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CE

Clearway Energy, Inc. (CWEN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered solid operating results: revenue $429.0M, net income $60M, Adjusted EBITDA $385M, Cash from Operating Activities $225M, and CAFD $166M; revenue rose sequentially vs Q2, while EBITDA and CAFD benefited from growth investments and higher wind resource .
  • Clearway narrowed FY2025 CAFD guidance to $420–$440M (raised bottom-end) and introduced FY2026 CAFD guidance at $470–$510M; dividend increased to $0.4528 per share .
  • Versus S&P Global consensus, revenue modestly beat, and EPS was a significant beat; company’s Adjusted EBITDA materially exceeded consensus EBITDA basis due to growth investments and resource tailwinds (see tables; values marked with asterisks are from S&P Global).
  • Management highlighted visibility to the top end or better of 2027 CAFD/share, established a 2030 CAFD/share target of $2.90–$3.10, and outlined multiple growth pathways (repowerings, sponsor dropdowns, third‑party M&A), positioning the stock with catalysts around execution and funding discipline .

What Went Well and What Went Wrong

What Went Well

  • “Our team operated our fleet with excellence, allowing us to reiterate and narrow our 2025 guidance range… our investment opportunity set for 2026 and 2027 has expanded to now include over 2 GW of identified investment opportunities” — Craig Cornelius, CEO .
  • Adjusted EBITDA up YoY to $385M on contributions from growth investments and higher wind resource at certain facilities; CAFD up YoY to $166M .
  • Opportunistic $50M equity raised via issuance programs; robust capital allocation framework supports guidance and long-term targets .

What Went Wrong

  • Revenue declined YoY to $429.0M from $486.0M, reflecting YoY variability and mix; operating income fell YoY (Q3 2025 $112M vs Q3 2024 $178M) .
  • Liquidity declined to $834M from $1,330M at year-end, driven by execution of growth investments and revolver borrowings; revolver outstanding was $405M at quarter-end (reduced to $215M by Oct 31) .
  • Flexible Generation Adjusted EBITDA declined YoY ($60M vs $66M), and Cash from Operating Activities fell YoY ($225M vs $301M), reflecting timing/resource factors despite growth contributions .

Financial Results

Actuals vs Prior Year and Prior Quarter

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$486.0 $392.0 $429.0
Operating Income ($USD Millions)$178.0 $85.0 $112.0
Net Income ($USD Millions)$27.0 $12.0 $60.0
Adjusted EBITDA ($USD Millions)$354.0 $343.0 $385.0
Cash from Operations ($USD Millions)$301.0 $191.0 $225.0
CAFD ($USD Millions)$146.0 $152.0 $166.0
EPS (Basic & Diluted, $ per share)$0.31 $0.28 $2.00

Notes:

  • Operating margin = Operating Income / Revenue: Q3 2024 ~36.6%, Q2 2025 ~21.7%, Q3 2025 ~26.1% (inputs cited above).
  • CAFD defined per company’s non‑GAAP framework (see reconciliation and definition) .

Actual vs S&P Global Wall Street Consensus (Q3 2025)

MetricConsensusActual
Revenue ($USD)$419.7M*$429.0M
Primary EPS ($USD)$0.69*$2.00
EBITDA ($USD)$349.4M*$385.0M (Adj. EBITDA)

Values marked with asterisks were retrieved from S&P Global. Consensus bases may differ from company’s non-GAAP presentation of Adjusted EBITDA.

Segment Performance

SegmentNet Income ($M) Q3 2024Net Income ($M) Q3 2025Adjusted EBITDA ($M) Q3 2024Adjusted EBITDA ($M) Q3 2025
Flexible Generation25 39 66 60
Renewables & Storage66 31 295 334
Corporate(64) (10) (7) (9)
Total27 60 354 385

KPIs and Operating Metrics

KPIQ3 2024Q3 2025
Flexible Generation Equivalent Availability Factor87.5% 92.5%
Solar MWh generated/sold (000s)2,943 2,930
Wind MWh generated/sold (000s)2,012 2,221
Renewables & Storage generated/sold (000s)4,955 5,151
Total Liquidity ($USD Millions)—$834 (9/30/25)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CAFD ($USD Millions)FY 2025$405–$440 $420–$440 Raised bottom-end; narrowed range
CAFD ($USD Millions)FY 2026—$470–$510 New guidance
Quarterly Dividend ($/sh)Q3 → Q4 2025$0.4456 (Q3 declared) $0.4528 (declared Nov 3) Raised

Company’s detailed 2025/2026 Adjusted EBITDA and CAFD guidance bridge provided in appendix .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Hyperscaler/data center energy complexesAwarded PPAs at Mt. Storm & Goat Mountain; strategy to support digital infrastructure demand Developing multi‑technology complexes (1–5 GW) across five states; 1.8 GW PPAs executed/awarded; flexible gas paired with renewables under consideration Expanding pipeline; clearer visibility to complex builds post‑2028
Repowerings (wind)Mt. Storm repower agreements; San Juan Mesa bridge PPA; Goat Mountain targeted 2027 Repowering program to >1 GW by 2029; PPA advanced for San Juan Mesa; CAFD yields 10–12% targeted; 2027 investments drive 2028 CAFD uplift Accelerating; strong economics
Sponsor dropdowns2025/2026 COD program >1.6 GW; storage offer 291 MW 2026 dropdowns on track; Roseland/Royal Slope solar+storage identified; additional WEC battery opportunities Pipeline maturing; accretive returns
Third‑party M&ATuolumne wind closed; CA solar signed Binding agreement to acquire 613 MWac Deriva portfolio; ~12% 5‑yr CAFD yield; ~$27M annual CAFD (2027–2031) Active; accretive; leverages CAISO/PJM
Capital allocation & payout ratioReaffirm 2025 guidance; funding via retained cash, debt, modest equity Target long‑term payout <70%; disciplined equity via ATM/DRIP; corporate debt/EBITDA 4–4.5x Increasing retained cash funding
Flexible generation (CAISO RA)Performance aligned with sensitivities Durable value; cautious optimization, positive view vs cost of four‑hour storage and long‑duration alternatives Supportive macro tailwinds

Management Commentary

  • “We have line of sight to delivering our increased CAFD per share target of $2.70 or better [by 2027]… we are establishing a 2030 financial target, setting a CAFD per share goal of $2.90–$3.10 per share” — Craig Cornelius, CEO .
  • “We executed $50 million of opportunistic discrete equity issuances… and are narrowing our 2025 CAFD guidance to $420–$440 million; establishing 2026 CAFD guidance at $470–$510 million” — Sarah Rubenstein, CFO .
  • On repowerings: “PPA tenors… are quite attractive… most CAFD uplift from those assets [will be] reflected in our 2028 financial year” — CEO .
  • On M&A: “Three transactions consummated at cap yields above 12%… [Deriva] leverages our core strengths… positions us to enhance value in the 2030s through battery hybridizations” — CEO .

Q&A Highlights

  • Flexible gas + renewables for hyperscaler clusters: Management is developing complementary contracted gas resources where utilities/regulators/customers need load-following; projects may be owned by utilities or Clearway enterprise; risk‑adjusted returns at least as good as dropdowns .
  • Repowering economics and timing: CAFD yields 10–12% cited; majority of investments in 2027 with CAFD uplift primarily in 2028; San Juan Mesa PPA advanced .
  • PPA renewals/recontracting: Early renewals/extension opportunities exist (e.g., Wildorado extension); focus on maintaining/enhancing cash flow; some hedge-to-PPA optimizations (e.g., Mount Storm) .
  • M&A and funding: Accretive deals (spreads ~500 bps vs WACC); funding within means via retained cash/debt/modest equity; aim to lower payout ratio to enhance self‑funding .
  • Asset dispositions: Not core to funding plan; will be selective based on NPV, cap yield, and terminal value vs market buyers .

Estimates Context

  • Revenue modestly beat consensus: $429.0M actual vs $419.7M estimate*; driven by growth investments and higher wind resource at certain facilities .
  • EPS was a significant beat: $2.00 reported vs $0.69 consensus*; aided by lower tax expense and consolidated loss at noncontrolling interests improving net income attributable to CWEN .
  • Adjusted EBITDA exceeded consensus EBITDA basis: company $385.0M vs $349.4M estimate*; management cited contributions from dropdowns/M&A and supportive wind resource .

Values marked with asterisks were retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term execution: Narrowed FY2025 CAFD and introduced FY2026 CAFD guidance with drivers spanning repowerings, dropdowns, and Deriva portfolio integration; monitor 2026 COD milestones .
  • 2027–2030 trajectory: Clear visibility to the top end or better of 2027 CAFD/share and a 2030 target of $2.90–$3.10, supported by >2 GW identified opportunities and >6.5 GW late-stage development for 2028–2029 .
  • Funding discipline: Payout ratio trending <70% by 2030 and balanced use of retained cash/debt/modest equity reduce equity dependence; opportunistic ATM usage evidenced in 2025 .
  • Strategic M&A: Deriva acquisition (~613 MWac) is immediately accretive with ~12% 5‑yr CAFD yield; deepens CAISO/PJM presence and opens hybridization optionality .
  • Flexible generation value: CAISO RA markets and storage cost dynamics support durable cash generation; patience in recontracting could yield upside .
  • Operational KPIs: Improved Flexible Generation availability; higher renewables generation YoY underpins CAFD resilience amid quarterly variability .
  • Trading lens: Near-term stock reaction likely keyed to guidance tightening and outsized EPS/EBITDA beats vs consensus; incremental catalysts include deal closings, repowering PPAs, and dropdown offer timing .

Sourcing and Citations:

  • Q3 2025 8-K and Exhibit 99.1 press release: financials, guidance, segment/KPI details .
  • Q3 2025 earnings call transcript: strategy, targets, Q&A themes and duplicates –, –.
  • Q2 2025 8-K for prior quarter comps and prior guidance .
  • Q1 2025 8-K for trend context .
  • Deriva portfolio acquisition press release .

Values marked with asterisks were retrieved from S&P Global.