• Adjusted EBITDA: $252 million for the first quarter.
• Cash Available for Distribution (CAFD): $77 million for the first quarter.
• Renewable & Storage Segment Capacity Factors: Solar improved by 4.7% to 25.7%; Wind improved by 2.9% to 33.9%.
• Flexible Generation Availability: Improved by 3% to 89.3%.
• 2025 CAFD Guidance Range: Reiterated at $400 million to $440 million, targeting the higher end.
• Retained CAFD (2025-2027): Expected to generate $250 million or more.
• Excess Debt Capacity: Estimated at approximately $400 million or greater.
• Corporate Debt-to-EBITDA Ratio Target: 4 to 4.5 times.
• Interest Rate Hedging: Forward-starting hedges executed for the majority of the $850 million corporate bonds maturing in 2028.

• Warning! GuruFocus has detected 12 Warning Signs with CWEN.

Release Date: April 30, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Clearway Energy Inc (NYSE:CWEN) delivered solid first quarter results across all segments, reaffirming its 2025 guidance range.
• The company made accretive progress in fleet enhancements, sponsor-enabled drop-down investments, and asset-centered third-party M&A.
• Clearway Energy Inc (NYSE:CWEN) signed a revenue contract with Microsoft for the Mt. Storm repowering project, advancing towards construction in 2025.
• The company closed the Tuolumne Wind acquisition and signed a binding agreement to acquire an operational solar project in California.
• Clearway Energy Inc (NYSE:CWEN) mitigated interest rate risk for refinancing its corporate bond maturing in 2028 through opportunistic hedging.

Negative Points

• The company faces potential challenges with tariff impacts on battery storage projects, which may require cost-sharing or sourcing from non-Chinese suppliers.
• There is uncertainty regarding the future of the IRA and potential changes in policy that could affect project economics.
• Clearway Energy Inc (NYSE:CWEN) may need to issue modest amounts of equity through an ATM facility to fund growth, which could dilute existing shareholders.
• The company is exposed to risks related to permitting and regulatory changes for its repowering projects.
• Clearway Energy Inc (NYSE:CWEN) must navigate a competitive M&A market, requiring rigorous and selective evaluation of opportunities.

Q & A Highlights

Q: How is Clearway Energy Inc. approaching battery storage in its pipeline, especially considering potential tariff impacts? A: Craig Cornelius, CEO, explained that Clearway is committed to battery storage due to its reliability and revenue generation. The company is confident in managing tariff impacts through strategic planning and collaboration with suppliers and customers. They expect to continue deploying battery projects beyond 2026, leveraging diverse global supply chains to mitigate tariff costs.

Q: With recent acquisitions like Tuolumne and a new third-party M&A, could Clearway revise its 2025 guidance? A: Craig Cornelius, CEO, stated that while they are confident in reaching the top end of their guidance, they prefer to wait for more of the year to unfold and for acquisitions to close before considering any revisions. Sarah Rubenstein, CFO, added that they would update the range if appropriate after further evaluation.

Q: Can you elaborate on the potential to source batteries outside of China and manage tariff levels? A: Craig Cornelius, CEO, noted that Clearway is exploring multiple supply chains, including Southeast Asia and domestic sources, to reduce reliance on China. The company is managing tariff impacts through strategic partnerships and expects to continue delivering projects economically despite current tariffs.

Q: What CAFD yields does Clearway expect from repowering projects like Goat Mountain and San Juan Mesa? A: Craig Cornelius, CEO, indicated that Clearway targets CAFD yields of at least 10% for repowering projects, aligning with their capital allocation framework. The company evaluates these investments based on incremental CAFD and cash flow improvements compared to non-repowered projects.

Q: How is Clearway managing energy margins for its gas plants in California, and are there risks to wind project repowering due to permitting issues? A: Craig Cornelius, CEO, expressed confidence in the energy margin potential of their California gas plants, supported by favorable market conditions. He also assured that their wind projects have necessary permits and are progressing without significant risk from potential policy changes.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.