With a combined revenue of $21 trillion and $2.1 trillion in profits, the 2026 Fortune 500 is the definitive list of America's largest companies.

Fortune 500

Almost $20 trillion in revenue—and a record-breaking $1.87 trillion in profits. Introducing the 2025 Fortune 500, the definitive list of the biggest companies in America.

Industries included in the sector are mining, oil and gas exploration and services, pipelines, refining, and utilities.

Fortune Sector Leaders: Energy

The Fortune 500, in its 70th year in 2024, ranks the biggest U.S. companies by revenue.

The Fortune 500, in its 69th year in 2023, ranks the biggest U.S. companies by revenue.

This year’s Fortune 500 marks the 68th running of the list.

This year’s Fortune 500 marks the 67th running of the list.

F500-2021-274-Vistra

The electricity and power company services 20 states and Washington, D.C., including all but one of the seven competitive wholesale markets in the United States, as well as parts of Canada and Japan. Vistra offers over 50 renewable energy plans.

This year's Fortune 500 marks the 66th running of the list.

F500-2020-270-Vistra-Energy

The Dallas-area electricity and natural gas provider shot up the ranks this year, from 337 in 2018.

This year's Fortune 500 marks the 65th running of the list.

This year's Fortune 500 marks the 64th running of the list.

This year's Fortune 500 marks the 63rd running of the list.

Key Financials (last Fiscal Year)

Revenues ($M)

Profits ($M)

Assets ($M)

Total Stockholder Equity ($M)

Profit Ratios

Profit as % of Revenues

Profits as % of Assets

Profits as % of Stockholder Equity

Earnings Per Share (last Fiscal Year)

Earnings Per Share ($)

EPS % Change (from prior fiscal year)

EPS % Change (5 year annual rate)

EPS % Change (10 year annual rate)

Total Return

Total Return to Investors (last year)

Total Return to Investors (5 year, annualized)

Total Return to Investors (10 year, annualized)

Vistra is a power-generation company that operates across the U.S., with a particularly strong concentration in Texas. It specializes in producing and selling electricity for residential and commercial customers; it also provides power for AI data centers. Vistra’s portfolio includes natural gas and nuclear power plants, coal-powered facilities, and solar power, as well as battery storage for energy. The company changed its name from Vistra Energy to Vistra in July 2020.

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Q4 2025

Q3 2025

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Q3 2024

Vistra (VST): Company Profile, Stock Price, News, Rankings

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Vistra

vistra

Today, and welcome to Vistra's third quarter 2025 earnings call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Eric Micek, Vice President, Investor Relations. Please go ahead.

Good morning, and thank you for joining Vistra's Investor Webcast discussing our third quarter 2025 results. Our discussion today is being broadcast live from the Investor Relations section of our website at www.vistracorp.com. There you can also find copies of today's investor presentation and earnings release. Leading the call today are Jim Burke, Vistra's President and Chief Executive Officer, and Chris Moldovan, Vistra's Executive Vice President and Chief Financial Officer. They are joined by other Vistra senior executives to address questions during the second part of today's call as necessary. Our earnings release, presentation, and other matters discussed in the call today include references to certain non-GAAP financial measures. All references to adjusted EBITDA and adjusted free cash flow before growth throughout this presentation refer to ongoing operations adjusted EBITDA and ongoing operations adjusted free cash flow before growth.

Reconciliations to the most directly comparable GAAP measures are provided in the earnings release and in the appendix to the investor presentation available in the Investor Relations section of Vistra's website. Also, today's discussion contains forward-looking statements which are based on assumptions we believe to be reasonable only as of today's date. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected or implied. We assume no obligation to update our forward-looking statements. I encourage all listeners to review the safe harbor statements included on slide two of the investor presentation on our website that explain the risks of forward-looking statements, the limitations of certain industry and market data included in the presentation, and the use of non-GAAP financial measures. I will now turn the call over to our President and CEO, Jim Burke.

Thank you, Eric, and good morning, everyone. I appreciate you joining us to review Vistra's third quarter 2025 results. This year continues to be a transformational one for our company, and the activity during the quarter was a key driver of our progress. We announced a landmark power purchase agreement at Comanche Peak, announced our plan to develop two gas-fired units in West Texas, and successfully closed the acquisition of approximately 2.6 GW of natural gas-fired assets from Lotus Infrastructure Partners. Importantly, while we are successfully advancing our growth efforts, we continue to be steadfastly focused on execution in our core business. As we will discuss, our core business continues to point to additional value creation in the years ahead. I'm proud of what our team has accomplished this year as we continue building the foundation for sustainable growth and value creation well into the future.

Continuing on the topic of sustainable growth on slide five, you can see the positive impact of steps we've taken over the past several years. Combined with a more favorable demand backdrop, those actions are now translating into sustainably higher levels of profitability for our company. At the core of this success are the approximately 7,000 team members across the organization. Their dedication and hard work allowed us to deliver another solid quarter of financial performance. Combined with our results year to date, we are narrowing our guidance range for 2025 adjusted EBITDA to $5.7 billion-$5.9 billion and our 2025 adjusted free cash flow before growth to $3.3 billion-$3.5 billion. Moving to our near-term outlook, we are introducing guidance ranges for 2026 adjusted EBITDA of $6.8 billion-$7.6 billion and adjusted free cash flow before growth of $3.925 billion-$4.725 billion.

Including the expected contribution from the assets acquired from Lotus Infrastructure Partners. It's worth noting that excluding the benefits from the Lotus assets, the midpoint of our 2026 adjusted EBITDA guidance range is above our previously communicated 2026 adjusted EBITDA midpoint opportunity of $6.8 billion plus. Another clear sign of sustainable momentum across our business. We are confident in our forecast as we expect consistent earnings from our retail business paired with strong performance from our reliable, flexible, and highly hedged generation fleet. Finally, for 2027, we are introducing an adjusted EBITDA midpoint opportunity range of $7.4 billion-$7.8 billion. While multiple drivers of gross margin variability remain, including the 2027-2028 PJM capacity auction, our hedge percentage, which currently sits at approximately 70% of expected generation, provides line of sight to our adjusted EBITDA midpoint opportunity.

Finally, the recently announced power purchase agreement at Comanche Peak marks a major milestone for our company, for our site, and for Texas. We believe this 20-year agreement, which enables our customer to energize up to 1,200 MW of new load, ensures the Comanche Peak nuclear plant will continue to deliver power to Texans at least through the middle of this century. As you may recall, we recently relicensed Comanche Peak out to the 2050s, and this agreement provides the financial backing to maintain operations through that date and potentially beyond. Further, the customer's commitment to bring significant backup generation to the site will also enhance resource adequacy while meeting their own reliability needs. I want to commend our team for their hard work and constant dedication in getting this agreement over the finish line, working, of course, very closely with our customer.

We believe this is yet another example of why Vistra is a reliable and trusted partner for these types of long-term agreements needed to meet the ever-increasing power demand across the U.S. We continue to see multiple pathways for long-term agreements at other sites as we believe our fleet and development capabilities are well-positioned to provide a variety of power solutions to meet the needs of these large load customers. Turning to slide six, our four strategic priorities remain integral to our success. We believe our integrated business model and comprehensive hedging program provide our stakeholders greater visibility into our future financial performance. Our diverse fleet of generation assets, combined with our trusted retail brands and strong commercial acumen, form an integrated platform that consistently delivers attractive earnings and downside protection. Our generation team achieved another solid quarter of commercial availability of approximately 93% for our coal and gas fleet.

This included exceptional performance during the late July nationwide heat wave and the impacts of the extended outage at one of our three Martin Lake units. Nuclear also had a solid quarter of performance, achieving a capacity factor of approximately 95%. Complementing our generation portfolio, our commercial team continues to deliver strong results through disciplined execution of our comprehensive hedging strategy. We've established a highly hedged position for '26 as we enter the year, providing enhanced earnings visibility and stability. Over the next 12 months, the team will continue to prudently manage our open length for '27 to further strengthen that position. As I'll discuss later, we're also making solid progress in advancing additional capacity contracts with large load customers, which will further enhance the long-term value of our company.

On the retail side, we continue to see strong customer count growth driven by our portfolio of brands in the Texas market. We believe the team's continuous innovation, combined with strong customer service, drives the consistent earnings level of the business while outperforming on customer complaint performance versus our key competitors and maintaining our five-star ranking. Switching to capital allocation, we remain disciplined in our approach by targeting a significant return of capital, executing on our attractive growth project pipeline, and maintaining a strong balance sheet. Since implementing the capital return plan put in place during the fourth quarter of 2021, we have returned over $6.7 billion to our shareholders through share repurchases and common stock dividends.

Chris will cover capital allocation in more detail later in the presentation, but you will see that we expect to return at least an additional approximately $2.9 billion through share repurchases and common dividends, including the additional $1 billion authorized this quarter by the board for share repurchases through 2027. Turning to growth, with the increasing power needs in West Texas, including from the state's expanding oil and natural gas industries, combined with expected demand growth from data center additions, we have made the decision to move forward with developing two natural gas units totaling 860 megawatts. We view these projects as attractive for our owners with projected returns in excess of our mid-teens levered return thresholds. Both units remain part of the Texas Energy Fund due diligence process, and we plan to make a final decision on financing in the coming months.

Equipment and EPC procurement is progressing well, and we remain on track to deliver this West Texas capacity in early to mid-2028. Lastly, we successfully closed on our acquisition of seven natural gas plants from Lotus Infrastructure Partners totaling approximately 2,600 megawatts of capacity. This acquisition, which includes assets across PJM, New England, New York, and California, reflects our disciplined and opportunistic approach to M&A. It will enhance our already wide geographic footprint and strengthen our ability to meet the diverse needs of our customers. We look forward to integrating these assets into the Vistra portfolio and driving operational efficiencies by running them in line with the high standards of our current large, combined cycle, and peaking gas fleet. We continue to target approximately $270 million of adjusted EBITDA from these assets in 2026, with potential upside in the out years driven by synergies and higher capacity revenue.

Moving to the balance sheet, we continue to prioritize liquidity and low leverage to manage the business prudently. While we currently have a strong balance sheet with leverage of approximately 2.6 times, we expect additional deleveraging through the end of 2027 through higher earnings and continued prudent management of our debt levels. As we stated on our last call, we believe the lower leverage levels, combined with a reduction in business risk as a result of more contracted revenue sources, puts us on the path for an upgrade to investment-grade credit ratings. On our strategic energy transition, we continue to execute on our strategy of utilizing existing land and interconnects to develop solar and energy storage projects. Our Oak Hill solar project in ERCOT reached commercial operations last month, bringing 200 GW of clean energy to the ERCOT grid.

Our Pulaski and Newton sites remain on schedule for commercial operations by year-end 2026. We continue to evaluate the remainder of our development portfolio for additional opportunities as long-term power agreements materialize. Finally, we believe nuclear, with its carbon-free profile and 24 by seven availability, is a vital component in meeting the country's electricity needs for decades to come. Large load customers clearly have a preference for this type of generation. To meet these needs, we continue to evaluate upgrade opportunities at our nuclear plants, with studies planned to be completed by the end of this year. Initial assessments are promising, indicating the potential to increase capacity at nuclear plants by approximately 10%, with the additional capacity starting to come online in the early 2030s. Turning to slide seven, we continue to see a structurally improved demand environment, which carries significant positive implications for our business.

As we've discussed over the past several quarters, electricity consumption across the country is undergoing a fundamental shift. Load growth in our largest markets remains well ahead of national averages, with weather-normalized load in PJM rising approximately 2%-3% and the ERCOT market growing around 6% year-over-year. Importantly, customer investment continues to send stronger, more sustained market signals. Data center development remains robust, with the number of planned facilities across the U.S. more than doubling from 12 months ago. Our largest markets, PJM and ERCOT, continue to be targeted for a larger share of these developments. As an example, ERCOT's market share of these announcements is over double the region's market share of currently installed data centers.

While it's unlikely that every announced project ultimately reaches completion, even factoring in a haircut, we believe this data indicates the load growth levels we covered at the top of the slide will materialize. In fact, we continue to see the potential for even greater acceleration. This is especially evident in recent results calls from the hyperscalers, where they've emphasized expanded investments in AI and data infrastructure, signaling that development activity is expected to remain strong, if not increase further, in the year ahead. This load growth is already leading to higher utilization rates for our combined cycle gas assets, where capacity factors have increased from the low 50% range to the high 50% over the last several years. Growing consumption should efficiently drive existing assets to higher utilization levels over time, potentially reaching rates in the mid-80% range for combined cycle gas plants.

This is evidence that there is capacity currently on the grid capable of meeting the load growth anticipated over the next three to five years. In addition to supply-side solutions, there is also increasing interest in demand-side solutions. The infrequent super peak hours can also be met through practical solutions like on-site backup generation and demand response, approaches that large load customers are continuing to develop and implement. This framework supports accelerating demand growth from emerging sectors such as data centers, crypto operations, and other industrial load, allowing them to integrate into our markets by leveraging existing grid investments while improving system utilization and lowering unit costs for end customers. Turning to slide eight, Vistra is in the middle of a multi-year plan to drive significantly higher profitability levels against the backdrop of accelerating electricity demand growth just outlined.

The team has already delivered on several initiatives that have led to our increased outlook through 2027. Our retail business consistently achieves strong margin performance and high levels of free cash flow conversion. Our commercial team, through our comprehensive hedging program, lock in benefits from stronger power markets, while our generation team looks for attractive and cost-effective ways to organically add capacity, such as our natural gas upgrades in Texas. Inorganic expansion has also been a big value driver through both the acquisitions of Energy Harbor and the natural gas plants from Lotus. However, we see an extensive list of near-term and long-term opportunities that are not included in our outlook that will enable us to grow our business through the end of the decade and beyond.

Some of these initiatives are already underway, such as the 1,200 megawatt power purchase agreement at Comanche Peak or the Coletto Creek coal-to-gas conversion, and these are expected to begin contributing to profitability in the next few years. Projects like the new Permian gas units and the Miami Fort coal-to-gas conversion are in the early stages of project execution. Others, such as the nuclear upgrades, while still early in the process, could provide significant additional optionality around our assets. Long-term power purchase agreements will also be a key driver of increasing our earnings visibility, and we see multiple pathways to agreements across our large diversified fleet of more than 40,000 MW of nuclear, gas, coal, and renewable generation. We also see numerous opportunities for contracting new-build capacity across our geographies, and our experienced development team is actively progressing these options.

We continue to see an acceleration in strong customer interest we outlined last quarter, and we believe the momentum we have today should enable us to realize multiple contracting opportunities. In fact, we set aside roughly $50 million per year over the next several years, including 2026, in increased expenses for investments in people and development activities to capture these opportunities and handle the level of customer interest. Importantly, all the potential future drivers I've outlined remain incremental to the core objective of delivering for our customers while running an efficient and reliable fleet that benefits from improving power market fundamentals. We believe there is significant optionality embedded in our large generation fleet, particularly our combined cycle and peaking gas fleet, given that strong market fundamentals can drive higher volumes and higher revenue without significant incremental investment.

Now I'll turn it over to Chris to provide more details on our third-quarter results, outlook, and capital allocation. Chris.

Thank you, Jim. Turning to slide 10, Vistra delivered $1.581 billion in adjusted EBITDA in the third quarter, including $1.544 billion from generation and $37 million from retail. Consistent with last quarter, the generation segment continued to realize material benefits from our comprehensive hedging program, with average realized prices over $10 per megawatt hour higher compared to the same quarter last year. The stronger realized price benefit, together with the higher capacity revenue in our East segment and the expected nuclear PTC revenue recognized at Comanche Peak, more than offset the impacts of extended outages at Martin Lake Unit One and our battery facilities at Moss Landing.

On a year-to-date basis, the incremental contribution from two additional months of Energy Harbor results, combined with stronger realized wholesale prices and higher capacity revenue, have more than offset the impact from the outages and are driving the strong year-over-year performance gains. Moving to retail, as a reminder, based on the shape and level of supply costs, we typically expect lower profitability in the first and third quarters, with this year being no exception. Notably, the third quarter, like the first six months of the year, benefited from strong customer count and margin performance, with the results in the quarter being offset by weather-driven gains in the third quarter of last year that were not repeated this summer and some expected intra-year timing impacts of supply costs.

Importantly, the retail business continues to generate strong earnings for our business in a variety of market conditions and remains on track to outperform 2024 results. Turning to slide 11, based on our expectations for 2025 and 2026 and the range of midpoint opportunities for 2027 that Jim outlined earlier, as well as our expectation that we will continue to achieve a targeted medium-term adjusted EBITDA to adjusted free cash flow before growth conversion rate of at least 60%, we project to generate a significant amount of cash, approximately $10 billion through year-end 2027. The confidence in our outlook and the cash generation of our business continues to be underpinned by our comprehensive hedging program and the downside support provided by the nuclear PTC, resulting in a highly hedged position over the next several years.

As we've highlighted in previous quarters, our share repurchase program has generated significant value for our shareholders. Since beginning the program in November 2021, we've reduced our shares outstanding by approximately 30% through repurchase of approximately 165 million shares at an average price per share under $34. We continue to expect to return at least $1.3 billion to our shareholders each year through share repurchases and common dividends. With the board's recent authorization of an additional $1 billion of share repurchases, we have approximately $2.2 billion of share repurchase authorization, enough to meet our annual share repurchase target through 2027. We will continue to execute the share repurchase program through our 10B5-1 plan, allowing us to stay in the market even when in possession of material non-public information.

While this plan allows us to remain consistent buyers of our shares, we have designed it such that it accelerates repurchase amounts during times of market dislocation. On the balance sheet, after increasing our net debt to reflect the closing of the Lotus transaction and the financing activities completed in October, as well as incorporated the midpoint of our 2026 guidance range for adjusted EBITDA, our net leverage ratio is approximately 2.6 times. As mentioned last quarter, we are targeting leverage metrics consistent with investment-grade credit ratings and believe the improvement in our net leverage levels, combined with the higher earnings visibility from more contracted earnings streams, could position us for an upgrade, potentially within the next 12-18 months. Turning to growth investments, we will continue to be opportunistic, yet disciplined in the deployment of capital.

In addition to our planned solar and energy storage investments, we will be allocating capital to our new gas-fired units in West Texas, which we estimate will require approximately $900 million before any offsets from project financing. Finally, we expect to continue to evaluate M&A opportunities for both the generation and retail businesses. Even after allocating approximately $3.4 billion to our equity holders through share repurchases and common and preferred dividends, and $2.6 billion for accretive growth investments, including closing the acquisition of the gas assets from Lotus Infrastructure Partners, we still expect to have approximately $4 billion of additional capital available to allocate through year-end 2027. Share repurchases remain an important capital allocation priority, and we still believe our shares are trading at an elevated free cash flow yield, especially when compared to the average free cash flow yield for companies in the S&P 500.

A strong balance sheet is also important, and we see multiple benefits to achieving investment-grade credit ratings. Finally, the shift in power market fundamentals has led to a significantly wider opportunity set for growth compared to years past. Notably, while the opportunity set has changed, our approach has not. We remain disciplined, seeking to balance growth with shareholder returns and a strong balance sheet. We continue to place a high threshold on capital, targeting at least mid-teens levered returns for any opportunity we pursue. Finally, moving to slide 12, as Jim mentioned, we are in a multi-year execution plan that is leading to a sustainably higher level of earnings power for our business. This is evident in the higher adjusted EBITDA and adjusted free cash flow before growth guidance we've provided today.

While these metrics have been the focus of our guidance historically and will likely continue to be going forward, at least in the short term, these metrics do not fully capture our best-in-class capital allocation demonstrated over the past several years. As a result, we have included a new perspective focused on adjusted free cash flow before growth per share through 2026. We view this metric as a direct indicator of long-term value creation for shareholders. It demonstrates both our ability to generate recurring cash flow and the capacity to deploy that cash toward value-enhancing initiatives. It is also an important measure within Vistra's long-term incentive compensation framework, keeping management and shareholders aligned on how we define success.

You can see from the chart on the left that based on actions taken to date, four curves as the end of October and a stable share count as of September 30th, we see a trajectory for adjusted free cash flow before growth per share to grow by approximately 50% from 2024 through 2026. We think this level of improvement over the two-year period is compelling and is a testament to both the operational excellence and disciplined capital allocation by the team. As Jim outlined earlier, the number of opportunities for our business has never been higher, and we continue to see heightened engagement from our customer base. These opportunities vary in the amount of capital required, as well as our ability to control them. Some of these opportunities, like continued share repurchases, are fully in our control.

Many of these opportunities, like the recently announced Permian gas units, the 1,200 MW Comanche Peak PPA, or other new long-term contracts at existing or new-build generation assets, are highly accretive but are not expected to begin contributing immediately to our results. The continued improvement in power markets remains a potentially significant source of future growth in our business. Collectively, we see these multiple drivers leading to meaningfully higher adjusted free cash flow before growth per share, with a compelling growth rate over the next three to five years. We will continue to deploy our excess capital to maximize the value creation from these opportunities and will provide updates as they materialize. In closing, the growth and results we've shared today reflect the strength of our strategy and the dedication of our entire team in consistently delivering for our customers and our shareholders.

As we look to the months ahead, our focus remains on finishing the year with solid execution, ensuring reliable performance through the winter season, and setting the stage for continued success in 2026. With that, operator, we're ready to open the line for questions.

We will now begin the question and answer session. To ask a question, you may press star, then one on your touch-tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star, then two. In the interest of time, please limit yourself to one question and one follow-up. Your first question today will come from Shar Pereza with Wells Fargo. Please go ahead.

Hopefully as well. Just maybe focusing on the 2027 opportunities, which is generally in line with expectations. I guess, what's currently embedded in that range? Obviously, it's a little early for the Comanche deal ramp, but I guess, where do you see opportunities to improve versus the midpoint? Is it sort of market vol and locking in some of the forward curves, or is there more strategic dry powder just given the $4 billion of cash available for allocation? Thanks.

Thank you, Shar. I think there are a number of levers still to pull. Obviously, there is an open position. We've disclosed we're still open in 2027. We disclosed about a 70% hedge percentage. As you continue to see the market strengthen, we have exposure to that for sure.

In terms of strategic deals, obviously, contracting is one of these topics that comes up, and we see opportunities to have contracts, some of which could start in a 2027 time period. We do not have that embedded in our forward view. I do think, Shar, it's always difficult to put numbers that far out and make too many assumptions because we have to deliver on these opportunities. We think there's upside in our business. That's why we have a wider range there. Our goal would obviously be to continue to do what we've done in the past, which is trend upwards as we get closer to the delivery year. I think we've shown a track record of doing that, and I think we have quite a few levers to pull.

Perfect. No, I appreciate that, Jim. And then just on the 27.

Sort of like you talked about contracting opportunities, I mean, peers have been talking about deals becoming unanimously more front of the meter for obviously reasons, including circumventing political sensitivities and reliability arguments. Is this how you're thinking about your Eastern fleet, like Beaver Valley, and are you seeing converging pricing between front and behind the meter? Tha

nks. Yeah, that's a really good question, Shar. There are challenges and opportunities with both co-located deals and front of the meter. The additionality concept comes up, and so some folks are doing the bridge power to then get started and potentially then later get a grid connection. Some are starting front of the meter from the get-go. I do think ultimately customers are going to look for a grid connection. I think that's been integral to long-term reliability from a data center point of view.

The way we think about this is that each deal, and we've talked about this for over a year, each deal has unique characteristics, and that's hard, I think, to explain in advance because customers have different goals around sustainability, around speed to market, around which markets they prefer to actually support from a data center standpoint. When you even think about the new build opportunities, which we're part of, that we're in discussions with parties, some of those are looking at how can they bring additional resources to the marketplace to address the long-term concerns folks have that load growth ultimately is going to have to be met with additional generation. It doesn't have to be in the near term.

I think one of our key messages that I think is starting to resonate is there is excess capacity on the system in most markets today, particularly the major markets we're in, ERCOT and PJM, to meet most of the load growth during these non-super peak hours. In the super peak hours, the customers are bringing some solutions as well with their backup generation. I really think all options are on the table from a customer standpoint, whether it's front of the meter, whether it's co-located, whether it's bridge power to then get to the grid, or bridge power to then get to building an on-site generation resource that more directly supports their data center. We haven't seen any options come off the table from our discussions with customers.

I think that's what's really important is customers are being creative as well because they want to work with stakeholders like the regulators and the state leaders who want to make sure things stay reliable and affordable. I do not see a trend yet, Shar. I still see the same variety of options on the table that we were talking about a year ago.

Got it. Perfect, Jim. That's actually really helpful color. Thank you so much. Appreciate it.

Your next question today will come from Jeremy Tonnet with JPMorgan. Please go ahead.

I just wanted to pick up on some of the comments in the prepared remarks there. I believe you talked about meaningfully higher adjusted free cash flow before growth and compelling growth rate over the next three to five years here. Just wondering if.

You might look to quantify that in some sense for the market in the future, given there is a lot of variables as you laid out there, but just wondering any more sense you could provide to that.

Yeah, Jeremy, this is Chris. I appreciate the question, and I think we talked about this. We were expecting this question. As we look forward, there are so many opportunities that we just think it is a disservice to try to put a growth rate on there and to give a range because there is just a number of different things that could come, and the timing of them and when they come could be different. I think we do see, we laid out all the opportunities on the right side of that slide, and we see a lot of those opportunities. We feel like the right time to.

Announce those, we'll continue to update the growth on a likely, at least on an annual basis. We're just not going to try to forecast when and at what level all these opportunities are going to become reality.

Jeremy, I would just like to add that when we give you our 2026 view and our 2027 midpoint opportunities, we're in a highly hedged position, obviously, when we provide that. Part of our strategy has been, let's give our investors the information that we've got, the hedging and the contracting, to give you high confidence in it. As you go further out and you start looking four and five years in a cycle where there haven't been capacity clears and auctions, you haven't necessarily hedged that far out, the degrees of variability out there are wide.

I think that's actually positive from a Vistra shareholder standpoint because the fundamentals of the business, as we talked about in our prepared remarks, are really strong. To just put a number out there and put a growth rate number out there, I think there are too many variables at play that I think you would have many more questions about what are the assumptions underlying that. I do not think we would be giving you enough confidence around all those assumptions to say, "Take that to the bank." We have been, as a company, very consistent, I think, in our view that we want to give you things you can count on, and that's our focus. I think what we have given you in disclosures in the 2026-2027 timeframe meet that hurdle.

Just wanted to come back to, I guess, contracting discussions, if we could. Any color you might be able to provide here. Granted, deals happen when they happen. Just as far as conversations related to gas fire generation relative to nuclear, wondering if you could provide any more color, I guess, on how those trend.

Sure. I'm going to ask Stacey to provide some feedback here as well. You noticed in our prepared remarks, we talked about investing in growth, even, which we're reluctant. I have to tell you, our business is one where we know that fundamentally, in a commodity-driven business, you need to be a low-cost operator. These are unique opportunities in the pace at which we have not seen before. In fact, this is the highest level of engagement we have been part of is what we're in right now.

Recognizing that, we're adding people and we're adding dollars to make sure that we can handle the level of inbounds that we're getting. It's an exciting time. It's a stressful time because there's a ton of work that customers are asking of us. I think the range of options from gas to nuclear to doing some things that are more short-term versus long-term, those options are on the table. Frankly, our people are excited to see the growth opportunities they haven't seen in this industry in their whole career. We're investing in that, not only in SG&A and O&M, but also some CapEx assumptions to capture it. I'd like Stacey to weigh in on this.

Yeah. Thanks, Jim. Hi, Jeremy. Yes, I would just say to echo what Jim said, all options continue to be on the table, and we continue to see.

Sort of record levels of interest across our portfolio, as well as in opportunities to do new build of generation. Demand actually seems to be accelerating from our standpoint based on the conversations we're having and also lengthening into the later years of the decade, whereas I would say a year ago, customers were very focused on 2026, 2027 power. They're now starting to recognize that they need to layer in longer-dated deals as well and serve their needs in the later part of this decade. We just continue to have a number of conversations across our fleet. The number of engagements we have currently and the number of inbounds we're getting are the highest that they've ever been.

We're really excited about the opportunity, but we're also very committed to being disciplined about what opportunities we pursue, making sure that we can deliver and execute on those opportunities.

Thanks, Stacey. Understood. Thank you. Real quick, last one, if I could. As it relates to 2027 hedging price levels, are you able to provide any color there?

We are not providing that at this point. We will next quarter. That's our typical cadence for providing the roll forward, if you will, of the hedge disclosures. Obviously, we've been laddering into an increasing power market through time, and so you would expect to see that increase year over year. You've seen that from 2024 to 2025, 2025, 2026. You're going to see it again in 2027.

As you know, our philosophy isn't to try to capture the absolute peak on any of this because the volumes that we're hedging are so large that you do need to thoughtfully execute in the marketplace, both on the retail customer contract side, any of the large commercial and industrial and data center contracts, as well as third-party hedging in the market. We will provide that disclosure, Jeremy, in the next quarter.

Your next question today will come from Steve Leishman with Wolfe Research. Please go ahead.

Hey, Jim. Just on that last question on the hedging. Just given the kind of bullish factors you mentioned, all the demand, etc., and time to power, I'm just curious, though, why not, have you considered maybe a little less hedging, kind of.

Than the ratable you have done in the past? Just how you are thinking about that. I guess it sounds like just your volumes are so big, you just feel like you need to get a decent chunk of it put in with customers. Yeah, be curious, your view.

Yeah, Steve, that is a really—it is a great question. Even if you look at this year, and I know you follow these markets very closely. You can be hedging out in the forward, and even in 2026, it can look like your hedges are out of the money because the market continues to move up after you hedge. You can get into a third quarter of 2025 in ERCOT, where the weather really did not materialize, and now all those hedges settle deeply in the money.

I do think there is a reality that when you decide you want to hedge, it still takes some time to be moving some of these volumes. I think that gives certainty to our investors that our share buyback program and our dividends and our CapEx plans to sustain and grow the business, debt pay down, that we can deliver on all of those. I do not think the idea for a fleet this size producing over 200 TW hours a year is easy to just back off and then say, "Now it's time to hit the gas pedal on the hedging." We do have to be thoughtful. We do use a point of view, so we're not constantly hedging in a programmatic way.

We do, just like our share buyback, we have some flexibility in our program that when we like prices at certain times, we'll do more. I do think it's partly a reality of the hedging dynamic of a large fleet. It's also the retail customers pulling through, their pricing and their products because they too want to hedge some of their exposure. That's part of the value add that we have as Vistra is to meet customers in their needs when they want to meet them. We have the discussions all the time internally, "How far out should we go? What's the right risk premium for going out that far?" I do think you're hitting on the key aspect, Steve, in terms of the size of the business and having a method to it.

Okay. Just on the kind of M&A and investment-grade metrics, maybe you could talk to how to balance those, how you're looking at balancing those things. I know you've got $4 billion cash still available. Is that enough for the M&A opportunities you're seeing? If you saw something bigger, would you be willing to go above the metric targets a little bit on debt to do it? How should we just think about that?

Yeah, Steve, thanks. That's a good question. We have been upfront in our discussions with the rating agencies that we think that the opportunity set for inorganic growth is at a high level right now. We don't want to be in a position where we're not able to be opportunistic.

One of the things why we think that it could be—why I said 12-18 months—is we have certainly talked to the agencies about having some cushion that we do not want to just get into investment-grade land and then be at risk of missing an opportunity. I do think, though, that if you look at where our metrics are going, even with the $4 billion, and we noted in the presentation that that would assume a 2.3 times leverage ratio, that there is a lot of dry powder there where we would still meet investment-grade metrics. That leverage could probably come as our business risk improves. That leverage, there is probably some room there, even with that, to increase that leverage. There is probably a little bit more than $4 billion. The last thing I will say is if it is the right opportunity. We do view.

We're buyers of our stock, but the stock could be used, our equity could be used as a currency as well. We've seen others in our industry do that. That would obviously have to be for the right opportunity, but that could be a path as well for us.

Your next question today will come from Bill Appocelii with UBS. Please go ahead.

Just a question around your views on the forward curves. You mentioned earlier about the soft weather, and the forwards held up reasonably well, all things considered. You highlight here about 6.5% year-to-date growth on a weather-normal basis in ERCOT. When you guys think about the potential for constructing additional generation, I know you made a decision to move forward with the peakers.

Maybe just some updated thoughts around where the curves are and as you sort of look out to the demand profile and what's your bias on the pricing level from here.

Sure. Bill, great question. I'll start with our decision, obviously, for Texas because the 860 MW, which is in addition to almost 500 MW of gas augmentations and things that we've done in the ordinary course to bring more megawatts to the grid. But 860 MW of putting that in West Texas is a unique opportunity because of what we've been seeing in West Texas specifically. That hub out there used to trade at a discount to the North Hub, which picks up the Dallas-Fort Worth area. Now it's trading at a premium, a significant premium.

We're looking at fundamental supply and demand activity in West Texas driven with the electrification of oil and gas load as well as data centers. We think that having a site there already, our Permian gas site, which we're tripling by virtue of bringing these turbines to that site, that's a unique opportunity. It would not have penciled in the same manner in other parts of Texas. I think that's just an important thing to note is I don't think this is all of a sudden new build economics. You saw we're building these at $1,100 per kW, which is lower than where a fully priced new build would be because we had pre-ordered some of this equipment, and we have good relations on our EPC that we feel good about being able to deliver this really at a below-market cost. That's unique.

To your forward curve aspect, we are seeing more life in ERCOT forwards than we had seen, obviously, a year ago. I think that's still not fully reflective of the load-growth forecast that we have, and we're conservative in our load-growth forecast. I say conservative. We try to ground our forecast in our best view of physically what can come onto the grid in a certain timeframe. We have lower numbers than where the utilities are and even where ERCOT is. We're comfortable with our numbers, and we're comfortable the forward curves don't even reflect that level of load growth. We're still bullish on where we think power prices could go just on supply and demand. In PJM, that market has actually not shown as much life on the energy side. It had on capacity because it's predicting.

Supply demand on capacity driven by low growth. In the actual load that's materializing, and then looking at the dynamics of supply and demand, we haven't seen those curves move as much. In the last quarter, we have seen more life in PJM. We think that also is not reflective of where load growth is likely to take energy prices in PJM. It is starting to, I think, recognize that tightening aspect. We don't know with coal plant retirements and any extensions what might happen fundamentally with supply demand in the next three to five years. You get beyond that, you're going to have to still deal with load growth and ultimately what new resources will come on in the 2030-plus timeframe and what do we do with some of the older assets.

There's more coal to retire in PJM as a market than, say, ERCOT. I do think those supply-demand fundamentals over time will still show strength in the forwards that we really still do not see with today's marks.

Okay. No, that's very helpful. Then just one other one around the nuclear upgrades. I think what you described sounds like potentially 6-700 MW. How would you consider pursuing that? Does that have to come with offtake agreements or contracting of that output to potentially pursue it, or maybe just to think through? I know you're still evaluating, but maybe just how would that potentially come to fruition?

Yeah, Bill, that's the most. That is still. While it's maybe less expensive than building new nuclear, it's still expensive. The market price.

The clean attributes, there is interest in the upgrades from support with potential data center parties. Those are conversations that are ongoing. Those are obviously complex because they do take time to bring to market. Those things will come on beginning in the 2030s. They are not quick capacity. To Stacy's earlier point, the customers are doing longer-term planning. I think this does meet their interest levels. We do not think the current forwards in either market would support just embarking on upgrades for that reason.

Last question today will come from David Arcara with Morgan Stanley. Please go ahead.

I was wondering, could you give an update on the other data center contracting opportunities that I think in the last quarter you had suggested could come to fruition by year-end? Just any comments as to whether that timeframe is still looking possible for certain opportunities? Any just directional? Is it nuclear versus gas or PJM versus ERCOT? I am curious any color you might be able to offer.

Vistra (VST) Q3 2025 Earnings Call Transcript

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