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RANGE RESOURCES CORP (RRC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered solid cash generation with cash from operations of $248M and adjusted EPS of $0.57, modestly above Wall Street consensus, while GAAP diluted EPS was $0.60 aided by a $93M mark-to-market derivative gain .
  • Revenue composition remained balanced, with realized prices of $3.29/mcfe (+$0.22 vs NYMEX), production at ~2.23 Bcfe/d (69% gas), and total cash unit costs down versus last year; cash margin per mcfe was $1.36 vs $1.24 in Q3’24 but down from $1.53 in Q2 .
  • Guidance tightened/improved: 2025 gas differential to NYMEX narrowed to (-$0.40)–(-$0.43), NGL differential narrowed to MB +$0.50–$0.75, production outlook edged up to ~2.23 Bcfe/d, and transportation cost guidance lowered on the high end .
  • Capital allocation remained shareholder-friendly: $56M repurchases and $21M dividends in Q3; net debt at ~$1.23B with a revolver amended to 2030 increasing bank commitments to $2.0B, preserving flexibility for the 2026–2027 growth plan .
  • Near-term catalysts: Q4 production step-up to ~2.3 Bcfe/d, ongoing discussions on in-basin data center/power agreements, and positive LNG/NGL export capacity trends that management sees improving realizations and supporting growth through 2027 .

What Went Well and What Went Wrong

What Went Well

  • Efficiency and cost discipline: Total cash unit costs declined YoY to $1.91/mcfe; DD&A remained controlled at $0.46/mcfe; interest expense per mcfe fell YoY to $0.11 .
  • Pricing and differentials: Realized price after hedges at $3.29/mcfe delivered a $0.22 premium vs NYMEX; pre-hedge NGL realizations carried a premium to Mont Belvieu .
  • Strategic positioning and liquidity: Share repurchases ($56M) and dividends ($21M), net debt ~$1.23B, amended revolver to 2030 with commitments raised to $2.0B; CEO highlighted “ability to generate significant free cash flow through cycles” positioning Range for demand growth .

Quote: “Range’s third quarter results continue to showcase our ability to generate significant free cash flow through cycles… well-positioned to benefit from growing local and global demand for natural gas” — CEO Dennis Degner .

What Went Wrong

  • Sequential cash margin compression: Cash margin per mcfe slipped to $1.36 from $1.53 in Q2, reflecting lower sequential realized pricing and seasonal transportation effects .
  • NGL/condensate pricing headwinds: Pre-hedge NGL price ($22.09/bbl) and oil/condensate ($54.25/bbl) were down vs prior year, with condensate at WTI minus $10.73 .
  • Revenue versus consensus definition gap: S&P Global’s revenue actual ($0.656B*) tracked below its consensus ($0.690B*), even as company-reported GAAP revenues and other income were $0.749B; investors should note definitional differences when benchmarking .

Financial Results

Headline Financials vs Prior Periods and Consensus

MetricQ3 2024Q2 2025Q3 2025
GAAP Revenues & Other Income ($USD Billions)$0.615 $0.856 $0.749
GAAP Diluted EPS ($USD)$0.21 $0.99 $0.60
Adjusted Diluted EPS ($USD)$0.48 $0.66 $0.57
Cash Margin per mcfe ($USD)$1.24 $1.53 $1.36
Average Realized Price after hedges ($/mcfe)$3.18 $3.49 $3.29
Production (Bcfe/d)2.20 2.20 2.23

S&P Global Consensus vs Actuals (Revenue/EPS/EBITDA)

MetricQ3 2024Q2 2025Q3 2025
Primary EPS Consensus Mean ($USD)$0.368*$0.639*$0.555*
Primary EPS Actual ($USD)$0.48*$0.66*$0.57*
Revenue Consensus Mean ($USD Billions)$0.628*$0.723*$0.690*
Revenue Actual ($USD Billions)$0.565*$0.695*$0.656*
EBITDA Consensus Mean ($USD Billions)$0.236*$0.327*$0.300*
EBITDA Actual ($USD Billions)$0.196*$0.431*$0.315*

Values retrieved from S&P Global.*

Unit Cost and Margin Detail

Unit Metric ($/mcfe)Q3 2024Q2 2025Q3 2025
Total Cash Unit Costs$1.96 $1.97 $1.91
DD&A$0.45 $0.46 $0.46
Total Unit Costs + DD&A$2.41 $2.43 $2.37
Transportation/Gathering/Processing/Compression$1.51 $1.52 $1.47

Product Sales Mix

Sales ($USD Millions)Q3 2024Q2 2025Q3 2025
Natural Gas$234.1 $397.96 $361.12
NGLs$266.19 $238.03 $224.38
Oil$32.95 $30.65 $25.99
Total Natural Gas, NGLs & Oil Sales$533.28 $666.64 $611.49

KPIs and Cash Metrics

KPIQ3 2024Q2 2025Q3 2025
Cash from Operations ($USD Millions)$245.9 $336.2 $247.5
CFO before WC changes ($USD Millions)$250.2 $300.5 $279.3
Capital Spending ($USD Millions)—$154 $190
Share Repurchases ($USD Millions)—$53 $56
Dividends Paid ($USD Millions)—$21 $21
Net Debt ($USD Billions)—$1.225 $1.229

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
All-in Capital BudgetFY 2025$650–$680M $650–$680M Maintained
Annual ProductionFY 2025~2.225 Bcfe/d ~2.23 Bcfe/d Raised (slightly)
Transportation/Gathering/Processing/CompressionFY 2025$1.50–$1.55/mcfe $1.50–$1.52/mcfe Lowered (high end)
Direct Operating ExpenseFY 2025$0.12–$0.13/mcfe $0.12–$0.13/mcfe Maintained
G&A ExpenseFY 2025$0.17–$0.18/mcfe $0.17–$0.18/mcfe Maintained
Net Interest ExpenseFY 2025$0.12–$0.13/mcfe $0.12–$0.13/mcfe Maintained
DD&AFY 2025$0.45–$0.46/mcfe $0.45–$0.46/mcfe Maintained
Net Brokered Gas MarketingFY 2025$8–$12M $8–$12M Maintained
Natural Gas Differential to NYMEXFY 2025-$0.40 to -$0.48 -$0.40 to -$0.43 Tightened/Improved
NGL Differential vs MBFY 2025+$0.40 to +$1.25/bbl +$0.50 to +$0.75/bbl Narrowed (higher floor, lower cap)
Oil/Condensate Differential vs WTIFY 2025-$10 to -$15/bbl -$10 to -$15/bbl Maintained
Liquids MixFY 2025>30% >30% Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
AI/data center and in-basin power demandQ1: JV with Liberty/Imperial to supply a proposed power site in Washington County, PA; increasing in-basin opportunities . Q2: $90B AI/power investments announced in PA; Range poised to supply; discussions on large long-term supply agreements .Progressing conversations; narrowing potential end users; focus on reliability and pricing structures (floors/ceilings) .Building momentum
LNG/export capacityQ2: Record LNG feed gas; expected +8.5 Bcf/d new demand over next 18 months .Q3: 3 additional LNG FIDs; export capacity expected to exceed 30 Bcf/d by 2031; constructive macro for gas .Strengthening
NGL exports (ethane/LPG)Q2: East Coast export capability; premium vs MB; capacity expansions underway .Q3: Ethane export record in Sept (>600 kbpd); ethane spread vs gas improving; more capacity and new crackers add demand .Improving
Basis/differentialsQ2: durable basis post-MVP, demand pull shifting; need for Appalachia supply .Q3: Basis around ~$0.70 seen as durable; potential strengthening as demand outstrips supply without incremental infra .Stable to stronger
Capital intensity and growth planQ2: 2 rigs/1 crew building 400k lateral ft; growth to 2.6 Bcfe/d by 2027 with <$700M annual capex .Q3: 2026 to lean on completions of DUCs; linear utilization of inventory; Q4 step-up to ~2.3 Bcfe/d .Executing toward plan
Sustainability/regulatoryQ2: Net zero Scope 1 & 2; MIQ A-grade; permit reform optimism .Q3: Continued constructive state/federal tone supporting in-basin demand projects .Supportive backdrop

Management Commentary

  • CEO emphasized free cash flow resilience and readiness to meet growing local/global gas demand: “We believe Range is exceedingly well-positioned… high-return, long-life asset base and low full-cycle cost structure” .
  • CFO highlighted capital returns and balance sheet strength: year-to-date share repurchases/dividends while reducing net debt, enabling opportunistic investments and long-duration term deals with global counterparties .
  • Marketing update underscored flexibility and premium realizations via East Coast exports to Europe and diversified transport portfolio linking key U.S./global markets .

Q&A Highlights

  • Work-in-progress inventory and 2026 cadence: Management plans a linear drawdown of >400k lateral feet through 2026–2027, with completions stepping up and drilling tapering; production ramps ratably with midstream expansions (e.g., Harmon Creek 3) .
  • Basis and investment grade: Basis seen as durable with potential strengthening; management noted credit rating not a constraint for long-term deals; leverage below investment-grade peers, bonds trade at IG levels .
  • Curtailments/modulation: Range’s calculus differs due to 80% of gas sold out of basin and NGL uplift; strategy favors program shaping over broad shut-ins .
  • Capital allocation: Within target net debt range, returns of capital (buybacks/dividends) scale with cycle; optionality for modest midstream investments/royalty buy-ins focused on per-share value .
  • NGL macro outlook: Strong LPG/ethane demand and expanding export capacity support improved fundamentals; Range secured northeast terminal access for late 2026/2027 .

Estimates Context

  • EPS: Adjusted EPS of $0.57 modestly beat S&P Global consensus of ~$0.555; GAAP diluted EPS was $0.60 aided by a $93M derivative gain due to commodity price decreases .
  • Revenue: S&P Global “Revenue” actual ($0.656B*) tracked below its consensus ($0.690B*), while the company’s GAAP revenues and other income were $0.749B; benchmarking should account for reporting definition differences in “revenue” used by consensus providers .
  • EBITDA: Actual EBITDA of ~$0.315B* exceeded consensus of ~$0.300B*, reflecting solid cash margins and cost control despite sequential pricing pressure.

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Sequential profile: Expect Q4 production to step up to ~2.3 Bcfe/d as DUCs are turned to sales and midstream additions commission; monitor cash margin trajectory given stronger seasonal transport and pricing .
  • Differentials: Improved 2025 guidance on gas (-$0.40 to -$0.43) and NGL (+$0.50 to +$0.75) differentials provide tailwinds to realized pricing versus benchmarks .
  • Capital returns and balance sheet: Continuing buybacks/dividends alongside net debt ~$1.23B and expanded revolver commitments to $2.0B support flexibility into the 2026–2027 growth plan .
  • In-basin demand optionality: Data center/power agreements (Liberty/Imperial) could crystallize new long-term demand; Range’s inventory depth and transport footprint enable surety of supply and creative pricing structures .
  • LNG/NGL macro: Additional LNG FIDs and expanding ethane/LPG export capacity underpin medium-term pricing/realizations; watch export premiums and East Coast terminal access ramp .
  • Valuation lens: Management frames >$2B multi-year FCF potential under conservative price scenarios and a strategy to compound per-share value by growing cash flow while shrinking share count .
  • Risks to monitor: Commodity price volatility, NGL/condensate spreads, midstream commissioning timelines, and timing/terms of in-basin long-term supply agreements .