TXNM · TXNM Energy, Inc.

TXNM Energy delivered mixed Q1 2026 results, with top-line growth and operating leverage tempered by bottom-line pressures. Revenue reached $505.0 million, up 4.6% from $482.8 million in the prior-year quarter, driven by rate hikes at TNMP for transmission and distribution resiliency alongside PNM's formula rate increases. These adjustments, combined with steady customer expansion in key markets, supported revenue resilience despite broader utility sector headwinds. Operating income advanced 7.1% to $77.0 million from $71.9 million, expanding the operating margin to 15.3%. This outperformance stems from regulatory-approved rate riders that recover capital costs, operating expenses, and associated taxes for investments in grid modernization plans, allowing recoveries to exceed incremental expense growth from ongoing infrastructure builds.

Net income, however, fell 37.4% to $8.0 million from $12.8 million, primarily due to challenges at PNM including losses in investment securities held in decommissioning trusts. While specific drivers like milder weather impacts on volumetric sales were noted in prior context, the decline underscores the sensitivity of non-operating items to market conditions in nuclear-related assets like PVNGS, where on-site fuel storage capacity supports operations through the initial license period ending December 2027. Operating cash flow strengthened to $153.2 million from $141.3 million, bolstered by non-cash items such as depreciation, providing liquidity to fund construction programs. Management highlights that these expenditures may evolve with new customer growth in New Mexico and Texas, plus transmission and renewable energy expansions, aligning capex with long-term clean energy transition needs.