NGL Energy Partners LP reported QQ1 2026 results with a standout gross margin of 88.6% and a robust EBITDA of $161.7 million, despite a sharp year-over-year revenue decline. Revenue came in at $622.2 million, down 61.82% year-over-year and 59.84% quarter-over-quarter, reflecting the cyclicality of U.S. energy volumes and commodity pricing. Management delivered an operating income of $87.1 million and a net income of $68.9 million, resulting in a net income margin of 11.1% and an earnings per share (EPS) of $0.0403. The company generated EBITDA margin of 25.99% (EBITDA/Revenue), underscoring the earnings power of its integrated midstream operations despite revenue headwinds.
From a cash flow perspective, net cash provided by operating activities was $33.2 million, with capital expenditures of $22.1 million and a negative free cash flow of $4.9 million. The balance sheet shows total assets of $4.19 billion against total liabilities of $4.05 billion, with total stockholders’ equity of $142.5 million. Notably, the company carries a sizable stock of noncurrent liabilities (around $3.58 billion) relative to its current assets, highlighting balance sheet leverage and potential liquidity considerations. Net debt stood at approximately $121.0 million, implying a leverage profile that is manageable on an EBITDA basis but warrants monitoring given the noncurrent liability stack.
Looking ahead, the absence of formal forward guidance in the disclosed materials means investors should weigh macro energy markets, continued volume recoveries in liquids and water solutions, and the trajectory of commodity spreads. The core strengths are the diversified three-segment platform, a diversified asset base with export capabilities, and solid EBITDA generation. The primary overhangs are funding liquidity given the noncurrent liabilities backdrop and sensitivity to energy price and demand cycles. Overall, the QQ1 2026 print signals positive operating discipline and earnings power, but prudence on liquidity management and debt composition is warranted.
Liquidity and Cash Flows
- Net cash provided by operating activities: $33.202 million; Operating cash flow: $17.256 million.
- Investing activities: Free cash flow after capex: -$4.873 million (FCF negative).
- Net cash used in investing activities: -$199.147 million (driven by investing outflows and asset movements).
- Net cash used by financing activities: -$232.557 million (debt repayments and share repurchases); Net change in cash: -$0.208 million.
- Cash at end of period: $5.441 million; Cash at beginning: $5.649 million.
Balance Sheet and Leverage
- Total assets: $4.189 billion; Total liabilities: $4.046 billion; Total stockholders' equity: $142.454 million.
- Cash and equivalents: $5.441 million; Net receivables: $469.991 million; Inventory: $81.480 million.
- PP&E net: $2.150 billion; Goodwill: $599.348 million; Intangible assets: $838.502 million; Total non-current assets: $3.603 billion.
- Current liabilities: $468.745 million; Long-term debt: $181.090 million; Total debt: $126.480 million; Net debt: $121.039 million.
- Notable balance sheet item: Other non-current liabilities ≈ $3.488 billion, implying a large noncurrent liability stack that warrants ongoing assessment for liquidity planning.
Valuation and Performance Context
- The quarter displays an atypical revenue decline amid a backdrop of strong gross margins and EBITDA generation, suggesting a favorable product/segment mix and efficient cost absorption.
- The contrast between high gross margins and net income variability underscores the importance of interest, depreciation, and non-operating items in ongoing profitability assessment.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
622.16M
-61.82%
-59.84%
Gross Profit
551.39M
244.00%
219.04%
Operating Income
87.12M
205.89%
15.39%
Net Income
68.92M
129.11%
410.27%
EPS
0.04
102.25%
133.58%
Key Financial Ratios
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