Core Viewpoint - Clearway Energy (CWEN) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with stock price movements, particularly due to institutional investors adjusting their valuations based on these estimates [4][6]. - Clearway Energy's earnings estimates have shown a significant upward trend, with a 107.5% increase in the Zacks Consensus Estimate over the past three months [8]. Company Performance Indicators - Clearway Energy is projected to earn $1.18 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 57.3% [8]. - The upgrade to Zacks Rank 2 places Clearway Energy in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10]. Zacks Rating System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - The system maintains a balanced distribution of ratings, ensuring that only the top 5% of stocks receive a 'Strong Buy' rating, while the next 15% receive a 'Buy' rating [9].

Investment Rating - The report maintains a positive outlook on Clearway Energy, reaffirming its guidance for 2025 [1][2]. Core Insights - Clearway Energy reported adjusted net income exceeding consensus expectations, with adjusted EBITDA of $252 million, surpassing the consensus estimate of $237 million [2][3]. - The company reiterated its 2025 fiscal year guidance for cash available for distribution (CAFD) at $400 million to $440 million, with a long-term target of 5%-8%+ growth in CAFD per share post-2027 [1][2]. - Capacity expansion is on track, with a guidance of 1.1 GW for fiscal year 2025 and 2.3 GW for fiscal years 2026-2027, with all domestic equipment in place and funding secured for key projects [1][3]. Financial Performance Summary - For Q1 2025, Clearway Energy reported revenues of $298 million, which is in line with expectations, and a net income of $4 million, compared to a consensus loss of $30 million [2][4]. - The company achieved a gross profit margin of 59% for Q1 2025, reflecting a significant year-over-year increase [4]. - The adjusted EBITDA margin was reported at 85%, indicating strong operational efficiency [4].

Core Insights - Clearway Energy Inc. (CWEN) reported first-quarter 2025 earnings of 3 cents per share, exceeding the Zacks Consensus Estimate of a loss of 25 cents by 112% [1] - Total revenues for the quarter were $298 million, which fell short of the Zacks Consensus Estimate of $311 million by 4.1% [1] Financial Performance - Adjusted EBITDA for the quarter was $252 million, an increase from $211 million in the same period last year [2] - Total operating costs and expenses were $298 million, up 2.1% from $292 million year-over-year, attributed to higher depreciation, amortization, and accretion costs [2] - Interest expenses rose to $116 million compared to $57 million in the year-ago quarter [2] - Net cash provided by operating activities totaled $95 million, up from $81 million in the previous year [6] Acquisitions - On April 25, 2025, the company entered a binding agreement to acquire a 100 MW solar project in California for $120 million to $125 million, which has a revenue contract with an investment-grade utility through 2038 [3] - On April 29, 2025, CWEN closed the acquisition of the 137 MW Tuolumne Wind project in Washington, which has a Power Purchase Agreement (PPA) with Turlock Irrigation District until 2040 [4] Financial Position - As of March 31, 2025, CWEN had cash and cash equivalents of $297 million, down from $332 million as of December 31, 2024 [5] - Total liquidity was $1.325 billion, slightly down from $1.33 billion at the end of 2024 [5] - Long-term debt increased to $7.23 billion from $6.75 billion as of December 31, 2024 [5] Guidance - The company expects 2025 adjusted EBITDA to be in the range of $1.195 billion to $1.235 billion [7] - Cash from Operating Activities is projected to be between $844 million and $884 million for the year [7] - CWEN reaffirmed its guidance for 2025 cash available for distribution (CAFD) in the range of $400 million to $440 million [7]

Core Viewpoint - Clearway Energy reported quarterly earnings of $0.03 per share, surpassing the Zacks Consensus Estimate of a loss of $0.25 per share, and showing improvement from a loss of $0.02 per share a year ago [1][2]. Financial Performance - The earnings surprise for the quarter was 112%, although the company had a negative surprise of -76.92% in the previous quarter [2]. - Clearway Energy's revenues for the quarter were $298 million, which missed the Zacks Consensus Estimate by 4.12%, but increased from $263 million year-over-year [3]. - Over the last four quarters, the company has only surpassed consensus revenue estimates once [3]. Stock Performance - Clearway Energy shares have increased approximately 14.2% since the beginning of the year, contrasting with a -5.5% decline in the S&P 500 [4]. - The sustainability of the stock's price movement will largely depend on management's commentary during the earnings call [4]. Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.62 on revenues of $444.09 million, and for the current fiscal year, it is $0.74 on revenues of $1.5 billion [8]. - The estimate revisions trend for Clearway Energy is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [7]. Industry Context - The Alternative Energy - Other industry, to which Clearway Energy belongs, is currently ranked in the bottom 31% of over 250 Zacks industries, suggesting potential challenges ahead [9].

Financial Performance - Total operating revenues for Q1 2025 were $298 million, up from $263 million in Q1 2024, representing a 13.3% increase[20] - Net loss for Q1 2025 was $104 million, compared to a net loss of $46 million in Q1 2024, indicating a significant increase in losses[20] - Earnings per share attributable to Clearway Energy, Inc. Class A and Class C common stockholders was $0.03 in Q1 2025, compared to a loss of $0.02 in Q1 2024[20] - Comprehensive loss attributable to Clearway Energy, Inc. was $2 million in Q1 2025, compared to a comprehensive loss of $4 million in Q1 2024[22] - Net income attributable to Clearway Energy, Inc. for the three months ended March 31, 2025, was $1 million, resulting in basic and diluted earnings per share of $0.03[82] - Net income attributable to Clearway Energy, Inc. for Q1 2025 was $4 million, compared to a net loss of $2 million in Q1 2024[85] Operating Costs and Expenses - Operating costs and expenses totaled $298 million in Q1 2025, compared to $292 million in Q1 2024, reflecting a 2.1% increase[20] - Interest expense rose to $116 million in Q1 2025, compared to $57 million in Q1 2024, indicating increased borrowing costs[20] - The company incurred $21 million in operation and maintenance service expenses for Q1 2025, up from $19 million in Q1 2024[90] - Administrative services expenses amounted to $5 million for the three months ended March 31, 2025, down from $6 million in the previous year[91] - Net expenses under the CEG Master Services Agreement were $6 million for the three months ended March 31, 2025, compared to $1 million in the prior year[93] Dividends and Shareholder Returns - Dividends per Class A and Class C common share increased to $0.4312 in Q1 2025 from $0.4033 in Q1 2024, marking a 6.5% increase[20] - The company declared quarterly dividends of $0.4384 per share for Class A and Class C common stock, payable on June 16, 2025[44] - The company expects to continue paying comparable cash dividends in the foreseeable future based on current circumstances[43] Assets and Liabilities - Total assets increased to $14,647 million as of March 31, 2025, up from $14,329 million at December 31, 2024, representing a growth of 2.2%[24] - Long-term debt rose to $7,231 million as of March 31, 2025, compared to $6,750 million at December 31, 2024, marking an increase of 7.1%[24] - Total liabilities increased to $9,227 million as of March 31, 2025, up from $8,765 million at the end of 2024, a rise of 5.3%[24] - The company’s total stockholders' equity decreased to $5,420 million as of March 31, 2025, from $5,564 million at December 31, 2024, a decline of 2.6%[24] Cash Flow and Operational Efficiency - Net cash provided by operating activities was $95 million for Q1 2025, an increase from $81 million in Q1 2024, reflecting improved operational efficiency[26] - Cash, cash equivalents, and restricted cash decreased to $711 million at the end of Q1 2025 from $963 million at the end of Q1 2024, a decline of 26.1%[26] - The company reported a net cash used in investing activities of $46 million, significantly improved from $203 million in the same period of 2024[26] Acquisitions and Investments - The company acquired the Tuolumne wind facility for approximately $207 million, with an estimated total capital investment of $61 million, including transaction expenses[49] - The acquisition of Luna Valley solar facility involved an initial cash consideration of $18 million, with an expected total capital investment of $90 million upon substantial completion[50] - The Daggett 1 BESS facility acquisition had an initial cash consideration of $11 million, with an estimated total capital investment of $53 million expected[51] - The Rosamond South I solar facility acquisition involved an initial cash consideration of $4 million, with a total estimated capital investment of $21 million[52] Market and Operational Challenges - Clearway Energy, Inc. continues to face risks related to its substantial indebtedness and the ability to access capital markets[15] - The company anticipates continued challenges in achieving profitability due to market conditions and operational costs[13] - The company is focused on expanding its renewable energy portfolio and enhancing operational efficiencies[20] Equity and Investments - The company reported equity in earnings of unconsolidated affiliates of $5 million in Q1 2025, down from $12 million in Q1 2024[20] - The company’s equity investments in affiliates decreased to $300 million as of March 31, 2025, down from $309 million at December 31, 2024[24] - The Company’s equity investments in unconsolidated affiliates totaled $300 million as of March 31, 2025, with significant interests in Desert Sunlight (25%, $213 million) and GenConn (50%, $73 million) [55] Derivative Instruments and Risk Management - The Company recorded derivative assets valued at $127 million and derivative liabilities at $4 million as of March 31, 2025, with energy-related commodity contracts liabilities amounting to $383 million [63] - The Company manages credit risk through established credit approval processes and monitoring of counterparties' credit limits[67] - A significant portion of energy-related commodity contracts are with utilities of strong credit quality, although some counterparties, like PG&E, have credit ratings below investment-grade[68]

Financial Data and Key Metrics Changes - The company reported first quarter adjusted EBITDA of $252 million and CAFD of $77 million, reflecting strong wind resource in California and contributions from 2024 growth investments [22][23] - Capacity factors for the renewable and storage segment improved by 4.7% to 25.7% for solar and by 2.9% to 33.9% for wind [22] - Flexible generation availability improved by 3% to 89.3%, continuing the trend of strong availability and grid reliability in California [22] Business Line Data and Key Metrics Changes - The company continued to advance repowering opportunities, with significant projects like Mount Storm and Goat Mountain on track for completion in 2026 and 2027 [7][12] - The acquisition of Tuolumne Wind and a solar project in California are expected to contribute positively to CAFD growth [10][19] - The company is on pace to complete safe harbor investments for approximately 13 gigawatts of projects that could achieve COD through 2029 [8] Market Data and Key Metrics Changes - The company noted a supportive market for energy value from its gas plants in California, with expected appreciation in energy gross margin creation potential [91] - The late-stage pipeline grew over a gigawatt sequentially, indicating strong project development despite market uncertainties [85] Company Strategy and Development Direction - The company aims to achieve the top half of its 2025 CAFD guidance range through committed investments and operational efficiencies [6][20] - The strategy includes a focus on battery storage projects, with plans to continue executing these projects beyond 2026 [36] - The company is committed to maintaining a disciplined approach to capital allocation, targeting a long-term payout ratio trending towards 70% [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the high end of the 2027 CAFD per share growth targets, supported by recent acquisitions and ongoing project developments [11][20] - The company is actively evaluating further third-party M&A opportunities to enhance its growth strategy [21] - Management highlighted the importance of adapting to changes in policy and market conditions to ensure project viability and profitability [68] Other Important Information - The company has implemented a hedging strategy to mitigate interest rate risk associated with refinancing corporate bonds maturing in 2028 [27] - The company is focused on enhancing its wind fleet through capital light contract extensions and repowering initiatives [14] Q&A Session Summary Question: Thoughts on battery storage as part of the pipeline going forward - Management expressed strong confidence in battery technology and its revenue-generating potential, indicating plans to continue executing battery projects beyond 2026 [36] Question: 2025 guidance and potential revisions - Management reiterated the 2025 guidance and indicated that any revisions would depend on the confidence gained from ongoing execution and acquisitions [40][42] Question: Battery supply sourcing outside of China - Management confirmed that they are exploring sourcing options beyond China and are confident in managing tariff impacts through various strategies [49][53] Question: Expected CAFD yields from repowering opportunities - Management indicated that they aim for CAFD yields of at least 10% for repowering investments, aligning with their capital allocation strategy [58] Question: Current M&A market conditions - Management noted a balanced market between buyers and sellers, emphasizing the importance of unique synergies in recent acquisitions [60] Question: Risks associated with permitting for wind projects - Management acknowledged potential risks related to permitting but expressed confidence in their existing permits and project timelines [91]

Financial Data and Key Metrics Changes - The company reported first quarter adjusted EBITDA of $252 million and CAFD of $77 million, reflecting strong wind resource in California and contributions from 2024 growth investments [22][23] - Capacity factors for the renewable and storage segment improved by 4.7% to 25.7% for solar and by 2.9% to 33.9% for wind [22] - Flexible generation availability improved by 3% to 89.3%, continuing the trend of strong availability and grid reliability in California [22] Business Line Data and Key Metrics Changes - The company continued to advance repowering opportunities, with significant projects like Mount Storm and Goat Mountain on track for completion in 2026 and 2027 [9][14] - The acquisition of Tuolumne Wind and a solar project in California are expected to contribute positively to the company's growth and CAFD yield [11][19] - The company is on pace to complete safe harbor investments for approximately 13 gigawatts of projects that could achieve COD through 2029 [10] Market Data and Key Metrics Changes - The company noted a supportive market for energy value from its gas plants in California, with expected appreciation in energy gross margin creation potential [88] - The late-stage pipeline grew over a gigawatt sequentially, indicating strong project development despite market uncertainties [83] Company Strategy and Development Direction - The company aims to achieve the top half of its 2025 guidance range and is focused on long-term growth through fleet enhancements, dropdown investments, and asset-centered M&A [7][8] - The capital allocation framework emphasizes funding high-return investments and maintaining a disciplined approach to equity issuance [25][70] - The company is committed to increasing self-funding growth and targeting a long-term payout ratio trending towards 70% [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving the high end of the 2027 CAFD per share growth targets due to strong execution across growth pathways [12][20] - The company is actively evaluating third-party M&A opportunities and pursuing additional fleet optimization improvements [21][60] - Management highlighted the importance of collaboration with customers and suppliers to adapt to changes in policy and ensure project viability [66] Other Important Information - The company has implemented a hedging strategy to mitigate interest rate risk for refinancing corporate bonds maturing in 2028 [26] - The company is focused on maintaining a strong balance sheet and liquidity while pursuing growth investments [26] Q&A Session Summary Question: Thoughts on battery storage as part of the pipeline going forward - Management expressed strong confidence in battery technology and its reliability, indicating plans to continue executing battery projects without slowing down [34][35] Question: Potential for sourcing batteries outside of China - Management acknowledged the increased capital expense due to tariffs but emphasized the ability to manage costs through various strategies, including sourcing from domestic suppliers [48][50] Question: Expectations for CAFD yields on repowering opportunities - Management indicated that they aim for CAFD yields of at least 10% for repowering investments, assessing the additional cash flow generated from such projects [56] Question: Current state of the M&A market - Management noted a balanced market between buyers and sellers, emphasizing the unique synergistic benefits Clearway can bring to acquisitions [58][59] Question: Risks associated with permitting for repowering projects - Management expressed confidence in the current permitting environment and the ability to manage risks associated with repowering projects [88]

Financial Performance & Guidance - First quarter CAFD reached $77 million, demonstrating strong operational performance across segments[7, 27] - Clearway Energy reaffirmed its 2025 CAFD guidance range of $400-440 million[7, 27] - The company announced a dividend increase of 1.7% to $0.4384 per share in 2Q25, resulting in an annualized rate of $1.7536 per share[7] - The company reaffirms CAFD per share target of $2.40-2.60 in 2027 with no external equity needed to achieve midpoint, and now has strong visibility to achieve the top end of the target[7] Growth Initiatives - Mt Storm repowering is on track, with construction slated to begin in 2025 and a Microsoft PPA signed[7] - Goat Mountain repowering is targeted for 2027, with PPA in final negotiations, and San Juan Mesa repowering is advancing with a PPA extension as a bridge[7] - Committed drop-downs are progressing as planned, with initial fundings completed for Rosamond South I, Dan's Mountain, and LV+Daggett 1[7] - Clearway Energy closed a 3rd party acquisition of Tuolumne Wind and signed a 3rd party M&A agreement for a solar project, involving approximately $120-125 million of corporate capital[7] Sponsor-Enabled Growth & Pipeline - The sponsor is advancing approximately 9.9 GW of late-stage projects, which are expected to support Clearway Energy's growth plan[7, 48] - Existing and pending safe harbor investments are on pace to qualify approximately 13 GW through 2029 CODs, maximizing site optionality[7, 19]

Financial Performance - Clearway Energy, Inc. reported a Net Loss of $104 million for Q1 2025, compared to a Net Loss of $46 million in Q1 2024[4] - Adjusted EBITDA for Q1 2025 was $252 million, an increase from $211 million in Q1 2024, driven by growth investments[5] - Total operating revenues increased to $298 million in Q1 2025, up from $263 million in Q1 2024, representing a growth of 13.3%[29] - Net loss attributable to Clearway Energy, Inc. was $4 million in Q1 2025, compared to a net loss of $2 million in Q1 2024[29] - The company reported a comprehensive loss of $109 million in Q1 2025, compared to a comprehensive loss of $47 million in Q1 2024[31] - Net income for the three months ended March 31, 2025, was a loss of $104 million, compared to a loss of $46 million for the same period in 2024[39] Cash Flow and Liquidity - Cash from Operating Activities increased to $95 million in Q1 2025, up from $81 million in Q1 2024[7] - Cash Available for Distribution (CAFD) rose to $77 million in Q1 2025, compared to $52 million in Q1 2024[8] - Total liquidity as of March 31, 2025, was $1,325 million, slightly down from $1,330 million at the end of 2024[10] - Net cash provided by operating activities was $95 million in Q1 2025, compared to $81 million in Q1 2024, indicating a 17.3% increase[36] - The net cash change for Q1 2025 was a decrease of $22 million, primarily due to dividend payments and long-term debt repayments[43] Dividends and Shareholder Returns - Clearway Energy, Inc. announced a 1.7% increase in quarterly dividend to $0.4384 per share, payable in Q2 2025[6] - Dividends per Class A and Class C common share increased to $0.4312 in Q1 2025, up from $0.4033 in Q1 2024, a rise of 6.5%[29] Acquisitions and Investments - The company closed the acquisition of Tuolumne Wind, a 137 MW project, for a corporate capital commitment of $61 million[14] - Clearway Energy, Inc. entered into a binding agreement to acquire a 100 MW operating solar project in California for $120 million to $125 million[13] - The company reported capital expenditures of $56 million for Q1 2025[43] Operational Metrics - The company reported a 13% increase in Renewables & Storage generation, with 4,481 MWh sold in Q1 2025 compared to 3,962 MWh in Q1 2024[9] - Total assets grew to $14,647 million as of March 31, 2025, compared to $14,329 million at the end of 2024, reflecting an increase of 2.2%[34] - Total liabilities increased to $9,227 million as of March 31, 2025, up from $8,765 million at the end of 2024, an increase of 5.3%[34] - Long-term debt increased to $7,231 million as of March 31, 2025, compared to $6,750 million at the end of 2024, reflecting a rise of 7.1%[34] Performance Metrics and Guidance - The company expects full-year 2025 Adjusted EBITDA guidance in the range of $1,195 million to $1,235 million[44] - For 2025, the company projects cash available for distribution between $400 million and $440 million[44] - Contributions from noncontrolling interests for Q1 2025 amounted to $44 million, compared to $215 million in Q1 2024[43] Interest and Financing Costs - Interest expense for Q1 2025 was $109 million, compared to $40 million in Q1 2024, reflecting an increase in financing costs[39] EBITDA and CAFD Definitions - EBITDA is a key performance measure for Clearway Energy, representing net income before interest, taxes, depreciation, and amortization, but has limitations as an analytical tool[48] - Adjusted EBITDA is used to provide a clearer picture of operating performance, adjusted for non-cash expenses and other items not indicative of future performance[50] - Cash Available for Distribution (CAFD) is defined as Adjusted EBITDA plus various cash receipts and distributions, minus certain cash outflows, and is considered a relevant measure for cash returns to investors[55] - Management believes CAFD is useful for evaluating the company's ability to make quarterly distributions and for planning future acquisitions[56] - Limitations of CAFD include exclusion of changes in operating assets and liabilities, which could materially affect financial condition[57] - Clearway Energy emphasizes that EBITDA and CAFD should not be viewed as alternatives to GAAP measures of performance[49] - Adjusted EBITDA is widely used by investors to compare operating performance across companies and periods, excluding items like interest and taxes[51] - The company acknowledges that other companies may calculate EBITDA differently, which limits its comparability[54] - Management uses Adjusted EBITDA for planning, forecasting, and evaluating actual results against expectations[53] - Clearway Energy compensates for the limitations of EBITDA by primarily relying on GAAP results[49]

Financial Results - Clearway Energy, Inc. reported a net loss of $104 million for Q1 2025, compared to a net loss of $46 million in Q1 2024 [4][6][29] - Adjusted EBITDA for the first quarter of 2025 was $252 million, an increase from $211 million in the same period last year [5][8] - Cash from operating activities was $95 million, up from $81 million in Q1 2024, while Cash Available for Distribution (CAFD) rose to $77 million from $52 million [6][8] Operational Performance - The company achieved strong operational performance with availability and capacity factors improving year-over-year across all segments [7] - Generation in the Renewables & Storage segment increased by 13% year-over-year, primarily due to growth investments [9] Growth Initiatives - Clearway Energy is advancing its long-term financial objectives through fleet enhancements, sponsor-offered dropdowns, and asset-centered M&A [2] - The company announced the acquisition of a 100 MW operational solar project in California, with a capital commitment of $120 million to $125 million [13] - The acquisition of Tuolumne Wind, a 137 MW project, was completed with a capital commitment of $61 million, expected to contribute approximately $9 million in asset CAFD annually starting in 2026 [14] Financial Guidance - The company reaffirmed its 2025 full-year CAFD guidance range of $400 million to $440 million, based on median renewable energy production estimates and other operational factors [21][22] Dividend Declaration - Clearway Energy's Board of Directors declared a quarterly dividend of $0.4384 per share, payable on June 16, 2025 [18]