Executive Summary
NGL delivered a solid Q3 2025 EBITDA performance despite the ongoing wind-down of non-core assets and a prioritization of balance sheet deleveraging. Consolidated adjusted EBITDA totaled $147.7 million for the quarter, vs. $151.7 million in the year-ago period. Excluding biodiesel, adjusted EBITDA was approximately $160 million, about 5% higher year-over-year, underscoring that core Water Solutions and Crude Oil/Liquids logistics remained cash-flow positive even as the biodiesel wind-down weighed on near-term profitability. Water Solutions continued to show momentum with EBITDA of $132.7 million and a 2.62 million barrels per day (MMBPD) disposal volume in Q3 2025, up from 2.38 MMBPD a year ago and 2.91 MMBPD of total disposed volumes (including deficiency volumes) up 12% YoY. Crude Oil Logistics posted EBITDA of $17.4 million, with Grand Mesa volumes averaging ~61,000 BPD (down from 70,000 BPD prior year), reflecting the ongoing transition but with multiple long-term acreage dedications positioned to lift volumes toward the 100,000 BPD target. Liquids Logistics delivered EBITDA of $8.2 million; however, biodiesel wind-down contributed a negative $12.1 million of adjusted EBITDA in the quarter, highlighting the scale of strategic exit effects. Management reaffirmed a full-year EBITDA target of $620 million, signaling ongoing deleveraging and capital-recycling initiatives, including asset sales of non-core terminals and a broader push to convert the portfolio toward a Water Solutions–Crude Oil Logistics model. The quarter also featured material balance-sheet actions and capital allocation moves (warrant repurchase, advanced asset sales, and a plan to deploy proceeds to the balance sheet), all aimed at reducing working capital needs and positioning the company for debt reduction and potential preferred-share redemption. This analysis connects the quarterly results to management’s longer-term strategy and outlines the investment implications for equity and debt holders in a volatile midstream environment.
Key Performance Indicators
QoQ: 14.52% | YoY:-17.15%
QoQ: -2.87% | YoY:-25.83%
QoQ: 450.41% | YoY:-70.43%
QoQ: 42.86% | YoY:-134.29%
Key Insights
Revenue: 1.549 billion (YoY -17.15%, QoQ +14.52%). Gross profit: 172.827 million (YoY -6.34%, QoQ +1.93%). Operating income: 75.497 million (YoY -25.83%, QoQ -2.87%). Net income: 13.507 million (YoY -70.43%, QoQ +450.41%). EPS: -0.12 per share. EBITDA (reported): 143.829 million; Consolidated adjusted EBITDA (adjusted): 147.7 million (3Q25 vs 3Q24 5% higher excluding biodiesel impact). Water Solutions EBITDA: 132.7 million; Crude Oil Logistics EBITDA: 17.4 million; Liquids Logistics EBITDA: 8.2 ...
Financial Highlights
Revenue: 1.549 billion (YoY -17.15%, QoQ +14.52%). Gross profit: 172.827 million (YoY -6.34%, QoQ +1.93%). Operating income: 75.497 million (YoY -25.83%, QoQ -2.87%). Net income: 13.507 million (YoY -70.43%, QoQ +450.41%). EPS: -0.12 per share. EBITDA (reported): 143.829 million; Consolidated adjusted EBITDA (adjusted): 147.7 million (3Q25 vs 3Q24 5% higher excluding biodiesel impact). Water Solutions EBITDA: 132.7 million; Crude Oil Logistics EBITDA: 17.4 million; Liquids Logistics EBITDA: 8.2 million (biodiesel wind-down -12.1 million in quarter). Free cash flow: 95.372 million; Cash flow from operations: 153.792 million; Capex: -58.42 million; Net debt: 3.198 billion; Cash at period-end: 5.683 million. Balance sheet: Total assets 4.8487 billion; Total liabilities 4.6859 billion; Total equity 0.1626 billion. Full-year EBITDA guidance: 620 million. Liquidity: undrawn ABL balance targeted by March 31, 2025; Non-core asset sales completed or in-flight (e.g., 17 NGL terminals and Green Bay terminal for ~$95 million combined; additional wholesale propane divestiture). Growth runway: Grand Mesa potential to reach 100,000 BPD with new customer contracts. Rationale for de-leveraging: capital recycling and working capital reductions of $60–70 million annually from biodiesel and wholesale propane exits.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.55B |
-17.15% |
14.52% |
| Gross Profit |
172.83M |
-6.34% |
1.93% |
| Operating Income |
75.50M |
-25.83% |
-2.87% |
| Net Income |
13.51M |
-70.43% |
450.41% |
| EPS |
-0.12 |
-134.29% |
42.86% |
Key Financial Ratios
operatingProfitMargin
4.87%
operatingCashFlowPerShare
$1.17
freeCashFlowPerShare
$0.72
Management Commentary
Key management takeaways from the 3Q25 earnings call (Brad Cooper, CFO; Mike Krimbill, CEO):
- Strategic actions underway to simplify the asset base and reduce working capital, including biodiesel wind-down and sale of wholesale propane assets. “During the third quarter, we also wound down the majority of our biodiesel marketing business… the elimination of this business permanently reduces our working capital needs by $30 million to $40 million on average per year. With the additional sale of substantially all of the wholesale propane business, we have eliminated a total of $60 million to $70 million of working capital on average per year.”
- Grand Mesa growth remains a focal point. “Volume increase will be 50%,” and management pointed to long-term acreage dedications with Prairie Operating and a second producer that could lift volumes toward 100,000 BPD, supporting a dollar-for-dollar uplift in EBITDA and free cash flow with minimal maintenance capex.
- LEX II performance aligns with plan. “LEX II project commenced operations in October and is performing as expected.”
- Biodiesel wind-down remains a drag in the near term but is a deliberate path to cash-flow stability; full-year EBITDA guided to $620 million reflects weakness in the liquids segment but overall path to de-leveraging persists. “As for our full year results, we are updating the guide to reflect additional weakness in our liquid segment. For the full year, we are guiding to $620 million of EBITDA.”
- Non-core asset monetization and balance-sheet hygiene: warrants repurchase to reduce future dilution, and a plan to redeploy proceeds to strengthen the balance sheet. “We purchased 23,375,000 of the 25,500,000 outstanding warrants for $6.9 million. This transaction… eliminates the potential future dilution to our LP unitholders.”
- 4Q guidance and leverage trajectory emphasize debt reduction and potential preferred redemptions as liquidity improves. “Undrawn ABL balance at March 31st” and commentary around redeeming Series D preferred shares post deleveraging.
- Management highlighted a shift toward Water Solutions paired with Crude Oil Logistics as the structural backbone of the future; a move designed to smooth EBITDA and Free Cash Flow, reducing seasonality pressures. “we are now on our way to becoming a Water Solutions partnership with a Crude Oil Logistics segment.”
“Consolidated adjusted EBITDA for the quarter came in at $147.7 million in the third quarter versus $151.7 the prior year third quarter. As I just mentioned, we are winding down our biodiesel business, which negatively impacted adjusted EBITDA in the quarter by $12.1 million. So, if you exclude the impact of biodiesel, adjusted EBITDA was approximately $160 million for the quarter, or approximately 5% higher than the prior third quarter.”
— Brad Cooper, CFO
“LEX II project commenced operations in October and is performing as expected.”
— Mike Krimbill, CEO
Forward Guidance
Management maintained full-year EBITDA guidance of $620 million, reflecting ongoing portfolio simplification and the expected contribution from Grand Mesa volume growth as new customers come online. The company signaled continued asset-disposition momentum (NGL terminals and propane assets) and a disciplined use of proceeds to strengthen the balance sheet, with an undrawn ABL target by March 31, 2025. The absence of additional formal Water Solutions EBITDA guidance suggests an evolving structure, but the implied path is to leverage higher, more stable cash flows from Water Solutions and Crude Oil Logistics while reducing volatility and seasonality through the exit of biodiesel and wholesale propane activities. Our assessment: the $620 million EBITDA guide is achievable if Grand Mesa volumes scale toward the 100,000 BPD target, biodiesel winds down as planned, and asset sale proceeds contribute meaningfully to debt reduction. Risks include execution risk on asset sales, timing of customer commitments in Grand Mesa, potential commodity price volatility affecting volumes, and potential delays in deleveraging that could impede preferred redemptions.