NextDecade Corp (NEXT) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. NextDecade Corporation is a Houston-based energy company primarily engaged in the construction and development of the Rio Grande LNG Facility near Brownsville, Texas. The company is currently constructing Trains 1 through 5 (Phase 1, Train 4, and Train 5) and advancing permitting for expansion Trains 6 through 8. As of the reporting date, the company has no operating revenues as the facility is under construction.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Revenues | $0 | $0 |
| Net Loss (Attributable to Common Stockholders) | $(136.4) million | $(88.8) million |
| Operating Loss | $(55.1) million | $(51.9) million |
| Derivative Loss, Net | $(62.1) million | $(168.7) million |
| Interest Expense | $(79.2) million | $(27.2) million |
| Cash and Cash Equivalents | $143.1 million | $143.8 million (Dec 2025) |
| Restricted Cash | $321.9 million | $563.3 million (Dec 2025) |
| Total Debt, Net | $9.36 billion | $8.51 billion (Dec 2025) |
| Capital Expenditures (Investing Cash Flow) | $(1.18) billion | $(0.78) billion |
Material Changes vs. Prior Period
- Net Loss Increase: Net loss attributable to common stockholders increased by approximately $47.6 million compared to Q1 2025. This was driven by a $52.0 million increase in interest expense due to additional borrowings for construction, partially offset by a $106.6 million decrease in derivative losses.
- Derivative Performance: The derivative loss improved significantly (decreased) from $168.7 million in Q1 2025 to $62.1 million in Q1 2026, primarily due to higher forward SOFR rates reducing the fair-value loss on interest rate swaps.
- Construction Progress: Capital expenditures increased by $397.3 million year-over-year, reflecting accelerated construction on Trains 4 and 5, which achieved Final Investment Decision (FID) in late 2025. Phase 1 (Trains 1-3) is 67.8% complete overall, while Train 4 is 10.6% complete and Train 5 is 6.8% complete.
- Debt Levels: Total debt increased by approximately $844 million from the prior quarter to fund ongoing construction and equity commitments.
Guidance, Outlook, and Risks
- Project Timeline: The company expects first gas into the Rio Grande LNG Facility in the second half of 2026 and first LNG production from Train 1 in the first half of 2027. Commercial operation for Trains 1 through 5 is expected to range from late 2027 to the first half of 2031.
- Commercial Activity: In February 2026, the company entered into LNG sales agreements for over 175 TBtu of early cargoes (2027-2028) with a target cargo margin of over $3.00 per MMBtu. Long-term Sale and Purchase Agreements (SPAs) cover approximately 25.3 MTPA of capacity.
- Liquidity: The company expects to fund remaining equity commitments for Trains 4 and 5 through borrowings under the FinCo Credit Agreement. Corporate cash needs are met by cash on hand and a $50 million fee due from Train 4 LLC in September 2026.
- Risks: Key risks include the ability to secure additional financing, construction delays, cost overruns, regulatory approvals (including a pending D.C. Circuit appeal regarding FERC authorization), and global LNG demand/price volatility.
Investor Verification Checklist
- Construction Schedule: Verify the "first gas" (H2 2026) and "first LNG" (H1 2027) milestones against actual progress reports, given the complexity of the project.
- Debt Covenants: Confirm continued compliance with debt covenants, specifically the Debt Service Coverage Ratio (DSCR) requirements, as the company carries over $9 billion in debt.
- Regulatory Status: Monitor the status of the pending D.C. Circuit appeal regarding the FERC Remand Order, which could impact project authorization.
- Financing Needs: Assess the company's ability to raise the remaining equity capital required for Trains 4 and 5 and potential future expansion (Trains 6-8) without excessive dilution.
- Derivative Exposure: Review the impact of interest rate fluctuations on the company's swap portfolio and the valuation of the Series A Exchange Option and Warrants.