Breaking Down Spire Inc. (SR) Financial Health: Key Insights for Investors

You're looking at Spire Inc. (SR) because its regulated utility model suggests stability, but honestly, the story right now is about a massive, strategic pivot that introduces real execution risk. The company just closed its fiscal 2025, reporting a solid 7.5% jump in adjusted earnings per share (EPS) to $4.44, with net income hitting $271.7 million, which is great. But here's the quick math: they poured $922 million into capital expenditures, mostly for utility infrastructure, which directly supports their long-term growth target of 5-7% adjusted EPS growth. Still, the near-term is complicated by the pending $2.48 billion acquisition of Piedmont Tennessee, which is a huge move into a new, favorable jurisdiction, but it also creates a significant, concentrated short-term liquidity hurdle of about $1.8 billion that needs to be permanently financed. So, you have a utility showing strength-raising its dividend by 5.1% to an annualized $3.30 per share-but it's also making a high-stakes trade-off that requires defintely close monitoring.

Revenue Analysis

You need to know where Spire Inc. (SR)'s money is coming from and if that stream is growing, so let's cut right to the numbers: the company reported total fiscal year 2025 revenue of approximately $2.48 billion. The immediate takeaway is that this top-line figure actually represents a 4.5% decline from the prior fiscal year. That drop is a headwind, but the underlying segment earnings tell a more complex, and ultimately more positive, story about the stability of their core business.

Spire's business model, typical for a utility, is built on three main segments, with the regulated natural gas distribution business being the bedrock. While the raw revenue figure dipped, the adjusted earnings-which is a better measure of the segments' profitability contribution-showed growth across the board. Here's the quick math on how each part of the business contributed to the total adjusted earnings of $275.5 million in fiscal 2025:

• Gas Utility: $231.4 million in adjusted earnings.
• Midstream: $56.3 million in adjusted earnings.
• Gas Marketing: $25.9 million in adjusted earnings.

The core Gas Utility segment, which is the distribution and sale of natural gas to residential, commercial, and industrial customers primarily in Missouri and Alabama, is the clear anchor. It is defintely the most important piece of the puzzle. This segment's adjusted earnings grew almost 5% from the prior year, driven by regulatory wins.

Segment Performance and Revenue Drivers

The year-over-year revenue decline of 4.5% for the whole company is largely a function of fluctuating natural gas prices and weather, which impacts the pass-through cost of gas that is included in the total revenue figure for a utility. What matters more for investors is the stability and growth of the regulated earnings base, and here, Spire Inc. delivered in fiscal 2025.

The Midstream segment-which includes natural gas storage and transportation like Spire Storage-was the real standout growth engine, increasing its adjusted earnings from $33.5 million in 2024 to $56.3 million in 2025. That's a huge jump, fueled by additional storage capacity and the benefit of new contracts at higher rates. The Gas Marketing segment also saw a modest increase in adjusted earnings to $25.9 million, simply by being well-positioned to create value in the market.

Here is a snapshot of the segment earnings growth that drove the overall positive adjusted earnings per share (EPS) growth of 7.5% for the year:

The significant changes in the Gas Utility segment were regulatory: new rates were implemented at Spire Alabama, and higher Infrastructure System Replacement Surcharge (ISRS) revenues in Spire Missouri provided a solid boost, offsetting slightly lower usage in Alabama. For a deeper dive into the ownership structure behind these results, you should check out Exploring Spire Inc. (SR) Investor Profile: Who's Buying and Why?

Profitability Metrics

You want to know if Spire Inc. (SR) is a lean, mean, profit-generating machine or just a regulated utility cruising on autopilot. The quick takeaway is that Spire's profitability is solid and growing, driven by regulatory rate recovery, but its Gross Margin suggests a structural difference from the broader utility sector you need to understand.

For the fiscal year 2025, which ended September 30, Spire Inc. reported GAAP net income of $271.7 million, a healthy increase from $250.9 million in fiscal 2024. This performance translates into a Net Profit Margin of about 10.97% on annual revenue of $2.476 billion. That's a tight, consistent margin, which is exactly what you expect from a regulated business.

• Net Income (FY2025): $271.7 million
• Adjusted EPS Growth (FY2024 to FY2025): 7.5%
• Annual Revenue (FY2025): $2.476 billion

Margin Comparison and Efficiency Analysis

When we break down Spire Inc.'s profitability, the margins tell a clear story of how the company manages its costs, especially compared to the wider utility sector. Here's the quick math on the key ratios for fiscal 2025:

The low Gross Profit Margin of 41.54% for Spire Inc. is not a red flag; it's a feature of the natural gas distribution business model. Since the cost of gas is typically high and then largely passed through to customers, the gross margin is naturally lower than, say, an electric utility where fuel costs are a smaller percentage of revenue. The fact that the Net Profit Margin of 10.97% is right at the industry benchmark of roughly 11% for the broader utility sector shows that Spire is defintely managing its operating expenses well enough to convert revenue to bottom-line profit efficiently.

The trend over time is positive: the 8.3% increase in net income from fiscal 2024 to fiscal 2025 is solid. This growth was largely driven by new rates implemented at Spire Alabama and higher Infrastructure System Replacement Surcharge (ISRS) revenues at Spire Missouri. This highlights that operational efficiency in a regulated business often means successful execution on rate cases and timely recovery of capital investments, rather than just cutting costs. Higher operation and maintenance (O&M) and depreciation expenses were a partial offset, so keep an eye on those rising costs in future quarters.

To see how this solid financial health translates into investor interest, you should check out Exploring Spire Inc. (SR) Investor Profile: Who's Buying and Why?

Debt vs. Equity Structure

You need to know how Spire Inc. (SR) funds its operations and growth, because a utility's capital structure dictates its risk profile and its ability to invest in the rate base. The short answer is that Spire Inc. relies heavily on debt, which is typical for a capital-intensive, regulated utility, but its leverage ratio is still better than the sector average.

As of the quarter ending June 2025, Spire Inc.'s total debt stood at approximately $4.90 billion. This debt is split between a manageable $1,402 million in short-term debt and a larger $3,498 million in long-term debt and capital lease obligations. This structure reflects the company's continuous need for capital to fund its long-term infrastructure projects, which are the engine of its regulated earnings growth.

Here's the quick math on their core financial leverage:

• Total Debt (Jun 2025): $4.90 billion
• Total Stockholders' Equity (Jun 2025): $3,480 million
• Debt-to-Equity Ratio: 1.41

A Debt-to-Equity (D/E) ratio of 1.41 means Spire Inc. uses $1.41 of debt for every dollar of shareholder equity. To be fair, this is a high D/E ratio, but it's normal for utilities because their stable, regulated cash flows can reliably service the debt. More importantly, Spire Inc.'s Debt-to-Capital ratio was 53.23% for fiscal year 2025, which is notably lower than the sector's average of 60.90%, suggesting a slightly more conservative approach than some peers.

Recent Debt Activity and Credit Ratings

The company is actively managing its debt maturity schedule, which is a good sign. For instance, in August 2024, a subsidiary, Spire Missouri Inc., issued $320 million of 5.150% First Mortgage Bonds due 2034. The primary goal of this issuance was to redeem $300 million of existing Floating Rate Bonds, essentially locking in a fixed, long-term rate and managing refinancing risk. Also, in February 2024, Spire Inc. priced a $350 million debt offering of 5.300% Senior Notes due 2026, using $175 million of the proceeds to repay existing debt.

The credit rating agencies have a mixed, but investment-grade, view:

S&P's Negative Outlook on the BBB+ rating, which was downgraded from A- in 2024, signals that the agency is watching the company's financial metrics closely, particularly its funds from operations (FFO) to debt. Management is targeting an FFO to debt of 15% to 16%, which provides a cushion above the published downgrade thresholds of 12%-13%.

Balancing Debt and Equity Funding

Spire Inc.'s financing strategy through 2027 is a balanced mix of debt, equity, and hybrid securities to fund its capital plan, which includes approximately $600 million in long-term debt for refinancing and incremental funding. They are also using their At-The-Market (ATM) program to meet remaining equity needs. In a strategic move, the company is evaluating the sale of its gas storage facilities as a potential source of funds, which could significantly reduce the need for new debt or equity, strengthening the balance sheet and providing a non-dilutive source of capital. This is a smart way to de-risk the balance sheet. For a deeper dive into who is buying the stock, check out Exploring Spire Inc. (SR) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know how easily Spire Inc. (SR) can cover its short-term bills, which is what we call liquidity. For a regulated utility like Spire Inc., liquidity ratios are often lower than other sectors, but the fiscal year 2025 numbers still point to a tight situation.

The core takeaway is this: Spire Inc. is heavily reliant on continuous financing to fund its capital-intensive operations, a common but risky utility model. Its low liquidity ratios mean it has negative working capital and cannot cover current liabilities with current assets alone.

• Low ratios signal reliance on external financing.

Current and Quick Ratios Signal Negative Working Capital

The current ratio and quick ratio (acid-test ratio) are the fastest way to check near-term financial health. The current ratio tells you if current assets can cover current liabilities. The quick ratio is stricter, excluding inventory.

For fiscal year 2025, Spire Inc.'s current ratio stood at just 0.37. This means for every dollar of short-term debt, the company only holds 37 cents in current assets. The quick ratio is even tighter at 0.19, indicating that excluding inventory, they only have 19 cents in highly liquid assets to cover each dollar of immediate obligations. Honestly, anything below 1.0 is a red flag for most companies, and this level defintely demands a closer look at the financing strategy.

This low ratio directly translates to a negative working capital position. Working capital is simply current assets minus current liabilities, and with the current ratio at 0.37, the company's current liabilities significantly exceed its current assets. This is typical for a utility that collects cash from customers before paying for the long-term infrastructure they use, but it still means the company must manage its cash flow precisely.

Cash Flow Statements Overview

The cash flow statement shows where the money is actually coming from and going. For Spire Inc. in fiscal year 2025, the picture is clear: strong operating cash flow is being entirely consumed, and then some, by massive infrastructure investments.

Here's the quick math on the major cash flow movements for the year, in millions:

The $578 million in operating cash flow shows the core natural gas utility business is healthy and generating cash. But, the company's capital expenditures (CapEx) alone were about $922.4 million, which is why the cash flow from investing activities was a massive outflow of $916.4 million. This spending is for pipeline upgrades and expansion, which drives future rate base growth, but it creates a substantial cash deficit today.

Near-Term Risks and Opportunities

The negative cash flow after capital expenditures means Spire Inc. must turn to the financing markets constantly. In fiscal 2025, the company issued $520 million in total debt to bridge this gap and fund its growth. This is a deliberate strategy for a utility-grow the rate base, increase earnings, and raise the dividend, which they did by 5.1%.

The risk here is interest rates. If the cost of debt rises unexpectedly, the financing cash flow becomes more expensive, eating into future earnings. The opportunity, however, is clear: the $11.2 billion 10-year capital investment plan is designed to grow the rate base and support the long-term adjusted EPS growth target of 5-7%. This is the classic utility trade-off: low liquidity for high, predictable, regulated growth.

For a deeper dive into the valuation and strategic frameworks, you can read the full post at Breaking Down Spire Inc. (SR) Financial Health: Key Insights for Investors.

Valuation Analysis

You want to know if Spire Inc. (SR) is a buy, a hold, or a sell right now. The short answer is that the market sees it as fairly valued, maybe slightly overextended near its recent high, but the long-term analyst consensus is still a Buy. The stock has had a strong run, up nearly +25% over the last 52 weeks, so you're not buying at a deep discount.

Spire Inc. is a regulated utility, so we look at stable, predictable metrics. For the 2025 fiscal year, the valuation multiples suggest the stock is trading in line with its growth expectations. You need to watch the Price-to-Earnings (P/E) ratio, which is sitting at an estimated 19.6x for 2025. That's a bit rich for a utility, but it reflects the stable earnings and dividend history.

Here's the quick math on key valuation metrics:

• Price-to-Earnings (P/E) Ratio: Approximately 19.6x (2025 fiscal estimate).
• Price-to-Book (P/B) Ratio: Approximately 1.67x (2025 fiscal estimate).
• Enterprise Value-to-EBITDA (EV/EBITDA): Approximately 12.3x (2025 fiscal estimate).

The Price-to-Book of 1.67x shows the market values the company at a significant premium to its net asset value (book value). For a utility, this premium suggests investors are defintely paying for the regulated, predictable cash flows and the dividend. The EV/EBITDA of 12.3x is also on the higher end for the sector, which means the company's total value (including debt) is high relative to its operating cash flow proxy (Earnings Before Interest, Taxes, Depreciation, and Amortization).

The stock price has moved from a 52-week low of $64.44 to a high of $91.11, reflecting a strong recovery and investor confidence in the utility sector's stability. As of mid-November 2025, the stock is trading near the $86 range. The dividend is a core part of the return story here. Spire Inc. offers an annualized dividend of $3.30 per share, which translates to a yield of about 3.8%, with a payout ratio of roughly 75.00%. That payout ratio is sustainable for a utility, but it leaves less room for major capital investments without taking on more debt.

What this estimate hides is the interest rate environment. Higher rates make the debt load of utilities more expensive and make their dividends less attractive compared to fixed-income alternatives. Still, the analyst community is bullish. The consensus rating from 11 analysts is a clear Buy, with an average 12-month price target of $85.64. Since the stock is currently trading slightly above this target, the near-term upside is limited-just +0.56% from a recent price. It's a low-upside conviction buy, not a deep-value play.

For a more comprehensive look at the risks and opportunities, you can read our full analysis: Breaking Down Spire Inc. (SR) Financial Health: Key Insights for Investors.

Risk Factors

You're looking at Spire Inc. (SR) as a utility, and while it offers stability, you defintely need to map out the risks. The core takeaway is this: Spire's growth hinges on regulatory approval for its massive capital spending, and any hiccup there, or a shift in the interest rate environment, immediately pressures their bottom line.

In fiscal year 2025, Spire Inc. reported solid adjusted earnings of $275.5 million, up 7.5% year-over-year, but that performance masks some very real, near-term headwinds. The most significant risks are a blend of external market forces and internal operational pressures common to the regulated utility space.

External and Regulatory Pressures on Spire Inc.

The biggest external risk for any utility like Spire Inc. is weather-plain and simple. Milder winters mean lower natural gas usage, which directly impacts the Gas Utility segment's revenue, even with weather mitigation strategies in place for areas like Spire Alabama. Plus, the regulatory environment is a constant factor; the company's ability to earn a fair return on its investments relies on timely rate case approvals from state Public Service Commissions.

• Regulatory Lag: Delays in recovering costs through new rates, despite the positive Missouri rate case outcome, can erode earnings.
• Economic Factors: Higher interest expense is already a headwind, contributing to an adjusted loss of $38.1 million in the company's other activities for fiscal 2025, up from a $30.3 million loss the prior year. Rising rates make their debt more expensive.
• Competitive Environment: While natural gas remains cost-competitive, the long-term push for electrification and decarbonization presents an existential, though distant, threat to their core business model.

Operational and Strategic Risks

From an operational standpoint, the company continues to battle rising costs. In fiscal 2025, higher operation and maintenance (O&M) expense and depreciation expense partially offset the earnings benefit from new rates in the Gas Utility segment. This is a classic utility challenge: you have to spend money to keep the system safe and running, but cost recovery isn't always immediate or complete.

Strategically, the pending acquisition of the Piedmont Natural Gas Tennessee business for $2.48 billion is a massive opportunity, but it also carries integration risk. Anytime you absorb a business of that size, you have to execute flawlessly to realize the expected synergies and growth. If you want to dive deeper into how this deal is changing the shareholder base, you should check out Exploring Spire Inc. (SR) Investor Profile: Who's Buying and Why?

Here's the quick math on their investment: Spire Inc. invested $922 million in infrastructure in fiscal 2025, with almost 90% going to the utilities. That's a huge outlay, and the risk lies in ensuring the regulatory bodies allow them to recover it.

Mitigation and Forward Action

Spire Inc. is mitigating these risks by leaning heavily on its capital expenditure plan and regulatory mechanisms. The company plans to invest a total of $11.2 billion over the next ten years, and they expect to recover approximately 96% of that through various regulatory surcharges and rate cases. That high recovery rate is the firewall against regulatory risk.

They are also strategically growing their Midstream segment, which delivered $56.3 million in adjusted earnings in fiscal 2025, up significantly from the prior year, driven by additional storage capacity and asset optimization. This diversification helps offset some of the volatility in the core Gas Utility business. The board's confidence is reflected in the 5.1% dividend hike, raising the annualized rate to $3.30 per share.

Growth Opportunities

You're looking for a clear map of where Spire Inc. (SR) goes from here, and the answer is straightforward: regulated infrastructure investment and strategic expansion are the core drivers. The company's fiscal 2025 results, with adjusted earnings per share (EPS) hitting $4.44, up 7.5% from the prior year, confirm this utility-focused model is working.

The biggest near-term opportunity is simply getting paid for the work they're already doing. This is a utility, so growth is anchored in rate base expansion, which is the value of assets they can earn a regulated return on. Spire Inc. is projecting long-term adjusted EPS growth of 5% to 7%, a solid expectation for a regulated business.

• Invest in pipes, earn a predictable return.
• New rates in key states boost immediate earnings.
• Acquisitions expand the regulated footprint.

Analysis of Key Growth Drivers

The main engine for Spire Inc.'s future growth is a massive capital expenditure (CapEx) plan. The company has committed to an 10-year capital investment target of $11.2 billion through fiscal 2035, with about 70% dedicated to safety and reliability projects. In fiscal 2025 alone, Spire Inc. invested $922 million, with nearly 90% going directly into the utilities segment for system enhancements. This spending is not just maintenance; it's a direct lever for rate base growth, which is expected to climb to $10.7 billion by fiscal 2030.

Plus, the regulatory landscape is turning constructive. New rates, like those from the positive Missouri rate case settlement effective in October 2025, and anticipated Infrastructure System Replacement Surcharge (ISRS) revenues, are designed to provide timely recovery of these investments. This is defintely the key to translating CapEx into earnings.

Future Financial Projections and Strategic Initiatives

The company's guidance for fiscal 2026 is a significant jump, with adjusted EPS projected to be between $5.25 and $5.45 per share. That midpoint represents over 20% growth from the fiscal 2025 result, driven heavily by the new Missouri rate outcomes. This is a huge step-up in a single year, but it's anchored on regulatory wins, not market volatility. The Gas Utility segment's fiscal 2025 adjusted earnings were $231.4 million, and new rates will push that higher.

The biggest strategic move is the pending $2.48 billion acquisition of the Piedmont Natural Gas Tennessee business from Duke Energy. This deal expands Spire Inc.'s regulated footprint into a new, high-growth region, though it does introduce some near-term financing risk. To be fair, the company is also looking at potentially divesting its high-performing Midstream storage assets-which generated $56.3 million in adjusted earnings in fiscal 2025-to help fund the acquisition, trading higher-margin but more volatile earnings for regulated utility stability.

Competitive Advantages and Innovation

Spire Inc.'s core competitive advantage is simple: it's a state-regulated utility. This creates enormous barriers to entry for competitors, as building out a parallel gas distribution network is prohibitively expensive and requires significant regulatory approval. This monopoly-like position in its service territories (Missouri, Alabama, and Mississippi) ensures stable cash flow, even if it limits explosive growth.

On the innovation front, Spire Inc. is rolling out advanced metering infrastructure, specifically ultrasonic meters, to improve customer experience and operational efficiency. They installed over 350,000 advanced meters in fiscal 2024, bringing the total to 850,000 customers benefiting from this technology. This technological push, along with efforts like the customer affordability initiative, helps manage costs and keeps regulators happy, which ultimately supports the rate-setting process. For a deeper dive into who is betting on this strategy, you should read Exploring Spire Inc. (SR) Investor Profile: Who's Buying and Why?

Next Step: Portfolio Manager: Model the impact of the Midstream asset sale on the 2026 EPS guidance range by next Wednesday.