Executive Summary
NGL Energy Partners LP reported Q2 2025 revenue of $1.353 billion and GAAP net income of $2.45 million, with Adjusted EBITDA of $147.3 million and GAAP EBITDA of $143.1 million. The quarter featured meaningful performance by the Water Solutions segment, which posted Adjusted EBITDA of $182.9 million and saw water disposal volumes rise roughly 9% QoQ to 2.68 million barrels per day, supported by margin discipline (costs per barrel fell to $0.22 from $0.24). Crude Oil Logistics and Liquids Logistics contributed more modestly, with Adjusted EBITDA of $17.3 million and $9.4 million, respectively, as the company navigates soft interim demand in parts of the liquids network and a warier propane environment.
Key Performance Indicators
QoQ: -2.49% | YoY:-26.53%
QoQ: -74.66% | YoY:-91.24%
QoQ: -50.00% | YoY:-200.00%
Key Insights
Financial delta drivers include: Revenue $1,352.68 million in Q2 2025, down 2.49% QoQ and down 26.53% YoY to the prior-year quarter; Gross profit $169.55 million (gross margin 12.53%); Operating income $77.73 million (operating margin 5.75%); EBITDA $143.11 million (EBITDA margin 10.58%); Adjusted EBITDA $147.30 million. Net income $2.45 million (net margin 0.18%); EPS -$0.21. Free cash flow negative $82.90 million; cash flow from operations $6.72 million; capital expenditures $89.62 million; to...
Financial Highlights
Financial delta drivers include: Revenue $1,352.68 million in Q2 2025, down 2.49% QoQ and down 26.53% YoY to the prior-year quarter; Gross profit $169.55 million (gross margin 12.53%); Operating income $77.73 million (operating margin 5.75%); EBITDA $143.11 million (EBITDA margin 10.58%); Adjusted EBITDA $147.30 million. Net income $2.45 million (net margin 0.18%); EPS -$0.21. Free cash flow negative $82.90 million; cash flow from operations $6.72 million; capital expenditures $89.62 million; total debt $3.231 billion; net debt $3.227 billion. Balance sheet highlights: total assets $4.89 billion; total liabilities $4.153 billion; total stockholders’ equity $185.34 million; current ratio 1.21; quick ratio 0.98; cash ratio 0.0054. Leverage remains elevated with debt-to-capitalization near 0.946 and long-term debt-to-capitalization near 0.944. Management commentary indicates a strategic focus on Water Solutions as the growth engine, ongoing LEX II expansion (initial 200,000 bpd, expandable to 500,000 bpd) placed in service, and a program to reduce dilution via warrant repurchase.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.35B |
-26.53% |
-2.49% |
| Gross Profit |
169.55M |
-8.48% |
0.84% |
| Operating Income |
77.73M |
-9.65% |
3.71% |
| Net Income |
2.45M |
-91.24% |
-74.66% |
| EPS |
-0.21 |
-200.00% |
-50.00% |
Key Financial Ratios
operatingProfitMargin
5.75%
operatingCashFlowPerShare
$0.05
freeCashFlowPerShare
$-0.63
dividendPayoutRatio
1121%
Management Commentary
Key takeaways from the earnings call include: (1) Management highlighted the Water Solutions segment as the growth engine, with EBITDA of $182.9 million and water disposal volumes of 2.68 million barrels per day, up 9% QoQ; (2) LEX II expansion placed in service in October, expanding capacity to 200k bpd with potential upsize to 500k bpd, fully underwritten by a minimum volume commitment from an investment-grade producer; (3) Warrant repurchase: agreements to purchase 92% of Class D warrants (23.375 million warrants, ~18% of common units) reducing potential dilution over the next five years; (4) Short-term demand dynamics: warmer weather pressured propane demand butbutane blending is outperforming expectations, with wholesale propane activity seasonally dependent; (5) Guidance: full-year 2025 EBITDA guidance narrowed modestly to $640–$650 million; Water EBITDA guidance reaffirmed at $550–$560 million; (6) Strategic priorities include asset sales in Liquids Logistics, debt reduction, and a common unit buyback program to minimize dilution and strengthen the balance sheet.
"Consolidated Adjusted EBITDA came at $147.3 million for the second quarter. The consolidated Adjusted EBITDA was primarily driven by our Water Solutions and Crude Logistics segments."
— Brad Cooper, CFO
"The LEX II expansion project ... was placed in service in October on time. This project is fully underwritten by a minimum volume commitment with an investment grade producer."
— Michael Krimbill, CEO
Forward Guidance
Management tightened EBITDA guidance to $640–$650 million for FY2025, a 2%–4% reduction reflecting a softer second half driven by weather and commodity price dynamics. Water Solutions EBITDA is guided at $550–$560 million, underscoring its role as the company’s growth engine. The LEX II expansion remains a cornerstone, with initial capacity of 200,000 bpd and expandable to 500,000 bpd; the project is fully underwritten by a minimum-volume commitment, suggesting a cash-flow-rich growth trajectory if contracted volumes materialize. The company also signaled ongoing asset sales in Liquids Logistics and a prioritization of leverage reduction and equity repurchases to minimize dilution. Investors should monitor: (i) utilization of LEX II and realized volume ramp; (ii) drilling activity and pipeline capacity in the Delaware Basin and adjacent basins (DJ, Eagle Ford) affecting water volumes; (iii) propane/butane demand dynamics and seasonality; (iv) any further warrant or equity-related transactions and their impact on unit economics; (v) capex progression and working capital needs given high current liabilities and moderate liquidity.