📢 Earnings Summary — VST

Vistra delivered a solid Q3 with strong Generation results, higher realized prices, and steady retail performance, while narrowing 2025 guidance and introducing higher 2026 and 2027 outlooks. Management highlighted a structurally stronger demand backdrop, especially from data centers, and noted robust hedging that provides visibility into 2026–2027 earnings. Strategic actions advanced materially: a 20-year PPA at Comanche Peak, closing the 2.6 GW Lotus acquisition, and progressing two new West Texas gas units with attractive projected returns. Capital allocation remains shareholder-friendly with additional buyback authorization, rising free cash flow expectations, and balance sheet strength targeting investment-grade. While outages and capacity market variability remain risks, the tone was confident, underpinned by operational execution, contracting momentum, and identifiable growth levers.

📈 Growth Highlights

• Introduced 2026 adjusted EBITDA guidance of $6.8–$7.6B and adjusted FCF before growth of $3.925–$4.725B, reflecting step-up from 2025.
• Set 2027 adjusted EBITDA midpoint opportunity range of $7.4–$7.8B with ~70% of expected 2027 generation already hedged.
• Closed acquisition of ~2.6 GW of gas-fired assets from Lotus Infrastructure Partners; targeting ~$270M adjusted EBITDA in 2026 with upside from synergies/capacity revenues.
• 20-year PPA at Comanche Peak supports long-term nuclear operations and enables up to 1,200 MW of new customer load.
• Developing two West Texas gas units totaling 860 MW; expected returns above mid-teens levered thresholds; targeted in-service early to mid-2028.

🔨 Business Development

• Executed landmark 20-year PPA at Comanche Peak; customer to add significant on-site backup generation; supports operations into the 2050s.
• Closed acquisition of seven natural gas plants (~2.6 GW) across PJM, New England, New York, and California from Lotus Infrastructure Partners.
• Advanced development of two new gas-fired units in West Texas (860 MW) under Texas Energy Fund due diligence; financing decision expected in coming months.
• Brought 200 MW Oak Hill solar (ERCOT) to commercial operations; Pulaski and Newton projects on schedule for COD by year-end 2026.
• Progressing coal-to-gas conversions at Coleto Creek and Miami Fort; evaluating nuclear uprates (~10% capacity increase) with potential online in early 2030s.

💵 Financial Performance

• Q3 adjusted EBITDA: $1.581B (Generation $1.544B; Retail $37M).
• Generation realized prices were >$10/MWh higher YoY; higher East capacity revenues and Comanche Peak nuclear PTC recognition offset outages.
• 2025 guidance narrowed: adjusted EBITDA $5.7–$5.9B; adjusted FCF before growth $3.3–$3.5B.
• Expect to generate ~$10B adjusted FCF before growth through YE 2027, assuming ≥60% EBITDA-to-FCF conversion.
• Retail on track to outperform 2024 results despite seasonal Q1/Q3 pressure; strong customer count and margin performance.

🏦 Capital & Funding

• Returned >$6.7B to shareholders since Q4 2021 via repurchases and dividends.
• Board authorized additional $1B share repurchase; expect at least ~$2.9B more capital returns through 2027.
• Leverage ~2.6x; targeting further deleveraging through 2027 and path to investment-grade ratings.
• Highly hedged position for 2026; ~70% of expected 2027 generation hedged, enhancing cash flow visibility.
• Texas Energy Fund financing under evaluation for West Texas projects; final decision in coming months.

🧠 Operations & Strategy

• Integrated retail-generation model with comprehensive hedging driving earnings stability.
• Coal/gas fleet commercial availability ~93% in Q3; nuclear capacity factor ~95%; strong performance during late July heat wave.
• Managing open length for 2027 over next 12 months; disciplined contracting to lock in value.
• Retail growth led by Texas brands; strong customer service/complaint performance and maintained 5-star ranking.
• Allocating ~$50M per year over next several years (including 2026) to staffing and development to pursue long-term contracting and build-out opportunities.

🌍 Market Outlook

• Structural demand shift with weather-normalized load growth: PJM ~2–3% YoY; ERCOT ~6% YoY.
• Data center pipeline more than doubled YoY; ERCOT’s share of announcements >2x its share of installed base.
• Combined-cycle gas capacity factors rising from low-50% to high-50% in recent years; potential to reach mid-80% with continued demand growth.
• Near-term super-peak coverage expected from customer-backed on-site generation and demand response alongside existing grid capacity.
• Multiple pathways for additional long-term capacity contracts across Vistra’s >40 GW diversified fleet.

⚠ Risks & Headwinds

• Outage impacts: extended outages at Martin Lake Unit 1 and Moss Landing batteries affected results.
• PJM 2027/2028 capacity auction outcomes and other gross margin variability drivers could affect 2027 results.
• Execution and permitting risks for new builds, coal-to-gas conversions, and nuclear uprates; TEF financing not yet finalized.
• Integration risk for the Lotus asset acquisition.
• Retail seasonality and supply cost timing can pressure intra-year margins; not all announced data center projects may materialize.

AI-generated earnings recap sourced from company results & conference call observations. Not investment advice — verify with official filings.