Business Context and Reporting Period
Company: NextDecade Corp (NASDAQ: NEXT)
Filing Type: Form 10-K (Annual Report)
Period Ended: December 31, 2025
Business Overview: NextDecade is a Houston-based energy company developing the Rio Grande LNG Facility in Brownsville, Texas. The company is currently in the construction phase for Trains 1 through 5 (Phase 1, Train 4, and Train 5), with a combined expected capacity of approximately 30 million tonnes per annum (MTPA). The company has no operating revenues as the facility is not yet commercial. It is also advancing permitting for expansion Trains 6 through 8 and exploring a Carbon Capture and Storage (CCS) project.
Key Financial Metrics
| Metric (in thousands) | 2025 | 2024 |
|---|---|---|
| Revenues | $0 | $0 |
| Net Loss Attributable to Common Stockholders | $(306,434) | $(61,751) |
| Net Loss Per Share (Basic & Diluted) | $(1.17) | $(0.24) |
| Operating Cash Flow | $(169,397) | $(95,585) |
| Investing Cash Flow | $(4,852,904) | $(2,574,205) |
| Financing Cash Flow | $5,336,627 | $2,768,074 |
| Total Debt (Gross) | $8,827,368 | $4,035,000 |
| Cash, Cash Equivalents & Restricted Cash | $707,088 | $392,762 |
| Total Assets | $12,425,828 | $6,404,059 |
Note: The company reported no revenues for the period. The increase in net loss was primarily driven by higher interest expense, derivative losses, and increased general and administrative costs.
Material Changes vs. Prior Period
- Project Financing & Construction: The company achieved Final Investment Decisions (FID) for Train 4 (September 2025) and Train 5 (October 2025). This triggered significant capital deployment, with investing cash outflows increasing from $2.6 billion in 2024 to $4.9 billion in 2025.
- Debt Levels: Total debt more than doubled from approximately $4.0 billion in 2024 to $8.8 billion in 2025 to fund the construction of Trains 4 and 5. This included new credit facilities and private placement notes.
- Derivative Activity: The company recorded a net derivative loss of $11.0 million in 2025, compared to a gain of $586.5 million in 2024. This reversal was due to lower forward SOFR rates impacting the company's interest rate swap portfolio.
- Equity Structure: The company issued warrants in connection with debt amendments and refinancing. Certain warrants were reclassified from equity to derivative liabilities following modifications in November 2025.
Guidance, Outlook, and Risks
Outlook and Management Commentary
- Timeline: Commissioning activities are expected to begin in 2026, with first LNG production from Train 1 targeted for the first half of 2027. Guaranteed substantial completion for Train 4 is Q3 2030, and for Train 5 is Q2 2031.
- Commercial Agreements: The company has secured long-term Sale and Purchase Agreements (SPAs) for approximately 25.3 MTPA of LNG from Trains 1 through 5. In 2025, new agreements were signed with Saudi Aramco, TotalEnergies, JERA, EQT, and ConocoPhillips.
- Liquidity: The company expects to fund remaining equity commitments for Trains 4 and 5 through borrowings under the FinCo Credit Agreement and cash on hand. Future development of Trains 6-8 and CCS projects will require additional debt and equity financing.
Risks and Contingencies
- Regulatory Appeals: While FERC issued a final order on remand in August 2025 reaffirming authorization for the first five trains, intervenors petitioned the D.C. Circuit Court for review in December 2025. The outcome remains pending.
- Construction Risks: The project relies on third-party contractors (Bechtel) for EPC. Delays, cost overruns, or failure to perform could materially impact the timeline and budget.
- Debt Service: The company has substantial indebtedness with significant debt service obligations. Restrictions in debt agreements limit flexibility, and the ability to refinance depends on market conditions.
- Market Conditions: Future profitability depends on global LNG demand, pricing competitiveness against other energy sources, and the availability of LNG vessels.
Investor Verification Checklist
- Regulatory Status: Monitor the status of the D.C. Circuit Court appeal regarding the FERC order for the first five trains.
- Construction Progress: Verify the physical completion percentages of Phase 1, Train 4, and Train 5 against the EPC contract schedules.
- Debt Covenants: Review compliance with Debt Service Coverage Ratio (DSCR) covenants and interest rate hedge requirements (75-90% of debt must be hedged).
- Capital Requirements: Assess the sufficiency of current financing to cover the remaining equity commitments for Trains 4 and 5 and the funding needs for Trains 6-8.
- Derivative Exposure: Evaluate the impact of interest rate fluctuations on the company's swap portfolio and the reclassified warrant liabilities.