Kinetik (KNTK) Q4 2025 earnings summary

Executive summary

• 2025 was marked by commodity price volatility, macroeconomic uncertainty, and inflation, but strategic progress included key asset acquisitions, commercial agreements, and strong operational execution, resulting in record Adjusted EBITDA of $987.7 million and net income of $525.9 million.

• Closed Barilla Draw gathering asset acquisition, completed sale of EPIC Crude equity interest, and finalized major commercial agreements, including LNG pricing and residue gas supply contracts.

• Advanced major projects: Kings Landing processing facility achieved full commercial service, ECCC pipeline construction progressed on schedule, and FID reached for a 40 MW power project at Diamond Cryo.

• Amended major customer contracts to fixed-fee structures, improving long-term cash flow visibility and expected EBITDA from 2026.

• Initiated a pilot with Palantir to enhance analytics and planning, and dual-listed common stock on NYSE Texas.

Financial highlights

• Q4 2025 Adjusted EBITDA was $252 million; full-year Adjusted EBITDA reached $988 million, up from $971 million in 2024; net income for 2025 was $525.9 million.

• Distributable cash flow for Q4 2025 was $151.7 million and $620.5 million for the year; free cash flow was -$12 million for Q4 and $167.2 million for the year.

• Repurchased $176 million of Class A stock in 2025; year-end leverage at 3.8x; net debt at year-end was $3.81 billion.

• Dividend coverage ratio stood at 1.2x for Q4 and full year 2025.

• $500 million from EPIC Crude sale used to pay down revolver, improving liquidity and leverage.

Outlook and guidance

• 2026 Adjusted EBITDA guidance: $950–$1,050 million, a 7% year-over-year increase at the midpoint.

• 2026 capital expenditures expected at $450–$510 million, with 70% allocated to New Mexico projects.

• High single-digit growth in processed gas volumes expected, with ECCC Pipeline in-service in Q2 2026 and Kings Landing AGI project in-service by year-end 2026.

• Dividend increases targeted at 3–5% annually until coverage reaches 1.6x, then to track earnings growth.

• Commodity price assumptions for 2026: WTI $61.58/bbl, HSC gas $3.34/MMBtu, Waha gas $0.44/MMBtu, NGL $0.52/gal.