TransAlta (TA) Q4 2025 earnings summary

Executive summary

• Delivered Adjusted EBITDA of $1.1 billion and free cash flow of $514 million ($1.73/share) for 2025, with fleet availability at 92.3% and an 8% dividend increase, marking the seventh consecutive annual increase.

• Achieved record safety performance with a total recordable injury frequency rate of 0.12, surpassing targets.

• Advanced strategic priorities, including a major MOU for Alberta data centre development, the acquisition of Far North Power, and integration of Heartland.

• Returned $0.34 per share, or 20% of free cash flow, to shareholders through buybacks and dividends.

• Reduced Scope 1 and 2 emissions by 75% from 2015 levels, meeting 2026 target ahead of schedule.

Financial highlights

• 2025 Adjusted EBITDA was $1.1 billion, with free cash flow of $514 million ($1.73/share), both at or above guidance midpoints.

• Q4 2025 Adjusted EBITDA was $247 million, down year-over-year, mainly from lower Alberta and Mid-C prices.

• Segment Adjusted EBITDA: Hydro $285M, Wind & Solar $338M (up 7%), Gas $438M, Energy Transition $100M, Energy Marketing $85M.

• Operational availability improved to 92.3% in 2025.

• Revenues for 2025: $2,405 million, down 15% year-over-year.

Outlook and guidance

• 2026 Adjusted EBITDA guidance: $950–$1,100 million; free cash flow: $350–$450 million ($1.18–$1.51/share).

• Alberta spot power prices expected at $40–$60/MWh; AECO gas price: $2.65–$3.15/GJ.

• Substantially hedged for 2026, with average hedged power price at $65/MWh.

• Centralia plant conversion to gas will temporarily reduce EBITDA and FCF until post-conversion.

• 2026 priorities include advancing data centre and Centralia projects, optimizing Alberta fleet, and pursuing M&A.