Revenue surged 102.7% YoY to $811.9M in 2026Q2, but gross margin volatility (swinging from -2.4% to 100.0%) and non-cash gains inflate EPS to $3.31, obscuring underlying cost structure.
Diversified Energy Company PLC (DEC) annual income statement — 13-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 |
|---|
| Sales/Revenue | 2.87B | 1.61B | 794.84M | 868.26M | 1.92B | 977.04M | 408.69M | 462.26M | 289.77M | 41.78M | 18.28M | 6.3M | 7.36M | 5.17M |
| Revenue Growth % | 36.56% | 102.74% | -8.46% | -54.76% | 96.44% | 139.07% | -11.59% | 59.53% | 593.61% | 128.55% | 189.96% | -14.32% | 42.35% | - |
| Cost of Goods Sold | 1.71B | 1.2B | 685.39M | 665.11M | 668.15M | 458.86M | 321.25M | 181.79M | 51.17M | 27.92M | 16.81M | 7.64M | 5.72M | 5.06M |
| COGS % of Revenue | - | 74.46% | 86.23% | 76.6% | 34.81% | 46.96% | 78.61% | 39.33% | 17.66% | 66.83% | 91.94% | 121.18% | 77.72% | 97.87% |
| Gross Profit | 1.16B | 411.59M | 109.45M | 203.16M | 1.25B | 515.35M | 87.44M | 280.46M | 238.59M | 13.86M | 1.47M | -1.33M | 1.64M | 110K |
| Gross Margin % | 40.44% | 25.54% | 13.77% | 23.4% | 65.19% | 52.75% | 21.39% | 60.67% | 82.34% | 33.17% | 8.06% | -21.18% | 22.28% | 2.13% |
| Gross Profit Growth % | - | 276.03% | -46.12% | -83.76% | 142.79% | 489.37% | -68.82% | 17.55% | 1621.96% | 840.67% | 210.34% | -181.45% | 1390% | - |
| Operating Expenses | 490.05M | 167.63M | 152.48M | -957.9M | 1.92B | 1.02B | 64.68M | 170.94M | 126.59M | 7.33M | 2.5M | 1.09M | 1.14M | 557K |
| OpEx % of Revenue | - | 10.4% | 19.18% | -110.32% | 100.17% | 103.96% | 15.83% | 36.98% | 43.69% | 17.56% | 13.67% | 17.27% | 15.51% | 10.78% |
| Selling, General & Admin | 189.39M | 167.63M | 22.38M | 17.79M | 85.22M | 24.77M | 17.51M | 20.47M | 12.15M | 2.14M | 896K | 472K | 697K | 308K |
| SG&A % of Revenue | - | 10.4% | 2.81% | 2.05% | 4.44% | 2.54% | 4.28% | 4.43% | 4.19% | 5.12% | 4.9% | 7.49% | 9.47% | 5.96% |
| Research & Development | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| R&D % of Revenue | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Operating Expenses | 2M | 0 | 130.11M | -975.69M | 1.84B | 990.99M | 47.17M | 150.47M | 114.45M | 5.83M | 1.6M | 617K | 444K | 249K |
| Operating Income | 670.34M | 243.96M | -43.03M | 1.16B | -671.4M | -467.06M | -77.57M | 107.05M | 295M | 16.19M | 22.45M | 4.63M | 2.67M | -562K |
| Operating Margin % | 23.36% | 15.14% | -5.41% | 133.72% | -34.98% | -47.8% | -18.98% | 23.16% | 101.8% | 38.76% | 122.82% | 73.46% | 36.23% | -10.87% |
| Operating Income Growth % | - | 667.01% | -103.71% | 272.93% | -43.75% | -502.13% | -172.46% | -63.71% | 1721.64% | -27.87% | 384.78% | 73.71% | 574.38% | - |
| EBITDA | 1.42B | 656.47M | 213.46M | 1.39B | -449.15M | -299.42M | 39.72M | 205.19M | 336.99M | 23.21M | 26.49M | 8.02M | 5.2M | 1.75M |
| EBITDA Margin % | 49.4% | 40.74% | 26.86% | 159.58% | -23.4% | -30.65% | 9.72% | 44.39% | 116.29% | 55.55% | 144.91% | 127.2% | 70.63% | 33.78% |
| EBITDA Growth % | -34.72% | 207.54% | -84.59% | 408.5% | -50.01% | -853.79% | -80.64% | -39.11% | 1352.08% | -12.39% | 230.33% | 54.3% | 197.65% | - |
| D&A (Non-Cash Add-back) | 747.11M | 412.51M | 256.48M | 224.55M | 222.26M | 167.64M | 117.29M | 98.14M | 41.99M | 7.01M | 4.04M | 3.39M | 2.53M | 2.31M |
| EBIT | 881.46M | 511.32M | -86.31M | 1.13B | -698.76M | -500.34M | -94.02M | 168.03M | 277.23M | 33.48M | 34.93M | 2.76M | 2.5M | -561K |
| Net Interest Income | -616.78M | -209.97M | -137.64M | -134.17M | -102.18M | -51.09M | -43.86M | -36.54M | -17.66M | -5.22M | -3.29M | -3.18M | -2.73M | -2.27M |
| Interest Income | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1K |
| Interest Expense | 616.78M | 209.97M | 137.64M | 134.17M | 102.18M | 51.09M | 43.86M | 36.54M | 17.66M | 5.22M | 3.29M | 3.18M | 2.73M | 2.27M |
| Other Income/Expense | -123.39M | 57.39M | -180.93M | -160.71M | -128.1M | -83.84M | -59.17M | 0 | -33.2M | -11.46M | 10.06M | -5.04M | -2.9M | -2.27M |
| Pretax Income | 546.95M | 301.35M | -223.95M | 1B | -799.5M | -550.9M | -136.74M | 131.49M | 261.8M | 4.74M | 32.51M | -413K | -238K | -2.83M |
| Pretax Margin % | 19.06% | 18.7% | -28.18% | 115.21% | -41.65% | -56.38% | -33.46% | 28.45% | 90.35% | 11.34% | 177.86% | -6.55% | -3.23% | -54.69% |
| Income Tax | 61.39M | -40.55M | -136.95M | 240.64M | -178.9M | -225.69M | -113.27M | 32.09M | 60.68M | -4.14M | 14.83M | 0 | 0 | 0 |
| Effective Tax Rate % | 11.22% | -13.46% | 61.15% | 24.06% | 22.38% | 40.97% | 82.83% | 24.41% | 23.18% | -87.35% | 45.61% | 0% | 0% | 0% |
| Net Income | 485.51M | 341.9M | -88.27M | 758.02M | -625.41M | -325.21M | -23.47M | 99.4M | 201.12M | 8.88M | 17.68M | -413K | -238K | -2.83M |
| Net Margin % | 16.92% | 21.22% | -11.11% | 87.3% | -32.58% | -33.28% | -5.74% | 21.5% | 69.41% | 21.24% | 96.73% | -6.55% | -3.23% | -54.69% |
| Net Income Growth % | -55.26% | 487.32% | -111.65% | 221.2% | -92.31% | -1285.39% | -123.62% | -50.58% | 2166.13% | -49.81% | 4381.36% | -73.53% | 91.58% | - |
| Net Income (Continuing) | 489.92M | 341.9M | -87M | 759.7M | -620.6M | -325.21M | -23.47M | 99.4M | 201.12M | 27.45M | 17.68M | -413K | -238K | -2.83M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 10.88M | 10.93M | 11.88M | 12.6M | 14.96M | 16.54M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 6.50 | 4.58 | -1.86 | 15.95 | -14.82 | -8.20 | -0.69 | 2.42 | 10.37 | 1.48 | 8.42 | -0.21 | -0.01 | -0.07 |
| EPS Growth % | -71.61% | 346.24% | -111.66% | 207.62% | -80.73% | -1088.41% | -128.51% | -76.66% | 600.68% | -82.42% | 4109.52% | - | 91.63% | - |
| EPS (Basic) | - | 4.67 | -1.87 | 16.07 | -14.82 | -8.20 | -0.69 | 2.43 | 10.41 | 1.48 | 8.42 | -0.21 | -0.01 | -0.07 |
| Diluted Shares Outstanding | 74.71M | 74.48M | 47.56M | 47.51M | 42.2M | 39.68M | 34.26M | 32.24M | 19.4M | 6.01M | 2.1M | 2M | 40.1M | 40.1M |
| Basic Shares Outstanding | 72.3M | 72.97M | 47.2M | 47.16M | 42.2M | 39.68M | 34.26M | 32.08M | 19.33M | 6.01M | 2.1M | 2M | 40M | 40.1M |
| Dividend Payout Ratio | - | 24.86% | - | 22.17% | - | - | - | 82.65% | 15.57% | 65.08% | 5.41% | - | - | - |
Quick answers to the most common questions about buying DEC stock.
For fiscal year 2025, Diversified Energy Company PLC (DEC) reported total revenue of $1.61B. This represents a 31075.4% increase compared to $5.2M in 2013.
Diversified Energy Company PLC (DEC) is profitable, generating $341.9M in net income for the fiscal year ending 2025 with a net profit margin of 21.2%.
Diversified Energy Company PLC (DEC) reported an operating income of $244.0M, resulting in an operating profit margin of 15.1%. This margin reflects the operational efficiency of the business before interest and taxes.
Diversified Energy Company PLC (DEC) generated $411.6M in gross profit for the year, representing a gross profit margin of 25.5%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Elevated leverage and regulatory costs
Metrics are mathematically derived from official filings.
Inorganic Surge Masks Organic Decline
Revenue jumped 102.7% year-over-year to $504.0M in the latest quarter, according to reported figures, but this appears driven by acquisitions rather than organic growth, given the underlying base decline. Investors should monitor integration and production sustainability.
The 102.7% revenue growth in the most recent quarter, as reported in financial statements, likely reflects the consolidation of acquired mature assets, consistent with DEC's harvest model. However, the sequential decline from $873.1M in 2025Q4 to $811.9M in 2026Q2 suggests that organic production declines are not fully offset by acquisitions. The durability of this growth hinges on continued M&A at attractive multiples, which may become harder as asset prices rise.
Gross Margin Volatility Signals Hedging Impact
Gross margin swung from -2.4% in 2025Q4 to 100.0% in 2026Q2, per SEC filings, reflecting non-cash hedging gains and bargain purchase accounting. This volatility obscures the underlying cost structure, which appears higher than peers due to mature asset operations.
The reported gross margin of 100% in 2026Q2 is clearly distorted by non-cash items, as COGS is zero, likely due to hedging settlements or acquisition accounting. In contrast, 2025Q4 showed a negative gross margin, indicating that cash operating costs exceeded revenue before hedging gains. This suggests that DEC's true gross margin is structurally lower than the 25% average, and investors should focus on cash operating costs per Mcfe to assess profitability.
Operating Leverage Masked by Non-Operating Gains
Operating income of $471.8M in 2026Q2, as reported, appears inflated by non-cash gains, given SG&A of only $43.5M. The underlying operating leverage is weak, with high fixed costs and low incremental margins on mature assets.
The 58.1% operating margin in 2026Q2 is not sustainable, as it likely includes gains from derivative settlements or bargain purchase. Excluding these, operating income would be much lower, as seen in 2025Q2 when operating margin was 18.0% on $738.3M revenue. This indicates that DEC's cost structure is heavily fixed, and operating leverage is limited because revenue growth requires acquisitions, not organic volume expansion.
Earnings Distorted by Non-Cash Gains
Net income of $246.9M in 2026Q2, per financial statements, includes significant non-cash items such as bargain purchase gains and hedging mark-to-market, inflating EPS to $3.31. Adjusted earnings likely trail reported figures, warranting scrutiny.
The wide swings in net income, from -$937.4M in 2022Q2 to $630.0M in 2023Q2, highlight the impact of non-operating items. The 2026Q2 net margin of 30.4% is inconsistent with the company's operational reality, as gross margins are volatile and SG&A is modest. Investors should adjust for these non-cash items to assess true earning power, which appears lower than reported.
SG&A Efficiency Improves, But LOE Remains Key
SG&A as a percentage of revenue fell to 5.4% in 2026Q2 from 13.3% in 2025Q4, based on reported data, indicating cost discipline. However, lease operating expenses, embedded in COGS, are the primary cost driver and remain elevated due to mature wells.
The reduction in SG&A from $116.2M to $43.5M quarter-over-quarter suggests management is controlling overhead, but this may be due to timing or acquisition accounting. The real cost challenge is LOE, which is not separately disclosed but is likely high per unit given the low production volumes of mature wells. Any increase in regulatory compliance costs, such as methane monitoring, could pressure margins further.
2022Q2 Loss Marks Turning Point
The $937.4M net loss in 2022Q2, as reported, appears to be a major inflection, driven by non-cash impairments or hedging losses, after which the company shifted to a more conservative financial posture. This period likely shaped its current acquisition and hedging strategy.
The 2022Q2 loss, with an operating margin of -125.4%, likely reflected a significant write-down or derivative loss, signaling the end of an aggressive expansion phase. Subsequent quarters show improved but volatile profitability, with 2023Q2 net income of $630.0M benefiting from non-cash gains. This inflection suggests that DEC's earnings are highly sensitive to commodity prices and accounting adjustments, and the company has since prioritized hedging and debt reduction.
Reported Profits May Overstate Cash Generation
Despite strong reported net income, DEC's cash flow may be weaker than indicated, as non-cash gains and bargain purchase accounting inflate earnings. Short-sellers could argue that the company's high dividend is funded by debt, not sustainable cash flow.
The discrepancy between gross and net margins, along with the use of ABS financing, suggests that reported earnings are not a reliable proxy for cash generation. The elevated debt-to-equity ratio of 3.04, as noted in recent context, indicates financial risk, and the company's ability to service debt depends on commodity prices and hedging. If natural gas prices decline or regulatory costs rise, the dividend may be at risk, challenging the investment thesis.