a notable factor in the period's results.)

Basic earnings per average common share

The net income available to common shareholders divided by the weighted-average number of common shares outstanding during the period, without considering the dilutive effect of potential common shares. (A fundamental measure of profitability on a per-share basis for common stockholders.)

Year-Over-Year Comparison

For the nine months ended September 30, 2025, OGE Energy Corp. demonstrated robust top-line growth with operating revenues increasing by 13.9% to $2,534.3 million, driven by higher revenues from customer contracts. Net income also saw a substantial rise of 18.2% to $401.5 million, with basic EPS growing from $1.69 to $1.99. However, this improved profitability was partially offset by a significant 25.4% increase in fuel, purchased power, and direct transmission expenses, alongside a 10.5% rise in interest expense. Total assets grew to $14,257.4 million, indicating continued investment in the business.

Key Financial Figures

• $0.01 — Energy Corp.'s common stock, par value $0.01 per share, outstanding. At September
• $2.50 — ctric Company's common stock, par value $2.50 per share, outstanding, all of which we

Filing Documents

• oge-20250930.htm (10-Q) — 4719KB
• oge-ex31_01.htm (EX-31.01) — 26KB
• oge-ex31_02.htm (EX-31.02) — 26KB
• oge-ex32_01.htm (EX-32.01) — 15KB
• oge-ex32_02.htm (EX-32.02) — 15KB
• 0001193125-25-253956.txt ( ) — 16766KB
• oge-20250930.xsd (EX-101.SCH) — 1463KB
• oge-20250930_htm.xml (XML) — 4229KB

- FINANCIAL INFORMATION

Part I - FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 3 OGE Energy Corp. Condensed Consolidated Financial Statements 3 Oklahoma Gas and Electric Company Condensed Financial Statements 9 Combined Notes to Condensed Financial Statements 14

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 30

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 42

Controls and Procedures

Item 4. Controls and Procedures 42

- OTHER INFORMATION

Part II - OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 43

Risk Factors

Item 1A. Risk Factors 43

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 43

Other Information

Item 5. Other Information 43

Exhibits

Item 6. Exhibits 43 Signature 44 i GLOSSARY OF TERMS The following is a glossary of frequently used abbreviations that are found throughout this Form 10-Q. Abbreviation Definition 2024 Form 10-K Annual Report on Form 10-K for the year ended December 31, 2024 Act 373 Arkansas Act 373, also known as the Generating Arkansas Jobs Act of 2025 ALJ Administrative Law Judge APSC Arkansas Public Service Commission ASU Financial Accounting Standards Board Accounting Standards Update CO 2 Carbon dioxide COVID-19 Novel Coronavirus disease CWIP Construction work in progress Dry Scrubber Dry flue gas desulfurization unit with spray dryer absorber EPA U.S. Environmental Protection Agency Federal Clean Water Act Federal Water Pollution Control Act of 1972, as amended FERC Federal Energy Regulatory Commission FIP Federal Implementation Program GAAP Accounting principles generally accepted in the U.S. IRP Integrated Resource Plan MW Megawatt MWh Megawatt-hour NAAQS National Ambient Air Quality Standard NO X Nitrogen oxide OCC Oklahoma Corporation Commission ODEQ Oklahoma Department of Environmental Quality OG&E Oklahoma Gas and Electric Company, wholly-owned subsidiary of OGE Energy OGE Energy OGE Energy Corp., collectively with its subsidiaries, holding company and parent company of OG&E Other operations Other operations primarily includes the operations of the holding company, other energy-related investments and consolidating eliminations Pension Plan Qualified defined benefit retirement plan PM Particulate matter Regional Haze The EPA's Regional Haze Rule Registrants OGE Energy and OG&E Restoration of Retirement Income Plan Supplemental retirement plan to the Pension Plan SB 998 Oklahoma Senate Bill 998 SIP SO 2 Sulfur dioxide SPP Southwest Power Pool System sales Sales to OG&E's customers U.S. United

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS Except for the historical statements contained herein, the matters discussed within this Form 10-Q, including those matters discussed within "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations," are forward-looking statements that are subject to certain risks, uncertainties and assumptions. Such forward-looking statements are intended to be identified in this document by the words "anticipate," "believe," "estimate," "expect," "forecast," "intend," "objective," "plan," "possible," "potential," "project," "target" and similar expressions. Actual results may vary materially from those expressed in forward-looking statements. In addition to the specific risk factors discussed within "Item 1A. Risk Factors" in the Registrants' 2024 Form 10-K and within "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations" herein, factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to: general economic conditions, including the availability of credit, access to existing lines of credit, access to the commercial paper markets, actions of rating agencies and inflation rates, and their impact on capital expenditures; the ability of the Registrants to access the capital markets and obtain financing on favorable terms, as well as inflation rates and monetary fluctuations; the ability to obtain timely and sufficient rate relief to allow for recovery of items such as capital expenditures, fuel and purchased power costs, operating costs, transmission costs and deferred expenditures; prices and availability of electricity, coal and natural gas; competitive factors, including the extent and timing of the entry of additional competition in the markets served by the Registrants, potentially through deregulation; the impact on demand for the Registrants' services resulting from cost-competitive advances

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements. OGE ENERGY CORP. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Nine Months Ended September 30, September 30, (In millions, except per share data) 2025 2024 2025 2024 OPERATING REVENUES Revenues from contracts with customers $ 1,028.4 $ 945.2 $ 2,489.2 $ 2,171.9 Other revenues 16.6 20.2 45.1 52.9 Operating revenues 1,045.0 965.4 2,534.3 2,224.8 FUEL, PURCHASED POWER AND DIRECT TRANSMISSION EXPENSE 388.5 350.1 973.6 776.2 OPERATING EXPENSES Other operation and maintenance 143.3 131.4 392.2 394.2 Depreciation and amortization 146.7 144.0 424.7 408.7 Taxes other than income 25.2 26.7 82.6 82.6 Operating expenses 315.2 302.1 899.5 885.5 OPERATING INCOME 341.3 313.2 661.2 563.1 OTHER INCOME (EXPENSE) Allowance for equity funds used during construction 6.3 6.9 19.3 18.2 Other net periodic benefit income (expense) ( 2.7 ) 1.7 ( 8.2 ) 5.0 Other income 6.1 6.8 30.3 20.2 Other expense ( 4.6 ) ( 4.7 ) ( 14.3 ) ( 15.8 ) Net other income 5.1 10.7 27.1 27.6 INTEREST EXPENSE Interest on long-term debt 66.4 59.6 194.4 166.5 Allowance for borrowed funds used during construction ( 3.7 ) ( 3.9 ) ( 11.9 ) ( 10.7 ) Interest on short-term debt and other interest charges 6.9 8.5 26.6 33.5 Interest expense 69.6 64.2 209.1 189.3 INCOME BEFORE TAXES 276.8 259.7 479.2 401.4 INCOME TAX EXPENSE 45.5 41.0 77.7 61.8 NET INCOME $ 231.3 $ 218.7 $ 401.5 $ 339.6 BASIC AVERAGE COMMON SHARES OUTSTANDING 201.5 200.9 201.3 200.7 DILUTED AVERAGE COMMON SHARES OUTSTANDING 202.1 201.5 202.0 201.2 BASIC EARNINGS PER AVERAGE COMMON SHARE $ 1.15 $ 1.09 $ 1.99 $ 1.69 DILUTED EARNINGS PER AVERAGE COMMON SHARE $ 1.14 $ 1.09 $ 1.99

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