Clearway Energy, Inc. (CWEN) Earnings

Management highlights

### Long-Term Growth Confidence - Management reaffirms the 2027 CAFTI per share target of $2.70 or better, and now has greater visibility into the deployment of $3 billion of corporate capital between 2026 and 2029, supporting confidence in achieving at least the top end of 2030 financial targets. - Approximately 70% of the growth investment needed to hit the top end of the 2030 target is already commercialized, with a redundant pipeline of development projects de-risking the plan. - Management expects 7% to 8%+ compound annual growth in CAFTI per share from 2025 to 2030, at the top end of the original target range. There is already over $2 billion of identified growth lined up for 2027-2029 completion vintages. ### Operational Progress Across Growth Pathways - **Fleet Enhancements**: Completed new long-term PPA transactions for all three targeted ERCOT wind projects, extending contracted tenors across over 600 megawatts to beyond 2040, improving cash flow predictability and increasing pro forma EBITDA and CAFTI. The $600 million capital powering program remains on track, targeting 11% to 12% CAFD yields and extending project lifespans. - **Sponsor-Enabled Development**: All committed 2026 and 2027 commercial operation date (COD) projects remain on track for construction, and are 100% commercialized. Royal Slope Energy Center is nearing financial close, and Honeycomb Phase II is added as a 2027 investment opportunity. The 2028 COD vintage has over 2 gigawatts of late-stage projects with signed/awarded contracts, planned for construction mobilization in H1 2027. The 2029 COD vintage has approximately 2 gigawatts of late-stage solar plus storage projects, representing roughly $650 million of potential corporate capital investment. ### Upside from Digital Infrastructure - Clearway Group's maturing co-located digital infrastructure business presents meaningful additive upside not currently factored into official targets. The pipeline holds over 17 gigawatts of co-located generation under development, with over 6 gigawatts incorporated into the reported pipeline, and initial revenue contracts already signed. The first phases of generating capacity are targeted for completion in 2029, with potential future earnings contribution to CWIN starting in 2030 and beyond. ### Capital Allocation & Funding Discipline - Between 2026 and 2029, over $500 million in growth funding is expected to come from retained cash flows, aligned with the target to lower the long-term payout ratio below 70%. Corporate debt is expected to contribute over $1.5 billion, of which $600 million has already been raised, while maintaining a target double B credit rating and 4-4.5x leverage ratio. $500 million to $1 billion of external equity is planned, with $50 million raised to date, to be issued only when accretive, at opportune timing, and in line with peer practice. At a payout ratio below 70%, increased retained cash flow will de-risk future funding needs and extend the 5% to 8%+ long-term growth trajectory well into the 2030s.

Guidance

- Full year 2026 CAFTI guidance was revised downward to a range of $430 million to $470 million, from the prior range of $470 million to $510 million. The downward revision is driven by transitory below-average renewable resource output in H1 2026 tied to ENSO weather patterns; management emphasizes that the underlying long-term earnings power of the fleet remains fully intact. - The midpoint of the new 2026 guidance range reflects updated production expectations, while the low end assumes the ENSO weather pattern persists through H2 2026. Management is targeting to deliver results in the top half of the new range. - The 2027 CAFTI per share target of $2.70 or better remains reaffirmed, with management confident in achieving the top end or better of 2030 financial targets. - An updated CAFTI per share growth target extended to 2031 will be formalized and communicated during the Q3 2026 earnings call.

Segment performance

No detailed breakdown of absolute financial results or revenue contribution percentages by individual product segment was provided in the call. Overall Q2 2026 results: adjusted EBITDA of $409 million and CAFTI of $167 million, bringing year-to-date adjusted EBITDA to $666 million and year-to-date CAFTI to $237 million. The flexible generation segment delivered performance in line with budgeted expectations. Solar and battery fleet results were impacted by lower renewable resource output, though plant availability remained high. Wind fleets (ALTA and ERCOT) also experienced below-average resource levels due to ongoing El Nino Southern Oscillation (ENSO) weather patterns, which also affected Q1 2026 results.

Risks & headwinds

- Transitory short-term weather volatility tied to the El Nino Southern Oscillation has resulted in below-average wind and solar resource output in H1 2026, reducing 2026 full-year earnings guidance. Management notes that single-year weather deviations do not impact long-term average earnings assumptions, but create short-term earnings downside. - U.S. trade and foreign ownership policy creates compliance risks for renewable energy equipment sourcing, particularly related to tariffs under Section 232 and foreign entity of concern (FIOC) rules that restrict sourcing from Chinese-controlled enterprises. - Third-party M&A valuations and Clearway's current share price create a barrier to accretive acquisitions at this time, limiting the upside from this potential growth pillar in the near term. - The company's digital infrastructure opportunity is early-stage, with timing and customer contracting still uncertain, and all upside from this segment is uncommitted and not included in base growth targets. - Longer-term, merchant energy price volatility creates uncertainty around flexible generation segment margins, which is incorporated into the breadth of the annual guidance range.

Analyst Q&A

• Q: How does the current share price impact the company's approach to third-party M&A? Is management pausing M&A to focus on organic development? /

  A: Management notes the company has always been selective with M&A, only pursuing synergistic, accretive acquisitions when the cost of capital is favorable. At the current share price, the company is focused on digesting assets acquired last year. The large organic pipeline is more than sufficient to meet the top end of growth targets even without M&A, so there is no pressure to pursue external acquisitions at this time.

• Q: What is the realistic scale, timing, and key milestones for digital infrastructure investments to be added to CWIN's growth plan? /

  A: Digital infrastructure is an additional upside opportunity beyond the core organic growth plan that already enables the company to hit 2030 targets. The first potential investment opportunity for CWIN would likely arrive around 2030, when the first complexes are completed. Once projects are fully commercialized (with clear revenue contracts and final permitting), they will be added to CWIN's identified opportunity list the same as core renewable projects, and can either substitute for core projects or add incremental growth if accretive capital is available.

• Q: For the recently restructured ERCOT PPA projects, is CAFTI accretive starting on day one, and do you plan to add non-recourse project-level debt to these projects? /

  A: The restructured transactions are accretive to EBITDA and CAFTI from the first month of operation. Pre-existing hedge breakage costs are financed through existing bank relationships in a structure that allows for an immediate CAFTI uplift while servicing the related obligation over time. Management has no current plans to add non-recourse debt to these specific wind projects, and is comfortable with the existing capital structure for the fleet.

• Q: How is Clearway managing FIOC compliance and Section 232 tariff risks related to its recent module supply agreement with T1RG? /

  A: Clearway proactively adapted its supply chain long before current FIOC rules were formalized, requiring suppliers to source components and structure intellectual property to limit exposure to U.S. policy restrictions on Chinese-controlled enterprises. All equipment for projects through 2027, and most through 2028, is already sourced and meets compliance requirements. For post-2028 supply, T1RG has taken steps to structure its U.S. domestic manufacturing to meet regulatory requirements, and Clearway has completed rigorous due diligence and is comfortable with T1RG's position.