Sempra is a holding company that owns the pipes, wires, and terminals that move electricity and natural gas to millions of homes and businesses across California, Texas, and parts of Mexico. It does not make money by selling the energy itself. It makes money by charging a fee every time energy travels through its networks, the way a toll road charges every car that drives on it regardless of where the car is going. Its California utilities, SDG&E and SoCalGas, serve roughly 3.6 million electric customers and more than 21 million people with natural gas. Its Texas stake, Oncor, delivers electricity to more than 4.1 million homes and businesses. A separate division called Sempra Infrastructure owns pieces of facilities that turn natural gas into a super-cold liquid, called LNG, so it can be loaded onto ships and exported. Regulators set the rates Sempra is allowed to charge, which means earnings move slowly and predictably, like a toll road rather than a casino. The diagram below traces where the money goes.

Five years of financial data tell a story of a business growing its physical assets aggressively while paying more and more to do it. Revenue climbed from $12.9 billion in 2021 to a peak of $16.7 billion in 2023 before falling back to $13.7 billion in 2025. That drop is not a sign of a shrinking business. It largely reflects lower natural gas commodity costs being passed through to customers, which flow in and out of revenue without changing earnings. Gross margin actually expanded sharply, rising from roughly 75% in 2021 to roughly 85% in 2025, which shows the core toll-road economics getting cleaner as commodity pass-throughs shrank relative to infrastructure fees.

The cash picture is more complicated. Operating cash flow swung from $3.8 billion in 2021 to just $1.1 billion in 2022, recovered to $6.2 billion in 2023, then settled around $4.6 billion in 2025. Free cash flow, meaning what is left after capital spending, has been negative every single year, ranging from negative $1.2 billion in 2021 to negative $6.0 billion in 2025. This is not unusual for a regulated utility that is pouring money into physical infrastructure, but it does mean the business relies on borrowing and equity issuance to fund its growth. Net debt climbed steadily from $24.0 billion in 2021 to $33.1 billion in 2025.

Sempra announced a $48 billion capital investment plan in 2024, targeting its California and Texas utilities where regulators have approved growing rate bases. Oncor alone is the largest transmission and distribution system in Texas by customer count, and Texas population growth keeps pulling new investment forward. In 2025, Oncor earnings grew 10% compared to 2024, driven by rate updates tied to invested capital and continued customer growth. The California side had a rougher year. A regulator called the California Public Utilities Commission disallowed recovery of certain wildfire-related costs, resulting in a $651 million charge at SDG&E in 2025, which cut Sempra California earnings by 23% compared to the prior year.

The KKR deal reshapes what Sempra actually is. Before it closes, Sempra consolidates SI Partners on its balance sheet. After it closes, the company becomes much more purely a regulated utility, with its California and Texas operations driving the bulk of earnings. That simplification reduces volatility, because regulated utilities earn predictable returns. But it also reduces growth optionality, because the LNG export business had the potential to grow revenues faster than any regulator would ever allow a traditional utility to grow.

Several specific risks stand out in the filing. First, Sempra is a holding company that depends on cash moving up from subsidiaries to pay dividends and service debt. Oncor is legally ring-fenced, meaning Sempra cannot directly control it or force it to send cash. If Oncor or other subsidiaries are blocked from distributing money upward, Sempra can face pressure at the parent level. Second, SDG&E's franchise to serve San Diego could be challenged. The City of San Diego has studied replacing SDG&E with a city-owned utility, and lawsuits are active against both the electric and gas franchises. Losing a franchise would be a significant blow to the rate base. Third, U.S. tariffs on steel, aluminum, and related equipment raise construction costs across all of Sempra's capital projects, squeezing the economics of the $48 billion investment plan. Fourth, Mexico's 2025 energy law increased government control over energy infrastructure, creating new uncertainty around Sempra Infrastructure's Mexican assets.

There is also a financial structure risk worth noting. Sempra has entered forward sale agreements that allow certain banks to force immediate settlement involving 4.99 million shares at any time they choose. If stock prices rise significantly at the time of settlement, Sempra could owe the banks a meaningful cash difference. This is a specific structural obligation that sits outside the normal operating risks of a utility.