tapebrief
KMI · Q3 2025

KMI · Q4 2025 Earnings

Cautious

Kinder Morgan

Reported January 21, 2026

30-second summary

KMI closed FY2025 above guidance — Adjusted EBITDA $8.39B (vs. $8.3B guide), Adjusted EPS $1.30 (vs. $1.27), net income $2.996B (vs. $2.8B) — and lifted the backlog to $10.0B with ~60% power-related. But the FY2026 budget tells a different story: EBITDA growth slows to 2.5% (from 4% guided last year and 6% delivered), net income is flat, leverage holds at 3.8x with no deleveraging, and the long-term gas demand growth claim was trimmed from 20% to 17% through 2030. The beat is real; the forward setup is materially less bullish than management's tone suggests.

Headline numbers

EPS

Q4 FY2025

$0.39

Revenue

Q4 FY2025

$4.51B

+13.1% YoY

Free cash flow

Q4 FY2025

$0.87B

Operating margin

Q4 FY2025

30.3%

Key financials

Q4 FY2025
MetricQ4 FY2025YoYQ3 FY2025QoQ
Revenue$4.51B+13.1%$4.15B+8.7%
EPS$0.39—$0.29+34.5%
Operating margin30.3%—25.7%+464bps
Free cash flow$0.87B—$0.62B+40.4%

Guidance

KMI beat FY2025 guidance across net income, EPS, and EBITDA; FY2026 outlook shows significant deceleration with EPS growth of only 5%, flat net income, and EBITDA growth of 2.5%, signaling moderating momentum.

Guidance is issued for the full year only, refreshed each quarter. Prior and new below are the same FY updated this quarter.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
Net Income Attributable to KMIFY2025$2.8 billion$2.996 billion+$0.196 billion above guideBeat
Adjusted EPSFY2025$1.27$1.30+$0.03 above guideBeat
Adjusted EBITDAFY2025$8.3 billion$8.391 billion+$0.091 billion above guideBeat
Net Debt-to-Adjusted EBITDAFY20253.8 times3.8 timesin-lineMet

New guidance

MetricPeriodGuideYoY
Adjusted EPSFY2026$1.36+4.6% YoY
Net Income Attributable to KMIFY2026$3.1 billionflat
Adjusted EBITDAFY2026$8.6 billion+2.5% YoY
Dividends per ShareFY2026$1.19+2.0% YoY
Net Debt-to-Adjusted EBITDAFY20263.8 times—

Other KPIs

Q4 FY2025
SegmentQ4 FY2025
Natural Gas Pipeline Transport Volumes48,353 BBtu/d
Natural Gas Gathering Volumes4,513 BBtu/d
LNG Feedstock Delivery Commitments8 Bcf/d, growing to 12 Bcf/d by end of 2028
Refined Products Total Delivery Volumes2,035 MBbl/d
Liquids Terminal Utilization92.9%
Adjusted EBITDA$2,271 million (Q4), $8,391 million (FY2025)
Net Debt-to-Adjusted EBITDA3.8x
Project Backlog$10.0 billion

Management tone

Narrative arc: Q2 FY2025 "best opportunity set in 24 years" → Q3 FY2025 "exceptionally promising" with AI as co-driver → Q4 FY2025 "strong growth, reliable performance" — softer, more measured language paired with a measurably softer forward guide.

The most consequential tone shift is the gap between the rearview celebration and the forward setup. Last quarter, Dave Coulter said KMI was "on track to beat our budget and deliver double digit earnings growth" — and it did, with FY2025 EPS up 13%. This quarter, management volunteered that the FY2025 result "was much stronger than we anticipated when we announced our Q3 results," but the FY2026 guide implies 5% EPS growth, flat net income, and 2.5% EBITDA growth. The arc has gone from "guidance is a floor we will beat" to "guidance is a baseline we expect to deliver" — and the baseline itself stepped down. Management did not flag the deceleration.

The long-term gas demand anchor quietly weakened. Rich Kinder's Q3 framing tied the bull case to "20% demand growth through 2030"; this quarter's framing is "17% through 2030." A 300bp cut to the multi-year demand thesis is the kind of revision that would normally warrant explanation; none was offered. Coupled with the backlog first-year EBITDA multiple compression from 5.7x to 5.6x, the message is that the unit economics of growth — both volume and return — are inching the wrong direction even as the dollar backlog ($10.0B vs. $9.3B) gets larger.

The take-or-pay framing has been pushed harder, and that is doing real narrative work. "Our throughput agreements for delivery of the feed gas are essentially take or pay in nature, which gives us great confidence in the resulting cash flow." This is a quality-of-earnings argument that becomes more important precisely when growth slows: it tells investors to value the FY2026 EBITDA at a higher multiple even if growth decelerates, because the cash flow is more contracted. Whether the market accepts that trade is the open question.

The leverage decision is louder by what was not said. KMI generated $2.89B of free cash flow in FY2025, beat EBITDA by $91M, and FY2026 guidance holds leverage flat at 3.8x. There is no commitment to deleverage. Capex envelope is ~$3B, dividends ~$2.6B, and the implied math is that the remaining flexibility is being deployed into the $10B backlog rather than the balance sheet. That's a defensible choice — Kim Dang's Q3 framing of "$850M of capacity per 0.1x of leverage" is the right framework — but it removes a possible source of multiple expansion.

The credit-rating commentary did real work in setting the bullish frame: S&P upgrade to BBB+, Fitch to BBB+, Moody's positive outlook. This is the strongest financial-position narrative KMI has delivered in years and partially offsets the growth deceleration message. But ratings agencies are reacting to FY2025 cash flow, not FY2026 guidance — the upgrades are a lagging confirmation of the prior environment, not the new one.

Recurring themes management leaned on this quarter:

Natural gas demand acceleration driving record throughput and LNG feed gas deliveriesProject backlog growth and execution ahead of scheduleBalance sheet strengthening with improved leverage ratios and credit upgradesRecord-setting earnings and EBITDA performance exceeding budgetsLong-term visibility from take-or-pay contracts and 10+ BCF day of future opportunitiesGeographic concentration benefit in Texas-Louisiana Gulf Coast export corridors

Risks management surfaced:

Project execution risks on $10 billion+ pipeline opportunities (noted as 'won't be successful on all')Double H crude pipeline conversion project timing impactsRefined products volume headwinds (down 2% in quarter)CO2 segment volume declines (oil 1%, NGL 2%, CO2 2% in quarter)

Q&A highlights

Julian DeMoulin-Smith · Jefferies

Discussion of data center exposure and power demand across the network, specifically referencing Georgia Power's revised IRP projecting 53 GW of demand through early 2030s. Follow-up on SSE-5 timing, scope (compression vs. looping), and subscription requirements for FID.

Management confirmed ~60% of $10B backlog is power-related (not just data center). Highlighted Georgia Power example (potential 10 BCF/day equivalent if 100% gas), with similar stories across Southeast. On SSE-5, noted strong Southeast interest, early stage on final scope, expects compression plus brownfield looping, and that final deal is subscription-driven.

$10 billion backlog with 60% power-related projectsGeorgia Power projecting 53 GW demand through early 2030sPotential ~10 BCF/day equivalent for gas if 100% gas conversionSSE-5 project timing dependent on customer subscription

Jackie Colettis · Goldman Sachs

Western Gateway capital allocation vs natural gas opportunity comparison and return expectations. Leverage management strategy given 3.8x ending leverage and target 3.5-4.5x range.

Management uses risk-adjusted return framework above cost of capital, with higher returns for weaker credit/shorter duration cashflows. Western Gateway contribution will be <50% of project cost due to asset contribution to 50-50 JV with Phillips 66. Targeting ~$3B annual CapEx fully funded from cash flow; backlog conversion generates EBITDA growth that creates leverage capacity without needing to lever to 4.5x.

Western Gateway: <50% of total project cost as cash contribution due to asset contribution50-50 joint venture structure with Phillips 66Targeting $3 billion annual CapExCurrent leverage: 3.8x, target range: 3.5-4.5x

Teresa Chen · Barclays

SFPP EBITDA displacement from Western Gateway contribution and current SFPP EBITDA contribution. Update on Double-H conversion timing and phase one throughput visibility given Bakken basin upstream pullback.

On Western Gateway, too early to quantify EBITDA impact pending open season completion and partnership negotiations. Double-H Phase 1 targeting late Q1/early Q2, well-contracted with visibility from company plants. Phase 1 on earlier end of timeframe; Phase 2 timing dependent on macro monitoring and positive customer discussions. GORs growing in basin.

Double-H Phase 1: late Q1/early Q2 timingPhase 1 well-contracted with customer visibilityPhase 1 production from company plantsGORs growing in Bakken pocket

Michael Bloom · Wells Fargo

Impact of Continental Resources halting Bakken drilling on current business and Double-H expansion opportunities. Non-core asset sale philosophy following Eagle Hawk divestment.

Bakken/Dakota EBITDA represents ~3% of total; Continental impact manageable due to: (1) small EBITDA exposure, (2) stronger volumes at year start, (3) well completions continuing through August, (4) multiple customers in basin. Eagle Hawk sale was opportunistic (8.5x multiple on non-operated minority interest), reinvestment opportunities below cost of capital. Asset sale philosophy is economic-driven at right prices; portfolio composition 67% natural gas, 26% products/pipelines/terminals, 7% CO2.

Bakken/Dakota EBITDA: ~3% of total company EBITDAContinental impact: manageable and not materialEagle Hawk sale at 8.5x multiple on non-operated GMT assetPortfolio: 67% natural gas, 26% products/pipelines/terminals, 7% CO2

Jean Ann Salisbury · Bank of America

Mississippi Crossing acceleration from 4Q28 to 2Q28 and implications for broader permitting process. LNG terminal investment appetite given peer activity.

MSX acceleration driven by: (1) elimination of 871 filing requirement (removed 5-month post-FERC wait), (2) FERC acting within ~12 months vs longer historical timelines. No blanket read-through to other projects; project-specific. On LNG: returns haven't met hurdle rates; company sticking to core pipeline business serving 40% of LNG demand, which is expected to grow significantly. Prefer take-or-pay contracts with investment-grade utilities over direct AI developer contracts.

MSX in-service: moved from 4Q28 to 2Q28 (6 months early)Order 871 eliminated, removing 5-month post-FERC waiting periodFERC approval timeframe: ~12 months (vs. longer historical)KMI serves 40% of LNG demand

Answers to last quarter's watch list

FY2026 budget release and FID slate — Budget delivered: $1.36 EPS, $8.6B EBITDA, $3.1B net income, ~$3B capex. Backlog stepped up to $10.0B (+$700M QoQ) but no specific FID announcements were made — the "significant projects to FID in 2026" commitment remains on the come.
Continue monitoring
Net debt / Adj. EBITDA exit — Hit 3.8x exactly, meeting the FY2025 exit target after sitting at 3.9x at Q3. Achieved. But FY2026 is guided to hold flat at 3.8x — meaning no further deleveraging is planned. Status: Resolved positively for FY2025 / Continue monitoring for FY2026.
Outrigger Energy II contribution quantification — The $91M FY2025 EBITDA beat vs. guide implies Outrigger's contribution was modest at the margin (lower than the "primarily due to" Q3 framing suggested). Management did not isolate Outrigger contribution explicitly.
Not resolved
RNG segment outlook — Not specifically called out in the press release this quarter. CO2 segment was down 7% YoY but RNG was not separately addressed.
Continue monitoring
Hiland Express initial commitment delivery — Not explicitly addressed in the Q&A; Double-H Phase 1 (separate project) confirmed for late Q1 / early Q2 FY2026 with strong contracting.
Continue monitoring
2026 demand quantification — Management revised the long-term gas demand growth claim downward from 20% to 17% through 2030 — a 300bp cut. KMI's specific take-rate of that demand was not quantified, but LNG feedstock delivery commitments were disclosed as growing from 8 Bcf/d to 12 Bcf/d by end of 2028 (50% growth). Status: Resolved negatively — the macro anchor weakened.

What to watch into next quarter

FY2026 EBITDA tracking vs. $8.6B guide: With growth guided at only 2.5%, KMI has minimal room for negative surprise. Watch Q1 FY2026 print: Adjusted EBITDA of ~$2.15B+ would imply a credible path to beating $8.6B (annualizing Q1 / 26% historical seasonality of full-year EBITDA). A Q1 print below that flags the deceleration is real.

Leverage trajectory in 1H FY2026: Guidance is 3.8x flat, but management's own framework says backlog conversion generates organic leverage capacity. If 1H FY2026 leverage holds at 3.8x or drifts higher, it confirms cash is flowing entirely to capex/dividends and the deleveraging story is dead. If it drops to 3.7x mid-year, FY2026 guide is conservative.

Specific FID announcements from the >10 Bcf/d shadow backlog: Management has repeatedly committed to "significant FIDs in 2026" but has not announced any. Watch Q1 or Q2 FY2026 for the first one — name, size, in-service date, contract structure. Without a tangible FID, the shadow backlog narrative weakens each quarter it remains shadow.

Backlog first-year EBITDA multiple: Drifted from 5.7x (Q3 FY2025) to 5.6x (Q4 FY2025). Watch the next print — if it continues to compress, project economics are deteriorating and the backlog dollar growth understates the return profile. A return to 5.7x+ would re-anchor the bull case.

Power share of backlog: Disclosed at ~60% this quarter (up from ~50% in Q3). Watch whether this share continues climbing and what that does to contract duration and counterparty mix — utility take-or-pay contracts (which management explicitly prefers) carry different durability than direct hyperscaler exposure.

Liquids terminal utilization: Slipped to 92.9% from 94.6% Q3 and 94.9% prior-year Q3. Watch whether this is a one-quarter dip or the start of a structural decline that would pressure the Terminals segment +4.6% growth rate.

Sources

  1. Kinder Morgan Q4 FY2025 press release / 8-K exhibit, filed January 21, 2026: https://www.sec.gov/Archives/edgar/data/1506307/000150630726000002/kmi2025q48-kex991.htm
  2. Kinder Morgan Q4 FY2025 earnings call (management prepared remarks and Q&A as referenced in tone and Q&A inputs)
  3. Tapebrief Q3 FY2025 KMI brief (prior-quarter trend and watch list context)
  4. Tapebrief Q2 FY2025 KMI brief (multi-quarter narrative arc)

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.