Core Viewpoint - AES Corporation's stock is performing well despite a broader market downturn, primarily due to better-than-expected earnings results [1][2]. Financial Performance - AES reported earnings of $0.51 per share, surpassing the forecast of $0.40, although it missed revenue expectations with $2.9 billion [2]. - The company experienced a $0.15-per-share loss according to generally accepted accounting principles (GAAP), attributed to various factors including sales type leases and lower margins [4][5]. - Management provided forward guidance of adjusted earnings between $2.10 and $2.26 for the year, while analysts expect GAAP earnings to be around $1.69 per share [6]. Stock Valuation - AES stock is priced at $13, resulting in a price-to-earnings (P/E) ratio of less than 8, which is considered attractive for a company with a 5.4% dividend yield and an 8% projected long-term growth rate [7].

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $681 million for Q2 2025, an increase from $658 million in the previous year, driven by growth from new renewables projects and cost reductions [25][26] - Adjusted EPS increased by 34% to $0.51 per share compared to $0.38 in the prior year, supported by higher U.S. renewable tax attributes [26][32] Business Line Data and Key Metrics Changes - The Renewables Strategic Business Unit (SBU) saw adjusted EBITDA of $240 million, representing a 56% growth year-over-year, attributed to 3.2 gigawatts of new projects added to the portfolio [10][27] - The Utilities SBU experienced lower adjusted pretax contributions due to planned outages and the sell-down of AES Ohio, but significant growth is expected driven by new investments [29][31] Market Data and Key Metrics Changes - The company has a backlog of 12 gigawatts of signed Power Purchase Agreements (PPAs), with 4.1 gigawatts international and 7.9 gigawatts in the U.S., with plans to place 6 gigawatts in service by the end of 2027 [13][40] - Demand for electricity in the U.S. is growing rapidly, with expectations of over 600 terawatt hours of additional power needed by the end of the decade, primarily driven by data centers [19][20] Company Strategy and Development Direction - The company aims to maintain its position as a leading provider of renewables to data centers, with over 11 gigawatts of agreements signed to date [18][41] - The strategy focuses on delivering energy solutions that meet customer demands for renewables and storage, while also maintaining flexibility to adapt to market changes [21][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the backlog of renewables and energy storage projects, emphasizing that recent U.S. policy changes are largely inconsequential to their operations [12][36] - The company expects strong demand for electricity to continue, with a robust growth outlook even as tax credits expire [18][35] Other Important Information - The company is on track to invest approximately $1.4 billion in U.S. utilities in 2025, focusing on improving customer reliability and supporting economic development [22][24] - The company has implemented a supply chain strategy that mitigates risks from potential future tariffs and ensures compliance with U.S. manufacturing requirements [16][36] Q&A Session Summary Question: Project online timing and EPS/EBITDA recognition - Management confirmed that most of the remaining 1.3 gigawatts will be commissioned by the end of the year, with tax attributes expected to be split between the third and fourth quarters [46][47] Question: Value of the underlying business and potential acquisition - Management believes the company has been undervalued and highlighted the strength of their backlog and execution capabilities [51][52] Question: Risk to safe harboring from executive orders - Management expressed confidence in their robust position, noting that most projects are not exposed to potential changes in treasury guidance [58][60] Question: Load updates and demand in service territories - There is strong interest and demand in their utility sectors, particularly from data centers, with about 2 gigawatts of additional demand signed [64] Question: Details on signed PPAs - The company signed 1.6 gigawatts of new PPAs, primarily with data center customers, skewed towards solar plus batteries [70] Question: Gas generation build-out capabilities - Management confirmed ongoing capabilities to build gas plants as needed, particularly for data centers, while focusing primarily on renewables [101][102] Question: Consolidation in the renewable industry - Management anticipates opportunities for acquisitions of smaller developers and advanced-stage projects due to the current market environment [103]

Core Insights - The AES Corporation reported second-quarter 2025 adjusted earnings of 51 cents per share, exceeding the Zacks Consensus Estimate of 39 cents by 30.8% and improving 34.2% from 38 cents in the same quarter last year [1][9] - The increase in adjusted earnings was attributed to a lower adjusted tax rate and higher contributions from new renewable projects [1] - The company experienced a GAAP loss of 15 cents per share compared to GAAP earnings of 39 cents in the second quarter of 2024 [1] Revenue and Financial Performance - Total revenues for AES amounted to $2.86 billion, reflecting a 3% year-over-year decline due to lower non-regulated revenues, and missing the Zacks Consensus Estimate of $3.28 billion by 13.5% [3][9] - The total cost of sales in Q2 was $2.40 billion, up 0.5% year over year, while operating income fell 18.1% to $453 million from $553 million in the prior year [4] - Interest expenses decreased to $352 million, down 9.5% from $389 million in the same quarter last year [4] New Contracts and Backlog - During Q2 2025, AES secured new long-term power-purchase agreements (PPAs) for 1.6 gigawatts (GW) of solar and wind, increasing its total backlog to 12 GW, with 5.2 GW currently under construction [5][9] Financial Condition - As of June 30, 2025, AES had cash and cash equivalents of $1.35 billion, down from $1.52 billion at the end of 2024 [6] - Non-recourse debt increased to $21.75 billion from $20.63 billion as of December 31, 2024 [6] - Net cash flow from operating activities for the first half of 2025 was $1.52 billion, compared to $0.68 billion in the same period of 2024 [6] Capital Expenditure and Guidance - Total capital expenditure for the first six months of 2025 was $2.59 billion, a decrease from $3.83 billion recorded in the previous year [7] - AES reaffirmed its 2025 earnings guidance, expecting adjusted earnings in the range of $2.10-$2.26 per share, with the Zacks Consensus Estimate at $2.14 [8]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q2 2025 was $681 million, up from $658 million in the previous year, reflecting growth driven by new renewables projects and cost reductions [22][24] - Adjusted EPS increased by 34% to $0.51 per share compared to $0.38 in the prior year, supported by higher U.S. renewable tax attributes [23][24] Business Line Data and Key Metrics Changes - The Renewables Strategic Business Unit (SBU) saw adjusted EBITDA of $240 million, a 56% increase year-over-year, attributed to 3.2 gigawatts of new projects added to the portfolio [8][24] - The Utilities SBU experienced lower adjusted pretax contributions due to planned outages and the sell-down of AES Ohio, but significant growth is expected driven by new investments [25][28] - The Energy Infrastructure SBU's lower EBITDA was primarily due to prior year recognition of the Warrior Run coal PPA monetization and the transition of Chile renewables to the Renewables segment [25][26] Market Data and Key Metrics Changes - The U.S. electricity market is experiencing rapid demand growth, with a significant shift towards renewables and energy storage expected over the next five years [6][16] - AES has a backlog of 12 gigawatts of signed Power Purchase Agreements (PPAs), with 4.1 gigawatts international and 7.9 gigawatts in the U.S., positioning the company well against U.S. policy changes [11][12] Company Strategy and Development Direction - AES aims to maintain flexibility in its business model by providing electric energy and capacity that meet market demands, focusing on renewables and energy storage [7][16] - The company is executing the largest investment program in the history of its U.S. utilities, with a planned investment of approximately $1.4 billion in 2025 [19][21] - AES is positioned as a leading provider of renewables to data center companies, with over 11 gigawatts of agreements signed to date [16][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2025 guidance and long-term growth targets, citing a resilient business model and a strong backlog of projects [4][38] - The company anticipates strong demand for electricity driven by data center growth, requiring over 600 terawatt hours of additional power by the end of the decade [16][18] - Management noted that recent U.S. policy changes are largely inconsequential to the majority of their business, including their operating portfolio and international operations [10][12] Other Important Information - AES has implemented a supply chain strategy that mitigates risks from U.S. policy changes and tariffs, ensuring that major equipment is sourced from U.S.-based suppliers [14][15] - The company is focused on maintaining a triple investment grade rating while continuing to pay dividends and invest in growth [32][34] Q&A Session Summary Question: Can you discuss the project online timing for the rest of the year and its impact on EPS and EBITDA recognition? - Management confirmed that most of the remaining 1.3 gigawatts will be commissioned in the third quarter, with full confidence in meeting the timeline [43][44] Question: How does the company view its current valuation compared to private markets? - Management believes the company has been consistently undervalued and highlighted the strength of its backlog and execution capabilities [48][49] Question: What is the company's outlook on safe harboring risks from potential executive orders? - Management expressed confidence in their robust position, noting that most projects are not exposed to new treasury guidance and have safe harbor protections [57][59] Question: How is the demand for electricity evolving in the utility sector? - Management reported strong interest and demand, particularly in their utilities, with significant data center demand contributing to growth [62] Question: Can you provide details on the PPAs signed in the quarter? - Management indicated that all new PPAs signed were with data center customers, with a significant portion being solar plus batteries [68] Question: What is the company's strategy regarding gas generation for data centers? - Management stated that they are capable of building gas plants if required by customers, while continuing to focus on renewables [99][100] Question: Is there potential for consolidation in the renewable industry due to policy uncertainty? - Management acknowledged that smaller developers may face challenges, creating opportunities for AES to acquire assets or advanced stage projects [101][102]

Financial Performance - Adjusted EBITDA for Q2 2025 was $681 million, an increase of $23 million compared to Q2 2024[51] - Renewables SBU Adjusted EBITDA grew by 56% in Q2 2025[18] - Adjusted EPS increased by 34% from $0.38 in Q2 2024 to $0.51 in Q2 2025[53] - The company is reaffirming its 2025 Adjusted EBITDA guidance of $2650-$2850 million [70] - The company is reaffirming its Adjusted EPS guidance of $210-$226 [73] Strategic Highlights & Growth - The company is on track to add 32 GW of new projects in full year 2025, with 19 GW completed year-to-date and ~80% completion on the remaining 13 GW[18] - Since the Q1 call in May, 16 GW of new PPAs for renewables have been signed or awarded, all with data center customers[18] - The backlog of projects under signed PPAs is now 12 GW[18] - The company is on track to invest ~$14 billion across AES Indiana & AES Ohio in 2025[43] Market Position & Resilience - The company has a market-leading position in signed agreements with data center customers, totaling 86 GW[29] - The company expects the majority of capacity to be completed through 2029 has no exposure to potential changes in tax credit policy, with nearly all capacity safe harbored[21] - The company expects data center demand to grow at a 22% CAGR from 2023-2030[29]

AES (AES) came out with quarterly earnings of $0.51 per share, beating the Zacks Consensus Estimate of $0.39 per share. This compares to earnings of $0.38 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +30.77%. A quarter ago, it was expected that this power company would post earnings of $0.37 per share when it actually produced earnings of $0.27, delivering a surprise of -27.03%. Over the last four quarters, the company has ...

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) AES reported a Q2 2025 Net Loss, but Adjusted EBITDA and EPS grew, driven by renewables and strategic PPA expansion, reaffirming 2025 guidance and long-term growth targets [Q2 2025 Performance Overview](index=1&type=section&id=Q2%202025%20Performance%20Overview) AES reported a Net Loss for Q2 2025, a significant decrease from Net Income in Q2 2024, primarily due to day-one losses on sales-type leases and higher income tax expense. However, Adjusted EBITDA and Adjusted EPS showed growth, driven by strong performance in the Renewables SBU and a lower adjusted tax rate | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Net Loss (GAAP) | **($150M)** | **$153M** | **($303M)** decrease | | Net Loss Attributable to AES (GAAP) | **($95M)** | **$276M** | **($371M)** decrease | | Diluted EPS (GAAP) | **($0.15)** | **$0.39** | **($0.54)** decrease | | Adjusted EBITDA (Non-GAAP) | **$681M** | **$658M** | **$23M** increase (**3.5%**) | | Adjusted EBITDA with Tax Attributes (Non-GAAP) | **$1,057M** | **$849M** | **$208M** increase (**24.5%**) | | Adjusted EPS (Non-GAAP) | **$0.51** | **$0.38** | **$0.13** increase (**34.2%**) | - Renewables SBU Adjusted EBITDA grew **56%** compared to Q2 2024, driven by higher revenues from new projects placed in service[1](index=1&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) - The Net Loss was primarily due to higher day-one losses on sales-type leases at AES Clean Energy Development, higher income tax expense, and lower margins from the Energy Infrastructure SBU[6](index=6&type=chunk) [Strategic Accomplishments Summary](index=1&type=section&id=Strategic%20Accomplishments%20Summary) AES continued to expand its renewable energy portfolio, adding new projects and securing significant long-term power purchase agreements (PPAs), particularly with data center companies, while also advancing regulatory processes for its utility operations - On track to add **3.2 GW** of new projects in operation in 2025, with **1.9 GW** already completed[4](index=4&type=chunk)[8](index=8&type=chunk) - Signed or awarded new long-term PPAs for **1.6 GW** of solar and wind since Q1 results, all with data center companies, contributing to a total PPA backlog of **12 GW** (including **5.2 GW** under construction)[3](index=3&type=chunk)[4](index=4&type=chunk)[8](index=8&type=chunk) - AES Indiana filed a petition for regulatory rate review with the Indiana Utility Regulatory Commission (IURC), marking its first rate case using a forward-looking test year[4](index=4&type=chunk)[14](index=14&type=chunk) [Financial Position and Outlook Summary](index=1&type=section&id=Financial%20Position%20and%20Outlook%20Summary) The company reaffirmed its 2025 guidance for Adjusted EBITDA and Adjusted EPS, along with long-term growth targets through 2027, demonstrating confidence in its diversified operating portfolio and project backlog | Metric | 2025 Guidance | Annualized Growth Target | | :----------------------------------- | :-------------------- | :----------------------- | | Adjusted EBITDA | **$2,650M** to **$2,850M** | **5%** to **7%** through 2027 (from 2023 base) | | Adjusted EBITDA with Tax Attributes | **$3,950M** to **$4,350M** | N/A | | Adjusted EPS | **$2.10** to **$2.26** | **7%** to **9%** through 2025 (from 2020 base) and through 2027 (from 2023 base) | - Growth in 2025 is expected to be driven by new renewables projects, rate base growth at US utilities, and normalized results in Colombia and Mexico[9](index=9&type=chunk) - The company expects to maintain its current quarterly dividend payment of **$0.17595**[10](index=10&type=chunk) [Q2 2025 Financial Results](index=2&type=section&id=Q2%202025%20Financial%20Results) Q2 2025 GAAP metrics showed a Net Loss and decreased EPS, while non-GAAP Adjusted EBITDA and EPS grew, driven by new renewables and tax adjustments [GAAP Financial Metrics](index=2&type=section&id=GAAP%20Financial%20Metrics) The company reported a Net Loss and a decrease in Diluted EPS for Q2 2025 compared to Q2 2024, primarily impacted by day-one losses on sales-type leases and higher income tax expense | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Net Loss | **($150M)** | **$153M** | **($303M)** | | Net Loss Attributable to The AES Corporation | **($95M)** | **$276M** | **($371M)** | | Diluted EPS | **($0.15)** | **$0.39** | **($0.54)** | | Income tax benefit (expense) | **($167M)** | **$35M** | **($202M)** | | Operating margin | **$453M** | **$553M** | **($100M)** | - The decrease in Net Income was primarily due to higher day-one losses on sales-type leases at AES Clean Energy Development, higher income tax expense, and lower margins from the Energy Infrastructure Strategic Business Unit (SBU)[6](index=6&type=chunk) - The reclassification of Mong Duong from held-for-sale to held and used, and higher contributions from new renewables projects, partially offset the negative impacts[6](index=6&type=chunk) [Non-GAAP Adjusted Financial Metrics](index=2&type=section&id=Non-GAAP%20Adjusted%20Financial%20Metrics) Despite GAAP losses, non-GAAP adjusted metrics showed positive growth, with Adjusted EBITDA and Adjusted EPS increasing year-over-year, largely driven by new renewables projects and favorable tax adjustments | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------------------------- | :------ | :------ | :----------- | | Adjusted EBITDA | **$681M** | **$658M** | **$23M** (**3.5%**) | | Adjusted EBITDA with Tax Attributes | **$1,057M** | **$849M** | **$208M** (**24.5%**) | | Adjusted EPS | **$0.51** | **$0.38** | **$0.13** (**34.2%**) | - Adjusted EBITDA growth was primarily driven by higher contributions from the Renewables SBU due to new projects and prior year outages in Colombia, partially offset by the sale of AES Brasil and the sell-down of AES Ohio[6](index=6&type=chunk) - Adjusted EBITDA with Tax Attributes saw a significant increase due to higher realized tax attributes from more projects placed in service and higher income from tax credit transfers[6](index=6&type=chunk) [Strategic Accomplishments](index=2&type=section&id=Strategic%20Accomplishments) AES advanced project development, completing new projects and expanding its PPA backlog for data centers, while AES Indiana initiated a regulatory rate review [Project Development and Backlog](index=2&type=section&id=Project%20Development%20and%20Backlog) AES made substantial progress in project development, completing a significant portion of its planned new projects for 2025 and expanding its PPA backlog, with a notable focus on serving data center demand - The company's backlog of projects with signed contracts but not yet operational stands at **12 GW**, including **5.2 GW** currently under construction[3](index=3&type=chunk)[8](index=8&type=chunk) - Completed construction of **1.2 GW** of energy storage and solar, including the **1 GW** Bellefield 1 solar-plus-storage facility, contributing to **1.9 GW** year-to-date and on track for a total of **3.2 GW** by year-end 2025[4](index=4&type=chunk)[8](index=8&type=chunk) - Signed or was awarded new long-term PPAs for **1.6 GW** of renewables since May 2025, all with data center companies, bringing the year-to-date total to **2 GW**[3](index=3&type=chunk)[4](index=4&type=chunk)[14](index=14&type=chunk) [Regulatory Filings](index=3&type=section&id=Regulatory%20Filings) AES Indiana initiated a regulatory rate review process, aiming for a more efficient and cost-effective electricity service for its customers - In June, AES Indiana filed a petition for regulatory rate review with the Indiana Utility Regulatory Commission (IURC)[4](index=4&type=chunk)[14](index=14&type=chunk) - This is AES Indiana's first rate case using a forward-looking test year, intended to enable a more efficient investment program to best serve customers[9](index=9&type=chunk)[14](index=14&type=chunk) [Guidance and Expectations](index=3&type=section&id=Guidance%20and%20Expectations) AES reaffirmed 2025 financial guidance and long-term growth targets for Adjusted EBITDA and EPS through 2027, while maintaining its current quarterly dividend [2025 Guidance Reaffirmation](index=3&type=section&id=2025%20Guidance%20Reaffirmation) AES reaffirmed its financial guidance for 2025 across key non-GAAP metrics, anticipating growth from new renewable projects and utility rate base expansion, despite some offsetting factors | Metric | 2025 Guidance | | :----------------------------------- | :-------------------- | | Adjusted EBITDA | **$2,650M** to **$2,850M** | | Adjusted EBITDA with Tax Attributes | **$3,950M** to **$4,350M** | | Adjusted EPS | **$2.10** to **$2.26** | - Expected growth drivers for 2025 include contributions from new renewables projects, rate base growth at US utilities, and normalized results in Colombia and Mexico[9](index=9&type=chunk) - Growth will be partially offset by revenues from the monetization of the Warrior Run coal plant PPA in 2024, asset sales, higher Parent interest, and a higher adjusted tax rate[9](index=9&type=chunk) [Long-Term Growth Targets](index=3&type=section&id=Long-Term%20Growth%20Targets) The company reiterated its long-term annualized growth targets for both Adjusted EBITDA and Adjusted EPS through 2027, signaling confidence in sustained performance | Metric | Annualized Growth Target | | :----------------------------------- | :----------------------- | | Adjusted EBITDA | **5%** to **7%** through 2027 (from 2023 guidance base) | | Adjusted EPS | **7%** to **9%** through 2025 (from 2020 base) and through 2027 (from 2023 guidance base) | [Dividend Policy](index=3&type=section&id=Dividend%20Policy) AES plans to maintain its current quarterly dividend payment - The Company expects to maintain its current quarterly dividend payment of **$0.17595** going forward[10](index=10&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) This section defines non-GAAP financial measures like Adjusted EBITDA and EPS, and provides detailed reconciliations from GAAP Net Income (Loss) to these adjusted metrics [Definitions and Rationale](index=3&type=section&id=Definitions%20and%20Rationale) This section provides detailed definitions for non-GAAP financial measures such as Adjusted EBITDA, Adjusted EBITDA with Tax Attributes, Adjusted PTC, and Adjusted EPS, explaining their components and the rationale for their use in assessing the company's underlying business performance - Adjusted EBITDA is defined as EBITDA adjusted for various non-recurring or non-operational items, including unrealized gains/losses, disposition/acquisition impacts, impairments, and restructuring costs[29](index=29&type=chunk) - Adjusted EBITDA with Tax Attributes further includes the pre-tax effect of Production Tax Credits (PTCs), Investment Tax Credits (ITCs), and depreciation tax deductions allocated to tax equity investors, as well as tax benefits from retained or transferred tax credits[29](index=29&type=chunk) - Adjusted EPS is defined as diluted earnings per share from continuing operations, excluding similar non-operational gains or losses as Adjusted EBITDA, to better reflect core business performance[33](index=33&type=chunk) [Reconciliation of Adjusted EBITDA and Adjusted EBITDA with Tax Attributes](index=9&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20with%20Tax%20Attributes) The reconciliation table details the adjustments made to GAAP Net Income (Loss) to arrive at Adjusted EBITDA and Adjusted EBITDA with Tax Attributes for both the three and six months ended June 30, 2025 and 2024 | Metric | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :----------------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Net income (loss) | **($150M)** | **$153M** | **($223M)** | **$431M** | | EBITDA | **$653M** | **$734M** | **$1,207M** | **$1,566M** | | Adjusted EBITDA | **$681M** | **$658M** | **$1,272M** | **$1,298M** | | Tax attributes | **$376M** | **$191M** | **$562M** | **$419M** | | Adjusted EBITDA with Tax Attributes | **$1,057M** | **$849M** | **$1,834M** | **$1,717M** | - Key adjustments for Q2 2025 included adding back income tax expense (**$167M**), interest expense (**$352M**), and depreciation, amortization, and accretion of AROs (**$354M**) to reach EBITDA[31](index=31&type=chunk) - Significant adjustments from EBITDA to Adjusted EBITDA for Q2 2025 included unrealized derivatives, equity securities, and financial assets and liabilities losses (**$133M**) and disposition/acquisition losses (**$126M**)[31](index=31&type=chunk) [Reconciliation of Adjusted PTC and Adjusted EPS](index=10&type=section&id=Reconciliation%20of%20Adjusted%20PTC%20and%20Adjusted%20EPS) This section provides the reconciliation from GAAP income (loss) from continuing operations to Adjusted PTC and Adjusted EPS, detailing the specific adjustments made for non-operational items to provide a clearer view of core earnings | Metric | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :----------------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Income (loss) from continuing operations, net of tax, attributable to AES | **($95M)** | **$276M** | **($49M)** | **$708M** | | Diluted EPS (GAAP) | **($0.13)** | **$0.39** | **($0.07)** | **$0.99** | | Adjusted PTC | **$276M** | **$273M** | **$437M** | **$609M** | | Adjusted EPS | **$0.51** | **$0.38** | **$0.78** | **$0.89** | - For Q2 2025, significant adjustments to pre-tax contribution included unrealized derivatives, equity securities, and financial assets and liabilities losses of **$133 million** (or **$0.18 per share**) and disposition/acquisition losses of **$125 million** (or **$0.18 per share**)[37](index=37&type=chunk) - Day-one losses on commencement of sales-type leases at AES Clean Energy Development (**$149M**) were a primary component of disposition/acquisition losses for Q2 2025[37](index=37&type=chunk)[38](index=38&type=chunk) [Attachments & Supplemental Information](index=5&type=section&id=Attachments%20%26%20Supplemental%20Information) This section provides unaudited condensed consolidated financial statements, including operations, balance sheets, cash flows, SBU revenue, and Parent Company financial information [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section presents the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024, detailing revenue, cost of sales, operating margin, and net income (loss) | Metric | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :----------------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Total revenue | **$2,855M** | **$2,942M** | **$5,781M** | **$6,027M** | | Total cost of sales | **($2,402M)** | **($2,389M)** | **($4,887M)** | **($4,855M)** | | Operating margin | **$453M** | **$553M** | **$894M** | **$1,172M** | | NET INCOME (LOSS) | **($150M)** | **$153M** | **($223M)** | **$431M** | | DILUTED EARNINGS PER SHARE | **($0.15)** | **$0.39** | **($0.08)** | **$0.99** | - Non-Regulated revenue decreased from **$2,070M** in Q2 2024 to **$1,922M** in Q2 2025, while Regulated revenue increased from **$872M** to **$933M**[22](index=22&type=chunk) [Strategic Business Unit (SBU) Information](index=6&type=section&id=Strategic%20Business%20Unit%20(SBU)%20Information) This section provides a breakdown of revenue by the company's Strategic Business Units (SBUs) for the three and six months ended June 30, 2025 and 2024 | SBU | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :------------------------ | :----------------- | :----------------- | :------------------ | :------------------ | | Renewables SBU | **$644M** | **$619M** | **$1,310M** | **$1,262M** | | Utilities SBU | **$954M** | **$896M** | **$1,963M** | **$1,769M** | | Energy Infrastructure SBU | **$1,306M** | **$1,462M** | **$2,626M** | **$3,071M** | | Total Revenue | **$2,855M** | **$2,942M** | **$5,781M** | **$6,027M** | - Renewables SBU revenue increased by **$25M** (**4.0%**) in Q2 2025 compared to Q2 2024, and Utilities SBU revenue increased by **$58M** (**6.5%**)[24](index=24&type=chunk) - Energy Infrastructure SBU revenue decreased by **$156M** (**10.7%**) in Q2 2025 compared to Q2 2024[24](index=24&type=chunk) [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides the unaudited condensed consolidated balance sheets as of June 30, 2025, and December 31, 2024, detailing assets, liabilities, and equity | Metric | June 30, 2025 | December 31, 2024 | | :----------------------------------- | :------------ | :---------------- | | Total current assets | **$6,320M** | **$6,831M** | | Total noncurrent assets | **$42,222M** | **$40,575M** | | TOTAL ASSETS | **$48,542M** | **$47,406M** | | Total current liabilities | **$7,679M** | **$8,571M** | | Total noncurrent liabilities | **$31,001M** | **$30,193M** | | Total equity | **$7,683M** | **$7,704M** | | TOTAL LIABILITIES, REDEEMABLE STOCK OF SUBSIDIARIES, AND EQUITY | **$48,542M** | **$47,406M** | - Property, plant and equipment, net, increased from **$33,166M** at December 31, 2024, to **$34,727M** at June 30, 2025[26](index=26&type=chunk) - Current held-for-sale assets significantly decreased from **$862M** to **$31M**, while noncurrent held-for-sale assets were eliminated[26](index=26&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents the unaudited condensed consolidated statements of cash flows for the three and six months ended June 30, 2025 and 2024, outlining cash flows from operating, investing, and financing activities | Cash Flow Activity | Q2 2025 (3 Months) | Q2 2024 (3 Months) | YTD 2025 (6 Months) | YTD 2024 (6 Months) | | :----------------------------------- | :----------------- | :----------------- | :------------------ | :------------------ | | Net cash provided by operating activities | **$976M** | **$392M** | **$1,521M** | **$679M** | | Net cash used in investing activities | **($1,600M)** | **($1,838M)** | **($2,882M)** | **($4,224M)** | | Net cash provided by financing activities | **$145M** | **$1,153M** | **$1,462M** | **$3,759M** | | Total increase (decrease) in cash, cash equivalents and restricted cash | **($365M)** | **($407M)** | **$162M** | **$158M** | | Cash, cash equivalents and restricted cash, ending | **$2,201M** | **$1,573M** | **$2,201M** | **$2,148M** | - Net cash provided by operating activities significantly increased in Q2 2025 to **$976M** from **$392M** in Q2 2024[28](index=28&type=chunk) - Capital expenditures were **($1,332M)** in Q2 2025, a decrease from **($1,685M)** in Q2 2024[28](index=28&type=chunk) [Parent Financial Information](index=12&type=section&id=Parent%20Financial%20Information) This section provides data on subsidiary distributions to the Parent Company and Parent Company liquidity, highlighting the cash flow from subsidiaries essential for the holding company's financial needs | Metric | Q2 2025 (Quarter Ended) | Q1 2025 (Quarter Ended) | Q4 2024 (Quarter Ended) | Q3 2024 (Quarter Ended) | | :----------------------------------- | :---------------------- | :---------------------- | :---------------------- | :---------------------- | | Subsidiary distributions to Parent & QHCs | **$557M** | **$230M** | **$715M** | **$204M** | | Returns of capital distributions to Parent & QHCs | **$44M** | **$3M** | **$28M** | **$0M** | | Total subsidiary distributions & returns of capital to Parent | **$601M** | **$233M** | **$743M** | **$204M** | | Cash at Parent & Cash at QHCs | **$9M** | **$151M** | **$265M** | **$6M** | | Availability under credit facilities | **$2,185M** | **$1,526M** | **$1,782M** | **$335M** | | Ending liquidity | **$2,194M** | **$1,677M** | **$2,047M** | **$341M** | - Total subsidiary distributions and returns of capital to Parent for the quarter ended June 30, 2025, were **$601 million**, a significant increase from the previous quarter[40](index=40&type=chunk) - Parent Company Liquidity, defined as cash at Parent and QHCs plus available borrowings under credit facilities, increased to **$2,194 million** at June 30, 2025, from **$1,677 million** at March 31, 2025[40](index=40&type=chunk) [Corporate Information](index=3&type=section&id=Corporate%20Information) This section provides conference call details, an overview of AES, safe harbor disclosures for forward-looking statements, and website disclosure practices [Conference Call Details](index=3&type=section&id=Conference%20Call%20Details) Details for the upcoming conference call to discuss the Q2 2025 financial results, including access information and webcast availability - AES will host a conference call on Friday, August 1, 2025, at 10:00 a.m. Eastern Time (ET)[13](index=13&type=chunk) - Internet access to the conference call and presentation materials will be available on the AES website at www.aes.com under 'Investors' and 'Presentations and Webcasts', with a replay accessible shortly after the call[13](index=13&type=chunk)[15](index=15&type=chunk) [About The AES Corporation](index=4&type=section&id=About%20The%20AES%20Corporation) A brief overview of The AES Corporation as a global energy company focused on accelerating greener, smarter energy solutions - The AES Corporation (NYSE: AES) is a Fortune 500 global energy company dedicated to accelerating the future of energy by delivering greener, smarter energy solutions[16](index=16&type=chunk) - The company emphasizes continuous innovation, operational excellence, and partnering with customers on strategic energy transitions[16](index=16&type=chunk) [Safe Harbor and Forward-Looking Statements](index=4&type=section&id=Safe%20Harbor%20and%20Forward-Looking%20Statements) This section provides a safe harbor disclosure regarding forward-looking statements, cautioning readers about inherent risks and uncertainties that could cause actual results to differ materially from projections - The news release contains forward-looking statements related to future earnings, growth, and financial/operating performance, which are not guarantees of future results but current expectations based on reasonable assumptions[17](index=17&type=chunk) - Actual results could differ materially due to risks, uncertainties, and other factors discussed in AES' filings with the SEC, including the 2024 Annual Report on Form 10-K[18](index=18&type=chunk) [Website Disclosure](index=4&type=section&id=Website%20Disclosure) AES utilizes its website as a primary channel for distributing company information, advising investors to monitor it alongside other official communications - AES uses its website, including quarterly updates, as channels of distribution for Company information, which may be deemed material[20](index=20&type=chunk) - Investors are encouraged to monitor the website, in addition to press releases, SEC filings, and public conference calls, and can subscribe to email alerts[20](index=20&type=chunk)

Core Insights - The AES Corporation reported a net loss of $150 million for Q2 2025, a significant decrease from a net income of $153 million in Q2 2024, primarily due to higher day-one losses on sales-type leases and increased income tax expenses [3][6][10] - Adjusted EBITDA for Q2 2025 was $681 million, reflecting a 3.5% increase from $658 million in Q2 2024, driven by higher contributions from the Renewables Strategic Business Unit (SBU) [4][32] - The company reaffirmed its 2025 guidance for Adjusted EBITDA between $2,650 million and $2,850 million, with expected annualized growth of 5% to 7% through 2027 [8][9][10] Financial Highlights - Q2 2025 Adjusted EBITDA with Tax Attributes was $1,057 million, up from $849 million in Q2 2024, attributed to higher realized tax attributes and contributions from new projects [5][32] - The diluted earnings per share (EPS) from continuing operations was ($0.15) for Q2 2025, a decrease from $0.39 in Q2 2024 [6][36] - Adjusted EPS for Q2 2025 was $0.51, an increase of $0.13 compared to $0.38 in Q2 2024, mainly due to a lower adjusted tax rate and contributions from new renewables projects [7][10] Strategic Accomplishments - The company has a backlog of 12 GW of signed long-term Power Purchase Agreements (PPAs), with 5.2 GW currently under construction [2][11] - AES completed 1.9 GW of new projects year-to-date and is on track to add a total of 3.2 GW to its operating portfolio by the end of 2025 [11][12] - The company signed or was awarded new long-term PPAs for 1.6 GW of renewables, all with data center companies, since the first quarter of 2025 [11][12] Financial Position and Outlook - Total revenue for Q2 2025 was $2.855 billion, a decrease from $2.942 billion in Q2 2024, with non-regulated revenue at $1.922 billion and regulated revenue at $933 million [24] - The company’s total assets increased to $48.542 billion as of June 30, 2025, compared to $47.406 billion at the end of 2024 [25] - The company expects to maintain its quarterly dividend payment of $0.17595 going forward [13]

Core Viewpoint - The AES Corporation is set to report its second-quarter 2025 results on July 31, 2025, with expectations of revenue growth and improved earnings per share despite challenges from extreme weather conditions [1][6][8]. Group 1: Upcoming Results Expectations - The Zacks Consensus Estimate for AES' revenues is $3.27 billion, indicating an 11.3% increase from the same quarter last year [6]. - The earnings per share (EPS) estimate is 43 cents, reflecting a 13.2% improvement year-over-year [6][8]. - The company experienced a negative earnings surprise of 27.03% in the last quarter but has a four-quarter average earnings surprise of 13.92% [1]. Group 2: Factors Influencing Performance - Mixed temperature patterns and above-normal precipitation during the April-June quarter are expected to have a moderate impact on quarterly revenues [2]. - Extreme weather events, including hail and thunderstorms, may have caused outages and negatively affected top-line performance [3]. - Favorable rate outcomes from previous quarters and increased energy demand from data center expansions are anticipated to positively contribute to revenue growth [4]. Group 3: Cost and Cash Position - Severe weather may have led to infrastructural damage, increasing operating expenses for restoration, which could hurt earnings [4]. - Solid sales growth expectations, cost-saving initiatives, and favorable returns from renewable projects are likely to support overall bottom-line performance [5]. - The divestment of a 30% stake in AES Ohio, completed in April 2025, is expected to enhance the company's cash position in the second quarter [5]. Group 4: Earnings Prediction Model - The current Zacks model does not predict an earnings beat for AES, with an Earnings ESP of -6.68% [7]. - AES holds a Zacks Rank of 3, indicating a neutral outlook [9].

Core Viewpoint - The market anticipates AES to report a year-over-year increase in earnings driven by higher revenues, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - AES is expected to report quarterly earnings of $0.47 per share, reflecting a year-over-year increase of 23.7% [3]. - Revenue projections stand at $3.35 billion, indicating a 14% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised 4.44% higher in the last 30 days, indicating a collective reassessment by analysts [4]. - The Most Accurate Estimate for AES is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -2.95%, suggesting a bearish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank of 1, 2, or 3 [10]. - AES currently holds a Zacks Rank of 3, making it challenging to predict an earnings beat [12]. Historical Performance - In the last reported quarter, AES was expected to post earnings of $0.37 per share but only achieved $0.27, resulting in a surprise of -27.03% [13]. - Over the past four quarters, AES has beaten consensus EPS estimates three times [14]. Conclusion - While AES does not appear to be a compelling earnings-beat candidate, investors should consider other factors before making investment decisions [17].