NRG Profit Rebounds as East Generation Lifts Earnings
Operating margin reached 13.0% as acquired assets and higher East capacity prices lifted results.
NRG Energy (NRG), the power and smart-home company, swung to a second-quarter profit as LS Power assets, higher East capacity prices and unrealized hedge gains boosted earnings. GAAP net income was $506 million, compared with a $104 million loss a year earlier and $125 million in the first quarter.
The quarter marked a shift from the start of the year, with adjusted EBITDA rising 34% to $1.217 billion after declining 4% year over year in the first quarter. Adjusted EBITDA also increased 13% sequentially from $1.080 billion.
Revenue rose 11% from a year earlier to $7.481 billion, while declining 27% from the first quarter. Adjusted net income fell 7% to $315 million as acquisition-related interest and depreciation increased, and adjusted earnings declined to $1.49 a share from $1.73. Adjusted net income edged up sequentially from $308 million, while adjusted earnings per share were unchanged.
The East segment supplied much of the lift. Its adjusted EBITDA increased $370 million to $469 million, driven by acquired generation, CPower and higher capacity prices. Texas adjusted EBITDA fell $131 million to $381 million as higher supply costs, mild weather and expenses from added generation assets weighed on the segment, though the result recovered from an implied $216 million in the first quarter.
Vivint Smart Home adjusted EBITDA rose 16% to $301 million as new-customer additions and monthly recurring service margin per customer increased. Companywide economic gross margin climbed 17% to $2.289 billion, with gains in East and Vivint offsetting declines in Texas and West/Other.
NRG reiterated its 2026 guidance for a second consecutive quarter. The company expects adjusted net income of $1.685 billion to $2.115 billion, adjusted earnings of $7.90 to $9.90 a share, adjusted EBITDA of $5.325 billion to $5.825 billion and free cash flow before growth investments of $2.8 billion to $3.3 billion.
Free cash flow before growth investments rose 12% to $1.025 billion and rebounded from negative $66 million in the first quarter. NRG also aligned with a hyperscaler on principal commercial terms for a 1.2-gigawatt Texas plant, subject to final agreements and approvals, extending its generation expansion after the 415-megawatt T.H. Wharton facility began commercial operation May 26.