Kinetik (KNTK) Q4 2024 earnings summary

Executive summary

• Achieved record 2024 financial results with $244.2 million net income and $971.1 million Adjusted EBITDA, marking 16% year-over-year growth and transformational asset expansion in the Delaware Basin.

• Completed major transactions, including the Durango Permian and Barilla Draw acquisitions, a 15-year gas gathering agreement in Eddy County, and divestiture of a non-core GCX stake to fund New Mexico expansion.

• Increased quarterly cash dividend by 4% to $0.78 per share, marking the first accelerated return of capital to shareholders, and nearly doubled public float after Apache's exit.

• Leverage ratio reduced to 3.4x, below the 3.5x target, and received a 'Positive' outlook from S&P, supporting investment-grade ambitions.

• Issued 2025 guidance for continued double-digit Adjusted EBITDA growth and significant capital investments.

Financial highlights

• 2024 Adjusted EBITDA was $971.1 million (+16% YoY); Net Income $244.2 million; Distributable Cash Flow $657.0 million; Free Cash Flow $410.1 million; revenue reached $1.48 billion.

• Q4 2024 Adjusted EBITDA was $237.5 million; Distributable Cash Flow $155.4 million; Free Cash Flow $32.5 million; revenue $385.7 million.

• 2024 capital expenditures totaled $264.5 million, below guidance; reinvestment ratio was 27%.

• Gas processing volumes averaged 1.64 Bcf/d for 2024 and 1.74 Bcf/d in Q4, up 13% year-over-year.

• Midstream Logistics contributed 62% and Pipeline Transportation 38% of total Adjusted EBITDA.

Outlook and guidance

• 2025 Adjusted EBITDA guidance is $1.09–$1.15 billion, implying 15% year-over-year growth at midpoint; Q4 2025 annualized Adjusted EBITDA expected to exceed $1.2 billion.

• 2025 capital expenditures projected at $450–$540 million, including up to $75 million for Kings Landing Complex.

• Expects 20% year-over-year growth in gas processed volumes, with Kings Landing Complex starting up by end of June 2025.

• 83% of 2025 expected gross profit from fixed fee agreements; only 4% exposed to unhedged commodity prices; 75% of commodity-exposed gross profit is hedged.

• ECCC pipeline construction expected in H2 2025; strong positioning for 2026.