Executive Summary

Q1 2025 materially beat Wall Street consensus: revenue $117.8M vs $98.7M est., EBITDA $29.3M vs $5.2M est., and EPS $0.23 vs -$0.16 est., driven by higher energy pricing, increased dispatch volumes from colder weather, and new Q1 contracts . Estimates from S&P Global; see table for details.*
Revenue grew 6% YoY and 24% QoQ to $117.8M as electric sales rose to $85.9M (73% of mix), highlighting progress in the IPP transition .
Profitability inflected: net income $10.0M vs $(1.7)M YoY and $(215.8)M in Q4 (impairment-related), operating cash flow $38.4M (~2x YoY), and Adjusted EBITDA $19.3M (~3x YoY) .
Balance sheet strengthened further: bank debt cut to $23.0M (from $44.0M at 12/31/24 and $77.0M at 3/31/24) and liquidity rose to $69.0M (from $37.8M at 12/31/24) .
Potential stock catalysts: large estimate beats; advancing data center negotiation (exclusivity through early June, may continue on nonexclusive basis if not extended); strong forward pricing/capacity dynamics in MISO Zone 6 .

What Went Well and What Went Wrong

What Went Well
- Revenue and profit inflection: Total revenue up 6% YoY/24% QoQ to $117.8M; net income $10.0M; Adjusted EBITDA $19.3M (~3x YoY) as higher energy pricing and dispatch volumes plus new Q1 contracts boosted electric sales .
- Cash generation and deleveraging: Operating cash flow $38.4M (~2x YoY) enabled debt paydown to $23.0M and liquidity increase to $69.0M .
- Strategic momentum: CEO highlighted “meaningful progress” with a leading global data center developer and confidence in executing a strategic transaction; strong demand backdrop for reliable power and MISO capacity supports improved economics .
What Went Wrong
- Coal sales lower YoY given deliberate Sunrise Coal restructuring; coal revenue fell to $30.2M vs $49.6M YoY as the company prioritizes electric margins .
- Q4 comparison noise: Prior quarter’s $(215.8)M loss from non-cash Sunrise Coal impairment complicates sequential comparisons and underscores coal headwinds .
- Ongoing uncertainty around timing of data center deal: counterparty requested exclusivity extension; management may proceed non-exclusively if not extended, highlighting multi-party complexity and timing risk .

Financial Results

Overall P&L and Cash Flow (oldest → newest)

Metric	Q1 2024	Q4 2024	Q1 2025
Total Sales & Operating Revenue ($M)	$111.6	$94.8	$117.8
Net Income (Loss) ($M)	$(1.7)	$(215.8)	$10.0
Diluted EPS ($)	$(0.05)	N/A	$0.23
Operating Cash Flow ($M)	$16.4	$32.5	$38.4
Adjusted EBITDA ($M)	$6.8	$6.2	$19.3

Segment Revenue Mix (oldest → newest)

Segment ($M)	Q1 2024	Q4 2024	Q1 2025
Electric Sales	$60.7	$69.7	$85.9
Coal Sales (3rd party)	$49.6	$23.3	$30.2
Other Revenue	$1.3	$1.8	$1.7

Profitability Margins and Operating Profit (S&P Global calculations)*

Metric	Q3 2024	Q4 2024	Q1 2025
EBITDA ($M)	$18.67*	$24.54*	$29.32*
EBIT ($M)	$4.42*	$1.42*	$13.92*
EBITDA Margin %	17.75%*	26.04%*	24.89%*
EBIT Margin %	4.21%*	1.51%*	11.82%*
Net Income Margin %	1.48%*	-229.03%*	8.47%*

KPIs and Balance Sheet (point-in-time; oldest → newest)

Metric	Mar 31, 2024	Dec 31, 2024	Mar 31, 2025
Total Bank Debt ($M)	$77.0	$44.0	$23.0
Total Liquidity ($M)	$39.5	$37.8	$69.0
Capital Expenditures ($M)	$14.9 (Q1’24)	$13.8 (Q4’24)	$11.7 (Q1’25)
Forward Energy & Capacity Sales Position ($M)	$657.5	$685.7	$630.4

Notes:

Electric sales comprised 73% of revenue in Q1 2025, underscoring the pivot to IPP .
Adjusted EBITDA is a non-GAAP measure; see reconciliation and definition in the company’s release (principal adjustments include non-cash Hoosier PPA amortization and other items) .

Guidance Changes

No formal revenue/EPS/margin guidance was provided in Q1. Management offered the following disclosures and updates:

Metric	Period	Previous Guidance	Current Guidance/Disclosure	Change
CapEx	FY 2025	—	~$66M; ~~20% (~~$14.8M) tied to EPA ELG rule	New disclosure
Coal Production	FY 2025	—	~3.8M tons expected; 1.1M tons delivered in Q1	New disclosure
Planned Maintenance	Q2 2025	—	Unit outages with second unit back online by July 2	New disclosure
Forward Contracted Energy	2025	—	~3.0M MWh at avg $37.20/MWh	New disclosure
Forward Contracted Energy	2026	—	~3.4M MWh at avg $44.43/MWh	New disclosure

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024, Q4 2024)	Current Period (Q1 2025)	Trend
Data center transaction	Signed non-binding term sheet; in-front-of-the-meter with utility; expected pricing “above the curve”; majority of plant output contemplated	“Meaningful progress”; exclusivity through early June 2025; evaluating extension; other parties interested; structure unit-contingent for well over a decade	Advancing; timing risk remains
MISO capacity/pricing	MISO reducing accreditation for wind/solar; accredited capacity scarcity supports value; forward curves supportive	MISO summer accredited capacity >$600/MWd; seeing strong pricing indications for 2025+	Strengthening
Fuel flexibility (gas co-firing)	Requirement by 2032 mentioned; feasibility being evaluated; gas line near plant	Engaged contractor; feasible; considering pull-forward even if regulation rolled back; provides cost flexibility	Accelerating evaluation
Balance sheet	Prepaid PPAs used to delever; bank debt at $23.5M end Oct 2024	Bank debt $23.0M at 3/31/25; liquidity $69.0M	Further improved
Sunrise Coal restructuring	Headcount and cost optimization ongoing; lower production to support IPP focus; costs trending down to low $40s/ton by Q4	Coal sales expected lower; restructuring benefits continue; internal production ~3.8M tons in 2025 with third-party supplementation	Stable execution
M&A for dispatchable assets	Actively evaluating coal and gas assets; multiple geographies	Continues to explore acquisitions to enhance scale/diversification	Ongoing

Management Commentary

Strategic shift: “We…returned to top line growth and saw material improvements…underscoring the strength of our strategic shift to a vertically integrated independent power producer” .
Data center negotiations: “We are making meaningful progress…Our partner has demonstrated their commitment through significant investments…exclusivity…runs through early June 2025…we remain confident that we will execute a strategic transaction that delivers long-term value” .
Market backdrop: “Rising demand for reliable power…retirement of dispatchable generation…positions us well for sustained growth” .
Pricing/capacity: “MISO auction…accredited capacity sold at prices in excess of $600 per MWd…strong indications for both energy and capacity prices in 2025 and beyond” .
Fuel flexibility: “Evaluating the addition of natural gas co-firing at Merom…believe it will provide fuel flexibility…capitalize on the best fuel cost scenario and better control our operating expenses” .

Q&A Highlights

Exclusivity and timing: Counterparty requested an extension; management may proceed non-exclusively while considering other interest; most major points negotiated, with hyperscaler and developer finalizing finer points .
Co-firing with natural gas: Current law requires co-firing by 2032; project viewed as feasible with contractor engaged; potential to pull forward regardless of regulatory rollback, providing cost resiliency .
Contract structure: Any long-term hyperscaler deal would be unit-contingent for well over a decade .
Grid interconnection context: Management cautioned not to over-interpret a single powered land EPR approval, as power could be taken anywhere in MISO Zone 6 and multiple opportunities exist .

Estimates Context

Q1 2025 vs S&P Global Consensus*

Metric	Consensus	Actual	Beat/Miss
Revenue ($M)	$98.7	$117.8	+$19.1M
EBITDA ($M)	$5.2	$29.3*	+$24.1M
EPS ($)	-$0.16	$0.23	+$0.39
# of Estimates (Rev / EPS)	1 / 1	—	Limited sample size

Interpretation:

Significant beats across revenue, EBITDA, and EPS, aided by higher energy pricing, increased dispatch volumes in Jan–Feb, and new Q1 contracts that were not in effect in 2024 .
With only one estimate for revenue and EPS, consensus breadth is limited and revisions may be volatile.*

Key Takeaways for Investors

Step-change quarter: Strong top-line and profit inflection with electric sales at 73% of mix and largest beats vs S&P Global consensus in several quarters; confirms the IPP pivot is translating into financials .*
Cash and balance sheet optionality: Robust OCF ($38.4M) alongside continued deleveraging (bank debt $23.0M) bolsters flexibility for maintenance, growth, or opportunistic transactions .
Forward visibility: $630.4M in forward energy and capacity sales and ~$1.5B total forward book (incl. coal and intercompany) underwrite medium-term cash flows; contracted MWh and average prices into 2026 support margin trajectory .
Strategic catalyst: Progress toward a long-term data center contract (unit-contingent, premium to forward curve per prior commentary) remains a key re-rating driver; timing remains uncertain given multi-party complexity .
Cost resilience: Evaluating gas co-firing could protect margins through fuel flexibility and regulatory alignment; Sunrise Coal restructuring supports lower delivered fuel costs and improved power segment economics .
Risk checks: Deal timing slippage, energy price volatility, and regulatory changes (MISO capacity accreditation and EPA rules) remain watch items; however, MISO capacity pricing strength provides a supportive backdrop .
Near-term trading implications: Positive surprise vs consensus and constructive call tone around pricing/capacity and data center negotiations likely supportive; monitor exclusivity decision by early June and any definitive agreement announcements .*

Footnotes:

*Values marked with an asterisk are retrieved from S&P Global.
Adjusted EBITDA is a non-GAAP metric; see reconciliation and definition in the company’s press release .

Additional Detail and Source Cross-Checks:

Q1 2025 press release and 8‑K: revenue $117.8M, net income $10.0M, OCF $38.4M, Adjusted EBITDA $19.3M; electric $85.9M, coal $30.2M, other $1.7M; 73% revenue mix from electric .
Balance sheet/KPIs: bank debt $23.0M, liquidity $69.0M; forward sales book $1.1B third-party and ~$1.5B including intercompany; capex $11.7M .
Q&A clarifications: exclusivity/timing, unit-contingent structure, gas co-firing feasibility .
Prior quarters for trend: Q4 2024 loss due to ~$215M Sunrise impairment; Q4 Adjusted EBITDA $6.2M; forward book $685.7M at year-end; 2025 capex ~$66M with ~$14.8M ELG .

HALLADOR ENERGY CO (HNRG)·Q1 2025 Earnings Summary