NextDecade Q4 Earnings Call Highlights

NextDecade (NASDAQ:NEXT) used its fourth-quarter 2025 investor update call to highlight major commercial, construction, and financing milestones at its Rio Grande LNG project, while also outlining priorities for 2026 tied to commissioning readiness, early cargo sales, and continued expansion planning.

Commercial milestones and LNG contracting

Chairman and CEO Matt Schatzman said 2025 was “another transformational year,” emphasizing that the company executed five 20-year LNG sale and purchase agreements (SPAs) in 2025 totaling 7.2 million tons per annum with TotalEnergies, Aramco, JERA, EQT, and ConocoPhillips. Those agreements, together with a 1.9 million ton per annum SPA signed with ADNOC in 2024, completed the commercialization of trains 4 and 5.

Across the 9.1 million tons per annum of SPAs for trains 4 and 5, Schatzman said fixed liquefaction fees total approximately $1.2 billion annually before inflation escalation.

Project execution: construction progress and schedule

NextDecade reported continued progress on Phase 1 construction at Rio Grande LNG with EPC contractor Bechtel, saying the project is advancing safely, on budget, and ahead of guaranteed substantial completion dates.

As of January 2026, the company said:

• Trains 1 and 2 were almost 65% complete.
• Train 3 was almost 40% complete.
• Train 4 (FID in September 2025) was 7.8% complete.
• Train 5 (FID in October 2025) was 3.3% complete.

Schatzman said Train 1 structural steel and equipment installation had become “substantially complete,” with early electrical commissioning underway alongside piping installation and testing, cable pulling, and main compressor installation. Marine loading and tug berths were also advancing, including berth 1 loading arm installation. For trains 4 and 5, the company described early work centered on engineering, purchase requisitions for key equipment, and site preparation.

The company reiterated expectations for first LNG production from Train 1 in the first half of 2027, with commissioning activities expected to begin in 2026 and Train 1 transitioning to operations later in 2027.

Schatzman also highlighted safety performance, stating the project recorded a Total Recordable Incident Rate (TRIR) of 0.22 in 2025.

Financing and capital structure updates

Interim CFO Mike Mott reviewed the financing completed at the final investment decisions (FIDs) for trains 4 and 5. He said each train was fully funded at FID, including NextDecade’s equity commitments, and that no incremental capital raises are expected to fund trains 4 and 5 construction based on current funding sources. Estimated total project costs were cited at approximately $6.7 billion per train, unchanged since FID.

Mott said the funding structure at FID was approximately 60% debt and 40% equity, using delayed-draw, senior secured, non-recourse project finance credit facilities. He cited approximately $3.8 billion of project debt for Train 4 and $3.6 billion for Train 5. For Train 5, the company also used $500 million of senior secured non-recourse private placement notes to be issued in tranches through October 2026; as of year-end 2025, $150 million had been issued and was outstanding.

On equity, Mott said Train 4 has approximately $2.8 billion in total equity commitments (about $1.7 billion from equity partners and $1.1 billion from NextDecade), with NextDecade initially holding a 40% economic interest that increases to 60% after partners achieve certain returns. Train 5 has approximately $2.6 billion in total equity commitments (roughly $1.3 billion from partners and $1.3 billion from NextDecade), with NextDecade’s economic interest initially at 50% and increasing to 70% after a similar return threshold.

To fund its equity commitments across trains 4 and 5, Mott said NextDecade entered into approximately $2.7 billion in term loans and used over $200 million of cash on hand. He described an all-in expected cost of approximately 9% for the term loans, including a $1.2 billion Super FinCo term loan and an approximately $1.5 billion FinCo bank facility. The FinCo facility was described as delayed-draw with pre-payable commitments without penalty and priced at SOFR plus 350 basis points.

At the corporate holding level, Mott said the company amended a loan at Rio Grande LNG Super Holdings, resulting in a $100 million, 8% exchangeable loan due 2030 (interest payable in cash or in kind at NextDecade’s election), exchangeable into common shares at $9.50 per share. He also referenced an amended 13.5% loan due 2030 with a $175 million initial principal amount before paid-in-kind interest.

Early cargo strategy, cash flow sensitivities, and leverage targets

Management spent significant time discussing “early volumes” produced before the start of long-term SPA deliveries. Mott reiterated a projection of approximately 3,800 TBtu of LNG produced and sold from Train 1 startup in 2027 through the date of first commercial deliveries (DFCD) for Train 5 SPA customers in the first half of 2031. That total includes 1,275 TBtu above volumes contracted under long-term SPAs, which the company characterized as largely tied to expected early production after substantial completion and before DFCD for each train.

Schatzman and Mott said the company began marketing early cargoes in 2026 and reported year-to-date sales of over 175 TBtu on an FOB basis, with fixed liquefaction fees expected to achieve margins (FOB LNG sales price less expected feedgas and fuel costs) of over $3 per MMBtu. Mott said those sales reduced Phase 1 uncontracted early LNG production exposed to market price fluctuations by about a third. Management said it expects to sell additional early cargoes through 2026 and into early 2027 as visibility improves and timing assurance from Bechtel increases, and said cash flows from early volumes are expected to be used to pay down portions of the FinCo and Super FinCo loans.

For the early volume period through first-half 2031, management reiterated prior estimates that early LNG production could generate approximately $2 billion of NextDecade’s share of Rio Grande LNG project-level distributable cash flow at a $5 per MMBtu cargo margin. The company added a sensitivity at a $3 per MMBtu cargo margin, projecting approximately $1.2 billion of distributable cash flow to NextDecade over the same period.

Looking to steady-state operations, Mott said NextDecade’s initial leverage target after DFCD of Train 5 is a NextDecade-level debt-to-Adjusted EBITDA ratio of 3.0x to 3.5x, where NextDecade-level debt excludes project-level debt. He said trains 1 through 5 are approximately 85% contracted with SPAs that have a weighted average life of 19.5 years and annual fixed fee cash flow of approximately $3 billion before escalation.

Management outlined optionality to contract an additional approximately 2 million tons under long-term SPAs across trains 4 and 5 in a lower early-margin environment, describing the rationale as maximizing project-level debt and reducing equity needs, thereby reducing expected corporate-level debt. Schatzman stressed that this decision is not immediate and is tied to future market conditions, with management noting it does not expect to draw on the FinCo loan for multiple years.

In steady-state guidance, Mott reiterated a $5 per MMBtu margin case projecting NextDecade distributable cash flow of approximately $800 million per year after the economic interest “flip” in trains 4 and 5 (and approximately $500 million before the flip), with the flip estimated in the mid-2030s. He also described a sensitivity case assuming a $3 per MMBtu margin during the early volume period but returning to a $5 per MMBtu margin beginning in the second half of 2031, which included the assumption of contracting an additional 2 million tons across trains 4 and 5; in that case, management projected approximately $500 million per year after the flip and approximately $400 million per year between Train 5 DFCD and the flip, with flip timing estimated in the mid-to-late 2030s.

Expansion plans: trains 6–8 and permitting timeline

Schatzman said NextDecade’s ultimate goal at Rio Grande LNG is to double capacity from 30 million tons per annum to 60 million tons per annum, or 10 trains. He said the company initiated the pre-filing process with FERC in November 2025 for Train 6 and a third berth and expects to file a full application in mid-2026. He described Train 6 as identical in design to trains 1 through 5, located inside the existing levee, and initially contemplated in the original footprint, which management believes should support a “relatively easy and straightforward” permitting process. The company said it believes it could receive a FERC permit for Train 6 as early as mid-2027.

Management said it has begun early discussions with counterparties for Train 6 and continues to see strong interest for incremental LNG supply in the 2030s and beyond, which is when it estimates Train 6 could be operational depending on commercialization, EPC contracting, and financing. The company said it is also evaluating the placement of trains 7 and 8 and intends to advance their development in 2026 with a goal of permitting them under the current administration.

Q&A: geopolitical disruption and market outlook

During the question-and-answer session, Schatzman addressed a question about weekend events in the Middle East, saying the short-term impact is that nearly 20% of global LNG supply “will be disrupted,” which he said would likely cause prices to rise. He added that longer-term impacts would depend on the duration of the conflict and any damage to LNG infrastructure, noting rumors of an attack on Ras Laffan that he said had not been confirmed.

Schatzman said the company would update the market on potential upside to early volumes as 2026 progresses and as it gets more assurance from Bechtel, while noting that potential longer-term production above nameplate related to hydraulic capacity and debottlenecking would likely not be addressed until the facility is operating and performance data is available.

On EPC costs and competitive positioning, Schatzman said Train 6’s brownfield characteristics and standardized design should be competitive, while also noting he does not currently see equipment or labor costs decreasing. He described greenfield LNG development as “very, very hard to get off the ground,” and said expansion capacity can be important to achieving attractive returns.

About NextDecade (NASDAQ:NEXT)

NextDecade Corporation is a Houston‐based liquefied natural gas (LNG) and decarbonization company focused on the development, engineering, construction and operation of large‐scale LNG export facilities. The company’s core mission is to deliver cleaner energy solutions to global customers while integrating carbon capture and sequestration technologies to reduce greenhouse gas emissions. NextDecade’s projects are designed to leverage abundant U.S. natural gas supplies to meet growing worldwide demand for low‐carbon fuel.

NextDecade’s flagship project, Rio Grande LNG, is located at the Port of Brownsville in southern Texas.