Kinetik Holdings Reports 30% Revenue Growth to $443.3 Million in Q1 2025

Kinetik Holdings Inc. reported a significant increase in financial performance for the first quarter of 2025, with total revenues reaching $443.3 million, a 30% increase from $341.4 million in the same period of 2024. This growth was primarily driven by higher service and product revenues, attributed to the recent acquisitions of Durango and Barilla Draw. Service revenue rose by 25% to $127.9 million, while product revenue surged by 32% to $312.5 million, reflecting increased sales volumes and higher natural gas prices.

Despite the revenue growth, Kinetik's operating income decreased by 26% to $19.3 million, down from $26.1 million in the prior year. The increase in operating costs, which rose by 34% to $424.0 million, was a significant factor in this decline. Costs of sales, excluding depreciation and amortization, increased by 45% to $223.4 million, driven by higher volumes of NGLs and condensate sold. Additionally, operating expenses rose by 47% to $63.6 million, largely due to the integration of the newly acquired assets.

Kinetik's strategic developments included the completion of the Barilla Draw Acquisition for $178.4 million in January 2025, which added significant natural gas and crude gathering assets to its portfolio. The company also reported a net income of $19.3 million, a 46% decrease from $35.4 million in the previous year, influenced by increased interest expenses and lower equity earnings from unconsolidated affiliates. The company’s total assets increased to $7.03 billion, up from $6.81 billion at the end of 2024, reflecting the impact of recent acquisitions.

Operationally, Kinetik's customer engagement metrics showed positive trends, with gas gathering volumes increasing by 23% and processed gas volumes rising by 17%. The company reported a total of 60.9 million shares of Class A Common Stock outstanding as of March 31, 2025, and a cash balance of $8.8 million, up from $3.6 million at the end of 2024. The company also announced a cash dividend of $0.78 per share, payable on May 2, 2025, indicating a commitment to returning value to shareholders.

Looking ahead, Kinetik Holdings remains focused on integrating its recent acquisitions and optimizing its operations to enhance profitability. The company anticipates that its existing capital resources will be sufficient to fund future capital expenditures and maintain its dividend policy. However, it continues to monitor market conditions, particularly commodity price volatility and interest rate fluctuations, which could impact its financial performance in the coming quarters.