Vistra Corp. Q3 FY2025 earnings call

• Strategic priorities remain integral to success, including an integrated business model and comprehensive hedging program.
• Announced a landmark power purchase agreement at Comanche Peak, plan to develop 2 gas-fired units in West Texas, and closed acquisition of ~2.6 gigawatts of natural gas-fired assets from Lotus Infrastructure Partners.
• Generation segment had ~93% commercial availability for coal and gas fleet, nuclear had ~95% capacity factor. Retail side saw strong customer count growth.
• Balance sheet prioritizes liquidity and low leverage, aiming for investment-grade credit ratings.
• Oak Hill solar project reached commercial operations, Pulaski and Newton sites on track for year-end 2026. Evaluating nuclear uprates with potential to increase capacity by ~10% starting early 2030s.

Vistra delivered $1.581 billion in adjusted EBITDA in the third quarter. The Generation segment contributed $1.544 billion, which is approximately 97.6% of the total adjusted EBITDA, and the Retail segment contributed $37 million, which is approximately 2.4% of the total adjusted EBITDA.

• Narrowed 2025 adjusted EBITDA guidance to $5.7 billion to $5.9 billion and adjusted free cash flow before growth to $3.3 billion to $3.5 billion.
• Introduced 2026 adjusted EBITDA guidance of $6.8 billion to $7.6 billion and adjusted free cash flow before growth of $3.925 billion to $4.725 billion, including benefits from Lotus acquisition. Excluding Lotus, midpoint of 2026 adjusted EBITDA guidance is above previous midpoint.
• 2027 adjusted EBITDA midpoint opportunity range of $7.4 billion to $7.8 billion.
• Comanche Peak 20-year power purchase agreement ensures nuclear plant operations through mid-century.

• Forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from projections.
• Market volatility and execution risks associated with growth initiatives and long-term power purchase agreements.

Q: Focusing on '27 opportunities, what's embedded in the range and opportunities to improve?

A: Jim Burke said there are levers to pull, including hedging and contracting, and the range is wide as there are uncertainties but upside potential.

Q: On contracting discussions for Eastern fleet like Beaver Valley and converging pricing between front and behind the meter?

A: James Burke said all options are on the table, with unique characteristics for each deal, and customers will likely look for grid connections.

Q: Quantifying adjusted free cash flow before growth per share growth?

A: Kris Moldovan and Jim Burke said it's difficult to put a growth rate due to many variables and uncertainties, but there are many opportunities.

Q: Views on hedging price levels for '27?

A: James Burke said they will provide disclosure next quarter, and typically update hedge disclosures quarterly.

Q: Why not less hedging and thoughts on hedging large fleet?

A: James Burke said it's a reality of hedging a large fleet and retail customers' needs, and they are thoughtful in their hedging approach.

Q: Balancing M&A and investment-grade metrics with $4 billion cash available?

A: Kris Moldovan said they are upfront with rating agencies, have dry powder, and equity could be used as currency for the right opportunity.

Q: Update on data center contracting opportunities and directional on nuclear vs gas or PJM vs ERCOT?

A: James Burke said exact timing is hard to predict, but there are material deals in progress with heightened activity, and opportunities exist across different segments.