CNX Resources(CNX) - 2025 Q2 - Quarterly Results

CNX Resources 2Q 2025 Earnings Results This report details CNX Resources' Q2 2025 performance, including production volumes, financial statements, hedging, and corporate guidance Production Volumes and Activity Summary Total production volume for Q2 2025 was 167.6 Bcfe, a 13.4% increase from Q1 2025, driven by higher Shale Sales Volumes Quarterly Production Volumes (Bcfe) | GAS/LIQUIDS | Q2-2025 | Q1-2025 | Q4-2024 | Q3-2024 | Q2-2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Shale Sales Volumes (Bcf) | 146.9 | 126.0 | 115.6 | 110.8 | 111.7 | | CBM Sales Volumes (Bcf) | 9.4 | 9.3 | 9.9 | 10.0 | 9.7 | | NGLs Sales Volumes (Bcfe) | 11.1 | 12.2 | 16.2 | 13.2 | 12.4 | | TOTAL (Bcfe) | 167.6 | 147.8 | 141.9 | 134.5 | 134.0 | | Average Daily Production (MMcfe) | 1,841.8 | 1,642.3 | 1,543.1 | 1,461.8 | 1,472.5 | - In Q2 2025, drilling and completion activity was focused in the Central Pennsylvania (CPA) region, with 3 Utica wells drilled, 2 fracked, and 3 turned-in-line (TIL)[4] - Additionally, 5 Marcellus wells were turned-in-line in the CPA region[4] Hedge Volumes and Pricing CNX maintains a substantial natural gas hedging portfolio through 2028, with 482.3 Bcf hedged for 2025 Total Hedged Volumes and Average Prices | Period | Total Volumes Hedged (Bcf) | Average Price (NYMEX + Basis) ($/Mcf) | | :--- | :--- | :--- | | 2025 | 482.3 | $2.58 | | 2026 | 431.5 | $2.70 | | 2027 | 339.0 | $3.26 | | 2028 | 31.1 | $3.35 | Gas Hedging Gain/Loss Projections and Actuals The company projects a full-year 2025 hedging loss of $244.8 million, contrasting with a Q2 2025 total derivative gain of $421 million Projected Realized Hedging Loss | Period | Total Projected Realized Loss ($ in 000s) | | :--- | :--- | | Q3 2025 | ($8,762) | | CY2025 | ($244,763) | | CY2026 | ($391,875) | Actual Change in Derivatives (Q2 2025 vs Q1 2025) | (Dollars in millions) | Q2 2025 | Q1 2025 | | :--- | :--- | :--- | | Realized (Loss) Gain | ($35) | ($110) | | Unrealized Gain (Loss) | 456 | (418) | | Gain (Loss) on Commodity Derivative Instruments | $421 | ($528) | Consolidated Financial Statements CNX reported a Q2 2025 net income of $432.5 million, a strong turnaround driven by derivative gains, with stable assets and strong cash flow Consolidated Statements of Income Q2 2025 net income reached $432.5 million, a significant improvement from the prior quarter's loss due to derivative gains Key Income Statement Data (Dollars in thousands) | Metric | Q2-2025 | Q1-2025 | Q2-2024 | | :--- | :--- | :--- | :--- | | Total Revenue and Other Operating Income | $962,422 | $82,388 | $321,443 | | Gain (Loss) on Commodity Derivative Instruments | $421,121 | ($528,220) | $14,095 | | Net Income (Loss) | $432,521 | ($197,715) | ($18,261) | | Diluted Earnings (Loss) per Share | $2.53 | ($1.34) | ($0.12) | Consolidated Balance Sheets Total assets stood at $8.99 billion as of June 30, 2025, with a notable decrease in liabilities boosting stockholders' equity Key Balance Sheet Data (Dollars in thousands) | Metric | 30-Jun-25 | 31-Mar-25 | | :--- | :--- | :--- | | Total Current Assets | $394,225 | $425,430 | | Total Property, Plant and Equipment—Net | $7,858,604 | $7,896,327 | | TOTAL ASSETS | $8,987,867 | $9,046,709 | | Total Current Liabilities | $1,197,683 | $1,582,893 | | Long-Term Debt | $2,286,855 | $2,353,350 | | TOTAL LIABILITIES | $4,895,154 | $5,275,935 | | TOTAL STOCKHOLDERS' EQUITY | $4,092,713 | $3,770,774 | Consolidated Statements of Cash Flows Net cash from operations was $282.5 million in Q2 2025, funding capital expenditures and $115.7 million in share repurchases Key Cash Flow Data (Dollars in thousands) | Metric | Q2-2025 | Q1-2025 | Q2-2024 | | :--- | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $282,492 | $215,656 | $191,766 | | Net Cash Used in Investing Activities | ($94,922) | ($633,597) | ($144,539) | | Net Cash (Used in) Provided by Financing Activities | ($184,566) | $375,755 | ($45,292) | | Purchases of Common Stock | ($115,714) | ($125,138) | ($44,381) | Market and Pricing Analysis The company's Q2 2025 average realized sales price was $2.68 per Mcfe, yielding a production cash margin of $1.89 per Mcfe Market Mix and Natural Gas Price Reconciliation For 2025, the company projects a realized price of $3.11/Mcf before hedging, with sales diversified across several key markets 2025E Natural Gas Price Reconciliation | Metric | Value | | :--- | :--- | | NYMEX | $3.59 /MMBtu | | Weighted Average Basis (Not considering hedging) | ($0.67) /MMBtu | | Realized Price (per MMBtu) | $2.92 /MMBtu | | Realized Price Before Financial Hedging (per Mcf) | $3.11 /Mcf | Price and Cost Data (Per Mcfe) The Q2 2025 average sales price was $2.68/Mcfe, with total production cash costs decreasing to $0.79/Mcfe from the prior quarter Key Price and Cost Data (Per Mcfe) | Metric | Q2-2025 | Q1-2025 | Q2-2024 | | :--- | :--- | :--- | :--- | | Average Sales Price of Natural Gas, NGL and Oil, including Cash Settlement | $2.68 | $2.99 | $2.58 | | Total Natural Gas, NGL and Oil Production Cash Costs, before DD&A | $0.79 | $0.85 | $0.86 | | Natural Gas, NGL and Oil Production Cash Margin, before DD&A | $1.89 | $2.14 | $1.72 | Guidance CNX updated its 2025 guidance, raising its production forecast and increasing its FCF per share target to ~$4.07 Updated 2025E Guidance | Metric | Previous 2025E | Updated 2025E | | :--- | :--- | :--- | | Production Volumes (Bcfe) | 605 - 620 | 615 - 620 | | Adjusted EBITDAX ($ in millions) | $1,225 - $1,275 | $1,225 - $1,275 | | Total Capital Expenditures ($ in millions) | $450 - $500 | $450 - $500 | | Free Cash Flow (FCF) ($ in millions) | ~$575 | ~$575 | | FCF Per Share | ~$3.97 | ~$4.07 | - The increase in FCF per share guidance is attributed to a reduction in shares outstanding, from 144.7 million as of April 14, 2025, to 141.4 million as of July 15, 2025[23] Non-GAAP Measures This section reconciles non-GAAP measures, reporting Q2 2025 Adjusted EBITDAX of $332 million and Free Cash Flow of $188 million Definitions This section defines key non-GAAP financial measures used by management, including Adjusted EBITDAX, Net Debt, and Free Cash Flow - Key non-GAAP measures are defined as follows[26]: - Adjusted EBITDAX: EBITDAX adjusted for items like unrealized gains/losses on derivatives and stock-based compensation - Net Debt: Total long-term debt minus cash, cash equivalents, and restricted cash - Free Cash Flow (FCF): Net cash from operating activities minus capital expenditures plus proceeds from asset sales and minus investments in equity affiliates Adjusted EBITDAX and Adjusted Net Income Adjusted EBITDAX for Q2 2025 was $332 million, with adjustments primarily for a $456 million unrealized gain on derivatives Adjusted EBITDAX Reconciliation (Dollars in millions) | Metric | Q2-2025 | Q1-2025 | Q2-2024 | | :--- | :--- | :--- | :--- | | Net Income (Loss) | $432 | ($198) | ($18) | | EBITDAX | $783 | ($102) | $143 | | Unrealized (Gain) Loss on Commodity Derivative Instruments | (456) | 418 | 96 | | Adjusted EBITDAX | $332 | $325 | $242 | Adjusted Net Income (Dollars in millions) | Metric | Q2-2025 | Q1-2025 | Q2-2024 | | :--- | :--- | :--- | :--- | | Adjusted Net Income | $100 | $116 | $55 | Operating and Cash Operating Margin The Cash Operating Margin remained stable at 65% in Q2 2025, while the non-GAAP Operating Margin decreased slightly to 34% Non-GAAP Margins | Metric | Q2-2025 | Q1-2025 | Q2-2024 | | :--- | :--- | :--- | :--- | | Operating Margin | 34 % | 37 % | 29 % | | Cash Operating Margin | 65 % | 65 % | 58 % | Net Debt and Adjusted EBITDAX TTM Net Debt decreased to $2.60 billion as of June 30, 2025, with a trailing-twelve-month Adjusted EBITDAX of $1.19 billion Net Debt (Dollars in millions) | Metric | 30-Jun-25 | 31-Mar-25 | | :--- | :--- | :--- | | Total Long-Term Debt (GAAP) | $2,616 | $2,682 | | Less: Cash, Cash Equivalents, and Restricted Cash | 16 | 13 | | Net Debt | $2,600 | $2,669 | - Adjusted EBITDAX for the trailing-twelve-months (TTM) ending June 30, 2025 was $1,190 million[40] Free Cash Flow The company generated $188 million in Free Cash Flow during Q2 2025, a significant increase from the $100 million in Q1 2025 2025 Free Cash Flow (Dollars in millions) | Metric | Q2-2025 | Q1-2025 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $283 | $216 | | Capital Expenditures | (114) | (131) | | Proceeds from Asset Sales | 21 | 16 | | Free Cash Flow | $188 | $100 | Risk Factors The report contains forward-looking statements subject to risks including commodity price volatility, economic conditions, and regulations - The report contains forward-looking statements and investors are cautioned not to place undue reliance on them as predictions of future results[49] - Material risks include[50]: - Pricing volatility for natural gas and NGLs - Negative impacts from local, regional, and national economic conditions - Nonperformance by customers of their contractual obligations - Changes in safety, health, environmental, and other regulations