CNX Resources (CNX)·Q4 2025 Earnings Summary

CNX Beats Estimates, Announces $2B Buyback as FCF Streak Hits 24 Quarters

January 29, 2026 · by Fintool AI Agent

CNX Resources delivered another solid quarter, beating EPS estimates by 31% and extending its free cash flow streak to 24 consecutive quarters. The Appalachian natural gas producer also announced a significant $2 billion share repurchase authorization, signaling confidence in its capital return strategy. Despite the strong results, shares dipped approximately 2% in after-hours trading.

Did CNX Beat Earnings?

CNX comfortably exceeded analyst expectations across key metrics:

*Values retrieved from S&P Global

The company generated $132 million in free cash flow during Q4, bringing full-year 2025 FCF to $646 million—exceeding management's prior guidance of ~$640 million.

This marks the 8th consecutive quarter of EPS beats for CNX, demonstrating consistent operational execution and effective cost management.

What's the Big Story? The $2 Billion Buyback

The headline announcement was a new $2 billion share repurchase authorization with no expiration date. Combined with the existing $400 million remaining capacity, CNX now has $2.4 billion in total buyback authorization—approximately 45% of its current equity market capitalization.

CNX's capital return track record is substantial:

• 98.2 million shares repurchased since Q3 2020
• $1.9 billion total spent on buybacks
• $19.27 average purchase price per share
• 36% reduction in shares outstanding (224.5M → 142.4M)

CEO Alan Shepard emphasized the strategic rationale: "We continue to believe that our share repurchase program represents a compelling capital allocation opportunity."

In Q4 alone, CNX repurchased 2.9 million shares at an average price of $34.05 for a total cost of $100 million.

What Did Management Guide for 2026?

CNX provided comprehensive 2026 guidance:

Key takeaway: At a stock price of ~$36, the 2026E FCF of ~$550M implies an 11% free cash flow yield—well above the energy sector average.

The company plans 30 wells turned-in-line in 2026, with an average lateral length of 13,750 feet in SWPA Marcellus and 13,500 feet in CPA Utica.

How Did the Stock React?

Despite the strong beat and aggressive buyback announcement, CNX shares traded down approximately 2% in after-hours trading ($36.00 vs. $36.73 close). Several factors may explain the muted reaction:

1. Already priced in: The stock rose 36% from its 52-week low of $27 to recent levels around $37
2. 2026 FCF guidance lower YoY: ~$550M vs. $646M in 2025
3. Production guidance flat to down: 605-620 Bcfe vs. 620-625 Bcfe in 2025
4. Natural gas price uncertainty: Guidance assumes NYMEX of $4.07/MMBtu for open volumes

What Changed From Last Quarter?

Comparing Q4 2025 to prior guidance and Q3 2025 results:

Full-Year 2025 vs. Prior Guidance:

• FCF delivered $646M vs. updated guidance of ~$640M (slight beat)
• Production came in at 620-625 Bcfe range as guided

Balance Sheet Improvement:

• TTM Leverage ratio improved to 1.9x (targeting 1.4x by year-end 2026)
• Exchanged convertible notes reducing debt by $122 million
• Weighted average senior unsecured debt maturities of 4.7 years

Cost Performance:

• Q4 2025 cash operating margin: 60%
• Q4 2025 fully burdened cash costs: $1.11/Mcfe before DD&A
• 2026E targets: 64% cash margin, ~$1.15/Mcfe costs

ESG Highlight: Methane Leadership

CNX continues to emphasize its environmental credentials:

• Methane intensity of 0.004%—among the lowest in the industry
• Captured approximately 9.0 million metric tons of CO2e from waste methane—over 10x greater than Scope 1 emissions
• Appalachian Basin has the lowest methane intensity of any U.S. natural gas basin

Q&A Highlights: What Did Analysts Ask?

The earnings call Q&A provided additional color on key operational and strategic topics:

Capex Timing and Production Flexibility

Management confirmed 60% of 2026 capex will be front-loaded to the first half, keeping production flat throughout the year while preserving optionality. CFO Everett Good noted this approach "gives us some flexibility in the second half of the year to potentially accelerate frac activity if conditions warrant."

What Would Trigger Activity Increases?

CEO Alan Shepard was clear that CNX won't chase short-term price spikes: "We're not going to try to jump around to catch a month of pricing." Instead, they're looking for "some sort of long-term call associated with new infrastructure, new power plants, something like that that would really get the 2027, 2028, 2029 strip moving."

On pipeline constraints, Shepard noted: "We've been in maintenance of production, give or take, for the last six years. That's really a function of just the constraints up here in Appalachia, the unwillingness for regulators to allow additional pipelines to get gas to where it should go."

Utica Program Update

Despite only 3 scheduled turn-in-lines, the company is completing 5 Utica laterals in 2026—the lower TIL count is purely timing. COO Navneet Behl confirmed: "We are really confident of our deep Utica program right now."

Key Utica metrics:

• Drilling costs: Averaging ~$1,700 per foot as guided
• Well performance: In line with expectations
• Spacing tests underway: 1,300-foot and 1,500-foot spacing evaluations

2027 Hedging Strategy

CNX is already 60% hedged for 2027 at a weighted average NYMEX price of approximately $4. Management targets 80% hedged heading into any given year. As Shepard noted: "That $4 kind of swaps in a business performs really, really well at that level."

Environmental Attribute Revenue (45Z)

On 45Z tax credits, CFO Good indicated current production levels can generate ~$30 million annually under initial proposed guidance. Final guidance is pending. The PA Tier 1 REC market has "softened a little" with the new administration, with prices settling at the marginal cost of new renewable supply.

Weather Operations

Asked about the extreme cold weather event, Shepard confirmed the team "has been preparing for the last weeks" and expects no disruptions to operations or volumes. The Q4 numbers already account for any expected impacts.

Remaining Marcellus Inventory

In Southwest PA Marcellus (the core area), CNX has approximately 40,000-50,000 acres remaining, providing runway "towards the end of the decade" at current activity levels.

Forward Catalysts

Near-Term:

• Natural gas pricing trends into spring shoulder season
• Progress on convertible note refinancing (May 2026 maturity)
• Utica spacing test results (1,300-ft and 1,500-ft)

Medium-Term:

• Execution on $2.4B buyback authorization
• 2026 well productivity from Utica development
• Environmental attribute revenue (~$70M FCF impact expected)
• 45Z final guidance and implementation

The Bottom Line

CNX delivered another quarter of operational execution, beating estimates handily while announcing an aggressive $2 billion buyback expansion. The company's 24-quarter FCF streak and disciplined capital allocation have reduced shares outstanding by 36% since 2020. At an 11% forward FCF yield with $2.4B in buyback capacity (45% of market cap), management is betting heavily on the stock remaining undervalued. The muted stock reaction suggests investors may be waiting to see natural gas prices stabilize before giving CNX full credit for its execution.

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Related Links:

• CNX Company Profile
• CNX Earnings Transcripts
• Q3 2025 Earnings Review