$HESM earnings report

Third-quarter revenue declined to $410.1 million from $420.9 million in the prior-year quarter. The company attributed the $10.8 million decline to lower throughput volumes, partly offset by higher tariff rates. Affiliate services revenue declined to $392.1 million from $405.6 million, while third-party services revenue increased to $16.6 million from $14.0 million. Oil terminaling, gas processing and water gathering throughput declined 10%, 8% and 4%, respectively, versus the third quarter of 2025, while direct third-party volumes were relatively flat.

Costs declined more sharply than revenue. Total operating costs and expenses were $147.7 million versus $162.0 million in the prior-year quarter, driven by lower omnibus and employee secondment agreement charges and lower maintenance expenses. Income from operations increased to $262.4 million from $258.9 million, and gross margin rose to 64% from 62%. Gross Adjusted EBITDA Margin increased to 84% from 82%, although Adjusted EBITDA was $319.9 million compared with $320.7 million in the third quarter of 2025.

GAAP net income was $179.1 million, compared with $175.5 million in the prior-year quarter. Net income attributable to Hess Midstream LP was $99.4 million, or $0.77 basic and diluted earnings per Class A share, compared with $97.7 million and $0.75 per share in the prior-year quarter. Net cash provided by operating activities increased to $267.9 million from $258.9 million, while Adjusted Free Cash Flow increased to $247.9 million from $186.8 million. Capital expenditures fell to $21.5 million from $79.8 million, mainly following the January 2026 completion of the gas compression capacity expansion.

Capital allocation remained centered on distributions. The company declared a $0.7985 per Class A share quarterly distribution, up $0.0097 per Class A share from the second quarter of 2026, and stated that the increase is in line with targeted annual distribution growth of at least 5% on an annualized basis. Hess Midstream had a $180.0 million drawn balance on its revolving credit facility at September 30, 2026. The company reiterated updated 2026 guidance, including net income of $650 - 675 million, Adjusted EBITDA of $1,225 - 1,250 million, capital expenditures of $105 million and Adjusted free cash flow of $910 - 935 million.

The major strategic item is the transaction announced on October 6, 2026, which management expects to close by year-end. Management stated that the DJ Basin assets are expected to approximately triple crude gathering throughput, significantly grow gas gathering throughput and add ownership in a long-haul crude oil pipeline. The filing also identifies closing, integration, transition-services, customer-volume and financing risks associated with the transaction and the broader business.

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.