Hess Midstream LP (HESM): Results of Operations and Financial Condition
Hess Midstream LP (HESM) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 HESS MIDSTREAM LP HESS MIDSTREAM LP REPORTS ESTIMATED RESULTS FOR THE SECOND QUARTER OF 2026 Second Quarter 2026 Highlights: • Net income was $173.7 million. Net cash provided by operating activities was $278.6 million. • Net income attributable to Hess Midstream LP
How this was made
The 30-second read
Why it matters
Traders can update models for midstream yield and cash generation using the declared distribution, Q2 cash-flow metrics, and the reaffirmed 2026 net income, Adjusted EBITDA, capex, and Adjusted Free Cash Flow ranges, while monitoring the stated throughput declines and maintenance drivers.
Market read
Fresh quarterly results plus a higher distribution and reaffirmed 2026 guidance are directly tradable inputs for valuation and income-focused positioning.
What to watch
Adjusted Free Cash Flow after distributions is referenced as a forward support metric, but the release also notes lower revenues driven by throughput declines, which could re-emerge if maintenance or production weakness persists.
Hess Midstream LP reports estimated second quarter 2026 net income of $173.7 million, Adjusted EBITDA of $313.7 million, and reaffirms full-year 2026 guidance.
Revenue, net income, Adjusted EBITDA, and throughput volumes declined from the prior-year quarter, while operating costs and capital expenditures decreased, Adjusted Free Cash Flow increased, and full-year guidance was reaffirmed.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenues and other incomeGAAP | $399.0 million | – | down $15.2 million |
| Pass-through electricity, produced water trucking and disposal costs and certain other feesGAAP | $29.6 million | – | – |
| Total operating costs and expensesGAAP | $145.8 million | – | – |
| Income from operationsGAAP | $253.2 million | – | – |
| Gross marginGAAP | 63 % | – | – |
| Net incomeGAAP | $173.7 million | – | – |
| Net income attributable to Hess Midstream LPGAAP | $96.4 million | – | – |
| Basic earnings per Class A shareGAAP | $0.75 basic earnings per Class A share | – | – |
| Depreciation expenseGAAP | 54.4 (in millions) | – | – |
| Interest expense, netGAAP | $54.5 million | – | approximately flat |
| Income tax expenseGAAP | 31.1 (in millions) | – | – |
| Net cash provided by operating activitiesGAAP | $278.6 million | – | – |
| Adjusted EBITDAnon-GAAP | $313.7 million | – | – |
| Adjusted Free Cash Flownon-GAAP | $231.6 million | – | – |
| Gross Adjusted EBITDA Marginnon-GAAP | 85 % | – | – |
| Revenues excluding pass-throughother | 369.4 (in millions) | – | – |
| Capital expendituresother | $30.6 million | – | 56% decrease |
| Oil terminaling throughput volumesother | decreased 15% | – | decreased 15% |
| Water gathering throughput volumesother | decreased 12% | – | decreased 12% |
| Gas processing throughput volumesother | decreased 4% | – | decreased 4% |
| Drawn balance on revolving credit facilityGAAP | $256.0 million | – | – |
Year Ending December 31, 2026 outlook
- NoteNet income $ 650 - 700 (in millions)
- NoteAdjusted EBITDA $ 1,225 - 1,275 (in millions)
- NoteCapital expenditures $ 105 (in millions)
- NoteAdjusted free cash flow $ 910 - 960 (in millions)
- NoteGas gathering - MMcf of natural gas per day 450 - 460
- NoteCrude oil gathering - MBbl of crude oil per day 115 - 125
- NoteGas processing - MMcf of natural gas per day 435 - 445
- NoteCrude terminals - MBbl of crude oil per day 125 - 135
- NoteWater gathering - MBbl of water per day 125 - 135
- NoteDepreciation expense 230 (in millions)
- NoteInterest expense, net 220 (in millions)
- NoteIncome tax expense 125 (in millions)
- NoteInterest, net 210 (in millions)
- NoteDistributions 655 (in millions)
- NoteAdjusted free cash flow after distributions $ 280 (in millions)
- Noteapproximately $1 billion of Adjusted Free Cash Flow after Distributions through 2028
Capital returns
- On July 27, 2026, the Board of Directors of Hess Midstream’s General Partner declared a quarterly cash distribution of $0.7888 per Class A share for the second quarter of 2026.
- The quarterly cash distribution increased $0.0096 per Class A share compared with the first quarter of 2026.
- The distribution is expected to be paid on August 14, 2026, to shareholders of record as of the close of business on August 6, 2026.
- Hess Midstream continues to expect to generate approximately $1 billion of Adjusted Free Cash Flow after Distributions through 2028 that is expected to be available for incremental shareholder returns and debt repayment.
What drove it
- Revenues and other income were down $15.2 million compared with the prior-year quarter, primarily due to lower throughput volumes, partially offset by higher tariff rates and third-party services.
- Total operating costs and expenses declined primarily due to lower employee costs and lower maintenance expense, partially offset by higher depreciation expense.
- Oil terminaling and water gathering throughput volumes declined primarily due to lower production as a result of lower new-well activity.
- Gas processing throughput volumes declined primarily due to planned maintenance at the Tioga Gas Plant.
- Capital expenditures decreased mainly because Hess Midstream completed its expansion of gas compression capacity.
Concerns
- Oil terminaling throughput volumes decreased 15% and water gathering throughput volumes decreased 12% compared with the second quarter of 2025.
- Gas processing throughput volumes decreased 4% compared with the second quarter of 2025.
- Revenues and other income, net income, income from operations, and Adjusted EBITDA were below the prior-year quarter.
- The Company cited lower production resulting from lower new-well activity and planned maintenance at the Tioga Gas Plant.
What to watch
- Execution against reaffirmed full-year 2026 throughput guidance for gas gathering, crude oil gathering, gas processing, crude terminals, and water gathering.
- Whether higher tariff rates and third-party services continue to offset the effect of lower throughput volumes.
- Adjusted Free Cash Flow generation relative to the full-year guidance range of $ 910 - 960 (in millions).
- Capital expenditures relative to full-year guidance of $ 105 (in millions) following completion of the gas compression expansion.
- Delivery of the expected approximately $1 billion of Adjusted Free Cash Flow after Distributions through 2028.
Balance sheet and cash flow
- Net cash provided by operating activities was $278.6 million.
- Adjusted Free Cash Flow was $231.6 million.
- At June 30, 2026, Hess Midstream had a drawn balance of $256.0 million on its revolving credit facility.
Analysis
Hess Midstream reported second-quarter 2026 revenues and other income of $399.0 million, down from $414.2 million in the prior-year quarter. The Company said the $15.2 million decline primarily reflected lower throughput volumes, partly offset by higher tariff rates and third-party services. Net income was $173.7 million versus $179.7 million, while income from operations was $253.2 million versus $260.2 million.
Operational activity was weaker year over year. Oil terminaling throughput volumes decreased 15% and water gathering volumes decreased 12%, which the Company attributed primarily to lower production resulting from lower new-well activity. Gas processing throughput volumes decreased 4%, primarily due to planned maintenance at the Tioga Gas Plant. These volume declines are the central demand and utilization issue in the reported period.
Costs and cash flow provided partial offsets. Total operating costs and expenses declined to $145.8 million from $154.0 million, primarily due to lower employee costs and lower maintenance expense, partly offset by higher depreciation expense. Capital expenditures fell to $30.6 million from $70.0 million, mainly following completion of the gas compression capacity expansion. Net cash provided by operating activities was $278.6 million and Adjusted Free Cash Flow increased to $231.6 million from $193.8 million. Gross Adjusted EBITDA Margin improved to 85 % from 82 %.
Hess Midstream declared a $0.7888 per Class A share quarterly cash distribution, up $0.0096 per Class A share from the first quarter of 2026. The Company had a $256.0 million drawn balance on its revolving credit facility at June 30, 2026. It reaffirmed all full-year 2026 financial and throughput guidance, including Adjusted EBITDA of $ 1,225 - 1,275 (in millions), Adjusted free cash flow of $ 910 - 960 (in millions), and capital expenditures of $ 105 (in millions). The reaffirmation leaves execution on volume ranges, free-cash-flow delivery, and the expected approximately $1 billion of Adjusted Free Cash Flow after Distributions through 2028 as the principal items to monitor.
Management, verbatim
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
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
Not in the filing
stated, not guessed- Diluted earnings per share
- Prior-quarter financial metrics other than the stated increase in quarterly cash distribution
- Segment revenue disclosures
- Cash balance
- Total debt balance
- Net debt
- Revenue guidance
- Gross-margin guidance
- Operating-expense guidance
- Tax-rate guidance
- Previous-release outlook for comparison with actual results
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
This is Hess Midstream LP’s SEC Form 8-K (Item 2.02) reporting estimated Q2 2026 results, operational metrics, capital expenditures, and declared quarterly cash distribution, along with reaffirmed full-year 2026 guidance.
Ticker impact
Hess Midstream reported Q2 2026 net income of $173.7M, raised its quarterly distribution to $0.7888/share, and reaffirmed full-year 2026 guidance.
Likely supportive for the stock versus peers if the market was concerned about throughput declines, since guidance and distributions were reaffirmed/increased.
The release includes multiple decision-relevant datapoints: Q2 earnings and cash flow, a declared distribution with a specific record and pay date, and explicit reaffirmed full-year financial and throughput ranges.
Market effects
Reaffirmed midstream throughput and cash-flow guidance with a distribution increase supports the fee-based midstream narrative, even with volume softness.
Bakken/Williston Basin operations guidance and throughput commentary can influence expectations for regional gathering and terminaling demand.
Limited direct global linkage; primarily affects US midstream cash-flow and shareholder-return expectations.
Counterpoint
Throughput volumes fell (oil terminaling -15%, water gathering -12%), so the distribution increase may rely on tariff rates and cost discipline rather than volume recovery.
Key entities
- issuerHess Midstream LP
Reported Q2 2026 net income, Adjusted EBITDA, Adjusted Free Cash Flow, declared a higher quarterly cash distribution, and reaffirmed full-year 2026 guidance.
- governanceHess Midstream’s General Partner
Declared the quarterly cash distribution of $0.7888 per Class A share, payable Aug 14, 2026.
- assetTioga Gas Plant
Planned maintenance contributed to a 4% year-over-year decline in gas processing throughput in Q2 2026.
