Puget Energy Swings to Profit, Boosted by Electric Revenue Growth

TL;DR

**Puget Energy's massive profit swing and revenue jump make it a strong buy, but keep an eye on that ballooning debt.**

AI Summary

Puget Energy Inc. reported a significant turnaround in its financial performance for the nine months ended September 30, 2025, with net income reaching $218.038 million, a substantial improvement from a net loss of $20.275 million in the same period of 2024. Total operating revenue increased to $3.877 billion in 2025 from $3.476 billion in 2024, driven primarily by a rise in electric revenue to $2.827 billion from $2.434 billion. Operating income surged to $481.815 million in 2025, compared to $213.417 million in 2024, largely due to the absence of unrealized losses on derivative instruments, which were $131.712 million in 2024. The company's total assets grew to $20.255 billion as of September 30, 2025, up from $18.960 billion at December 31, 2024, with net utility plant increasing to $14.478 billion from $13.643 billion. Long-term debt also increased significantly to $8.522 billion from $7.424 billion, reflecting ongoing capital investments. Cash and cash equivalents saw a substantial increase to $390.759 million from $101.836 million. The company also noted a significant increase in unamortized investment tax credits to $195.584 million from zero, indicating new tax benefits.

Why It Matters

This strong financial performance from Puget Energy, a key utility provider in Washington, signals stability and growth for investors, especially given the significant swing from a net loss to a substantial profit. The increased investment in utility plant, up by over $800 million, suggests a commitment to infrastructure development, which could lead to improved service reliability for customers and job creation for employees. However, the substantial increase in long-term debt, up by over $1 billion, warrants investor scrutiny regarding future interest burdens and financial leverage. In a competitive utility landscape, this growth positions Puget Energy to potentially expand its market share and enhance its operational efficiency, but regulatory actions and commodity price risks remain critical factors.

Risk Assessment

Risk Level: medium — The risk level is medium due to the significant increase in long-term debt from $7.424 billion to $8.522 billion, which could increase financial leverage and interest expense. While the company reported a strong net income of $218.038 million, it operates in a highly regulated environment with risks from governmental policies and regulatory actions, as highlighted in the forward-looking statements, which could affect cost recovery and return on investment.

Analyst Insight

Investors should consider Puget Energy's improved profitability and revenue growth as positive indicators, but carefully evaluate the increased long-term debt. Monitor future regulatory decisions by the Washington Utilities and Transportation Commission and the Federal Energy Regulatory Commission, as these will directly impact the company's ability to recover costs and maintain its financial health.

Financial Highlights

revenue

$3,877,246,000

operating Margin

12.4%

total Assets

$20,255,000,000

total Debt

$8,522,000,000

net Income

$218,038,000

cash Position

$390,759,000

revenue Growth

+11.5%

Revenue Breakdown

Key Numbers

• $218.038M — Net Income (Swung from a $20.275M net loss in 2024 to a profit in 2025 for the nine-month period.)
• $3.877B — Total Operating Revenue (Increased from $3.476B in 2024, primarily driven by electric revenue growth.)
• $481.815M — Operating Income (Significantly up from $213.417M in 2024, largely due to the absence of derivative losses.)
• $8.522B — Total Long-Term Debt (Increased by $1.098B from $7.424B at December 31, 2024, reflecting capital investments.)
• $14.478B — Net Utility Plant (Increased from $13.643B at December 31, 2024, indicating infrastructure investment.)
• $390.759M — Cash and Cash Equivalents (Substantial increase from $101.836M at December 31, 2024.)
• $195.584M — Unamortized Investment Tax Credits (New item in 2025, indicating significant tax benefits.)
• $131.712M — Unrealized Loss on Derivative Instruments (Zero in 2025, compared to a significant loss in 2024, contributing to profit swing.)

Key Players & Entities

• PUGET ENERGY INC /WA (company) — Registrant for 10-Q filing
• Puget Sound Energy, Inc. (company) — Subsidiary of Puget Energy, Inc.
• Washington Utilities and Transportation Commission (regulator) — Key regulatory body affecting operations
• Federal Energy Regulatory Commission (regulator) — Key regulatory body affecting operations
• $218.038 million (dollar_amount) — Net income for nine months ended September 30, 2025
• $20.275 million (dollar_amount) — Net loss for nine months ended September 30, 2024
• $3.877 billion (dollar_amount) — Total operating revenue for nine months ended September 30, 2025
• $8.522 billion (dollar_amount) — Total long-term debt as of September 30, 2025
• $1.098 billion (dollar_amount) — Increase in long-term debt from December 31, 2024, to September 30, 2025
• $195.584 million (dollar_amount) — Unamortized investment tax credits as of September 30, 2025

FAQ

Risk Factors

• Derivative Instrument Volatility [medium — financial]: The company experienced a significant unrealized loss of $131.712 million on derivative instruments in the nine months ended September 30, 2024. While this loss did not recur in 2025, the potential for future volatility in derivative markets remains a financial risk.
• Regulatory Environment [high — regulatory]: As a utility, Puget Energy operates within a heavily regulated environment. Changes in regulations, rate approvals, or environmental policies could impact operations and profitability. The company's financial performance is subject to the decisions of regulatory bodies.
• Utility Infrastructure Maintenance [medium — operational]: The company's net utility plant increased to $14.478 billion, indicating ongoing investment in infrastructure. However, maintaining and upgrading this extensive network is crucial and subject to operational risks, including weather events and equipment failures.
• Increased Debt Levels [medium — financial]: Total long-term debt increased to $8.522 billion from $7.424 billion at the end of 2024. This substantial increase, driven by capital investments, raises the company's financial leverage and interest expense burden.
• Energy Price Fluctuations [medium — market]: The company's revenues are sensitive to fluctuations in energy prices, particularly for electricity and natural gas. While the company hedges some of this risk, significant market swings can impact operating revenue and costs.

Industry Context

Puget Energy operates in the regulated utility sector, primarily serving Washington state. The industry is characterized by stable demand for essential services but is subject to significant capital expenditure requirements for infrastructure maintenance and upgrades. Trends include a growing focus on renewable energy integration, grid modernization, and evolving regulatory frameworks impacting pricing and environmental compliance.

Regulatory Implications

As a regulated utility, Puget Energy's operations and profitability are heavily influenced by state and federal regulatory bodies. Decisions on rate increases, environmental standards, and capital recovery directly impact financial performance. The company must navigate complex compliance requirements and seek approvals for significant investments.

What Investors Should Do

1. Monitor derivative instrument performance and hedging strategies.
2. Analyze the impact of increased long-term debt on financial leverage and interest coverage.
3. Evaluate the return on new capital investments in utility plant.
4. Assess the utilization and impact of new investment tax credits.

Key Dates

• 2025-09-30: Nine Months Ended — Reported significant financial turnaround with net income of $218.038 million, compared to a net loss in the prior year.
• 2024-09-30: Nine Months Ended — Reported a net loss of $20.275 million, impacted by unrealized losses on derivative instruments.
• 2025-09-30: Balance Sheet Date — Total assets reached $20.255 billion, with substantial increases in net utility plant and cash.
• 2024-12-31: Balance Sheet Date — Total assets were $18.960 billion, with lower long-term debt and cash balances.

Glossary

Unrealized gain (loss) on derivative instruments

Changes in the fair value of financial instruments (like futures or options) that have not yet been settled or realized through a transaction. These can cause significant fluctuations in reported income. (The absence of a $131.712 million unrealized loss in 2025 compared to 2024 was a primary driver of the company's improved net income.)

Net utility plant

The value of the company's operational assets (like power lines, gas pipes, and generation facilities) after deducting accumulated depreciation. (An increase to $14.478 billion indicates significant ongoing investment in the company's core infrastructure.)

AFUDC

Allowance for Funds Used During Construction. This represents the cost of capital (both debt and equity) used to finance construction projects during the construction period. (This is a component of interest charges, reflecting the cost of financing new utility plant construction.)

Unamortized investment tax credits

Tax credits that have been earned but not yet fully recognized as a reduction in income tax expense over time. (The appearance of $195.584 million in 2025 signifies new tax benefits that will reduce future tax liabilities.)

Operating revenue

The total income generated from the company's primary business activities, such as selling electricity and natural gas. (The increase to $3.877 billion reflects growth in the company's core business operations.)

Year-Over-Year Comparison

Puget Energy has demonstrated a strong financial recovery in the nine months ended September 30, 2025, compared to the same period in 2024. Total operating revenue increased by approximately 11.5% to $3.877 billion, primarily driven by higher electric revenue. Operating income surged significantly due to the absence of substantial unrealized losses on derivative instruments that impacted the prior year. Net income swung from a loss of $20.275 million to a profit of $218.038 million. While assets and long-term debt have both increased, reflecting capital investments, the company's cash position has also improved dramatically.

Filing Documents

• psd-20250930.htm (10-Q) — 2182KB
• exhibit221-pe2025xq1q3roll.htm (EX-22.1) — 10KB
• exhibit311-pe10q2025xq3.htm (EX-31.1) — 10KB
• exhibit312-pe10q2025xq3.htm (EX-31.2) — 10KB
• exhibit313-pe10q2025xq3.htm (EX-31.3) — 10KB
• exhibit314-pe1qq2025xq3.htm (EX-31.4) — 10KB
• exhibit321-pe10q2025xq3.htm (EX-32.1) — 5KB
• exhibit322-pe10q2025xq3.htm (EX-32.2) — 5KB
• psd-20250930_g1.jpg (GRAPHIC) — 11KB
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• psd-20250930_g9.jpg (GRAPHIC) — 126KB
• 0001085392-25-000025.txt ( ) — 13381KB
• psd-20250930.xsd (EX-101.SCH) — 60KB
• psd-20250930_cal.xml (EX-101.CAL) — 85KB
• psd-20250930_def.xml (EX-101.DEF) — 494KB
• psd-20250930_lab.xml (EX-101.LAB) — 713KB
• psd-20250930_pre.xml (EX-101.PRE) — 588KB
• psd-20250930_htm.xml (XML) — 1890KB

Forward-Looking Statements

Forward-Looking Statements 4 Part I. Financial Information 5 Item 1.

Financial Statements

Financial Statements 5 Puget Energy, Inc. Consolidated Statements of Income – Three and Nine Months Ended September 30, 2025 and 202 4 5 Consolidated Statements of Comprehensive Income – Three and Nine Months Ended September 30, 2025 and 2024 6 Consolidated Balance Sheets – September 30, 2025 and December 31, 2024 7 Consolidated Statements of Common Shareholder's Equity - September 30, 2025 and December 31, 2024 8 Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2025 and 2024 9 Puget Sound Energy, Inc. Consolidated Statements of Income – Three and Nine Months Ended September 30, 2025 and 2024 12 Consolidated Statements of Comprehensive Income – Three and Nine Months Ended September 30, 2025 and 2024 11 Consolidated Balance Sheets – September 30, 2025 and December 31, 2024 12 Consolidated Statements of Common Shareholder's Equity - September 30, 2025 and December 31, 2024 14 Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2025 and 2024 15 Notes Combined Notes to Consolidated Financial Statements 16 Item 2.

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

Management's Discussion and Analysis of Financial Condition and Results of Operations 37 Item 3. Quantitative and Qualitative Disclosure About Market Risk 59 Item 4.

Controls and Procedures

Controls and Procedures 59 Part II. Other Information 60 Item 1.

Legal Proceedings

Legal Proceedings 60 Item 1A.

Risk Factors

Risk Factors 60 Item 5. Other Information 60 Item 6. Exhibits 60 Exhibit Index 61

Signatures

Signatures 62 2 DEFINITIONS ASU Accounting Standards Update ARO Asset Retirement Obligation ASC Accounting Standards Codification CCA Climate Commitment Act CEIP Clean Energy Implementation Plan CETA Clean Energy Transformation Act CWIP Construction Work in Progress EBITDA Earnings Before Interest, Tax, Depreciation and Amortization FASB Financial Accounting Standards Board GAAP U.S. Generally Accepted Accounting Principles GHG Greenhouse gases GRC General Rate Case IOU Investor-Owned Utility ISDA International Swaps and Derivatives Association ITCs Investment tax credits LNG Liquefied Natural Gas MMBtu One Million British Thermal Units MWh Megawatt Hour (one MWh equals one thousand kWh) MYRP Multi-year Rate Plan NAESB North American Energy Standards Board NPNS Normal Purchase Normal Sale OBBB One Big Beautiful Bill Act PCA Power Cost Adjustment PGA Purchased Gas Adjustment PSE Puget Sound Energy, Inc. Puget Energy Puget Energy, Inc. Puget Holdings Puget Holdings LLC Puget LNG Puget LNG, LLC SERP Supplemental Executive Retirement Plan Washington Commission Washington Utilities and Transportation Commission WDOE Washington Department of Ecology WSPP WSPP, Inc. FILING FORMAT This combined Quarterly Report on Form 10-Q is separately filed by Puget Energy, Inc. (Puget Energy) and Puget Sound Energy, Inc. (PSE). Information in this filing relating to PSE is filed by PSE on its own behalf. PSE makes no representation as to information relating to Puget Energy (except as it may relate to PSE) or any other affiliate or subsidiary of Puget Energy. Any references in this report to "the Company" are to Puget Energy and PSE collectively. 3

FORWARD-LOOKING STATEMENTS

FORWARD-LOOKING STATEMENTS Puget Energy and PSE include the following cautionary statements in this Form 10-Q to make applicable and to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 for any forward-looking statements made by or on behalf of Puget Energy or PSE. This report includes forward-looking statements, which are statements of expectations, beliefs, plans, objectives and assumptions of future events or performance. Words or phrases such as "anticipates," "believes," "continues," "could," "estimates," "expects," "future," "intends," "may," "might," "plans," "potential," "predicts," "projects," "should," "will likely result," "will continue" or similar expressions are intended to identify certain of these forward-looking statements and may be included in discussion of, among other things, our anticipated operating or financial performance, business plans and prospects, planned capital expenditures and other future expectations. In particular, these include statements relating to future actions, business plans and prospects, future performance expenses, the outcome of contingencies, such as legal proceedings, government regulation and financial results. Forward-looking statements reflect current expectations and involve risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed. There can be no assurance that Puget Energy's and PSE's expectations, beliefs or projections will be achieved or accomplished. In addition to other factors and matters discussed elsewhere in this report, some important risks that could cause actual results or outcomes for Puget Energy and PSE to differ materially from past results and those discussed in the forward-looking statements include: Governmental policies and regulatory actions, including those of the Federal Energy Regulatory Commission and the Washington Commission, that may affect our ability to recover costs and earn

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements PUGET ENERGY, INC. CONSOLIDATED STATEMENTS OF INCOME (Dollars in Thousands) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Operating revenue: Electric $ 968,125 $ 736,113 $ 2,827,428 $ 2,434,458 Natural gas 176,835 182,737 1,012,132 1,017,096 Other 9,818 8,694 37,686 24,375 Total operating revenue 1,154,778 927,544 3,877,246 3,475,929 Operating expenses: Energy costs: Purchased electricity 354,795 250,822 1,012,441 892,436 Electric generation fuel 86,106 78,305 249,338 241,293 Residential exchange ( 17,452 ) ( 17,477 ) ( 62,053 ) ( 61,630 ) Purchased natural gas 53,957 68,243 397,956 472,776 Unrealized (gain) loss on derivative instruments, net — 108,979 — 131,712 Utility operations and maintenance 226,024 183,915 666,366 579,697 Non-utility expense and other 9,936 10,919 42,677 33,359 Depreciation & amortization 212,806 197,975 632,718 585,317 Conservation amortization 36,790 28,837 120,977 96,326 Taxes other than income taxes 95,300 75,869 335,011 291,226 Total operating expenses 1,058,262 986,387 3,395,431 3,262,512 Operating income (loss) 96,516 ( 58,843 ) 481,815 213,417 Other income (expense): Other income 31,370 31,350 103,681 73,284 Other expense ( 3,873 ) ( 4,839 ) ( 22,325 ) ( 14,984 ) Interest charges: AFUDC 8,853 9,321 29,851 27,389 Interest expense ( 117,954 ) ( 111,642 ) ( 346,817 ) ( 320,926 ) Income (loss) before income taxes 14,912 ( 134,653 ) 246,205 ( 21,820 ) Income tax (benefit) expense 8,604 ( 13,545 ) 28,167 ( 1,545 ) Net income (loss) $ 6,308 $ ( 121,108 ) $ 218,038 $ ( 20,275 ) The accompanying notes are an integral part of the financial statements. 5 PUGET ENERGY, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Dollars in Thousands) (Unaudited) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net income (loss) $ 6,308 $ ( 121,108 ) $ 218,038 $ ( 20,275 ) Other comprehensive

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