AI Takeaway
FANG (Diamondback Energy) delivered record revenue of $15.0B in FY2025, up 35.8% YoY driven by production growth, but operating income collapsed 71.2% to $1.27B as surging D&A costs from acquisitions compressed margins significantly.
Revenue
$15.03B
++35.79% YoY
EPS (Basic)
$5.73
-63.10% YoY
Operating Income
$1.27B
-71.20% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-K filing
Revenue surged 35.8% YoY to $15.03B in FY2025 from $11.07B in the prior year, reflecting significant production growth likely tied to Diamondback's major acquisition activity in the Permian Basin. This top-line expansion demonstrates the company's aggressive growth strategy.
Source: Source: 10-K Income Statement, Financial Data
Operating margin collapsed from 39.7% to just 8.4% YoY, a decline of over 31 percentage points. The primary driver was D&A expense nearly doubling, rising 76.8% to $5.04B from $2.85B, reflecting the depreciation burden from large-scale asset acquisitions integrated into the portfolio.
Source: Source: 10-K Income Statement & Cash Flow Statement, Financial Data
Despite the sharp drop in net income (down 55.0% to $1.66B), operating cash flow grew 36.6% to $8.76B, demonstrating that the business generates robust cash from operations. The divergence between net income and operating cash flow is largely explained by the non-cash D&A charges of $5.04B.
Source: Source: 10-K Cash Flow Statement, Financial Data
2 more insights available
Upgrade to unlockThe dramatic 76.8% increase in D&A to $5.04B suggests Diamondback completed major asset acquisitions that are now weighing heavily on reported earnings. If acquired assets underperform expectations or integration costs escalate, profitability could remain suppressed for an extended period. This is the primary driver of the 71.2% operating income decline.
Source: Source: 10-K Cash Flow Statement & Income Statement, Financial Data
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $1.74 versus the $2.12 analyst consensus — a -18.0% miss for FY2025.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $15.03B | $11.07B | +35.79% |
Operating Income | $1.27B | $4.4B | -71.20% |
Net Income | $1.66B | $3.7B | -55.04% |
EPS (Basic) | $5.73 | $15.53 | -63.10% |
EPS (Diluted) | $5.73 | $15.53 | -63.10% |
SG&A Expense | $288M | $213M | +35.21% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $71.06B | $67.29B | +5.60% |
Current Assets | $1.92B | $2.11B | -9.24% |
Total Liabilities | $28.09B | $27.43B | +2.41% |
Current Liabilities | $4.6B | $4.81B | -4.39% |
Stockholders' Equity | $36.97B | $37.74B | -2.02% |
Cash & Equivalents | $104M | $161M | -35.40% |
Long-Term Debt | $13.73B | $12.07B | +13.67% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $8.76B | $6.41B | +36.57% |
Investing Cash Flow | $-7.81B | $-11.22B | +30.41% |
Financing Cash Flow | $-1.01B | $4.39B | -122.95% |
D&A | $5.04B | $2.85B | +76.77% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 8.4% | 39.7% | -31.30% |
Net Margin | 11.1% | — | — |
ROE | 4.5% | — | — |
ROA | 2.3% | — | — |
Current Ratio | $0.416 | — | — |
Debt to Equity | $0.76 | — | — |
Other companies in Oil & Gas Exploration & Production
FANG's revenue hit a record $15.03B in FY2025, up 35.8%, but net income fell 55% to $1.66B because depreciation, depletion, and amortization (D&A) charges surged 76.8% to $5.04B, likely from large Permian Basin acquisitions. These non-cash charges dramatically reduced reported operating income by 71.2% to $1.27B. Importantly, operating cash flow actually grew 36.6% to $8.76B, showing the underlying business remains cash-generative.
The key takeaways are: record revenue of $15.03B (+35.8%), a sharp collapse in operating margin from 39.7% to 8.4% due to surging D&A, and strong operating cash flow of $8.76B (+36.6%). EPS fell 63.1% to $5.73, and the company carries $13.73B in long-term debt with a very low current ratio of 0.42. The divergence between cash flow and net income is the central story of FY2025.
Diamondback Energy (FANG) grew revenue by 35.8% to $15.03B in FY2025, up from $11.07B in the prior year. This growth was driven by increased production volumes, likely reflecting the integration of assets from major acquisitions in the Permian Basin. The revenue growth was strong, but was offset by a proportionally larger increase in operating costs.
FANG's financial health is mixed: operating cash flow is robust at $8.76B, but the balance sheet shows stress with only $104M in cash, a current ratio of 0.42 (below the healthy threshold of 1.0), and long-term debt of $13.73B. The company's ability to service debt depends heavily on sustained commodity prices and continued strong cash generation. Stockholders' equity declined slightly to $36.97B.
Based on the financial data, the key risks for FANG in FY2025 include commodity price exposure (revenue is directly tied to oil and gas prices), elevated leverage with $13.73B in long-term debt, and integration risk from major acquisitions that have caused D&A to surge 76.8%. The company also has a very low current ratio of 0.42, indicating reliance on credit facilities for near-term liquidity. A sustained drop in oil prices could significantly impair cash flows and debt servicing capacity.