0002007855-26-000040
SEC filingRevenue growth driven by higher LNG volumes at Plaquemines, partially offset by lower prices; operating income up 7%.
For Q1 2026, revenue rose 59% to $4.6 billion from $2.9 billion in Q1 2025, driven primarily by a $3.1 billion increase from higher LNG sales volumes at the Plaquemines Project due to continued production ramp-up. This was partially offset by a $1.4 billion decline from lower net LNG sales prices, reflecting lower commissioning sales prices at Plaquemines and the transition from commissioning sales to post-COD SPAs at the Calcasieu Project. Cost of sales increased 163% to $2.8 billion, largely from higher volumes and feed gas costs. Income from operations grew 7% to $1.15 billion, as volume gains were tempered by margin compression. Net income attributable to common stockholders increased 23% to $488 million. Operating margin contracted to 25.0% from 37.3% in the prior year, driven by lower prices and higher feed gas costs.
The Calcasieu Project reported operating income of $182 million, down 80% from $902 million, as revenue decreased $553 million due to lower post-COD SPA prices versus prior commissioning sales, partially offset by higher volumes. The Plaquemines Project posted operating income of $1.04 billion, up 151% from $415 million, on a $2.2 billion revenue increase from higher volumes, partially offset by lower prices. The CP2 Project reduced its operating loss to $50 million from $163 million, as development costs were capitalized after the project was declared probable. Sales and shipping generated $99 million in operating income, up 209%, on higher resale volumes through VG Commodities. Corporate and eliminations posted a loss of $121 million, widening 14% due to higher inter-segment eliminations.
Management highlighted several trends affecting 2026 outlook. Geopolitical events, including the Iran conflict and Strait of Hormuz closure, have boosted LNG demand and pricing for the Company's sales. Tariffs are estimated to increase CP2 Project capital costs by approximately $600 million, though the impact of recent legal rulings remains uncertain. The Calcasieu Project faces arbitration with BP seeking damages of $3.7 billion to over $6.0 billion, with a final award expected after May 2027. A settlement with Edison was reached in March 2026. The Company expects to meet short-term cash needs from operating cash flows and $22.3 billion in available liquidity. Post-COD SPA disputes and market volatility remain key risks. No specific numerical guidance was provided.
Total assets increased to $56.3B from $53.4B, driven by property, plant & equipment net ($49.8B). Cash and cash equivalents dropped $756M to $1.6B, while restricted cash rose $382M to $1.5B, mainly construction reserves. Total debt net stood at $36.6B vs $34.2B, with current portion reduced to $126M from $812M due to refinancing of Calcasieu Pass construction loan. Shareholders' equity grew to $7.2B from $6.7B on retained earnings. The debt-to-equity ratio increased.
Unsatisfied LNG transaction price (backlog) was $336.5B as of March 31, 2026, representing future revenue from long-term sales agreements with a weighted average recognition period of 19.4 years. The Company also disclosed $825M in credit arrangements to secure natural gas transportation and regasification capacity. No explicit purchase commitments for inventory were disclosed.
Dividends: $45M common ($0.02/share) and $68M preferred were declared. Debt activity: net debt increase of $2.4B from $2.7B in new issuances (CP2 Credit Facilities upsize) and $388M repayments. Capital expenditures totaled $3.2B, predominantly for CP2 Project ($2.4B) and Plaquemines ($321M). No share buybacks were reported.
Segment revenue: Calcasieu $1,085M (-33.7% YoY), Plaquemines $3,393M (+186%), Sales & Shipping $818M (+70%). Operating income: Calcasieu $182M, Plaquemines $1,041M, Sales & Shipping $99M, CP2 ($50M) loss. Plaquemines now the largest segment, benefiting from commissioning. No geographic revenue breakdown was provided.
Net income of $625M translated to operating cash flow of $763M, a healthy conversion ratio of 1.22x. However, the $351M decline from prior year's $1,114M is notable. The drop stems from a $589M swing in working capital, particularly accounts payable and accrued liabilities which shifted from a $249M inflow to a $340M outflow. Capex intensity remains high at $3,181M, though slightly reduced YoY. The company relied heavily on debt issuance ($2,720M) to fund investing activities and dividends ($180M). No free cash flow was stated; with capex exceeding CFO, the company is cash flow negative from operations and investing combined. Financing activities provided $1,861M, covering the shortfall. The $317M in financing costs reflects IPO and debt placement expenses. Overall, cash flow quality is moderate due to working capital volatility, but the underlying business generates positive operating cash flow.