Diamondback Energy, Inc. (NASDAQ: FANG) reported fourth‑quarter and full‑year 2025 results on February 23, 2026. Revenue reached $3.38 billion, a 9% decline from the $3.71 billion reported in the same quarter a year earlier, but the figure still met or slightly exceeded analyst consensus estimates of $3.15 billion to $3.43 billion. Adjusted earnings per share were $1.74, falling short of the consensus estimate of $1.88 by $0.14, a miss of 7.4%. The miss reflects a $3.7 billion non‑cash impairment related to lower SEC pricing assumptions, which reduced GAAP earnings but did not affect the adjusted EPS figure.
The revenue decline was driven by lower commodity prices and a modest shift in the company’s production mix. Despite the headwinds, Diamondback’s operational discipline and cost controls helped it maintain profitability, allowing the adjusted EPS to remain close to expectations. The company’s revenue beat consensus estimates, indicating that the underlying business remains resilient even as market conditions tighten.
The company’s adjusted free‑cash‑flow for the year was $5.9 billion, while the reported free‑cash‑flow was $5.5 billion. A reinvestment ratio of 39% demonstrates disciplined capital allocation, with the firm allocating a substantial portion of cash to growth while preserving liquidity. The strong free‑cash‑flow generation underscores the company’s ability to fund dividends, share repurchases, and debt reduction.
Diamondback increased its quarterly base dividend by 5% to $1.05 per share, effective March 12, 2026. The dividend hike reflects the company’s confidence in its cash‑flow generation and its commitment to returning value to shareholders.
Management guided that 2026 production will remain flat at 500‑510 thousand barrels of oil per day (MBO/d) and that capital expenditures will be $3.6‑$3.9 billion. CEO Kaes Van't Hof said, "We are focused on generating free cash flow per share, growing free cash flow per share over growing cash flow into a tenuous macro environment." He added, "Therefore, our 2026 plan is to keep activity and production flat relative to our 4Q25 levels (adjusted for the impact of Viper's non‑Permian asset divestiture), with production guidance of 500 - 510 MBO/d (926 - 962 MBOE/d)." The flat production outlook signals management’s focus on maintaining operational efficiency amid oil price volatility, while the disciplined capex plan indicates confidence in sustaining cash‑flow generation.
The company returned $3.2 billion to shareholders in 2025, representing 54% of adjusted free‑cash‑flow, and reduced its consolidated net debt to $14.6 billion. These actions demonstrate a strong balance‑sheet position and a strategic emphasis on deleveraging and shareholder returns.
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