Summit Midstream Corp (SMC)·Q1 2025 Earnings Summary

Executive Summary

• Q1 2025 was in line with management expectations: revenue rose to $132.70M (+23.9% q/q; +11.6% y/y), Adjusted EBITDA increased to $57.51M (+24.5% q/q), and net income was $4.63M while diluted EPS was $(0.16) due to capital structure effects .
• Management reiterated full-year 2025 guidance: Adjusted EBITDA of $245–$280M and total capex of $65–$75M; Rockies segment guide held at $100–$125M, with caution that crude weakness could bias results to the low end if 2H wells slip .
• Operational highlights: 41 wells connected; six rigs running; >100 DUCs; Rockies optimization project completed and expected to lift margins starting Q2; Moonrise Midstream bolt-on in DJ Basin closed Mar-10; Double E volumes averaged 664 MMcf/d in Q1 and ~700 MMcf/d “this week” at time of call .
• Liquidity/capital: $26.2M cash; $145M drawn on $500M ABL with $354M availability; additional $250M 8.625% second lien raised in January; preferred dividend reinstated (common dividend still suspended) .
• Near-term stock catalysts: confirmation of margin uplift from Rockies optimization in Q2, sustained Mid-Con momentum post-Tall Oak, and further Double E commercialization; risk skew from crude-driven Rockies activity deferrals in 2H .

What Went Well and What Went Wrong

What Went Well

• Mid-Con strength: Adjusted EBITDA increased to $22.46M (+$9.6M q/q) on Tall Oak contribution, ramp in Arkoma/Barnett, and a new Arkoma customer; volumes +48% q/q .
• Rockies momentum and optimization: Rockies Adjusted EBITDA rose to $24.87M (+$1.6M q/q) on +8.8% liquids throughput, higher freshwater sales, and Moonrise contribution; management expects optimization to “improve Adjusted EBITDA margin beginning in the second quarter 2025” .
• Management tone/confidence: “We remain very optimistic” on Double E and reiterated 2025 guidance despite crude softness; “positioned with a strong balance sheet” and active customer base .

What Went Wrong

• Crude price headwind in Rockies: Management flagged risk that 2H Rockies wells could slip if crude weakens, biasing to the low end of Rockies guide ($100–$125M) .
• Product mix/quality: Arkoma wells “had lower-than-expected BTU and NGL content,” despite strong initial rates, tempering NGL uplift .
• Piceance softness: Throughput fell 4% q/q and segment EBITDA was flat; no new wells were connected .

Financial Results

Consolidated P&L and Non-GAAP

Notes: Adjusted EBITDA margin computed from reported Adjusted EBITDA and total revenues (citations for inputs in each cell).

• QoQ: Revenue +23.9% (132.70 vs 107.02), Adjusted EBITDA +24.5% (57.51 vs 46.18) .
• YoY: Revenue +11.6% (132.70 vs 118.87), Adjusted EBITDA down vs an unusually high Q1’24 (70.06) due to 2024 one-offs/gains .

Segment Adjusted EBITDA

KPIs and Operating Metrics

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “Summit’s first quarter 2025 financial and operating results were in line with management expectations with $57.5 million of adjusted EBITDA generated in the first quarter.”
• “We continue to monitor the potential impact of tariffs and the recent reduction in crude oil prices… To the extent all of the remaining wells anticipated to come online during the second half of the year in the Rockies segment are deferred, we would expect to trend towards the lower end of our existing guidance range.”
• “We remain very optimistic in our ability to further commercialize Double E in the years ahead.”
• “In January, we raised $250 million… and [in March] reinstated a cash dividend on the Series A preferred stock.”
• On Moonrise: acquisition “expands our DJ Basin footprint… provides additional processing capacity… and [enables] operational and commercial synergies.”

Q&A Highlights

• The published transcript excerpts available did not include the detailed Q&A; the call opened Q&A after prepared remarks, but the Q&A content was not present in retrieved transcripts . No additional clarifications beyond prepared remarks were available in our source set.

Estimates Context

• S&P Global/Capital IQ consensus for Q1 2025 was unavailable in our feed for EPS and revenue; the estimates tool returned actuals only without consensus figures, precluding beat/miss analysis. Actuals: Revenue $132.70M; Adjusted EBITDA $57.51M; Diluted EPS $(0.16) .
• Given the absence of consensus, we expect sell-side models to adjust for: (i) stronger-than-expected q/q Mid-Con contribution, (ii) margin benefits from Rockies optimization starting Q2, and (iii) potential 2H Rockies timing risk due to crude prices as flagged by management .
• Values retrieved from S&P Global where applicable; consensus data was unavailable.*

Key Takeaways for Investors

• Execution: Strong q/q step-up in revenue and Adjusted EBITDA with Mid-Con outperforming post-Tall Oak and Rockies optimization set to expand margins from Q2 .
• Guidance intact: FY25 guide maintained; watch crude-sensitive Rockies 2H activity—deeper crude declines could bias outcomes to the low end of segment/total guide .
• Structural capacity: Moonrise adds processing and gathering capacity in DJ, supporting 2026+ growth, reducing third-party offloads, and improving reliability and NGL recoveries .
• Double E upside: Throughput trending toward ~700 MMcf/d with basin takeaway tightening; provides a resilient Permian growth lever .
• Balance sheet/liquidity: $26.2M cash and $354M availability post add-on notes; interest coverage covenant headroom; total leverage ~4.0x at Q1 (ex Tall Oak earnout) .
• Cash returns path: Preferred dividend reinstated; management frames preferred as step toward eventual common resumption, contingent on deleveraging and sustained FCF .
• Trading setup: Near-term upside if Q2 confirms Rockies margin uplift and Mid-Con volumes hold; monitor crude price trajectory and any 2H Rockies deferrals vs plan (potential sentiment driver) .