Oil and gas producer Matador Resources (NYSE: MTDR) reported Q3 2026 results topping the market’s revenue expectations, with revenue up 23.8% year on year to $1.16 billion. Its non-GAAP profit of $2.08 per share was 14.2% above analysts’ consensus estimates.

For more on Matador Resources, read our free full research report.

“Oil and natural gas revenues reached record levels in the third quarter. These revenues increased 51% as compared to the third quarter of 2025, up from $810 million to $1.22 billion in the third quarter of 2026. This increase was driven by record production and improved oil and natural gas price realizations. The previously mentioned $162 million in natural gas revenue in the third quarter was a quarterly high this year for Matador. We expect this upward revenue trend will continue, supported by natural gas production growth and improved natural gas pricing provided by the Hugh Brinson pipeline when compared to Waha prices. Natural gas production also increased 10% to 591 million cubic feet per day (“MMcfd”) in the third quarter of 2026 as compared to second quarter of 2026 production of 537 MMcfd, which also added to third quarter of 2026 outperformance. Additionally, Matador expects higher natural gas realizations when its long-term gas sales agreements with liquefaction companies on the Gulf Coast become effective in the first quarter of 2027.

Revenue growth

Cyclical sectors like energy often flatter weaker operators during favorable price environments, but a longer-term lens separates those from businesses that can consistently perform across market cycles. Matador Resources’s 24.8% annualized revenue growth over the last five years was strong. Its growth surpassed the average energy upstream and integrated energy company and shows its offerings resonate with customers.

Energy cycles can be long enough that a single five-year period can still reflect one price environment, which is why an additional, decade-long view can help capture through-cycle performance. Matador Resources’s annualized revenue growth of 30.8% over the last ten years is above its five-year trend.

While looking at revenue is important, it can also introduce noise around commodity prices and M&A. Analyzing production, on the other hand, highlights what is happening inside the asset base and whether the economic footprint of a company is expanding. Over the last two years, Matador Resources’s oil production per day averaged 17.2% year-on-year growth while its natural gas production per day averaged 17.6% year-on-year growth.

This quarter, Matador Resources reported strong year-on-year revenue growth of 23.8%, and its $1.16 billion in revenue topped Wall Street’s consensus estimates by 5.5%. Oil production per day grew 10.4% year on year.

Adjusted EBITDA margin

Matador Resources has performed well over the last five years. It demonstrated strong profitability for an upstream and integrated energy business, with an average EBITDA margin of 68.7%.

Looking at the trend in its profitability, Matador Resources’s EBITDA margin decreased by 8.2 percentage points over the last year. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q3, Matador Resources generated an EBITDA margin of 67.5%, up 2.4 percentage points year on year. This improvement shows it was more efficient. Adjusted EBITDA beat Wall Street’s consensus estimates by 13.2%.

Free cash flow

As mentioned above, adjusted EBITDA ignores capital structure and drilling expenditure decisions. These are two important aspects of an energy producer, so investors need to account for them to get a comprehensive picture of business quality. In other words, adjusted EBITDA margins could be solid but free cash flow poor because asset decline rates are high and drilling is expensive. Free cash flow reflects not only the economics of past production but also the cost of staying in business through further drilling or extraction.

Matador Resources has shown strong cash profitability, driven by its profitable business model that enables it to reinvest, return capital to investors and maintain its competitive edge. The company’s free cash flow margin was among the best in the energy upstream and integrated energy sector, averaging 24.4% over the last five years.

While the level of free cash flow margins is important, their consistency matters just as much.

Matador Resources’s ratio of quarterly free cash flow volatility to volatility in West Texas Intermediate, or WTI, crude prices over the past five years was 4.7 (lower is better), indicating strong insulation from commodity swings. This stability supports capital access in downturns and positions Matador Resources to act as a consolidator when weaker peers are forced to retrench.

Why assess stability against commodity prices at the free cash flow line? Why not compare revenue or EBITDA with WTI crude prices for Matador Resources? What ultimately matters is not how much revenue or profit a company earns when prices are high but how much cash it can generate when prices are low. Free cash flow is the superior metric because it includes everything from hedging effectiveness to growth and maintenance capex to management behavior during good times and bad.

Matador Resources’s free cash flow came in at $287.6 million in Q3, equivalent to a 24.7% margin. The company’s cash profitability declined, with its margin falling 6.7 percentage points from the same quarter last year, an unfavorable result given its longer-term trend.

Key takeaways from Matador Resources’s Q3 results

Matador Resources delivered some important positives in Q3, with revenue well above analysts’ consensus estimates and EBITDA also topping Wall Street’s consensus. Shares remained flat at $54.86 immediately after the report.

Matador Resources had a solid quarter, but one earnings result doesn’t necessarily make the stock a buy. The latest quarter matters, but not nearly as much as longer-term fundamentals and valuation when deciding whether the stock is a buy. For more on those factors, read our full research report here (it’s free).