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EQT Corp (EQT)·Q1 2025 Earnings Summary

Executive Summary

  • EQT delivered a strong Q1 2025 with sales volume at the high end and robust cash generation: $1.74B net cash from operations and $1.15B free cash flow; diluted EPS was $0.40 and adjusted EPS $1.18 .
  • Relative to S&P Global consensus, EQT posted a beat: adjusted EPS $1.18 vs. $1.01*; revenue beat with actual $2.37B* vs. $2.09B*, driven by tighter differentials and tactical production into strong winter pricing (EPS/Revenue values via S&P Global) .
  • Guidance improved: FY 2025 sales volume raised by 25 Bcfe to 2,200–2,300 Bcfe; maintenance capex mid-point lowered by $25M; Q2 2025 volume guided to 520–570 Bcfe; third‑party midstream revenue increased to $550–$650M .
  • Strategic catalysts: announced $1.8B bolt-on Olympus Energy (upstream/midstream) at ~3.4x adjusted EBITDA and ~15% unlevered FCF yield, positioning EQT adjacent to proposed power projects and supporting in‑basin demand optionality .

What Went Well and What Went Wrong

What Went Well

  • “Strongest financial results in recent company history,” with high-end volumes and tightened price differential via tactical choke openings into peak winter pricing; >$1B free cash flow in Q1 alone .
  • Guidance raised (production) and maintenance capex mid-point lowered, reflecting efficiency gains and Equitrans synergies; per-unit operating costs fell to $1.05/Mcfe .
  • Deleveraging: net debt fell to $8.1B from $9.1B at year-end; free cash flow and operating cash flow elevated; CFO reinforced medium-term plan to reach ~$5B net debt by mid-2026 at recent strip .

What Went Wrong

  • GAAP diluted EPS remained modest at $0.40 despite strong adjusted EPS, highlighting derivative impacts and non-GAAP adjustments; transmission costs rose on MVP and Transco capacity charges .
  • Processing and O&M per-unit expenses increased YoY with operation of acquired midstream assets; SG&A per-unit also up on higher headcount post-merger .
  • Macro uncertainties persist (tariff-driven inflation, potential LNG timing variability, associated gas response risks), prompting cautious hedging posture and emphasis on structural low-cost positioning .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Total Operating Revenues ($USD Millions)$1,283.8 $1,624.7 $1,739.9
Sales of Nat Gas, NGLs & Oil ($USD Millions)$1,099.8 $1,641.2 $2,244.7
Production Adjusted Operating Revenues ($USD Millions)$1,382.9 $1,820.9 $2,152.7
Diluted EPS ($)$(0.54) $0.69 $0.40
Adjusted EPS ($)$0.12 $0.69 $1.18
Net Income Attributable to EQT ($USD Millions)$(300.8) $418.4 $242.1
Adjusted EBITDA ($USD Millions)$831.9 $1,411.9 $1,780.7
Net Cash from Operating Activities ($USD Millions)$593.0 $756.3 $1,741.2
Free Cash Flow ($USD Millions)$(120.8) $587.7 $1,151.4

Margins and KPIs

MetricQ3 2024Q4 2024Q1 2025
Sales Volume (Bcfe)581 605 571
Average Realized Price ($/Mcfe)$2.38 $3.01 $3.77
Operating Costs ($/Mcfe)$1.14 $1.07 $1.05

Operating Revenues Breakdown

Component ($USD Millions)Q3 2024Q4 2024Q1 2025
Sales of Nat Gas, NGLs & Oil$1,099.8 $1,641.2 $2,244.7
(Loss)/Gain on Derivatives$66.8 $(183.5) $(678.9)
Pipeline, Net Marketing & Other$117.0 $167.1 $174.0
Total Operating Revenues$1,283.8 $1,624.7 $1,739.9

Per-Unit Operating Cost Breakdown ($/Mcfe)

Cost ItemQ3 2024Q4 2024Q1 2025
Gathering$0.20 $0.09 $0.08
Transmission$0.43 $0.41 $0.44
Processing$0.13 $0.14 $0.14
LOE$0.09 $0.09 $0.07
Production Taxes$0.07 $0.09 $0.08
O&M$0.07 $0.07 $0.08
SG&A$0.15 $0.18 $0.16
Total Operating Costs$1.14 $1.07 $1.05

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Sales Volume (Bcfe)FY 20252,175–2,275 2,200–2,300 Raised by 25 Bcfe
Total Maintenance Capex ($MM)FY 2025$1,950–$2,120 $1,950–$2,070 Lowered mid-point by $25M
Total Sales Volume (Bcfe)Q2 2025—520–570 New Q2 detail
Third-Party Midstream Revenue ($MM)FY 2025$500–$600 $550–$650 Raised
Average Differential ($/Mcf)FY 2025($0.70)–($0.50) ($0.70)–($0.50) Maintained
SG&A ($/Mcfe)FY 2025$0.17–$0.19 $0.17–$0.19 Maintained
DividendQ2 2025 Payable—$0.1575/sh payable Jun 2, 2025 Declared

Earnings Call Themes & Trends

TopicQ3 2024Q4 2024Q1 2025Trend
Equitrans synergies & compression>60% integration; early synergy capture; compression upside highlighted 90% integration; ~$200–360M annualized synergies captured vs base Savings increased to ~$360M; maintenance capex down; volumes & differential tailwinds Improving
Curtailment strategy & pricingTactical curtailments tightened differential; MVC eliminated via integration Curtail/ surge flexibility; realized pricing uplift; opened chokes Opened chokes; surged ~300 mmcf/d into peak pricing Positive impact
In-basin power/data center demandEarly pipeline of opportunities; net zero positioning Broader acceptance of gas for data centers; 6–7 Bcf/d local demand by 2030 Active negotiations with hyperscalers; Olympus adjacency enhances options Accelerating
Balance sheet deleveraging & hedgingAsset sale plans; hedge 2025; unhedged longer term Net debt cut >$4.6B Q3→Q4; unhedged beyond 2026 Pro forma year-end 2025 net debt ~$7B forecast; medium-term target $5B Strengthening
M&A strategy & OlympusFocus on high-quality integrated assets Discipline; equity-friendly structures Olympus deal at ~3.4x EBITDA; ~15% unlevered FCF yield; Utica upside Accretive

Management Commentary

  • CEO: “EQT is off to an exceptional start in 2025… tactical production response opening chokes into peak winter prices drove higher realizations… generated more than $1 billion of free cash flow in the first quarter alone” .
  • CEO: “We are raising 2025 production guidance by 25 Bcfe while reducing the mid-point of 2025 capital spending by $25 million… continued efficiency gains and additional Equitrans Midstream synergy capture” .
  • CFO: “We exited the quarter with $8.1 billion of net debt… forecast exiting the year at $7 billion of net debt on a pro forma basis… target $5 billion of net debt on a medium-term basis” .
  • CEO on Olympus: “Accretive bolt-on… ~3.4x adjusted EBITDA multiple and ~15% unlevered free cash flow yield… assets positioned adjacent to proposed power generation projects” .

Q&A Highlights

  • Breakeven and deleveraging: CFO noted levered breakeven ~$2.35 Henry Hub for 2025; pro forma leverage metrics improve on Olympus equity financing .
  • Pricing strategy & dailies: Flexibility to sell more into daily markets as hedging declines and balance sheet de-risks; choke openings captured winter storm pricing .
  • In-basin demand contracting: Active discussions with hyperscalers and power producers; expect portfolio structures (index-plus and fixed-price mix) tailored to counterparties .
  • Synergies: +$85M since last update driven by water disposal cost reduction, capex optimization, receipt point and system optimization .
  • Growth stance: Will grow with firm supply deals tied to customer demand; distinguish selling to market vs. selling to customer for durable cash flows .

Estimates Context

Q1 2025 vs S&P Global consensus:

MetricConsensusActual
Adjusted EPS ($)1.012*1.18
Revenue ($USD)2,090.98M*2,372.13M*

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Execution beat: Strong Q1 with tightened differentials and tactical surge into winter pricing produced a clear EPS and revenue beat vs. consensus; focus on continued realized pricing tailwinds through utility contracts and basis tightening .
  • Guidance upgrade: Raised FY volume and trimmed maintenance capex mid-point; Q2 volume detailed; third‑party midstream revenue plans increased—supporting FY EBITDA/cash outlook .
  • Strategic optionality: Olympus adds 500 MMcf/d and integrated midstream near Pittsburgh’s industrial corridor; adjacency to proposed power assets is a unique in‑basin growth lever .
  • Balance sheet and hedging: Rapid deleveraging enables opportunistic exposure to upside scenarios; unhedged beyond 2026 maintains asymmetry to rising gas prices while structural low costs provide downside resilience .
  • Synergy momentum: Compression and system optimization continue to drive efficiency gains and lower capital intensity; expect ongoing benefits beyond base synergy case .
  • Demand thematic: Active pursuit of firm supply agreements linked to data center/power projects; EQT’s scale, integrated assets, IG rating and low emissions credentials are differentiators in negotiations .
  • Traders: Watch MVP station spreads and Appalachian basis tightening; choke management and daily sales mix can amplify realized pricing in near-term volatility .

Non-GAAP notes

Adjusted EPS/EBITDA and “Production adjusted operating revenues” exclude fair value changes of derivatives prior to settlement and reflect settled derivatives; see reconciliations and definitions in press release and 8-K .