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CE

Clearway Energy, Inc. (CWEN)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024: Adjusted EBITDA $228M, CAFD $40M; full-year 2024 CAFD $425M exceeded guidance, supported by diversified fleet performance and growth investments .
  • Reaffirmed 2025 CAFD guidance range of $400–$440M; management aims to meet the midpoint or better and ultimately top half of the 2027 CAFD/share target range of $2.40–$2.60 .
  • Strategic contracting and growth: 272 MW RA contracts at El Segundo (100% capacity contracted through 2027), Wildorado PPA extended to March 2030; signed binding agreement to acquire 137 MW Tuolumne Wind; committed ~$78M to Honeycomb BESS Phase 1 .
  • Dividend increased 1.7% to $0.4312 per share for Q1 2025 (from $0.4240 in Q4 2024), reinforcing DPS growth commitment .

What Went Well and What Went Wrong

  • What Went Well

    • Exceeded 2024 objectives; “met our dividend per share growth commitment, while delivering full year CAFD ahead of our guidance” .
    • Accretive growth and fleet optimization: Tuolumne (~12% five‑year average CAFD yield) and Honeycomb BESS commitment; added ~492 MW of Western US storage to identified dropdown pipeline .
    • Contracting visibility improved: “two new RA contracts at El Segundo… fully contracted in 2026 and 78% contracted through 2027”; Wildorado PPA extension supports upper half of 2027 CAFD/share target .

  • What Went Wrong

    • Q4 CAFD declined YoY ($40M vs $53M) primarily due to timing of PTC sales and vendor payments; Q4 cash from operations also down ($192M vs $206M) .
    • Flexible Generation availability lower vs Q4 2023 (91.5% vs 98.0%) due to outages at certain facilities .
    • Total liquidity decreased to $1,330M at year-end 2024 (vs $1,505M prior year) reflecting deployment into growth investments .

Financial Results

  • Quarterly headline metrics
MetricQ2 2024Q3 2024Q4 2024
Net Income ($USD Millions)$4 $27 $(48)
Adjusted EBITDA ($USD Millions)$353 $354 $228
Cash from Operating Activities ($USD Millions)$196 $301 $192
CAFD ($USD Millions)$187 $146 $40
  • Year-over-year Q4 comparison
MetricQ4 2023Q4 2024
Net Income (Loss) ($USD Millions)$(73) $(48)
Adjusted EBITDA ($USD Millions)$201 $228
Cash from Operating Activities ($USD Millions)$206 $192
CAFD ($USD Millions)$53 $40
  • Segment breakdown (Adjusted EBITDA)
Segment ($USD Millions)Q4 2023Q4 2024
Flexible Generation$65 $58
Renewables$142 $178
Corporate$(6) $(8)
Total$201 $228
  • KPIs
KPIQ4 2023Q4 2024
Flexible Generation Equivalent Availability Factor (%)98.0% 91.5%
Solar MWh generated/sold (000s)1,193 1,659
Wind MWh generated/sold (000s)2,152 2,473
Renewables MWh generated/sold (000s)3,345 4,132
  • Full-year context
MetricFY 2023FY 2024
Total Operating Revenues ($USD Millions)$1,314 $1,371
Net Income (Loss) ($USD Millions)$(14) $(63)
Adjusted EBITDA ($USD Millions)$1,058 $1,146
Cash from Operating Activities ($USD Millions)$702 $770
CAFD ($USD Millions)$342 $425
EPS ($)$0.67 $0.75

Notes: Q4 quarterly revenue and EPS were not disclosed in the company’s Q4 materials; the company emphasizes Adjusted EBITDA and CAFD for quarterly performance .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
CAFD ($USD Millions)FY 2025$400–$440M (initiated) $400–$440M (reaffirmed) Maintained
Dividend per Share (Quarterly)Q4 2024 → Q1 2025$0.4240 (Q4’24) $0.4312 (Q1’25) Raised (1.7%)
CAFD/Share Target ($)2027$2.40–$2.60 (target) Target unchanged; management aiming for top half Maintained; confidence ↑
El Segundo RA ContractingAug 2026–Dec 2029Prior periods not fully disclosed272 MW contracted; 100% capacity through 2027; pricing aligned to 2027 CAFD/share plan Visibility ↑
Wildorado PPAThrough 2030Expired Apr 2027 (prior) Extended to Mar 2030 (pricing supports upper half of 2027 target) Extended

Earnings Call Themes & Trends

TopicQ2 2024 (Prior-2)Q3 2024 (Prior-1)Q4 2024 (Current)Trend
Flexible Generation/RANew RA at Marsh Landing; ~195 MW; improves 2027 project CAFD Expiration impact (El Segundo) cited; reaffirmed guidance 272 MW RA at El Segundo; fully contracted in 2026, ~100% through 2027; pricing supports 2027 plan Strengthening contracting and pricing
Growth InvestmentsCommitted to Luna Valley & Daggett 1; pipeline offers (Pine Forest) Offer for Honeycomb; initiate 2025 guidance Tuolumne acquisition; Honeycomb Phase 1 commitment; Mt. Storm repowering option Executing accretive investments
Data Centers/AI demandNot highlightedNot highlighted5 GW front-of-meter pipeline; behind-the-meter demo at Elbow Creek; multi-tech complexes across 5 states Emerging secular growth theme
Tariffs/Supply ChainNot highlightedNot highlightedProactive planning; projects proceeding amid duty changes; pricing can absorb tariff impacts Managed risk; constructive pricing
Regulatory/PermittingNot highlightedNot highlightedExecutive order context; limited exposure; most pipeline on private lands; repowerings executable with certainty Diligent mitigation; low exposure

Management Commentary

  • “We met our dividend per share growth commitment, while delivering full year CAFD ahead of our guidance… set us up for a bright future… aim to deliver sustainable earnings growth through the balance of this decade.” — Craig Cornelius (CEO) .
  • “Signed a binding agreement to acquire Tuolumne… expected to generate an approximately twelve percent five year average annual CAFD yield.” — Craig Cornelius .
  • “Committed to Phase one of the Honeycomb Battery Hybridization Program… approximately $78M corporate capital at an attractive CAFD yield.” — Craig Cornelius .
  • “California flexible generation fleet… fully contracted in 2026 and 78% contracted through 2027 at price levels supportive of meeting the midpoint or better of our 2027 CAFD per share target range.” — Craig Cornelius .
  • “Full year adjusted EBITDA of $1,146M and CAFD of $425M… 98% of consolidated long-term debt with a fixed interest cost.” — Sarah Rubenstein (CFO) .
  • “Active development engagements on five gigawatts of projects to serve data center demand… first behind-the-meter demonstration at Elbow Creek Wind.” — Craig Cornelius .

Q&A Highlights

  • Capital structure and debt capacity: Management now sees $300–$400M excess corporate debt capacity driven by improved long-run CAFD outlook and recontracting, without incremental equity to meet 2027 midpoint; 98% fixed-rate long-term debt supports resilience .
  • Tariffs and supply chain: Clearway planned for duty changes; projects proceed on schedule with tariffs absorbed via revenue pricing; strong sponsor and supplier relationships mitigate policy risk .
  • RA pricing/El Segundo: Latest RA contracts priced consistent with assumptions to achieve midpoint or better of 2027 CAFD/share range .
  • M&A posture: Focus on right-sized, complementary assets across wind/solar/storage/gas; optimization and repowering capabilities drive value; sponsors (GIP/BlackRock, TotalEnergies) enable larger opportunities if needed .
  • Mt. Storm timing: Majority of CAFD impact starts in 2028; 2027 target confidence increasingly oriented to top half ($2.5–$2.6/share) via multiple pathways .

Estimates Context

  • Wall Street consensus via S&P Global (EPS, revenue, EBITDA, FCF) for Q4 2024 could not be retrieved at this time due to SPGI request limit; estimates comparison is therefore unavailable. We will update comparisons vs consensus when accessible.
  • Management’s reaffirmed 2025 CAFD guidance ($400–$440M) and contracting progress suggest estimate stability near the midpoint absent unforeseen resource/availability variances .

Key Takeaways for Investors

  • Near-term: Q4 demonstrated resilient EBITDA and contracting momentum, but CAFD was seasonally and timing-affected; watch for Tuolumne closing and Honeycomb milestones as catalysts to 2025 midpoint .
  • Dividends: Incremental DPS increase to $0.4312 supports upper-range 5–8% long-term CAFD/share growth framework; payout ratio trending toward 70% over time enhances retained CAFD .
  • 2027 trajectory: Multiple pathways (RA contracting, PPA extensions, repowerings, targeted M&A, dropdowns) bolster confidence in achieving the top half of $2.40–$2.60 CAFD/share target; no external equity needed to reach midpoint .
  • Risk management: Tariffs and permitting risks appear well-mitigated; fixed-rate debt profile and diversified fleet reduce financing/operational volatility .
  • Secular growth: Data center-driven load and co-location concepts provide optionality for accretive deployments in late-decade; not yet in 2027 numbers but supports medium-term optionality .
  • Monitoring points: Flexible Generation availability recovery vs Q4 2023, execution on RA pricing, timing of PTC sales, and vendor payments can swing quarterly CAFD .
  • Stock narrative catalysts: Continued contracting wins (RA/PPA), execution on accretive acquisitions/repowerings, and visibility into data center projects are likely to drive sentiment near-term.

Supporting detail:

  • Q4 Results press release and 8‑K furnish quarterly and segment metrics and liquidity .
  • Dividend increase PR confirms DPS action .
  • Q3 and Q2 PRs provide trend analysis for EBITDA, CAFD, RA contracting, and pipeline .
  • Earnings call transcript provides qualitative context, strategy, guidance tone, and Q&A clarifications .