Kinetik (KNTK) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 Adjusted EBITDA of $251.2 million, exceeding guidance, with strong commercial execution, new and amended contracts in Texas and New Mexico, and major projects advancing, despite a net loss of $5.1 million including noncontrolling interest.

• Operational reliability was maintained, with progress on key capital projects such as the Kings Landing AGI and sour gas conversion, ECCC Pipeline, and power generation initiatives.

• Navigated volatile Waha gas pricing through effective marketing and hedging strategies, offsetting curtailment impacts.

• Revenue for Q1 2026 decreased 8% year-over-year to $410.0 million, primarily due to lower gas service revenues and the EPIC Crude divestiture.

Financial highlights

• Adjusted EBITDA reached $251.2 million, up 0.5% year-over-year; Distributable Cash Flow was $180.8 million; Free Cash Flow totaled $101.4 million.

• Service revenue declined 27% year-over-year to $93.8 million, while product revenue remained flat at $312.2 million.

• Midstream Logistics segment delivered $178.9 million Adjusted EBITDA, up 12% year-over-year; Pipeline Transportation segment generated $78.0 million Adjusted EBITDA, down 17% due to the EPIC Crude divestiture.

• Net loss including noncontrolling interests was $5.1 million for Q1 2026, compared to net income of $19.3 million in Q1 2025.

• Dividend per share declared at $0.81, with a coverage ratio of 1.4x.

Outlook and guidance

• Affirmed full-year 2026 Adjusted EBITDA guidance of $950 million to $1.05 billion and capital expenditures guidance of $450 million to $510 million.

• Expects low- to mid-single-digit percentage growth in processed gas volumes for 2026, reflecting higher curtailments due to Waha price volatility.

• Quarterly EBITDA expected at $230–$240 million in Q2 and $260–$270 million in Q3 and Q4.

• Management expects existing capital resources and cash flows to cover capital expenditures and planned dividends over the next 12 months.

• Commodity price assumptions for 2026 include WTI at $61.58/bbl, HSC natural gas at $3.34/MMBtu, and Waha natural gas at $0.44/MMBtu.