Vistra Corp. Q2 FY2025 earnings call

• The business performed well with year-to-date results on track for a record in 2025. Trends in demand growth persisted, with examples like PJM in the Northeast having high load during the June heat wave.
• Reaffirmed 2025 adjusted EBITDA guidance of $5.5 billion to $6.1 billion and adjusted free cash flow before growth of $3 billion to $3.6 billion. Acquired 7 modern natural gas facilities from Lotus Infrastructure Partners, with a combined capacity of approximately 2,600 megawatts.
• 4 strategic priorities remain integral: integrated business model, comprehensive hedging, operational preparedness, and capital allocation. Achieved commercial availability in line with expectations, with a fleet commercial availability of approximately 95% during the June heat wave.
• Retail segment had solid performance with growth in ERCOT and large business markets. Capital allocation includes returning capital to shareholders, executing growth opportunities, and maintaining a strong balance sheet, having returned over $6.5 billion to investors since 2021.
• Executing on energy transition with solar and energy storage projects on schedule, and successful relicensing of Perry Nuclear Power Plant through 2046.

Vistra delivered $1.349 billion in adjusted EBITDA in the second quarter. The Generation segment contributed $593 million, representing approximately 44% of the total adjusted EBITDA. The retail segment contributed $756 million, making up approximately 56% of the total adjusted EBITDA. The Generation segment benefited from a comprehensive hedging program with average realized prices nearly $3 per megawatt hour higher than the same quarter last year. The retail segment had strong customer count and margin performance, with Texas business markets volumes 10% higher year-over-year with strong margins.

• Reaffirmed 2025 adjusted EBITDA guidance of $5.5 billion to $6.1 billion and adjusted free cash flow before growth of $3 billion to $3.6 billion.
• Increased the 2026 adjusted EBITDA midpoint opportunity, excluding Lotus assets, to at least $6.8 billion. Targeted a higher free cash flow conversion rate, increasing the targeted conversion rate of adjusted free cash flow before growth to adjusted EBITDA to at or above 60% starting in 2026.
• Expect to generate additional unallocated capital and have multiple options for deployment, with a detailed update planned on the third quarter results call.

• Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected or implied. Market and industry data included in the presentation have limitations, and non-GAAP financial measures have associated risks.

Q: Given the September 1 timeline, what's the expectation regarding the Comanche Peak deal?

A: We'll be done when we're done. Our deal will work pre or post 9/1 completion. We meet current rule requirements and feel confident we meet any new process requirements. Clarity is better, but we don't see it as a material driver of the deal outcome.

Q: Any comments on 2027 relative to 2026?

A: The curves are down a bit, but our fundamental view still holds that growth in energy consumption will outpace peak energy demand. We're a little more bullish than the current curves suggest, and we're not fully hedged in 2027, but our views on 2026, 2027, and 2028 still trend in the right direction.