Nextdecade Corp (NEXT) | The Buildout — AI Infrastructure
The Verdict
NextDecade is a Houston-based energy company constructing the Rio Grande LNG Facility near Brownsville, Texas. It is pre-first-LNG and is transitioning from an LNG developer to an LNG operator. The AI infrastructure link is indirect and not disclosed: AI/data-center growth could increase power demand, some of which may be met by gas-fired generation, supporting LNG demand. Management has not named AI or data centers as a demand driver.
| Market Cap | — |
| Revenue (TTM) | $0M |
| Net Debt | $10.5B |
| Earnings Beats | 4 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Construction is ahead of schedule: Trains 1 & 2 were 74% complete as of June 2026, up from 67.8% in March, and Train 3 was over 50%.
- Early cargo sale of over 175 TBtu at an expected margin over $3/MMBtu reduced early-production market exposure by 33%.
- Financing de-risked: the $3.5B senior secured notes issue rated BBB- drew an order book over $14B and paid down about $4.6B of Phase 1 bank borrowings.
- Commercial offtake shows 14 counterparties for about 25.3 MTPA across Trains 1–5, with 99% of Phase 1 contracted LNG priced off Henry Hub.
- South Texas feedgas basis advantage: Agua Dulce/Houston Ship Channel gas trades at a substantial discount to Henry Hub.
What We’re Watching
- Commissioning is the main near-term risk: first gas is 2H 2026, first LNG is 1H 2027, and timing has not yet been narrowed.
- About 67% of early production remains unhedged, leaving merchant exposure to spot LNG prices.
- Train 6 FID is targeted for 2H 2027 but remains contingent on commercial support and financing; equity structure is unresolved.
- Bechtel is the sole-source EPC contractor for Phase 1, Train 4, and Train 5, creating single-point execution dependency.
The execution and financing case has strengthened: construction is ahead of schedule, early cargo sales have begun, and the capital structure has been termed out. The thesis remains intact but still gated on first LNG and Train 6 commercialization. The open question is whether management can narrow first-LNG timing in Q4 2026 without changing the 1H 2027 range.
Earnings Beat
The latest update was a business update, not an earnings release; NextDecade reported no LNG revenue through Q2 2026 because the facility is not yet operational. Construction progress was the standout: Trains 1 & 2 reached 74% complete and Train 3 reached over 50%. Management reaffirmed first gas in 2H 2026 and first LNG from Train 1 in 1H 2027.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $0M | $0M | $0M | — |
| Gross margin | — | — | — | — |
| EBITDA | −$47M | −$54M | −$52M | −9.8% |
| EPS | $-0.25 | $-0.51 | $-0.23 | +5.6% |
| Trains 1 & 2 completion | 74% | 67.8% | n/a | — |
| Train 3 completion | Over 50% | 44.2% | n/a | — |
On our last call, we told you that we’re tracking ahead of the schedule reflected in our production guidance, and that remains true today.— Matt Schatzman, CEO, July 30, 2026
Management tone: Management's tone remained execution-focused and specific. On the Q2 call, the CEO and new CFO detailed milestones, reaffirmed timing, and answered questions directly. Management said construction remains ahead of schedule and expects to narrow first-LNG timing in Q4 2026.
Management Guidance
Management reaffirmed early volume, cash flow, and steady-state guidance. Total early LNG production is approximately 3,800 TBtu, of which about 1,275 TBtu is uncontracted. NextDecade's share of early distributable cash flow is approximately $2 billion at a $5/MMBtu margin and about $1.2 billion at a $3/MMBtu margin. Steady-state annual distributable cash flow is approximately $500 million pre-flip and approximately $800 million post-flip beginning mid-2030s, with a steady-state leverage target of 3.0–3.5x. First gas remains 2H 2026 and first LNG remains 1H 2027; management expects to narrow first-LNG timing in Q4 2026.
Trajectory
There has been no LNG revenue through Q2 2026; the Q1 10-Q showed revenue of $0. Construction completion is the leading indicator: Trains 1 & 2 rose from 67.8% in March to 74% in June, Train 3 from 44.2% to over 50%, Train 4 from 10.6% to 15.5%, and Train 5 from 6.8% to 9.4%. The driver is Bechtel's execution ahead of schedule, with FERC-approved 24/7 construction at no incremental project cost.
The Model
The model projects FY+1 revenue of $0M and EBITDA of -$220M, consistent with pre-first-LNG construction. FY+2 projects revenue of $1,478M and EBITDA of $458M, a 31.0% EBITDA margin, as early cargoes and Train 1 deliveries begin. The five-run FY+2 revenue spread is 42%, from $1,050M to $1,670M against the $1,478M median. The near term is anchored by first LNG in H1 2027; FY+2 depends on commissioning and margins on uncontracted early cargoes.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $0M | $0M | $1.5B |
| YoY Growth | — | — | — |
| EBITDA | −$214M | −$220M | $458M |
| EBITDA Margin | — | 0.0% | 31.0% |
Projections are the median of 5 independent model runs.
Management reaffirmed early volume, cash flow, and steady-state guidance. Total early LNG production is approximately 3,800 TBtu, of which about 1,275 TBtu is uncontracted. NextDecade's share of early distributable cash flow is approximately $2 billion at a $5/MMBtu margin and about $1.2 billion at a $3/MMBtu margin. Steady-state annual distributable cash flow is approximately $500 million pre-flip and approximately $800 million post-flip beginning mid-2030s, with a steady-state leverage target of 3.0–3.5x. First gas remains 2H 2026 and first LNG remains 1H 2027; management expects to narrow first-LNG timing in Q4 2026.
What Could Go Right — and Wrong
- First LNG arrives early in H1 2027 with smooth commissioning and remaining unhedged early volumes sold at margins above $5/MMBtu.
- Train 6 SPAs are signed within the next six months at or above $3.00 plus 115% Henry Hub, supporting FID in 2H 2027.
- The Agua Dulce/Houston Ship Channel basis discount is locked in long-term with producers on acceptable bid-offer terms.
- Early distributable cash flow exceeds the guided $2 billion scenario if spot LNG prices remain elevated.
- NextDecade acquires additional Phase 1, Train 4, or Train 5 operating interests on economic terms.
- Commissioning or technical problems push first LNG beyond 1H 2027.
- Spot LNG prices decline faster than expected, cutting margins on the roughly 67% of early production that remains unhedged.
- Train 6 commercialization stalls, causing FID to slip beyond 2H 2027.
- A regulatory setback or legal challenge delays Train 6, Train 7, or Train 8 permits.
- A Bechtel performance issue or Bay Runner pipeline delay disrupts the schedule.
Looking Ahead
The next 12 months are the transition from construction to operations. The Bay Runner Pipeline is expected in service in Q3 2026, LNG tank completion is expected before end of 2026, and first gas is targeted for 2H 2026. Management expects to narrow first-LNG timing in Q4 2026, while Train 6 SPA announcements are expected within the next six months and Train 6 equity financing detail later in 2026. First LNG from Train 1 remains targeted for 1H 2027.
- Q3 2026Bay Runner pipeline in-service — Tests feedgas readiness for Trains 1–3.
- 2H 2026First gas into Rio Grande LNG — Starts commissioning; management cautions not to over-read exact gas timing.
- Before end of 2026LNG tank completion — Clears a major pre-first-gas milestone.
- Q4 2026Narrow first-LNG timing guidance — Tests whether the 1H 2027 first-LNG schedule still holds.
- Next six months from July 2026Train 6 SPA announcements — Volume and counterparty disclosures will validate Train 6 commercialization.
- 1H 2027First LNG from Train 1 — Ultimate transition to revenue generation.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $0M | $0M | $0M | — |
| Gross Margin | — | — | — | — |
| EBITDA | −$164M | −$214M | −$804M | -30.0% |
| EBITDA Margin | — | — | — | — |
| Net Income | −$62M | −$306M | −$359M | -396.0% |
| Free Cash Flow | −$2.7B | −$5.3B | −$10.2B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- ROIC-1.7%
The Company
NextDecade is a Houston-based energy company constructing the Rio Grande LNG Facility near Brownsville, Texas. The first five liquefaction trains—Phase 1, Train 4, and Train 5—are under construction, with Trains 6–8 in development and permitting. The company is pre-first-LNG and has not generated LNG revenue. Management's longer-term goal is to increase capacity at Rio Grande LNG up to 60 million tonnes per annum by advancing Trains 6 through 8.
The facility is built under fully wrapped, lump-sum turnkey EPC contracts with Bechtel Energy Inc., the sole-source EPC contractor for Phase 1, Train 4, and Train 5; Bechtel is also performing Train 6 FEED. NextDecade had more than 400 employees as of Q1 2026, the majority in Brownsville, and more than 6,000 workers on site daily as of Q2 2026. The main substation was energized in May 2026 with 138 kV power.
Business Segments
Competitive Landscape
The 10-K notes intense competition from independent, technology-driven companies and major or integrated oil and gas companies and utilities. The supplied filings do not name specific competitors.
Supply Chain
NextDecade sits at the end of a construction-heavy LNG supply chain: EPC, feedgas pipelines, liquefaction equipment, and LNG shipping feed one export facility near Brownsville.
More on NEXT: Earnings recap