Talen Energy — Second Quarter 2026 Earnings Summary

Financial Performance

• Reported GAAP Net Loss Attributable to Stockholders of $(92) million for the quarter ended June 30, 2026, compared to a net income of $72 million in the same period in 2025.
• Reported Adjusted EBITDA of $374 million for the quarter, an increase of $284 million year-over-year from $90 million in Q2 2025.
• Reported Adjusted Free Cash Flow of $212 million for the quarter, an increase of $290 million year-over-year from a loss of $(78) million in Q2 2025.
• For the six months ended June 30, 2026, reported Adjusted EBITDA of $847 million compared to $290 million in the prior year period.
• For the six months ended June 30, 2026, reported Adjusted Free Cash Flow of $562 million compared to $9 million in the prior year period.
• Total generation for the quarter was 14.1 TWh, up from 7.3 TWh in Q2 2025; capacity factor was 47.6% compared to 31.8% in the prior year.
• Energy and other revenues were $722 million for the quarter, up from $366 million in Q2 2025.
• Capacity revenues were $237 million for the quarter, up from $88 million in Q2 2025.
• Unrealized losses on derivative instruments were $(212) million for the quarter, compared to an unrealized gain of $176 million in Q2 2025.
• As of June 30, 2026, total assets were $15,068 million compared to $10,905 million as of December 31, 2025.
• Long-term debt was $9,543 million as of June 30, 2026, compared to $6,782 million as of December 31, 2025.
• Net leverage target is below 3.5x net debt-to-Adjusted EBITDA; as of July 31, 2026, total available liquidity was approximately $1.9 billion.

Guidance and Future Outlook

• Raised 2026 Adjusted EBITDA guidance range to $2,025 million – $2,225 million.
• Raised 2026 Adjusted Free Cash Flow guidance range to $1,200 million – $1,350 million.
• Increased 2027 and 2028 outlooks in addition to the 2026 guidance raise.
• Hedged approximately 85% of expected generation volumes for 2026, 70% for 2027, and 30% for 2028.
• Progressing a pipeline of approximately 4 GW of land development and data center contracting options.

Business Segments and Product Lines

• Completed the "Cornerstone Acquisition" in June 2026, acquiring the Waterford Energy Center, Darby Generating Station, and Lawrenceburg Power Plant, adding approximately 2.6 GW of generation.
• Cleared over 10 GW in the 2028/2029 PJM Base Residual Auction at $325.00 per megawatt-day for the MAAC, PPL, and RTO locational deliverability areas.
• Owns and operates approximately 15.7 GW of power infrastructure, including 2.2 GW of nuclear power and a dispatchable fossil fleet.
• Generation fleet is located in the Mid-Atlantic, Ohio, Indiana, and Montana.

Market and Competitive Landscape

• Operating as a leading independent power producer and energy infrastructure company.
• Positioned to serve the growing demand for reliable power from artificial intelligence data centers.
• Produces and sells electricity, capacity, and ancillary services into wholesale U.S. power markets.

Risks and Challenges

• GAAP net income was negatively impacted by unrealized losses on derivative instruments and increases in interest expense.
• Adjusted Free Cash Flow was partially offset by higher capital expenditures and cash interest payments.
• Forward-looking statements are subject to risks including integration of the Cornerstone acquisition, regulatory matters, litigation, and hedging outcomes.

Management Commentary and Tone

• CEO Mac McFarland stated the company is raising 2026 guidance and increasing 2027 and 2028 outlooks due to strong year-to-date results and the closing of the Cornerstone Acquisition.
• Management emphasized commitment to the "flywheel strategy," leveraging an advantaged asset portfolio to build development pipelines and enter long-term contracts with large loads.
• The tone reflects confidence in the company's ability to deliver value per megawatt produced and power the digital infrastructure revolution.

Other Key Points

• Repurchased 550,000 shares of common stock for approximately $200 million in the second quarter; total repurchases since 2024 are approximately 15 million shares for $2.3 billion.
• $1.7 billion of share repurchase program capacity remains through December 2028.
• Issued $1.5 billion in 6.125% senior unsecured notes due 2031 and $2.5 billion in 6.375% senior unsecured notes due 2033 in April 2026 to fund the Cornerstone Acquisition and redeem $1.2 billion of 8.625% senior secured notes due 2030.
• Upsized Revolving Credit Facility from $900 million to $1.35 billion and Letter of Credit Facility from $1.1 billion to $1.5 billion.
• Extended maturity of the Letter of Credit Facility to December 2029 and TLB-1 to November 2032.
• The 2026 guidance excludes the Keystone facility as of July 1, 2026.