WILLIAMS COMPANIES, INC. (WMB) Q1 2025 Earnings Summary

Executive Summary

WMB delivered a solid Q1 2025 with GAAP diluted EPS $0.56 and Adjusted EPS $0.60 as base-business growth and recent projects lifted service revenues; Adjusted EBITDA rose 3% YoY to $1.989B, while CFFO increased 16% YoY to $1.433B .
Management raised FY25 Adjusted EBITDA midpoint by $50M to $7.7B (range $7.5–$7.9B) and materially lifted growth capex to $2.575–$2.875B, citing the commercialized “Socrates” Power Innovation project for AI demand and a minority investment in Cogentrix Energy .
Against S&P Global consensus, WMB beat on revenue ($3.048B vs est. $2.942B*) and EPS (GAAP $0.56 vs Primary EPS est. $0.553*); Adjusted EBITDA also topped consensus ($1.989B vs est. $1.949B*) as fee-based expansions offset softer marketing margins .
Strategic catalysts: record contracted transmission capacity (34.3 Bcf/d), in‑service Transco expansions on 4/1, accelerating Deepwater contributions into 2H, and a leadership transition (Armstrong to Executive Chairman; Zamarin to CEO) that maintains strategic continuity .

What Went Well and What Went Wrong

What Went Well
- Fee-based growth delivered: service revenues increased $98M YoY on expansion projects and acquisitions; Adjusted EBITDA +$55M YoY to $1.989B .
- Strategic execution: Transco’s Texas to Louisiana Energy Pathway and Southeast Energy Connector placed into service on April 1; management now sees accelerating growth through 2025 and raised FY25 EBITDA midpoint to $7.7B .
- AI/power initiative momentum: commercialized $1.6B “Socrates” project (10-year fixed-price PPA) and announced Transco Power Express (950 MMcf/d) to serve growing data center and power demand; CEO: “Our business is firing on all cylinders…” .
What Went Wrong
- Marketing margin softness: lower commodity marketing margins impacted both GAAP results and Adjusted EBITDA growth vs last year, partially offsetting expansion benefits .
- Higher costs from growth: operating costs and D&A increased due to expansion projects and acquisitions, pressuring net income despite revenue uplift .
- Segment mix: Gas & NGL Marketing Services Adjusted EBITDA fell YoY ($155M vs $189M), though still strong for Q1 seasonality .

Financial Results

Metric	Q1 2024	Q4 2024	Q1 2025	S&P Global Consensus
Revenue ($B)	$2.771	—	$3.048	$2.942*
GAAP Diluted EPS ($)	$0.52	$0.40	$0.56	$0.553*
Adjusted EPS ($)	$0.59	$0.47	$0.60	—
Adjusted EBITDA ($B)	$1.934	$1.776	$1.989	$1.949*
Cash Flow from Operations ($B)	$1.234	$1.218	$1.433	—
AFFO ($B)	$1.507	$1.335	$1.445	—

Consensus denotes S&P Global Market Intelligence consensus. Values marked with an asterisk (*) retrieved from S&P Global.

Segment Adjusted EBITDA (oldest → newest):

Segment ($MM)	Q1 2024	Q1 2025
Transmission & Gulf of America	$839	$862
Northeast G&P	$504	$514
West	$328	$354
Gas & NGL Marketing Services	$189	$155
Other	$74	$104
Total Adjusted EBITDA	$1,934	$1,989

Key Operating/Financial KPIs (oldest → newest):

KPI	Q1 2024	Q4 2024	Q1 2025
Contracted Transmission Capacity	33.4 Bcf/d (FY24)	—	34.3 Bcf/d
Transco Avg Daily Reserved Capacity (MMdth)	20.3	20.4	20.8
Transco Avg Daily Transportation (MMdth)	14.6	14.1	15.9
Quarterly Dividend/Share	$0.4750 (2024 run-rate)	$0.4750 (2024 run-rate)	$0.50 (Apr 29 declaration)
Dividend Coverage (AFFO/Common)	2.60x	2.31x	2.37x
Debt-to-Adjusted EBITDA (period-end)	3.79x	3.79x	3.83x
Capital Investments excl. acquisitions ($MM)	$563	$760	$670

Why variances vs prior periods and estimates:

YoY: Higher service revenues from expansions and acquisitions (+$98M), favorable swing in unrealized derivative gains/losses (+$60M) and upstream contributions drove net income; partially offset by higher O&M and D&A and lower marketing margins .
Sequential: Adjusted EBITDA rose vs Q4 2024 ($1.989B vs $1.776B) as transmission set records and West improved; marketing normalized from a softer Q4 .
Estimates: Revenue and EPS exceeded S&P consensus while Adj. EBITDA modestly beat; strength was fee-based, with “marketing” less robust YoY as flagged by management .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Adjusted EBITDA	FY 2025	$7.45–$7.85B (mid $7.65B)	$7.5–$7.9B (mid $7.7B)	Raised midpoint +$50M
Growth Capex	FY 2025	$1.65–$1.95B	$2.575–$2.875B	Raised materially (Socrates)
Maintenance Capex	FY 2025	$650–$750M	$650–$750M	Maintained
Leverage Ratio Midpoint	FY 2025	3.55x	3.65x	Slightly higher
Dividend	FY 2025	$2.00 annualized (raised from $1.90)	$2.00 annualized (quarterly $0.50)	Maintained at higher level
AFFO/Share	FY 2025	~$4.50 midpoint	—	Not updated in May release

Management rationale: strong base business performance, addition of Cogentrix, and visibility to high-return projects (including AI-related power) underpin the higher EBITDA midpoint; capex lift reflects the commercialized “Socrates” project .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q1 2025)	Trend
AI/Data Center Power (“Power Innovation”)	Q3 2024: data center-driven lateral capacity (Dalton Lateral); growing industrial reshoring/power load . Q4 2024: first “behind-the-meter” model taking shape; equipment ordered; speed-to-market emphasized .	Commercialized “Socrates” ($1.6B, 10-yr fixed price PPA), equipment ordered for two additional projects; goal to layer to ~1 GW by 2027 if supply chain allows .	Accelerating; now monetized with scaled pipeline.
Transmission expansions & capacity	Q3: REA, Southside, MountainWest placed/in-service; guidance raise . Q4: 1.25 Bcf/d of 2025 in-service projects identified .	Two Transco projects in-service 4/1 (Southeast Energy Connector; Texas to Louisiana Energy Pathway); announcing Power Express (950 MMcf/d) to Virginia .	Continued build; demand pull from power/LNG sustaining backlog.
Deepwater Gulf projects	Q3: Whale/Anchor commissioning . Q4: four 2025 startups (Whale expansion online in Jan; Shenandoah, others later) .	Whale and Ballymore in service; run-rate step-up targeted by late 2025 into 2026 .	Ramp through 2H25–2026.
LNG and Storage	Q3: Gulf Coast storage acquisition; first 10 Bcf expansion . Q4: Pine Prairie 10 Bcf expansion; more Gulf Coast opportunities .	Gulf Coast storage recontracting at higher rates; continued expansions likely; Pine Prairie progressing .	Tight market; supportive economics.
Regulatory/Permitting	Q4: emphasized permitting reform need .	Encouraged by federal momentum but litigation remains risk; judicial reform needed for permanence .	Incrementally supportive, but structural hurdles remain.
Leadership/Org	—	Announced CEO transition effective July 1 (Armstrong to Executive Chair; Zamarin to CEO) .	Stable strategy continuity.

Management Commentary

Strategic message: “Our business is firing on all cylinders… our track record of generating predictable, growing earnings… underscores the value of Williams as a stable, long-term investment with a strong dividend” — Alan Armstrong, CEO .
Guidance rationale: “We are raising our adjusted EBITDA guidance midpoint by $50 million to $7.7 billion, driven by our strong base business performance and our Cogentrix investment addition” .
AI/power positioning: Socrates fully contracted with fixed-price PPA; two more projects advancing with similar returns; customer relationships/supply chain access as key differentiators .
Outlook: Q1 should be the “lowest growth” quarter; 2Q–4Q growth to accelerate; at least 9% growth in 2025 expected at midpoint .
Transition: Leadership handoff to Chad Zamarin as CEO on July 1 to maintain strategic focus on natural gas and high-return projects .

Q&A Highlights

Power Innovation/AI: Two additional behind-the-meter projects targeted for commercialization in 2025; returns similar to Socrates; layered build given turbine supply constraints and balance sheet discipline .
Cogentrix rationale: Minority stake for market intelligence and gas supply optimization into power markets (not a pivot to merchant generation); expected stable earnings within Sequent .
Gas market dynamics: “Call on gas” materializing; increasing dry gas basin response; WMB systems seeing volume growth into Q2 .
Deepwater cadence: On track for late-2025 run-rate ~$300M uplift from project set, with potential high end if performance continues; step-up into 2026 .
Storage expansions: High demand in Gulf Coast; Pine Prairie 10 Bcf underway with more likely .
Transco rate case: Conservative assumptions embedded; settlement could be upside .

Estimates Context

Consensus vs Actual (S&P Global for Q1 2025):
- Revenue: $2.942B* vs actual $3.048B — beat .
- Primary EPS: $0.553* vs GAAP diluted EPS $0.56 — beat .
- EBITDA (Adjusted): $1.949B* vs actual $1.989B — beat .
Implications: Modest estimate raises likely for FY25 EBITDA given midpoint lift to $7.7B and improving intra-year trajectory; watch for upward revisions in transmission and West segment run-rates, with marketing remaining conservative per commentary .
Consensus values marked with an asterisk (*) retrieved from S&P Global.

Key Takeaways for Investors

Fee-based engine compounding: Record contracted capacity and in‑service expansions are driving steady EBITDA; Q1 likely the trough for growth in 2025, setting up sequential acceleration .
Guidance and capex reset are constructive: FY25 Adjusted EBITDA midpoint raised to $7.7B; growth capex lifted by ~$925M at midpoint to fund AI‑power (Socrates) and backlog — both high-return, long-duration projects .
AI/power optionality: Williams’ integrated gas/power solution and equipment access support faster-to-market projects; potential to layer projects through 2027 with attractive ~5x EBITDA build multiples (management commentary) .
Deepwater step-up into 2H25–2026: Whale and Ballymore online, with Shenandoah and others ramping; management targets reaching the ~$300M run-rate addition by late 2025 .
Storage/LNG tailwinds: Gulf Coast storage recontracting at higher rates; Pine Prairie expansion progressing; additional LNG-driven demand likely to tighten markets further .
Strategic continuity under new CEO: Leadership transition preserves natural gas-focused strategy and capital allocation discipline; dividend remains well covered at 2.37x AFFO in Q1 .
Near-term trading setup: Positive revision momentum (guidance raise), visible 2H catalysts (deepwater ramp, rate case settlement potential), and AI/power headlines should support sentiment; watch marketing margins and permitting timelines as execution variables .

Citations:

Q1 2025 8‑K/Press Release and financial schedules .
Q1 2025 Earnings Call Transcript .
Transco projects in service (Apr 1, 2025) .
Dividend declaration (Apr 29, 2025) .
Q4 2024 press release and 8‑K for prior quarter comps .
Q3 2024 press release for trend context .
Executive transitions (May 5, 2025) .

Notes: Consensus figures marked with an asterisk (*) are retrieved from S&P Global.