NRG Energy (NYSE:NRG) reported what executives called a “record year” in 2025 and reaffirmed its 2026 guidance after closing the acquisition of the LS Power portfolio at the end of January. On the company’s fourth-quarter and full-year 2025 earnings call, management emphasized that integration is underway and that early performance is exceeding underwriting assumptions, while also rolling forward its long-term financial framework through 2030.
2025 results exceeded raised guidance
Chair and CEO Larry Coben said NRG exceeded the midpoint of its raised 2025 guidance, marking the third consecutive year the company increased its outlook and delivered above it. For the full year, NRG posted adjusted earnings per share of $8.24 and adjusted EBITDA of $4.087 billion, both “above the high end” of raised guidance, according to management.
Management also highlighted operational and strategic milestones from 2025, including:
- Top-decile safety performance for the 10th consecutive year
- Progress under a $750 million organic growth plan
- Signing 445 MW of long-term data center power purchase agreements (PPAs)
- Securing Texas Energy Fund loans for 1.5 GW of new capacity, with construction described as on budget and on schedule
- Launching a Texas residential virtual power plant (VPP), ending the year at nearly 10 times the company’s original objective
- Returning $1.6 billion to shareholders through repurchases and dividends and increasing the dividend by 8% for the sixth consecutive year
Coben also pointed to performance during Winter Storm Fern, when the Texas fleet achieved 97% “in the money availability,” which he said reflected prior plant investments and operational execution.
Segment performance and cash flow drivers
Chung attributed Texas segment adjusted EBITDA of $1.877 billion to margin expansion, commercial optimization, and favorable weather that benefited home energy volumes. The East segment delivered adjusted EBITDA of $981 million, down slightly year over year due to higher retail supply and planned maintenance costs, as well as the retirement of the Indian River facility, partially offset by strong capacity revenues and winter-driven natural gas margin expansion.
West and Other adjusted EBITDA was $137 million, reflecting the absence of earnings from the sale of the Airtron business in September 2024 and a lease expiration at the Cottonwood facility in May 2025, partially offset by higher retail margins in the West. Smart Home generated adjusted EBITDA of $1.092 billion, driven by record customer adds, retention, and higher net service margins.
Free cash flow before growth increased by $148 million year over year to $2.21 billion. Chung said the increase was primarily driven by higher adjusted EBITDA, lower interest payments due to the Vivint ring fence removal, and receipt of remaining insurance proceeds tied to WA Parish Unit 8 claims.
LS Power acquisition doubles generation fleet and expands demand response
NRG closed the acquisition of the LS Power portfolio at the end of January, and Coben said the transaction is already outperforming underwriting assumptions due to stronger capacity and energy prices. He also noted that 100% bonus depreciation enhances after-tax returns versus original modeling.
Management said the combined generation fleet has doubled to 25 GW, adding 18 natural gas assets primarily in PJM with additional positions in ERCOT, MISO, and ISO New England. The combined fleet is now “more than 75% natural gas,” and Coben said the company is “naturally long” against its residential load in core markets.
NRG also highlighted the addition of CPower, which Coben described as a “preeminent” demand response company that strengthens NRG’s commercial and industrial flexibility offering. The company said the deal was immediately accretive, supports long-term leverage targets, and strengthens its credit profile.
2026 guidance reaffirmed; capital allocation outlined
NRG reaffirmed the 2026 guidance ranges it introduced in early February following the LS Power close, which reflect 11 months of ownership for the acquired assets rather than a full year. Midpoints cited by Chung were:
- Adjusted EBITDA: $5.575 billion
- Adjusted net income: $1.9 billion
- Adjusted EPS: $8.90
- Free cash flow before growth: $3.05 billion
Chung said updated disclosures captured improved pricing and capacity values and included a pre-closing adjustment for January 2026 performance for the LS Power assets.
For 2026 capital allocation, NRG expects $3.05 billion of total cash for allocation, including $2.1 billion from the legacy business and $950 million from LS Power assets prorated to 11 months. Planned uses include roughly $1 billion for debt payments, $123 million of one-time integration costs, and at least $1.4 billion returned to shareholders through repurchases and dividends. The company also earmarked $310 million for growth initiatives, including Texas generation builds and consumer platform investments.
Long-term framework extended to 2030; data center contracting emphasized
NRG rolled forward its long-term outlook, continuing to target at least 14% annual growth in adjusted EPS and free cash flow before growth per share, now measured from 2026 through 2030. Management emphasized that the outlook assumes flat power and capacity prices and does not include upside from rising prices, additional data center contracts, or potential conversion/upgrade opportunities at acquired LS assets.
Chung said the company is forecasting adjusted EPS of greater than $14 by 2030 and free cash flow before growth of greater than $22 per share by 2030, while maintaining the 14%+ compounded annual growth framework. He also noted that the updated plan incorporates all three Texas Energy Fund projects (with the first targeted for completion in June 2026 and the additional two expected online by mid-2028) and the portion of previously signed 445 MW of data center contracts expected to come online during the period.
On large-load strategy, Coben stressed that “affordability and reliability will define long-term success,” arguing that new large loads should “bring their own power” by contracting for the generation supporting them, alongside scaling demand response such as VPPs. Management said NRG has more than 6 GW of natural gas generation capacity reserved for customer-backed projects, including 5.4 GW through a GE Vernova and Kiewit venture and 1 GW of uprate potential within the acquired LS portfolio.
In Q&A, executives said they are pursuing large data center contracting blocks in excess of 1 GW, typically with 10- to 20-year terms, and “very heavy” capacity payments with a variable component. President Rob Gaudette said the structure under discussion would generally leave the hyperscaler taking gas price risk, though NRG could assist via its gas platform if a counterparty wanted to offload that exposure. Coben said the company is targeting tier-1 hyperscalers and “even inside” that universe based on credit assessments.
NRG said its target is to sign at least 1 GW of long-term data center power contracts in 2026, but management clarified in Q&A that this target is not included in 2026 guidance or in the rolled-forward long-term outlook. Coben also indicated that, assuming needed agreements are reached, initial power from large projects could be online “late 2029,” with potential for roughly 1 GW per year thereafter.
Coben closed by outlining 2026 priorities: integrating LS Power, completing TH Wharton, expanding the VPP platform, executing under the Bring Your Own Power approach, delivering guidance, returning at least $1.4 billion to shareholders, growing the dividend within the company’s framework, and maintaining balance sheet strength. He also noted he is approaching the conclusion of his time as CEO and plans to continue as an advisor and shareholder.
About NRG Energy (NYSE:NRG)
NRG Energy (NYSE: NRG) is a U.S.-based integrated power company headquartered in Houston, Texas. The company develops, owns and operates a diversified portfolio of power generation assets and participates in wholesale and retail energy markets. NRG supplies electricity to utilities, commercial and industrial customers, and retail consumers, while also providing energy-related products and services designed to manage consumption and support reliability.
NRG’s generation mix includes conventional thermal plants as well as renewable and distributed energy resources.
