The combination of steady operating cash generation and large capital outlays is the core dynamic investors must internalize. Entergy’s operating cash flow margin — operating cash flow divided by revenue — was approximately +37.79% for 2024, a sign that core utility operations generate significant cash before investment. By contrast, free cash flow margin (free cash flow divided by revenue) was -12.46%, reflecting the near-term cash-drain from modernization and generation builds. The capex-to-revenue ratio for 2024 was roughly 50.25%, a clear indicator that Entergy is in a multiyear heavy-investment phase.

Financial trend tables: 2021–2024 income statement and balance-sheet/cash-flow snapshots#

The following tables present the company-reported figures and our calculated margins and ratios for clarity. All primary figures are drawn from Entergy’s FY filings and company financial disclosures (see Entergy filings and investor relations). Calculations in the right-hand columns are arithmetic results of those reported figures.

Year	Revenue (USD)	Operating Income (USD)	Net Income (USD)	Operating Margin	Net Margin	EBITDA (USD)	EBITDA Margin
2024	$11.88B	$2.65B	$1.06B	22.32%	8.93%	$5.04B	42.42%
2023	$12.15B	$2.62B	$2.36B	21.55%	19.45%	$4.92B	40.52%
2022	$13.76B	$2.05B	$1.10B	14.90%	7.97%	$4.24B	30.78%
2021	$11.74B	$1.85B	$1.12B	15.72%	9.53%	$4.39B	37.36%

Source: Entergy FY filings (accepted 2025-02-18) — margins calculated by Monexa AI from reported line items.

Year	Total Assets (USD)	Total Debt (USD)	Net Debt (USD)	Total Equity (USD)	Cash (USD)	Op CF (USD)	CapEx (USD)	Free Cash Flow (USD)	NetDebt/EBITDA (calculated)
2024	$64.79B	$28.92B	$28.06B	$15.12B	$0.86B	$4.49B	-$5.97B	-$1.48B	5.57x
2023	$59.70B	$26.25B	$26.11B	$14.66B	$0.13B	$4.29B	-$4.71B	-$0.42B	5.31x
2022	$58.60B	$26.76B	$26.54B	$13.00B	$0.22B	$2.59B	-$5.29B	-$2.70B	6.26x
2021	$59.45B	$27.08B	$26.64B	$11.64B	$0.44B	$2.30B	-$6.42B	-$4.12B	6.07x

Notes: NetDebt/EBITDA = Net Debt divided by EBITDA (we use stated year EBITDA for the denominator). Monexa AI calculations may differ from the dataset’s TTM ratios because those reflect trailing-12-month aggregates and different timing conventions. Source: Entergy FY filings (2021–2024);

Reconciling reported ratios and the company’s TTM metrics: discrepancies and why they matter#

The dataset includes several TTM and ratio fields that diverge slightly from arithmetic results using fiscal‑year end line items. For example, Entergy’s year‑end net debt of $28.06 billion divided by FY 2024 EBITDA of $5.04 billion gives a calculated net debt/EBITDA of 5.57x, while the dataset’s TTM ratio lists 4.82x. Similarly, our balance-sheet-based debt/equity calculation (total debt $28.92B divided by equity $15.12B) produces ~191.27%, whereas the dataset’s debt-to-equity figure is reported as 187.54%. These differences are predictable: the dataset’s TTM ratios use trailing-12-month aggregates that may include intra‑year seasonality, non-FY adjustments or different EBITDA definitions (adjusted EBITDA, pro forma items, or rolling sums). We flag these discrepancies because ratio selection materially affects leverage narratives and covenant stress tests: a 5.6x net-debt/EBITDA appears meaningfully tighter than 4.8x when evaluating balance-sheet flexibility in a capital‑intensive window.

For dividend math, the commonly quoted headline in the company materials and market commentary references an annualized dividend of $2.40 (quarterly $0.60). Using Entergy’s TTM net income per share of $4.02, the implied payout ratio is approximately 59.70% (2.40 / 4.02 = 0.5970) and, using 2025 consensus EPS of $3.88, the implied payout ratio rises to 61.86%. The dataset includes a stated payout ratio of 43.71% in its dividends section; that figure is inconsistent with the above arithmetic and likely arises from a different EPS basis (for example, adjusted or normalized earnings excluding special items). Because dividend sustainability is core to investor decisions, it is important to reconcile the payout on both reported TTM EPS and on management-guided FY figures; both approaches point to a payout in the ~60% range on the company’s operating profile and guidance.

Strategic implications: Meta, customer-funded infrastructure, and the rate‑base lever#

Entergy’s approach is a textbook example of converting an industrial off‑take into a rate‑base-accretive project while minimizing base-customer capital exposure. Meta’s willingness to fund the $3.2 billion dedicated infrastructure reduces Entergy’s near-term capital burden on ratepayers and shortens payback timing for the company because the large anchor customer secures substantial industrial sales and a long-term demand stream. The hybrid supply model of gas turbines for firm capacity paired with ~1,500 MW of solar reflects a pragmatic reconciliation of reliability and sustainability demands: firm thermal capacity ensures compute availability and renewables reduce lifecycle emissions for hyperscalers with green commitments.

Quantitatively, the opportunity for Entergy is straightforward. Incremental industrial sales increase system load factors and expand regulated rate base, leading to higher depreciation allowance and regulatory returns over asset lives. Management has guided to an EPS CAGR above 8% through 2028 driven by these investments and rising industrial sales, a trajectory that depends on (a) load permanence, (b) timely rate-case approvals that recover investment, and (c) the scalability of the Louisiana model elsewhere in Entergy’s footprint.

Execution risks and the stranded-asset question#

The LPSC dissent and public commentary underscore a central risk: the life‑cycle mismatch between long‑lived gas assets and possibly shorter-term customer contracts or shifts in compute architectures. If hyperscaler demand evolves faster than expected, if contracts fail to secure full cost recovery, or if regulatory frameworks shift, Entergy could face underutilized assets. Environmental scrutiny of new gas investments remains a reputational and policy risk, and methane‑leakage or lifecycle‑emission concerns could attract tighter permitting or offset obligations. Those risks do not invalidate the project economics, but they are nontrivial variables in the capital-allocation calculus.

On the balance-sheet side, Entergy’s net debt of $28.06B and a calculated net‑debt/EBITDA near 5.6x (using FY 2024 EBITDA) imply leverage that is higher than some utility peers. That leverage is intentional — funding growth through debt is conventional for regulated utilities — but it does reduce margin for error in the face of adverse regulatory outcomes or slower load growth.

Earnings quality and the short-term cash-flow profile#

Earnings quality remains anchored in strong operating cash generation: $4.49B of operating cash flow in 2024 compared with $1.06B of reported net income. The divergence between cash-generated and reported earnings signals a capital-heavy model where depreciation and non-cash charges moderate reported net income while generating rate-base growth for future returns. Free cash flow is negative in several recent years as capex outlays surged, which is consistent with a multi-year investment program. Quality concerns arise only if operating cash flow falters while capex remains elevated; current evidence shows healthy operating cash, but the company’s ability to sustain this while executing the $37 billion plan is the primary operational risk.

Competitive positioning: why Louisiana matters for Entergy’s AI corridor play#

Entergy’s advantages in this contest are regional: comparatively low gas prices, supportive state policy (Act 730’s 20‑year tax exemptions for certain data center equipment), and a regulatory willingness — at least in Louisiana — to greenlight customer-funded infrastructure. Those elements allow Entergy to compete on price, speed and the certainty of service, making it a credible magnet for hyperscaler campuses. Peer utilities are pursuing similar opportunities, but Entergy’s combination of policy tailwinds and the Meta anchor gives it a first-mover edge in the Louisiana corridor.

Still, the competitive moat is narrow: other utilities can and will replicate incentive structures or lure projects with alternative fiscal packages. Entergy’s defense is execution speed, the economics of existing gas supply, and the ability to scale transmission and distribution upgrades cost-effectively.

Key Takeaways#

Entergy has converted a headline project into a tangible rate‑base lever: the LPSC vote (4–1) and Meta’s ~$10B campus create a $3.2B customer-funded build that materially supports the company’s $37B 2025–2028 plan. Fiscal 2024 shows resilient operating cash flow ($4.49B) but negative free cash flow (-$1.48B) due to $5.97B of capex, signaling that earnings growth will be capex‑driven and that dividend sustainability depends on load realization and regulatory recovery. Leverage metrics calculated from year-end figures produce a net‑debt/EBITDA around 5.57x and debt/equity near 191.27%, emphasizing that balance‑sheet flexibility will be tested as investment ramps. The company’s dividend (annualized $2.40) implies a payout near 59.70% on TTM EPS of $4.02 and roughly 61.86% on FY‑2025 consensus EPS of $3.88, a level consistent with regulated utility norms but higher than the dataset’s isolated payout figure, which appears to use a different EPS basis.

What This Means For Investors#

Entergy’s strategic shift toward powering hyperscale computing is a credible pathway to convert today’s CapEx into tomorrow’s regulated earnings because the projects are largely rate‑base eligible and — in the Meta case — substantially customer funded. That dynamic should underpin the company’s EPS growth guidance through 2028 if load and regulatory recovery materialize as anticipated. In the meantime, investors will be watching three measurable variables. First, the cadence of rate-case approvals and the final cost-recovery mechanics that determine how quickly capex converts to allowed returns. Second, the industrial load profile and the duration/contracting details with hyperscalers that determine utilization and revenue longevity. Third, cash‑flow and leverage metrics — specifically operating cash flow relative to capex, and net‑debt/EBITDA — which will indicate whether the balance sheet can absorb the multi‑year investment without forcing capital discipline that could slow the plan.

Final perspective#

Entergy sits at an inflection point where regulatory approvals and a single large anchor customer have materially changed the scale and shape of its capital program. The math is clear: heavy capex now with the prospect of higher regulated earnings later. That trade‑off explains why the company’s reported operating cash remains healthy while free cash flow is negative. Reconciling reported TTM ratios with fiscal-year arithmetic shows material sensitivity to timing choices, and investors should treat reported ratios with scrutiny, preferring consistent denominator/numerator pairings when modeling leverage and payout scenarios. The LPSC approval and Meta funding materially derisk the short-term capital allocation question for the Louisiana project, but execution, regulatory detail and long-term load permanence remain the gating variables that will determine whether this era of heavy investment produces sustained EPS growth and preserves the company’s dividend trajectory.

Sources: Entergy FY filings (accepted 2025-02-18) and company financial disclosures; coverage of the LPSC vote and Meta/Entergy project from Louisiana Radio Network and AInvest (see LPSC Approves Entergy's Power Plan for AI Data Center in Richland Parish, Energy & Utility Growth: AI-Driven Infrastructure and Entergy Louisiana Megaproject (AInvest), Meta $10B Data Center and Regional AI Corridors (AInvest).