SM Energy Company (SM) Q1 2025 (Q&A) earnings summary

Executive summary

• Q1 2025 production reached 17.8 MMBoe (197.3 MBoe/d), with oil comprising 53%, driven by strong Uinta Basin integration and outperforming expectations.

• Net income for Q1 2025 was $182.3 million ($1.59 per diluted share), up from $131.2 million ($1.13 per share) year-over-year, with adjusted net income at $202.0 million ($1.76 per share).

• Adjusted EBITDAX rose 44% year-over-year to $588.9 million, and net cash from operating activities before working capital was $514.5 million, up 38%.

• Paid $22.9 million in dividends and reduced debt by $31 million in Q1 2025, progressing toward 1x leverage; $500 million remains authorized for repurchases through 2027.

• Recognized as a leader in sustainability among peers, with Rystad ranking among the top three U.S. oil-focused operators.

Financial highlights

• Operating revenues for Q1 2025 were $844.5 million, up from $559.9 million in Q1 2024; oil, gas, and NGL production revenue was $839.6 million, with realized prices per Boe at $47.29 pre-hedge and $47.73 post-hedge.

• Net cash provided by operating activities was $483.0 million, up from $276.0 million in Q1 2024.

• Adjusted free cash flow was $73.8 million, supporting dividends and debt reduction.

• Capital expenditures before accruals were $440.8 million, including $15 million in accelerated Texas equipment spend and $5 million in Midland Basin non-operated projects.

• Net debt at quarter-end was $2.77 billion, with net debt-to-adjusted EBITDAX reduced to 1.3x.

Outlook and guidance

• Full-year 2025 guidance maintained, except LOE increased to ~$5.90/Boe due to higher workover, water disposal, and fuel gas costs in the Uinta Basin.

• Q2 2025 production expected at 197–203 MBoe/d (54–55% oil); capital expenditures forecasted at $375–$385 million.

• FY25 production guidance: 200–215 MBoe/d (51–52% oil); FY25 CapEx: $1.3 billion.

• 34% of expected 2Q–4Q 2025 oil and 38% of natural gas production hedged at average prices of $66.76–$72.51/Bbl and $3.71–$4.26/MMBtu, respectively.

• FY25 G&A includes ~$7 million one-time Uinta Basin integration costs.