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SM

Summit Midstream Corp (SMC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered solid operational momentum: Adjusted EBITDA rose 7.2% quarter-over-quarter to $65.5M, supported by Rockies gas volume strength and record Double E throughput; DCF was $36.7M and FCF $16.7M .
  • Management reiterated year-end landing “near the low end” of the original FY2025 Adjusted EBITDA guidance range of $245–$280M, while expecting full-year well connects around the midpoint of the 125–185 range, with ~50 additional connects in Q4 2025 .
  • Segment mix improved: Rockies Adjusted EBITDA increased $3.8M q/q to $29.0M on higher fixed-fee revenue and better product margins; Permian (Double E) posted 4.5% q/q growth and record quarterly volumes of 712 MMcf/d, with September averaging 745 MMcf/d .
  • Liquids throughput fell 7.7% q/q to 72 Mbbl/d, but stronger realized NGL/condensate pricing helped product margins; MVC shortfall mechanisms contributed $4.2M to Adjusted EBITDA in Q3 .
  • 2026 setup improving: customer programs under discussion point to >120 well connects in H1’26 and Double E contracted volumes ramping through 2027 to 1.215 Bcf/d, corresponding to >$40M EBITDA net to Summit at that time .

What Went Well and What Went Wrong

What Went Well

  • Rockies execution: Adjusted EBITDA rose to $29.0M (+$3.8M q/q) on higher gas volumes, increased third-party onloads, fixed-fee revenue, and improved NGL/condensate pricing . “Adjusted EBITDA increased 7.2% from the prior quarter, representing approximately $260 million of run-rate adjusted EBITDA, driven by higher natural gas volumes in the Rockies region” — Heath Deneke .
  • Double E outperformance: Record throughput of 712 MMcf/d in Q3 and 745 MMcf/d in September; segment Adjusted EBITDA net to SMC reached $8.7M, up 4.5% q/q .
  • Activity pipeline: 21 wells connected in Q3, five rigs active, 90+ DUCs; well connects expected to reach around the midpoint of full-year guidance (125–185), with ~50 more in Q4 .

What Went Wrong

  • Liquids softness: Liquids throughput decreased 7.7% q/q to 72 Mbbl/d, partly due to natural declines, though margins improved with stronger NGL/condensate pricing .
  • Mid-Con margin pressure: Mid-Con Adjusted EBITDA fell by $1.3M q/q to $23.6M, primarily due to product margin, partially offset by higher throughput from 12 well connects .
  • EPS remained negative: Despite $5.0M GAAP net income, reported EPS was -$0.13, and common cash dividend remains suspended; total leverage approximated 4.2x including Tall Oak earnout liability .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Revenue ($USD Millions)$102.4 $140.2 $146.9
Net Income ($USD Millions)$(197.5) $(4.2) $5.0
EPS ($USD)$(19.25) $(0.66) $(0.13)
Adjusted EBITDA ($USD Millions)$45.2 $61.1 $65.5
Net Income Margin %(192.9%) (3.0%) 3.4%
Adjusted EBITDA Margin %44.2% 43.6% 44.6%
EBIT Margin % (rev − costs ÷ rev)11.4% 10.1% 17.1%

Segment Adjusted EBITDA ($USD Thousands)

SegmentQ3 2024Q2 2025Q3 2025
Rockies$24,850 $25,235 $28,999
Permian (Double E JV)$8,472 $8,300 $8,675
Piceance$12,831 $10,474 $12,509
Mid-Con$7,278 $24,900 $23,556
Total Segments$53,431 $68,909 $73,739
Corporate & Other$(8,193) $(7,815) $(8,241)
Adjusted EBITDA$45,238 $61,094 $65,498

KPIs and Operational Throughput

KPIQ3 2024Q2 2025Q3 2025
Aggregate Avg Daily Throughput – Gas (MMcf/d)667 912 925
Aggregate Avg Daily Throughput – Liquids (Mbbl/d)70 78 72
Rockies Gas Throughput (MMcf/d)128 147 158
Piceance Gas Throughput (MMcf/d)284 263 259
Mid-Con Gas Throughput (MMcf/d)255 502 508
Double E Avg Throughput (MMcf/d)661 682 712
Double E September Avg (MMcf/d)——745
Wells Connected (count)—47 21
Rigs Active (count)—3 5
DUCs (approx.)—100+ 90+

Cash Flow and Other Financial Data

MetricQ3 2024Q2 2025Q3 2025
Net Cash from Operating Activities ($USD Thousands)$9,151 $37,213 $26,677
Capital Expenditures ($USD Thousands)$10,941 $26,390 $22,914
DCF ($USD Thousands)$22,091 $32,356 $36,686
Free Cash Flow ($USD Thousands)$9,663 $9,222 $16,716

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAFY 2025$245–$280M (reiterated in Q1) “Near the low end” of range Maintained, narrowed to low end
Well ConnectsFY 2025125–185 wells (original range) “Around the midpoint”; 109 YTD, ~50 more expected in Q4 Maintained, increased confidence
Double E Contracted Volumes2026–2027~1.069 Bcf/d (2025 baseline) 1.115 Bcf/d (2026); 1.215 Bcf/d (2027); >$40M EBITDA net to SMC (2027) Raised medium-term outlook
Dividends (Common)OngoingSuspended Suspended in Q3 Maintained suspension
Series A Preferred DividendCurrent periodReinstated March 2025 Next dividend for period ended Dec 14, 2025; record Dec 1, 2025 Maintained payment cadence
FY 2026 Financial GuidanceFY 2026Not yet providedTo be provided with Q4 release in March 2026 Forthcoming

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2025 and Q1 2025)Current Period (Q3 2025)Trend
Double E pipeline commercializationNew 100 MMcf/d precedent agreement; avg 682 MMcf/d in Q2; ramp ahead Record 712 MMcf/d; 745 MMcf/d in September; ramp to 1.115 Bcf/d (2026) and 1.215 Bcf/d (2027) Strengthening
Arkoma 20-well programExpected to begin drilling; rig mobilization planned Drilling commenced; expected to drive 5–10% volumetric growth in 2026 Executing
Rockies margins and commodity mixQ2 margins pressured by lower realized prices, higher O&M; Moonrise integration Higher fixed-fee revenue; improved product margin on stronger NGL/condensate prices (liquids volumes down) Improving
Compressor relocations (Opex mitigation)Redeployments initiated; O&M normalization expected later in year 9 compressors redeployed; 3 more identified; expect ~$4M annual lease cost mitigation starting 2026 Cost tailwind in 2026
Tariffs/macro monitoringQ1: monitoring tariffs and crude price softness; guidance baked in No incremental macro/tariff update in Q3 release Faded from narrative
Capital & liquidityCovenants healthy; first lien leverage 0.5x; liquidity strong Interest coverage 2.7x; first lien leverage 0.6x; total leverage ~4.2x (incl. earnout) Stable balance sheet
Dividends policySeries A Preferred reinstated; common suspended Common suspended; next Series A Preferred record date Dec 1 Unchanged
FY2026 guidanceNot providedWill be issued with Q4 release in March 2026 Clear timeline

Management Commentary

  • “Adjusted EBITDA increased 7.2% from the prior quarter, representing approximately $260 million of run-rate adjusted EBITDA, driven by higher natural gas volumes in the Rockies region” — Heath Deneke, CEO .
  • “We expect Double E contracted volumes to be 1.215 BCF per day in 2027, representing over 13% growth relative to 2025, which would correspond to over $40 million of EBITDA net to Summit.” — Bill Mault, CFO .
  • “We anticipate well connects to come in around the midpoint of our full-year expectations, with 109 wells connected year-to-date and approximately 50 wells expected to be connected in the fourth quarter.” — Heath Deneke .
  • “Natural gas volume throughput averaged 158 MMcf/d during the quarter, an increase of approximately 7.5% relative to the second quarter… Liquids volumes averaged 72,000 barrels per day…” — Bill Mault .

Q&A Highlights

  • The Q3 earnings call concluded without a Q&A segment; prepared remarks focused on segment performance, 2025 guidance stance (“near low end”), Double E pipeline ramp, and 2026 development visibility .

Estimates Context

  • S&P Global Wall Street consensus estimates were unavailable for Q3 2025 EPS, revenue, EBITDA, target price, recommendation, and counts; only actuals were present within S&P’s dataset, limiting beat/miss determinations (Values retrieved from S&P Global).*
  • Actuals: Revenue $146.9M ; Adjusted EBITDA $65.5M ; EPS $(0.13) .

Key Takeaways for Investors

  • The quarter showed resilient execution: Adjusted EBITDA up 7.2% q/q to $65.5M on Rockies volume strength; record Double E volumes provide visible medium-term growth optionality .
  • Near-term catalyst: ~50 well connects projected for Q4’25 and expected midpoint outcome for full-year well connects (125–185), positioning volumes and EBITDA for early-2026 acceleration .
  • Segment mix trending favorably: Rockies margins improving with better NGL/condensate pricing; Mid-Con volume adds continue despite q/q margin pressure; Piceance lifted by deferred revenue and lower Opex .
  • Balance sheet and liquidity remain solid with ample covenant headroom (interest coverage 2.7x; first lien leverage 0.6x), though total leverage (~4.2x including earnout) warrants continued monitoring as growth capex and integration projects wind down .
  • Non-GAAP mechanics (MVC shortfalls of $4.2M in Q3) and compressor redeployments are meaningful to reported Adjusted EBITDA; expect Opex tailwinds beginning 2026 (~$4M annual lease cost mitigation) .
  • Dividend policy unchanged (common suspended; Series A Preferred maintained); any change in capital return likely tied to deleveraging progress and sustained FCF trajectory .
  • Double E commercialization is a medium-term thesis driver; contracted volumes ramping into 2026–2027 support EBITDA net to Summit >$40M by 2027, with upside if additional free-flow capacity is subscribed .