Breaking Down Berry Corporation (BRY) Financial Health: Key Insights for Investors

You're looking at Berry Corporation (BRY) and seeing a confusing signal, right? The Q3 2025 earnings, released on November 5, 2025, defintely gave investors pause, especially since the reported revenue of $151.14 million missed the Wall Street consensus. The company posted a GAAP net loss of $26 million, or $0.34 per diluted share, but here's the quick math: they still generated a strong $55 million in operating cash flow and $38 million in Free Cash Flow (FCF) for the quarter, even with production at 23.9 thousand barrels of oil equivalent per day (MBoe/d). That FCF, plus the year-to-date total debt reduction of approximately $34 million, shows their capital discipline is working, but still, you have to weigh the near-term earnings volatility against the long-term, hedged stability. With the pending merger with California Resources Corporation now a major factor, understanding how their $74.15/Bbl Brent oil hedge for the remainder of 2025 protects that cash flow is crucial. We need to look past the loss and see the cash.

Revenue Analysis

Berry Corporation (BRY)'s revenue picture for 2025 shows the challenge of navigating volatile commodity markets, but its core business remains anchored in high-oil-content production. The trailing twelve months (TTM) revenue, which captures the most recent performance up to Q3 2025, stands at approximately $730.29 million. That number is down about 10.27% year-over-year from the 2024 annual revenue of $783.84 million. Still, the Q3 2025 reported revenue of $151.14 million missed analyst consensus, which is a clear signal that commodity price volatility and production dynamics are a constant headwind.

The company's revenue streams are straightforward, falling into two main segments: Exploration and Production (E&P), and Well Servicing and Abandonment Services. The E&P segment is the primary driver, focused on long-lived oil and gas reserves in California and Utah. This is defintely an oil-heavy operation, with production characterized by a high oil content-around 91% to 93% oil.

Here's the quick math on the segment contribution, based on the Q1 2025 revenue figures, which gives you a solid sense of the revenue mix:

• Oil, Natural Gas, and NGL Sales: Approximately 80.95%
• Well Servicing and Abandonment Services: Approximately 12.96%
• Electricity Sales, Derivatives, and Other: Approximately 6.09%

The E&P segment's stability comes from its long-lived, low-decline assets, but its value is heavily tied to the price of crude, specifically the Brent-linked pricing model it uses. The Well Servicing segment, while smaller, provides a consistent, complementary revenue stream by servicing both Berry Corporation (BRY)'s own E&P operations and third-party operators in California.

The most significant near-term change to the revenue structure is the pending merger with California Resources Corporation (CRC), announced in September 2025. This combination is set to fundamentally reshape the company's revenue base, creating a larger, more diversified California-focused entity. What this estimate hides is the potential for a combined entity to achieve greater cost synergies and a more robust capital program, which could improve the overall revenue stability and growth trajectory beyond the current TTM decline. This move is a clear, decisive action to manage the risks inherent in being a smaller independent producer. For a deeper dive into the players involved in this shift, you should read Exploring Berry Corporation (BRY) Investor Profile: Who's Buying and Why?

To see how the core commodity sales dominate the top line, look at the Q1 2025 breakdown in thousands of US dollars:

The takeaway is simple: Berry Corporation (BRY) is an oil play, and its financial health is overwhelmingly tied to E&P, but the merger is the new variable that changes the long-term revenue equation.

Profitability Metrics

You want to know if Berry Corporation (BRY) is making money, and more importantly, how efficiently. The quick takeaway is that while the GAAP net profit is volatile due to non-cash items, the company is showing real progress in operational efficiency, which is the foundation of long-term profitability. The trailing twelve months (TTM) Operating Margin as of October 2025 stands at 7.91%.

This figure, while positive, is a stark contrast to the Oil and Gas Extraction industry median Operating Margin of 21.4% in 2024. The gap tells you that Berry Corporation's cost structure, or its realized price after hedging, is significantly compressing its operating profit compared to peers. Still, the company's TTM Operating Margin has improved from 3.58% at the end of 2024, a clear upward trend.

Gross, Operating, and Net Margins

In the Exploration & Production (E&P) world, Lease Operating Expenses (LOE) are the main driver of gross profitability. Berry Corporation's focus on cost control is defintely paying off here. For the first quarter of 2025, the hedged LOE came in at $26.40 per barrel of oil equivalent (BOE), which was 9% below the full-year guidance midpoint of $28.90 per BOE. This kind of cost discipline directly boosts the Gross Profit Margin.

When you look at the bottom line, the Net Profit Margin is a wilder ride. The company reported a GAAP Net Loss of $26 million in Q3 2025, which, against their Q3 revenue of $128 million, translates to a Net Profit Margin of roughly -20.3%. This volatility is common in the sector, especially for a company with a pending merger and non-cash charges, like the $113 million impairment that hit Q1 2025 results.

Here's the quick math on the quarterly net results in 2025, which shows the non-GAAP (Generally Accepted Accounting Principles) Adjusted Net Income is a better measure of core business health:

• Q1 2025: GAAP Net Loss of $97 million, but Adjusted Net Income of $9 million.
• Q2 2025: GAAP Net Income of $34 million, Adjusted Net Loss of $0 million. [cite: 7, 13 in previous step]
• Q3 2025: GAAP Net Loss of $26 million, Adjusted Net Loss of $6 million.

Operational Efficiency and Cost Trends

The core story at Berry Corporation is operational efficiency. Management has been relentless in driving down costs, a critical move in a commodity-price-sensitive business. They reduced Lease Operating Expenses (LOE) by 12% year-over-year in 2024 and cut Adjusted General and Administrative (G&A) expenses by 6%. This focus is what generates resilient free cash flow, even with price volatility.

The company's hedging strategy also acts as a profitability shield. With approximately 71% of their 2025 oil production hedged at an average price of $74.59 per barrel of Brent as of July 2025, [cite: 13 in previous step] they lock in a predictable revenue floor. This stability is essential for funding their capital program, which is budgeted at $110-$120 million for 2025, with a strategic shift toward the high-return Uinta Basin. To dive deeper into the full picture, read our complete analysis at Breaking Down Berry Corporation (BRY) Financial Health: Key Insights for Investors.

What this estimate hides is the potential for merger synergies, as the pending sale to California Resources Corporation may unlock further cost savings not yet reflected in the 2025 numbers.

Debt vs. Equity Structure

When you look at Berry Corporation (BRY), the first thing to understand is that their capital structure-how they fund the business-has undergone a significant, recent shift. The direct takeaway is that while they successfully removed a near-term maturity risk with a major refinancing, they took on a higher-cost debt structure, pushing their debt-to-equity ratio above the industry average.

As of November 2025, Berry Corporation (BRY)'s Debt/Equity ratio sits at approximately 63% (0.63). This is a critical number because it tells you the company relies on 63 cents of debt for every dollar of equity capital. To be fair, this is a bit higher than the Energy sector average for developed economies, which is closer to 42.9%. A higher ratio means more financial leverage, which can amplify both returns and risks.

Here's the quick math on their debt composition following the comprehensive refinancing completed in late 2024:

• Long-Term Debt: The core is a $450 million Term Loan Credit Agreement. This was used to pay off the old 7.000% Senior Notes due 2026.
• Short-Term Debt/Liquidity: The company also has a three-year Reserve-Based Revolving Loan (RBL) with elected commitments of $63 million until Spring 2025. As of June 30, 2025, they had no borrowings outstanding on this revolving credit facility, which is a good sign for near-term liquidity.

The total debt on the balance sheet as of June 2025 was around $0.41 Billion USD. This new debt structure successfully extended their debt maturities, removing the refinancing risk that S&P Global Ratings had flagged in May 2024 with a 'B-' rating and a negative outlook.

Still, this stability came at a cost. The new term loan carries a high interest rate, which was around 12% at the time of issuance. This is defintely a headwind, expected to increase their 2025 interest costs by roughly $20 million compared to the previous notes. The company's strategy is clear: prioritize debt reduction. They are required to make substantial annual term loan repayments of $45 million in 2025, which means a large portion of their expected free cash flow will be dedicated to servicing and paying down this debt.

Berry Corporation (BRY) balances debt financing and equity funding by using debt for large, strategic shifts-like refinancing and capital expenditure-while maintaining a fixed quarterly cash dividend of $0.03 per share to reward equity holders. The focus for 2025 is on using cash flow from operations to fund their capital program and reduce debt, a disciplined capital allocation strategy that helps protect the balance sheet. You can dive deeper into who is holding this equity and why in Exploring Berry Corporation (BRY) Investor Profile: Who's Buying and Why?

The table below summarizes the key debt metrics for the 2025 fiscal year, showing the financial picture after the refinancing:

Liquidity and Solvency

You need to know if Berry Corporation (BRY) can cover its near-term obligations, and the hard numbers from the third quarter of 2025 (Q3 2025) tell a story of tight, but managed, liquidity. The company's current ratio, a key measure of short-term financial health, stands at 0.81 as of September 30, 2025.

A Current Ratio (Current Assets / Current Liabilities) below 1.0 means that, in a pinch, Berry Corporation does not have enough liquid assets to cover all its debts coming due within the next year. Here's the quick math for Q3 2025, in thousands of dollars: Current Assets of $143,780 divided by Current Liabilities of $178,214 equals 0.81. This results in a negative working capital of $(34,434) thousand, which is a slight deterioration from the $(22,315) thousand negative working capital reported at the end of Q1 2025.

The Quick Ratio (Acid-Test Ratio), which excludes less-liquid assets like inventory, would naturally be even lower, signaling a tighter liquidity position. Still, for an exploration and production (E&P) company, this isn't defintely a panic button, as their primary assets are long-term oil and gas properties, and they manage liquidity closely through credit facilities. You're looking at a company that is managing its cash flow, not sitting on a massive pile of current assets.

The cash flow statement provides a clearer picture of their operational strength. Berry Corporation's cash flow from operations remains positive and robust, which is the real engine for its short-term debt servicing and capital program. In Q3 2025 alone, the company generated $55,411 thousand in net cash from operating activities. That's a strong number. This operating cash flow is what they use to fund their capital expenditures (CapEx) and service debt.

The cash flow trends for Q3 2025 (in thousands of dollars) show a clear capital allocation strategy:

• Operating Cash Flow: $55,411 (Strong source of funds)
• Investing Cash Flow: $(47,199) (Used for CapEx)
• Financing Cash Flow: $(14,576) (Used for debt paydown and dividends)

The company's strategy is to fund its entire 2025 capital development program from cash flow from operations, which they are on track to do. They paid down approximately $34 million of total debt year-to-date through Q3 2025, which shows a clear commitment to balance sheet strength. This is a debt-reduction focus, not a cash-hoarding one. You can read more about their corporate focus here: Mission Statement, Vision, & Core Values of Berry Corporation (BRY).

The key strength here is the $94 million in total liquidity as of September 30, 2025, which includes $13 million in cash and equivalents, plus available borrowing capacity under their revolving credit facility. This available credit acts as a safety net, mitigating the risk implied by the sub-1.0 current ratio. Plus, their aggressive commodity price hedging strategy-with 73% of the remainder of their 2025 oil production hedged at an average price of $74.69/Bbl of Brent-provides significant cash flow visibility and protection against market volatility.

Valuation Analysis

You're looking at Berry Corporation (BRY) and asking the core question: Is this stock a value play or a trap? Based on the key metrics through November 2025, the stock presents a mixed signal, suggesting it is priced for a significant turnaround or is potentially overvalued on a trailing earnings basis, but cheap on a book and cash flow basis. The market is defintely hesitant right now.

The core of the issue is the Price-to-Earnings (P/E) ratio, which measures the current share price relative to its trailing twelve months (TTM) earnings per share. Berry Corporation's TTM P/E ratio stands at an elevated 47.0 as of November 2025. Here's the quick math: a P/E this high suggests investors are expecting massive earnings growth, or the trailing earnings are temporarily depressed-which is common in the volatile Energy sector. Contrast that with the Forward P/E of 277.60, which suggests expected earnings for the next 12 months are very low.

However, when you look at asset-based and cash-flow-based metrics, the picture shifts dramatically. The Price-to-Book (P/B) ratio is currently just 0.42, meaning the stock trades at less than half its book value. That's a classic sign of potential undervaluation. Also, the Enterprise Value-to-EBITDA (EV/EBITDA) ratio, a superior metric for energy companies because it strips out capital structure differences and non-cash charges, is a low 2.33 as of November 17, 2025. A ratio below 5.0 is often considered cheap in this industry, so this is a clear opportunity signal.

The stock price trend over the last 12 months tells a story of market skepticism, with the price decreasing by 22.93%. The stock closed around $3.40 on November 17, 2025, which is well below its 52-week high of $5.09. This decline reflects the recent earnings miss and the broader uncertainty in the sector, but it also creates the value-investing opportunity seen in the P/B and EV/EBITDA figures. Mission Statement, Vision, & Core Values of Berry Corporation (BRY).

The dividend situation is a key part of the investment thesis. The current dividend yield is attractive at about 3.53% annually. The company pays an annual dividend of $0.12 per share. The payout ratio, however, is tricky because of the low trailing earnings. It's reported as -10.2% based on net income, but a much more sustainable 17.1% based on cash flow. This low cash payout ratio suggests the dividend is well-covered by operational cash flow, which is what truly matters for dividend stability.

Wall Street analysts are currently conflicted, reflecting the mixed fundamental data:

• The consensus rating is a Hold or Reduce.
• Out of four analysts, there are currently 2 Sell ratings and 2 Hold ratings.
• The average 12-month price target is $4.00, which implies a significant upside of around 17.65% from the current price.

The stock is cheap on assets and cash flow, but expensive on trailing earnings. That's the trade-off.

Your action here is to dig into the earnings quality. If you believe the company can stabilize its earnings and realize the value implied by its low P/B and EV/EBITDA, the stock is a buy. If not, the high P/E is a warning. Finance: Model a scenario where the EV/EBITDA normalizes to 4.0 and see what that implies for the share price by the end of Q1 2026.

Risk Factors

You're looking at Berry Corporation (BRY) and, honestly, the biggest near-term risk is the one you can't control: commodity prices. While the company is an expert in managing its low-decline assets, the core financial health still hinges on oil and gas prices, and the recent earnings show how quickly core performance can get masked by market volatility.

In fact, the Q3 2025 earnings report, released on November 5, 2025, highlighted this operational pressure. Berry Corporation reported an actual Earnings Per Share (EPS) loss of -$0.08, missing the analyst consensus of $0.07 by $0.15. Revenue was also disappointing at $151.14 million, falling short of the consensus estimate of $169.50 million. This kind of miss defintely signals that core margin pressures are real.

Operational and Financial Headwinds

The operational risks for Berry Corporation center on two key areas: the cost of doing business and sustaining cash flow. While the company's Q2 2025 net income was reported at $34 million, it was largely propped up by a significant $56.4 million non-recurring gain from oil and gas derivatives. That's a huge one-time boost that hides a negative trend in underlying operational performance.

This situation led to a negative free cash flow (FCF) of -$25.6 million in Q2 2025. That's a stark contrast to the first quarter and shows that, despite a favorable hedge book, the company is still facing margin pressure. Here's the quick math: you need a strong, consistent FCF to fund your capital program and debt reduction without straining the balance sheet. For 2025, the capital program is set between $110 million and $120 million, which must be funded.

• Regulatory Complexity: Operating primarily in California means navigating one of the most complex regulatory environments in the US energy sector.
• Reserve Replacement: The long-term health of any Exploration & Production (E&P) company depends on replacing reserves; failure to do so is a slow-motion risk.
• Integration Risk: The September 2025 announcement of an all-stock combination with California Resources Corporation (CRC) introduces significant integration risk, though it's a strategic move to gain scale.

Mitigation Strategies and Balance Sheet Strength

The good news is that Berry Corporation is not just sitting on its hands; their risk management is deliberate and active. The primary defense against commodity price swings is their robust hedging program. For the remainder of 2025, approximately 71% of estimated oil production volumes are hedged at an average price of around $74.59 per barrel (Brent). Also, about 80% of expected gas demand is hedged with an average swap price of approximately $4.22 per MMBtu. This strategy provides a floor for cash flow, which is crucial for stability.

On the financial front, the company is prioritizing debt reduction. They have a clear target of reducing total debt by at least $45 million in 2025 and, as of Q2, they had already paid down approximately $23 million year-to-date. Plus, their liquidity position as of March 31, 2025, was strong at $120 million, which included $39 million in cash and equivalents. This financial discipline helps buffer against the operational challenges.

The hedging and debt focus are the clear actions here. You can't ignore the weak Q3 results, but you also can't ignore the protection the hedge book provides. If you want to dig deeper into the shareholder base and who is betting on this strategy, you should be Exploring Berry Corporation (BRY) Investor Profile: Who's Buying and Why?

Growth Opportunities

You're looking for a clear path forward on Berry Corporation (BRY), and the direct takeaway is this: the company's future growth is now fundamentally tied to a major strategic combination, but its underlying operational efficiency in California and Utah remains the core value driver. The biggest near-term opportunity is the announced All-Stock Combination with California Resources Corporation (CRC), which was announced in September 2025.

This is a game-changer, not just a partnership. The combination is set to create a larger, more diversified energy producer focused on California's complex regulatory environment. Honestly, the move is a smart way to scale up and consolidate operations, which should translate to defintely stronger free cash flow generation and a more resilient balance sheet in the long run. It's a clear action to map out a more secure future, especially in a volatile commodity market.

Before that deal closes, the company's standalone 2025 financial outlook shows a mixed but improving picture. Analyst consensus for the full 2025 fiscal year projects revenue around $707.00 million, though one August 2025 upgrade pushed the consensus to $748 million. Earnings per share (EPS) estimates show a tight range, reflecting commodity price uncertainty, but the consensus is a positive $0.09 per share for the year ending December 2025.

Here's the quick math on the near-term financial outlook, showing the range of expectations from various analysts:

What this estimate hides is the operational strength. The company's competitive advantages are what position it to deliver on these numbers, combination or not. They are leveraging their deep inventory of long-lived, low-decline assets to produce consistent cash flow.

• Capital Allocation: 40% of the 2025 capital program, between $110 million and $120 million, is directed to high-return assets in Utah's Uinta Basin, up from 25% in 2024.
• Cost Control: Q1 2025 lease operating expenses (LOE) came in at $26.40 per BOE, which is a 9% improvement over the full-year guidance midpoint. That kind of cost discipline directly boosts the bottom line.
• Risk Management: A robust hedging program protects cash flow, with 73% of estimated 2025 oil production hedged at an average Brent price of $74.69/Bbl. This shields the company from a sharp drop in oil prices.
• Sustainability Initiatives: The company is targeting an 80% reduction in methane emissions in 2025 from a 2022 baseline, a move that provides a durable competitive advantage in the increasingly regulated California market.

You should also look into the details of the CRC deal and the company's investor profile to understand the market's reaction. Exploring Berry Corporation (BRY) Investor Profile: Who's Buying and Why?