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Clearway Energy, Inc. (CWEN)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered mixed results: revenue rose 7% YoY to $392M while Adjusted EBITDA fell to $343M and CAFD declined to $152M on lower wind resource and milder pricing in flexible generation .
  • Clearway missed Wall Street consensus: revenue $392M vs $428.3M*, EPS $0.28 vs $0.733*, and Adjusted EBITDA $343M vs $368.1M*; management cited lower renewable production and energy margin as key drivers .
  • Guidance tweaked: 2025 CAFD range raised at the bottom from $400–$440M to $405–$440M; Adjusted EBITDA range nudged to $1,200–$1,235M (from $1,195–$1,235M) .
  • Strategic catalysts: hyperscaler-backed Goat Mountain repowering, storage portfolio offer (291 MW), acquisition of 109 MW Catalina, dividend increased to $0.4456/share, and a $100M ATM program announced to fund growth .

What Went Well and What Went Wrong

What Went Well

  • Hyperscaler-backed growth blocks: Goat Mountain signed a 15-year PPA; Mt. Storm repowering on track with staged COD and strong economics, increasing 2027 CAFD/share target to $2.50–$2.70 . “Collectively, our growth pathways have put us in a position to increase our 2027 CAFD per share target range to $2.50 to $2.70…” .
  • Third-party M&A and execution: Closed 109 MW Catalina in July ($127M purchase; ~$122M net corporate capital), underpinning 2025 guidance and fleet synergies .
  • Financing discipline and liquidity: Forward starting interest rate hedges executed on $850M earliest bonds; ATM program established to opportunistically fund accretive growth .

What Went Wrong

  • Miss vs consensus and YoY EBITDA/CAFD compression: Revenue/EPS/EBITDA came in below Street; Adjusted EBITDA down YoY (343 vs 353) and CAFD down (152 vs 187) on lower wind resource and flexible generation margins, plus higher project-level debt service timing .
  • Flexible Generation availability and pricing headwinds: EAF fell to 95.0% (from 97.1% YoY); energy margin impacted by milder California weather and timing of maintenance .
  • Continued sensitivity to resource variability and debt service timing: Management highlighted seasonality and timing of distributions/maintenance capex affecting quarterly CAFD .

Financial Results

Sequential trend (last two quarters)

MetricQ1 2025Q2 2025
Revenue ($USD Millions)$298 $392
Diluted EPS ($)$0.03 $0.28
Adjusted EBITDA ($USD Millions)$252 $343
Cash from Operating Activities ($USD Millions)$95 $191
CAFD ($USD Millions)$77 $152

YoY comparison (Q2 2025 vs Q2 2024)

MetricQ2 2024Q2 2025
Revenue ($USD Millions)$366 $392
Diluted EPS ($)$0.43 $0.28
Adjusted EBITDA ($USD Millions)$353 $343
Cash from Operating Activities ($USD Millions)$196 $191
CAFD ($USD Millions)$187 $152

Actual vs S&P Global consensus (Q2 2025)

MetricConsensus (Q2 2025)Actual (Q2 2025)
Revenue ($USD Millions)$428.3*$392
Diluted EPS ($)$0.733*$0.28
Adjusted EBITDA ($USD Millions)$368.1*$343

Margins

MarginQ1 2025Q2 2025Q2 2024
Net Income Margin %(104/298) = (34.9%) (12/392) = 3.1% (4/366) = 1.1%
Adjusted EBITDA Margin %252/298 = 84.6% 343/392 = 87.5% 353/366 = 96.4%

Segment breakdown (Adjusted EBITDA)

Segment ($USD Millions)Q2 2024Q2 2025
Flexible Generation57 52
Renewables & Storage306 300
Corporate(10) (9)
Total Adjusted EBITDA353 343

KPIs (Operational)

KPIQ2 2024Q2 2025
Flexible Gen Equivalent Availability Factor97.1% 95.0%
Solar MWh (thousands)2,613 2,650
Wind MWh (thousands)2,947 2,941
Renewables & Storage MWh (thousands)5,560 5,591

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Income ($M)FY 2025(40)–0 (32)–8 Raised bottom end
Adjusted EBITDA ($M)FY 20251,195–1,235 1,200–1,235 Raised bottom end
Cash from Ops ($M)FY 2025844–884 860–900 Raised range
CAFD ($M)FY 2025400–440 405–440 Raised bottom end
Dividend per shareQ3 2025$0.4384 (Q2) $0.4456 Raised
2027 CAFD/share target2027$2.40–$2.60 (prior disclosed) $2.50–$2.70 Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 / Q1’25)Current Period (Q2’25)Trend
Hyperscaler/data center demandPipeline of ~5 GW front-of-meter & co-location concepts; Mt. Storm PPA with major tech company Goat Mountain PPA with hyperscaler; continued dialogues; 2027/2028 growth blocks Strengthening
Supply chain & tariffsCollaborative risk-sharing; domestic sourcing, battery supply adjustments Ability to absorb tariff impacts via PPA terms; FIAC compliance and safe harbor preserved Managed/Resilient
RA/pricing (CAISO)El Segundo RA contracted through 2027; supportive pricing RA ~75% contracted for 2027; marketing posture aligned with guidance Stable/Positive
Tax credits & safe harbor~13 GW safe-harbored across vintages; robust late-stage pipeline Pre-2025 commence construction preserved; additional 4 GW commenced; strategy secure Secure
Financing & hedgingFixed-rate profile; excess debt capacity; forward hedges planned $850M pre-hedged base rates; $100M ATM for accretive issuances De-risking
M&A & dropdownsTuolumne closed; Honeycomb phase 1 committed; dropdowns identified Catalina closed; 291 MW storage portfolio offered Active

Management Commentary

  • “We are updating our 2025 CAFD guidance range to $400–$440M…continuing to target the higher end of the range” (CFO) .
  • “We have increased our 2027 CAFD per share target range to $2.5 to $2.7 per share…today’s battery storage portfolio offer provides an additional building block” (CEO) .
  • “We have pre-hedged the $850,000,000 initial maturity…eliminating the volatility risk” (CFO, base rates fixed via forward hedges) .
  • “Goat Mountain…signed a 15-year PPA with a new hyperscaler customer…expected corporate capital investment of $200M at an incremental annual CAFD yield above 10%” (CEO) .

Q&A Highlights

  • Repowering cadence and tax credits: Projects advanced on schedule; commenced construction already secure; additional repowerables emerging later in decade .
  • RA market visibility: ~100% contracted in 2026 and ~75% in 2027; pricing normalized to meet mid-to-top of guidance range .
  • Equity needs and ATM: Modest, opportunistic issuance ($50–$100M over time) to reach top-end of 2027 range; ATM readied for accretive funding .
  • Battery supply chain/tariffs: 2026 projects remain on track via cost-sharing and sourcing; FIAC compliance and policy-aware planning mitigate risk .
  • Interest-rate risk: $850M earliest maturity pre-hedged; intent to fix base rate for refinancing .

Estimates Context

  • Q2 2025 actuals vs consensus: revenue $392M vs $428.3M*, EPS $0.28 vs $0.733*, Adjusted EBITDA $343M vs $368.1M* .
  • Near-term consensus trajectory: Q3 2025 revenue $419.7M*, EBITDA $349.4M*, EPS $0.69*; Q4 2025 revenue $310.0M*, EBITDA $260.1M*, EPS $(0.046)*. Variability underscores resource seasonality and timing of debt service/non-controlling distributions .
  • Implications: Street likely revises EBITDA/CAFD expectations marginally lower for 2H25 given Q2 shortfall; however, storage offers, Catalina contribution, and execution in Q3 (seasonally strong) provide offset .

Note: Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Near-term: Q2 miss driven by resource/margin timing; watch Q3 execution (seasonally strongest) and RA contracting progress to validate higher-end guidance .
  • Medium-term: Updated 2025 CAFD and raised 2027 CAFD/share target signal confidence in growth blocks (Goat Mountain, Mt. Storm, storage portfolio, M&A) .
  • Funding plan: Balance of retained CAFD, excess debt capacity, and modest ATM issuance to fund accretive projects; interest-rate risk hedged .
  • Strategic edge: Hyperscaler partnerships and policy-aware supply chain/contracting provide resilience amid tariff/permits/credit shifts .
  • Dividend growth: Increased to $0.4456/share (Q3), supported by contracted portfolio; monitor payout ratio trajectory vs self-funding goals .
  • Segment focus: Flexible Generation margin volatility persists; continued RA recontracting and cost management key to stabilize CAFD .
  • Watch list: COD milestones for 2025/2026 dropdowns, final approvals for storage portfolio partnership, and repowering decisions/returns .
Sources: Company Q2 2025 press release and 8-K, consolidated financial statements, and earnings call transcript **[1567683_6d747e08ffb249fea556c2d4eb4b2dc5_1]** **[1567683_6d747e08ffb249fea556c2d4eb4b2dc5_2]** **[1567683_6d747e08ffb249fea556c2d4eb4b2dc5_4]** **[1567683_6d747e08ffb249fea556c2d4eb4b2dc5_5]** **[1567683_6d747e08ffb249fea556c2d4eb4b2dc5_6]** **[1567683_6d747e08ffb249fea556c2d4eb4b2dc5_10]** **[1567683_6d747e08ffb249fea556c2d4eb4b2dc5_14]** **[1567683_6d747e08ffb249fea556c2d4eb4b2dc5_15]** **[1567683_0001567683-25-000023_exhibit991-clearwayenergyi.htm:0]** **[1567683_0001567683-25-000023_exhibit991-clearwayenergyi.htm:1]** **[1567683_0001567683-25-000013_exhibit991-clearwayenergyi.htm:0]** **[1567683_0001567683-25-000013_exhibit991-clearwayenergyi.htm:1]** **[1567683_0001567683-25-000013_exhibit991-clearwayenergyi.htm:6]** **[1567683_1975321_3]** **[1567683_13d0fddb5fa242ac88cadeeb8c9a633f_4]**. S&P Global consensus and estimate data as marked*.