Antero Midstream (AM) Q3 2024 earnings summary

Executive summary

• Q3 2024 net income was $100 million ($0.21 per diluted share), up 5% per share year-over-year, with adjusted EBITDA rising 2% to $256 million and free cash flow after dividends up 32% to $40 million, all used for debt reduction.

• Revenue for Q3 2024 increased 2% year-over-year to $270 million, driven by 10% growth in gathering and processing, while water handling revenues declined 24%.

• Completed integration of Marcellus gathering and compression assets, enhancing infrastructure and capacity, with no significant capital investments anticipated for these assets.

• Torreys Peak Compressor Station construction is progressing, with 160 MMcf/d capacity expected online in Q2 2025.

• Jeffrey Muñoz, with over 30 years of energy industry experience, was appointed as an independent director in October 2024.

Financial highlights

• Q3 2024 Adjusted EBITDA: $256 million (+2% YoY); net income: $100 million; EPS (diluted): $0.21.

• Free cash flow after dividends was $40 million, up 32% year-over-year, all used for debt reduction; cumulative FCF after dividends since Q3 2022 exceeded $350 million.

• Net debt as of September 30, 2024: $3.19 billion; leverage ratio at 3.1x, expected to fall to 3.0x in Q4.

• Gross margin for Q3 2024 was approximately 60%.

• Interest expense decreased 6% year-over-year in Q3 2024 due to lower borrowings and debt redemption.

Outlook and guidance

• 2024 Adjusted EBITDA guidance: $1,035M–$1,075M; net income: $400M–$420M; free cash flow after dividends: $245M–$285M.

• Capital expenditures for 2024 expected to remain within the $150–$170 million guidance range, with a sequential decline in Q4.

• Leverage target of 3.0x or below to be achieved in Q4 2024, a year ahead of initial expectations.

• 2025 CapEx expected in the $150–$200 million range, with low to mid-single-digit gathering growth and stable water volumes depending on deferrals.

• Management expects adequate liquidity to fund working capital, capital expenditures, and dividends for at least the next 12 months.