Earnings call transcript: CNX Resources beats Q3 2025 earnings expectations

CNX Resources Corp reported a significant earnings beat for Q3 2025, with actual earnings per share (EPS) of $1.21, surpassing the forecasted $0.40, marking a surprise of 202.5%. The company’s revenue also exceeded expectations, reaching $583.8 million compared to the anticipated $438.29 million. Following the announcement, CNX Resources’ stock rose 3.56% in pre-market trading, reflecting investor optimism.

Key Takeaways

• CNX Resources reported a substantial earnings and revenue beat for Q3 2025.
• The stock price increased by 3.56% in pre-market trading.
• The company maintained its free cash flow guidance at $575 million.
• CNX is focusing on cost reduction and operational efficiency in its Utica play development.

Company Performance

CNX Resources demonstrated strong performance in Q3 2025, significantly outperforming earnings expectations. The company’s strategic focus on cost reduction and efficient resource management in the Utica play contributed to these positive results. The company’s commitment to maintaining financial guidance, despite minor adjustments, highlights its robust operational strategy.

Financial Highlights

• Revenue: $583.8 million, exceeding the forecast of $438.29 million.
• Earnings per share: $1.21, compared to the forecast of $0.40.
• Free cash flow guidance maintained at $575 million.

Earnings vs. Forecast

CNX Resources reported an EPS of $1.21, significantly higher than the forecasted $0.40, marking a 202.5% surprise. This strong performance is a continuation of the company’s positive trend, as it has consistently managed to beat expectations in previous quarters. The revenue also exceeded forecasts by 33.2%, showcasing the company’s effective market strategies.

Market Reaction

Following the earnings announcement, CNX Resources’ stock rose by 3.56% in pre-market trading, reaching $32.90. This increase reflects investor confidence in the company’s financial health and strategic direction. The stock’s performance aligns with its recent upward trend, moving closer to its 52-week high of $41.93.

Outlook & Guidance

CNX Resources maintained its free cash flow guidance at $575 million, signaling confidence in its operational strategies. The company is also focusing on reducing drilling costs and optimizing development processes in the Utica play. Looking forward, CNX anticipates continued maintenance mode production in 2026 and awaits the finalization of the 45Z rule, which could contribute $30 million annually.

Executive Commentary

Alan Shepard, President and CFO, expressed optimism about the long-term prospects for AI-generated demand in the Appalachian basin. Navneet Behl, Chief Operating Officer, highlighted the company’s progress in cost reduction, stating, "Our team is actually making progress almost section by section, and that’s why you see the 20% reduction in costs." CEO Nick DeIuliis emphasized the company’s strategic approach to acquisitions, stating, "We look at everything that comes to market. Our threshold is acquiring ourselves."

Risks and Challenges

• Potential delays in pipeline infrastructure development could impact future growth.
• Market volatility and fluctuating gas prices may affect revenue stability.
• Regulatory changes, such as the 45Z rule, could influence financial projections.

Q&A

During the earnings call, analysts inquired about the details of the Utica acquisition and the company’s strategies for improving well performance and efficiency. Questions also addressed CNX’s infrastructure and development plans, as well as the potential impact of AI and in-basin demand on future operations.

Full transcript - CNX Resources Corp (CNX) Q3 2025:

Conference Operator: Good morning and welcome to the CNX Resources Third Quarter 2025 Q&A conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the STAR key followed by zero. After today’s remarks, there will be an opportunity to ask questions. To ask a question, you may press STAR then one on your touchtone phone. To withdraw your question, please press STAR then two. Please note this event is being recorded. I would now like to turn the conference over to Tyler Lewis. Please go ahead.

Tyler Lewis, Investor Relations, CNX Resources: Thanks and good morning everybody. Welcome to CNX Resources Corporation’s third quarter Q&A conference call. Today we will be answering questions related to our third quarter results. This morning we posted to our investor relations website an updated slide presentation and detailed third quarter earnings release data such as quarterly E&P data, financial statements, and non-GAAP reconciliations, which can be found in a document titled 3Q 2025 Earnings Results and Supplemental Information of CNX Resources. Also, we posted to our investor relations website our prepared remarks for the quarter, which we hope everyone had a chance to read before the call, as the call today will be used exclusively for Q&A. With me today for Q&A are Nick DeIuliis, our Chief Executive Officer, Alan Shepard, our President and Chief Financial Officer, and Navneet Behl, our Chief Operating Officer.

Please note that the company’s remarks made during this call, including answers to questions, include forward-looking statements which are subject to various risks and uncertainties. These statements are not guarantees of future performance and our actual results may differ materially as a result of many factors. A discussion of risks and uncertainties related to those factors in CNX Resources Corporation’s business is contained in its filings with the Securities and Exchange Commission and in the release issued today. With that, thank you for joining us this morning and operator, can you please open the call up for Q&A at this time?

Conference Operator: Thank you. We will now begin the question and answer session. To ask a question, you may press Star then one on your touch-tone phone. If you’re using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press Star then two. Our first question comes from Zach Parham from JPMorgan Chase & Co. Please go ahead.

Alan Shepard, President and Chief Financial Officer, CNX Resources: Thanks for taking my questions. First, Nick, congrats and good luck in your retirement. Alan, congrats on your new role. Thanks. First off, just wanted to ask on the buyback. You had a sizable buyback during 3Q. It was the highest since, I think, 4Q 2022. Can you talk about what drove that uptick in buybacks and how you think about the pace of the buyback going forward? Yeah, I think the primary driver was this is a significant free cash flow generator in terms of what we were able to do for the quarter. Our underlying process for evaluating whether or not we’re doing buybacks versus other capital allocation opportunities hasn’t changed. We continue to view the business valuation very attractive relative to its intrinsic value.

Navneet Behl, Chief Operating Officer, CNX Resources: Thanks.

Alan Shepard, President and Chief Financial Officer, CNX Resources: My follow up, just wanted to ask, on the Utica acquisition that you made on the Apex acreage, could you give us a little more color there? Do you now have Utica rights across the position? If not, are you looking to make other acquisitions where you could get more Utica rights on that acreage? If you recall, when we did that acquisition, there was about 30,000 Marcellus acres, kind of the footprint for the whole asset, and it came with about 8,000 Utica rights. What that transaction represents is we really went out there and got the remaining unleased Utica rights that underlie that footprint for Apex, and now we’re able to go in and leverage all that infrastructure, kind of like we envisioned when we did the acquisition. Thanks. Appreciate the color.

Conference Operator: The next question comes from Leo Paul Mariani from ROTH Capital Partners. Please go ahead.

Navneet Behl, Chief Operating Officer, CNX Resources: Hey guys, wanted to see if there’s any type of update on new tech here specifically. Was just curious if there’s any update on the oil field service, auto, SEP business, perhaps the CNG, kind of LNG business, and just status of 45Z as you guys see it.

Alan Shepard, President and Chief Financial Officer, CNX Resources: Yes, let’s start with 45Z. We’re still in the period where we’re waiting for the notice of final rulemaking on 45Z. We expect that before the end of the year. There’ll be a comment period and a finalization of that rule, hopefully in the early first half of 2026. All that’s subject to, you know, the government reopening and things like that. Once we have that, the expectation is that the guidance we provided last quarter on 45Z, that $30 million a year run rate, will be sort of confirmed with that guidance. In terms of oil field services, we have outsourced sort of the operational part of that to our partner on that, and they’re continuing to make progress in rolling out those different technologies, but nothing material in sort of the current quarter for 2026 as of yet.

Navneet Behl, Chief Operating Officer, CNX Resources: Okay. In terms of the plans as we roll into next year, just at a high level, it sounds like the company still wants to stay in maintenance mode. Should we expect production’s not a whole lot different in 2026, and would that be similar for spending as well? How are you guys thinking about that?

Alan Shepard, President and Chief Financial Officer, CNX Resources: Yeah, I mean we’ll give you the full detail on the guidance when we get to January, but generally I would expect to see maintenance mode. Right. We’re going into winter, full storage, and we’ll see what kind of weather we get this winter. We need to see some of these longer term calls on gas develop before you’d be thinking about doing anything other than that.

Navneet Behl, Chief Operating Officer, CNX Resources: Okay, that makes sense. Just on M&A, obviously you guys sold a little asset, bought another asset, seems kind of longer term, neutral on cash. What’s the company’s appetite in general for deals? Do you see other things you’d like to pick up in Appalachia and perhaps there’s other, you know, Utica deals out there that you guys would like to consider?

Alan Shepard, President and Chief Financial Officer, CNX Resources: We look at everything that comes to market. Our threshold is acquiring ourselves. Unless there’s an opportunity that out competes that opportunity, you won’t see us do anything. That’s sort of how we think about it. We’re certainly open to anything.

Navneet Behl, Chief Operating Officer, CNX Resources: Thank you, guys.

Conference Operator: The next question comes from Noah B. Hungness from BofA Securities. Please go ahead.

Alan Shepard, President and Chief Financial Officer, CNX Resources: Morning guys. For my first question here, I was just hoping you could kind of unpack some of the moving pieces on your free cash flow guidance. Even when you take out the additional asset sales, it looks like free cash flow guide is roughly flat to where it was before, even though the adjusted EBITDAX guide moved.

Tyler Lewis, Investor Relations, CNX Resources: Down and CapEx moved up.

Alan Shepard, President and Chief Financial Officer, CNX Resources: I’m just hoping to unpack some of the moving parts there. The way to think about that is our free cash flow guidance includes all working capital adjustments.

Conference Operator: Right.

Alan Shepard, President and Chief Financial Officer, CNX Resources: If you try to take just EBITDA and CapEx, you got to account for sort of fluctuations in AR and AP. I mean, we give you a sort of rough number to target for, and we try not to move that number around a bunch. You’re going to see movements like you see here, where we’re refining guidance throughout the year. We’re still confident we’ll be at kind of the range we got to, $575 million free asset sale number.

Tyler Lewis, Investor Relations, CNX Resources: That makes sense.

Alan Shepard, President and Chief Financial Officer, CNX Resources: On the Utica acquisition here in Pennsylvania, could you maybe talk about are there any requirements for drilling on that acreage next year or is there?

Tyler Lewis, Investor Relations, CNX Resources: Any acreage that may be expiring here.

Alan Shepard, President and Chief Financial Officer, CNX Resources: Term that you’ll want to drill on to hold. We plan to develop the field. Obviously that’s part of the underwriting case for making the investment. The exact timing of that development not going to get into at this point, but you’ll see that folded into our development plan in the years ahead. Great, thank you.

Conference Operator: The next question comes from Michael Stephen Scialla from Stephens Inc. Please, go ahead.

Alan Shepard, President and Chief Financial Officer, CNX Resources: Good morning. Had a couple questions on the Utica. I guess as you think about next year’s plan, is there any thought about trying to delineate the play any more with wells maybe further north or further south, or you plan to stay kind of in that area that you’ve been developing so far? I think the plan for next year is really just focus on sort of the operational side of it. Nav and team have done a great job sort of driving down costs, and we want to give them a couple more opportunities to do that. We’re pretty confident that we have a view on where the fairway is. I don’t think there’s a burning desire to do much exploration either north or south.

Navneet Behl, Chief Operating Officer, CNX Resources: Yeah, I can add to that. Sorry, go ahead.

Alan Shepard, President and Chief Financial Officer, CNX Resources: No, go ahead. Go ahead, Navneet. Yeah.

Navneet Behl, Chief Operating Officer, CNX Resources: I think we’re pretty confident in our geological model. Our plan is to just step up the development of the play.

Conference Operator: Makes sense.

Alan Shepard, President and Chief Financial Officer, CNX Resources: I wanted to see, in terms of well costs, where do you see the opportunities there? Does the Utica require a different rig? If so, you’ve been just running one rig most of the year. Are there further efficiencies that could be had by keeping a rig running continuously in that play? Yeah. If you think about it, I’ll let Nav get into the details on rigs and things like that, but just at a real high level, the efficiencies are all on the drilling side. The completions is sort of pretty well known at this point. What they’re focused on is getting drilling days down. Maybe Nav can talk about that a little bit.

Navneet Behl, Chief Operating Officer, CNX Resources: Yeah. The rigs that we have right now are fully capable of drilling the deep Eureka. We don’t have any issues with that. Over the last 12 months or so, we’ve made really huge strides on the drilling side. We’ve been able to increase the efficiency of drilling the whole well. I’ve cut down the days on the pad pretty much. Basically, on the drilling side, our drilling operations are pretty steady. They’re very repeatable, and best of all, we are improving and making up big efficiency gains to get the well down faster and reduce our cost.

Alan Shepard, President and Chief Financial Officer, CNX Resources: In terms of guidance on the cost per foot, we’re still at that sort of $1,750 range for right now. Yeah.

Navneet Behl, Chief Operating Officer, CNX Resources: Just to kind of add to that, like last year our drilling cost on Utica were like about $2,200 a foot. We are down almost 20% to $1,750 per foot.

Alan Shepard, President and Chief Financial Officer, CNX Resources: Sounds good.

Navneet Behl, Chief Operating Officer, CNX Resources: Thank you, guys.

Conference Operator: The next question comes from Jacob Phillip Roberts from Tudor, Pickering, Holt & Co. Securities. Please go ahead.

Morning.

Alan Shepard, President and Chief Financial Officer, CNX Resources: Wanted to start on the well outperformance that we’ve seen over the past several quarters. I’m curious if you could provide some color on if this is a function of better than expected well declines on older vintages.

Is this better new well performance?

How durable do you think these results are and how that translates to your longer term capital efficiency plans? Yeah, I think for this year you’re seeing two things, right? There’s some outperformance on the Apex acreage we acquired. In particular, it’s kind of the big pad that we brought in right when we acquired it. Then you’re seeing outperformance on some of the new pods that got converted this year, you know, in terms of long term performance and capital efficiency ratios and things like that. That, you know, remains to be seen. We’re, you know, our focus is not on that, right. You know, we’re still in the sort of flat production mode and focused on generating as much free cash flow as possible. Great, thank you.

Maybe if I could just ask your opinion on current in-basin demand and power generation and all that, you know, topic du jour and your thoughts there and ability to participate perhaps? Yeah, we’re still long term extremely bullish on the prospect for AI-generated new demand coming to the basin. Obviously we sit on an enormous resource base here that can be developed. Still in the early innings. Still a lot of talk with folks about developing some of these projects, but can’t say exactly when it’s going to occur. It definitely, all the math suggests that Appalachia and all the gas up here needs to be part of that mix moving forward.

Navneet Behl, Chief Operating Officer, CNX Resources: Jacob, just to add to what Alan said, the other issue underneath all of this that sometimes gets lost with the excitement of AI demand and in-basin demand is the increasingly obvious need for additional pipeline infrastructure to get these low-cost BTUs and molecules from this basin, not just within the basin, but to wherever else the demand centers may be. Until that happens, AI sort of demand gets fulfilled in-basin from our perspective. If that infrastructure gets built, other regions across the nation can start to participate more wholesomely in this AI revolution.

Alan Shepard, President and Chief Financial Officer, CNX Resources: Thank you, guys. Appreciate the time.

Conference Operator: The next question comes from David Adam Deckelbaum from TD Cowen. Please go ahead.

I just wanted to echo the sentiments. Congratulations to Nick and Alan. I just also wanted to ask on the activity for the fourth quarter. You have a frac crew coming back to work. Still wanted to get some color on the timing of the tills. It seemed like the guidance had been more of a December timeframe. I think last quarter when we checked in the macro perhaps seemed a little bit more precarious and perhaps now things are tightening up a little bit. How do you guys think about that in terms of turning on new volumes into the winter season here?

Alan Shepard, President and Chief Financial Officer, CNX Resources: Yes, we started the frac crews. I think we mentioned in the prepared remarks kind of that October timeframe. The expectation on those tills would be sometime in December, a little bit later in the quarter. In terms of the macro for 2026, things have kind of settled into a trading range. We’re still not to the part of winter yet where you can have a good read on where we’re going to exit winter. We’ll see. I think activity is going to look sort of like it did last year, where you have a concentration of completion activities in Q4 and Q1, and then you set up yourself to be able to be flexible in 2026 to respond to whatever sort of pricing environment develops. Appreciate that.

My follow up is just obviously you guys crossed a couple deals this quarter. Seems like the basin in general that there’s been a lot more land spend through all your peers right now, I guess.

Is there.

Can you just generally speak to that environment right now? Are we just seeing a lot more horse trading or folks kind of willing to transact on single zone areas? It seems like we should be underwriting perhaps a larger land spend in the 2026 time frame and perhaps beyond as maybe these opportunities are increasing.

Yeah. Maybe I’m not going to speak to the activities of, you know, some of the peers that happened down in West Virginia and Ohio, but definitely in Central PA, where we’re focused on sort of the deep Utica development. In the long term, you see more interest as folks start to understand the sort of potential of the reservoir. Some of the transactions we’ve seen up there, you kind of have a moment in time here where there’s an opportunity to pick up some of the acreage that still may be open or, you know, held by folks that are looking to deal it to some of the more consolidated players in the area.

Conference Operator: Appreciate that.

Just to confirm real quick, the acres that you sold out of the Marcellus rights, are those areas where you’ve already developed Utica, or are those areas that you intend to develop Utica in the future?

Alan Shepard, President and Chief Financial Officer, CNX Resources: Those would be the Ohio areas where we’ve already developed the Utica. Appreciate it, guys.

Conference Operator: Again, if you have a question, please press star then one. Our next question comes from Betty Jiang from Barclays Bank PLC. Please go ahead.

Good morning. Thank you for taking my question. I want to ask about the pretty small, but in the guidance, the increase in the non-DNC capital, what’s driving that? As I’m hearing just more focus on the Utica development going forward, is there a need for facility infrastructure spend going forward for you to optimize development there?

Alan Shepard, President and Chief Financial Officer, CNX Resources: Yes, maybe. For your first question, in terms of just the $7 million bump to the midpoint there, that’s really just timing. I mean we build all of our midstream and water infrastructure, so sometimes you’re just talking about a project sliding around three months or so, something like that. It’s really just noise on that front. Longer term, the way we think about infrastructure development as we move to central PA, because our decline rates are so low, there will need to be additional infrastructure, but it’s not going to be anywhere near the scale that you saw last decade. The sort of midstream build out cycles that occurred. We’re talking about adding a handful of pads a year, so you’re able to really just sort of meter out that spend at a different pace from what we’ve seen historically.

Navneet Behl, Chief Operating Officer, CNX Resources: Yeah, I can add to that comment too. As I told earlier, we’re pretty confident of the model. We will just be moving from pad which are contiguous to each other, and our infrastructure spend will just be a little bit of additional infrastructure rather than in a delineation model where you have to delete the wells and build a whole fairway model. We are getting into a more efficient infrastructure spend, which won’t change from year to year. It’ll be pretty steady, just like we have our drilling program.

Got it. So non D&C CapEx as % of total probably going to be fairly steady.

Alan Shepard, President and Chief Financial Officer, CNX Resources: I mean it won’t be anything like last decade. There’ll be periods where you maybe need to add a station or something like that, but it’s nothing on the scale of last year. As Nick pointed out, the goal is to be as efficient as possible at that spend, given that we’re able to kind of do return trips and have a focused development plan that just kind of steps out as opposed to needing to go to the extreme end of a field and build infrastructure to that part of it.

Great. My follow-up is on the back to the deep Utica development. I know there’s been many questions asked around that, but what I’m hearing is the focus is really trying to get the per foot cost down. As we have seen in the past with play development, it’s just about steady state development and park a rig there and optimize and reduce drill time. With one rig running, it just seems that’s not moving between the Southwest and Central. That’s just not the most efficient way. Is there a possibility for us to start seeing one dedicated rig being allocated to the Utica to maximize that efficiency?

Yeah, I think you nailed it. This industry is incredible. The engineers in the industry are incredible when it comes to optimizing development. Once you give enough reps at any particular project, we do try to align our development plan so that we go back to back on those types of pads. We will have southwest PA wells develop next year as well. It all gets taken into consideration. Your broader point is the right one that we’re at $1,750 per foot right now is what we’ve got into. My expectation would be that we’re able to drive that down as the engineers do what they do.

Navneet Behl, Chief Operating Officer, CNX Resources: To add to that, most of our pad development, we have three to four wells that we are testing right now, especially with the spacing of 1,300 and 1,500 ft. Us being on a three and a four well pad leads to a lot more efficiency than it would otherwise appear in other places. Our team is actually making progress almost section by section, and that’s why you see the 20% reduction in costs. That will continue to be there. We will focus on increasing drilling efficiency and reducing the cost no matter what. That’s the advantage that we have in CNX with the acreage position we have right now.

Great. Helpful color. Thank you.

Conference Operator: There are no more questions in the queue. I would like to turn the conference back over to Tyler Lewis for any closing remarks.

Tyler Lewis, Investor Relations, CNX Resources: Great, thank you. Thank you again for joining us this morning. Please feel free to reach out if anyone has any additional questions. Otherwise, we’ll look forward to speaking with everyone again next quarter. Thank you.

Conference Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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