NGL earnings analysis
What we found in NGL's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
NGL reported a strong year-over-year operating improvement: revenue rose $367.836 million to $989.992 million, operating income increased $47.869 million to $145.319 million, and continuing-operations Adjusted EBITDA rose $42.246 million to $186.218 million. Water Solutions was the central driver, with segment operating income up $53.621 million on materially higher Delaware Basin disposal volumes and recovered-crude revenue. Sequentially, revenue and calculated margins recovered versus the preceding quarter, but free cash flow was negative $31.759 million as $108.762 million of capital spending exceeded $77.003 million of operating cash flow. Liquidity is adequate by management's assessment, though substantial debt, variable-rate exposure, commodity-driven working-capital needs, and an expected $245 million fiscal-2027 capital program remain key constraints.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue up 59% year over year
- Revenue rose to $989.992 million from $622.156 million in the prior-year quarter, a $367.836 million increase. Operating income increased $47.869 million to $145.319 million, lifting operating margin to 14.68% from 15.66% a year earlier as the revenue mix shifted materially toward lower-margin commodity sales.
- Water Solutions drove earnings growth
- Water Solutions segment operating income increased $53.621 million to $138.568 million. Produced-water volumes processed rose by 543,441 barrels per day to 3,315,055 barrels per day, while water-disposal service-fee revenue increased $20.004 million to $182.079 million.
- EBITDA and operating cash flow improved
- Continuing-operations Adjusted EBITDA increased $42.246 million to $186.218 million. Net cash provided by continuing operating activities improved to $77.003 million from $17.256 million.
- Crude logistics volumes and sales expanded
- Crude Oil Logistics revenue increased $271.829 million to $439.460 million, supported by higher prices and DJ Basin production. Grand Mesa Pipeline physical volumes averaged about 74,000 barrels per day versus about 55,000 barrels per day in the prior-year quarter.
- LEX II expansion supports future volume growth
- The LEX II expansion adds 165,000 barrels per day of capacity, targets approximately 560,000 barrels per day of system capacity, and is underwritten by a new long-term volume-commitment contract. The project is expected to enter service by the end of calendar 2026.
- Positive working capital and ABL capacity
- Current assets exceeded current liabilities by approximately $92.9 million at June 30, 2026. The ABL borrowing base was $417.3 million, against $177.0 million outstanding borrowings and $49.5 million of letters of credit.
- Sequential margin recovery
- Sequentially, revenue increased from $950 million in the preceding quarter to $989.992 million, while calculated gross margin improved from 22.9% to 30.87% and operating margin improved from 5.2% to 14.68%. Reported EPS was not disclosed in the provided filing extract.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Leverage and floating-rate exposure remain high
- The partnership had $947.6 million outstanding under its variable-rate 2026 Term Loan B and $177.0 million drawn on the ABL Facility at June 30, 2026, in addition to $2.2 billion of senior secured notes. A 0.125% interest-rate change would change annual interest expense by $1.2 million on the Term Loan B and $0.2 million on the ABL balance.
- Growth spending pressured free cash flow
- Cash capital expenditures were $108.762 million, exceeding $77.003 million of operating cash flow and resulting in calculated free cash flow of negative $31.759 million. Management expects approximately $245 million of fiscal 2027 growth and maintenance capital expenditures.
- Commodity volatility compressed crude margins
- Crude Oil Logistics physical product margin fell to $1.482 per barrel from $4.174 per barrel, reflecting higher-priced inventory sold into a declining market and expiration of a producer purchase agreement. A 10% increase in underlying butane prices would change derivative fair value by $15.512 million.
- No formal risk-factor updates
- No material changes were made to the risk factors disclosed in the March 31, 2026 Form 10-K. Nonetheless, management states that a significant commodity-price increase could raise working-capital needs, limit deleveraging, and restrict financial flexibility.
What they reported.
What the company itself reported, taken out of the document.
- Gross margin
- 30.87%
- Operating margin
- 14.68%
- Segment
- Water Solutions revenue: $254.356 million, up $53.076 million year over year; segment operating income: $138.568 million, up $53.621 million.
- Segment
- Crude Oil Logistics revenue: $439.460 million, up $271.829 million year over year; segment operating income: $5.858 million, up $5.186 million.
- Segment
- Liquids Logistics segment operating income: $16.310 million, down $7.422 million year over year; Adjusted EBITDA: $10.285 million, up $7.414 million.
What they said about what is next.
No quantitative revenue or EPS outlook was provided in the 10-Q. Management expects fiscal 2027 capital expenditures of approximately $200 million for growth and $45 million for maintenance; LEX II is expected in service by the end of calendar 2026.
The filing reads better than the one before it.
What came before.
- 10-K · May 28, 2026
- NGL Energy Partners LP reported a significant decline in performance for FY 2026, notably a goodwill impairment of $247.8 million in its Crude Oil Logistics segment. The company continues to manage liquidity concerns…
- 10-Q · November 9, 2023
- NGL reported Q1 (three months ended Sept 30, 2023) revenues of $1,841,096,000, down from $2,009,447,000 a year ago, while gross profit expanded to $262,648,000 (14.27% margin) and operating income rose to $86,030,000.…
- 10-Q · August 9, 2023
- NGL reported total revenues of $1,616,104 (in thousands) for the quarter ended June 30, 2023, down from $2,497,383 (in thousands) a year earlier. Gross margin expanded to 14.65% from 9.71% and operating margin improved…
- 10-Q · February 9, 2023
- NGL reported Q3 (three months ended December 31, 2022) revenue of $2,139,240,000, down modestly from $2,171,876,000 a year earlier, while gross margin expanded to about 13.0% and operating income roughly doubled to…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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