AI Takeaway
FANG reported Q1 FY2026 revenue of $4.24B (+4.7% YoY) but saw a dramatic collapse in profitability, with operating income plunging 93.1% to $116M and net income falling 98.2% to just $25M, likely driven by a significant one-time or non-cash charge.
Revenue
$4.24B
++4.74% YoY
EPS (Basic)
$0.08
-98.34% YoY
Operating Income
$116M
-93.07% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Total revenue grew 4.7% YoY to $4.24B in Q1 FY2026 from $4.05B in the prior-year period, suggesting the underlying business continues to generate top-line growth even as profitability was severely impacted.
Source: Source: 10-Q Income Statement
Operating income fell 93.1% YoY to $116M (vs. $1.67B prior year), and net income dropped 98.2% to $25M (vs. $1.41B prior year), indicating a massive increase in costs or a large non-recurring charge that was not present in the prior year period.
Source: Source: 10-Q Income Statement
Operating margin contracted from approximately 41.3% in Q1 FY2025 to just 2.7% in Q1 FY2026, a decline of roughly 38.6 percentage points, reflecting the outsized impact of elevated costs or impairment charges relative to revenue.
Source: Source: 10-Q Key Ratios
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Upgrade to unlockCash and equivalents dropped 90.4% YoY to just $174M, while current liabilities stand at $4.82B, resulting in a current ratio of only 0.56—well below 1.0. This means FANG's short-term liabilities significantly exceed its liquid assets, creating potential refinancing or liquidity risk if operating cash flows deteriorate.
Source: Source: 10-Q Balance Sheet
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Upgrade to unlockReported EPS of $4.23 versus the $3.37 analyst consensus — a +25.5% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $4.24B | $4.05B | +4.74% |
Operating Income | $116M | $1.67B | -93.07% |
Net Income | $25M | $1.41B | -98.22% |
EPS (Basic) | $0.08 | $4.83 | -98.34% |
EPS (Diluted) | $0.08 | $4.83 | -98.34% |
SG&A Expense | $79M | $73M | +8.22% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $70.08B | $70.07B | +0.02% |
Current Assets | $2.7B | $4.08B | -33.77% |
Total Liabilities | $27.44B | $28.32B | -3.12% |
Current Liabilities | $4.82B | $4.75B | +1.33% |
Stockholders' Equity | $36.47B | $38.47B | -5.20% |
Cash & Equivalents | $174M | $1.82B | -90.42% |
Long-Term Debt | $13.15B | $13B | +1.18% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $1.83B | $2.35B | -22.38% |
Investing Cash Flow | $-658M | $-1.65B | +60.19% |
Financing Cash Flow | $-1.1B | $1.18B | -193.62% |
D&A | $1.29B | $1.1B | +17.87% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 2.7% | 41.3% | -38.59% |
Net Margin | 0.6% | — | — |
ROE | 0.1% | — | — |
ROA | 0.0% | — | — |
Current Ratio | $0.561 | — | — |
Debt to Equity | $0.752 | — | — |
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FANG's earnings collapsed in Q1 FY2026, with net income falling 98.2% YoY to just $25M from $1.41B, and EPS dropping from $4.83 to $0.08. The sharp decline appears driven by a massive increase in costs or a large non-recurring charge, as revenue only grew modestly by 4.7% to $4.24B.
Yes, FANG's revenue grew 4.7% YoY to $4.24B in Q1 FY2026, up from $4.05B in the prior-year period. However, this top-line growth was far overshadowed by the near-total collapse in profitability during the same period.
The most pressing risks include a severe liquidity squeeze—cash fell 90.4% to just $174M while current liabilities stand at $4.82B, yielding a current ratio of only 0.56—and the potential for continued earnings weakness if the factors that crushed margins persist. Additionally, $13.15B in long-term debt adds financial pressure in an environment of compressed operating cash flows.
FANG's operating margin collapsed from approximately 41.3% in Q1 FY2025 to just 2.7% in Q1 FY2026, a decline of roughly 38.6 percentage points. This means the company retained only about $0.027 in operating profit for every dollar of revenue, compared to over $0.41 in the prior year.
FANG generated $1.83B in operating cash flow in Q1 FY2026, which remains positive and is supported by $1.29B in non-cash D&A, suggesting the business can still fund operations. However, cash on hand fell sharply to $174M and the current ratio of 0.56 indicates short-term liabilities significantly exceed liquid assets, warranting close attention to liquidity management.