NRG Energy, Inc. Fourth Quarter and Full Year 2024 Earnings Presentation February 26, 2025 1 | NRG 4Q24 Earnings Safe Harbor Forward-Looking Statements In addition to historical information, the information presented in this presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. These statements involve estimates, expectations, projections, goals, assumptions, known and unknown risks and uncertainties and can typi ...

Financial Performance - NRG Energy reported GAAP Net Income of $643 million for Q4 2024 and $1.1 billion for the full year 2024, with Adjusted EPS of $6.83, exceeding prior guidance[2][4][7]. - Total revenue for 2024 was $28,130 million, a decrease of 2.4% from $28,823 million in 2023[34]. - Operating income increased significantly to $2,424 million in 2024, compared to $384 million in 2023[34]. - Net income available for common stockholders was $1,058 million in 2024, a recovery from a net loss of $256 million in 2023[34]. - The company reported a comprehensive income of $1,099 million in 2024, compared to a comprehensive loss of $163 million in 2023[37]. - Net income for the year ended December 31, 2024, was $1,125 million, a significant recovery from a net loss of $202 million in 2023[44]. - Adjusted Net Income for the twelve months ended December 31, 2024, was $1,408 million, compared to $1,076 million for the same period in 2023, representing a 30.8% increase[59]. - Adjusted Net Income before Preferred Stock dividends for Full Year 2024 was $1.475 billion, indicating robust profitability[54]. Shareholder Returns - The company returned $1.263 billion to shareholders in 2024, including $925 million in share repurchases and $338 million in dividends[12][13]. - The company plans to execute $1.3 billion in share repurchases and approximately $345 million in dividends for 2025[13][14]. - Cumulative dividends attributable to Series A Preferred Stock of $67 million for 2024, an increase from $54 million in 2023[63]. - Cumulative dividends attributable to Series A Preferred Stock are expected to be $67 million[67]. Guidance and Projections - NRG is reaffirming its 2025 guidance for Adjusted EPS of $6.75 - $7.75 and Free Cash Flow before Growth (FCFbG) of $1,975 - $2,225 million[3][10]. - 2025 guidance for Net Income is projected to be between $1,025 million and $1,225 million[65]. - Adjusted EBITDA is expected to range from $3,725 million to $3,975 million[65]. - Adjusted Net Income is forecasted to be between $1,330 million and $1,530 million, translating to Adjusted EPS of $6.75 to $7.75[67]. - Cash provided by operating activities is estimated to be between $2,085 million and $2,335 million[69]. - Free Cash Flow before Growth Investments (FCFbG) is projected to be between $1,975 million and $2,225 million[69]. Operational Highlights - NRG's retail energy business achieved over 5% net subscriber growth and a record-high retention rate of 90% in 2024[8]. - A strategic Project Development Agreement was signed with GE Vernova and Kiewit to develop up to 5.4 GW of new gas-fired generation projects by 2029-2032[5][17]. - The company has 1.1 GW of Texas Energy Fund projects in active due diligence, with commercial operation expected by summer 2026[5][20]. - Adjusted EBITDA for the full year 2024 was $3.8 billion, reflecting a $470 million improvement year-over-year[6][7]. - Adjusted EBITDA for Full Year 2024 was $3.789 billion, with significant contributions from the East segment at $2.036 billion and the Texas segment at $1.582 billion[54]. Liquidity and Cash Flow - NRG's total liquidity increased to $5.4 billion as of December 31, 2024, up $0.6 billion from the previous year[25]. - Cash provided by operating activities increased to $2,306 million in 2024, compared to a cash used of $221 million in 2023[44]. - Cash and cash equivalents increased to $966 million in 2024 from $541 million in 2023[40]. - Cash and cash equivalents at the end of 2024 were $1,173 million, up from $649 million at the end of 2023[45]. - Total current assets decreased to $8,964 million in 2024 from $9,727 million in 2023[40]. - Total liabilities decreased to $21,544 million in 2024 from $23,132 million in 2023[42]. Expenses and Costs - The company incurred a loss on debt extinguishment of $382 million in 2024, contrasting with a gain of $109 million in 2023[44]. - Capital expenditures for 2024 were $472 million, a decrease from $598 million in 2023[44]. - The provision for credit losses increased to $314 million in 2024, compared to $251 million in 2023[44]. - The company reported a provision for credit losses of $312 million, highlighting the impact of economic conditions on receivables[55]. - Depreciation and amortization expenses increased to $1,403 million for the twelve months ended December 31, 2024, compared to $1,295 million in 2023[63]. - The company incurred acquisition and divestiture integration and transaction costs of $(113) million for the twelve months ended December 31, 2024[64]. Market Performance - Total revenue for Q4 2024 reached $6,858 million, an increase from $6,767 million in Q4 2023, representing a growth of approximately 1.34%[48]. - Adjusted EBITDA for Q4 2024 was $902 million, compared to $861 million in Q4 2023, reflecting an increase of about 4.77%[50]. - Economic gross margin for Q4 2024 was $1,968 million, up from $1,818 million in Q4 2023, indicating a growth of approximately 8.25%[51]. - The economic gross margin percentage for Q4 2024 was approximately 28.7%, compared to 26.9% in Q4 2023, showing an improvement of 1.8 percentage points[51]. - The company recognized a mark-to-market gain of $2,863 million on economic hedges, significantly impacting the overall financial results[56].

Company Performance - NRG Energy's stock closed at $104.66, reflecting a -0.49% change from the previous session, underperforming compared to the S&P 500's gain of 0.03% [1] - Over the past month, NRG Energy's stock has increased by 8.21%, outperforming the Utilities sector's gain of 4.55% and the S&P 500's gain of 4.19% [1] Upcoming Earnings - NRG Energy is set to announce its earnings on February 26, 2025, with an expected EPS of $1.05, which represents a decline of 7.89% from the same quarter last year [2] Analyst Projections - Investors are advised to monitor recent shifts in analyst projections for NRG Energy, as upward revisions indicate positive sentiment regarding the company's business operations and profit generation capabilities [3] Zacks Rank and Estimates - The Zacks Consensus EPS estimate for NRG Energy has decreased by 0.4% in the past month, and the company currently holds a Zacks Rank of 4 (Sell) [5] - The Zacks Rank system has shown a strong track record, with 1 ranked stocks yielding an average annual return of +25% since 1988 [5] Valuation Metrics - NRG Energy has a Forward P/E ratio of 14.02, which is lower than the industry average Forward P/E of 17.19 [6] - The company has a PEG ratio of 1.24, compared to the Utility - Electric Power industry's average PEG ratio of 2.54 [7] Industry Context - The Utility - Electric Power industry is currently ranked 141 in the Zacks Industry Rank, placing it in the bottom 44% of over 250 industries [7][8] - The Zacks Industry Rank indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [8]

Core Viewpoint - NRG Energy has received an upgrade to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors often rely on earnings estimates to determine the fair value of stocks, leading to significant buying or selling activity that affects stock prices [3]. Company Performance Indicators - NRG is projected to earn $6.36 per share for the fiscal year ending December 2024, reflecting a year-over-year increase of 47.2% [7]. - Over the past three months, the Zacks Consensus Estimate for NRG has risen by 16.6%, indicating a positive trend in earnings expectations [7]. Zacks Rank System - The Zacks Rank system categorizes stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [6]. - NRG's upgrade to Zacks Rank 1 places it in the top 5% of stocks covered by Zacks, suggesting a strong potential for market-beating returns in the near term [9].

Group 1 - NRG Energy's stock closed at $112.37, reflecting a +1.66% change, outperforming the S&P 500, Dow, and Nasdaq indices [1] - The stock has increased by 19.07% over the past month, contrasting with the Utilities sector's decline of 1.8% and the S&P 500's gain of 2.52% [1] Group 2 - The upcoming EPS for NRG Energy is projected at $1.06, indicating a 7.02% decrease compared to the same quarter last year [2] - Recent modifications to analyst estimates for NRG Energy are crucial as they reflect changing near-term business trends [3] Group 3 - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), indicates NRG Energy holds a Zacks Rank of 2 (Buy) [5] - NRG Energy's Forward P/E ratio is 14.67, which is lower than the industry's average Forward P/E of 16.6, suggesting a valuation discount [5] Group 4 - NRG has a PEG ratio of 1.3, significantly lower than the Utility - Electric Power industry's average PEG ratio of 2.61 [6] - The Utility - Electric Power industry is ranked 94 in the Zacks Industry Rank, placing it in the top 38% of over 250 industries [6]

Core Viewpoint - Investors in the Utility - Electric Power sector should consider NRG Energy and Vistra Corp, with NRG currently presenting a better value opportunity based on various financial metrics [1] Group 1: Zacks Rank and Earnings Outlook - NRG Energy has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Vistra Corp. has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank emphasizes stocks with positive revisions to earnings estimates, suggesting that NRG has an improving earnings outlook [3] Group 2: Valuation Metrics - NRG has a forward P/E ratio of 14.81, significantly lower than Vistra Corp.'s forward P/E of 30.57, indicating that NRG may be undervalued [5] - NRG's PEG ratio is 1.31, while Vistra Corp. has a PEG ratio of 1.76, further supporting NRG's valuation advantage [5] - NRG's P/B ratio stands at 12.31 compared to Vistra Corp.'s P/B of 21.38, reinforcing NRG's superior valuation metrics [6] Group 3: Value Grades - NRG has a Value grade of B, while Vistra Corp. has a Value grade of D, highlighting NRG's stronger position in terms of value investment [6] - The combination of solid earnings outlook and favorable valuation figures positions NRG as the superior value option in the current market [6]

Group 1 - Zacks Premium offers various tools for investors to enhance their stock market confidence and investment strategies [1][2] - The Zacks Style Scores provide a unique rating system for stocks based on value, growth, and momentum characteristics, aiding investors in selecting securities with high potential for market outperformance [3][4][5][6][7] Group 2 - The Zacks Rank is a proprietary model that utilizes earnings estimate revisions to assist investors in building successful portfolios, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [8][9] - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, while also considering earnings outlook changes [11][12] Group 3 - NRG Energy Inc. is engaged in the production, sale, and delivery of energy products and services in the U.S. and holds a Zacks Rank of 3 (Hold) with a VGM Score of B [13] - NRG Energy has a Value Style Score of B, supported by a forward P/E ratio of 13.87, and has seen an upward revision in earnings estimates for fiscal 2024 [14]

Group 1 - The article emphasizes the unique investment approach of "First Principles," which focuses on breaking down complex problems in finance and technology to identify overlooked investment opportunities [1] - The analyst has a strong background in investment, private equity, and venture capital, demonstrating a proven track record of delivering strong returns [1] - The content on Seeking Alpha highlights themes of emerging technologies, sustainable investing, and the intersection of innovation and finance, aiming to share insights and foster collaboration among investors [1]

Core Insights - Zacks Premium provides tools for investors to enhance their stock market strategies, including daily updates, research reports, and stock screens [1] - The Zacks Style Scores are designed to help investors identify stocks with the potential to outperform the market within a 30-day timeframe [2] Zacks Style Scores Overview - The Style Scores consist of four categories: Value Score, Growth Score, Momentum Score, and VGM Score, each focusing on different investment strategies [3][4][5][6] - Value Score emphasizes identifying undervalued stocks using financial ratios [3] - Growth Score focuses on a company's financial health and future growth potential [4] - Momentum Score identifies trends in stock prices and earnings estimates to optimize entry points [5] - VGM Score combines all three styles to provide a comprehensive assessment of stocks [6] Zacks Rank and Performance - The Zacks Rank utilizes earnings estimate revisions to guide investors in stock selection, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] - A large number of stocks are rated, with over 800 top-rated options available for investors [9] Stock Selection Strategy - For optimal returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B [10] - Stocks rated 3 (Hold) should also have A or B Scores to maximize upside potential [10] - Stocks with lower ranks (4 or 5) should be avoided, even if they have high Style Scores, due to declining earnings forecasts [11] Company Spotlight: NRG Energy - NRG Energy Inc. operates in the energy sector, providing energy products and services across the United States [12] - Currently rated 3 (Hold) with a VGM Score of B, NRG has a Momentum Style Score of A and has seen a 2.8% increase in shares over the past four weeks [12][13] - The Zacks Consensus Estimate for NRG's fiscal 2024 earnings has increased by $0.07 to $6.36 per share, with an average earnings surprise of 3.1% [13]

Group 1 - Direct Energy is donating $30,000 each to the Alberta Children's Hospital Foundation and the Stollery Children's Hospital Foundation, demonstrating its commitment to supporting local communities [1] - The Alberta Children's Hospital Foundation focuses on providing world-class care and innovative research for severely ill and injured children, with the donation aimed at supporting research, equipment, and family-centered care programs [2] - The Stollery Children's Hospital, the only children's hospital integrated with an adult hospital in Canada, will use the donation to enhance specialized care, programs, and training for children with complex medical issues [3][4] Group 2 - Direct Energy has a history of supporting these foundations, having previously donated $15,000 to each hospital in 2020 and participating in annual radiothons [4] - Direct Energy is a leading retail provider of energy and energy-related services in North America, part of NRG Energy, which operates in 50 U.S. states and 8 Canadian provinces [6]