SM Energy Company (SM) Q3 2026 earnings summary

Executive summary

• Q3 operating cash flow was $1.122B, adjusted EBITDAX was $1.341B and adjusted free cash flow was $397MM; $133MM was returned to stockholders.

• Merger integration was substantially complete, with $400MM of annual run-rate synergies actioned against a revised $375MM target; full run-rate capture is expected in 2027.

• Net debt was $6.014B at quarter-end, down from $7.4B at 1Q26; low-1x leverage at mid-cycle prices remains targeted by year-end 2026.

Financial highlights

• GAAP net income was $93MM, or $0.39 per diluted share; adjusted net income was $465MM, or $1.95 per diluted share.

• Q3 capital expenditures were $747MM before changes in accruals; FY26 capital guidance narrowed to ~$2.75B.

• Q3 production revenue was $2.16B; operating income was $236MM, compared with $246MM a year earlier.

• Q3 included a $684MM net derivative loss, compared with a $45MM net derivative gain in Q3 2025; derivative settlement losses were $207MM.

• Q3 adjusted free cash flow included $5MM of one-time merger integration cash costs; 9M26 adjusted free cash flow included $227MM of one-time integration and divestiture cash costs.

Outlook and guidance

• FY26 production guidance is 420–422 MBoe/d, including 220–222 MBbl/d of oil; Q4 guidance is 435–445 MBoe/d, including 229–239 MBbl/d of oil.

• FY26 capital guidance is ~$2.75B; Q4 capital spending is expected to be ~$610MM.

• FY26 cash tax guidance is $100–$120MM, reflecting higher oil prices and substantial use of annual tax attributes.

• Uinta takeaway constraints are expected to persist into Q4, with added capacity expected to resolve them in early 2027; formal 2027 guidance is expected in February.

• Full-year merger synergies and further efficiencies are expected to help offset inflation; 2026 capital excluding one-time costs is a starting point for 2027 planning.