SO
UtilitiesSouthern Company
Price Chart
Market Data
Financials
XBRL · SEC EDGAR2007–2025(19yr)| Metric | FY 2007 | FY 2008 | FY 2009 | FY 2010 | FY 2011 | FY 2012 | FY 2013 | FY 2014 | FY 2015 | FY 2016 | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $15.4B | $17.1B | $15.7B | $17.5B | $17.7B | $16.5B | $17.1B | $18.5B | $17.5B | $19.9B | $23.0B | $23.5B | $21.4B | $20.4B | $23.1B | $29.3B | $25.3B | $26.7B | $29.6B | +10.6% |
| Operating Income | $3.3B | $3.5B | $3.3B | $3.8B | $4.2B | $4.5B | $3.3B | $3.6B | $4.3B | $4.6B | $2.6B | $4.2B | $7.7B | $4.9B | $3.7B | $5.4B | $5.8B | $7.1B | $7.3B | +3.1% |
| Operating Margin | 21.7% | 20.5% | 20.8% | 21.8% | 24.0% | 27.0% | 19.0% | 19.7% | 24.5% | 23.3% | 11.1% | 17.8% | 36.1% | 24.0% | 16.0% | 18.3% | 23.1% | 26.4% | 24.7% | -1.8pp |
| Net Income | $1.8B | $1.8B | $1.7B | $2.0B | $2.3B | $2.4B | $1.7B | $2.0B | $2.4B | $2.5B | $926.0M | $2.3B | $4.7B | $3.1B | $2.3B | $3.4B | $4.0B | $4.4B | $4.3B | -1.4% |
| Net Margin | 11.6% | 10.6% | 10.8% | 11.7% | 12.8% | 14.6% | 10.0% | 11.0% | 13.9% | 12.7% | 4.0% | 9.8% | 22.1% | 15.2% | 10.0% | 11.7% | 15.7% | 16.5% | 14.7% | -1.8pp |
| Free Cash Flow | -$112.0M | -$497.0M | -$1.4B | -$95.0M | $1.4B | $89.0M | $634.0M | -$162.0M | $600.0M | -$2.4B | -$1.0B | -$1.1B | -$1.8B | -$745.0M | -$1.1B | -$1.6B | -$1.5B | $833.0M | -$2.9B | -452.3% |
| FCF Margin | -0.7% | -2.9% | -8.9% | -0.5% | 7.8% | 0.5% | 3.7% | -0.9% | 3.4% | -12.1% | -4.5% | -4.5% | -8.3% | -3.7% | -4.6% | -5.5% | -6.1% | 3.1% | -9.9% | -13.0pp |
| EPS (Diluted) | $2.28 | $2.25 | $2.06 | $2.36 | $2.55 | $2.67 | $1.87 | $2.18 | $2.59 | $2.55 | $0.84 | $2.17 | $4.50 | $2.93 | $2.24 | $3.26 | $3.62 | $3.99 | $3.92 | -1.8% |
1. THE BIG PICTURE
Southern Company is currently a high-stakes bet on the "all-of-the-above" energy expansion required to power the modern digital economy. It is balancing a 10.6% revenue growth rate against a massive $61.4 billion debt pile, all while its ultimate profitability remains entirely dependent on the willingness of state regulators to approve rate hikes for its multi-billion dollar infrastructure projects (8-K, XBRL).
2. WHERE THE RISKS HIT HARDEST
Southern Company's primary strength—its Infrastructure Scale, including 77,900 miles of gas pipelines and extensive generation facilities—is directly threatened by Regulatory Cost Recovery risks. Because Southern Company operates as a regulated utility, its ability to earn a return on these massive assets is not guaranteed; if state commissions deem capital projects "imprudent," Southern Company must absorb those costs, materially harming its financial condition (10-K Item 1, Risks).
Furthermore, the Strategic Partnerships that provide revenue stability through long-term power purchase agreements (PPAs) face a looming "vulnerability" in the form of Contractual Expirations. If Southern Power cannot successfully remarket these agreements as they expire, the earnings stability that management highlights as a core advantage could quickly erode (10-K Item 1).
3. WHAT THE NUMBERS SAY TOGETHER
While Southern Company leads its peer group with a 29.3% operating margin, its bottom line is showing signs of strain. Fourth-quarter 2025 net income fell to $416 million from $534 million a year earlier, even as revenues jumped 10.1% (8-K, Peer Benchmarking). This divergence suggests that while the "generational growth" from data centers is boosting the top line, the costs of servicing the parent company's debt and losses in the Southern Power segment are eating into the gains.
Southern Company’s revenue growth of 10.6% (TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter) is remarkably consistent with its most recent quarterly growth of 10.1%, suggesting a structural shift rather than a temporary spike. This is fueled by what management describes as "large load customers" (8-K). However, with a Free Cash Flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin of just 0.2%, Southern Company is barely breaking even on a cash basis after accounting for its massive capital investments. This puts it ahead of peers like Duke Energy (-2.1%) but far behind American Electric Power (31.9%). Supplemental signals show short interest remains low at 2.2% of the float, indicating that despite the $61.4 billion debt load, the market is not currently betting on a credit event (Supplemental Signals).
4. IS IT WORTH IT AT THIS PRICE?
At 19.6x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Southern Company trades at an 8% premium to the peer median of 18.1x. The market is currently pricing in a long-term growth rate of approximately 1.6% (CAPM Analysis).
This valuation is "in line with peers" considering Southern Company’s superior operating margins (29.3%) and its status as one of the faster-growing large utilities (+10.6% revenue growth vs. Duke’s +5.6%). However, the price is only "right" if Southern Company can maintain its regulatory relationships. The biggest risk that could force a lower multiple is Southern Company's extreme leverage; with net debt at $61.4 billion against negligible annual free cash flow, any tightening of credit markets or a downgrade in credit ratings would make its business plan significantly more expensive to execute (Risks, Peer Benchmarking).
5. WHAT WOULD CHANGE THIS VIEW?
- Cautious if the FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin turns negative, signaling that the "all-of-the-above" capital cycle is consuming more cash than the regulated rate increases can replenish.
- Constructive if the Georgia or Alabama Public Service Commissions approve higher-than-expected retail returns on equity (ROEROEReturn on Equity — net income as a percentage of shareholder equity; how efficiently a company uses the capital investors have put in) or allow for faster recovery of environmental compliance costs (Recent Results).
6. BOTTOM LINE
Structural Advantage: Vertically integrated operations and centralized economic dispatch within a favorable, cost-based Southeastern regulatory environment.
Bottom Line: Southern Company is a premium-priced utility that offers best-in-class operating efficiency but carries a massive debt burden that leaves no room for regulatory error.
1. Top 5 Material Risks
- Regulatory Cost Recovery: The profitability of Southern Company’s traditional electric and natural gas utilities depends on their ability to recover costs and earn a return on invested capital through retail rates approved by state commissions. Regulators may alter the timing or amount of cost recovery, or require rate refunds, which could adversely affect results of operations and liquidity.
- Capital Expenditure and Infrastructure Growth: Southern Company faces a period of rising costs and increased projected capital expenditures to meet electric demand growth and comply with environmental laws. If these costs are deemed imprudent or are not recovered in a timely manner, Southern Company’s financial condition and cash flow could be materially harmed.
- Environmental Compliance and AROs: Compliance with environmental laws governing air, water, and coal combustion residuals (CCR) involves significant capital and operating costs, including the settlement of asset retirement obligations (AROs). There is no assurance that these costs will be fully recovered through rates.
- Cybersecurity and Physical Security: As a provider of critical infrastructure, Southern Company faces heightened risks from cyberattacks, ransomware, and physical attacks on its generation, transmission, and distribution assets. Such incidents could disrupt operations, compromise sensitive data, and lead to material financial losses not covered by insurance.
- Access to Capital Markets: Southern Company relies on access to capital markets to fund its operations and infrastructure investments. A credit rating downgrade or market disruption could increase borrowing costs, limit liquidity, and force Southern Company to scale back infrastructure investments, impacting safety and reliability.
2. Company-Specific Risks
- Nuclear Operational Risks: Alabama Power and Georgia Power own interests in eight nuclear units operated by Southern Nuclear. A major nuclear incident or non-compliance with NRC requirements could result in fines, unit shutdowns, or material contributory payments for incidents at other U.S. nuclear facilities.
- GHG Emission Goals: Southern Company has established a goal of net zero GHG emissions by 2050, but current projections indicate it will be "extremely challenging" to meet the intermediate 2030 goal of a 50% reduction from 2007 levels due to projected electric load growth.
- Pipeline Development Exposure: Southern Company Gas has significant investments in pipeline development projects, such as the project through SNG, where it lacks direct control over construction management. Failure of third-party partners to perform could lead to impairment of the book value of these investments.
- Large Load Customer Concentration: The traditional electric operating companies are experiencing demand growth driven by data centers and advanced manufacturing. While these customers provide incremental revenue, the increased concentration of business within these industries creates risks if anticipated demand does not materialize or if these customers experience a business downturn.
3. Regulatory/Legal Risks
- FERC Authority: Southern Power and the traditional electric operating companies are subject to FERC review regarding wholesale rates and market-based rate authority. Changes in FERC policy regarding transmission planning could impact the recovery of transmission costs.
- Tax Legislation: The Inflation Reduction Act (IRA) imposes a 15% Corporate Alternative Minimum Tax (CAMT) on adjusted financial statement income. The OBBB, signed into law on July 4, 2025, materially changed requirements for federal renewable energy incentives, and Southern Company is currently assessing the impact on tax credit transferability.
- Environmental Litigation: Southern Company faces ongoing litigation regarding CO2 emissions, CCR disposal, and releases of regulated substances, which could result in substantial costs or injunctive relief.
- Storm Cost Recovery: Recovery of costs related to severe weather events, such as the $880 million in incremental restoration costs from Hurricane Helene in 2024, is subject to state commission approval. Delays or denials of such recovery can lead to lower credit ratings and higher costs for future debt issuances.
4. Financial Impact Map
Regulatory Cost Recovery → Net Income → The ability to earn a reasonable rate of return on invested capital is dependent on state PSC-approved retail rates. Capital Expenditure/Infrastructure Growth → Cash Flow → Increased capital spending needs to serve large load customers (e.g., data centers) require sufficient access to capital to maintain the value proposition to customers. Environmental Compliance (AROs) → Operating Expenses → Cost estimates for CCR disposal are based on assumptions regarding inflation, discount rates, and closure methods; updates to these estimates could be material. Cybersecurity/Physical Security → Net Income → Insurance may not be adequate to cover losses from cyber or physical attacks, and there is no assurance that such losses would be recovered through customer rates. Access to Capital Markets → Interest Expense → A credit rating downgrade could trigger automatic increases in interest rates or fees under existing term loans and credit facilities.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Feb 2026 | — |
| 10-Q | Oct 2025 | Sep 2025 |
| 14A | Apr 2025 | — |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Southern Company Q1 adjusted EPS $1.32, up from $1.23 YoY on data center demand
- ▸Q1 adjusted EPS $1.32, up from $1.23 year-over-year
- ▸Data center load identified as primary growth driver
- ▸Utility sector benefiting from 2026 reliability shock
- ▸Reported results on April 30, 2026
Southern Company's Georgia Power Secures Approval for 70 MW Distributed Solar Agreement
- ▸Georgia Power secured regulatory approval for 16 solar PPAs totaling 70 MW
- ▸Largest distributed generation solar commitment in Georgia Power's history
- ▸Company planning 10 GW of new generation capacity
- ▸Incremental capital investment program totals $13 billion
- ▸Current share price $95.42 with estimated fair value of $101.24
Southern Company Regulatory Risk Overstated as Alabama Legislation Expected to Soften
- ▸Mizuho maintains Outperform rating, citing fading Alabama regulatory risks
- ▸Proposed ROE cap in HB 475 expected to be excluded from final legislation
- ▸Alabama Power Q4 2025 revenue $1.937B, +10.6% YoY
- ▸Full-year 2025 revenue $29.553B, +10.59% YoY
- ▸Full-year 2025 adjusted EPS $4.30, in line with estimates
Southern Company projects 8-9% EPS growth through 2028, raises capital plan to $81B
- ▸Projected adjusted EPS growth of 8% to 9% from 2026 through 2028
- ▸Initial 2027 EPS guidance set at $4.85–$4.95; 2028 at $5.25–$5.45
- ▸Five-year base capital plan (2026-2030) increased 30% to $81 billion
- ▸Secured 10 GW of signed contracts with large load customers, up 2 GW
- ▸Contracts feature 15-year minimum terms with take-or-pay cost recovery provisions
Southern Company secures record $26.54B DOE loan for Southeastern energy infrastructure projects
- ▸Secured $26.54 billion loan package from U.S. Department of Energy
- ▸Largest financing deal in history from DOE Office of Energy Dominance Financing
- ▸Loan term approximately 30 years to support regional grid infrastructure
- ▸Projected to save Georgia and Alabama customers over $7 billion
- ▸Capital investment plan raised to $81 billion over next 5 years