NGL Energy Partners LP (NGL) Income Statement

The 59.1% year-over-year growth in 2027Q1 appears driven by a recovery from depressed prior-year levels, but the trajectory is far from stable. The sharp contractions in 2026Q1 and 2026Q2 (down 18.1% and 50.1% year-over-year, respectively) suggest that revenue is highly sensitive to commodity price movements and possibly contract timing. Investors should monitor whether the recent rebound is sustainable or merely a cyclical uptick.

The gross margin expansion is notable, especially when compared to peers like CAPL (9.2%) and GEL (21.1%). This may indicate that NGL is benefiting from a more favorable product mix or better contract terms. However, the volatility in gross margin (ranging from 11.2% to 30.9%) suggests that the company's profitability is not stable and could be influenced by one-off items or commodity price swings. The sustainability of this margin level warrants further investigation.

SG&A expenses have been consistently low (ranging from $12.2M to $318.7M, with the latter likely including one-time charges), which suggests that NGL's cost structure is largely variable. This operating leverage means that small changes in revenue can lead to disproportionate changes in operating income. The 2026Q4 quarter saw a massive SG&A spike to $318.7M, likely due to impairments or restructuring, which crushed operating income. This highlights the risk of earnings volatility from non-recurring items.

The reduction in COGS relative to revenue is a positive sign, as it directly boosts gross margin. SG&A has been kept remarkably low, except for the anomalous 2026Q4 quarter, which suggests that NGL is running a lean overhead structure. This cost discipline is crucial for a midstream company facing volatile commodity prices. However, the 2026Q4 SG&A spike to $318.7M (33.6% of revenue) is a red flag that could indicate a lack of control over certain expenses, though it may be a one-time event.

Compared to the prior quarters, 2027Q1 shows a dramatic improvement in profitability metrics, with revenue growing 59.1% year-over-year and net income turning positive. This could indicate that NGL has successfully repositioned its asset base or benefited from favorable market conditions. However, it is unclear whether this is a sustainable trend or a one-quarter anomaly. The company's ability to maintain these margins will be critical for future valuation.