NRG Energy Surges As Q1 Crushes Forecasts, LS Power Deal Supercharges Long-Term Outlook

NRG Energy, Inc.’s NRG stock skyrocketed after the company reported better-than-expected first-quarter 2025 results and announced the acquisition of Premier Power Portfolio from LS Power.

NRG reported a revenue increase of 15.6% year-over-year to $8.59 billion, beating the consensus of $7.83 billion. Adjusted EPS stood at $2.62, beating the consensus of $1.49.

Quarterly operating income rose 30.9% YoY to $1.134 billion, and the margin expanded by 147 bps to 13.2%.

Adjusted EBITDA rose 29.4% YoY to $1.126 billion and the margin expanded 141 bps YoY to 13.1%. Adjusted net income rose to $531 million, up $226 million year-over-year.

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Operating cash flow for the quarter was $855 million, compared to $267 million a year ago. Free Cash Flow Before Growth Investments was $293 million.

As of March 31, 2025, NRG held $0.7 billion in unrestricted cash and had $4.5 billion available through credit facilities, totaling $5.2 billion in liquidity.

NRG reaffirmed its 2025 capital allocation plan, aiming to return $1.3 billion via share repurchases and about $345 million in dividends. As of April 30, 2025, the company had returned $532 million—$445 million in buybacks and $87 million in dividends.

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Additionally, NRG announced that it has agreed to acquire a 13 GW natural gas power portfolio and a 6 GW commercial VPP business from LS Power. The deal includes $6.4 billion in cash, 24.25 million NRG shares, and $3.2 billion in assumed debt. It also brings an estimated $400 million in tax benefits. The transaction is expected to close in Q1 2026, pending regulatory approvals.

NRG’s acquisition of LS Power assets doubled its generation capacity and added a 6 GW commercial & industrial VPP business, with key assets in the Northeast and Texas.

The deal immediately increases adjusted EPS, raising NRG’s 5-year EPS CAGR forecast from 10% to 14%, excluding further upside. It enhances the company’s credit profile and enables $1B in annual share repurchases until leverage drops below 3.0x, after which NRG will return to its 80/20 capital allocation framework.

2025 Guidance reaffirmed: The company reaffirmed its 2025 guidance, reinforcing its growth strategy and capital allocation framework.

NRG sees Adjusted EPS of $6.75-$7.75 versus the $7.41 consensus and Adjusted EBITDA of $3.725 billion—$3.975 billion.

It expects Free Cash Flow Before Growth Investments (FCFbG) to be between $1.975 billion and $2.225 billion.

Price Action: NRG shares are trading higher by 16.94% at $139.55 on Monday’s last check.

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