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Vistra Corp. (VST)·Q3 2025 Earnings Summary

Executive Summary

  • Solid quarter on non-GAAP metrics and portfolio actions: Ongoing Operations Adjusted EBITDA was $1.581B; GAAP net income $652M. Management narrowed FY25 adjusted EBITDA to $5.7–$5.9B and raised adjusted FCFbG to $3.3–$3.5B; initiated FY26 guidance at $6.8–$7.6B EBITDA and $3.925–$4.725B FCFbG .
  • Versus consensus, Vistra delivered an EBITDA beat but posted modest misses on revenue and EPS; drivers were higher realized prices and nuclear PTC recognition offset by the Martin Lake Unit 1 outage and lower mark-to-market gains YoY . Estimates marked with * are from S&P Global.
  • Strategic catalysts: 20-year 1,200 MW PPA at Comanche Peak, completion of 2.6 GW Lotus gas acquisition, plan to build 860 MW of new gas units in West Texas, and an additional $1.0B buyback authorization (total remaining ~$2.2B) .
  • Balance sheet and liquidity remain strong with ~$3.7B available; hedging is ~98% for 2025, ~96% for 2026, ~70% for 2027, supporting guidance and 2027 midpoint opportunity of $7.4–$7.8B EBITDA .
  • Capital returns: Quarterly common dividend set at $0.2270 per share for Dec. 31, 2025; buybacks since 2021 total ~$5.6B, shares outstanding ~339M (≈30% reduction) .

What Went Well and What Went Wrong

  • What Went Well

    • Strong non-GAAP execution: Adjusted EBITDA up YoY to $1.581B, driven by higher realized energy and capacity prices and nuclear PTC revenue recognition .
    • Contracting and portfolio growth: Signed 20-year 1,200 MW PPA for Comanche Peak and closed on 2.6 GW of Lotus gas assets across PJM/New England/NY/CA, enhancing geographic diversification .
    • West Texas capacity expansion: Final investment decision for two gas units totaling 860 MW in the Permian; CEO: “These announcements underscore our commitment to deliver solutions to meet the growing power demand…” .

  • What Went Wrong

    • Outages impacted results: Martin Lake Unit 1 and Moss Landing batteries weighed on performance; GAAP net income decreased YoY primarily due to lower unrealized mark-to-market gains (−$1.671B YoY) and outage impacts .
    • Retail softness vs prior year quarter: Retail Adjusted EBITDA was $37M vs $102M in Q3’24, reflecting non-repeat of favorable weather-driven gains last year and timing of supply costs .
    • Revenue miss vs consensus*: Operating revenues were $4.971B vs ~$6.178B estimate*; CFO emphasized gains from hedging and capacity but weather did not repeat prior-year tailwinds .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Billions)$6.288 $4.250 $4.971
Net Income ($USD Millions)$1,837 $327 $652
Operating Income ($USD Millions)$2,588 $515 $1,037
Ongoing Ops Adjusted EBITDA ($USD Millions)$1,438 $1,349 $1,581
Primary EPS (SPGI) ($)$1.1118*$0.7118*$1.3841*
EBITDA Margin % (SPGI)52.80%*32.24%*35.28%*
EBIT Margin % (SPGI)41.17%*13.98%*21.04%*
Net Income Margin % (SPGI)30.03%*7.69%*13.12%*

Values with * retrieved from S&P Global.

Segment Adjusted EBITDA (Ongoing Operations)

Segment ($USD Millions)Q3 2024Q3 2025
Retail$102 $37
Texas$762 $784
East$529 $719
West$70 $63
Corporate & Other$(25) $(22)
Ongoing Ops Consolidated$1,438 $1,581

KPIs and Balance Sheet

KPIValueSource
Available Liquidity ($USD Millions)$3,705
Cash & Cash Equivalents ($USD Millions)$602
Hedging % (2025 / 2026 / 2027)98% / 96% / 70%
Shares Outstanding (approx.)~339M
Buyback Authorization Remaining ($USD Billions)~$2.2
Quarterly Dividend per Common Share$0.2270

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Ongoing Ops Adjusted EBITDA ($B)FY 2025$5.5–$6.1 $5.7–$5.9 Raised midpoint, narrowed range
Ongoing Ops Adjusted FCFbG ($B)FY 2025$3.0–$3.6 $3.3–$3.5 Raised midpoint, narrowed range
Ongoing Ops Adjusted EBITDA ($B)FY 2026≥$6.8 (midpoint opportunity, excl. Lotus) $6.8–$7.6 Initiated formal guidance
Ongoing Ops Adjusted FCFbG ($B)FY 2026N/A$3.925–$4.725 Initiated formal guidance
Dividend per Common Share ($)Q4 2025Q4’24 ≈2% lower (not specified)$0.2270Increased ~2%

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
AI/data center contractingActive pipeline; seeking clarity (SB6/FERC), confidence rising; potential nuclear uprates; colocation vs front-of-meter pricing spectrum Signed 20-year 1,200 MW Comanche Peak PPA; pursuing additional long-term contracts; highest-ever inbound interest; $50M/yr investment in people/dev to capture opportunities Accelerating engagement and execution
Hedging & guidanceHighly hedged 2025–2026, raising 2026 midpoint opportunity; FCF conversion targeted ≥60% medium term Hedged 98%/96%/70% for 2025/2026/2027; narrowed FY25 ranges; initiated FY26 guidance; 2027 midpoint opportunity $7.4–$7.8B Increased visibility
Supply/demand & market curvesPJM/ERCOT load growth (PJM 2–3%, ERCOT ~6% YoY); belief forwards understate demand; auction collars support new build CEO reiterates stronger demand backdrop, higher utilization potential; ERCOT West hub premium; forwards still lag fundamentals Structural tailwind persisting
Outages & operationsMartin Lake Unit 1/Moss Landing outages impacted Q1/Q2; availability ~95% Outages continued to impact Q3; coal/gas fleet availability ~93%; nuclear capacity factor ~95% Operational resilience with isolated headwinds
Regulatory/legalSB6 in Texas and PJM colocation docket; push for timely resolution SB6 implications acknowledged; project structure expected to meet requirements; PJM/FERC clarity still sought Progressing with engagement

Management Commentary

  • CEO on strategic milestones: “We… entered into a 20-year PPA at our Comanche Peak Nuclear Power Plant… and successfully closed the acquisition of seven natural gas plants… These announcements underscore our commitment to deliver solutions… while growing our earnings over the medium and long-term.”
  • CEO on demand and hedging: “We are confident in our forecast as we expect consistent earnings from our retail business paired with strong performance from our… highly hedged generation fleet.”
  • CFO on performance drivers: “Average realized prices over $10/MWh higher YoY… higher capacity revenue in East… and nuclear PTC revenue recognized… more than offset impacts of extended outages.”
  • CFO on capital returns and leverage: “We expect to return at least ~$1.3B per year… With the board’s… $1B authorization… ~ $2.2B remains through 2027… net leverage ratio ~2.6x, with path to investment grade in 12–18 months.”

Q&A Highlights

  • 2027 outlook levers: With ~70% hedged, upside from market strengthening and potential contracting; management aims to “trend upwards” as delivery year approaches .
  • Hedging philosophy: Maintain disciplined laddering for a large fleet; flexibility to “do more” when prices are attractive; balance certainty for capital allocation with market exposure .
  • PJM/ERCOT market views: ERCOT West hub now at a premium; forwards seen as under-reflecting demand; PJM energy curves showing more life; capacity clears support conversions/new build .
  • Nuclear upgrades: Potential ~10% capacity increase starting early 2030s; likely needs offtake contracts to proceed, given current forwards insufficient alone .
  • Contracting cadence: Multiple deals at various stages; focus on getting “the right deal”; potential for more put points by year-end or thereafter .

Estimates Context

MetricActual (Q3 2025)Consensus (Q3 2025)Outcome
Revenue ($USD Billions)$4.971 $6.178*MISS; lower realized revenue vs high estimate; management cited mark-to-market dynamics and outage impacts
Primary EPS ($)$1.3841*$1.4026*MISS (modest); one EPS estimate in quarter*
EBITDA ($USD Billions)$1.581 $1.5549*BEAT; stronger realized prices, capacity revenue, and nuclear PTC recognition

Values with * retrieved from S&P Global.

Implications: Street models likely lift EBITDA/FCF trajectories for FY25–26 given narrowed FY25 and initiated FY26 guidance, but may trim revenue assumptions and adjust GAAP/mark-to-market lines. EPS estimate dispersion is limited (few estimates*), suggesting higher sensitivity to management guidance updates.

Key Takeaways for Investors

  • Guidance credibility rising: Narrowed FY25 and initiated FY26 ranges, plus high hedge ratios, underpin visibility; 2027 midpoint opportunity suggests continued momentum .
  • Non-GAAP strength vs GAAP volatility: Adjusted EBITDA beat reflects operating/hedging execution; GAAP net income will remain sensitive to mark-to-market and outage timing .
  • Structural demand tailwinds: Data center and industrial load growth in ERCOT/PJM support higher utilization and contracting optionality; forwards likely understate medium-term fundamentals .
  • Contracting catalysts: Comanche Peak 20-year PPA establishes template; management indicates highest-ever engagement and willingness to invest in pipeline development .
  • Accretive portfolio actions: 2.6 GW Lotus gas acquisition and planned 860 MW West Texas units broaden footprint and add earnings capacity; mid-teens levered return targets maintained .
  • Capital returns and balance sheet: ~$2.2B buyback capacity through 2027 and $0.2270 dividend support total return; path to investment grade over next 12–18 months enhances optionality .
  • Trading lens: Near-term narrative favors EBITDA/FCF beats, contracting announcements, and clarity on outages; watch SB6/FERC developments and incremental hedge disclosures for 2027 .