Q3 2025 Vistra Corp Earnings Call

Good day and welcome to vistra, third quarter 2025, earnings call. All participants will be in a listen-only mode. Should you need a 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 1 on a touchtone phone to withdraw your question. Please press star then 2

please note this event is being recorded.

I would now like to turn the conference over to Eric Meek, vice president investor relations. Please go ahead.

Good morning and thank you for joining visitors. 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.voy.com.

To update our forward-looking statements, I encourage all listeners to review the Safe. Harbor statements included on the slide 2 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'll 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 the Q3 2025 results.

This year continues to be a transformational 1 for our company and the activity. During the quarter was a key driver of our progress.

We announced the landmark power purchase agreement at. Comanche Peak announced, our plans to develop 2. Gas fired units in West, Texas and successfully closed the acquisition of approximately 2.6. Gigawatts of natural. Gas, fire and assets from Lotus infrastructure partners.

Importantly, while we are successfully advancing our growth efforts, we continue to be steadfastly focused on execution and 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 is 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 5. 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 ibida to 5.7, to 5.9 billion dollars and our 2025 adjusted free. Cash flow before growth to 3.3 to 3.5 billion.

Moving to our near-term Outlook. We are introducing guidance ranges for 2026 adjusted IB but uh, of 6.8 to 7.6 billion dollars,

And adjusted free cash flow before growth of 3.925 to 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 e, but our guidance range is above our previously, communicated 2026 adjusted, EBA midpoint opportunity of 6.8 billion dollars. 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 a reliable flexible, and highly hedge generation Fleet.

Finally, for 2027, we are introducing an adjusted IBA, midpoint opportunity range of 7.4 to 7.8 billion dollars,

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 IBA 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 customers to energize up to 1200, megawatts 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 re-licensed Comanche Peak out to the 2050s.

And this agreement provides the financial backing to maintain operations through that date and potentially beyond.

Further the customers 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 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 US.

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.

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 or commercial team continues to deliver strong results. Through disciplined execution over a comprehensive hedging strategy.

We've established a highly hedge 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 teams continuous innovation combined with strong customer service drives, a consistent earnings level of the business. While outperforming on customer complaint performance versus our key competitors. And maintaining our 5-star ranking

Switching the cap 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 dollars to our shareholders. Through share repurchases and common stock dividends Chris will cover cap allocation in more detail later in the presentation, but you will see that we expect a return. At least an additional approximately 2.9 billion dollars through share repurchases and common dividends including the additional 1 billion dollars. 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 2, 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.

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 and early to mid 2028.

Lastly, we successfully closed in our acquisition of 7 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 EBIT 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, driven by higher earnings and continued prudent management of our debt levels.

As we stated.

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.

Oakhill solar project and urkai reach commercial operations last month.

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 this carbon-free profile and 24. By7 availability is a vital component in meeting the country's electricity needs for decades to come

large low 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 plan 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.

Regarding the slide 7 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.

Slow growth in our largest markets remains, well, ahead of national averages with whether normalized load in pjm Rising approximately 2 to 3% and the urop market growing around 6% year-over-year.

Our largest markets, pjm, and ercot can continue to be targeted for a larger share of these developments.

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 low 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 50s 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 and anticipating over the next 3 to 5 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 the slide. 8 Vista 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 20127.

Our retail business consistently achieved, strong margin performance and high levels of free cash flow conversion.

Our commercial teams 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.

In organic expansion is 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 1200 megawatt. Power purchase agreement at Comanche Peak.

Or the Cleto Creek called a gas conversion, and these are expected to begin contributing to profitability in the next few years.

Project execution.

Others such as the nuclear up rates, 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 megawatts 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 outline last quarter, and we believe the momentum we have today should enable us to realize multiple Contracting opportunities.

In fact, we've set aside roughly 50 million dollars per year over the next several years, including 2026 and 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 particular a 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 Vista delivered, 1 billion 581 million in adjusted. Ava in the third quarter, including 1,544 million 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 e segment and the expected nuclear PTC Revenue recognized, the Comanche Peak, more than offset, the impacts of extended outages at Martin Lake unit 1 and our battery facilities at Moss, Landing

On a year to date basis. The incremental contribution from 2, 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 the 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 Eva to adjusted free cash flow before growth conversion rate of at least 60%.

We projected generate a significant amount of cash approximately 10 billion dollars 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 hedge 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 160 165 million shares at an average price per share under $34,

We continue to expect to return at least 1.3 billion dollars to our shareholders each year through Sherry purchases and common dividends.

With the board's recent authorization of an additional 1 billion dollars of share repurchases. We have approximately 2.2 billion dollars of share repurchase authorization enough to meet our annual Sherry purchase Target through 2027.

Through our 10 b51 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 Ava,

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 to 18 months.

Turning the 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 dollars 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 dollars to our Equity holders through, share repurchases and common and preferred dividends and 2.6 billion dollars for a creative 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 purchases or 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, have led to a significantly wider opportunity, set for growth compared to years past.

notably, while the opportunity set has changed, our approach is 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 the 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 ibida and adjusted free cash flow before growth guides, 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 don't fully capture our best-in-class Capital allocation demonstrated over the past several years.

As a result, we've included a new prospective 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's also an important measure with Investor'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 for 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 2-year period is compelling and is a testament to both the operational excellence and discipline Capital allocation by the team.

As Jim outlined earlier, the number of opportunities for our business have 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 Cherry purchases are fully in our control.

Many of these opportunities, like the recently announced Permian gas units, the 1,200 megawatt Camanche Peak PPA, or other new long-term contracts that exist for our new bill 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.

Growth per share.

With a compelling growth rate over the next 3 to 5 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 and 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 1 on your touchtone phone,

If you are using a speaker-phone, 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 2

In the interest of time, please let me yourself to 1 question and 1 follow-up.

And your first question today will come from a sharp, pereza with Wells Fargo. Please go ahead.

Hey guys. Good morning.

Hey Sean. Good to hear from you.

Yeah, you too. Jim, hopefully, as well.

Um so just maybe focusing on the 27 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, you know, V and locking in some of the forward curves or is there more strategic dry powder, just giving the 4 billion of cash available for allocation, thanks.

Thank you. Sure. I think there are a number of of levers still to pull. Obviously there is

Uh, an open position. We've disclosed that we're still open in 2027 and have disclosed about a 70% hedge percentage. So, as you continue to see the market strengthen, we have exposure to that, for sure.

Um, in terms of strategic deals obviously Contracting, is 1 of these topics that comes up, and we see opportunities to have contracts, some of, which could start in the 2027 time period, we do not have that embedded, you know, in our forward View. And so I do think Char there's, you know, it's always difficult to put numbers that far out and make too many assumptions because we have to deliver.

On, on these opportunities. But we think there's upside in our business. That's why we we, uh, we have a wider range there and, you know, 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 and I think we've shown a track record of doing that. And I think we have quite a few levers to pull

Perfect. Now I appreciate that. Jim and then just on the you know the 27 sort of like you talked about Contracting opportunities. I mean peers have been talking about deals becoming unanimously more fun of the meter for obviously reasons, including you know, circumventing political sensitivities. And you know 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? Thanks.

Yeah, that's a really good question. Sure. I, you know, there are challenges and opportunities with both co-located deals and front of the meter, you know, the additionality concept comes up. And so folks, some folks are doing the bridge power.

To then get started and potentially then later get a grid connection. Some are starting in 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, uh, support from a data center standpoint. So, when you even think about the new build opportunities, which we're part of that, we're in discussions with parties,

Particularly the major markets, we're in kott and pjm to meet most of the load growth during these non super peak hours, and then the super peak hours, the customers are bringing some solutions as well with their backup generation. So I really think all options are on the table from a customer standpoint. You know, 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 and 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. So I don't see a trend yet. Sure, 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 caller. Thank you so much. Appreciate it.

Thanks sure.

And your next question today will come from Jeremy tonette with JP Morgan. Please go ahead.

Hi, good morning.

Hey, Jeremy.

I just want to pick up on some of the comments in the prepared remarks there. I, I believe you talked, about meaningfully higher, adjusted pre-cast flow before growth and compelling growth rate, you know, over the next, uh, 3 to 5 years here, just wondering if, um, you might look to quantify that in some sense for the market, and in the future, you know, giving us 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, I think we talked about this. And, and, and we're expecting this question. I, you know, as we look forward there, there's so many opportunities that we, we just think it's a disservice to try to put a growth rate on there. We, um, and, and to give a range because there's, there's just a number of different things that could come and the timing of them and, and when they come could be different. So, um, I think, you know, we, we do see, uh, you know, we, we laid out all the opportunities on the right side of that slide and we see a lot of those opportunities, and we feel like that the right time to announce those. You know, we'll, we'll continue to update the growth on a, you know, likely, you know, on, on, at least, on an annual basis, but

But we're we're just not going to Fork. Try to forecast when and and and at what level all these opportunities are going to uh

Become reality.

Jeremy. This is, I would just like to add that when we give you our 26, few and our 27, midpoint opportunities, we're in a highly hedged position, obviously, when we provide that. So 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 4 and 5 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 or wide and and I and I think that's actually positive from a vist for shareholder standpoint because the fundamentals of the business as we talked about in our prepared, remarks are really strong but to just to put a number out there and put a growth rate number out there I think is there's too many variables at play that I think you would have many more questions about what are the assumptions underlying that and I don't think we would be giving you enough confidence around all those assumptions to say take that to the bank. We've been as a company very consistent, I think at our view that we want to give you things, you can count on and that's the

So that's our focus and I think what we've given you and disclosures in the 2627 time frame, you know meet that meet that hurdle.

Got it. That's uh helpful thank you and just wanted to come back to uh I guess Contracting discussions. If we could in any color you might be able to provide here granted deals happen when they happen. But just as far as uh you know conversations related to gas uh fire generation relative to new cure wondering if you could provide any more color I guess on um how those trends

Sure. And I'm going to ask Stacey to to provide some feedback here as well. Um, you noticed in our prepared remarks, we talked about investing in growth even through sgna which we're reluctant. I have to tell you, our business is 1 where we know that in a fundamentally in a, in a, in a commodity-driven business, you need to be a low-cost operator.

In the in the pace at which we have not seen before. In fact, this is the highest level of Engagement. We've, we've been part of is what we're in right now and so recognizing that we we're adding people and we're adding dollars to make sure that we can handle the level of inbounds.

That we're getting and it's an exciting time, it's a stressful time, you know, because there's a ton of work that customers are asking of us, but I think the 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 and frankly are people that are excited to see the growth opportunities. They haven't seen in this industry and their whole career. So we're investing in that not only in sgna and on and M, but also some capex of suctions to capture it, but I I'd like Stacy to to weigh in on this. Yeah. Thanks, dude.

Hi, Jeremy. Yes, I would just say to Echo what Jim said. You know, all options continue to be on the table and we continue to see, um, 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, uh, customers were very focused on 2026 2027 power. They're now starting to recognize that they need to

Layer in, uh, longer dated, uh, deals as well and serve their needs in the later part, uh, of this decade. And so, we just continue to have a number of conversations across our Fleet.

Uh the number of engagements we have currently and the number of inbounds we're getting are the highest that they've ever been. So we're really excited about the opportunity, but we're also very committed to being disciplined about what opportunities we pursue, uh, making sure that we can deliver and execute on those opportunities.

Thanks Stacy.

Understood, thank you real quick. Last 1, if I could, as it relates to 27 hedging, uh, price levels, are you able to provide, uh, any color there?

We are not providing that at this point, we will next quarter. Um, that's our typical Cadence, for providing the role for it, if you will of the Hedge disclosures. But obviously, we've been laddering into an increasing power Market through time. And so you would expect to see that um, in increased year-over-year and you've seen that from 24 to 25 25/26, you're going to see it again in 27, 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, and the

The large commercial to Industrial and and data center contracts, as well as third-party hedging in the market. But we will provide that disclosure disclosure Jeremy in the next quarter.

Fair enough worth a try. Thank you.

Thanks, Jeremy.

And your next question today will come from Steve leechman, with wolf research, please go ahead.

Yeah. Hi. Good morning.

Hey morning, Steve. Um, hey Jim. Um, so just on that last question on the hedging. Uh, you know, just given the kind of bullish factors you mentioned

All the demand Etc and time to power. I'm just curious.

though, why not, you know, have you considered maybe a little less,

Hedging.

Kind of, uh, than the rateable you've done in the past.

And just how you're thinking about.

That it's I guess it sounds like you just your volumes are so big. You just feel like you need to

To get a decent chunk of it. Uh,

You know, we put in with customers.

But you'd be curious about your view.

Yeah, see that is a really it's a great question, you know, even if you look at this year and I know you follow these markets very closely, um you know you can be hedging out in the forward and it could and even in like 2026, it can look like your Hedges are out of the money because the market continues to move up after you Hedge.

Then you can get into like a third quarter of 2025 at Urgot where the weather really didn't materialize. And now all those Hedges settle deeply in the money.

My back 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. So I don't think the idea for a fleet this size producing over. 200 kilowatt hours a year is easy to just back off and then say now it's time to hit the gas pedal on the hedging. Um and so 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, but 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 a hedge, some of their exposure. And that's part of the value, add that we have is Vistas to meet customers, you know, in their needs, when they want to meet them and 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? But I do think you're hitting on the key aspects. Steve, in terms of, okay, size of the business is being, you know, having a method to it.

Okay, and then just just on the uh, kind of m&a and investment grade metrics, Maybe.

you know, you could talk to

uh, how how to balance those how you're looking at balancing, those things and

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, you know, would you want? Would you be willing to go above?

The metric targets a little bit on debt to to do it. How do, how should we just think about that?

Yeah. Steve uh, thanks. That's a a good question as we. And and we've been upfront in our discussions with the rating agencies that we think that the opportunity set for inorganic growth is, you know, is

is at at a high level right now and we don't want to be in a position where we're not able to be opportunistic. And so 1 of the things why we think that it could be what way, you know, I said 12 to 18 months is we we have certainly talked to the agencies about having some cushions that we don't 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 our where our metrics are going even with the 4 billion dollars and you and, and we, um, noted in the presentation, that that would assume a 2.3 times leverage ratio,

That there is a lot of dry powder there and where we'd still meet investment grade metrics. And and that leverage could probably come as our business risk improves that leverage. You know, there's probably some room there even with that to to increase that leverage. So there's probably a little bit more than 4 billion. And then the last thing I'll say is, you know, if it's the right opportunity, you know, we we do view, you know, we 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.

Okay, great. Thank you.

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

Hi, good morning.

How are you just question around your views on on the forward curves? Um, you know, we you you mentioned earlier about the soft, uh,

Whether or not, you know, the Fords held up reasonably well. All things considered um, you know, you you highlight here about 6 and a half percent year-to-date growth on a weather normal basis and are caught. Um, you know, when you guys think about, you know the potential for constructing, you know additional generation. I know you made a decision to move forward with the peers but maybe just a some updated thoughts around on where the curves are and you know as you sort of look out to the the demand profile and and you know, what's your bias on on the

The pricing level from here.

And 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. And we think that these having a site there already, our puran gas site which were tripling by virtue of bringing these turbines to that site. That's that's a unique opportunity. It would not have penciled in the same manner and other parts of Texas. So I think that's just an important thing to to note is, I don't think this is all the sudden new build economics and you saw, we're we're building these at 1100, a KW, which is lower than where a fully priced new build would be because we had pre-ordered, uh, 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. So that's unique. But to your forward curve aspect, we are seeing more life in kott forwards than we had seen, obviously,

A year ago.

And I think that's still not fully reflective of the low growth forecasts that we have, and we're conservative in our low growth forecasts. And when I say conservative, we try to ground our forecasts in our best view of physically what can come onto the grid in a certain time frame. We have lower numbers than where the utilities are and even where our KOTT is.

And we're comfortable with our numbers and we're comfortable. The forward curves don't even reflect that level of load growth. So, um, we're still bullish on where we think power prices could go, um, 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, you know, supply-demand on capacity driven by low growth, but 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. But in the last quarter, we have seen more life in PJM, and we think that also, uh, is not reflective of where load growth is likely to take energy prices in PJM, but it is starting to, I think, recognize that tightening, um, aspect. And we don't know if coal plant retirements and any...

Extensions what might happen fundamentally with Supply demand in the next you know 3 to 5 years but 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 time frame. And what do we do with some of the older assets, there's more call to retire and and pjm as a market than say kott. And so I do think those Supply demand fundamentals over time will still show strength in the

Forwards that we really still don't see with today's marks.

Okay. No that's very helpful and then just 1 other 1 around the, the nuclear upgrades. I think the what you described sounds like potentially 6 to 700 megawatts.

how would you consider pursuing that, does that have to come with, you know, uh,

Off-take agreements, or contracting of that output to potentially pursue it, or maybe just the think-through. I know you're still evaluating, but maybe just, you know, how would that potentially come to fruition?

Yeah, bill, that's the most.

Um that is still while it's maybe less expensive than building new nuclear it's still expensive. Um and so the market price,

And the clean attributes there is interest in the uprights from support with potential data, center parties and so those are conversations that are ongoing and there. Those are obviously um complex because they do take time to bring to Market. Those things will come on, beginning in the 2030s, so they're not, they're not quick Capac.

Capacity. And so to Stacy's earlier point, there are the, the customers are doing longer term planning. So, I think this does meet their interest levels, but we we don't think the current forwards in either Market would support just embarking on upgrades for that reason.

All right. Okay. Thanks very much.

Thank you, Bill.

Hey, thanks so much. Good morning.

Morning, David. Um, I was wondering could you give an update on the um, other data center? Contracting opportunities? That I think in the last quarter you would suggest it could come to fruition by year end, just any cam comments as to whether uh that time frame is still looking possible uh for certain opportunities. And then any just directional, uh, is it nuclear versus gas or PGM versus aircot? Uh, Curious any color you might be able to offer

Sure.

Yeah, the exact timing. I think this has come up on our previous calls and certainly some of our peers have had this question. The exact timing is hard to predict just because it's a complex contract, 2 parties need to reach agreement and 2 parties have to get through their own approval processes because these are material deals for both sides. You know, of these agreements. Um, I do think there's possibilities of that David. I think, you know, we are have stages of contracts that are much closer to execution and we've got some that are that are longer in terms of the development cycle to, to be able to bring those to Market. Um, but I do think that, as we mentioned earlier, the activity level is the highest that it's been. I think that also drives a bit of a sense of urgency on both sides of the equation. I think we want to make sure that we're able to deliver and capture this value, but the other side of the equation is the large customers know.

Know that there aren't that many immediate opportunities with which, to to execute. And so we are seeing heightened activity levels and we certainly hope to be able to give you more specifics, and execute what we call put points on the board by year end, but I can't predict that specifically. I mean, we're into November, you know, we hit the holidays. Um but either way whether it's right before year end or sometime thereafter, we're signing deals that would be in the 101 1520 year Horizon, we need to get these right and that and that's what we're focused on.

Yeah, absolutely, I appreciate that color. Um, and uh, on uh well, congratulations on, comment, you peek. Um, and I was just wondering if you could uh, maybe touch on the further opportunities, uh, that exist on the site. You know, what are the prospects for Contracting? The uh, second unit there and I'm just curious. Is there any other infrastructure on the site that you could be involved in?

Yeah, David it's a really good question. Thank you for actually, uh, bringing it up. We thought that might be question number 1 and uh, but it's always in the rear view mirror, right? Once you announce it. But yeah, about 5 weeks ago, we were very excited to announce that that agreement and um, we have great hope for expanding that agreement. There's been some interest on the customer's part to do so, but I also caution that, you know, a data center gets up to 1,200 megawatts is

Is still a very large Data Center and I'm I'm actually unaware of any data center even operating in the US today. That's a thousand megawatts in terms of actual polling, power and operating. So we want to get the first 1200, right? It's important for the State of Texas, the you know, State leaders for I for kott for the puc that we show leadership here on this and getting this, right? But the customer conversations have talked about more capacity. They've talked about the potential for updates and so once you establish a beach head like this, I think you're going to have more options but it all depends on the quality of our execution here. And so I do think of this as a relationship and not a transaction and I think there's going to be you know, multiple opportunities.

Great. Appreciate it. Thank you so much.

Thank you, David.

Includes our question and answer session. I would like to turn the conference back over to Jim Burke for any closing remarks.

Yeah, thank you everyone for joining. As you can see, this has been a very active time and we put a lot of points on the board in the third quarter. You know, as we like to call it, this is an incredibly exciting time for vistra. We look forward to executing not only on our large and growing base business, but our growth initiatives that we talked a lot about on today's call. I want to thank our team for their service to our customers and our communities and we appreciate your interest in this.

Mystra and we hope to see you in person soon. Have a great rest of your day.

On princess. Now concluded, thank you for attending today's presentation. You may now disconnect