second quarter 2026
Filed Aug 5, 2026Kinetik Reports Record Second Quarter 2026 Results and Raises Full Year 2026 Guidance
Kinetik reported record second-quarter results, with Midstream Logistics Adjusted EBITDA up 35% year-over-year, Free Cash Flow of $105,203, and increased full-year 2026 Adjusted EBITDA guidance to $1.04 billion to $1.1 billion.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net income including noncontrolling interest, three months ended June 30, 2026GAAP | $ 123,113 | – | – |
| Net income including noncontrolling interest, six months ended June 30, 2026GAAP | $ 117,988 | – | – |
| Adjusted EBITDA, three months ended June 30, 2026non-GAAP | $ 280,784 | – | – |
| Adjusted EBITDA, six months ended June 30, 2026non-GAAP | $ 531,984 | – | – |
| Midstream Logistics Adjusted EBITDA, three months ended June 30, 2026non-GAAP | $ 204,766 | – | 35% increase year-over-year |
| Midstream Logistics Adjusted EBITDA, six months ended June 30, 2026non-GAAP | $ 383,687 | – | – |
| Pipeline Transportation Adjusted EBITDA, three months ended June 30, 2026non-GAAP | $ 83,001 | – | 14% decrease year-over-year |
| Pipeline Transportation Adjusted EBITDA, six months ended June 30, 2026non-GAAP | $ 160,978 | – | – |
| Corporate and Other Adjusted EBITDA, three months ended June 30, 2026non-GAAP | $ (6,983) | – | – |
| Corporate and Other Adjusted EBITDA, six months ended June 30, 2026non-GAAP | $ (12,681) | – | – |
| Distributable Cash Flow, three months ended June 30, 2026non-GAAP | $ 194,924 | – | – |
| Distributable Cash Flow, six months ended June 30, 2026non-GAAP | $ 375,755 | – | – |
| Dividend Coverage Ratio, three months ended June 30, 2026other | 1.47x | – | – |
| Dividend Coverage Ratio, six months ended June 30, 2026other | 1.41x | – | – |
| Capital Expenditures, three months ended June 30, 2026other | $ 106,019 | – | – |
| Capital Expenditures, six months ended June 30, 2026other | $ 197,352 | – | – |
| Free Cash Flow, three months ended June 30, 2026non-GAAP | $ 105,203 | – | – |
| Free Cash Flow, six months ended June 30, 2026non-GAAP | $ 206,584 | – | – |
| Net Debtnon-GAAP | $ 3,940,170 | – | – |
| Liquidity (Cash and Revolver Availability)other | $ 1,072,230 | – | – |
| Leverage Rationon-GAAP | 3.85x | – | – |
| Net Debt to Adjusted EBITDA Rationon-GAAP | 3.84x | – | – |
| Common stock issued and outstandingother | 162,375 | – | – |
| Dividend per share of issued and outstanding Common stockother | $ 0.81 | – | – |
| Processed natural gas volumes, second quarter of 2026other | 1.74 Bcf/d | – | flat year-over-year |
full year 2026 outlook
- NoteAdjusted EBITDA guidance of $1.04 billion to $1.1 billion
- NoteCapital Expenditures guidance of approximately $560 million (including maintenance)
- NoteApproximately 25 MMcf/d of curtailments on average for the second half of 2026
- Note2026 processed gas volume exit rate of nearly 2.2 Bcf/d
- Noteapproximately 20% exit-to-exit
- Note$78.65 per barrel for WTI
- Note$2.83 per MMBtu for Houston Ship Channel natural gas
- Note($0.26) per MMBtu for Waha Hub natural gas
- Note$0.62 per gallon for composite NGLs
- NoteAdjusted EBITDA to be between $260 million and $270 million in the third quarter
- NoteAdjusted EBITDA to be between $270 million and $280 million in the fourth quarter
Capital returns
- Dividend per share of issued and outstanding Common stock: $ 0.81
- Dividend Coverage Ratio, three months ended June 30, 2026: 1.47x
- Dividend Coverage Ratio, six months ended June 30, 2026: 1.41x
What drove it
- Strong system operating performance
- Improved natural gas liquid recoveries and condensate yields
- Optimization opportunities
- Favorable commodity prices and spreads
- Permian Highway Pipeline outperformed year-over-year on lower fuel costs and higher gross margin
- Shin Oak outperformed expectations due to more robust throughput volumes
- The ECCC Pipeline was placed into service
- Kinetik secured firm access to additional Gulf Coast netback residue gas pricing in 2027
- Kinetik signed residue gas and NGL transportation agreements for its Delaware North processing complexes
Concerns
- Processed natural gas volumes were flat year-over-year despite an estimated 250 MMcf/d of Waha price-related processed gas volume shut-ins.
- Pipeline Transportation Adjusted EBITDA decreased 14% year-over-year due to the Company’s divestiture in late 2025 of its equity interest in EPIC Crude.
- Updated guidance assumes approximately 25 MMcf/d of curtailments on average for the second half of 2026.
- Capital Expenditures guidance increased to approximately $560 million (including maintenance).
What to watch
- 2026 processed gas volume exit rate of nearly 2.2 Bcf/d
- Completion of Kings Landing II in mid-2028
- Rich gas throughput volumes on the ECCC Pipeline increasing throughout the balance of the year as Kings Landing I reaches full utilization
- Acid gas injection and sour conversion project in-service expected by year-end 2026
- Diamond Volt in-service anticipated in the second quarter of 2027
- Anticipated ECCC Pipeline expansion in 2027
- Third-quarter Adjusted EBITDA expected to be between $260 million and $270 million
- Fourth-quarter Adjusted EBITDA expected to be between $270 million and $280 million
Balance sheet and cash flow
- Distributable Cash Flow, three months ended June 30, 2026: $ 194,924
- Distributable Cash Flow, six months ended June 30, 2026: $ 375,755
- Free Cash Flow, three months ended June 30, 2026: $ 105,203
- Free Cash Flow, six months ended June 30, 2026: $ 206,584
- Capital Expenditures, three months ended June 30, 2026: $ 106,019
- Capital Expenditures, six months ended June 30, 2026: $ 197,352
- Net Debt: $ 3,940,170
- Liquidity (Cash and Revolver Availability): $ 1,072,230
- Leverage Ratio: 3.85x
- Net Debt to Adjusted EBITDA Ratio: 3.84x
Analysis
Kinetik described its second-quarter results as record financial results. Net income including noncontrolling interest was $ 123,113 for the three months ended June 30, 2026, while Adjusted EBITDA was $ 280,784, Distributable Cash Flow was $ 194,924, and Free Cash Flow was $ 105,203. The company also reported $ 106,019 of Capital Expenditures during the quarter. Dividend coverage was 1.47x, and the dividend per share of issued and outstanding Common stock was $ 0.81.
The principal operating contributor was Midstream Logistics, where Adjusted EBITDA was $ 204,766, a 35% increase year-over-year. Processed natural gas volumes were 1.74 Bcf/d and flat year-over-year despite an estimated 250 MMcf/d of Waha price-related processed gas volume shut-ins. Management attributed the segment result to system performance, improved NGL recoveries and condensate yields, optimization opportunities, and favorable commodity prices and spreads.
Pipeline Transportation Adjusted EBITDA was $ 83,001, down 14% year-over-year because of the late-2025 EPIC Crude divestiture. Within the segment, Permian Highway Pipeline benefited from lower fuel costs and higher gross margin, while Shin Oak benefited from more robust throughput volumes. The company reported Net Debt of $ 3,940,170, Liquidity of $ 1,072,230, a Leverage Ratio of 3.85x, and a Net Debt to Adjusted EBITDA Ratio of 3.84x.
Management raised full-year 2026 Adjusted EBITDA guidance to $1.04 billion to $1.1 billion and Capital Expenditures guidance to approximately $560 million (including maintenance). The revised outlook includes higher investment for KLII, accelerated customer development, optimization projects, long-lead equipment for the next processing expansion, and right-of-way procurement for an ECCC Pipeline expansion. The company expects KLII to be completed in mid-2028, expects the acid gas injection and sour conversion project to be in service by year-end 2026, and anticipates Diamond Volt to be in service in the second quarter of 2027.
The updated outlook assumes approximately 25 MMcf/d of curtailments on average for the second half of 2026 and a processed gas volume exit rate of nearly 2.2 Bcf/d. Management also gave quarterly Adjusted EBITDA expectations of between $260 million and $270 million for the third quarter and between $270 million and $280 million for the fourth quarter. The guide is supported by stronger volumes, improved margins, operational performance, expanding Gulf Coast market access, and additional residue gas and NGL transportation agreements.
Management, verbatim
Kinetik delivered exceptional second quarter 2026 results, significantly exceeding expectations.
Jamie Welch, Kinetik’s President & Chief Executive Officer
The increase to our 2026 Adjusted EBITDA guidance reflects not only outperformance in the first half of the year, but also an increase relative to original expectations for the remainder of the year.
Jamie Welch, Kinetik’s President & Chief Executive Officer
Momentum is building across our system and is expected to be a strong tailwind into 2027.
Jamie Welch, Kinetik’s President & Chief Executive Officer
Not in the filing
stated, not guessed- Total revenue
- Segment revenue
- Revenue growth comparisons
- Gross profit and gross margin
- Operating income
- Operating expenses
- Net income attributable to common stockholders
- GAAP EPS
- Non-GAAP EPS
- Operating cash flow
- Cash balance
- Total debt
- Share repurchases
- Prior-quarter comparisons for reported financial metrics
- Prior-year values for reported financial metrics
- Prior full-year 2026 guidance figures required for a metric-by-metric comparison
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.