Southern Company Q2 2025: Revenue Grows, but Plant Vogtle Costs Squeeze Profits

Southern Company, one of the largest utility companies in the U.S., recently released its financial results for the second quarter of 2025. We're diving into the numbers from their latest quarterly report filed with the SEC to see how the company is performing and what trends are shaping its financial health.

At first glance, it’s a picture of strong revenue growth met with even stronger expense growth, leading to a squeeze on the bottom line.

Revenues on the Rise

Southern Company's total operating revenues climbed to $7.0 billion for the second quarter ended June 30, 2025, a solid increase from $6.5 billion in the same period last year. For the first six months of the year, revenues hit $14.7 billion, up from $13.1 billion in 2024.

This growth was broad-based:

• Retail Electric Revenues: Increased by 6.1% to $4.8 billion for the quarter, driven by higher rates and pricing, although milder weather partially offset these gains.
• Natural Gas Revenues: Saw a significant 17.8% jump to $979 million, thanks to higher recoverable gas costs and increased revenue from gas marketing services.
• Wholesale Electric Revenues: Grew 8.6% to $681 million, bolstered by new power purchase agreements and favorable market pricing.

The Cost of Power

While revenues grew, expenses grew faster. Total operating expenses surged from $4.5 billion to $5.2 billion in the second quarter. To see how these costs impact the company's profitability, the chart below illustrates the flow from total revenues to net income.

Several key areas drove this expense increase:

• Other Operations & Maintenance: This category saw one of the largest jumps, rising by $297 million to $1.7 billion for the quarter. The report points to higher costs at Georgia Power, largely due to Plant Vogtle Unit 4 beginning operations.
• Depreciation & Amortization: Increased by $141 million to $1.3 billion, also primarily due to the new Plant Vogtle unit being placed in service. New, large-scale assets mean higher depreciation costs.
• Interest Expense: Surged by 26% to $874 million for the quarter. This reflects the impact of higher overall debt taken on to fund major capital projects, including the Plant Vogtle expansion.

The Bottom Line

The combination of these rising costs outpaced revenue growth, resulting in a notable drop in profitability. Consolidated Net Income attributable to Southern Company fell to $880 million for the second quarter of 2025, down 26.8% from $1.2 billion in the same quarter of 2024. Earnings per share (diluted) followed suit, dropping to $0.79 from $1.09.

Looking at the company's main segments, the traditional electric operating companies (which include Alabama Power, Georgia Power, and Mississippi Power) saw their combined net income fall from $1.2 billion to $1.0 billion. Georgia Power's results were particularly impacted by the new operational costs of Plant Vogtle.

In conclusion, Southern Company's latest filing shows a company successfully growing its top line through rate adjustments and strong demand. However, the immense costs associated with bringing major new infrastructure online—specifically the long-awaited Plant Vogtle nuclear units—are placing significant pressure on its profits. Coupled with higher interest expenses, this has created a challenging environment. The key for investors will be watching how effectively Southern Company manages these new, higher operating costs and whether the current rate structures will allow profitability to recover and grow in the coming quarters.