Antero Midstream (AM) - 2025 Q2 - Quarterly Results

Q2 2025 Financial and Operating Results Antero Midstream's Q2 2025 results show strong operational growth, increased profitability, and significant free cash flow, leading to raised full-year guidance and continued shareholder returns Q2 2025 Highlights and Management Commentary Antero Midstream reported a record-breaking second quarter with gathering volumes reaching 3.5 Bcf/d, an 11% year-over-year increase in Adjusted EBITDA, and a 13% decrease in capital expenditures, leading to an 89% surge in Free Cash Flow after dividends, and debt reduction to 2.8x leverage - Management attributes the record gathering volumes to significant demand growth from U.S. Gulf Coast LNG facilities and anticipates future growth from data center power demand in Appalachia[3] - The company achieved significant capital efficiency, with a 13% YoY decrease in capital expenditures and an 11% YoY increase in EBITDA, resulting in an 89% increase in Free Cash Flow[3] - Strong free cash flow enabled debt reduction of nearly $100 million year-to-date, lowering leverage to 2.8x, with $83 million in shares repurchased year-to-date through July 30, 2025[3] Q2 2025 Key Financial and Operating Metrics | Metric | Q2 2025 Result | YoY Change | | :--- | :--- | :--- | | Net Income per Share | $0.26 | +44% | | Adjusted Net Income per Share | $0.29 | +26% | | Adjusted EBITDA | $284 million | +11% | | Capital Expenditures | $45 million | -13% | | Free Cash Flow after dividends | $82 million | +89% | | Low pressure gathering volumes | 3,460 MMcf/d | +6% | Updated 2025 Full-Year Guidance The company has raised its full-year 2025 guidance, increasing projections for Net Income, Adjusted Net Income, and Adjusted EBITDA by $10 million each at the midpoint, while lowering guidance for interest expense, capital expenditures, and current income tax expense by $5 million each, resulting in a $25 million increase to Free Cash Flow guidance Updated 2025 Full-Year Guidance Metrics | Metric ($ in millions) | Low | High | Change vs. Prior (Midpoint) | | :--- | :--- | :--- | :--- | | Net Income | $455 | $495 | +$10 | | Adjusted Net Income | $510 | $550 | +$10 | | Adjusted EBITDA | $1,090 | $1,130 | +$10 | | Capital Expenditures | $170 | $190 | -$5 | | Interest Expense | $190 | $200 | -$5 | | Free Cash Flow Before Dividends | $715 | $755 | +$25 | | Free Cash Flow After Dividends | $275 | $325 | +$25 | - The annual dividend per share guidance remains unchanged at $0.90[7] Shareholder Returns Antero Midstream continued its capital return program by repurchasing 1.0 million shares for $17 million during the second quarter of 2025, with approximately $426 million remaining under the authorized $500 million share repurchase program as of June 30, 2025 - In Q2 2025, the company repurchased 1.0 million shares for $17 million[5] - Year-to-date through July 30, 2025, total shares purchased, including for tax withholding, amounted to 5.0 million shares for a total of $94 million[5] - There is approximately $426 million of remaining capacity under the share repurchase program as of June 30, 2025[5] Detailed Financial and Operating Results In Q2 2025, Antero Midstream saw broad operational volume growth across its segments, with low pressure gathering up 6% and fresh water delivery up 21% YoY, driving total revenues to $305 million, Net Income to $125 million, and Adjusted EBITDA up 11% to $284 million, with capital expenditures at $45 million Operating Performance The company achieved significant year-over-year growth in operating volumes for Q2 2025, with low pressure gathering, compression, and high pressure gathering volumes increasing by 6%, 6%, and 8% respectively, and fresh water delivery volumes seeing the largest increase at 21% Average Daily Volumes | Average Daily Volumes | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Low Pressure Gathering (MMcf/d) | 3,258 | 3,460 | 6% | | Compression (MMcf/d) | 3,246 | 3,447 | 6% | | High Pressure Gathering (MMcf/d) | 2,994 | 3,221 | 8% | | Fresh Water Delivery (MBbl/d) | 81 | 98 | 21% | | Gross Joint Venture Processing (MMcf/d) | 1,588 | 1,687 | 6% | - During Q2 2025, Antero Midstream connected 18 new wells to its gathering system and serviced 11 wells with its fresh water delivery system[19] Financial Performance For Q2 2025, total revenues reached $305 million, up from $270 million in Q2 2024, with Net income rising to $125 million ($0.26/share) from $86 million ($0.18/share), Adjusted EBITDA growing 11% to $284 million, and Free Cash Flow after dividends surging 89% to $82 million - Q2 2025 revenues were $305 million, comprised of $239 million from Gathering and Processing and $66 million from Water Handling[12] Key Financial Metrics | Metric (in thousands) | Q2 2024 | Q2 2025 | % Change | | :--- | :--- | :--- | :--- | | Net Income | $86,037 | $124,513 | +45% | | Adjusted Net Income | $110,345 | $137,617 | +25% | | Adjusted EBITDA | $254,992 | $284,288 | +11% | | Free Cash Flow after dividends | $43,246 | $81,893 | +89% | - Interest expense decreased by 8% YoY to $48 million, driven by lower average total debt[16] Capital Investments Capital expenditures totaled $45 million in the second quarter of 2025, allocated with $22 million towards gathering and compression, $20 million for water infrastructure, and $3 million directed to the Stonewall Joint Venture - Total capital expenditures were $45 million in Q2 2025, broken down as follows: - Gathering and compression: $22 million - Water infrastructure: $20 million - Stonewall Joint Venture: $3 million[20] Non-GAAP Measures and Reconciliations This section provides definitions for non-GAAP measures such as Adjusted Net Income, Adjusted EBITDA, and Free Cash Flow, which management uses to assess operating performance, along with detailed tables reconciling these non-GAAP measures to their most directly comparable GAAP counterparts - The company uses non-GAAP measures like Adjusted EBITDA, Adjusted Net Income, and Free Cash Flow to assess operating performance, compare against peers, and evaluate the viability of capital projects[23][24][26] Reconciliation of Net Income to Adjusted Net Income | Reconciliation of Net Income to Adjusted Net Income (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2025 | | :--- | :--- | :--- | | Net Income | $86,037 | $124,513 | | Amortization of customer relationships | $17,668 | $17,668 | | Loss on early extinguishment of debt | $13,691 | — | | Tax effect of reconciling items | ($8,430) | ($4,564) | | Adjusted Net Income | $110,345 | $137,617 | Reconciliation of Consolidated Total Debt to Net Debt | Reconciliation of Consolidated Total Debt to Net Debt (in thousands) | June 30, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Consolidated total debt | $3,205,700 | $3,039,300 | | Less: Cash and cash equivalents | — | — | | Consolidated net debt | $3,205,700 | $3,039,300 | Condensed Consolidated Financial Statements The unaudited financial statements detail the company's financial position and performance, showing total assets of $5.73 billion and total liabilities of $3.64 billion as of June 30, 2025, with Q2 2025 revenue of $305 million and net income of $125 million, and net cash from operating activities of $464 million for the first six months of 2025 Condensed Consolidated Balance Sheets As of June 30, 2025, Antero Midstream's balance sheet shows total assets of $5.73 billion, a slight decrease from $5.76 billion at year-end 2024, with total liabilities at $3.64 billion, long-term debt reduced to $3.02 billion from $3.12 billion, and total stockholders' equity at $2.09 billion Balance Sheet Summary | Balance Sheet Item (in thousands) | Dec 31, 2024 | June 30, 2025 | | :--- | :--- | :--- | | Total current assets | $118,064 | $114,477 | | Property and equipment, net | $3,881,621 | $3,892,547 | | Total assets | $5,761,748 | $5,727,002 | | Total current liabilities | $100,612 | $111,168 | | Long-term debt | $3,116,958 | $3,023,800 | | Total liabilities | $3,646,577 | $3,639,613 | | Total stockholders' equity | $2,115,171 | $2,087,389 | Condensed Consolidated Statements of Operations For the three months ended June 30, 2025, total revenue increased to $305.5 million from $269.8 million in the prior-year period, operating income grew to $186.4 million from $152.8 million, and net income rose significantly to $124.5 million, or $0.26 per diluted share, compared to $86.0 million, or $0.18 per diluted share, in Q2 2024 Income Statement Summary | Income Statement (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2025 | | :--- | :--- | :--- | | Total revenue | $269,795 | $305,472 | | Total operating expenses | $117,042 | $119,028 | | Operating income | $152,753 | $186,444 | | Income before income taxes | $114,473 | $168,498 | | Net income | $86,037 | $124,513 | | Net income per share–diluted | $0.18 | $0.26 | Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, net cash provided by operating activities was $464.1 million, an increase from $426.4 million in the same period of 2024, while net cash used in investing activities decreased to $72.3 million from $148.4 million, and net cash used in financing activities was $391.8 million, primarily for dividends and debt repayment Cash Flow Summary | Cash Flow (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Net cash provided by operating activities | $426,367 | $464,125 | | Net cash used in investing activities | ($148,422) | ($72,334) | | Net cash used in financing activities | ($278,011) | ($391,791) | | Cash and cash equivalents, end of period | $— | $— |