分组1 - Kinetik Holdings Inc. reported quarterly earnings of $0.33 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, but down from $0.54 per share a year ago, resulting in an earnings surprise of +135.71% [1] - The company posted revenues of $426.74 million for the quarter ended June 2025, missing the Zacks Consensus Estimate by 29.85%, compared to revenues of $359.46 million a year ago [2] - Kinetik Holdings has surpassed consensus EPS estimates only once in the last four quarters, indicating inconsistent performance [2] 分组2 - The stock has underperformed the market, losing about 25.7% since the beginning of the year, while the S&P 500 gained 7.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.34 on revenues of $689.08 million, and for the current fiscal year, it is $0.56 on revenues of $2.57 billion [7] - The Oil and Gas - Field Services industry, to which Kinetik belongs, is currently in the bottom 8% of the Zacks Industry Rank, suggesting a challenging environment for the stock [8]

[Second Quarter 2025 Results and Commentary](index=1&type=section&id=Second%20Quarter%202025%20Results%20and%20Commentary) [1.1 Summary of Q2 2025 Performance](index=1&type=section&id=1.1%20Summary%20of%20Q2%202025%20Performance) Kinetik achieved **$74.4 million** net income and **$242.9 million** Adjusted EBITDA in Q2 2025, with natural gas throughput increasing **11%** year-over-year Metric | Metric | Q2 2025 (million USD) | H1 2025 (million USD) | | :----------------------------- | :-------------------------- | :------------------------ | | Net Income (incl. non-controlling interests) | 74.4 | 93.7 | | Adjusted EBITDA | 242.9 | 493.0 | | Distributable Cash Flow | 153.3 | 310.3 | | Free Cash Flow | 7.9 | 128.3 | - Natural gas throughput reached **1.75 Bcf/d** in Q2 2025, representing an **11% year-over-year increase**[4](index=4&type=chunk) [1.2 CEO's Strategic Outlook and Guidance Update](index=1&type=section&id=1.2%20CEO's%20Strategic%20Outlook%20and%20Guidance%20Update) CEO Jamie Welch noted natural gas throughput growth despite commodity price declines and rising costs, anticipating significant H2 2025 performance improvement with Kings Landing's September operation and updated full-year guidance - Q2 2025 Adjusted EBITDA was **$243 million**, with natural gas throughput increasing **11%** year-over-year[4](index=4&type=chunk) - The Kings Landing complex has begun commissioning and is expected to be fully in commercial operation by **late September 2025**, which will alleviate producer constraints and resume new development activity[4](index=4&type=chunk)[5](index=5&type=chunk) 2025 Full-Year Guidance Update | Metric | Original Guidance | Updated Guidance | | :-------------------- | :-------------------- | :-------------------- | | Adjusted EBITDA | Not mentioned | 1.03 billion to 1.09 billion USD | | Capital Expenditures | Not mentioned | 460 million to 530 million USD | - ECCC pipeline construction has commenced, anticipated to be in service in **H1 2026**, providing critical rich gas takeaway capacity for the Delaware North system[5](index=5&type=chunk) [Financial Highlights](index=2&type=section&id=Financial%20Highlights) [2.1 Selected Key Metrics](index=2&type=section&id=2.1%20Selected%20Key%20Metrics) The company reported key financial metrics for Q2 and H1 2025, including net income, Adjusted EBITDA, distributable cash flow, free cash flow, leverage ratio, and net debt 2025 Q2 and H1 Key Financial Metrics | Metric | Q2 2025 (thousand USD) | H1 2025 (thousand USD) | | :-------------------------------- | :---------------------- | :-------------------- | | Net Income (incl. non-controlling interests) | 74,416 | 93,678 | | Adjusted EBITDA | 242,933 | 492,950 | | Distributable Cash Flow | 153,303 | 310,284 | | Dividend Coverage Ratio | 1.2x | 1.2x | | Capital Expenditures | 126,267 | 204,341 | | Free Cash Flow | 7,882 | 128,275 | | Leverage Ratio (as of June 30) | - | 3.6x | | Net Debt to Adjusted EBITDA Ratio (as of June 30) | - | 4.0x | | Net Debt (as of June 30) | 3,943,567 | - | [2.2 Key Financial Achievements](index=2&type=section&id=2.2%20Key%20Financial%20Achievements) Kinetik achieved robust net income and Adjusted EBITDA in Q2 2025, actively executed a share repurchase program, and optimized its capital structure through debt refinancing - Q2 net income was **$74.4 million**, and Adjusted EBITDA was **$242.9 million**[9](index=9&type=chunk) - To date, **$172.6 million** of Class A common stock has been repurchased under the existing program, with **$72.6 million** repurchased in Q2[9](index=9&type=chunk) - Refinanced the company's Term Loan A and Revolving Credit Facility, extending maturities to **May 30, 2028**, and **May 30, 2030**, respectively[9](index=9&type=chunk) - At quarter-end, the company's leverage ratio under its credit agreement was **3.6x**, and the Net Debt to Adjusted EBITDA ratio was **4.0x**[9](index=9&type=chunk) [Operational and Construction Updates](index=2&type=section&id=Operational%20and%20Construction%20Updates) [3.1 Project Development and Commissioning](index=2&type=section&id=3.1%20Project%20Development%20and%20Commissioning) Kinetik advanced key projects in Q2, including Kings Landing commissioning and ECCC pipeline construction, enhancing infrastructure and operational capabilities - Kings Landing has commenced commissioning and is expected to be fully in commercial operation by **late September 2025**[10](index=10&type=chunk) - ECCC pipeline construction has begun, with an anticipated in-service date in **H1 2026**[10](index=10&type=chunk) - An acid gas injection permit application for Kings Landing has been submitted, with approval expected by **year-end 2025**[10](index=10&type=chunk) [Governance and Sustainability](index=2&type=section&id=Governance%20and%20Sustainability) [4.1 Corporate Governance and ESG Initiatives](index=2&type=section&id=4.1%20Corporate%20Governance%20and%20ESG%20Initiatives) The company implemented governance and sustainability initiatives, including NYSE Texas listing, publishing its 2024 Sustainability Report, and participating in an ultra-low carbon e-fuels project - Kinetik's common stock has been listed on NYSE Texas, while maintaining its primary listing on the New York Stock Exchange[10](index=10&type=chunk) - The **2024 Sustainability Report** has been published, highlighting the company's sustainability initiatives, progress, and achievements[10](index=10&type=chunk) - Infinium has begun construction of Project Roadrunner, an ultra-low carbon e-fuels production facility, with Kinetik becoming a long-term **CO2 feedstock supplier upon completion in 2027**[10](index=10&type=chunk) [Investor Relations and Company Information](index=3&type=section&id=Investor%20Relations%20and%20Company%20Information) [5.1 Upcoming Investor Events](index=3&type=section&id=5.1%20Upcoming%20Investor%20Events) Kinetik plans to attend several upcoming industry conferences and events, with updated investor presentations available online - Kinetik plans to attend the **Citi Natural Resources Conference (August 12-13)**, **Barclays CEO Energy-Power Conference (September 3)**, **PEP Energy Conference (September 29)**, and **Wolfe Utilities, Midstream & Clean Energy Conference (September 30)**[11](index=11&type=chunk)[15](index=15&type=chunk) - Updated investor presentations will be available in the investor section of the company's website[11](index=11&type=chunk) [5.2 Company Overview](index=3&type=section&id=5.2%20Company%20Overview) Kinetik Holdings Inc. is a fully integrated, pure-play midstream C-Corp operating in the Delaware Basin, providing comprehensive services for natural gas, NGLs, crude oil, and water - Kinetik is a fully integrated, pure-play midstream C-Corp operating from the Permian Basin to the Gulf Coast, headquartered in Houston and Midland, Texas[13](index=13&type=chunk) - The company provides comprehensive gathering, transportation, compression, processing, and treating services for companies producing natural gas, natural gas liquids, crude oil, and water[13](index=13&type=chunk) [5.3 Forward-Looking Statements Disclaimer](index=3&type=section&id=5.3%20Forward-Looking%20Statements%20Disclaimer) This press release contains forward-looking statements based on management's assumptions, where actual results may differ materially due to risks and uncertainties, and the company disclaims any obligation to update them unless legally required - Forward-looking statements include predictions, forecasts, or other descriptions of future events or circumstances, covering the company's future business strategies, plans, operational objectives, growth opportunities, shareholder returns, dividend amounts, and financial condition[14](index=14&type=chunk) - Actual results and developments may differ materially from expectations due to various risks and uncertainties, potentially causing significant discrepancies in actual results, performance, and financial condition compared to expectations[14](index=14&type=chunk) - The company undertakes no obligation to publicly update any forward-looking statements unless required by law[16](index=16&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) [6.1 Unaudited Financial Statements](index=6&type=section&id=6.1%20Unaudited%20Financial%20Statements) Kinetik released unaudited consolidated statements of operations for the three and six months ended June 30, 2025, detailing key financial data including revenue, costs, expenses, and net income Consolidated Statements of Operations Summary (Unaudited) | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :----------------------------------- | :---------------------- | :---------------------- | :-------------------- | :-------------------- | | Total Operating Revenues | 426,738 | 359,457 | 870,001 | 700,851 | | Total Operating Costs and Expenses | 349,283 | 302,869 | 773,266 | 618,162 | | Operating Income | 77,455 | 56,588 | 96,735 | 82,689 | | Income Before Income Taxes | 81,743 | 118,162 | 103,572 | 157,356 | | Net Income (incl. non-controlling interests) | 74,416 | 108,948 | 93,678 | 144,355 | | Net Income Attributable to Class A Common Stockholders | 23,645 | 37,192 | 29,775 | 48,742 | | Basic Net Income Per Share Attributable to Class A Common Stockholders | 0.33 | 0.54 | 0.38 | 0.68 | | Diluted Net Income Per Share Attributable to Class A Common Stockholders | 0.33 | 0.54 | 0.38 | 0.67 | [Non-GAAP Financial Measures and Reconciliations](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) [7.1 Explanation of Non-GAAP Measures](index=5&type=section&id=7.1%20Explanation%20of%20Non-GAAP%20Measures) Kinetik provides non-GAAP financial measures like Adjusted EBITDA, Distributable Cash Flow, Free Cash Flow, and Net Debt to enhance understanding of core operating performance, explaining their calculation and utility - Adjusted EBITDA is defined as Net Income (incl. non-controlling interests) adjusted for interest, taxes, depreciation and amortization, gains/losses on asset disposals and debt extinguishment, proportionate EBITDA from EMI pipelines, equity-based compensation, non-cash changes in commodity hedging activities, integration and transaction costs, and unusual or non-recurring losses and expenses[18](index=18&type=chunk)[26](index=26&type=chunk) - Distributable Cash Flow is defined as Adjusted EBITDA, adjusted for proportionate EBITDA from unconsolidated affiliates, distributions from unconsolidated affiliates, interest expense (net of capitalized amounts), unrealized gains/losses on interest rate swaps, and maintenance capital expenditures[18](index=18&type=chunk)[27](index=27&type=chunk) - Free Cash Flow is defined as Distributable Cash Flow, adjusted for growth capital expenditures, investments in unconsolidated affiliates, distributions from unconsolidated affiliates, cash interest, capitalized interest, realized gains/losses on interest rate swaps, and construction reimbursements[18](index=18&type=chunk)[28](index=28&type=chunk) - Net Debt is defined as total short-term and long-term debt (excluding deferred financing costs, premiums, and discounts), less cash and cash equivalents[19](index=19&type=chunk)[29](index=29&type=chunk) [7.2 Reconciliation Tables](index=7&type=section&id=7.2%20Reconciliation%20Tables) The company provides detailed tables reconciling GAAP financial metrics, such as net income and cash flow from operations, to non-GAAP measures like Adjusted EBITDA, Distributable Cash Flow, Free Cash Flow, and net debt Net Income (incl. non-controlling interests) to Adjusted EBITDA Reconciliation | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :----------------------------------- | :---------------------- | :---------------------- | :-------------------- | :-------------------- | | Net Income (incl. non-controlling interests) (GAAP) | 74,416 | 108,948 | 93,678 | 144,355 | | Add back: Interest expense | 56,514 | 54,049 | 112,228 | 101,516 | | Add back: Income tax expense | 7,327 | 9,214 | 9,894 | 13,001 | | Add back: Depreciation and amortization expense | 93,763 | 75,061 | 186,436 | 148,667 | | Add back: Proportionate EBITDA from unconsolidated affiliates | 88,100 | 85,922 | 175,630 | 174,324 | | Adjusted EBITDA (Non-GAAP) | 242,933 | 234,403 | 492,950 | 467,962 | Adjusted EBITDA to Distributable Cash Flow Reconciliation | Metric | Q2 2025 (thousand USD) | Q2 2024 (thousand USD) | H1 2025 (thousand USD) | H1 2024 (thousand USD) | | :----------------------------------- | :---------------------- | :---------------------- | :-------------------- | :-------------------- | | Adjusted EBITDA (Non-GAAP) | 242,933 | 234,403 | 492,950 | 467,962 | | Less: Proportionate EBITDA from unconsolidated affiliates | (88,100) | (85,922) | (175,630) | (174,324) | | Add back: Distributions from unconsolidated affiliates | 63,604 | 75,429 | 126,941 | 152,642 | | Less: Interest expense | (56,514) | (54,049) | (112,228) | (101,516) | | Less: Maintenance capital expenditures | (7,879) | (6,780) | (20,338) | (17,780) | | Distributable Cash Flow (Non-GAAP) | 153,303 | 162,892 | 310,284 | 317,418 | Net Debt Reconciliation | Metric | June 30, 2025 (thousand USD) | March 31, 2025 (thousand USD) | | :------------------- | :--------------------- | :--------------------- | | Short-term Debt | 189,300 | 148,800 | | Long-term Debt (net) | 3,736,972 | 3,568,457 | | Add: Debt Issuance Costs (net) | 28,028 | 26,543 | | Total Debt | 3,954,300 | 3,743,800 | | Less: Cash and Cash Equivalents | 10,733 | 8,845 | | Net Debt (Non-GAAP) | 3,943,567 | 3,734,955 |

Group 1 - Kinetik Holdings Inc. (NYSE: KNTK) is a mid-cap midstream provider based in the Delaware basin [1] - The company's stock price has faced significant pressure since Liberation Day, indicating potential market volatility [1] - The advantages of owning a highly contracted midstream company are being questioned in the current market environment [1] Group 2 - The author has a beneficial long position in KNTK shares, indicating a personal investment interest [2] - The article reflects the author's opinions and is not influenced by external compensation [2]

Core Insights - Kinetik Holdings Inc. operates in the midstream sector within the US Permian Basin, focusing on the collection, processing, and transportation of natural gas, oil, and NGL [1] - The company has demonstrated a stable financial situation, with rapid cash flow growth and dividends indicating maturity [1] Financial Performance - Recent months have shown significant cash flow growth for Kinetik Holdings Inc., reflecting the company's robust operational performance [1] - The stability in financial metrics suggests a mature business model capable of sustaining dividends [1]

Financial Performance - Total operating revenues for Q1 2025 reached $443.3 million, a 30% increase from $341.4 million in Q1 2024[15] - Service revenue increased to $127.9 million, up 25% from $102.2 million year-over-year[15] - Product revenue rose to $312.5 million, representing a 32% increase compared to $236.6 million in the same period last year[15] - Operating income decreased to $19.3 million, down 26% from $26.1 million in Q1 2024[15] - Net income attributable to Class A Common Stock Shareholders was $6.1 million, a decline of 47% from $11.6 million in Q1 2024[15] - Net income including noncontrolling interest decreased by 46% to $19.3 million compared to $35.4 million for the same period in 2024[140] - Adjusted EBITDA increased by $16.5 million, or 7%, to $250.0 million for the three months ended March 31, 2025, compared to $233.6 million for the same period in 2024[154] Cash and Assets - Cash and cash equivalents increased to $8.8 million, up from $3.6 million at the end of 2024[18] - Total assets grew to $7.0 billion, an increase from $6.8 billion at the end of 2024[18] - Total long-term debt as of March 31, 2025, was $3,595.0 million, an increase from $3,390.0 million as of December 31, 2024[61] - The Company had available committed borrowing capacity of $693.6 million as of March 31, 2025, compared to $657.2 million at the end of 2024[180] Investments and Acquisitions - The Durango Acquisition, completed on June 24, 2024, had an adjusted purchase price of approximately $785.7 million, allowing the company to expand its footprint into New Mexico and the Northern Delaware Basin[42] - The company completed the Barilla Draw Acquisition for a total of $194.1 million, enhancing its natural gas and crude gathering capabilities[136] - The company plans to issue 7.7 million shares of Class C Common Stock as deferred consideration on July 1, 2025[25] Debt and Interest - Interest expense increased by $8.2 million, or 17%, to $55.7 million, primarily due to decreased gains on interest rate swaps[148] - The fair value of the Company's consolidated debt was $3.74 billion as of March 31, 2025, up from $3.52 billion as of December 31, 2024[69] - A 1.0% increase in interest rates would result in an annualized interest expense change of approximately $16.9 million based on outstanding borrowings[186] Revenue Segments - Total segment operating revenue for the Midstream Logistics segment was $440.86 million, contributing to a consolidated revenue of $443.26 million for the three months ended March 31, 2025[115] - For the three months ended March 31, 2025, the Company reported revenues of $128.3 million from Permian Highway, $59.5 million from Breviloba, and $102.4 million from EPIC, compared to $126.2 million, $50.9 million, and $84.1 million respectively in the same period of 2024[58] Expenses - Cost of sales (excluding depreciation and amortization) increased by $69.7 million, or 45%, to $223.4 million, driven by higher NGL and condensate volumes sold[145] - Operating expenses rose by $20.2 million, or 47%, to $63.6 million, with significant contributions from the Durango and Barilla Draw acquisitions[146] - Depreciation and amortization expenses increased by $19.1 million, or 26%, to $92.7 million, largely due to the Durango and Barilla Draw acquisitions[147] Equity and Dividends - Common Unit limited partners received distributions totaling $70.52 million during the period[24] - Kinetik Holdings Inc. declared dividends on Class A Common Stock at a rate of $0.75 per share, amounting to $43.20 million[24] - During the quarter ended March 31, 2025, the Company made cash dividend payments of $123.2 million, with $0.4 million reinvested in shares of Class A Common Stock[74] Market and Economic Conditions - The annual inflation rate in the U.S. was 2.4% as of March 2025, with the Federal Open Market Committee maintaining the federal funds rate target range at 4.25% - 4.50%[139] - The U.S. government imposed a 25% tariff on steel imports on March 12, 2025, which may adversely affect the Company's construction costs[196] Strategic Initiatives - Kinetik Holdings provided an optimistic outlook, projecting a revenue growth of 10-12% for the next quarter[212] - The company is investing in new product development, with a budget allocation of $30 million for R&D in the upcoming fiscal year[212] - Kinetik is expanding its market presence, targeting a 25% increase in market share through strategic partnerships and acquisitions[212] - Kinetik is implementing new sustainability initiatives, including the issuance of 6.625% Sustainability-Linked Senior Notes to fund green projects[212] - The company emphasized the importance of technology upgrades, with a focus on enhancing user experience and operational efficiency[212]

Financial Data and Key Metrics Changes - Kinetic reported first quarter adjusted EBITDA of $250 million, a 7% year-over-year increase driven by process gas volume growth and margin expansion in the Midstream Logistics segment [7][14] - Distributable cash flow was $157 million, and free cash flow reached $120 million [14] - The company affirmed full-year adjusted EBITDA guidance of $1.09 billion to $1.15 billion, expecting a meaningful acceleration in adjusted EBITDA growth during the second half of the year [16][17] Business Line Data and Key Metrics Changes - The Midstream Logistics segment generated adjusted EBITDA of $159 million, up 11% year-over-year due to increased process gas volumes and margin expansion from Northern Delaware assets [14] - The Pipeline Transportation segment reported adjusted EBITDA of $94 million, down 2% year-over-year, primarily due to the absence of contributions from Gulf Coast Express following the sale of equity interest [16] Market Data and Key Metrics Changes - Kinetic's operations are primarily focused on the Permian Basin, which is expected to remain resilient despite macroeconomic challenges [9][10] - The company anticipates over 1 billion cubic feet per day of gas growth per year, even if Permian crude production remains flat [10] Company Strategy and Development Direction - Kinetic is focused on providing flow assurance and operational reliability to producer customers, with a strong emphasis on organic and inorganic growth opportunities [10][12] - The company announced a $500 million share repurchase program, reflecting management's confidence in Kinetic's value proposition [13][21] - Future capital expenditures are expected to be discretionary and flexible, with less than $50 million of committed growth capital in 2026 [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged elevated volatility and macroeconomic uncertainty but expressed confidence in Kinetic's ability to navigate these challenges [7][20] - The company is seeing some indirect impacts of lower commodity prices, leading to adjustments in gas process volume growth assumptions from approximately 20% to high teens growth [18][19] - Management remains optimistic about the long-term growth outlook, projecting a 10% compound annual growth rate through 2029 [23][26] Other Important Information - Kinetic has made substantial progress on strategic projects, including the commissioning of the King's Landing complex [7][19] - The company has a strong hedging strategy, with approximately 83% of expected gross profit sourced from fixed fee agreements [17][18] Q&A Session Summary Question: Long-term growth drivers - Management highlighted that the 10% compound annual growth rate is supported by contractual resets and growth in New Mexico, with a focus on operational efficiency [23][26] Question: Capital allocation and buybacks - Management confirmed a flexible approach to capital allocation, emphasizing the value seen in the current share price and the potential for M&A opportunities [28][30] Question: Macro environment and CapEx adjustments - Management indicated that further production cuts could lead to adjustments in capital expenditures, but emphasized a customer-specific approach to decision-making [49][52] Question: Commodity exposure and hedging - Management stated that approximately 83% of gross profit is fee-based, with plans to continue hedging against commodity price fluctuations [61][63] Question: Performance of acquired assets - The Barilla Draw acquisition has exceeded expectations, with significant activity anticipated in the coming years [105][106]

Financial Data and Key Metrics Changes - Kinetic reported adjusted EBITDA of $250 million for Q1 2025, a 7% increase year-over-year driven by process gas volume growth and margin expansion in the Midstream Logistics segment [6][14] - Distributable cash flow was $157 million, and free cash flow was $120 million for the quarter [14] - The company affirmed full-year adjusted EBITDA guidance of $1.09 billion to $1.15 billion, expecting a meaningful acceleration in growth during the second half of the year [15][16] Business Line Data and Key Metrics Changes - The Midstream Logistics segment generated adjusted EBITDA of $159 million, up 11% year-over-year due to increased processed gas volumes and margin expansion from Northern Delaware assets [14] - The Pipeline Transportation segment reported adjusted EBITDA of $94 million, down 2% year-over-year, primarily due to the absence of contributions from Gulf Coast Express following its sale [15] Market Data and Key Metrics Changes - Kinetic's operations are primarily focused on the Permian Basin, which is expected to remain resilient despite macroeconomic challenges [8][10] - The company anticipates over 1 billion cubic feet per day of gas growth per year, even if Permian crude production remains flat [10] Company Strategy and Development Direction - Kinetic is focused on providing flow assurance and operational reliability to producer customers, with a strong emphasis on organic and inorganic growth opportunities [10][12] - The company announced a $500 million share repurchase program, reflecting confidence in its value proposition and commitment to returning capital to shareholders [6][13] - Kinetic is taking a measured approach to future spending, with less than $50 million of committed growth capital in 2026, allowing flexibility in investment decisions [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's positioning to navigate macroeconomic uncertainties, highlighting a strong free cash flow profile and industry-leading earnings growth outlook [11][19] - The management noted that while commodity prices have declined, 83% of expected gross profit for 2025 is sourced from fixed fee agreements, providing stability [16][17] Other Important Information - Kinetic has made substantial progress on strategic projects, including the commissioning of the King's Landing complex, expected to unlock over 100 million cubic feet per day of currently curtailed volumes [16][19] - The company is also exploring behind-the-meter power generation opportunities, which could optimize costs and enhance operational efficiency [10][110] Q&A Session Summary Question: Long-term growth drivers - Management indicated that the company expects to maintain a 10% compound annual growth rate (CAGR) through 2029, driven by contractual resets and growth in New Mexico [21][24] Question: Capital allocation and buybacks - Management confirmed a flexible approach to capital allocation, emphasizing the value seen in the current share price and the potential for M&A opportunities [27][30] Question: Macro environment and CapEx adjustments - Management acknowledged uncertainty in the macro environment but indicated that they are seeing yellow lights rather than red, allowing for cautious progress on large infrastructure projects [54][55] Question: Commodity exposure and hedging - Management stated that approximately 83% of gross profit is fee-based, with only 15% directly tied to commodity prices, indicating a strong hedging strategy [61][62] Question: Performance of Barilla Draw assets - Management reported that the Barilla Draw acquisition has exceeded expectations, with significant activity anticipated in the coming years [105][106]

Core Viewpoint - Kinetik Holdings Inc. reported quarterly earnings of $0.05 per share, significantly missing the Zacks Consensus Estimate of $0.23 per share, representing a -78.26% earnings surprise [1]. Financial Performance - The company posted revenues of $443.26 million for the quarter ended March 2025, which was 19.09% below the Zacks Consensus Estimate and an increase from $341.39 million year-over-year [2]. - Over the last four quarters, Kinetik Holdings has surpassed consensus EPS estimates only once [2]. Stock Performance - Kinetik Holdings shares have declined approximately 28.6% since the beginning of the year, contrasting with the S&P 500's decline of -4.7% [3]. - The current consensus EPS estimate for the upcoming quarter is $0.34 on revenues of $594.5 million, and for the current fiscal year, it is $2.03 on revenues of $2.61 billion [7]. Industry Outlook - The Oil and Gas - Field Services industry, to which Kinetik Holdings belongs, is currently ranked in the bottom 43% of over 250 Zacks industries, indicating potential challenges ahead [8]. - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Kinetik Holdings' stock performance [5].

Financial Performance - Adjusted EBITDA for Q1 2025 was $250 million[6], compared to $233559 thousand for Q1 2024[39] - Free Cash Flow for Q1 2025 was $120 million[6], compared to $107511 thousand for Q1 2024[43] - Capital Expenditures for Q1 2025 were $78 million[6] - The company is affirming FY 2025 Adjusted EBITDA guidance of $109 billion to $115 billion[9] - The company is affirming FY 2025 Capital Guidance of $450 million to $540 million[9] Operational Highlights - Average gas processed volumes for Q1 2025 were 180 Bcfpd, a 17% year-over-year increase[14] - Midstream Logistics Adjusted EBITDA for Q1 2025 was $159 million, an 11% year-over-year increase[14] - Pipeline Transportation Adjusted EBITDA for Q1 2025 was $94 million, a 2% year-over-year decrease[14] - Construction of the 220 Mmcfpd Kings Landing Complex is progressing, with commissioning expected to begin in six weeks[9] Strategic Initiatives - The company authorized a $500 million share repurchase program[9] - The company issued $250 million of 6625% sustainability-linked senior notes[9]

[Kinetik First Quarter 2025 Results](index=1&type=section&id=Kinetik%20Reports%20First%20Quarter%202025%20Financial%20and%20Operating%20Results) This report details Kinetik's financial and operational performance for the first quarter of 2025, highlighting key achievements and future outlook [Financial & Operating Highlights](index=1&type=section&id=First%20Quarter%202025%20Results%20and%20Commentary) Kinetik reported strong Q1 2025 results with increased Adjusted EBITDA and gas volumes, affirming 2025 guidance and expanding share repurchases Q1 2025 Key Performance Indicators | Metric | Q1 2025 | YoY Change | | :--- | :--- | :--- | | Net Income | $19.3 million | - | | Adjusted EBITDA | $250.0 million | +7% | | Gas Processed Volumes | 1.80 Bcf/d | +17% | - Affirmed 2025 guidance with an Adjusted EBITDA range of **$1.09 billion to $1.15 billion** and a Capital Guidance range of **$450 million to $540 million**[4](index=4&type=chunk) - The Board of Directors authorized an increase to the existing share repurchase program, bringing the total authorization to **$500 million**[4](index=4&type=chunk)[5](index=5&type=chunk) - Construction on the Kings Landing Complex is progressing, with commissioning expected to start in six weeks and operations commencing in early Q3 2025[4](index=4&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management highlighted a solid quarter, emphasizing proactive risk management and capital flexibility, anticipating significant Adjusted EBITDA growth in H2 2025 - Management noted that the company is well-positioned to navigate macroeconomic uncertainty through proactive procurement of steel pipe, vigilant cost control, and significant capital allocation flexibility with **less than $50 million** of committed growth capital in 2026 and beyond[3](index=3&type=chunk) - The company's earnings profile is described as a "tale of two halves," with annualized first-half 2025 Adjusted EBITDA of approximately **$1 billion** expected to ramp to an annualized fourth-quarter rate of approximately **$1.2 billion** following the commissioning of Kings Landing[3](index=3&type=chunk) - If current lower commodity price futures persist, full-year Adjusted EBITDA could be negatively impacted by approximately **$20 million**, though results are still expected to fall within the 2025 guidance range[5](index=5&type=chunk) - To demonstrate conviction in the company's value, senior management will receive a material percentage of their remaining 2025 salary in Kinetik common stock, with the CEO taking **100%**[5](index=5&type=chunk) [Financial Performance](index=2&type=section&id=Financial%20Performance) Kinetik reported Q1 2025 net income of $19.3 million and Adjusted EBITDA of $250.0 million, with increased revenues but lower net income due to higher expenses [Key Financial Metrics](index=2&type=section&id=Selected%20Key%20Metrics) Kinetik generated $157.0 million in Distributable Cash Flow and $120.4 million in Free Cash Flow in Q1 2025, with Net Debt increasing to $3.73 billion Q1 2025 Financial Metrics | Metric | Value (in thousands, except ratios) | | :--- | :--- | | Adjusted EBITDA | $250,017 | | Distributable Cash Flow | $156,981 | | Free Cash Flow | $120,393 | | Dividend Coverage Ratio | 1.3x | | Leverage Ratio | 3.4x | | Net Debt to Adjusted EBITDA Ratio | 3.8x | Net Debt Comparison | Date | Net Debt (in thousands) | | :--- | :--- | | March 31, 2025 | $3,734,955 | | December 31, 2024 | $3,526,594 | - In March, the company issued an additional **$250 million** of 6.625% sustainability-linked senior notes and increased its accounts receivable securitization facility to **$250 million**[6](index=6&type=chunk) [Consolidated Statements of Operations](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) Total operating revenues increased to $443.3 million in Q1 2025, but net income decreased to $19.3 million due to higher operating and interest expenses Income Statement Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Total operating revenues | $443,263 | $341,394 | | Operating income | $19,280 | $26,101 | | Interest expense | ($55,714) | ($47,467) | | Net income including noncontrolling interest | $19,262 | $35,407 | | Diluted EPS | $0.05 | $0.12 | [Operational & Commercial Update](index=3&type=section&id=Operational%20and%20Commercial) Kinetik is advancing key growth projects, including the Kings Landing complex and ECCC Pipeline, while securing a new long-term gas gathering agreement - Substantial construction progress was made at the Kings Landing facility, with commissioning expected to begin in six weeks and operations in early Q3 2025[10](index=10&type=chunk) - The ECCC Pipeline right-of-way approval process continues, with construction expected to begin in Q3 2025 and an in-service date in Q1 2026[10](index=10&type=chunk) - A new long-term gas gathering and processing agreement was executed with an existing large, private producer in Reeves County, Texas, with production expected to start later in 2025[10](index=10&type=chunk) [Corporate Updates](index=3&type=section&id=Governance) Kinetik announced its virtual Annual Meeting, the retirement of its Chief Strategy Officer, and upcoming investor conference participation - The Annual Meeting will be held virtually on May 19, 2025[10](index=10&type=chunk) - Anne Psencik, Chief Strategy Officer, will retire effective June 30, 2025, and will continue to consult for the Company[10](index=10&type=chunk) - Kinetik plans to participate in investor conferences in May, June, and July 2025[10](index=10&type=chunk) [Non-GAAP Financial Measures & Reconciliations](index=4&type=section&id=Non-GAAP%20financial%20measures) This section provides reconciliations of non-GAAP measures like Adjusted EBITDA, Distributable Cash Flow, and Free Cash Flow, along with their definitions and utility Q1 2025 Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Line Item | Amount | | :--- | :--- | | Net income including noncontrolling interest (GAAP) | $19,262 | | Add: Interest, taxes, D&A, and other adjustments | $230,755 | | **Adjusted EBITDA (non-GAAP)** | **$250,017** | Q1 2025 Reconciliation to DCF and FCF (in thousands) | Line Item | Amount | | :--- | :--- | | Adjusted EBITDA (non-GAAP) | $250,017 | | Adjustments (Proportionate EBITDA, interest, etc.) | ($93,036) | | **Distributable cash flow (non-GAAP)** | **$156,981** | | Adjustments (CapEx, interest, etc.) | ($36,588) | | **Free cash flow (non-GAAP)** | **$120,393** | - The report provides definitions for key non-GAAP measures including Adjusted EBITDA, Distributable Cash Flow (DCF), Free Cash Flow (FCF), and Net Debt, stating they are used to compare business operations and cash generation performance[25](index=25&type=chunk)[26](index=26&type=chunk)[27](index=27&type=chunk)