EQT Corporation (EQT) Cash Flow Statement

The OCF/NI ratio spiked to 33.84 in 2024Q2 when net income was nearly breakeven, indicating that cash generation is more stable than earnings. However, in 2026Q1, the ratio dropped to 1.97 as net income surged, reflecting the cyclicality of gas prices. The persistent gap between net income and operating cash flow, driven by large D&A and working capital swings, suggests that reported earnings may not fully capture cash generation variability.

The trajectory of FCF is highly erratic, with negative FCF in 2024Q2 and a massive positive swing in 2026Q1. This volatility suggests that EQT's capital program is not fully flexible, as capex remained relatively stable even when cash flows contracted. Investors should monitor whether the company can sustain positive FCF during periods of lower gas prices, as the recent peak may not be repeatable.

CapEx/Revenue ranged from 17.7% to 62.6%, with the highest ratio in 2024Q2 when revenue was depressed. Even in strong quarters like 2026Q1, capex consumed nearly 18% of revenue, suggesting that growth capex is a significant cash outflow. The consistency of capex despite revenue swings implies that a portion is maintenance-related, which could pressure FCF if gas prices decline.

The working capital changes are highly erratic, with large positive and negative swings that appear to correlate with commodity price movements. For example, 2026Q1 saw a $474.3M positive change, while 2025Q4 had a -$424.9M negative change. This suggests that EQT's cash flow is significantly influenced by timing of collections and payments, which may not reflect underlying operational efficiency. Investors should adjust for these swings when assessing sustainable cash generation.

Dividends have been steadily increasing from $69.4M in 2024Q1 to $103.2M in 2026Q2, while buybacks were negligible or even negative (as in 2025Q2). The company also made significant acquisition-related cash outflows, such as -$711.7M in 2024Q3, which may indicate a strategy of using cash for M&A rather than buybacks. This deployment pattern suggests that management is focused on growth through acquisitions, but it also increases balance sheet risk if commodity prices weaken.

The cumulative gap between operating cash flow and net income is substantial, driven by D&A and other non-cash items. This indicates that EQT's earnings quality is high in the sense that cash generation is stronger than reported profits. However, the gap also reflects the capital-intensive nature of the business, where depreciation is a major expense. Investors should recognize that this divergence may narrow if gas prices decline, as cash flow would likely fall faster than earnings.