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EXPAND ENERGY Corp (EXE)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 delivered strong operational and financial execution: revenue (ex-derivatives) rose to $2.52B and Adj. EPS to $0.97, both above S&P Global consensus; Adjusted EBITDAX was ~$1.08B, and FCF was $423M despite softer gas prices . Q3 consensus: EPS $0.85; Revenue $1.93B; EBITDA $1.06B; Actuals: EPS $0.97, Revenue $2.52B, EBITDA $1.47B (beats on all) [Values retrieved from S&P Global]*.
  • Guidance improved: 2025 production midpoint raised to 7.15 Bcfe/d (+50 MMcfe/d) and total capex midpoint reduced by ~$75M to ~$2.85B; positioned to produce ~7.5 Bcfe/d in 2026 for roughly the same ~$2.85B capex .
  • Strategic catalysts: signed a 15-year, premium-to-NYMEX supply agreement with Lake Charles Methanol (sole supplier from ~2030) and upsized credit facility to $3.5B; net debt reduction focus continues with $500M targeted in 2H25 .
  • Narrative: sustained Haynesville efficiency (well costs >25% lower vs 2023) and marketing uplift underpin lower breakevens (<$2.75) and premium pricing opportunities; management highlights flexibility to modulate volumes into tightening Gulf Coast demand through 2026 .

What Went Well and What Went Wrong

  • What Went Well

    • Premium commercial progress: 15‑year LCM gas SPA at a premium to NYMEX; EXE is sole supplier, FID expected 2026, start ~2030; management frames shift from value protection to value creation via integrated marketing .
    • Efficiency and breakevens: Haynesville well costs down >25% since 2023; EXE indicates breakevens below $3 and < $2.75 in Haynesville, supported by owned sand mine and completion design “Gen 3” .
    • Capital discipline and liquidity: 2025 capex midpoint cut to ~$2.85B; credit facility upsized to $3.5B; 2H25 $500M debt paydown targeted; base dividend maintained at $0.575/sh .

  • What Went Wrong

    • Appalachia curtailments: weaker in-basin pricing led to voluntary curtailments in NE Appalachia in Q3 and into Q4, impacting regional volumes and capex mix .
    • Price headwinds and volatility: management remains cautious on mid-cycle gas price progression (focus $3.50–$4.00) given timing bottlenecks to demand realization and supply volatility .
    • Western Haynesville still appraisal stage: early data promising (vertical well), but management emphasizes uncertainty (long-term decline, deeper wells) and measured approach; first horizontal in 4Q25 .

Financial Results

  • Core P&L and per-share trends
MetricQ1 2025Q2 2025Q3 2025
Revenue ex-derivatives ($MM)$3,210 = $2,300 + $910 $2,809 = $2,021 + $788 $2,516 = $1,850 + $666
Total revenues and other ($MM)$2,196 $3,690 $2,966
GAAP Diluted EPS ($)$(1.06) $4.02 $2.28
Adjusted Diluted EPS ($)$2.02 $1.10 $0.97
Net Income (Loss) ($MM)$(249) $968 $547
Net Income Margin % (on revenue ex-derivatives)(7.8)% (= -249/3,210) 34.5% (= 968/2,809) 21.7% (= 547/2,516)
  • Q3 vs consensus and sequential
MetricQ2 2025 ActualQ3 2025 ActualQ3 2025 ConsensusSurpriseQ4 2025 Consensus
Revenue ($MM)$2,809 $2,516 $1,929.7*+30%$2,160.5*
Adjusted EPS ($)$1.10 $0.97 $0.8492*+14%$1.5375*
EBITDA ($MM, SPGI)—$1,472.0*$1,062.2*+39%$1,252.6*
  • Cash flow, capex, leverage, production
KPIQ1 2025Q2 2025Q3 2025
Adjusted EBITDAX ($MM)$1,395 $1,176 $1,082
Adjusted Free Cash Flow ($MM)$577 $1,269 $423
Total Capital Expenditures ($MM)$662 $727 $735
Net Debt ($MM)$4,901 $4,404 $4,412
Net Production (MMcfe/d)6,788 7,202 7,333
  • Segment/Q3 business unit snapshot
SegmentProduction (MMcfe/d)Realized Price incl. hedges ($/Mcfe)Production Expense ($/Mcfe)GP&T ($/Mcfe)Diff. to NYMEX ($/Mcf)D&C Capex ($MM)
Haynesville3,206 2.95 total avg 0.27 0.72 (0.27) $355
NE Appalachia2,556 2.95 total avg 0.18 0.85 (0.78) $150
SW Appalachia1,571 3.36 (segment total) 0.32 1.36 (0.43) $114

Notes: Revenue ex-derivatives aligns with SPGI “Revenue” (natural gas, oil & NGL + marketing). Q3 company Adjusted EBITDAX differs from SPGI EBITDA definition .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Production (Bcfe/d)FY 2025~7.10 mid-point 7.15 mid-point (raised +50 MMcfe/d) Raised
Total Capital Expenditures ($B)FY 2025~2.90 (base+PC) ~$2.85 mid-point; range $2.775–$2.925 Lowered
Productive Capacity Capex ($B)FY 2025~$0.275 “up to $0.25” in 2025 Lowered
Net Debt Reduction ($B)FY 2025$1.0 target for year -$0.5 in 2H25 (supports $1.0 FY) Maintained trajectory
Base Dividend ($/sh/qtr)Ongoing$0.575 $0.575 (Dec 4, 2025) Maintained
2026 Production Capacity (Bcfe/d)FY 2026Avg. ~7.5 (market dependent) Positioned to produce ~7.5 for ~$2.85B capex Reiterated/detail

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2 2025)Current Period (Q3 2025)Trend
Marketing uplift/premium pricingFramework for enhanced returns; hedging discipline; no specific premium deals disclosed -15‑yr LCM SPA at premium to NYMEX; “value creation” focus; many LNG/power/industrial dialogues underway Improving/expanding
Haynesville efficiency & breakevenSynergies and cost improvements; record drilling rates Well costs >25% lower vs 2023; < $2.75 breakeven; Gen 3 completion design progressing Improving
Appalachia curtailmentsNot highlighted in Q1; strong operations Q2 Voluntary curtailments continue given weak in-basin prices; prioritizing NE for curtailments Headwind persists
2026 setup & flexibilityPositioned to average ~7.5 Bcfe/d in 2026 if warranted Reiterated ability to modulate to ~7.5 Bcfe/d early 2026; capital ~flat vs 2025 Steady/clearer
Western Haynesville appraisalNot presentVertical well confirms thick, dense shale; 1st horizontal in 4Q25; measured approach due to uncertainty New initiative
Hedging “Hedge the Wedge”Not detailed in Q1/Q2 PR~47% 2026 hedged; collars ~75% of book; initiated 2027 (~15%) Ongoing discipline
Deleveraging & returnsIncreased FY25 net debt reduction to $1B; paid base + variable + buybacks Continue prioritizing debt reduction into 2026; maintain base dividend; flexibility on buybacks Steady

Management Commentary

  • “We can deliver with seven rigs the same production it took 13 rigs to deliver in 2023… costs >25% lower… average well productivity ~40% greater than basin average since 2022.” – CEO Nick Dell’Osso .
  • “Breakevens… sitting well below $3.” – Management in Q&A; Haynesville FCF breakeven < $2.75 on slide 12 .
  • “15-year [Lake Charles Methanol] gas sales agreement… sole supplier… premium to NYMEX… base load with operational flexibility.” – CEO .
  • “We expect to average 7.5 Bcf/d across 2026… with flexibility to push volumes higher or lower with demand.” – COO Josh Viets .
  • “We’ve already added low tens of millions of dollars to realizations this year through optimization; expect more over time.” – EVP Marketing Dan Turco .

Q&A Highlights

  • Pricing/macro: Management remains conservative on mid-cycle gas ($3.50–$4.00 focus; could trend higher over time as constraints clear) .
  • Breakevens and capex: Below $3 corporate breakeven; 2026 capex profile similar to 2025 (~$2.8–$2.9B) with flexibility .
  • Marketing uplift: Portfolio optimization, end-user sales, storage, and structured deals are adding margin; LCM demonstrates premium pricing for reliable, lower‑carbon supply .
  • Western Haynesville: Vertical well positive; Q4 horizontal to test deliverability; measured activity through 2026 .
  • Capital returns: Prioritize deleveraging into next year; maintain base dividend; opportunistic on buybacks .

Estimates Context

  • Q3 2025 vs S&P Global consensus: Adj. EPS $0.97 vs $0.85 (+14%); Revenue $2.52B vs $1.93B (+30%); EBITDA (SPGI) $1.47B vs $1.06B (+39%) . Q4 2025 consensus: EPS $1.54; Revenue $2.16B; EBITDA $1.25B [Values retrieved from S&P Global]*.
  • Implications: Magnitude of revenue/EBITDA beat driven by higher realized prices (including hedges) and derivative gains excluded from consensus “Revenue,” plus strong Haynesville productivity and marketing uplift .

Key Takeaways for Investors

  • EXE delivered a broad-based beat on revenue, EPS, and EBITDA, while cutting capex and raising production guidance—evidence of durable synergy capture and capital efficiency; this should support upward estimate revisions near term [Values retrieved from S&P Global]*.
  • The LCM 15‑yr SPA at premium pricing validates EXE’s commercial strategy and differentiates its marketing platform; more premium contracts could re-rate realizations and reduce cash flow volatility .
  • Haynesville efficiency and owned sand mine are structurally lowering well costs and breakevens (<$2.75), sustaining competitive advantage into 2026 even amid price volatility .
  • Flexibility to modulate to ~7.5 Bcfe/d in 2026 with roughly flat capex enhances risk/reward as Gulf Coast demand ramps; dynamic volume management is a core lever .
  • Appalachia curtailments and in-basin differentials remain a headwind; watch for pricing improvements and capacity shifts to ease constraints .
  • Balance sheet momentum intact (RBL to $3.5B; 2H25 $500M debt reduction); base dividend sustained; optionality for buybacks if market conditions improve .
  • Near-term catalysts: additional long-term offtake agreements (LNG/power/industrial), Western Haynesville appraisal results, and continued hedge/marketing optimization .

Appendix: Additional Detail and Source Citations

  • Q3 2025 press release and 8-K: financial statements, non-GAAP reconciliations, production/pricing tables, dividend and RBL updates .
  • Q3 2025 investor slides: guidance ranges, costs/differentials by segment, hedge book, Haynesville breakevens, capex mix .
  • Q3 2025 earnings call: strategy, SPA terms, breakevens, 2026 flexibility, Western Haynesville appraisal, hedging - -.
  • Prior quarters for trend analysis (Q1 & Q2 2025 8-Ks): revenue components, EPS, FCF, capex, synergies/outlook - -.

Footnote:

  • Values retrieved from S&P Global.