EQT sold a record 634 Bcfe (+11.7%) at lower unit costs, but net income fell 73% to $211M because last year included a $720M non-cash hedge gain; debt is down $2.1B this year and 2026 production guidance was raised.
Revenue
$1.8B
-29.2% YoY
Net income
$211M
-73.0% YoY
Diluted EPS
$0.34
-73.8% YoY
Operating margin
21.8%
Overview
EQT is the largest natural gas producer in the Appalachian Basin and also owns the pipelines that carry its gas. It produced more gas in Q2 2026 than ever before, but its reported profit fell 73%. Nearly all of that drop comes from how hedges are accounted for, not from a weaker business. A year ago the value of EQT's hedges rose by $720 million, and GAAP profit counted that non-cash gain. This quarter the hedge gain was only $45 million. EQT's adjusted profit strips out hedge revaluations and one-off items. On that basis profit fell just 11%, even though the benchmark gas price fell 16%.
Underneath, EQT sold more gas at a lower cost per unit, though at lower prices. Sales volume rose 11.7% to 634 billion cubic feet equivalent (Bcfe), above the top of guidance. Operating cost per unit fell to $1.03 per Mcfe (thousand cubic feet equivalent) from $1.08. With cash from a strong first quarter, EQT cut total debt from $7.8 billion at year-end to $5.7 billion.
Key metrics
Metric
Q2 2026
Q2 2025
YoY Change
Total operating revenues
$1,809.9M
$2,557.7M
-29.2%
of which: sales of gas, NGLs and oil
$1,610.0M
$1,700.5M
-5.3%
of which: gain on derivatives
$44.6M
$720.0M
-93.8%
Operating income
$394.0M
$1,134.0M
Read 0 community reports on EQT Corporation, or write your own.Write a report
Free cash flow attributable to EQT (non-GAAP, per earnings release)
$330M
$240M
+37.6%
Operating margin is operating income divided by total operating revenues: the share of revenue left after running the business, before interest and tax. Adjusted EPS, free cash flow and the per-unit cost total come from EQT's July 21, 2026 earnings release (Form 8-K, Exhibit 99.1). Every other figure comes from the Q2 10-Q.
Year to date (six months): total operating revenues were $5,188.7M, up 20.7% from $4,297.6M. Net income attributable to EQT was $1,698.7M, up 65.5% from $1,026.3M. Diluted EPS was $2.70 versus $1.70, and free cash flow attributable to EQT was $2,161M versus $1,275M. The half-year looks much stronger than Q2 alone because Q1 had high winter prices. The benchmark gas price averaged $3.91 per MMBtu for the half, compared with $2.89 in Q2.
Why GAAP profit swings so much: hedges
EQT locks in future selling prices for part of its gas using financial contracts called hedges. These include swaps and "collars," which set a price floor and a price ceiling. Accounting rules require EQT to revalue every open hedge at the end of each quarter and run the change through revenue, even though no cash has changed hands yet. When expected future gas prices fall, the hedges are worth more and EQT books a gain. When those prices rise, it books a loss.
Q2 2025: forward gas prices fell, so EQT recorded a $720M gain on derivatives. The 10-Q attributes $682M of it to NYMEX swaps and options. In cash, EQT paid a net $101M to settle hedges that quarter.
Q2 2026: the gain was only $45M: $37M from NYMEX swaps and options as forward prices fell, and $8M from basis and liquids swaps. This time EQT received $73M net in cash settlements, mostly $76M on NYMEX gas hedges.
Six months 2026: a $194M loss, mainly a $157M decline in the value of basis and liquids swaps. EQT paid $231M in net settlements over the half.
The derivative gain was $675M smaller than a year ago. That accounts for about 90% of the $748M fall in total revenue, while sales of the gas itself fell only $90M.
The prior-year quarter also carried a one-off cost: a $148M corporate legal reserve for a securities class-action settlement, which the release puts at $133.7M net. That charge reduced Q2 2025 profit, so without it the year-over-year decline would have been even steeper. Q2 2026 had a smaller charge of its own. Upstream "other operating expenses" rose $36M to $58M, which the 10-Q attributes to "changes in legal and environmental reserves, including from settlements."
Volumes and pricing
Upstream detail
Q2 2026
Q2 2025
Average daily sales volume
6,972 MMcfe/d
6,244 MMcfe/d
NYMEX (Henry Hub) gas price
$2.89/MMBtu
$3.43/MMBtu
Gas price incl. Btu uplift
$3.05/Mcf
$3.63/Mcf
Basis (discount to NYMEX)
$(0.67)/Mcf
$(0.75)/Mcf
Settled hedges
+$0.13/Mcf
$(0.19)/Mcf
Realized gas price incl. hedges
$2.51/Mcf
$2.69/Mcf
Average realized price, all products
$2.65/Mcfe
$2.81/Mcfe
Appalachian gas sells at a discount to the Henry Hub benchmark, called "basis" or the differential, because the region produces more gas than its pipelines can easily carry out. That discount narrowed from 75 cents to 67 cents. The release says the result beat guidance "despite widening basis during the quarter," helped by marketing and curtailment choices. Settled hedges added 13 cents per Mcf this quarter, compared with a 19-cent cost a year ago. As a result, EQT's realized price fell only 5.7% while Henry Hub fell 16%.
Per the 10-Q, lower prices cut gas, NGL and oil sales by $288M and higher volumes added $198M, for a net drop of $90M. Of the 66 Bcfe volume increase, 48 Bcfe came from the Olympus Energy assets acquired on July 1, 2025. The rest came from new wells brought online and "well performance optimization." Liquids were a small but growing contributor. Oil volume rose to 468 Mbbl from 313 Mbbl and sold at $70.14/bbl, and ethane volume grew 48%.
Costs
Per-unit operating cost ($/Mcfe)
Q2 2026
Q2 2025
Gathering
0.09
0.08
Transmission
0.40
0.45
Processing
0.12
0.15
Lease operating expense (LOE)
0.10
0.09
Production taxes
0.06
0.07
Operating and maintenance
0.09
0.10
SG&A
0.17
0.14
Total
1.03
1.08
Most of the decline comes from spreading fixed pipeline costs over more gas: the 10-Q says transmission cost per unit fell "due primarily to higher sales volume." Processing cost fell because EQT produced less of the gas that needs processing. Two lines rose:
LOE (the cost of running the wells) went up with the Olympus assets and higher water-network and winter maintenance costs.
SG&A (overhead) went up on higher long-term incentive pay and professional fees.
Depletion, the non-cash charge for using up gas reserves, stayed flat at $0.95/Mcfe.
The midstream side: owning the pipes
EQT reports three segments:
Upstream drills and sells gas.
Gathering and Transmission run the pipelines. Most of these came from Equitrans Midstream, which EQT bought in 2024.
This quarter the upstream business paid $336M to EQT's own gathering and transmission segments. The consolidated accounts eliminate that payment, so the money stays inside the company instead of going to an outside pipeline operator.
Segment operating income
Q2 2026
Q2 2025
Change
Upstream
$109.4M
$1,007.1M
-89.1%
Gathering
$216.7M
$205.4M
+5.5%
Transmission
$93.0M
$90.1M
+3.3%
Both pipeline segments grew. Gathered volume rose 10.7% to 10,875 BBtu/d, helped by the Olympus gathering assets, and transmission throughput rose 10.3%. Equity earnings from EQT's stake in the Mountain Valley Pipeline (MVP) joint venture rose to $45.0M from $41.6M. On March 30, EQT bought about 3.94% more of MVP A and MVP C for about $198M. Upstream operating income fell mainly because of the smaller derivative gain.
The ownership of these pipelines matters for shareholders. Many sit in a joint venture with Blackstone Credit & Insurance, whose affiliate receives 60% of the venture's cash distributions until it earns an agreed return. The venture paid the Blackstone affiliate $238M in the first half, and about $3.4B remained to reach that return as of June 30. This is why $70M of Q2 net income went to "noncontrolling interests" rather than EQT shareholders. It is also why EQT reports a separate free cash flow figure "attributable to EQT."
Power demand and new deals
The earnings release highlights a 10-year agreement to supply 325,000 Dth/d of gas to Competitive Power Ventures' Shay Energy Center. This is a planned 2-gigawatt power plant in Doddridge County, West Virginia. The price is linked to PJM wholesale power prices, which the company says provides "a substantial uplift relative to in-basin pricing." The CEO described it as another deal of this kind and said power generators and data-center developers are seeking long-term gas supply in Appalachia. Each deal of this kind lets EQT sell gas locally at a price that is not tied to the discounted Appalachian basis.
Other items from the release:
LNG: a 5-year agreement to sell 0.5 million tonnes per year of LNG to a large Asian energy company, starting in 2028. EQT expects the deal to add about $45M to 2028 free cash flow at recent futures prices.
MVP Southgate: all key regulatory approvals are in place. EQT is paying $85M of its capital contributions early so that construction finishes by year-end 2026.
Blackline Midstream: acquired on July 21 for $77M. It owns two propane storage terminals in New England, and EQT already supplies about 60% of their volume.
Cash flow and debt
Operating cash flow was $1,048M, down from $1,242M, because working capital used $101M this quarter after releasing cash a year earlier. Before working-capital changes, adjusted operating cash flow (non-GAAP, per the release) rose to $1,149M from $918M. Capital spending was $666M, 9% below the low end of guidance. Free cash flow attributable to EQT rose to $330M.
The bigger change to the balance sheet came earlier in the year. In the first half, EQT retired $2.12B of senior notes:
It redeemed its 6.500% notes due 2027.
It bought back about $1.4B of notes through a March tender offer.
It repaid its 3.125% notes at maturity in May.
Total debt fell to $5.7B (net debt $5.5B) from $7.8B at December 31, 2025. On July 15 EQT repaid another $115M of 7.75% debentures. Net interest expense fell to $75.5M from $105.7M. The quarterly dividend is $0.165 per share.
Takeaway: EQT's 73% profit decline reflects the comparison with a quarter that included a $720M paper gain on hedges. The underlying business improved: volume rose 12%, cost per unit fell 5%, free cash flow rose 38%, and debt is down $2.1B this year. Hedge revaluations move EQT's reported profit sharply from quarter to quarter, so gas prices and free cash flow are more reliable measures of how the business is doing.
Outlook
Management raised full-year 2026 production guidance by about 90 Bcfe to 2,375–2,450 Bcfe. It credited investments in compression, which have raised output from both old and new wells and slowed their decline. It also cut full-year capital spending guidance by $25M: maintenance capex is now expected at $2,040–2,190M, plus $580–640M of growth capex. For Q3, EQT guides to:
volume of 570–620 Bcfe
a differential of $(0.75)–$(0.65)/Mcf
operating costs of $1.09–1.23/Mcfe, above Q2's $1.03, with SG&A, transmission, LOE and O&M per unit all guided above their Q2 levels
What to watch:
Harder comparisons ahead. The Olympus acquisition closed on July 1, 2025, so from Q3 onward it no longer adds to year-over-year volume growth. The Q3 volume guidance of 570–620 Bcfe is also below Q2's 634 Bcfe.
Hedge protection. For Q3, EQT has about 1.4 MMDth/d hedged with collars, with a floor of about $3.50 and a ceiling of about $4.94. If Henry Hub stays near Q2's $2.89, those hedges will pay EQT cash, but GAAP profit will keep moving with the forward price curve.
Local basis. The Q3 differential guidance is wider than Q2's, so the discount on Appalachian gas remains the main risk to realized prices. The CPV deal, MVP Southgate and the LNG agreement are how EQT is trying to sell less of its gas at that discount over time.