Sign in

You're signed outSign in or to get full access.

CR

CNX Resources Corp (CNX)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered strong operational execution and adjusted profitability despite a GAAP net loss driven by large unrealized hedge losses; adjusted EBITDAX rose to $325M as operating margin expanded to 37% . Revenue (pre-derivative) was $610.6M, up sharply versus Q4 2024 and Q1 2024 .
  • Results beat Wall Street on revenue and adjusted EPS: Revenue $610.6M vs consensus $516.2M*; Primary EPS $0.785 vs $0.634*, while GAAP diluted EPS was -$1.34 due to derivative marks. However, EBITDA was a large miss on a GAAP basis (-$109.8M actual vs $317.7M estimate*) given unrealized hedge losses; adjusted EBITDA was $323M, consistent with the underlying business . Values retrieved from S&P Global.*
  • Guidance was reaffirmed: 2025 production 605–620 Bcfe, FCF ~$575M and FCF/share raised to ~$3.97 on lower shares; NYMEX and differential assumptions were modestly lowered, and NGL price trimmed, reflecting strip/pricing context .
  • Key catalysts: resilient FCF outlook supported by ~85% hedge coverage and continued buybacks ($125M in Q1), plus better-than-expected Apex wells turning in line; in-basin demand from data centers/power gen could tighten differentials over time .

What Went Well and What Went Wrong

What Went Well

  • Adjusted profitability strength: Adjusted EBITDAX rose to $325M; operating margin improved to 37% (from 33% in Q4 and 21% YoY), underscoring cash margin and cost discipline .
  • Volumes and Apex performance: Total production increased to 147.8 Bcfe with average daily production of 1,642 MMcfe; eight Apex wells came online and are producing better than expected .
  • FCF resilience and hedging strategy: 2025 FCF guidance reaffirmed at $575M ($3.97/share updated), with ~85% hedged volumes protecting cash generation amid volatile pricing .

What Went Wrong

  • GAAP earnings hit by hedging: GAAP net loss of -$197.7M and GAAP EBITDA of -$104M were driven by a $418M unrealized loss on commodity derivatives and a $110M realized hedge loss in Q1 .
  • Pricing/differentials pressure: Updated guidance trimmed NYMEX ($3.76 from $3.86), widened gas differential (-$0.59 from -$0.54), and lowered NGL realized price (~$20/bbl from ~$21.75/bbl) .
  • Derivative cash settlements reduced realized gas pricing: Realized cash settlement impact was -$0.80/Mcf in Q1, weighing on reported GAAP results despite operational strength .

Financial Results

Revenue, EPS, Margins vs Prior Periods and Estimates

MetricQ1 2024Q3 2024Q4 2024Q1 2025
Natural Gas, NGL & Oil Revenue ($USD Millions)$325.97 $259.46 $364.41 $551.09
Purchased Gas Revenue ($USD Millions)$14.28 $27.31 $6.86 $11.55
Other Revenue & Operating Income ($USD Millions)$36.78 $48.48 $48.30 $47.96
Total Revenue (pre-derivative) ($USD Millions)$377.03 $335.25 $419.57 $610.60
GAAP Diluted EPS ($)$0.04 $0.37 $(0.97) $(1.34)
Operating Margin (%) (Adjusted EBIT / revenue excl. unrealized)21% 29% 33% 37%
Revenue Consensus Mean ($USD Millions)———$516.20*
Primary EPS Consensus Mean ($)———$0.634*
EBITDA Consensus Mean ($USD Millions)———$317.75*
Actual Primary EPS ($)———$0.785*
Actual EBITDA ($USD Millions)———$(109.82)*

Values retrieved from S&P Global.*

Production and Activity KPIs

KPIQ1 2024Q3 2024Q4 2024Q1 2025
Shale Sales Volumes (Bcf)119.4 110.8 115.6 126.0
CBM Sales Volumes (Bcf)9.5 10.0 9.9 9.3
NGL Sales Volumes (Bcfe)11.2 13.2 16.2 12.2
Oil & Condensate Sales (Bcfe)0.2 0.4 0.2 0.2
Total Production (Bcfe)140.4 134.5 141.9 147.8
Average Daily Production (MMcfe)1,542.4 1,461.8 1,543.1 1,642.3
TILs (Q1 count)———19

Price and Cost per Mcfe (Non-GAAP)

Metric ($/Mcfe unless noted)Q1 2024Q4 2024Q1 2025
Average Sales Price – Natural Gas$2.17 $2.41 $3.66
Cash Settlement on Gas Derivatives ($/Mcf)$0.42 $0.18 $(0.80)
Total Production Cash Costs (before DD&A)$0.88 $0.87 $0.85
Fully Burdened Cash Margin (before DD&A)$1.51 $1.50 $1.88

Hedging Impact

Hedging Result ($USD Millions)Q1 2024Q2 2024Q3 2024Q4 2024Q1 2025
Realized (Loss) / Gain$55 $110 $95 $21 $(110)
Unrealized (Loss)$(47) $(96) $(6) $(304) $(418)
Total (Loss) / Gain on Commodity Derivatives$8 $14 $89 $(283) $(528)

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Production Volumes (Bcfe)2025E605–620 605–620 Maintained
% Liquids2025E~7%–~8% ~7%–~8% Maintained
% Gas Hedged2025E85% 85% Maintained
Natural Gas NYMEX ($/MMBtu)2025E$3.86 $3.76 Lowered
Natural Gas Differential ($/MMBtu)2025E$(0.54) $(0.59) Widened
NGL Realized Price ($/Bbl)2025E~$21.75 ~$20.00 Lowered
Adjusted EBITDAX ($MM)2025E$1,225–$1,275 $1,225–$1,275 Maintained
Total Capital Expenditures ($MM)2025E$450–$500 $450–$500 Maintained
FCF ($MM)2025E~$575 ~$575 Maintained
FCF per Share ($)2025E~$3.85 (based on 149.247M shares) ~$3.97 (based on 144.723M shares) Raised (share count update)

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024, Q4 2024)Current Period (Q1 2025)Trend
Activity & TIL cadenceOptionality to flex 2025 activity; DUCs retained; Q4 noted front-end weighting and flexibility based on storage/prices 19 TILs late in Q1; more in Q2, lull in Q3, additional in Q4; no planned changes yet Execution on planned cadence with flexibility maintained
Capital efficiency & UticaSignificant cost improvements; Utica wells compete with Marcellus; drilling costs down, strong productivity Efficiency theme continues; production strength and Apex TILs added Positive, sustained efficiency gains
Buybacks & capital allocationAttractive long-term opportunity; process-driven capital allocation; flexibility across options Robust Q1 repurchase ($125M); management views repurchases as value-accretive Continued buyback support
Environmental Attributes (EA), 45V/45QWaiting for regulatory clarity; EA run-rate ~17–18 Bcf; ~$75M annual run-rate; opportunities across power/manufacturing EA sales unaffected by Buchanan deactivation; continued multi-facility PJM approach Stable EA monetization; awaiting policy clarity
In-basin demand (data centers/power)Discussed tightness potential; marketing optimization ongoing Expect many announcements; bullish for narrowing differentials over time Constructive regional demand outlook
Cash taxesDe minimis until cumulative ~$3B FCF; timeline late ’26/’27 Still de minimis; minor state taxes only; similar timeline Unchanged low cash tax burden

Management Commentary

  • “We’ll see a few more TILs in Q2 and probably a lull in Q3 and then some additional TILs coming in, in Q4.”
  • “We’re solving for free cash flow per share as opposed to any particular production level target.”
  • “We’re 85% hedged…there’s not a huge amount of wiggle room associated with open pricing left for the full year…we’re reaffirming [FCF] range.”
  • “The 8 wells that we brought online from Apex…are producing better than we expected.”
  • “That [Buchanan deactivation] won’t have any impact on our EA sales. We use multiple facilities across PJM to create those credits.”

Q&A Highlights

  • Volume trajectory and cadence: Heavy H1 completions with Q2 TILs, pause in Q3, resuming in Q4; production path remains flexible, focused on FCF/share rather than volume targets .
  • Buybacks: $125M repurchased in Q1; management continues to see value in repurchases as part of the capital allocation process .
  • Pricing/FCF resilience: Despite lower NYMEX/differential assumptions and reduced open volumes exposure, 2025 FCF range reaffirmed, supported by hedge coverage .
  • Apex performance: TIL wells outperform expectations, adding confidence to acquired inventory quality .
  • Regional demand tailwinds: Anticipated data center/power gen projects in SW PA could tighten differentials, benefiting basin operators .

Estimates Context

  • Revenue beat: Actual $610.55M vs consensus $516.20M*; sizable beat driven by higher commodity revenue and purchased gas/other income components . Values retrieved from S&P Global.*
  • Adjusted EPS beat vs GAAP miss: Primary EPS actual $0.785 vs $0.634*, while GAAP diluted EPS was -$1.34 due to hedge losses; adjusted EBITDAX $325M and operating margin expansion evidence core strength . Values retrieved from S&P Global.*
  • EBITDA miss (GAAP): Actual -$109.82M vs $317.75M estimate* due to $418M unrealized derivative loss; adjusted EBITDA was $323M, more aligned with consensus intentions . Values retrieved from S&P Global.*
  • Implication: Street models likely need to emphasize adjusted metrics and hedge impacts; expect limited changes to 2025 FCF given reaffirmed guidance and hedge coverage .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Underlying operations are strong: Adjusted EBITDAX and margins improved materially; GAAP losses largely reflect derivative marks, not deterioration in operations .
  • FCF intact and per-share higher: 2025 FCF ~$575M reaffirmed; FCF/share raised to ~$3.97 due to lower share count—buybacks continue to be a meaningful lever .
  • Volume cadence supports efficiency: Front-half completions/TILs and Apex outperformance underpin 2025 production while preserving optionality to flex H2 activity based on pricing/storage .
  • Hedge strategy limits downside: ~85% hedged volumes and modest open pricing exposure should stabilize cash generation amid volatile strip and differentials .
  • Watch regional demand and policy: Data center/power announcements in Appalachia could narrow basis; EA monetization remains stable and diversified while 45V/45Q clarity could unlock upside pathways .
  • Trading setup: Potential for market confusion over GAAP misses vs adjusted beats; focus on adjusted metrics and FCF guidance reaffirmation as the narrative anchor .
  • Medium-term thesis: Capital discipline, cost efficiency (Utica competitiveness), and buybacks drive per-share value, with optional upside from regional demand trends and EA policy tailwinds .

Appendix: Additional References

  • Q1 2025 press release with links to materials .
  • Q1 2025 8-K (Item 2.02) and full supplemental package (production, hedging, financials, guidance) –.
  • Q1 2025 Q&A transcript –.
  • Prior quarter Q&A transcripts for trend context (Q4 2024, Q3 2024) – –.