ExxonMobil's Q3 Profit Dips Amid Revenue Decline

TL;DR

**XOM's latest earnings are a red flag, showing a significant profit drop and higher capital spending, making me bearish on short-term upside.**

AI Summary

Exxon Mobil Corporation reported a significant decline in financial performance for the three and nine months ended September 30, 2025, compared to the same periods in 2024. For the third quarter of 2025, total revenues and other income decreased by 5.2% to $85.294 billion from $90.016 billion in 2024. Net income attributable to ExxonMobil fell by 12.3% to $7.548 billion from $8.610 billion year-over-year. Diluted earnings per common share also dropped to $1.76 from $1.92. For the nine-month period, total revenues and other income decreased by 6.1% to $249.930 billion from $266.159 billion, and net income attributable to ExxonMobil declined by 14.3% to $22.343 billion from $26.070 billion. Cash provided by operating activities for the nine months decreased to $39.291 billion in 2025 from $42.793 billion in 2024. The company completed $2.4 billion in acquisitions, primarily for proved and unproved acreage in the Permian basin, during Q3 2025. Share repurchases totaled $15.037 billion for the nine months ended September 30, 2025, compared to $13.856 billion in the prior year.

Why It Matters

This filing reveals a notable slowdown in ExxonMobil's financial performance, with both revenue and net income experiencing double-digit percentage declines year-over-year for the nine-month period. For investors, this signals potential headwinds in the energy sector or specific operational challenges for XOM, impacting dividend sustainability and share price appreciation. Employees might face increased pressure for efficiency as the company navigates a tougher financial landscape. Customers could see pricing strategies adjust in response to market conditions. Competitively, this performance contrasts with the prior year's strong results, potentially indicating a shift in market dynamics or a less favorable operating environment compared to peers.

Risk Assessment

Risk Level: medium — The company faces medium risk due to declining revenues and net income, with net income attributable to ExxonMobil down 14.3% for the nine months ended September 30, 2025, to $22.343 billion. Additionally, cash provided by operating activities decreased by $3.502 billion to $39.291 billion, while additions to property, plant, and equipment increased by $3.439 billion to $20.908 billion, indicating higher capital intensity amidst lower cash generation.

Analyst Insight

Investors should closely monitor ExxonMobil's upcoming earnings calls for management's commentary on the revenue and net income declines, and assess if the increased capital expenditures in the Permian basin will yield sufficient returns to reverse the negative trend. Consider re-evaluating your position if future reports don't show signs of stabilization or improvement in core financial metrics.

Financial Highlights

revenue

$249.930B

net Income

$22.343B

eps

$5.16

revenue Growth

-6.1%

Revenue Breakdown

Key Numbers

• $85.294B — Total revenues and other income (Q3 2025) (5.2% decrease from $90.016 billion in Q3 2024)
• $7.548B — Net income attributable to ExxonMobil (Q3 2025) (12.3% decrease from $8.610 billion in Q3 2024)
• $22.343B — Net income attributable to ExxonMobil (9 months 2025) (14.3% decrease from $26.070 billion in 9 months 2024)
• $1.76 — Earnings per common share (Q3 2025) (Decrease from $1.92 in Q3 2024)
• $39.291B — Net cash provided by operating activities (9 months 2025) (Decrease from $42.793 billion in 9 months 2024)
• $20.908B — Additions to property, plant and equipment (9 months 2025) (Increase from $17.469 billion in 9 months 2024)
• $2.4B — Acquisitions in Q3 2025 (Primarily for proved and unproved acreage in the Permian basin)
• $15.037B — Common stock acquired (9 months 2025) (Increased from $13.856 billion in 9 months 2024)
• 4,217,165,614 — Common stock outstanding (As of September 30, 2025)

Key Players & Entities

• Exxon Mobil Corporation (company) — registrant
• Pioneer Natural Resources Company (company) — acquired company
• Permian basin (other) — location of acquisitions
• New York Stock Exchange (other) — exchange where XOM is listed
• SEC (regulator) — Securities and Exchange Commission
• ASC 805 (other) — accounting standard for business combinations
• Louisiana (other) — state with legal proceedings against ExxonMobil

FAQ

Risk Factors

• Commodity Price Volatility [high — market]: ExxonMobil's financial results are highly sensitive to fluctuations in global prices for crude oil, natural gas, and petroleum products. For the nine months ended September 30, 2025, total revenues decreased by 6.1% to $249.930 billion from $266.159 billion in 2024, reflecting potential impacts of price volatility.
• Environmental Regulations and Climate Change Policies [high — regulatory]: Increasingly stringent environmental regulations and global efforts to address climate change could lead to higher operating costs, increased capital expenditures for emissions reduction, and potential liabilities. This could impact the company's profitability and long-term strategy.
• Geopolitical Instability and Supply Chain Disruptions [medium — operational]: Operations in various regions are subject to geopolitical risks, including political instability, trade disputes, and potential disruptions to supply chains. These factors can affect production, transportation, and the availability of resources.
• Capital Allocation and Shareholder Returns [medium — financial]: The company's strategy involves significant capital expenditures, including $20.908 billion for property, plant, and equipment in the nine months of 2025, and substantial share repurchases totaling $15.037 billion. Balancing these investments with maintaining financial flexibility is crucial.
• Litigation and Legal Proceedings [medium — legal]: ExxonMobil is involved in various legal proceedings, including those related to environmental matters and product liability. Adverse outcomes could result in significant financial penalties and reputational damage.
• Competition in the Energy Sector [medium — market]: The energy industry is highly competitive, with numerous global and regional players. Maintaining market share and profitability requires continuous innovation, cost efficiency, and strategic investments in exploration and production.
• Asset Impairment and Write-offs [low — operational]: The company's financial statements include depreciation and depletion charges, which can include impairments. For example, $40 million in exploratory well costs were written off in Q2 2025. Significant impairments could negatively impact earnings.
• Interest Rate Fluctuations [low — financial]: Changes in interest rates can affect the cost of borrowing for the company. Interest expense was $440 million for the nine months ended September 30, 2025, and could be impacted by future rate movements.

Industry Context

The global energy market continues to be shaped by volatile commodity prices and increasing pressure for energy transition. Major integrated oil and gas companies like ExxonMobil face challenges in balancing traditional hydrocarbon production with investments in lower-carbon solutions. Competition remains intense, driven by both established players and emerging energy technologies.

Regulatory Implications

ExxonMobil operates under a complex web of environmental, safety, and financial regulations globally. Evolving climate change policies and emissions standards pose significant compliance challenges and could necessitate substantial capital investments. Potential litigation related to environmental impact remains a key regulatory risk.

What Investors Should Do

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Key Dates

• 2025-09-30: End of Third Quarter and Nine-Month Period — Reporting period for the financial results showing a decline in revenues and net income compared to the prior year.
• 2025-09-30: Acquisition of Permian Basin Acreage — Completion of $2.4 billion in acquisitions, signaling strategic investment in key resource areas.
• 2025-09-30: Common Stock Outstanding — 4,217,165,614 shares outstanding as of this date, relevant for EPS calculations and market capitalization.
• 2025-09-30: Nine Months of Operations — Net cash provided by operating activities was $39.291 billion, a decrease from $42.793 billion in 2024, indicating reduced cash generation.
• 2025-09-30: Nine Months of Share Repurchases — $15.037 billion in common stock acquired, an increase from $13.856 billion in the prior year, demonstrating commitment to shareholder returns.
• 2025-09-30: Nine Months of Capital Expenditures — Additions to property, plant, and equipment totaled $20.908 billion, an increase from $17.469 billion in 2024, showing increased investment in assets.

Glossary

Equity Affiliates

Investments in companies where ExxonMobil has significant influence but not control, typically between 20% and 50% ownership. (Income from these investments contributes to total revenues and reflects performance of joint ventures and associated companies.)

Depreciation and depletion (includes impairments)

The systematic allocation of the cost of tangible assets (depreciation) and natural resources (depletion) over their useful lives, including any write-downs in value (impairments). (Represents a significant non-cash expense impacting net income and reflects the consumption of assets.)

Noncontrolling interests

The portion of equity in a subsidiary not attributable to the parent company. It represents the ownership interest of outside shareholders. (Net income and comprehensive income are reported both including and attributable to noncontrolling interests, with the latter being the portion belonging to ExxonMobil shareholders.)

Comprehensive income (loss)

Includes net income plus other comprehensive income (OCI), which consists of unrealized gains and losses that bypass the income statement, such as foreign currency translation adjustments. (Provides a broader view of the company's financial performance beyond just net income.)

Foreign exchange translation adjustment

Gains or losses arising from translating the financial statements of foreign subsidiaries from their functional currency to the reporting currency (U.S. dollars). (Can cause significant fluctuations in other comprehensive income, impacting total equity.)

Common stock acquired

Represents the cost of shares repurchased by the company from the open market or through other means. (Indicates the company's use of cash for share buybacks, which reduces the number of outstanding shares and can boost EPS.)

Additions to property, plant and equipment

Capital expenditures made by the company to acquire, upgrade, or improve its long-term physical assets. (Reflects the company's investment in its operational capacity and future growth.)

Income tax expense (benefit)

The amount of tax liability recognized by the company for a given period, based on its taxable income. (A significant expense that directly impacts net income.)

Year-Over-Year Comparison

ExxonMobil reported a decline in financial performance for the nine months ended September 30, 2025, compared to the same period in 2024. Total revenues and other income decreased by 6.1% to $249.930 billion, and net income attributable to ExxonMobil fell by 14.3% to $22.343 billion. Net cash provided by operating activities also saw a reduction, decreasing to $39.291 billion from $42.793 billion. While capital expenditures increased, indicating investment in future production, the overall trend shows a contraction in top-line and bottom-line results year-over-year.

Filing Documents

• xom-20250930.htm (10-Q) — 1927KB
• exhibit31109302025.htm (EX-31.1) — 10KB
• exhibit31209302025.htm (EX-31.2) — 10KB
• exhibit31309302025.htm (EX-31.3) — 10KB
• exhibit32109302025.htm (EX-32.1) — 5KB
• exhibit32209302025.htm (EX-32.2) — 5KB
• exhibit32309302025.htm (EX-32.3) — 5KB
• xom-20250930_g1.gif (GRAPHIC) — 35KB
• xom-20250930_g2.jpg (GRAPHIC) — 62KB
• xom-20250930_g3.jpg (GRAPHIC) — 65KB
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• xom-20250930_g6.jpg (GRAPHIC) — 59KB
• xom-20250930_g7.jpg (GRAPHIC) — 61KB
• xom-20250930_g8.jpg (GRAPHIC) — 59KB
• xom-20250930_g9.jpg (GRAPHIC) — 60KB
• 0000034088-25-000061.txt ( ) — 10329KB
• xom-20250930.xsd (EX-101.SCH) — 36KB
• xom-20250930_cal.xml (EX-101.CAL) — 75KB
• xom-20250930_def.xml (EX-101.DEF) — 217KB
• xom-20250930_lab.xml (EX-101.LAB) — 542KB
• xom-20250930_pre.xml (EX-101.PRE) — 359KB
• xom-20250930_htm.xml (XML) — 1911KB

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements Condensed Consolidated Statement of Income - Three and nine months ended September 30, 2025 and 2024 3 Condensed Consolidated Statement of Comprehensive Income - Three and nine months ended September 30, 2025 and 2024 4 Condensed Consolidated Balance Sheet - As of September 30, 2025 and December 31, 2024 5 Condensed Consolidated Statement of Cash Flows - Nine months ended September 30, 2025 and 2024 6 Condensed Consolidated Statement of Changes in Equity - Three months ended September 30, 2025 and 2024 7 Condensed Consolidated Statement of Changes in Equity - Nine months ended September 30, 2025 and 2024 8 Notes to Condensed Consolidated Financial Statements 9

Management's Discussion and Analysis of Financial Condition and Results of Operations 21

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 21

Quantitative and Qualitative Disclosures About Market Risk 38

Item 3. Quantitative and Qualitative Disclosures About Market Risk 38

Controls and Procedures 39

Item 4. Controls and Procedures 39

OTHER INFORMATION

PART II. OTHER INFORMATION

Legal Proceedings 39

Item 1. Legal Proceedings 39

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 39

Other Information 39

Item 5. Other Information 39

Exhibits

Item 6. Exhibits 40 Signature 41 2 Table of Contents

FINANCIAL INFORMATION

PART I. FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CONDENSED CONSOLIDATED STATEMENT OF INCOME (millions of dollars, unless noted) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenues and other income Sales and other operating revenue 83,331 87,792 243,866 258,189 Income from equity affiliates 1,267 1,481 4,098 5,067 Other income 696 743 1,966 2,903 Total revenues and other income 85,294 90,016 249,930 266,159 Costs and other deductions Crude oil and product purchases 47,928 51,261 140,043 153,061 Production and manufacturing expenses 10,094 9,881 30,279 28,776 Selling, general and administrative expenses 3,032 2,296 8,100 7,359 Depreciation and depletion (includes impairments) 6,475 6,258 18,278 16,857 Exploration expenses, including dry holes (1) 149 339 464 640 Non-service pension and postretirement benefit expense 119 33 322 90 Interest expense 90 207 440 699 Other taxes and duties 6,475 6,715 18,767 19,617 Total costs and other deductions 74,362 76,990 216,693 227,099 Income (loss) before income taxes 10,932 13,026 33,237 39,060 Income tax expense (benefit) 3,164 4,055 10,082 11,952 Net income (loss) including noncontrolling interests 7,768 8,971 23,155 27,108 Net income (loss) attributable to noncontrolling interests 220 361 812 1,038 Net income (loss) attributable to ExxonMobil 7,548 8,610 22,343 26,070 Earnings (loss) per common share (dollars) 1.76 1.92 5.16 6.12 Earnings (loss) per common share - assuming dilution (dollars) 1.76 1.92 5.16 6.12 (1) Includes $ 40 million related to the write-off of exploratory well costs in second quarter 2025 that were previously capitalized for greater than one year at December 31, 2024. The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. 3 Table of Contents CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (millions of dollars) Three Months Ended September 30, Nine Months Ended September 3