NEXT

NextDecade Corp (NEXT) – Q2 2026 10-Q Summary

Business Context and Reporting Period

This report covers the quarterly period ended June 30, 2026. NextDecade Corporation is a Houston-based energy company constructing the Rio Grande LNG Facility near Brownsville, Texas. The company is currently in the development and construction phase with no commercial revenue. Construction is underway for Phase 1 (Trains 1–3), Train 4, and Train 5. The company is also advancing permitting for expansion Trains 6–8.

Key Financial Metrics

Note: Financial figures are in millions unless otherwise noted. The company reported a net loss attributable to common stockholders of $0.25 per share for Q2 2026.

Material Changes vs. Prior Period

• Construction Progress: Phase 1 (Trains 1–3) is 74.0% complete overall. Train 4 is 15.5% complete, and Train 5 is 9.4% complete. First gas into the facility is expected in H2 2026, with first LNG production from Train 1 in H1 2027.
• Debt Refinancing: In June 2026, the company repaid approximately $990 million of credit facility borrowings (CD and TCF Credit Agreements), resulting in a $32.5 million loss on debt extinguishment. In July 2026 (subsequent event), Phase 1 LLC issued $3.5 billion in senior secured notes to repay remaining credit facility borrowings.
• Derivative Gains: Net derivative gains increased significantly to $116.1 million in Q2 2026 (vs. $25.2 million in Q2 2025), driven by higher forward SOFR rates increasing the fair value of interest rate swaps.
• Interest Expense: Interest expense rose to $90.8 million in Q2 2026 (vs. $31.6 million in Q2 2025) due to increased borrowings for construction of Trains 4 and 5.
• Equity Commitments: The company received $760 million in equity commitments during the first six months of 2026, primarily from partners for Phase 1 and Train 4/5.

Outlook, Risks, and Management Commentary

• Commercial Outlook: The company has secured long-term Sale and Purchase Agreements (SPAs) for approximately 25.3 MTPA of LNG from Trains 1–5. In early 2026, it began marketing early cargoes, securing agreements for over 175 TBtu with a target margin of over $3.00/MMBtu.
• Liquidity: Corporate liquidity is funded by cash on hand, equity commitments, and debt facilities. The Rio Grande Project Entities (Phase 1, Train 4, Train 5) operate with independent capital structures, and their cash is restricted for project use. The company expects to fund remaining equity commitments for Trains 4 and 5 via borrowings under the FinCo Credit Agreement.
• Risks: Key risks include construction delays, cost overruns, the ability to secure future financing, regulatory approvals for expansion trains, and global LNG demand/price volatility. An appeal regarding FERC authorization for the first five trains remains pending in the D.C. Circuit Court.
• Unusual Items: The significant derivative gains are non-cash fair value adjustments. The loss on debt extinguishment is a one-time cost associated with refinancing.

Investor Verification Checklist

• Construction Schedule: Verify the timeline for "first gas" (H2 2026) and "first LNG production" (H1 2027) against actual site progress reports.
• Debt Maturity Wall: Review the maturity profile of the $10.4 billion debt load, specifically the refinancing of credit facilities with the new $3.5 billion note issuance in July 2026.
• Equity Commitments: Confirm the drawdown schedule of the $2.4 billion equity commitment for Trains 4 and 5 and the company's ability to fund its portion.
• Regulatory Status: Monitor the status of the D.C. Circuit Court appeal regarding FERC authorization for Trains 1–5.
• Derivative Exposure: Assess the impact of interest rate volatility on future earnings, given the significant fair value gains/losses recorded on swaps.