greeksoup/ stock research

Hess Midstream LP: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 3 August 2026: press release. Guidance figures: 16 kept. The quarter’s numbers.

Key takeaways

  • Net income and EPS below prior year: Net income attributable to Hess Midstream LP was $96.4 million, or $0.75 basic per Class A share, against $0.74 a year earlier. Total net income was $173.7 million, against $179.7 million. Source
  • Adjusted EBITDA slightly below prior year: Adjusted EBITDA was $313.7 million, compared with $316.0 million in the second quarter of 2025. Net cash provided by operating activities was $278.6 million. Source
  • Gathering operating income declined: Gathering income from operations was $120.0 million, against $131.8 million a year earlier, on affiliate services revenue of $203.2 million. Source
  • New-well activity drove volume declines: Oil terminaling throughput fell 15% and water gathering 12% year on year. Management attributed the declines to lower production from lower new-well activity. Source
  • Gross Adjusted EBITDA margin rose: Gross Adjusted EBITDA Margin, a non-GAAP ratio, was 85% against 82%, on revenues excluding pass-through of $369.4 million against $386.2 million. Source
  • Capital spending fell on completed project: Capital expenditures were $30.6 million, against $70.0 million, a 56% decrease from completion of the gas compression capacity expansion. Source
  • Adjusted Free Cash Flow higher: Adjusted Free Cash Flow was $231.6 million, against $193.8 million, after $30.6 million of capital expenditures and $51.5 million of net interest excluding deferred financing amortization. Source

“In the second quarter of 2026, we continued to progress our operational priorities, executing a safe and efficient maintenance program while delivering on our financial strategy,”

Jonathan Stein, Chief Executive Officer of Hess Midstream

Guidance

AreaPeriodFigureAgainst last quarter
Net income SourceFull year 2026$ 650 - 700Kept
Adjusted EBITDA SourceFull year 2026$ 1,225 - 1,275Kept
Capital expenditures SourceFull year 2026$ 105Kept
Adjusted free cash flow SourceFull year 2026$ 910 - 960Kept
Adjusted free cash flow after distributions SourceFull year 2026$ 280Kept
Targeted distributions SourceFull year 2026655Kept
Depreciation expense SourceFull year 2026230Kept
Interest expense, net SourceFull year 2026220Kept
Income tax expense SourceFull year 2026125Kept
Interest, net (Adjusted Free Cash Flow deduction) SourceFull year 2026210Kept
Gas gathering throughput SourceFull year 2026450 - 460Kept
Crude oil gathering throughput SourceFull year 2026115 - 125Kept
Gas processing throughput SourceFull year 2026435 - 445Kept
Crude terminals throughput SourceFull year 2026125 - 135Kept
Water gathering throughput SourceFull year 2026125 - 135Kept
Adjusted Free Cash Flow after Distributions Source2026 through 2028approximately $1 billionKept

What changed from last quarter

  • Guidance kept: Full-year 2026 financial and throughput guidance is reaffirmed, with the ranges as stated in the release. Source

Earnings and cash flow results

  • Net income and EPS below prior year: Net income attributable to Hess Midstream LP was $96.4 million, or $0.75 basic per Class A share, against $0.74 a year earlier. Total net income was $173.7 million, against $179.7 million. Source
  • Adjusted EBITDA slightly below prior year: Adjusted EBITDA was $313.7 million, compared with $316.0 million in the second quarter of 2025. Net cash provided by operating activities was $278.6 million. Source
  • Revenue down on lower throughput: Revenues and other income were $399.0 million, down $15.2 million year on year. Lower throughput was partly offset by higher tariff rates and third-party services. Source
  • Interest expense roughly unchanged: Interest expense, net of interest income, was $54.5 million, roughly flat against $55.4 million a year earlier. Source

Segments and regions

  • All assets in Bakken and Three Forks: Assets are oil, gas and produced water handling assets in the Williston Basin of North Dakota, serving Chevron, its subsidiaries and third-party customers. Source
  • Gathering operating income declined: Gathering income from operations was $120.0 million, against $131.8 million a year earlier, on affiliate services revenue of $203.2 million. Source
  • Processing income slightly lower: Processing and Storage income from operations was $109.0 million, against $110.6 million. Income from equity investments in this segment rose to $6.1 million from $4.0 million. Source
  • Terminaling and Export income rose: Terminaling and Export income from operations was $25.7 million, up from $20.6 million a year earlier, on affiliate services revenue of $36.5 million. Source

“As we enter the second half of the year, we remain focused on execution and generating Adjusted Free Cash Flow to support continued shareholder returns and balance sheet strength.”

Jonathan Stein, Chief Executive Officer of Hess Midstream

Volumes, customers and demand

  • Affiliate revenue down, third-party up: Affiliate services revenue was $379.8 million, against $405.3 million. Third-party services revenue rose to $17.9 million from $8.2 million. Source
  • Gas and crude gathering volumes lower: Gas gathering averaged 445 thousand Mcf per day and crude oil gathering 103 thousand barrels per day, against 464 and 127 a year earlier. Source
  • Other stream volumes mostly lower: Gas processing averaged 433 thousand Mcf per day, crude terminals 117 thousand barrels per day, and water gathering 121 thousand barrels per day, against 449, 137 and 138. NGL loading was flat at 17. Source
  • New-well activity drove volume declines: Oil terminaling throughput fell 15% and water gathering 12% year on year. Management attributed the declines to lower production from lower new-well activity. Source
  • Gas processing affected by plant maintenance: Gas processing throughput fell 4% year on year, which management attributed to planned maintenance at the Tioga Gas Plant. Source

Costs, margins and pricing

  • Operating costs fell on lower employee costs: Operating and maintenance expenses were $85.9 million, against $94.1 million a year earlier. Total operating costs and expenses were $145.8 million, down from $154.0 million. Source
  • Depreciation rose, G&A fell: Depreciation expense was $54.4 million, against $51.8 million. General and administrative expenses were $5.5 million, against $8.1 million. Source
  • Gross Adjusted EBITDA margin rose: Gross Adjusted EBITDA Margin, a non-GAAP ratio, was 85% against 82%, on revenues excluding pass-through of $369.4 million against $386.2 million. Source
  • Pass-through revenue slightly higher: Pass-through revenues for electricity, produced water trucking and disposal, and certain other fees were $29.6 million, against $28.0 million. Source
  • Income tax expense higher: Income tax expense was $31.1 million, against $29.1 million a year earlier. Source

Capital spending and debt

  • Capital spending fell on completed project: Capital expenditures were $30.6 million, against $70.0 million, a 56% decrease from completion of the gas compression capacity expansion. Source
  • Revolver drawn balance reduced: The drawn balance on the revolving credit facility was $256.0 million at June 30, 2026, against $343.0 million at March 31, 2026. Source

Free cash flow and shareholder returns

  • Adjusted Free Cash Flow higher: Adjusted Free Cash Flow was $231.6 million, against $193.8 million, after $30.6 million of capital expenditures and $51.5 million of net interest excluding deferred financing amortization. Source
  • Quarterly distribution per share increased: The Board declared a quarterly distribution of $0.7888 per Class A share, an increase of $0.0096 from the first quarter of 2026. Source
  • Equity investment cash distributions lower: Distributions from equity investments were $2.9 million, against $4.7 million, while income from equity investments was $6.1 million, against $4.0 million. Source

Strategy, operations and leadership

  • Operational priorities and maintenance continued: Management said it continued its operational priorities, including a safe and efficient maintenance program, while delivering on its financial strategy in the quarter. Source
  • Second-half focus on cash generation: Management said its focus for the second half is execution and generating Adjusted Free Cash Flow to support shareholder returns and balance sheet strength. Source
  • CEO comments on the quarter: Jonathan Stein, Chief Executive Officer, gave the company's comments on the quarter in the release. Source

Coming up, as management said on 3 August 2026

  • Distribution payable August 14: The quarterly distribution is expected to be paid August 14, 2026, to holders of record at the close of business on August 6, 2026. Source

Figures management reported

FigureReported
Production volumes: gas gathering Source445 thousand Mcf per day
Production volumes: crude oil gathering Source103 thousand barrels per day
Production volumes: gas processing Source433 thousand Mcf per day
Production volumes: crude terminals Source117 thousand barrels per day
Production volumes: water gathering Source121 thousand barrels per day
Capital expenditures Source$30.6 million
Shareholder returns: quarterly distribution per Class A share Source$0.7888

Risks management discussed

  • Demand: Lower new-well activity reduced throughput, which management cited as the main reason revenues fell year on year. Source
  • Operational: Planned maintenance at the Tioga Gas Plant reduced gas processing throughput by 4% in the quarter. Source

Earlier plans management reported on

  • Not stated: Management said it continued its operational priorities and was delivering on its financial strategy in the quarter. Source
  • Met: Management attributed the capital expenditure decrease to the completion of the gas compression capacity expansion. Source
  • Not stated: Management continues to expect about $1 billion of Adjusted Free Cash Flow after Distributions through 2028, for shareholder returns and debt repayment. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.