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SM

Summit Midstream Corp (SMC)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 performance: Revenue $140.2M, Adjusted EBITDA $61.1M, DCF $32.4M, FCF $9.2M; GAAP net loss $(4.2)M and diluted EPS $(0.66) . Management attributed the slight underperformance vs internal plan to timing/performance of certain DJ/Arkoma wells and lower realized commodity prices in the DJ Basin .
  • Guidance: Company now expects FY25 results “near the low end” of its original Adjusted EBITDA range of $245–$280M (range maintained, bias lowered) .
  • Commercial catalysts: 10-year Williston gathering extension (extends WA contract life to 8 years), 100 MMcf/d Double E precedent agreement with expected in-service Q4’26, and Arkoma anchor customer launching a 20-well program with completions beginning Q4’25 through 1H’26 .
  • Activity momentum: 47 wells connected; throughput up sequentially (912 MMcf/d gas, +3.3% q/q; 78 Mbbl/d liquids, +5.4% q/q); Double E averaged 682 MMcf/d, contributing $8.3M Adjusted EBITDA net to SMC .
  • Index inclusion: Added to Russell 3000/2000/Microcap in June, enhancing visibility and potential passive inflows .

What Went Well and What Went Wrong

  • What Went Well

    • Commercial wins and contract duration: 10-year extension with a key Williston customer increased weighted average contract life to eight years in the basin .
    • Permian growth visibility: Signed a precedent agreement for 100 MMcf/d of firm Double E capacity tied to a new plant; targeted in-service Q4’26 with 10-year term .
    • System activity and volumes improved: 47 wells connected; aggregate gas throughput +3.3% q/q to 912 MMcf/d and liquids +5.4% q/q to 78 Mbbl/d; Double E throughput averaged 682 MMcf/d . CEO: “We generated $61.1 million of Adjusted EBITDA… The primary driver of underperformance…was the timing and performance of certain wells…as well as lower than expected realized commodity prices in the DJ Basin” .

  • What Went Wrong

    • DJ Basin headwinds: Realized gas prices down ~40%, NGL ~10%, condensate ~15% vs Q1, with $2.0M Adjusted EBITDA impact; mix also shifted to lower-margin contracts ($1.0M impact); OpEx and G&A +$4.5M q/q (about $1.0M timing/one-time) .
    • Timing/slippage: Customers did not revert to original 1H’25 development plans despite commodity recovery; implies FY25 ending near low end of guidance .
    • Piceance softness: Segment Adjusted EBITDA fell $1.3M q/q on higher operating expenses and 1.1% throughput decline; no new wells connected .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Millions)$101.3 $132.7 $140.2
Net Income ($USD Millions)$(23.8) $4.6 $(4.2)
Diluted EPS ($)$(2.91) $(0.16) $(0.66)
Adjusted EBITDA ($USD Millions)$43.1 $57.5 $61.1
DCF ($USD Millions)$11.7 $33.5 $32.4
FCF ($USD Millions)$2.7 $11.4 $9.2
Capital Expenditures ($USD Millions)$10.5 $20.6 $26.4
Adjusted EBITDA Margin (%)42.6% 43.3% 43.6%

Segment Adjusted EBITDA ($USD Thousands)

SegmentQ2 2024Q1 2025Q2 2025
Rockies$22,858 $24,869 $25,235
Permian$7,697 $8,270 $8,300
Piceance$12,848 $11,786 $10,474
Mid-Con$5,420 $22,457 $24,900
Northeast$1,613 ——
Total$50,436 $67,382 $68,909
Less: Corporate & Other$7,288 $9,876 $7,815
Adjusted EBITDA$43,148 $57,506 $61,094

Key Operating KPIs

KPIQ2 2024Q1 2025Q2 2025
Aggregate Gas Throughput (MMcf/d)716 883 912
Aggregate Liquids Throughput (Mbbl/d)75 74 78
Double E Throughput (MMcf/d, gross)549 664 682
Double E Adj. EBITDA (SMC share, $MM)—$8.3 $8.3
Wells Connected (count)—41 47
MVC Billings ($MM)—$4.8 $4.2

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAFY 2025$245–$280M (reiterated in Q1’25) “Near the low end of our original 2025 Adjusted EBITDA guidance range of $245–$280M” Maintained range; lowered bias
Capital Expenditures (ex-Double E)FY 2025$65–$75M No update provided in Q2 releaseMaintained (no update)
Common DividendOngoingSuspended Suspended Maintained
Series A Preferred DividendQuarterlyReinstated Mar 15, 2025 Next cash dividend payable for period ended Sep 14, 2025; record date Sep 1, 2025 Maintained schedule

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Development timing/deferralsQ1: Monitoring crude softness; low end of Rockies guide already reflected 2–3 month delays Customers did not revert to original timing; expect low end of EBITDA range Slightly worse near-term timing
DJ Basin commodity mix/pricingQ1: Optimization to improve margins from Q2; Moonrise added capacity Realized prices lower (gas ~40%, NGL ~10%, condensate ~15% q/q); mix shift to lower-margin contracts; +$4.5M OpEx/G&A q/q (incl. ~$1M one-time) Headwind in Q2
Arkoma programQ1: Strong Mid-Con well results; 2 rigs; 16–17 DUCs Anchor customer to drill 20-well program; rig in Q3; completions Q4’25–1H’26 Positive 2026 catalyst
Williston contracts—10-year extension; WA contract life from 4 to 8 years; some rate relief to incentivize drilling Positive durability
Double E commercializationQ4/Q1: Throughput and steady JV EBITDA New 100 MMcf/d precedent agreement; Q4’26 in-service expected Positive visibility
Tariffs/macroQ1: Monitoring tariffs and crude price declines No new color beyond commodity price commentary Neutral
Index inclusion/IR—Added to Russell 3000/2000/Microcap Positive for liquidity

Management Commentary

  • CEO, on drivers and guidance bias: “We generated $61.1 million of Adjusted EBITDA in the second quarter, slightly below our expectations… The primary driver of underperformance…was the timing and performance of certain wells in the DJ and Arkoma Basins, as well as lower than expected realized commodity prices in the DJ Basin… we expect to be near the low end of our 2025 Adjusted EBITDA guidance range.”
  • CEO, on commercial progress: 10-year Williston extension (WA contract life to eight years), Double E 100 MMcf/d precedent agreement (Q4’26 in-service), and Arkoma 20-well program starting completions in Q4’25–1H’26 .
  • CFO, on costs/prices in DJ: Residue gas −40%, NGL −10%, condensate −15% vs Q1 with ~$2M Adjusted EBITDA impact; mix shift impact ~$1M; OpEx/G&A +$4.5M q/q with ~$1M one-time/timing .
  • CEO, on index inclusion: Russell additions should broaden shareholder base and liquidity .

Q&A Highlights

  • There was no analyst Q&A session on the call; operator concluded with no questions in queue .
  • No additional guidance clarifications beyond the prepared remarks were provided on the call .

Estimates Context

  • Wall Street consensus: S&P Global did not show published quarterly consensus for EPS or revenue for Q2 2025 or Q1 2025 for SMC; therefore, we cannot assess beats/misses vs consensus in this quarter. Values retrieved from S&P Global.*
  • Actuals used in this report are from company filings and press releases (see citations). Revenue actuals for Q2’25 and Q1’25 are $140.2M and $132.7M, respectively .

Key Takeaways for Investors

  • FY25 range intact but skewed to low end due to timing and DJ price/mix headwinds; near-term numbers de-risked but less upside to guide this year .
  • Commercial durability improving: 10-year Williston extension and Double E precedent agreement underpin multi-year contracted cash flows; Arkoma 20-well program is a 2026 volume catalyst .
  • Sequential fundamentals healthy: Throughput up q/q and Adjusted EBITDA +6% q/q despite DJ headwinds; DCF remained strong at $32.4M .
  • Watch the DJ Basin: Lower realized prices, margin mix, and elevated OpEx/G&A pressured Q2; normalization of one-time costs and commodity recovery could aid 2H’25 .
  • Balance sheet/liquidity: $359M revolver availability; first-lien leverage 0.5x; total leverage ~4.1x at quarter-end, providing flexibility to execute growth and de-lever .
  • No common dividend; Series A Preferred dividends ongoing; common resumption remains a medium-term goal contingent on progress versus leverage and cash flow priorities .
  • Stock catalysts: Execution on Double E contracting, Arkoma ramp milestones, DJ margin normalization, and any M&A bolt-ons in the Rockies could drive sentiment .

Footnote: *Values retrieved from S&P Global.