Earnings call transcript: Antero Midstream beats Q2 2025 forecasts, stock rises

Antero Midstream Corp (AM) reported its second-quarter 2025 earnings, surpassing market expectations with an earnings per share (EPS) of $0.29, compared to the forecasted $0.24. This represents a 20.83% positive surprise. The company also reported revenue of $305.5 million, exceeding the anticipated $291.79 million. Following the announcement, Antero Midstream’s stock surged by 7.32%, closing at $17.14, reflecting investor confidence in the company’s robust performance and strategic outlook. According to InvestingPro data, the stock is now trading near its 52-week high of $19.09, with a market capitalization of $8.82 billion and an attractive dividend yield of 5.25%. The company has maintained dividend payments for 9 consecutive years, demonstrating consistent shareholder returns.

Key Takeaways

• Antero Midstream’s Q2 2025 EPS of $0.29 exceeded forecasts by 20.83%.
• Revenue reached $305.5 million, surpassing expectations by 4.7%.
• The stock price increased by 7.32% post-earnings, indicating positive market sentiment.
• The company increased its 2025 Adjusted EBITDA guidance by $10 million.
• Antero Midstream continues to expand its infrastructure and operational capacity.

Company Performance

Antero Midstream demonstrated strong performance in the second quarter of 2025, with significant year-over-year growth in key financial metrics. The company’s EBITDA rose by 11% to $284 million, while free cash flow after dividends increased by 90% to $82 million. This performance is supported by strategic investments in infrastructure and operational efficiencies, positioning the company well within the competitive midstream sector.

Financial Highlights

• Revenue: $305.5 million, up from the forecasted $291.79 million.
• Earnings per share: $0.29, compared to the expected $0.24.
• EBITDA: $284 million, an 11% increase year-over-year.
• Free cash flow after dividends: $82 million, up 90% year-over-year.
• Leverage ratio: 2.8x as of June 30, 2025.

Earnings vs. Forecast

Antero Midstream’s Q2 2025 results showed a notable beat against market forecasts, with EPS coming in 20.83% higher than expected and revenue exceeding projections by 4.7%. This marks a strong quarter for the company, continuing its trend of surpassing analyst expectations.

Market Reaction

Following the earnings release, Antero Midstream’s stock experienced a significant increase, rising by 7.32% to $17.14. This movement places the stock closer to its 52-week high of $19.085, reflecting investor optimism driven by the company’s financial performance and strategic initiatives.

Outlook & Guidance

Antero Midstream has revised its 2025 Adjusted EBITDA guidance upward by $10 million, signaling confidence in future performance. The company is focusing on organic growth strategies, including infrastructure expansion and operational efficiencies, to meet increasing demand in the LNG and data center markets.

Executive Commentary

CEO Paul Rady emphasized the company’s commitment to organic growth and capital efficiency, stating, "We continue to execute on our organic growth plan, consistently delivering predictable earnings and peer-leading capital efficiency." CFO Brendan Krueger highlighted the potential for infrastructure opportunities in response to growing demand in the Northeast.

Risks and Challenges

• Potential regulatory changes could impact infrastructure projects.
• Market volatility in LNG and energy sectors may affect demand.
• Supply chain disruptions could pose challenges to operational efficiency.
• Economic downturns could impact capital availability and investment plans.

Q&A

During the earnings call, analysts inquired about Antero Midstream’s capital allocation strategy, which includes dedicating 50% of excess free cash flow to share buybacks. Questions also focused on processing capacity utilization and potential inorganic growth opportunities, reflecting interest in the company’s strategic direction and market positioning.

Full transcript - Antero Midstream Corp (AM) Q2 2025:

Conference Operator: Greetings. Welcome to the Antero Midstream 2Q twenty twenty five Earnings Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference is being recorded.

I will now turn the conference over to Justin Agnew, Vice President of Finance. Thank you. You may begin.

Justin Agnew, Vice President of Finance, Antero Midstream: Good morning and thank you for joining us for Antero Midstream’s second quarter investor conference call. We’ll spend a few minutes going through the financial and operating highlights and then we’ll open it up for Q and A. I would also like

Paul Rady, Chairman, CEO and President, Antero Resources and Antero Midstream: to direct you to the homepage of

Justin Agnew, Vice President of Finance, Antero Midstream: our website at www.anteromidstream.com, where we have provided a separate earnings call presentation that will be reviewed during today’s call. Today’s call may also contain certain non GAAP financial measures. Please refer to our earnings press release for important disclosures regarding such measures, including reconciliations to the most comparable GAAP financial measures. Joining me on the call today are Paul Rady, Chairman, CEO and President of Antero Resources and Antero Midstream Brendan Krueger, CFO of Antero Midstream and Michael Kennedy, CFO of Antero Resources and Director of Antero Midstream. With that, I’ll turn the call over to Paul.

Paul Rady, Chairman, CEO and President, Antero Resources and Antero Midstream: Thanks, Justin. Good morning, everyone. In my comments, I will discuss the progress on our twenty twenty five capital projects and an update on our capital reuse savings. Brendan will then provide a recap of our second quarter results and increased 2025 guidance. Let me start on slide number three titled 2025 Capital Projects On Track.

As depicted on this page, during the second quarter, we invest $45,000,000 in gathering, compression, water and the Stonewall joint venture projects. This brings our year to date capital investment to $82,000,000 or 45% of our updated 2025 capital budget at the midpoint of guidance. These projects included the completion of Torrey’s Peak compressor stations and significant progress on the water system expansion to the southern portion of the Marcellus. The capital invested in the back half of the year will be weighted toward the third quarter as we take advantage of better weather conditions for construction. Importantly, the remaining capital will be focused on low pressure gathering and water connects that set up the 2026 development plan.

Before turning the call over to Brendan, I also want to provide an update on our compression reuse program on slide number four titled Exceeding Expectations on Reuse Savings. To date we have realized over $50,000,000 of savings through our reuse program including $30,000,000 at the Torrey’s Peak Compressor Station. After successful proof concept on three compressor stations, we’re now increasing the future reuse savings estimates. As you can see on the left side of the page, our five year savings estimate from 2026 through 2030 has increased from 60,000,000 to over $85,000,000 This brings the cumulative savings already achieved plus the forecasted savings to over $135,000,000 To put it in perspective, these savings approximate the cost of building two brand new 160,000,000 cubic feet per day compressor stations. With that, let me turn it over to Brendan.

Brendan Krueger, CFO, Antero Midstream: Thanks, Paul. I will start with our second quarter financial results on Slide five. During the second quarter, we generated $284,000,000 of EBITDA, which was an 11% increase year over year. This was driven primarily by an increase in gathering and processing volumes, both of which set new company records. This EBITDA growth combined with declining capital year over year resulted in free cash flow after dividends of $82,000,000 which was almost a 90% increase compared to last year.

We utilized this free cash flow for share repurchases and for debt reduction, which drove our leverage down to 2.8 times as of June 30. Now let’s move on to slide number six titled increased 2025 guidance. This slide illustrates the components that resulted in the $25,000,000 increase in our free cash flow guidance. At the midpoint, we are increasing our adjusted EBITDA guidance by $10,000,000 driven by outperformance in our gathering and compression throughput. In addition, we are lowering our capital budget range, bringing the top end of the guidance down from $200,000,000 to $190,000,000 a $5,000,000 reduction at the midpoint.

Our debt reduction efforts have also resulted in $5,000,000 lower interest expense. Lastly, with the recently passed budget reconciliation bill, we are reducing our cash income taxes from a range of 0 to $10,000,000 to 0. This is driven by a combination of reinstating bonus depreciation and interest deduction limitation improvements. Looking ahead, we do not expect to be a material cash taxpayer through at least 2028. I will finish my comments on Slide seven titled Uniquely Positioned for LNG and Northeast Demand Growth.

AM plays the critical role investing in first mile infrastructure connecting low cost production to LNG facilities along the Gulf Coast. While most midstream companies can connect producers to local Appalachian markets, AM is uniquely positioned in the fact that it connects its investment grade producer to premium priced LNG markets, while still maintaining significant optionality to connect into local markets, should the demand growth warranted. As you can see on the snapshot on the right hand side of the page, additional projects in Appalachia continue to get announced and we expect project announcements to accelerate, given the regulatory support, specifically in West Virginia for data center development. In the future, if there is a structural change in Northeast demand or production tied to direct sales, Antero Resources has over ten years of dry gas locations that are substantially HPP and dedicated to AM that can supply that growing opportunity set. Importantly, with over twenty years of liquids rich and dry gas inventory and an investment grade balance sheet, Antero is one of the few companies that can be relied on to actually supply long term agreements.

In summary, we continue to execute on our organic growth plan, consistently delivering predictable earnings and peer leading capital efficiency. These attributes allow us to pay an attractive dividend, reduce absolute debt and make opportunistic share repurchases, all of which continue to drive value for our shareholders. With that, operator, we are ready to take questions.

Conference Operator: Thank you. We will now be conducting a question and answer session. Our first questions come from the line of John Mackay with Goldman Sachs. Please proceed with your questions.

John Mackay, Analyst, Goldman Sachs: Hey, guys. Thank you for the time. I appreciate it. I wanted to start on some of your comments you made on the AR call. I know you continue to talk about in basin demand opportunities, also kind of saying that you’d want it to be kind of NYMEX pricing and to be disciplined on growth entities.

But maybe can you spend a second talking about where AM could fit into this? Are there opportunities for AM specifically beyond just moving those gathering those incremental AR volumes?

Brendan Krueger, CFO, Antero Midstream: Yes, I think great question, John. I think for AM, we look at the opportunities similar to AR in the sense, AR could be a supplier, AM could build the infrastructure as needed. Obviously, we’ve got a large footprint with our current gathering and compression system in West Virginia and in Ohio. And so there are certainly opportunities where AM could be the one building the spur and have sort of take or pay contracts on those arrangements as well. So we’re looking at all of those items as potential solutions as it relates to this growing demand in the Northeast.

John Mackay, Analyst, Goldman Sachs: That’s fair. Maybe just on capital allocation, I think the first kind of two quarters of the year or sorry, guess you’ve talked about the buyback being kind of potentially 50% of, let’s call it, excess free cash flow. Kind of trending below that first two quarters of the year. It does look like it stepped up in July. But maybe just can you spend a second on how you think about allocating to the buyback versus the balance sheet?

And is that 50% number still kind of the right ballpark?

Brendan Krueger, CFO, Antero Midstream: Yes. I mean, I think we think about that 50% in probably longer term numbers. So when we’re giving those comments, it’s over a full year period, not kind of quarter to quarter here. The first quarter, we had some working capital headwinds, did not pay as much debt down in that first quarter. And then you saw in the second quarter, we did pay a substantial amount of debt down.

And then as you hit on in July, we certainly stepped up on the buyback there. So I would say it really does ebb and flow and we try to be opportunistic in those share repurchases can be more aggressive at times. We see more value in the shares. I think for AM, continue to see a lot of value in the share buyback And we also see the value of paying down debt accruing to the equity as well. I think we’re the lowest levered midstream name in the space.

And we think that debt pay down does accrue to the equity still as we look at that today. So we’ll continue to look at both opportunities and it will change quarter to quarter.

John Mackay, Analyst, Goldman Sachs: All right. That’s clear. Thank you. Appreciate the time.

Paul Rady, Chairman, CEO and President, Antero Resources and Antero Midstream: Thanks, Thanks, John.

Conference Operator: Thank you. Our next questions come from the line of Jeremy Tonet with Please proceed with your questions.

Jeremy Tonet, Analyst: Hi, good morning.

Paul Rady, Chairman, CEO and President, Antero Resources and Antero Midstream: Hi, Jeremy. Good morning.

Jeremy Tonet, Analyst: Just wanted to dig in maybe a little bit more if you could with regards to in basin demand opportunities and there’s been some announcements recently at the Pennsylvania Energy and Innovation Summit. I think there’s also been some announcements out of Meta with the new Albany facility. And was just wondering related to these recent developments, I guess, do you see opportunities emerging specific to AM here over time?

Brendan Krueger, CFO, Antero Midstream: Yes. I think we talked a little bit about in the first question there. West Virginia in particular is where we have our significant asset base for AM. West Virginia recently did pass this micro grid bill, where if you supply 70% of the power to a data center, you’re essentially you kind of skip the line. So a lot of benefits if you can fall under that microgrid bill.

And I think as mentioned in the previous question, for AM, I think there’s really two ways that AM plays a role. The extent AR accelerates production to meet that specific demand, AM, of course, gets the benefit of the water, the low pressure, the compression, the high pressure fees. And then the second piece is, of course, if AM participates in building out infrastructure for the supply, AM would then earn a fee with potential third party on building that infrastructure out. So I think I’d probably communicate what we did on the AR call, which is having lots of conversations. We’ve got a team internally working it, but no timeline in terms of when, if any, announcements could be made.

We’re trying to go through this thoughtfully. And to the extent something makes sense for the company, we’ll come out with it. But otherwise, plans in the medium term, intermediate term.

Jeremy Tonet, Analyst: Got it. Understood. Maybe just pivoting here to the Clearwater facility lawsuit. I don’t know if there’s any color you could shed on timeline at this point from a legal proceeding standing?

Brendan Krueger, CFO, Antero Midstream: No, unfortunately not. I think nothing’s changed from what we’ve put in disclosure. They appeal to the Colorado Supreme Court and just waiting on the Colorado Supreme Court to come out with any sort of decision in terms of whether they take it or not, but no change from that standpoint.

Conference Operator: Our next questions come from the line of Ned Baramov with Wells Fargo. Please proceed with your questions.

Ned Baramov, Analyst, Wells Fargo: Hi, thanks for taking the questions. Processing volumes ticked up well above capacity in the second quarter. And given AR’s development plan assumes a higher mix of liquids rich wells going into the fourth quarter, would imagine utilization will increase even further from here. Could you maybe talk about the threshold above nameplate that would potentially trigger a decision to add another processing plant at the JV? It seems that running 5% to 10% above nameplate is not really a trigger, but just curious at what utilization levels you would have to make that decision?

Brendan Krueger, CFO, Antero Midstream: Yes. I think there’s still some room there. You can typically run these about 10% over nameplate. So at the 1,600,000.0 related to the JV, you’d be 160,000,000 over nameplate. So you’ve got another 80 or $90,000,000 still above that.

So no imminent needs to increase processing capacity. And I think as was talked about in the AR call, there’s also pads that get layered in over the next couple of years that are leaner as well. So you’d expect that to stay in a similar ballpark as you look forward here.

Ned Baramov, Analyst, Wells Fargo: Understood. And then quick question on cash taxes. The earnings press release indicated an expected reversal of cash taxes paid year to date in the second half of the year. Could you maybe talk about your cash tax expectations longer term? When do you think AM will be a full cash taxpayer?

Brendan Krueger, CFO, Antero Midstream: As we look at at least over the five years, we’re not expect to be a full cash taxpayer. And I think as I mentioned in prepared remarks, do not expect to be a material cash taxpayer through at least 2028 and then we’ll see after that. But that the bill overall was favorable for AM in the sense it reduced at least next five years by about $150,000,000 in terms of deferred taxes. So nice benefit of getting that bill passed.

Ned Baramov, Analyst, Wells Fargo: Understood. Thank you.

Brendan Krueger, CFO, Antero Midstream: You. Our

Conference Operator: next questions come from the line of Wade Sukey with Capital One. Please proceed with your questions.

Brendan Krueger, CFO, Antero Midstream: Good morning, everyone. Thank you for taking my questions. I’m just wondering if you might be able to speak to sort of inorganic opportunities, what you’re seeing in the asset market out there. Any color you could give would be great. Thank you.

Yes, good question. We’ve had some bolt on acquisitions that we’ve completed over the last several years. Those we’ll continue to look at opportunities like that where there’s bolt on opportunities in and around our current asset base. Nothing immediate to talk about there, but we’re always looking at opportunities there. Great.

Thank you so much. Appreciate it.

Paul Rady, Chairman, CEO and President, Antero Resources and Antero Midstream: Thanks, Wade. Thanks, Wade.

Conference Operator: Thank you. This now concludes our question and answer session. I would now like to turn the floor back over to Justin Agnew for any closing comments.

Justin Agnew, Vice President of Finance, Antero Midstream: Thanks, operator, and thanks to everybody for joining today’s conference call. Please feel free to reach out with any follow-up questions.

Conference Operator: Thank you. This does now conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

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