SM Energy Sees 17% Q4 Revenue Decline, Sells South Texas Assets for $950M
SM Energy’s Q4 2025 adjusted EPS of $0.83 matched estimates, but revenue fell 17% YoY to $705M, missing forecasts by $55.6M, and net income plunged 42% to $109M. In FY2025 production rose 21% to 75.5 MMBoe and the $950M South Texas asset sale pushed its price target to $49.
1. Mixed Q4 2025 Financial Results
SM Energy reported adjusted EPS of $0.83 for Q4 2025, in line with analyst expectations, while revenue fell 17% year-over-year to $705 million, missing consensus by $55.6 million. Net income for the quarter plunged 42% to $109 million, and full-year net income declined 16% from 2024.
2. Full-Year Production and Cash Flow Growth
For full-year 2025, SM Energy achieved record production of 75.5 MMBoe, up 21% year-over-year with 53% oil weighting, driving adjusted EBITDAX to a record $2.26 billion. Operating cash flow reached $2.01 billion and adjusted free cash flow surged 28% to $620 million despite lower commodity prices.
3. South Texas Asset Divestiture and Revised Target
On February 18, SM Energy agreed to sell 61,000 net acres in Webb County, Texas—including 260 producing wells with 168 MMboe of proven reserves and 37–39 Mboe/d of output—for $950 million. Proceeds will reduce debt and reinforce financial flexibility, prompting a raise in the price target to $49.