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Clearway Energy, Inc. (CWEN)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered stronger non-GAAP cash metrics with Adjusted EBITDA of $252M and CAFD of $77M, driven by growth investments and improved fleet availability; 2025 CAFD guidance of $400–$440M was reaffirmed .
  • Revenue of $298M missed S&P Global consensus by ~$8M, while GAAP EPS of $0.03 beat consensus, reflecting noncontrolling interest impacts and higher interest expense on swaps; dividend raised 1.7% to $0.4384 per share for Q2 2025 .
  • Strategic execution advanced across repowerings (Mt. Storm Microsoft PPA signed; Goat Mountain awarded PPA; San Juan Mesa PPA extension), third‑party M&A (binding agreement for ~100 MW CA solar), and completion of Tuolumne Wind acquisition .
  • Management flagged confidence to reach the top half or better of the 2025 guidance and top end of 2027 CAFD/share targets via redundant growth pathways and interest-rate hedging on 2028 corporate bonds .
  • Near‑term trading catalysts: dividend increase, reaffirmed guidance, Microsoft PPA visibility, and project/M&A milestones; watch for tariff dynamics on batteries and closing timelines on the CA solar acquisition .

What Went Well and What Went Wrong

What Went Well

  • Broad operational outperformance: flexible generation availability rose to 89.3%, solar MWh to 1,738K, wind MWh to 2,743K, lifting Renewables & Storage generation 13% YoY .
  • Repowering pipeline progressed: Mt. Storm revenue contract signed with Microsoft; Goat Mountain awarded PPA for 2027 repower; San Juan Mesa PPA extension as bridge to 2027 repower .
  • Growth execution: closed 137 MW Tuolumne Wind (expected $9M annual CAFD from 2026) and signed binding agreement to acquire ~100 MW CA solar (expected corporate capital $120–$125M) .

Quote: “We have line of sight to achieving the top half of [the 2025] range or even better through contributions from newly committed investments.” — Craig Cornelius, CEO .

What Went Wrong

  • Consolidated net loss widened to $(104)M vs $(46)M YoY due to higher interest expense related to interest rate swaps; operating revenues of $298M grew vs $263M YoY but matched operating costs (zero operating income) .
  • Revenue missed S&P consensus for Q1 2025 by ~$8M; QoQ revenue lower than Q3 2024 seasonally and vs Q4 2024* .
  • Analyst concerns centered on battery supply chain tariffs (potential ~30% CapEx impact) and cost-sharing, with management detailing mitigation via PPAs, sourcing shifts, and hedges .

Financial Results

Core Financials vs Prior Periods and Estimates

MetricQ3 2024Q4 2024Q1 2025
Total Operating Revenues ($USD Millions)$486 $256*$298
GAAP EPS ($USD)$0.31 $0.50*$0.03
Adjusted EBITDA ($USD Millions)$354 $228 $252
CAFD ($USD Millions)$146 $40 $77
Revenue Consensus Mean ($USD Millions)$413.47*$299.73*$306.03*
Primary EPS Consensus Mean ($USD)$0.5803*$(0.0903)*$(0.1665)*

Notes: Values marked with * retrieved from S&P Global.

Q1 2025 vs Estimates: Revenue $298 vs $306.03* (miss), GAAP EPS $0.03 vs $(0.1665)* (beat) . Values marked with * retrieved from S&P Global.

Segment Breakdown (Q1 2025 vs Q1 2024)

Segment Metric ($USD Millions)Q1 2024Q1 2025
Net Income/(Loss) – Flexible Generation16 2
Net Income/(Loss) – Renewables & Storage(44) (70)
Net Income/(Loss) – Corporate(18) (36)
Consolidated Net Income/(Loss)(46) (104)
Adjusted EBITDA – Flexible Generation51 44
Adjusted EBITDA – Renewables & Storage169 219
Adjusted EBITDA – Corporate(9) (11)
Total Adjusted EBITDA211 252
Cash from Operating Activities81 95
CAFD52 77

Operating KPIs (Q1 2025 vs Q1 2024)

KPIQ1 2024Q1 2025
Flexible Generation Equivalent Availability Factor86.3% 89.3%
Solar MWh generated/sold (thousands)1,443 1,738
Wind MWh generated/sold (thousands)2,519 2,743
Renewables & Storage MWh generated/sold (thousands)3,962 4,481

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CAFD ($USD Millions)FY 2025$400–$440 $400–$440 Maintained
Adjusted EBITDA ($USD Millions)FY 2025$1,195–$1,235 $1,195–$1,235 Maintained
Dividend per shareQ1 2025 → Q2 2025$0.4312 (declared Feb 17, 2025) $0.4384 (declared Apr 29, 2025) Raised
2027 CAFD per share target2027$2.40–$2.60 (initiated Q3’24) Top end “or better” pathway reinforced (qualitative) Confidence increased
El Segundo RA contracting2026–2029N/A~272 MW contracted Aug 2026–Dec 2029 New disclosure

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024 and Q4 2024)Current Period (Q1 2025)Trend
Battery storage & tariffsHoneycomb Phase 1 offered (320 MW, 2026 COD); tariff risk acknowledged Management details tariff impact (~30% CapEx) and mitigation via PPAs, sourcing, hedges; pipeline includes 199 MW Spindle storage Strengthening execution; managed risk
RepoweringsInitiated Mt. Storm repower offer (335 MW wind) Microsoft PPA signed at Mt. Storm; Goat Mountain awarded PPA; San Juan Mesa PPA extension Accelerating
Third‑party M&ABinding agreement to acquire Tuolumne Wind (137 MW) Tuolumne closed; binding agreement for ~100 MW CA solar (~10–11% 10‑yr CAFD yield) Active & accretive
Interest‑rate hedgingNot detailed in Q3 docsForward‑starting swaps executed to hedge 2028 bond base rates Risk mitigation improved
CA flexible generation marginsQ3: El Segundo toll expiry headwind CFO sees supportive forward energy gross margins and hedges; low $1–$1.5 levels CAFD contribution Constructive outlook
Tax credit monetization2024 exceeded CAFD guidance; traditional structures Primarily via tax equity partnerships; limited transferability at end‑of‑PTC Stable

Management Commentary

  • “We…executed on initiatives that will enable future long‑term growth…in fleet enhancements, sponsor‑enabled dropdown investments and asset‑centered M&A…positioned the platform to potentially achieve the high end or better of our 2027 CAFD per share growth targets.” — CEO .
  • “We are pleased to report first quarter Adjusted EBITDA of $252M and CAFD of $77M…capacity factors…improved…We reiterate our 2025 CAFD guidance range of $400–$440M with a target to achieve the higher end.” — CFO .
  • “We…executed forward‑starting hedges for the majority of the principal amount of our $850M corporate bonds with the earliest maturity [2028]…mitigate…interest rate volatility.” — CFO .

Q&A Highlights

  • Battery tariffs and supply chain: Tariff impact on batteries (~30% CapEx) is being managed via contract structures, supplier collaboration, and sourcing diversification; no slowdown planned for post‑2026 storage execution .
  • Guidance cadence: Reaffirmed 2025 guidance; potential updates later in the year as acquisitions close and resource/outage trends crystallize .
  • Repowering yields: Capital allocation targets ≥10% CAFD yields; projects like Mt. Storm and Seadrill Hill cited as exemplars .
  • Equity needs and long‑term targets: Modest ATM issuance contemplated (~1% of float over three years) to hit top end of 2027 CAFD/share while maintaining leverage targets; long‑term guidance typically updated in Q3 .
  • CA energy margins: Supportive forward market and hedges underpin tens of millions of CAFD contributions from the fleet .
  • IRA/regulatory backdrop: Management expects resilience amid potential IRA changes; repower projects have required permits in hand .
  • Tax credits: Monetized via traditional tax equity partnerships; limited transferability late in PTC partnerships .

Estimates Context

  • Q1 2025: Revenue $298 vs $306.03* (miss); GAAP EPS $0.03 vs $(0.1665)* (beat) . Values marked with * retrieved from S&P Global.
  • Q4 2024: Revenue $256* vs $299.73* (miss); EPS $0.50* vs $(0.0903)* (beat). Values marked with * retrieved from S&P Global.
  • Q3 2024: Revenue $486 vs $413.47* (beat); EPS $0.31 vs $0.5803* (miss due to mix/noncontrolling impacts and derivative MtM). Values marked with * retrieved from S&P Global .

Consensus detail (S&P Global): Revenue estimates and Primary EPS consensus means with estimate count are provided in the table above. Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Reaffirmed 2025 CAFD guidance ($400–$440M) with improving confidence toward the upper half; dividend raised to $0.4384 in Q2 2025 — supportive for income‑focused holders .
  • Strong YoY cash generation: Adjusted EBITDA and CAFD stepped up on growth investments and fleet availability; Renewables & Storage EBITDA +50 vs Q1 2024 .
  • Execution de‑riskers: Microsoft PPA at Mt. Storm, awarded PPA at Goat Mountain, and San Juan Mesa extension provide visibility on repower economics and future CAFD .
  • Capital allocation: Interest‑rate swaps hedge base rates ahead of 2028 refinancing; modest ATM anticipated to fund accretive growth while keeping leverage in 4–4.5x target band .
  • Watch list: Timing of close on ~100 MW CA solar, resource adequacy pricing/margins in CAISO, and battery tariff pass‑through/contracts — potential catalysts for estimate revisions .
  • Narrative supports top end of 2027 CAFD/share target ($2.40–$2.60) through redundant pathways (dropdowns, repowerings, M&A, RA contracting), with optionality from safe‑harbored pipeline .
  • Trading implication: Near‑term support from dividend hike and guidance reaffirmation; any confirmation of CA solar close or additional PPAs/repowers could drive positive sentiment.
All non‑GAAP definitions and reconciliations provided in the 8‑K exhibits. Liquidity totaled $1,325M at 3/31/2025. Seasonality skews revenue/CAFD to Q2–Q3 **[1567683_0001567683-25-000013_exhibit991-clearwayenergyi.htm:1]** **[1567683_0001567683-25-000013_exhibit991-clearwayenergyi.htm:2]**.

Sources: Q1 2025 8‑K press release and exhibits ; Q1 2025 earnings call transcript ; Microsoft PPA press release ; Prior quarter results: Q4 2024 8‑K ; Q3 2024 8‑K . Values marked with * retrieved from S&P Global.