EQT Corporation — Cash Flow Stress, Rising Leverage and the Olympus Pivot

Immediate headline: profit slump, rising leverage and an acquisition that matters#

EQT’s most consequential recent developments combine a sharp earnings compression, an active acquisition program and a meaningful jump in leverage. For the fiscal year ended 2024 the company reported net income of $230.58 million, down -86.74% versus $1,740.00 million in FY2023, while net debt increased to $9.16 billion and management completed the approximately $1.8 billion Olympus Energy transaction that underpins its downstream push into data-center energy solutions (EQT FY2024 filings, filed 2025-02-19). The market is now grappling with a company that still sits on scale in Appalachia and generates multi-hundred-million dollar free cash flow, but that is simultaneously deploying capital in ways that raise short-term leverage and execution risk.

That combination — a material drop in reported profitability, a step-up in financed deals and a strategic tilt toward downstream opportunities tied to AI data-center demand — is the single most important fact investors must reconcile. The trade-off is stark: the firm’s Appalachian scale and operational optionality could convert into new, higher-margin infrastructure revenues, but only if integration goes smoothly and commodity markets cooperate.

Below I re-run the math on EQT’s recent financials, reconcile conflicting ratio measures in available datasets, and map the numbers to strategy, execution risk and near-term catalysts. Every figure cited in the narrative is calculated from the company’s FY2024–FY2021 financials and cash-flow statements provided in the corporate filings (EQT FY2024 filings, filed 2025-02-19).

Financial performance: revenue held, profit collapsed, cash flow halved#

EQT’s revenue held relatively steady in FY2024 at $5.22 billion, up +2.96% from $5.07 billion in FY2023. That revenue stability masks a profound profitability deterioration: operating income declined to $685.30 million and net income to $230.58 million in 2024 from $2.31 billion and $1.74 billion, respectively, in 2023 (EQT FY2024 filings, filed 2025-02-19). The primary drivers were lower gross profit and higher operating expense mix compared with the prior year that featured an outsized 2023 operating-income base.

Free cash flow followed a similar downshift. Free cash flow was $573.26 million in FY2024 versus $1,157.00 million in FY2023 — a decline of -50.48%. Capital expenditures rose to $2.25 billion in 2024 (up from $2.02 billion in 2023), reflecting both ongoing development in Appalachia and near-term project spend related to acquisitions and midstream/power initiatives (EQT FY2024 cash-flow statement). The combination of higher capex and lower net income is the mechanical explanation for the free-cash-flow compression.

Margins detail the story. FY2024 net margin was 4.42% (net income $230.58M / revenue $5.22B), versus 34.23% in 2023 — a swing of -29.81 percentage points. EBITDA for 2024 was reported at $2.88 billion, producing an implied FY2024 EBITDA margin of roughly 55.18% (EBITDA $2.88B / revenue $5.22B), indicating that depreciation and non-cash charges materially affect GAAP net income. The gap between robust EBITDA and low net income underscores heavier depreciation/amortization and interest/other items in 2024 relative to 2023.

Table: Income statement snapshot (FY2021–FY2024)

(Values calculated from EQT filings; margins computed as Net Income / Revenue.)

Balance sheet and leverage: the math behind the concern#

On the balance-sheet side, EQT’s year-end total assets rose to $39.83 billion in 2024 from $25.29 billion in 2023, driven largely by an increase in property, plant & equipment to $31.84 billion and acquisitions recorded in the period (EQT FY2024 balance sheet). Total debt increased to $9.37 billion (from $5.84 billion), and net debt (total debt less cash) rose to $9.16 billion from $5.76 billion the prior year.

Using FY2024 reported EBITDA of $2.88 billion, the company’s leverage on a simple net-debt-to-EBITDA basis is approximately +3.18x (Net Debt $9.16B / EBITDA $2.88B). That calculation contrasts with an alternative TTM metric in the available dataset that shows a negative net-debt-to-EBITDA; the FY 2024 balance sheet and EBITDA figures are clear and reconcile to a leverage multiple in the low-3x range. In short, EQT has moved from a more conservative net-debt posture into meaningful funded leverage in 2024, driven by asset additions and financing activity.

Liquidity is mixed. Cash and equivalents ended FY2024 at $202.09 million, while total current liabilities were $2.46 billion, yielding a current ratio of 0.69x (Current Assets $1.71B / Current Liabilities $2.46B). This stands in sharp conflict with a dataset line showing a TTM current ratio of 7.41x; the balance-sheet line items produce the 0.69x calculation and must be prioritized for liquidity analysis since they are line-item balances rather than an aggregate TTM indicator.

Table: Balance-sheet & cash-flow highlights (FY2021–FY2024)

(Values and year-over-year comparisons calculated from EQT balance-sheet and cash-flow statements.)

Reconciling conflicting dataset metrics and why I prioritize line-item calculations#

The provided datasets include several TTM ratios that conflict with arithmetic derived from the company’s FY line items. Examples: a TTM current ratio of 7.41x and a negative net-debt-to-EBITDA are at odds with the FY balance sheet showing current assets of $1.71B and current liabilities of $2.46B (current ratio ~0.69x) and with net-debt of $9.16B against EBITDA $2.88B (net-debt/EBITDA ~3.18x). When reconciling, I prioritize raw balance-sheet and income-statement line items and compute ratios directly, because TTM aggregates in third-party datasets can suffer from misaligned periods, trailing adjustments or mapping errors.

The practical implication is that some headline "TTM" metrics in vendor feeds may misrepresent EQT’s near-term liquidity and leverage. Investors should therefore base leverage and liquidity decisions on the latest audited or filed balance-sheet figures and the most recently reported EBITDA, rather than a single black‑box TTM field.

Capital allocation and the Olympus purchase: size, financing and near-term implications#

EQT disclosed an acquisition of Olympus Energy for roughly $1.8 billion in cash and assumed obligations (company communications). The balance-sheet movement between FY2023 and FY2024 — specifically the increase in total assets (+$14.54B) and total debt (+$3.53B) alongside reported acquisitions and an acquisitionsNet cash outflow of $874.26 million in 2024 — suggests the Olympus transaction and related integration costs materially contributed to the year’s financing activity.

Quantitatively, the Olympus purchase is meaningful relative to EQT’s capital structure: the acquisition price is roughly ~20% of the company’s FY2024 market capitalization (~$32.6B) and equal to roughly 0.62x of property, plant and equipment added to the balance sheet year-over-year. Management signaled the deal is intended to be accretive to cash flow and to extend EQT’s Appalachian position, improving the company’s optionality to supply high-value customers and to underpin downstream energy plays.

Financing the transaction and related investments has consequences. As shown above, net debt rose by $3.40 billion year-over-year (from $5.76B to $9.16B). With FY2024 EBITDA at $2.88B, the resulting leverage multiple sits in a range that heightens sensitivity to commodity-price volatility and requires robust free-cash-flow generation to bring net leverage back down. In short: the Olympus deal advances strategic optionality but also creates an execution and refinancing imperative.

Strategy and execution: Appalachian scale, AI-data-center angle, and the open-platform approach#

Strategically, EQT’s public posture is coherent: monetize Appalachian scale, pursue commercial relationships with large power customers (including AI data centers), and selectively sponsor downstream infrastructure while sharing capital risk through partnerships (the "open-platform" approach described in company commentaries). Appalachia’s proximity to East Coast load centers and its thick pipeline network provide a structural advantage for serving data centers where low-latency and reliable power matter.

The Olympus acquisition strengthens that play by increasing contiguous production and local infrastructure that reduce basis risk and shorten timelines to serve data-center campuses. Commercially, EQT can pursue long-term gas offtakes, firm pipeline capacity and even behind-the-meter or near-site generation projects that bundle fuel supply, reliability and emissions controls for large customers. Execution hinges on contracting discipline, permitting, and the company’s ability to present verifiable emissions improvements to corporate buyers.

Operationally the early indicators are mixed: EQT continues to generate meaningful operating cash from core upstream (Operating cash flow in 2024 was $2.83 billion), but conversion to durable free cash flow is being diluted by higher capex and acquisition-related cash outflows. The strategic test over the next several quarters will be whether signed contracts and realized synergies from Olympus translate into sustainably higher margins and improved cash-conversion dynamics.

ESG, emissions claims and the NEOGOV confusion#

EQT has emphasized reductions in Scope 1 & 2 emissions and has communicated a path to net-zero for those categories through operational methane reductions, electrification and selective use of offsets. Those claims will be judged on the transparency of measurement, third‑party assurance and verifiable year-over-year progress; absent clear external verification, corporate buyers focused on lifecycle emissions may remain cautious.

Separately, market confusion has arisen because the similarly named EQT AB (a private-equity firm) completed the purchase of NEOGOV, a software business. It is critical to distinguish the two: NEOGOV is an EQT AB private-equity asset and not part of EQT Corporation’s upstream gas and infrastructure operations (see EQT AB press release and Reuters coverage). Confusing the transactions risks mispricing EQT Corporation as if it had diversified into software when in fact the public gas company remains focused on Appalachian energy assets and downstream energy-infrastructure plays (EQT AB press release; Reuters coverage.

Risks, sensitivities and key near-term catalysts#

EQT’s largest near-term risks are commodity-price volatility, integration risk from acquisitions (including Olympus), permitting and execution risk for downstream infrastructure, and reputational/contract risk tied to emissions performance. On the balance-sheet front, the company’s sensitivity to natural gas price declines is amplified by higher funded leverage: a sustained drop in realized prices would compress margins and free cash flow, complicating deleveraging.

Material catalysts to watch include (1) quarterly free-cash-flow prints and the cadence of capex-to-FCF conversion, (2) progress on Olympus integration and any disclosed synergies, (3) material customer contracts or offtake agreements with data-center operators or utilities, and (4) published third‑party verification of Scope 1 & 2 emissions reductions. Each has a direct, quantifiable impact on leverage trajectory and earnings quality.

What this means for investors (no recommendation)#

The numbers imply a straightforward framework for assessing EQT’s risk/return profile. First, the company remains a large, low‑cost Appalachian producer with meaningful EBITDA generation ($2.88 billion in FY2024) and a capacity to monetize scale via midstream and power-facing offerings. Second, FY2024’s compressed net income and the ~$3.40 billion year-over-year rise in net debt materially increase execution risk and raise the bar for future cash generation. Third, the Olympus acquisition is strategically logical — it densifies Appalachia exposure and shortens timelines to serve customers — but it also obliges EQT to deliver integration synergies and to convert EBITDA into free cash flow to restore pre-acquisition leverage levels.

Investors should therefore treat EQT’s strategic pivot as conditional: the company’s optionality to win data-center and power contracts is real, but value realization depends on disciplined contracting, demonstrable emissions progress and prudent capital management. Near-term performance will be driven more by cash-flow conversion and leverage movement than by headline revenue figures.

Key takeaways#

EQT’s FY2024 financials present a mixed investment story. On one hand, the company has scale, Appalachia proximity and a credible playbook to monetize downstream energy needs for large customers. On the other hand, FY2024 showed a -86.74% decline in net income to $230.58 million, free cash flow declined ~-50.48% to $573.26 million, and net debt rose to $9.16 billion, moving leverage to roughly 3.18x on a simple net-debt-to-EBITDA basis. Those arithmetic facts are the gating items: until EQT demonstrates consistent FCF recovery and contraction of net leverage, strategic optionality will be valued through the lens of execution risk rather than potential upside alone.

Conclusion#

EQT sits at a strategic crossroads: its Appalachian footprint and the Olympus acquisition create a plausible path to serve high-value, reliability‑sensitive energy customers such as AI data centers. But the company has temporarily increased balance-sheet risk and must prove that acquisitions and higher capex translate into durable cash-flow improvement. The next several quarters of cash-flow conversion, disclosed integration progress, and emissions verification will determine whether EQT’s pivot is accretive to long-term shareholder value or a high-risk levered bet on a new downstream market. For market participants, the core question is operational discipline: can EQT convert strong EBITDA into dependable free cash flow while managing the balance-sheet consequences of growth and M&A?

References and data notes

All financials and ratios in this report are calculated from the FY2021–FY2024 line items supplied in EQT Corporation’s filings (filed 2025-02-19) and the company’s reported cash-flow statements. The NEOGOV transaction referenced in the narrative is an EQT AB private-equity deal and is documented in the EQT AB press release and Reuters coverage (EQT AB press release; Reuters coverage. Market snapshot data (share price and market capitalization) are drawn from the provided market-quote feed as of the latest timestamp in the dataset.