Expand Energy Corp. (NASDAQ:EXE)

The analysis of the financial ratios over the reported periods reveals several key trends in the company's financial structure and risk profile.

Debt to Equity Ratio

The debt to equity ratio steadily increased from 0.33 in March 2021 to a peak of 0.52 in June 2022, indicating a growing reliance on debt financing relative to equity during this period. Following this peak, the ratio declined significantly to 0.19 by December 2023, suggesting deleveraging or increased equity levels. However, from March 2024 to March 2025, a moderate rise occurred, ending at 0.30, which indicates a slight increase in leverage again but still below earlier highs.

Debt to Capital Ratio

This ratio shows a similar pattern to debt to equity, starting at 0.25 in March 2021 and increasing to 0.34 in June 2022. Subsequently, it decreased to around 0.16 by December 2023 and remained relatively stable through September 2024. By March 2025, it rose to 0.23, indicating a modest increase in capital structure leverage following a period of lower debt intensity.

Debt to Assets Ratio

The debt to assets ratio remained relatively stable, fluctuating mildly between 0.17 and 0.22 during 2021 and 2022, with a slight decline by late 2022 and early 2023 (around 0.14–0.15). From late 2024 through early 2025, the ratio increased again, reaching 0.19 by March 2025. This reflects consistent asset leverage with minor adjustments over time.

Financial Leverage Ratio

The financial leverage ratio exhibited some volatility, rising from 1.78 in March 2021 to a high of 2.47 in March 2022. Then, it decreased substantially to around 1.31 by December 2023, representing a notable reduction in overall leverage. However, by early 2025, the ratio increased again to 1.62, indicating a moderate return to higher leverage.

Interest Coverage Ratio

The interest coverage ratio data starts with missing values but shows a remarkably high figure of 75.07 in December 2021. This sharp drop follows, with a negative coverage of -1.25 in March 2022, suggesting a challenging period with insufficient earnings to cover interest expenses. Recovery is seen from June 2022 through December 2023, with ratios ranging between about 7.48 and 38.90, signaling strong ability to cover interest during most of this period. Nonetheless, late 2024 and early 2025 reveal a decline into negative coverage again (-5.84 to -6.32), highlighting a return to financial stress concerning interest obligations.

Overall, the company’s financial leverage indicators demonstrate an initial increase in debt levels peaking around mid-2022, followed by a period of deleveraging and improved solvency ratios until late 2023. The interest coverage ratio supports this narrative, showing a period of strong earnings capacity after a brief downturn, but recent negative coverage points to renewed financial challenges. The moderate rise in leverage ratios during late 2024 and early 2025 suggests a cautious return to increased financial risk that may warrant further monitoring.

Total Debt

The total debt exhibited fluctuations over the reported periods, beginning at approximately $1.26 billion in early 2021 and experiencing a significant increase by the end of 2021, peaking near $3.1 billion in late 2022. Following this peak, there was a notable decline to around $2.0 billion through the end of 2023 and mid-2024. However, a marked surge occurred towards the end of 2024 and early 2025, with debt rising sharply to approximately $5.7 billion and remaining elevated near $5.2 billion in the first quarter of 2025.

Stockholders’ Equity

Stockholders’ equity showed a generally upward trend throughout the period. Starting at about $3.9 billion in early 2021, equity initially declined to roughly $3.0 billion by the third quarter of 2021. Subsequently, it increased substantially, reaching over $10 billion by early 2023. This upward momentum continued with some minor fluctuations, culminating in a peak of approximately $17.6 billion late in 2024, before slightly decreasing but remaining near $17.2 billion in early 2025. The data reflects robust growth in equity after the initial dip.

Debt to Equity Ratio

The debt to equity ratio fluctuated over the observed timeframe, beginning with a low ratio of 0.33 in early 2021, rising to a peak close to 0.52 during mid-2022, indicating increased leverage relative to equity. Subsequently, the ratio decreased significantly to near 0.19 by late 2023 and remained at lower levels through most of 2024, suggesting a reduction in relative debt burden as equity grew. However, towards the end of 2024 and into early 2025, the ratio increased again to about 0.32, reflecting the spike in total debt coupled with the elevated equity levels.

Overall Trends and Insights

The financial data reveals a pattern of initially rising debt levels coupled with fluctuating equity, resulting in varying leverage. The significant growth in equity after the third quarter of 2021 lowered the debt to equity ratio through most of 2023 and 2024, indicating improved financial stability. The sharp increase in debt at the end of 2024 and early 2025, alongside continued high equity, suggests strategic adjustments possibly intended for expansion or capital-intensive projects. The ratio remains moderate despite the increased debt, reflecting a balance between leveraging and maintaining equity strength.

Total Debt

The total debt exhibited a fluctuating trend over the analyzed period. Initially, from March 2021 to December 2021, total debt remained relatively stable around 1,260 million USD before sharply increasing to 2,778 million USD by March 2022 and continuing an upward trajectory, peaking at 3,093 million USD by December 2022. Subsequently, a noticeable decline followed from March 2023 through September 2024, with debt levels dropping steadily to approximately 2,017 million USD. However, a significant rise occurred again in December 2024 and March 2025, reaching totals of 5,680 million USD and 5,243 million USD, respectively.

Total Capital

Total capital experienced substantial variation and generally increased over the analyzed timeframe. Starting just above 5,000 million USD in March 2021, it declined gradually until September 2021, after which a sharp surge took place toward December 2021, nearly doubling from earlier quarters to 7,949 million USD. This growth continued, peaking at 12,217 million USD in December 2022. Following this peak, total capital showed moderate fluctuations but remained relatively stable around the 12,000 to 12,700 million USD mark until September 2024. In the final two quarters, total capital sharply increased again, reaching levels exceeding 22,000 million USD by March 2025.

Debt to Capital Ratio

The debt to capital ratio reflected the interplay between debt and total capital trends. Initially, this ratio rose from 0.25 in March 2021 to a peak around 0.34 in the first half of 2022, indicating an increased proportion of debt in the capital structure. Subsequently, the ratio declined steadily through 2023 and 2024, reaching a low around 0.16 to 0.17, signifying a relatively lower leverage position during this period. However, the last two quarters of the dataset showed an uptick in the ratio to approximately 0.24 in March 2025, suggesting a renewed increase in leverage, though it remains below the peak levels observed in early 2022.

Total Debt

The total debt shows a fluctuating trend over the analyzed periods. Initially, debt remained relatively stable around 1,260 million USD from March 2021 through September 2021, before nearly doubling by December 2021 to approximately 2,278 million USD. This elevated level persisted with increments reaching 3,093 million USD by December 2022. Thereafter, a consistent decline occurred through 2023 and into mid-2024, reducing total debt gradually to about 2,017 million USD by September 2024. However, towards the end of 2024 and into March 2025, a sharp increase is observed, with debt approximately tripling to 5,680 million USD by December 2024 and remaining high at 5,243 million USD by March 2025.

Total Assets

Total assets display a strong growth trajectory during the first part of the period, increasing steadily from around 6,900 million USD in March 2021 to nearly 15,500 million USD by December 2022. Beginning in 2023, total assets moderately decreased, dropping to approximately 13,392 million USD by September 2024. This decline reversed abruptly at the end of 2024, with assets surging to nearly 27,900 million USD by December 2024 and maintaining a similar level in early 2025.

Debt to Assets Ratio

The debt to assets ratio was relatively stable and low (around 0.17–0.22) during early periods, with a slight increase towards the end of 2021 and mid-2022, peaking near 0.22. Subsequently, the ratio decreased to about 0.14 from March 2023 through mid-2024, indicating improved leverage ratios due to the reduction in debt and relatively steady assets. Finally, similar to the patterns observed in debt and assets, the ratio rose again towards late 2024 and early 2025, reaching values around 0.20, reflecting the simultaneous increase in debt and assets.

Overall Insights

The data reflects a period of substantial financial activity, characterized by two major phases: a rapid increase in both debt and assets during 2021-2022, followed by a moderate consolidation period in 2023 and the majority of 2024. The end of 2024 shows a marked escalation in both metrics, which could indicate significant financing and asset acquisition or other growth initiatives. Despite fluctuations, the company maintained a conservative leverage position for much of the period, as evidenced by the debt to assets ratio staying well below 0.25. The sharp rise in debt at the close of the period warrants attention, particularly in relation to asset growth, to understand sustainability and risk implications.

Total Assets

Over the observed period, total assets exhibited an overall upward trend, growing from approximately $6.9 billion in March 2021 to nearly $27.9 billion by March 2025. Notably, there was a significant surge between September 2024 and December 2024, where assets more than doubled from about $13.4 billion to $27.9 billion. Prior to this spike, asset growth was relatively steady with moderate increases quarter-over-quarter, indicating gradual expansion or acquisitions.

Stockholders’ Equity

Stockholders’ equity showed some fluctuations in the initial years, declining from $3.9 billion in March 2021 to a low near $3.0 billion in September 2021, followed by a recovery to over $9.1 billion by December 2022. From 2023 through mid-2024, equity levels hovered around $10.0 to $10.7 billion, demonstrating relative stability. A pronounced increase occurred between September 2024 and December 2024, rising sharply to approximately $17.6 billion, mirroring the surge in total assets. By March 2025, equity slightly decreased to around $17.2 billion but remained significantly higher than in prior periods.

Financial Leverage

The financial leverage ratio displayed considerable variability across the timeframe. Initially, leverage increased from 1.78 in March 2021 to a peak of 2.47 in March 2022, indicating a higher reliance on debt relative to equity. Subsequently, there was a consistent decline in leverage, reaching a low near 1.31 between March 2024 and September 2024, suggesting a reduction in debt or an increase in equity proportions. However, leverage rebounded moderately to around 1.62 by March 2025, in line with the substantial increases in both assets and equity at the end of the period. Overall, the trend reflects phases of heightened leverage followed by a de-leveraging strategy, and a slight return to moderate leverage in the latest quarters.

Earnings before interest and tax (EBIT)

EBIT exhibited significant volatility over the observed periods. Starting from a positive value of 5,644 million US dollars in March 2021, EBIT rapidly declined to negative figures in the subsequent two quarters of 2021, reaching -421 million and -338 million respectively. A recovery emerged in December 2021 with EBIT returning to a positive 1,421 million US dollars. However, the following quarters continued to show fluctuations, including negative values in early 2022 and mid-2024. The highest positive peaks after 2021 were observed in December 2022 (2,230 million US dollars) and March 2023 (1,830 million US dollars). Negative EBIT readings became more frequent toward the end of the timeline, indicating inconsistent operational profitability within recent quarters.

Interest Expense

Interest expense demonstrated a gradual upward trend across the time frame, increasing from 23 million US dollars in March 2021 to a peak of 64 million in December 2024, before a slight decrease in early 2025. The expense showed minor fluctuations but generally followed a rising pattern, suggesting possibly higher borrowing costs or increased debt levels over time.

Interest Coverage Ratio

The interest coverage ratio, a measure of the ability to meet interest obligations, showed considerable variability. It was notably high at 75.07 in September 2021, suggesting significant buffer for interest payments during that period. This was followed by a sharp drop to negative values in December 2021 (-1.25), reflecting EBIT losses low enough to impair coverage capability. Positive coverage resumed strongly through most of 2022 and early 2023, with ratios frequently above 20, indicating healthy earnings relative to interest expenses. However, from mid-2023 onward, a consistent decline was apparent, with the ratio falling below 10 and eventually turning negative again in late 2024 and early 2025. This pattern reflects recurring operational challenges impacting the company’s ability to comfortably service its interest obligations in recent periods.