Sign in
VC

Vistra Corp. (VST)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered solid integrated performance amid outages: operating revenues rose to $4.25B (+10.5% YoY), GAAP Net Income was $327M, and Ongoing Operations Adjusted EBITDA was $1.349B; guidance for 2025 Adjusted EBITDA ($5.5–$6.1B) and Adjusted FCFbG ($3.0–$3.6B) was reaffirmed .
  • Consensus vs actual: Vistra missed S&P EPS, revenue, and EBITDA estimates for Q2; EPS $0.71* vs $1.05*; revenue $4.25B vs $4.79B*; Adjusted EBITDA $1.349B vs $1.414B* (non‑GAAP) — primarily due to higher plant outage expenses and higher D&A from capital additions .
  • 2026 midpoint opportunity was raised to >$6.8B Adjusted EBITDA (ex-Lotus), supported by hedging (~100% 2025; ~95% 2026) and strong PJM capacity auction clears; nuclear PTC was not booked in Q2 but remains a downside buffer .
  • Strategic catalysts: definitive agreement to acquire ~2,600 MW gas assets from Lotus at ~$743/kW (closing late 2025/early 2026); NRC extended Perry nuclear license to 2046; disciplined buybacks totaling ~$5.4B to date; dividend lifted to $0.2260 per share in July .
  • Narrative for stock: visibility improves (hedges, capacity pricing, data‑center momentum), while outage normalization and deal execution are near-term watch items; 2026+ FCF conversion target increased to ≥60% supports capital returns and deleveraging path to investment grade in 12–18 months .

What Went Well and What Went Wrong

What Went Well

  • Integrated model resiliency: Retail delivered $756M Adjusted EBITDA; generation benefited from hedging and higher capacity revenues, offsetting outage impacts; commercial availability ~95% during late-June heat wave .
  • Strategic optionality expanded: Lotus ~2.6GW gas portfolio at ~$743/kW (targeting mid‑teens levered returns) and NRC extension for Perry through 2046; dual listing on NYSE Texas enhances profile .
  • Raised 2026 midpoint opportunity and FCF conversion outlook: 2026 Adjusted EBITDA midpoint opportunity to ≥$6.8B (ex-Lotus) and medium-term Adjusted FCFbG/EBITDA target to ≥60% starting in 2026 .
  • Quote: “We remain steadfast… expanding our generation capacity… NRC approval… license extension… each of Vistra’s six nuclear reactors are licensed to operate for 60 years.” — Jim Burke .

What Went Wrong

  • Outages compressed earnings: higher plant outage expense (Martin Lake Unit 1, Moss Landing) and higher D&A from capital additions reduced GAAP Net Income by $(140)M YoY; Ongoing Ops Adjusted EBITDA down $(63)M YoY .
  • Sequential retail softness (as expected): retail modestly decreased YoY in Q2 following strong Q1, reflecting supply cost shape and level dynamics, though customer count/margins remained strong .
  • Nuclear PTC timing: no nuclear PTC recognized in Q2 (based on realized/forward prices as of June 30); management reiterated PTC as downside support rather than current-period tailwind .

Financial Results

Core P&L metrics (quarterly)

MetricQ2 2024Q1 2025Q2 2025
Operating Revenues ($USD Billions)$3.85 $3.93 $4.25
GAAP Net Income ($USD Millions)$467 $(268) $327
Net Income from Ongoing Operations ($USD Millions)$498 $(200) $370
Ongoing Ops Adjusted EBITDA ($USD Billions)$1.412 $1.240 $1.349

EPS vs Estimates (S&P Global)

MetricQ2 2024Q1 2025Q2 2025
Primary EPS (Actual, $USD)0.803*0.325*0.712*
Primary EPS Consensus Mean ($USD)-0.940*0.780*1.054*

Values marked with * retrieved from S&P Global.

Revenue vs Estimates (S&P Global)

MetricQ2 2024Q1 2025Q2 2025
Operating Revenues (Actual, $USD Billions)$3.85 $3.93 $4.25
Revenue Consensus Mean ($USD Billions)$3.96*$5.32*$4.79*

Values marked with * retrieved from S&P Global.

Adjusted EBITDA vs Estimates

MetricQ2 2024Q1 2025Q2 2025
Ongoing Ops Adjusted EBITDA (Actual, $USD Billions)$1.412 $1.240 $1.349
EBITDA Consensus Mean ($USD Billions)$1.219*$1.006*$1.414*

Values marked with * retrieved from S&P Global.

Segment Adjusted EBITDA (trend)

Segment ($USD Millions)Q4 2024Q1 2025Q2 2025
Retail$600 $184 $756
Texas$598 $490 $142
East$774 $514 $418
West$44 $62 $49
Corporate & Other$(31) $(10) $(16)
Asset Closure$(51) $(24) $(17)

KPIs

KPIQ1 2025Q2 2025
Hedged expected generation~100% 2025; ~90% 2026 (as of May 2) ~100% 2025; ~95% 2026 (as of Aug. 1)
Total available liquidity ($USD Millions)$3,903 (as of Mar. 31) $2,618 (as of Jun. 30)
Cash & Equivalents ($USD Millions)$561 (as of Mar. 31) $458 (as of Jun. 30)
Shares outstanding (Millions)~339.3 ~339
Cumulative buybacks since Nov. 2021 ($USD Billions)~$5.2 ~$5.4
Common dividend per share ($)—$0.2260 (declared Jul. 30)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Ongoing Ops Adjusted EBITDA ($USD Billions)FY 2025$5.5–$6.1 $5.5–$6.1 Maintained
Ongoing Ops Adjusted FCFbG ($USD Billions)FY 2025$3.0–$3.6 $3.0–$3.6 Maintained
Adjusted EBITDA midpoint opportunity ($USD Billions)FY 2026>$6.0 >$6.8 (ex-Lotus) Raised
Hedging coverage (%)FY 2026~90% (as of May 2) ~95% (as of Aug. 1) Raised
Common dividend per share ($)Q3 2025N/A$0.2260 (declared) Increased ~3% vs 3Q24

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024 & Q1 2025)Current Period (Q2 2025)Trend
AI/data centers & contractingHighlighted electrification trend; record 2024, added nuclear fleet and retail scale via Energy Harbor; reaffirmed 2025 guidance; strong availability ~95% CEO: heightened hyperscaler interest; colocation premium; confidence in Comanche Peak deal without pre-announcement; SB6 process not gating; momentum rising Strengthening demand signals; active pipeline
Reliability/outages2024 strength aided by nuclear PTC; noted disciplined operations Outages at Martin Lake/Moss Landing pressured Q2 results; fleet commercial availability ~95% during heat wave Near-term headwind; operating execution mitigates
Hedging & capacity auctions2025 hedged ~100%; 2026 ~80–90%; visibility to >$6B 2026 2026 midpoint opportunity ≥$6.8B; PJM auction clears support new capacity; 2025 ~100% hedged; 2026 ~95% Improved earnings visibility
Capital allocation & leverageReturned capital; minority interest repurchase closed; buybacks ongoing ≥60% FCF conversion from 2026; path to investment grade in 12–18 months; lean in buybacks during dislocation More FCF; deleveraging
M&A & fleet optimizationEnergy Harbor integration; development pipeline progress Lotus 2.6GW gas acquisition at ~$743/kW; nuclear upgrades potential ≥600MW by early/mid-2030s; coal-to-gas conversions (Coleto Creek; exploring Miami Fort) Accretive growth, diversification

Management Commentary

  • “Adjusted EBITDA of $1,349,000,000 for the quarter… we are reaffirming the guidance ranges for 2025 adjusted EBITDA of $5,500,000,000 to $6,100,000,000 and adjusted free cash flow before growth of $3,000,000,000 to $3,600,000,000.” — Jim Burke .
  • “We are increasing the expected floor of our 2026 adjusted EBITDA midpoint opportunity to $6,800,000,000… and see possibility for $7,000,000,000.” — Kris Moldovan .
  • “In the second quarter, nearly two thirds of total share repurchases were executed during the April market downturn… average price < $115.” — Kris Moldovan .
  • “PJM capacity auction clears… markets responding; new supply and higher utilization needed; conversion opportunities like Miami Fort under evaluation.” — Jim Burke .
  • “NRC approval… Perry Nuclear Power Plant… license extension through 2046.” — Jim Burke .

Q&A Highlights

  • Comanche Peak data center contract: Management expects a binding deal without pre-announcing; SB6 process not a gating item; structure could include backup generation, potentially turnkey depending on customer .
  • M&A flexibility: Lotus deal does not preclude further transactions; sees regulatory headroom in ERCOT/PJM; valuation discipline maintained .
  • FCF conversion and investment grade: Medium-term Adjusted FCFbG/EBITDA target raised to ≥60%; expects deleveraging materially below 3x and investment grade within 12–18 months .
  • PJM capacity pricing: Clears at cap reflect higher new-build costs; expect banded outcomes; market signals should incent capacity additions; consumer bill impacts manageable vs wires charges .
  • 2026–2027 outlook: Curves modestly down from Q1 but management more bullish given load growth; hedging plus capacity supports visibility .

Estimates Context

  • Q2 2025 vs S&P Global consensus: EPS $0.712* missed $1.054*; revenue $4.25B missed $4.79B*; Adjusted EBITDA $1.349B missed $1.414B* (non‑GAAP). Primary drivers: higher outage expense (Martin Lake/Moss) and higher D&A on capital additions .
  • Prior quarters: Q1 2025 also missed EPS and EBITDA consensus; Q2 2024 beat EBITDA but EPS/estimates reflect post-Energy Harbor comparability effects*.
  • Implication: Street likely to raise out‑year EBITDA and FCF conversion assumptions given 2026 midpoint ≥$6.8B and ≥60% conversion, while trimming near‑term EPS for outage/delivery cost timing*.

Values marked with * retrieved from S&P Global.

Detailed Estimate Comparison

MetricQ2 2024Q1 2025Q2 2025
EPS Actual ($)0.803*0.325*0.712*
EPS Consensus ($)-0.940*0.780*1.054*
Revenue Actual ($B)3.85 3.93 4.25
Revenue Consensus ($B)3.96*5.32*4.79*
Adjusted EBITDA Actual ($B)1.412 1.240 1.349
EBITDA Consensus ($B)1.219*1.006*1.414*

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Near-term miss was driven by outages and D&A, not structural demand weakness; hedging and capacity revenue supported results, keeping 2025 guidance intact .
  • 2026 visibility improved: midpoint opportunity ≥$6.8B (ex-Lotus) plus ≥60% FCF conversion supports accelerated deleveraging and sustained capital returns .
  • Strategic upside from data‑center contracts (colocation premiums, nuclear attributes) and PJM auction signals; watch for Comanche Peak contract updates before/around SB6 timelines .
  • Growth optionality across fleet: Lotus acquisition (late 2025/early 2026 close), nuclear uprates (~≥600MW potential), coal-to-gas conversions (Coleto Creek; Miami Fort) .
  • Capital allocation disciplined: Buybacks leaned into April dislocation; dividend increased; path to investment grade within 12–18 months positions for lower cost of capital .
  • Watch list for traders: outage normalization (Martin Lake restart late 2025/early 2026), PJM/ERCOT curve moves vs hedges, regulatory developments (SB6, RRI), Lotus closing milestones .
  • Narrative: reliability + hedging + capacity pricing underpin earnings base; AI/data center anchors upside; execution on contracts and asset optimizations likely to be stock catalysts over coming quarters .

Notes on non‑GAAP: Ongoing Operations excludes Asset Closure; Adjusted EBITDA and Adjusted FCFbG are non‑GAAP measures; reconciliations provided in the press release/8‑K .