AES Operating Margin Reaches $982 Million in Third Quarter

The Tip Desk · November 8, 2026 · 4 min read

Third-quarter revenue reached $3.87 billion as Colombia hydrology, Argentina spot prices and Ohio retail rates lifted operating margin to $982 million.

The AES Corporation (AES) reported third-quarter revenue of $3.87 billion, up 16% from a year earlier, as spot-market power prices and utility retail rates lifted operating margin to $982 million.

Adjusted EBITDA, a non-GAAP measure, rose $260 million from $830 million to $1.09 billion. The company said the increase was driven by higher energy and capacity sales and prices in the spot market and higher retail rates and demand at its utilities, partly offset by lower contract sales volume mainly due to the expiration of the Maritza PPA in Bulgaria.

Net income was $527 million, up $10 million from $517 million a year earlier. Net income attributable to AES was $553 million, down 13% from $639 million. The company said the net-income increase reflected higher spot energy and capacity sales and prices, higher retail rates and demand at utilities, and the prior-year impairment of the Uplight equity-method investment and adjustments to convertible notes, partly offset by a lower income-tax benefit, lower contract sales volume after the Maritza PPA expired, and higher impairment expense.

Renewables posted the largest year-over-year revenue increase among the segments. Segment revenue was $1.10 billion, up 35% from $817 million. Operating margin was $361 million, up 69% from $213 million. The company attributed the revenue increase mainly to $182 million of higher spot sales in Colombia, benefiting from elevated spot prices due to El Niño-related unfavorable hydrological conditions across the country and relatively favorable hydrology at the AES Chivor basin, $77 million from appreciation of the Colombian peso, $56 million from new projects placed in service in the U.S. and Chile, and $34 million from development services in the U.S. Contracted and spot sales in Chile were $61 million lower.

Utilities revenue was $1.26 billion, up 14% from $1.11 billion. Operating margin was $270 million, up 37% from $197 million. The company said the revenue increase was driven mainly by $67 million of higher retail demand, mainly from weather, $48 million from higher retail rates after AES Ohio’s 2024 DRC Settlement in November 2025, and $43 million from higher transmission and rider revenues. Wholesale revenues at AES Indiana were $13 million lower on lower load requirements and unit availability.

Energy Infrastructure revenue was $1.54 billion, up 4% from $1.48 billion. Operating margin was $316 million, up 10% from $288 million. The company said the revenue increase was driven mainly by $254 million of higher energy and capacity sales and prices in the spot market, mainly in Argentina, $14 million of higher spot sales in Mexico after a PPA expired, and $11 million of higher LNG sales. Contract sales volume was $146 million lower, mainly from the Maritza PPA expiration, and prior-year net derivative gains reduced the year-over-year comparison by $74 million.

Consolidated operating margin of $982 million was up 34% from $735 million. The company said the increase was mainly due to higher margins at Renewables from Colombia spot sales and prices, higher spot energy and capacity sales and prices at Energy Infrastructure, and higher retail rates and demand at Utilities, partly offset by lower contract sales volume after the Maritza PPA expired.

General and administrative expenses were $68 million, up 48% from $46 million, including $12 million of costs related to the proposed merger with Horizon Parent, L.P. Interest expense was $361 million, up 4% from $348 million. Asset impairment expense was $91 million, up from $31 million, driven by $75 million of higher impairment at AES Clean Energy Development on project-budget reviews and a strategic evaluation of development-stage assets.

Net cash provided by operating activities was $1.20 billion, down 7% from $1.30 billion a year earlier.

On March 1, 2026, AES entered into a merger agreement under which Horizon Merger Sub, Inc. will merge with and into the company, with AES continuing as the surviving corporation. Parent is jointly controlled by investment vehicles affiliated with funds managed or advised by Global Infrastructure Management, LLC and the EQT Infrastructure VI fund.