Core Insights - Market volatility in 2025 has led investors to reassess their portfolios, with defensive stocks like the Utilities Select Sector SPDR Fund (XLU) gaining 18.3% year to date due to the consistent demand for electricity [1] Company Performance - AES reported a 30.6% increase in diluted earnings per share for Q3 2025, driven by new renewable projects and updated rates in Indiana and Ohio [2] - The company's net income reached $517 million, an increase of $302 million from the previous year, supported by improved tax results and earnings from renewable projects [6] - AES's adjusted EBITDA rose to $830 million, up $132 million, with adjusted EPS at $0.75 [6] Financial Metrics - AES has a dividend yield of 5.1%, significantly higher than the utility sector average of 3.75% [5] - The forward price-earnings ratio for AES is 6.31x, compared to the sector's 19.46x, indicating that the shares are relatively affordable for value investors [5] Growth Drivers - AES's growth is primarily attributed to its clean energy and utility businesses, despite a slight setback from the sale of AES Brasil [7] - The company has annual sales of $12.28 billion and net income of $1.68 billion, reflecting a stable balance sheet and reliable earnings growth [7] - AES is advancing its Bellefield project, which will be the largest solar-plus-storage site in the country, with a 15-year deal with Amazon to bring 1,000 MW online [8]

Core Insights - The market is perceived as overvalued, indicated by the high P/E ratio of the S&P 500 and the 'Buffett Indicator' exceeding 200% [2] Group 1: Investment Focus - iREIT+HOYA Capital specializes in income-producing asset classes, aiming for sustainable portfolio income, diversification, and inflation hedging [1][2] - The investment group targets dividend yields up to 10% and provides research on REITs, ETFs, closed-end funds, preferreds, and dividend champions [2] Group 2: Market Conditions - Despite concerns about market overvaluation, there remains a focus on defensive stocks with medium- to long-term investment horizons [2]

Core Insights - The AES Corporation is focusing on expanding its renewable energy generation through solar, wind, and battery storage while also increasing its presence in the liquefied natural gas (LNG) market [1] Group 1: Renewable Energy Expansion - AES aims to secure at least 4 gigawatts (GW) of power purchase agreements (PPAs) by 2025, having already signed or been awarded 2.2 GW year to date, including 1.6 GW from data center clients [2] - The company is on track to achieve its goal of 14-17 GW of PPAs for 2023-2025 and plans to bring 3.2 GW of new projects online in 2025, with 2.9 GW of construction completed this year [2] - AES completed the 1,000 MW Bellefield 1 project in June 2025, structured in two phases, each delivering 500 MW of solar and 500 MW of battery storage, totaling 2,000 MW [3] Group 2: LNG Market Development - AES is expanding its footprint in the LNG market through infrastructure development, including the operation of the Dominican Republic's sole LNG import terminal [4] - Key projects in Vietnam, such as the Son My LNG terminal and the 2,250-MW Son My 2 gas facility, are expected to enhance AES's global LNG presence [4] Group 3: Financial Performance Challenges - The decline in wholesale electricity prices due to increased renewable energy adoption and abundant natural gas supplies poses a risk to AES's financial performance [5] - As of September 30, 2025, AES had a long-term debt of $26.46 billion and cash equivalents of $1.76 billion, indicating a significant debt burden [6] Group 4: Stock Performance - Over the past six months, AES shares have increased by 19.7%, outperforming the industry's growth of 9.9% [7]

Core Insights - The AES Corporation has faced significant challenges in 2023 and 2024, with its shares dropping over 30% since reaching $20 last September, while the sector overall gained approximately 10% during the same period [1] Company Performance - AES Corporation's stock performance has been notably poor, with a decline of more than 30% in a timeframe where the broader sector experienced a 10% increase [1]

Core Insights - The AES Corporation has faced significant challenges in 2023 and 2024, with its shares dropping over 30% since reaching $20 last September, while the sector overall gained approximately 10% during the same period [1] Company Performance - AES shares have underperformed the sector, indicating potential issues within the company or its market positioning [1] Market Context - The broader sector experienced a gain of about 10%, contrasting sharply with AES's decline, suggesting that the company's struggles are not reflective of the overall market conditions [1]

Core Insights - AES Corporation is a global energy company focused on sustainable energy solutions and has a strong presence in renewable energy projects [1] Financial Performance - In Q3 2025, AES reported revenue of $3.35 billion, a 1.9% increase from the previous year, surpassing the Zacks Consensus Estimate of $3.29 billion, resulting in a positive surprise of 1.85% [2] - The company's EPS of $0.75 fell short of the expected $0.78, reflecting a negative surprise of 3.85% [2] - Net income for Q3 2025 was $517 million, significantly up from $215 million in Q3 2024 [3] - Net income attributable to AES Corporation rose to $639 million compared to $504 million in Q3 2024 [3] - Adjusted EBITDA reached $830 million, up from $698 million in Q3 2024, while adjusted EPS increased to $0.75 from $0.71 in the previous year [3] Future Growth Potential - AES is on track to add 3.2 gigawatts (GW) of new projects in operation by the end of 2025, with 2.9 GW already completed this year [4] - The company has signed or been awarded new long-term Power Purchase Agreements (PPAs) for 2.2 GW of renewables, including 1.6 GW with data centers [4] - The current PPA backlog stands at 11.1 GW, with 5 GW under construction, indicating strong future growth potential [4] Financial Metrics - AES's price-to-earnings (P/E) ratio is approximately 9.73, indicating the market's valuation of its earnings [5] - The company's price-to-sales ratio is about 0.82, and the enterprise value to sales ratio is 3.22 [5] - The debt-to-equity ratio is notably high at 8.99, indicating a significant reliance on debt financing [5] - The current ratio is 0.82, suggesting potential challenges in covering short-term liabilities [5]

Core Insights - The AES Corporation's third-quarter 2025 adjusted earnings of 75 cents per share missed the Zacks Consensus Estimate of 78 cents by 3.9%, but improved 5.6% from 71 cents in the year-ago quarter [1] - Total revenues for the company reached $3.35 billion, reflecting a year-over-year increase of 1.9% and surpassing the Zacks Consensus Estimate of $3.29 billion by 1.9% [2][8] - The company reaffirmed its 2025 earnings guidance, expecting adjusted earnings in the range of $2.10-$2.26 per share, with a consensus estimate of $2.17 [6][8] Financial Performance - The total cost of sales in Q3 2025 was $2.62 billion, up 1.9% year over year [3] - Operating income totaled $735 million, an increase of 1.8% from $722 million in the same period last year [3] - Interest expenses decreased to $348 million, down 8.2% from $379 million in the prior-year quarter [3] Financial Condition - As of September 30, 2025, cash and cash equivalents stood at $1.76 billion, up from $1.52 billion as of December 31, 2024 [4] - Non-recourse debt increased to $21.66 billion from $20.63 billion as of December 31, 2024 [4] - Net cash flow from operating activities for the first nine months of 2025 was $2.82 billion, compared to $1.66 billion in the same period of 2024 [4] Capital Expenditure - Total capital expenditure for the first nine months of 2025 was $4.39 billion, down from $5.67 billion recorded a year ago [5] Growth Outlook - AES reaffirmed its average annual earnings growth target in the range of 7-9% through 2027 [6][8]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2025 was $830 million, up from $698 million in the previous year, driven by growth from new renewables projects and rate-based investments in U.S. Utilities [19] - Adjusted EPS increased to $0.75 per share compared to $0.71 in the prior year, influenced by similar drivers as adjusted EBITDA [22] - The company has realized the majority of the $150 million in cost savings for the year and is on track to achieve a $300 million annual run rate in 2026 [20][26] Business Line Data and Key Metrics Changes - Renewables EBITDA saw a 46% increase year to date, primarily due to the organic growth of new projects and the maturation of U.S. Renewables businesses [6][30] - The U.S. Utilities segment is focused on maintaining affordability while addressing increased demand, with a rate increase request that is less than the cumulative impact of inflation since the last adjustment [14][17] - The Energy Infrastructure segment's higher EBITDA reflects the acquisition of the remaining ownership in the Cochrane coal plant and the commencement of operations at the Gatun gas plant [24] Market Data and Key Metrics Changes - The company signed 2.2 gigawatts of new Power Purchase Agreements (PPAs) year to date and expects to sign an additional 1.8 gigawatts by year-end [5] - The U.S. backlog is 7.5 gigawatts, with an additional 4 gigawatts in the pipeline, all of which are safe harbored [11] - The company is experiencing strong demand across the sector, particularly from data centers, with a focus on time to power [10] Company Strategy and Development Direction - The company is committed to executing its plan and is well-positioned for growth into 2026, reaffirming its full-year 2025 guidance and long-term growth rates [4][30] - The strategy includes a focus on larger, more profitable projects, with an average project size increase of over 50% in the past five years [7][53] - The company is leveraging its safe harbor pipeline and robust domestic supply chain to meet growing energy demand [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strategic and financial objectives, highlighting a clear line of sight to EBITDA growth through ongoing construction projects [30] - The company anticipates a strong step-up in growth rates over the next two years, with a long-term growth rate of 5% to 7% through 2027 [26][27] - Management noted that the energy infrastructure segment's drag from asset sales and coal retirements is expected to lessen, allowing for more robust overall growth [39] Other Important Information - The company has a capital allocation plan that includes returning over $500 million in dividends to shareholders while investing approximately $1.8 billion toward new growth [28] - The company has repaid approximately $400 million of subsidiary debt, maintaining a strong balance sheet consistent with its investment-grade credit ratings [29] Q&A Session Summary Question: Long-term growth outlook and asset sales impact - Management reaffirmed the 5% to 7% growth guidance through 2027, with the $400 million in EBITDA expected from projects coming online in 2027 and beyond [36][38] Question: Parent funding and balance sheet capacity - The focus is on strengthening the balance sheet and maintaining investment-grade ratings, with no plans to issue equity in the near term [42][44] Question: Demand acceleration and data center interest - Strong interest from data centers is noted, with a focus on larger, more profitable projects rather than just the number of gigawatts [51][53] Question: Energy storage demand and opportunities - Energy storage is critical for meeting growing demand, with strong demand expected for both behind-the-meter and grid services [56][57] Question: Utility opportunities and IRP update - Advanced negotiations are ongoing, with expectations to announce deals soon, focusing on building transmission and generation capacity [65][66] Question: Powered land opportunity details - The powered land solution involves co-locating data centers with existing power projects, providing a site for development along with an associated PPA [68][100]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2025 was $830 million, up from $698 million in the previous year, driven by growth in renewables projects and rate-based investments in U.S. utilities [12][14] - Adjusted EPS increased to $0.75 per share from $0.71 year-over-year, influenced by similar drivers as adjusted EBITDA [12][14] Business Line Data and Key Metrics Changes - Renewables EBITDA saw a 46% increase year-to-date, primarily due to the addition of 3 gigawatts of new capacity and cost reductions [5][15] - The utilities segment reported higher adjusted pre-tax contributions driven by $1.3 billion in rate-based investments over the past year [16] Market Data and Key Metrics Changes - The U.S. backlog for renewables stands at 7.5 gigawatts, with an additional 4 gigawatts in the pipeline, all of which are safe harbored [7] - AES Indiana is positioned as one of the lowest-cost providers in Indiana and Ohio, with expectations to maintain this position post-rate case resolution [8] Company Strategy and Development Direction - The company aims to sign 4 gigawatts of new Power Purchase Agreements (PPAs) in 2025, with 2.2 gigawatts already signed and expectations for an additional 1.8 gigawatts [4] - The focus is on profitable growth with attractive returns, emphasizing fewer but larger projects in renewables [32] Management's Comments on Operating Environment and Future Outlook - Management remains confident in achieving the full-year 2025 guidance and long-term growth rates, reaffirming a 5-7% growth rate for adjusted EBITDA through 2027 [18][22] - The company is well-positioned to meet the growing demand for reliable, low-cost power due to its advanced pipeline of development projects and strong domestic supply chain [7][24] Other Important Information - The company has achieved significant cost savings, realizing the majority of a $150 million target for the year and aiming for a $300 million annual run rate by 2026 [12][17] - A partial settlement agreement was filed in Indiana, reducing the original revenue increase request by 53% [9][68] Q&A Session Summary Question: Long-term growth guidance and asset sales impact - Management reaffirmed the 5%-7% long-term growth guidance, indicating that the $400 million in EBITDA expected beyond 2027 comes from projects already in the backlog [27][28] Question: Parent funding and balance sheet capacity - The focus is on strengthening the balance sheet and maintaining investment-grade ratings, with no plans to issue equity through 2027 [32] Question: Demand acceleration in data centers - There is strong interest from data centers, with a focus on larger, more profitable projects rather than just the number of gigawatts [37][39] Question: Utility opportunities and IRP update - Advanced negotiations are ongoing for potential deals in Indiana, with expectations to announce agreements soon [45][46] Question: Powered land opportunity - The powered land solution involves co-locating data centers with renewable projects, providing a unique value proposition [48][75] Question: Renewables segment growth expectations - The renewables segment is expected to grow significantly, with adjustments made for prior year comparisons [78]

Financial Performance - Q3 2025 Adjusted EBITDA reached $830 million, driven by new renewables projects, US utilities rate base investment, and cost savings[16] - Q3 2025 Adjusted EPS increased to $075, influenced by Adjusted EBITDA drivers and a lower adjusted tax rate[16] - Year-to-Date 2025 Renewables SBU Adjusted EBITDA increased by 46%, primarily due to 3 GW of new projects and higher returns[19] - The company reaffirms its 2025 Adjusted EBITDA guidance, projecting between $2650 million and $2850 million[78] - The company reaffirms Adjusted EPS guidance for 2025, estimating between $210 and $226[79] Strategic Objectives - The company is on track to sign at least 4 GW of PPAs in full year 2025, with 22 GW already signed or awarded year-to-date, including 16 GW with data center customers[16] - The company is on track to add 32 GW of new projects in full year 2025, having completed construction of 29 GW year-to-date[16] - The backlog of projects under signed PPAs has reached 111 GW[16] - The company anticipates an average annual Adjusted EBITDA growth of 5% to 7% through 2027[81] Capital Allocation - The company projects discretionary cash sources and uses between $2615 million and $2815 million[85]