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By Brandon Hornback
Alliance Resource Partners, L.P. (Nasdaq: ARLP) published solid fourth quarter results, with a surge in EBITDA and strong outlook for 2026.
The diversified-energy company’s EBITDA came in at $191.1 million in the fourth quarter, up 54.1% from the prior year. That translated to a healthy $93.8 million in free cash flow after adjusting for Capex.
Average coal sale prices decreased year over year 4% as higher-priced legacy contracts keep rolling off. Additionally, lower coal sales volumes, caused by the timing of committed deliveries, further contributed to a revenue decline year over year.
However, increased production and inventory point to significant earnings potential in the following quarters. Similarly, long-term and short-term industry conditions remain favorable. Extreme winter conditions reinforced coals role as critical reliability resource, an important status to maintain as data centers, AI workloads, and industrial demand increase load on the U.S. power market.
The royalties segment delivered another record year with a meaningful adjusted EBITDA contribution of $30 million for 2025. Oil and gas royalties will likely drive organic bottom-line growth in 2026 amid expected disciplined volume growth while maintaining a stable cost structure.
Despite record free cash flow generation and a rock-solid balance sheet, ARLP looks undervalued from a price to earnings perspective. Based on next twelve months expected earnings the firm trades at a 44% discount to coal peer companies and a 51% discount to oil peers.
Check out the links below for our latest coverage of ARLP’s 2026 guidance and fourth quarter results or our original initiation piece for a deeper overview of the business.
Download the Complete Report Here
Read Exec Edge’s Initiation on ARLP Here
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