AI Takeaway
TRGP delivered a strong Q1 FY2026 with net income surging 77.3% YoY to $479.6M and operating margin expanding nearly 9 percentage points to 20.7%, even as total revenue declined 10.2% due to lower cost-of-revenue pass-throughs, while the company significantly ramped capital investment with investing cash outflows rising 165.7% YoY.
Revenue
$4.09B
-10.23% YoY
EPS (Basic)
$2.22
++143.96% YoY
Operating Income
$846.9M
++55.88% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Total revenue fell 10.2% YoY to $4.09B in Q1 FY2026, but this was more than offset by a 26.5% drop in cost of revenue to $2.39B, suggesting the revenue decline reflects lower commodity prices or purchase-gas costs passed through to customers rather than a deterioration in underlying business volumes.
Source: Source: 10-Q Income Statement
Operating income surged 55.9% YoY to $846.9M, with operating margin expanding from 11.9% to 20.7%. This significant margin improvement indicates that TRGP's fee-based and higher-margin revenue streams grew as a proportion of the total mix, even as lower commodity-linked revenues compressed the top line.
Source: Source: 10-Q Income Statement
Net income rose 77.3% YoY to $479.6M, and basic EPS more than doubled, jumping 144.0% to $2.22 from $0.91 in the prior-year period. The outsized EPS growth relative to net income growth likely reflects share count changes or preferred dividend adjustments benefiting common shareholders.
Source: Source: 10-Q Income Statement
2 more insights available
Upgrade to unlockLong-term debt increased 18.0% YoY to $19.13B, representing a very large multiple of equity ($3.14B) and generating a debt-to-equity ratio of approximately 6.1x. With interest rates remaining elevated, the cost of servicing this debt could pressure future earnings and limit financial flexibility.
Source: Source: 10-Q Balance Sheet
Unlock 4 more detailed risk analysis
Upgrade to unlockReported EPS of $2.21 versus the $2.56 analyst consensus — a -13.7% miss for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $4.09B | $4.56B | -10.23% |
Cost of Revenue | $2.39B | $3.26B | -26.50% |
Operating Income | $846.9M | $543.3M | +55.88% |
Net Income | $479.6M | $270.5M | +77.30% |
EPS (Basic) | $2.22 | $0.91 | +143.96% |
EPS (Diluted) | $2.21 | $0.91 | +142.86% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $27.11B | $22.8B | +18.89% |
Current Assets | $2.44B | $2.08B | +17.44% |
Current Liabilities | $3.4B | $3.2B | +6.18% |
Stockholders' Equity | $3.14B | $2.45B | +27.94% |
Cash & Equivalents | $100.1M | $151.4M | -33.88% |
Long-Term Debt | $19.13B | $16.21B | +18.03% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $739.5M | $954.4M | -22.52% |
Investing Cash Flow | $-2.16B | $-813.3M | -165.70% |
Financing Cash Flow | $1.36B | $-147M | +1022.04% |
D&A | $426M | $367.6M | +15.89% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 20.7% | 11.9% | +8.77% |
Net Margin | 11.7% | — | — |
ROE | 15.3% | — | — |
ROA | 1.8% | — | — |
Current Ratio | $0.718 | — | — |
Other companies in Oil & Gas Storage & Transportation
TRGP delivered a strong Q1 FY2026 with net income rising 77.3% YoY to $479.6M and basic EPS more than doubling to $2.22 from $0.91. Operating margin expanded nearly 9 percentage points to 20.7%, even as total revenue declined 10.2% to $4.09B due to lower commodity-linked revenues.
TRGP's revenue declined 10.2% YoY to $4.09B largely because commodity-linked revenues such as product sales and purchase-gas pass-throughs fell with lower commodity prices. However, cost of revenue dropped even faster, down 26.5% to $2.39B, so the net effect was a significant improvement in profitability and margins.
TRGP carries $19.13B in long-term debt as of Q1 FY2026, up 18.0% YoY, against stockholders' equity of just $3.14B, implying a debt-to-equity ratio of approximately 6.1x. The company also has a current ratio of only 0.72 and just $100.1M in cash, making liquidity management a key focus.
TRGP spent $2.16B in investing activities in Q1 FY2026, a 165.7% increase from $813.3M in Q1 FY2025, signaling a major acceleration in infrastructure growth spending. This investment was largely funded by $1.36B in financing inflows, most likely new debt issuance, as long-term debt rose by approximately $2.9B YoY.
The most significant risks for TRGP include its very high leverage with $19.13B in long-term debt and a debt-to-equity ratio of ~6.1x, as well as a current ratio below 1.0 at 0.72 indicating tight near-term liquidity. Additionally, the aggressive capital investment cycle of $2.16B in a single quarter creates execution risk if projects face delays or cost overruns.