NGL Energy Partners LP Reports Strong Fiscal 2025 Results and Outlines Optimistic Guidance for Fiscal 2026
NGL Energy Partners LP (NYSE: NGL), a diversified midstream energy company, released its financial results for the fourth quarter and full fiscal year ending March 31, 2025. The company reported substantial improvements in earnings, positive trends across key business segments, and executed a series of strategic asset sales to reduce debt and sharpen its business focus. Looking ahead, the Partnership also issued its financial guidance for Fiscal 2026, which reflects confidence in continued operational momentum and further balance sheet enhancement.
Fiscal 2025: A Year of Turnaround and Operational Strength
NGL Energy Partners’ fiscal 2025 results demonstrated a marked improvement from the prior year. The Partnership reported income from continuing operations of $65.0 million, a significant turnaround from a loss of $157.7 million in fiscal 2024. This transition into profitability signals a strong operational and financial rebound, driven by improved performance in core segments and disciplined capital allocation.
The fourth quarter also reflected this trend. The company reported $16.2 million in income from continuing operations for Q4 of fiscal 2025, a dramatic swing from a loss of $234.3 million in the same quarter of the previous year. Such improvements underscore the success of cost reduction initiatives and the growing strength of the Water Solutions business.
NGL’s Adjusted EBITDA from continuing operations for fiscal 2025 reached $622.9 million, compared to $593.4 million in fiscal 2024. The fourth quarter of fiscal 2025 contributed $176.8 million in Adjusted EBITDA, a significant increase over the $147.9 million recorded in Q4 of fiscal 2024. These improvements highlight not only the Partnership’s ability to execute operationally but also its resilience in the face of broader energy market fluctuations.
Water Solutions Segment Achieves Record Growth
The company’s Water Solutions segment was a standout performer. During the fourth quarter, NGL processed approximately 2.73 million barrels of produced water per day, marking a 14.2% increase over the same period in fiscal 2024. On an annual basis, average volumes processed reached 2.63 million barrels per day, an 8.6% increase from the prior year.
In financial terms, the Water Solutions segment generated a record $542.0 million in Adjusted EBITDA for the full fiscal year. This figure represents a 6.6% increase over fiscal 2024 and an 8.7% increase when excluding contributions from assets that were divested. This performance is a testament to the long-term value proposition and growth potential of the Water Solutions business, which plays a critical role in handling water byproducts from oil and gas extraction across the U.S. shale plays.
Streamlining Through Strategic Asset Sales
NGL took meaningful steps in fiscal 2025 and into early fiscal 2026 to streamline its operations and reduce financial leverage through a series of asset divestitures. The company closed the sale of its natural gas liquids terminal in Green Bay, Wisconsin, as well as certain railcars from its Crude Oil Logistics segment.
Following the fiscal year-end on March 31, 2025, the Partnership completed additional divestitures including:
- The sale of 17 natural gas liquids terminals
- The majority of its wholesale propane business
- The refined products Rack Marketing business
- Its ownership in Limestone Ranch, a water asset
- More railcars in the Crude Oil Logistics segment
These transactions, combined with associated working capital and other cash receipts, generated approximately $270 million. Proceeds were used to repay outstanding borrowings on the company’s Asset-Based Lending (ABL) facility, repurchase preferred equity, and further reduce indebtedness.
CEO Mike Krimbill emphasized that these asset sales were executed at “attractive multiples” and serve to not only lower debt but also reduce the seasonality and volatility of NGL’s cash flow. “These asset sales will reduce the volatility and seasonality of our Adjusted EBITDA and working capital requirements,” he noted.
Capital Allocation and Preferred Equity Repurchase
In another shareholder-friendly move, NGL began repurchasing its Class D preferred units, acquiring 20,000 units in the open market at a discount. This capital allocation strategy reflects management’s confidence in the Partnership’s intrinsic value and its commitment to optimizing its capital structure.
Combined with debt reduction, these repurchases contribute to an overall healthier financial profile, potentially lowering the cost of capital and enhancing flexibility for future growth investments.
Fiscal 2026 Guidance: Continuing Momentum
Looking ahead, NGL has issued its financial guidance for the full year of fiscal 2026. The company projects consolidated Adjusted EBITDA to range between $615 million and $625 million, which reflects an increase over fiscal 2025’s results when adjusted for the EBITDA lost through asset sales.
Krimbill elaborated, “Fiscal 2026 holds more opportunities to continue addressing our capital structure and strengthening our balance sheet. We are guiding Fiscal 2026 full year consolidated Adjusted EBITDA to a range of $615 – $625 million, which is an increase over Fiscal 2025 actuals adjusted for EBITDA associated with asset sales.”
Additionally, the company expects to invest $45 million in maintenance capital expenditures and $60 million in growth capital expenditures during fiscal 2026. These capital plans reflect continued investment in core areas like Water Solutions while maintaining discipline around costs and growth opportunities.
A Focused Future
NGL’s fiscal 2025 results, taken together with its asset sales and fiscal 2026 guidance, paint a picture of a midstream energy company that is sharpening its focus on high-margin, less cyclical businesses. Water Solutions is clearly at the center of this strategic shift, supported by both operational scale and increasing demand from oilfield operators seeking environmentally responsible water management solutions.
The company’s divestiture of non-core and seasonal businesses—such as certain NGL terminals, propane distribution assets, and Rack Marketing—suggests a clear vision for the future: one where predictable cash flow, operational efficiency, and capital structure optimization take priority.
Moreover, the reallocation of proceeds toward debt repayment and preferred equity repurchases not only strengthens the balance sheet but also signals a more shareholder-focused approach.
Market Outlook and Industry Context
NGL’s performance and strategy come at a time when the midstream sector is evolving. Investors are increasingly favoring companies that deliver predictable returns, manage debt effectively, and focus on core competencies. In this context, NGL’s transition toward a more focused business model centered on water infrastructure aligns with broader industry trends.
The produced water treatment market, in particular, is growing due to increasing regulatory scrutiny and the operational needs of upstream producers. NGL’s large-scale infrastructure in key basins like the Permian positions it to benefit from this trend.
Furthermore, with commodity markets continuing to experience volatility, NGL’s reduced reliance on seasonal propane and Rack Marketing activities could make its earnings more resilient in the face of external shocks.
