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Antero Midstream Corp (AM)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a clean beat vs consensus on normalized EPS and revenue, supported by record JV processing throughput, lower interest expense, and stable fee escalators; GAAP diluted EPS was $0.25 and Adjusted EPS was $0.28 . Wall Street consensus from S&P Global stood at $0.229 EPS and $281M revenue; actual normalized EPS was $0.28 and revenue $309M, both above expectations*.
  • EBITDA was $274M (+3% YoY), Free Cash Flow after dividends was $79M (+7% YoY), and leverage declined to ~2.95x, enabling $29M of buybacks alongside the $0.225 dividend for the quarter .
  • Operationally, Torrey’s Peak compressor came online ahead of schedule with ~160 MMcf/d capacity and ~$30M capital savings from compressor unit reuse, underpinning volume growth and 2025 flexibility .
  • Management highlighted rising natural gas demand tied to data centers and in‑basin projects (Ohio/PA/WV) and reiterated a flexible capital return framework (50/50 debt paydown and buybacks) given leverage <3x .
  • Near-term stock narrative: sustained FCF after dividends (> $75M second consecutive quarter), ahead-of-schedule infrastructure additions, consensus beats, and confidence in data center gas demand could support multiple stabilization while water volumes and macro LPG nuances remain watch items .

What Went Well and What Went Wrong

What Went Well

  • Record processing throughput (JV at ~1.65 Bcf/d; >100% of nameplate) and increased low/high-pressure gathering volumes drove EBITDA growth and normalized EPS beat: “record processing volumes” ; JV processing averaged 1,650 MMcf/d (+3% YoY) and was >100% utilized .
  • Capital efficiency and balance sheet: leverage ~2.95x and $79M FCF after dividends, supporting dividends and $29M buybacks; “eleventh consecutive quarter” of FCF after dividends and flexibility in return of capital .
  • Execution: Torrey’s Peak compressor placed in service ahead of expectations (late Q1 vs planned Q2); ~160 MMcf/d capacity and ~$30M savings from unit relocation; management quote: “placed … ahead of initial expectations… third station … resulting in over $30 million of estimated capital savings” .

What Went Wrong

  • Water handling volumes -7% YoY (105 MBbl/d) with segment operating income only $8.3M despite $62.4M revenue, reflecting mix and operating expenses; management expects similar volumes Q2 given timing of completion crews .
  • Fresh water fee/volume dynamics and shorter average lateral lengths temper water segment growth; guidance implies stable rather than accelerating water volumes in 2025 .
  • Macro LPG/propane questions remain a watch item; while management is constructive on long-term demand (PDH vs naphtha cracking), near-term tariff/macro uncertainty persists for liquids; analyst concerns surfaced in Q&A .

Financial Results

Core P&L and Cash Flow vs Prior Year and Prior Quarter

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$279.1 $287.5 $291.1
GAAP Diluted EPS ($)$0.21 $0.23 $0.25
Adjusted EPS ($)$0.24 (Adj NI $117.1M ÷ diluted shares, per table; adj per share cited at $0.28 in Q1 2025) $0.26 $0.28
Adjusted EBITDA ($USD Millions)$265.3 $274.3 $274.3
Free Cash Flow after Dividends ($USD Millions)$74.0 $92.8 $79.1
Interest Expense ($USD Millions)$53.3 $49.7 $48.4
Capital Expenditures ($USD Millions)$29.8 (accrual) $24.0 (accrual) $37.3 (accrual)

Margins

MarginQ1 2024Q4 2024Q1 2025
Adjusted EBITDA Margin (%)95.1% (265.3/279.1) 95.4% (274.3/287.5) 94.2% (274.3/291.1)

Segment Breakdown (Q1 2025)

SegmentRevenue ($USD Millions)Operating Income ($USD Millions)
Gathering & Processing$228.7 $170.4
Water Handling$62.4 $8.3
Amortization of Customer Relationships (contra revenue)$(17.7) —
Total$291.1 $177.2

Operational KPIs

KPIQ1 2024Q1 2025
Low Pressure Gathering (MMcf/d)3,301 3,348 (+1%)
Compression (MMcf/d)3,260 3,330 (+2%)
High Pressure Gathering (MMcf/d)2,966 3,106 (+5%)
Fresh Water Delivery (MBbl/d)113 105 (−7%)
JV Processing (MMcf/d)1,602 1,650 (+3%; >100% utilized)
JV Fractionation (MBbl/d)40 40 (100% utilized)
Leverage (LTM Adj. EBITDA basis)~3.1x (FY24) 2.95x
Net Debt ($USD Millions)—$3,127.4
Capex ($USD Millions)$29.8 (accrual) $37.3 (accrual)
Share Repurchases—1.7M shares, $29M

Results vs S&P Global Consensus (Q1 2025)

MetricConsensusActualSurprise
Primary EPS (Normalized) ($)0.229*0.280*+0.051 (beat)*
Revenue ($USD Millions)280.8*308.8*+28.0 (beat)*

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Income ($M)FY 2025$445–$485 No update in Q1; reiterated trajectory on call Maintained
Adjusted EBITDA ($M)FY 2025$1,080–$1,120 No update in Q1; mid-single-digit growth reiterated Maintained
Capex ($M)FY 2025$170–$200 (incl. ~$85 G&P; ~$85 Water; $10–$15 Stonewall JV) No update in Q1; projects progressing (Torrey’s Peak online early) Maintained (execution ahead of schedule)
FCF After Dividends ($M)FY 2025$250–$300 assuming $0.90 DPS No update in Q1; reiterated 10% YoY at midpoint Maintained
Dividend per Share ($)FY 2025$0.90 annualized Q1 2025 declared $0.225 for quarter ($0.90 annualized) Maintained

Earnings Call Themes & Trends

TopicQ3 2024Q4 2024Q1 2025Trend
Data centers / AI‑driven gas demandSet up for 2025 growth; breakevens support stability “Early” but engaged in discussions; AM would support AR opportunities Demand estimates have “doubled” in six months; 70% of data centers expected to be powered by gas; Appalachia projects gaining momentum Strengthening narrative; rising visibility
Tariffs / macro impact on capexNot highlighted2025 budget detailed; Stonewall JV compression spend Materials secured through 2026; “immaterial impact” from tariffs/macros on 2025–26 budget Reduced perceived risk
Capital efficiency & leverageOn path to <3x by Q4 Achieved ~3x; initiated $29M buybacks Leverage ~2.95x; reinvestment rate ~17% best-in-class; flexible 50/50 debt/buybacks Improving balance sheet; increased capital returns
Water operations cadenceDeferrals modestly impacted volumes; one crew in Q3 Higher Q4 water volumes from DUC completion Q2 volumes similar to Q1 as second crew timing spills over Stable near-term; watch crew timing
Regulatory/legal (Veolia)Ongoing; no timing certainty Appeal process ongoing; use of proceeds TBD Not a Q1 focus; unchanged statusNeutral; uncertainty persists
JV utilization & expansion100% utilized; minor over‑nameplate historically JV contrib. to distributions; Stonewall JV expansion spend planned Running ~4% over nameplate; will reevaluate expansion as outlook evolves Sufficient capacity near-term

Management Commentary

  • Paul Rady (CEO): “We placed the Torrey’s Peak compressor station in service late in the first quarter… the third station to relocate underutilized compressor units, resulting in over $30 million of estimated capital savings… This additional capacity will support the further gathering volume growth anticipated throughout 2025.”
  • Brendan Krueger (CFO): “Throughput growth, combined with lower debt and interest expense, resulted in double-digit earnings per share growth year-over-year… eleventh consecutive quarter of generating Free Cash Flow after Dividends… we will continue to be flexible in our return of capital program.”
  • Paul Rady on demand: “Expectations for the power required for data centers by 2030 has doubled… percentage of data centers expected to be powered by natural gas… increased from 50% to 70%… supports significant growth in natural gas demand over the next several years.”
  • Brendan Krueger on capital returns: “Based on consensus estimates, AM has the ability to allocate approximately 65% of its EBITDA for dividends, additional debt reduction and share repurchases… nearly double the C‑corp average.”

Q&A Highlights

  • In-basin demand growth: Momentum across OH/PA/WV; AM well positioned with extensive gathering and water infrastructure; conversations ongoing but early-stage .
  • Propane/LPG outlook: PDH remains essential to global propylene production; naphtha cracking is not a substitute; steady res/comm demand and petrochemical growth underpin long-term liquids confidence .
  • JV capacity: Running ~4% over nameplate; historically up to ~10% over; comfortable near-term and will reevaluate expansion as prices/outlook evolve .
  • Capital allocation: With leverage below 3x, expect continued balanced approach between debt reduction and buybacks; opportunistic bolt-ons considered .
  • Water volumes cadence: Q2 volumes similar to Q1 given second crew timing; lateral length assumptions ~13,200 feet remain intact .

Estimates Context

  • Q1 2025 beat: Normalized EPS $0.280 vs $0.229 consensus (+$0.051); revenue $308.8M vs $280.8M consensus (+$28.0M)*.
  • Implications: Street may need to revise FY EBITDA/FCF trajectories modestly higher given sustained throughput strength, lower interest expense, and visible fee escalators; water volumes remain balanced by completion crew timing*.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Beat on normalized EPS and revenue plus stable EBITDA and sustained FCF after dividends reinforce AM’s defensive cash flow profile; leverage ~2.95x supports continued buybacks alongside dividend .
  • Execution upside: Torrey’s Peak ahead of schedule with ~$30M capital savings and ~160 MMcf/d capacity adds near-term volume headroom .
  • Structural demand narrative (data centers) is strengthening; Appalachia positioning and secured materials through 2026 de‑risk 2025–26 execution .
  • Capital returns likely remain a portfolio approach (50/50 debt/buybacks) with optionality for bolt-ons; medium-term FCF after dividends guided to $250–$300M .
  • Watch items: water segment volumes/lateral length mix, liquids macro/LPG pricing/tariffs (management constructive long-term), and timing of regulatory/legal outcomes .
  • Near-term trading: Consensus beats and early in‑service infrastructure are catalysts; downside risks mitigated by fee escalators, interest expense tailwinds, and high EBITDA margins .
Notes:
- GAAP vs non-GAAP: Adjusted EPS ($0.28) and Adjusted EBITDA ($274M) are non-GAAP; reconciliations and definitions provided in filings/press release **[1623925_0001104659-25-042686_tm2513563d1_ex99-1.htm:2]** **[1623925_20250430LA77206:2]** **[1623925_20250430LA77206:3]**.
- Revenue presentation: Total revenue is net of amortization of customer relationships; segment detail provided **[1623925_0001104659-25-042686_tm2513563d1_ex99-1.htm:8]**.

Sources: 8‑K Q1 2025 press release (Ex. 99.1) ; Q1 2025 call transcript ; Q4 2024 press release and call ; Q3 2024 press release and call .

S&P Global consensus and actuals for Q1 2025 (EPS, revenue)*.