ONE Gas, Inc.

Second-quarter adjusted net income was $52.1 million, or $0.82 per diluted share, compared with $32.7 million, or $0.54 per share, a year ago. GAAP EPS was $0.74 versus $0.53 last year. Management said results included about $16 million of new revenue from new rates and greater than anticipated benefits from Texas House Bill 4.38k. For the full year, guidance remains adjusted net income of $306 million to $314 million and adjusted EPS of $4.83 to $4.95, but management now expects results in the upper half of those ranges, or $310 million to $314 million and $4.89 to $4.95 per share.

Sid McAnnally emphasized that the quarter reflected disciplined execution across a fully regulated utility model, with the company keeping the average customer bill flat year over year while increasing the dividend. He framed growth as durable and sustainable, driven by constructive regulation, ongoing customer growth, and rising demand from gas-fired generation, data centers, and advanced manufacturing. His tone was confident, pointing to a clear runway for growth and saying the company expects strong performance to continue.

Christopher Paul Sighinolfi highlighted the quarter’s financial lift from approximately $16 million of new revenue tied to new rates and Texas House Bill 4.38k. He said the company now expects House Bill 4.38k to contribute approximately $0.42 to full-year adjusted EPS, and that O&M expenses were up about 6.6% year over year in the quarter, with the company still targeting 3% to 4% long-term annual O&M growth. He also noted January interest expense declined by $3.8 million excluding KGSS, the board declared a $0.68 dividend unchanged from the prior quarter, and equity needs of $41.5 million are already covered by forward sale agreements with remaining needs to be funded opportunistically through the ATM.

Analysts focused on capital allocation, dividend policy, large-load opportunities, O&M trajectory, and the timing of Texas legislative benefits. Management said system integrity capital is about 60% to 70% of the budget and is driven by system needs, while growth capital follows customer demand; it also said it is not pursuing a SOFR collar or similar hedge at the moment because of cost and earnings volatility concerns. On large loads, management said the late-stage pipeline could still sign before year-end or in early 2027, while O&M should step down meaningfully in the back half as insourcing benefits build and external cost pressures are already reflected in expectations.