Talen Energy Reports First Quarter 2025 Results, Affirms and Narrows 2025 Guidance

Core Viewpoint - Talen Energy Corporation reported a solid start to 2025, with significant earnings and operational performance despite a net loss attributable to stockholders. The company is committed to shareholder value through stock repurchases and has affirmed its guidance for the year [2][3][4]. Financial and Operating Results - For Q1 2025, Talen reported a GAAP net loss attributable to stockholders of $(135) million, a decrease of $(429) million compared to Q1 2024, primarily due to the absence of a gain from the AWS Data Campus sale and lower hedge gains [4][5]. - Adjusted EBITDA for the quarter was $200 million, down $(89) million from the previous year, while Adjusted Free Cash Flow was $87 million, a decrease of $(107) million compared to Q1 2024 [4][5]. - Total generation increased to 9.7 TWh, with 46% from carbon-free nuclear generation, down from 58% in the previous year [4][5]. Guidance and Outlook - The company is affirming and narrowing its 2025 guidance for Adjusted EBITDA to a range of $975 million to $1,125 million and Adjusted Free Cash Flow to $450 million to $540 million [7]. - The outlook for 2026 remains unchanged [7]. Operational Highlights - The Federal Energy Regulatory Commission (FERC) approved the reliability-must-run (RMR) settlement agreement, allowing Talen to operate its Brandon Shores and H.A. Wagner facilities until May 31, 2029, ensuring grid reliability [4][9]. - The Susquehanna Unit 2 refueling outage was extended to perform additional maintenance, expected to improve capacity and efficiency, with an investment of approximately $20 million [8]. Share Repurchase Program - Since the beginning of 2024, Talen has repurchased approximately 14 million shares, representing 23% of outstanding shares, totaling around $2 billion, with $995 million remaining under the repurchase program [10]. Balance Sheet and Liquidity - As of May 2, 2025, Talen had total available liquidity of approximately $970 million, consisting of $270 million in unrestricted cash and $700 million under its revolving credit facility [11]. - The projected net leverage ratio is approximately 2.6x, below the target of 3.5x net debt-to-Adjusted EBITDA [11]. Hedging Activities - As of March 31, 2025, Talen had hedged approximately 95% of expected generation volumes for 2025, 60% for 2026, and 30% for 2027, supporting cash flow stability [12].