EQT Corporation (EQT) Income Statement

The revenue trajectory is highly erratic, with a dramatic surge in 2025Q2 (+187% YoY) followed by a sharp contraction in 2026Q2 (-29% YoY). This pattern suggests that EQT's top line is heavily dependent on natural gas prices rather than volume growth. The 2026Q1 peak of $3.4B appears to be an outlier, possibly driven by a temporary price spike or hedging gains, but the subsequent decline indicates that such levels are not sustainable. Investors should monitor whether EQT can stabilize revenue through production growth or if it remains at the mercy of volatile gas markets.

The gross margin swings are extraordinary, with negative margins in 2024Q2 and near-100% margins in 2026Q1. This indicates that EQT's cost structure is relatively fixed, and revenue changes directly impact profitability. The 98.4% margin in 2026Q1 likely reflects a period of exceptionally high gas prices, while the negative margin in 2024Q2 suggests a period of depressed prices. Compared to peers like AR (22.1%) and RRC (34.1%), EQT's average gross margin appears higher but far more volatile, implying a higher beta to gas prices. This volatility may deter risk-averse investors seeking stable returns.

SG&A expenses have stayed in a narrow range of $67M to $108M over the ten quarters, while operating income has fluctuated dramatically. This suggests that EQT's cost structure is largely fixed, so any change in revenue directly impacts operating income. The 2026Q1 operating margin of 60.3% versus the 2024Q3 margin of -23.2% illustrates this leverage. While this can lead to outsized profits during price upswings, it also exposes EQT to significant downside risk during downturns. Investors should assess whether EQT's hedging strategy can mitigate this volatility or if it remains a high-risk, high-reward investment.

The COGS figures are puzzling: in 2026Q1, COGS was only $54.9M on revenue of $3.4B, implying a gross margin of 98.4%, while in 2024Q2, COGS was $1.1B on revenue of $891M, resulting in a negative margin. This suggests that COGS may include significant non-cash items like impairments or write-downs, which are not directly tied to production. Alternatively, EQT may have recognized large gains from derivative contracts in COGS, which would explain the extreme swings. Investors should examine the composition of COGS to understand whether these fluctuations are operational or accounting-related, as this affects the reliability of margin analysis.