Vistra Q2 2026 earnings: Adjusted EBITDA rises 31% despite hedge losses

Vistra (NYSE: VST) reported second-quarter 2026 revenue of $4.017 billion, down about 5.5% from $4.250 billion a year earlier, while net income declined 6.7% to $305 million from $327 million. Ongoing Operations Adjusted EBITDA rose 31.0% to $1.767 billion, primarily because of higher realized energy and capacity prices and a full-quarter contribution from the plants acquired from Lotus.

Core financial results

The quarter featured lower revenue but higher operating income. Fuel, purchased power costs, and delivery fees declined by $200 million to $1.774 billion, while depreciation and amortization and selling, general, and administrative expenses also decreased. These benefits more than offset a $120 million increase in operating costs.

GAAP net income moved in the opposite direction from adjusted operating performance because of unrealized derivative losses. Vistra recorded a $488 million year-over-year increase in unrealized mark-to-market losses, which largely offset the benefits from realized pricing, capacity revenue, and the Lotus assets.

Ongoing Operations Adjusted EBITDA is a non-GAAP measure that excludes the Asset Closure segment and certain items, including unrealized gains and losses from hedging.

Business and segment performance

East and Texas supplied most of the improvement in Ongoing Operations Adjusted EBITDA. Their combined year-over-year increase was $393 million, compared with a $418 million increase for ongoing operations overall. Retail was comparatively stable, while Corporate and Other became more negative.

Vistra attributed the consolidated adjusted EBITDA increase primarily to higher realized energy and capacity prices and three months of contributions from the Lotus plants. The Asset Closure segment, which is excluded from ongoing operations, recorded an adjusted EBITDA loss of $23 million compared with a $17 million loss a year earlier.

Profitability, cash flow, and liquidity

Operating margin expanded even as revenue declined. In addition to lower fuel and purchased power costs, depreciation and amortization fell to $445 million from $541 million, SG&A declined to $392 million from $419 million, and the quarter did not repeat the prior-year period’s $68 million impairment charge.

Cash flow figures were provided for the first six months rather than the standalone second quarter. Cash provided by operating activities increased to $2.222 billion from $1.171 billion, while capital expenditures, including nuclear fuel purchases and long-term service agreement prepayments, rose to $1.572 billion from $1.458 billion.

At June 30, Vistra had approximately $6.295 billion of available liquidity. This included $435 million in cash and cash equivalents, $4.408 billion available under its corporate revolving credit facility, and $1.452 billion under its commodity-linked revolving facility.

Vistra spent $709 million on share repurchases during the first six months of 2026. As of August 3, cumulative repurchases since November 2021 totaled approximately $6.5 billion, and about $1.2 billion of authorization remained, which the company expects to complete no later than the end of 2027.

Hedge marks separated GAAP income from operating performance

The main accounting issue in the quarter was the gap between GAAP net income and adjusted EBITDA. Vistra recorded a $472 million unrealized commodity hedging loss in Q2 2026, compared with a $16 million unrealized gain in Q2 2025. These hedge positions are expected to settle in future years, but their mark-to-market movements affected current GAAP results.

Adjusted EBITDA excludes these unrealized hedge gains and losses. That exclusion, together with higher realized prices, capacity revenue, and the Lotus contribution, explains why Ongoing Operations Adjusted EBITDA increased by more than 30% while GAAP net income declined modestly.

Guidance

Vistra reaffirmed both of its principal 2026 ongoing-operations guidance ranges. The company said its hedging program supports the outlook, with approximately 100% of expected 2026 generation volumes hedged as of August 3.

The guidance excludes potential effects from the pending Cogentrix acquisition and the announced long-term power purchase agreements with Meta. The guidance reconciliation also excludes any potential benefit from the nuclear production tax credit.

Vistra had hedged approximately 94% of expected 2027 generation volumes and 72% for 2028. The company also maintained a 2027 Ongoing Operations Adjusted EBITDA midpoint opportunity range of $7.4 billion to $7.8 billion, but explicitly stated that this range is not guidance and is based on market curves as of October 31, 2025.

Management perspective

Management emphasized fleet reliability during periods of extreme heat in Texas and the PJM market. Vistra reported commercial availability of at least 97% across its fleet during those periods, following its annual spring maintenance season.

The company also announced Helix Digital Infrastructure with KKR, Kuwait Investment Authority, and NVIDIA. Vistra’s initial commitment is up to $1.0 billion, and it will serve as Helix’s preferred power provider. Separately, Vistra received Federal Energy Regulatory Commission approval for the Cogentrix Energy acquisition, although the transaction remained pending at the time of the release.

Other projects highlighted by management included two natural gas units in the Permian Basin and the Oak Hill 2 and Pulaski solar facilities.

Recent insider transactions

The supplied insider data reports 946,271 shares purchased across 22 transactions and 66,588 shares sold across seven transactions during the last six months, producing net purchases of 879,683 shares. The latest individual filings include several sales followed by zero-value director stock grants; the data does not state the insiders’ reasons for these transactions.

Risks investors should monitor

• Hedge-related GAAP volatility: Unrealized derivative movements had a substantial effect on quarterly net income, even though the positions are expected to settle in future years.
• Energy and capacity pricing: Higher realized energy and capacity prices drove adjusted EBITDA growth. Changes in future pricing remain relevant, particularly as hedging coverage declines from approximately 100% in 2026 to 72% in 2028.
• Acquisition and project execution: Lotus assets contributed to the quarter, while Cogentrix remains pending and is excluded from guidance. Helix and the company’s generation and solar projects also require capital and operational execution.
• Weather and fleet reliability: Extreme temperatures can increase the importance of plant availability. Vistra reported at least 97% commercial availability during recent heat, but sustained reliable operation remains important to results.

Summary

Vistra’s Q2 2026 results showed a clear divide between GAAP and adjusted performance. Revenue and net income declined, but ongoing adjusted EBITDA increased as realized energy and capacity prices and the Lotus plants supported operations, while unrealized hedge losses weighed on GAAP earnings. The next areas to monitor are delivery against reaffirmed guidance, cash conversion, fleet reliability, and execution of Cogentrix, Helix, and other growth projects.