AI Takeaway
OKE delivered strong Q1 FY2026 results with revenue surging 19.6% YoY to $9.62B and net income rising 21.7% to $774M, though elevated cost of revenue and a current ratio below 1.0 highlight ongoing leverage and liquidity considerations.
Revenue
$9.62B
++19.58% YoY
EPS (Basic)
$1.23
++18.27% YoY
Operating Income
$1.43B
++17.05% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Revenue increased $1.575B (+19.6% YoY) to $9.618B in Q1 FY2026, reflecting strong throughput growth across OKE's midstream operations and higher commodity-linked revenues. This top-line expansion outpaced the prior-year period's $8.043B.
Source: Source: 10-Q Income Statement
Cost of revenue rose 24.7% YoY to $7.053B, growing faster than revenue (+19.6%), which compressed gross profit margins. This suggests higher commodity purchase costs or increased operating expenses tied to expanded volumes.
Source: Source: 10-Q Income Statement
Operating income grew 17.0% YoY to $1.428B, but operating margin edged down to 14.85% from 15.17% in the prior year, indicating that cost growth is modestly outpacing operating leverage gains.
Source: Source: 10-Q Income Statement & Key Ratios
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Upgrade to unlockOKE carries $32.0B in long-term debt as of Q1 FY2026, representing a significant portion of its $68.2B total asset base. Elevated debt levels increase interest expense sensitivity to rate changes and constrain financial flexibility. ROE of 3.46% and ROA of 1.13% reflect the drag of this leverage on returns.
Source: Source: 10-Q Balance Sheet & Key Ratios
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Upgrade to unlockReported EPS of $1.32 versus the $1.32 analyst consensus — a +0.3% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $9.62B | $8.04B | +19.58% |
Cost of Revenue | $7.05B | $5.66B | +24.72% |
Operating Income | $1.43B | $1.22B | +17.05% |
Net Income | $774M | $636M | +21.70% |
EPS (Basic) | $1.23 | $1.04 | +18.27% |
EPS (Diluted) | $1.23 | $1.04 | +18.27% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $68.2B | $64.26B | +6.13% |
Current Assets | $5.54B | $4.12B | +34.67% |
Current Liabilities | $7.81B | $6.18B | +26.33% |
Stockholders' Equity | $22.36B | $21.36B | +4.65% |
Cash & Equivalents | $172M | $141M | +21.99% |
Long-Term Debt | $32B | $31.8B | +0.63% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $934M | $904M | +3.32% |
Investing Cash Flow | $-1.01B | $-694M | -45.10% |
Financing Cash Flow | $167M | $-802M | +120.82% |
Dividends Paid | $674M | $643M | +4.82% |
D&A | $378M | $380M | -0.53% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 14.8% | 15.2% | -0.32% |
Net Margin | 8.0% | — | — |
ROE | 3.5% | — | — |
ROA | 1.1% | — | — |
Current Ratio | $0.71 | — | — |
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OKE reported strong Q1 FY2026 results with revenue of $9.618B (+19.6% YoY) and net income of $774M (+21.7% YoY). EPS came in at $1.23, up from $1.04 in Q1 FY2025, reflecting solid growth across its midstream operations.
OKE's revenue grew $1.575B or 19.6% YoY to $9.618B in Q1 FY2026, driven by higher throughput volumes and commodity-linked revenues in its midstream business. However, cost of revenue grew even faster at 24.7%, suggesting commodity purchase costs also rose significantly.
OKE's key risks include its $32.0B long-term debt load, a current ratio of only 0.71 indicating near-term liquidity reliance on credit markets, and negative free cash flow of approximately -$73M in Q1 FY2026 after capital expenditures. Commodity price volatility could further compress margins given that cost of revenue is growing faster than revenue.
OKE paid $674M in dividends in Q1 FY2026 against operating cash flow of $934M, a payout ratio of approximately 72%. However, with investing outflows of $1.007B exceeding operating cash flow, OKE generated negative free cash flow and relied on $167M of net financing inflows to bridge the gap, making dividend sustainability dependent on continued capital market access.
OKE's financial health shows a mixed picture: revenue and net income are growing strongly at 19.6% and 21.7% YoY respectively, but the company carries $32.0B in long-term debt, a below-1.0 current ratio of 0.71, and negative free cash flow this quarter. Total assets grew to $68.2B with stockholders' equity of $22.4B, reflecting a capital-intensive but growing midstream infrastructure business.