Revenue grew 9.9% year-over-year to $548.6M in 2026Q2, but operating margins are volatile, swinging from 31.2% in 2025Q3 to 14.5% in 2025Q2, indicating regulatory lag and seasonal effects.
TXNM Energy, Inc. (TXNM) annual income statement — 7-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 |
|---|
| Revenue | 2.23B | 2.17B | 1.97B | 1.94B | 2.25B | 1.78B | 1.52B | 1.46B |
| Revenue Growth % | 9.97% | 9.86% | 1.65% | -13.8% | 26.4% | 16.87% | 4.49% | - |
| Cost of Revenue | 1.35B | 1.34B | 1.16B | 1.31B | 1.53B | 1.15B | 938.67M | 892.93M |
| Gross Profit | 883.71M | 824.79M | 810.16M | 627.1M | 714.73M | 625.65M | 584.24M | 564.58M |
| Gross Margin % | 39.56% | 38.09% | 41.1% | 32.34% | 31.77% | 35.15% | 38.36% | 38.74% |
| Gross Profit Growth % | - | 1.81% | 29.19% | -12.26% | 14.24% | 7.09% | 3.48% | - |
| Operating Expenses | 387.54M | 384.35M | 347.7M | 323.84M | 320.14M | 316.3M | 297.86M | 269.28M |
| Other Operating Expenses | - | - | - | - | - | - | - | - |
| EBITDA | 939.61M | 866.82M | 885.48M | 656.96M | 735.72M | 629.56M | 601.05M | 596.36M |
| EBITDA Margin % | 42.06% | 40.03% | 44.92% | 33.88% | 32.7% | 35.37% | 39.47% | 40.92% |
| EBITDA Growth % | 8.22% | -2.11% | 34.78% | -10.71% | 16.86% | 4.74% | 0.79% | - |
| Depreciation & Amortization | 443.44M | 425.64M | 423.01M | 353.69M | 341.12M | 320.21M | 314.67M | 301.07M |
| D&A / Revenue % | 19.85% | 19.65% | 21.46% | 18.24% | 15.16% | 17.99% | 20.66% | 20.66% |
| Operating Income (EBIT) | 496.17M | 441.18M | 462.47M | 303.26M | 394.59M | 309.35M | 286.38M | 295.3M |
| Operating Margin % | 22.21% | 20.37% | 23.46% | 15.64% | 17.54% | 17.38% | 18.8% | 20.26% |
| Operating Income Growth % | - | -4.6% | 52.5% | -23.15% | 27.56% | 8.02% | -3.02% | - |
| Interest Expense | 4M | 335M | 228.07M | 190.35M | 127.91M | 96.88M | 114.39M | 121.02M |
| Interest Coverage | - | 1.54x | 2.22x | 1.44x | 2.67x | 3.55x | 2.84x | 1.60x |
| Interest / Revenue % | 0.18% | 15.47% | 11.57% | 9.82% | 5.69% | 5.44% | 7.51% | 8.3% |
| Non-Operating Income | -4M | -1000K | -1000K | -1000K | -1000K | -1000K | -1000K | -1000K |
| Pretax Income | 234.52M | 180.01M | 280.24M | 90.53M | 211.31M | 244.43M | 207.95M | 66.85M |
| Pretax Margin % | 10.5% | 8.31% | 14.22% | 4.67% | 9.39% | 13.73% | 13.65% | 4.59% |
| Income Tax | 20.11M | 10.19M | 21.52M | -16.35M | 26.13M | 32.58M | 20.64M | -25.28M |
| Effective Tax Rate % | 8.57% | 5.66% | 7.68% | -18.06% | 12.37% | 13.33% | 9.92% | -37.82% |
| Net Income | 196.39M | 151.36M | 242.68M | 88.35M | 170.06M | 196.36M | 173.3M | 77.89M |
| Net Margin % | 8.79% | 6.99% | 12.31% | 4.56% | 7.56% | 11.03% | 11.38% | 5.34% |
| Net Income Growth % | 10.37% | -37.63% | 174.69% | -48.05% | -13.39% | 13.3% | 122.5% | - |
| EPS (Diluted) | 1.77 | 1.62 | 2.67 | 1.02 | 1.97 | 2.27 | 2.15 | 0.96 |
| EPS Growth % | -7.35% | -39.33% | 161.76% | -48.22% | -13.22% | 5.58% | 123.17% | - |
| EPS (Basic) | - | 1.63 | 2.67 | 1.02 | 1.97 | 2.28 | 2.16 | 0.97 |
| Diluted Shares Outstanding | 111.23M | 93.18M | 90.59M | 86.37M | 86.17M | 86.11M | 80.3M | 80.3M |
Quick answers to the most common questions about buying TXNM stock.
For fiscal year 2025, TXNM Energy, Inc. (TXNM) reported total revenue of $2.17B. This represents a 48.6% increase compared to $1.46B in 2019.
TXNM Energy, Inc. (TXNM) is profitable, generating $151.4M in net income for the fiscal year ending 2025 with a net profit margin of 7.0%.
TXNM Energy, Inc. (TXNM) reported an operating income of $441.2M, resulting in an operating profit margin of 20.4%. This margin reflects the operational efficiency of the business before interest and taxes.
TXNM Energy, Inc. (TXNM) generated $824.8M in gross profit for the year, representing a gross profit margin of 38.1%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Regulatory lag and merger overhang
Metrics are mathematically derived from official filings.
Revenue Growth Driven by Rate Base Expansion
TXNM's revenue grew 9.9% year-over-year to $548.6M in 2026Q2, according to recent financial statements, reflecting rate base growth from grid investments and new rates, though quarterly volatility suggests timing effects.
The 9.9% revenue growth in 2026Q2 follows a 13.7% surge in 2025Q3, indicating that rate case outcomes and capital projects are translating into top-line expansion. However, the pattern is uneven, with 2024Q1 showing a 19.7% decline, likely due to weather normalization and rate case timing. This suggests that revenue growth is not smooth but tied to regulatory approvals and seasonal demand, which investors should monitor for sustainability.
Earned Returns Fluctuate Around Authorized Levels
Operating margin swung from 31.2% in 2025Q3 to 14.5% in 2025Q2, as per reported data, indicating that TXNM's earned ROE may be volatile relative to authorized returns, reflecting regulatory lag and seasonal factors.
The wide quarterly swings in operating margin—from 34.6% in 2024Q3 to 14.5% in 2025Q2—suggest that TXNM is not consistently earning its allowed return. The high-margin quarters likely benefit from seasonal demand and cost recovery mechanisms, while low-margin quarters may reflect regulatory lag on new investments. This volatility implies that the regulatory compact in New Mexico and Texas may not provide timely recovery, potentially compressing earned ROE below authorized levels for extended periods.
Fuel Costs Pass-Through but Timing Risks Persist
With gross margin at 38.09% per company data, a significant portion of revenue is consumed by fuel and purchased power, which are typically pass-through, but regulatory lag in recovery could strain working capital.
The gross margin of 38.09% indicates that over 60% of revenue is absorbed by energy procurement costs, which are generally recoverable through fuel adjustment clauses. However, the timing of recovery may lag actual expenditures, especially if commodity prices spike, as seen in the natural gas market. This could create temporary cash flow pressure, though the impact on earnings is muted if mechanisms are automatic. Investors should assess the speed of recovery in both New Mexico and Texas jurisdictions.
Earnings Volatility Masks Core Regulated Earnings
Net income swung from $130.8M in 2025Q3 to -$9.7M in 2025Q4, based on reported figures, indicating that reported EPS is heavily influenced by non-recurring items and regulatory accounting, obscuring underlying regulated earnings power.
The extreme quarterly swings in net income—from a 20.2% net margin in 2025Q3 to a -1.8% in 2025Q4—suggest that reported earnings are not a clean reflection of regulated operations. Items such as AFUDC, securitization amortization, and weather normalization likely contribute to this volatility. The 2025Q4 loss may be due to one-time charges or regulatory adjustments, which investors should adjust for to gauge the sustainable earnings run-rate. The absence of a reported EPS for the latest quarter adds to the opacity.
CAPEX Cycle Supports Rate Base but EPS Timing Lags
D&A rose from $103.0M in 2024Q1 to $127.6M in 2026Q2, as per financial statements, indicating significant capital investment, but EPS growth has been inconsistent, suggesting that rate base growth is not yet translating into proportional earnings.
The steady increase in depreciation and amortization reflects a growing asset base from grid modernization and renewable investments. However, EPS growth has been negative in several quarters (e.g., -65.4% in 2026Q1), indicating that the earnings benefit from rate base expansion is delayed by regulatory lag and financing costs. The use of CWIP in rate base may provide some current earnings, but once assets are placed in service, financing costs could pressure earnings. The current CAPEX cycle appears to be a step-change in investment, but the payoff is uncertain.
Regulatory and Merger Risks Could Undermine Growth
Despite revenue growth, TXNM's earnings quality is questionable, as evidenced by a 2025Q4 net loss and a terminated merger, which may indicate strained regulatory relations and potential for future rate case challenges.
The most significant challenge to the income statement narrative is the possibility that the New Mexico regulatory environment becomes more adversarial, as suggested by the failed Avangrid merger. This could lead to lower authorized ROEs or disallowances, compressing earned returns. Additionally, the reliance on securitization for coal plant retirements may introduce volatility in earnings. The anomalous 0% debt/equity ratio in the data snapshot warrants verification; if real, it could indicate a temporary deleveraging that may not be sustainable. Investors should monitor rate case outcomes and regulatory decisions closely.