Hess Midstream LP (NYSE: HESM) reported Q2 2026 revenue of $399.0 million, down about 3.7% from $414.2 million a year earlier, while diluted EPS increased to $0.75 from $0.74. Lower throughput pressured revenue and Adjusted EBITDA, but reduced operating expenses and sharply lower capital spending helped Adjusted Free Cash Flow rise to $231.6 million. The company reaffirmed its full-year 2026 guidance.
Core earnings data
Revenue declined primarily because lower new-well activity reduced production and related throughput, while planned maintenance at the Tioga Gas Plant affected gas processing volumes. Higher tariff rates and additional third-party services provided a partial offset.
Operating costs and expenses fell to $145.8 million from $154.0 million, mainly due to lower employee and maintenance costs, partially offset by higher depreciation. Consolidated net income declined, but net income attributable to Hess Midstream increased as income allocated to noncontrolling interests fell to $77.3 million from $89.4 million.
| Metric | Q2 2026 | Q2 2025 | YoY change |
|---|---|---|---|
| Revenue and other income | $399.0 million | $414.2 million | About -3.7% |
| Operating income | $253.2 million | $260.2 million | About -2.7% |
| Net income | $173.7 million | $179.7 million | About -3.3% |
| Net income attributable to HESM | $96.4 million | $90.3 million | About +6.8% |
| Diluted EPS | $0.75 | $0.74 | About +1.4% |
| Adjusted EBITDA | $313.7 million | $316.0 million | About -0.7% |
| Gross Adjusted EBITDA Margin | 85% | 82% | About +3 percentage points |
| Operating cash flow | $278.6 million | $276.9 million | About +0.6% |
| Adjusted Free Cash Flow | $231.6 million | $193.8 million | About +19.5% |
Adjusted EBITDA and Adjusted Free Cash Flow are non-GAAP measures. Gross Adjusted EBITDA Margin excludes pass-through revenue, which totaled $29.6 million in Q2 2026.
Business and segment performance
Gathering remained the largest source of revenue and operating income, but it also produced the largest year-over-year decline. Terminaling and Export was the only operating segment to report revenue growth, with operating income rising faster than revenue.
| Segment | Q2 2026 revenue | YoY change | Q2 2026 operating income | YoY change |
|---|---|---|---|---|
| Gathering | $209.8 million | About -5.7% | $120.0 million | About -9.0% |
| Processing and Storage | $151.3 million | About -4.2% | $109.0 million | About -1.4% |
| Terminaling and Export | $37.9 million | About +11.8% | $25.7 million | About +24.8% |
The volume data show that weakness was concentrated in oil-related activity and water gathering. The company attributed lower oil terminaling and water volumes mainly to reduced production caused by lower new-well activity, while planned maintenance affected gas processing.
| Throughput measure | Q2 2026 | Q2 2025 | YoY change |
|---|---|---|---|
| Gas gathering | 445 MMcf/d | 464 MMcf/d | About -4% |
| Crude oil gathering | 103 MBbl/d | 127 MBbl/d | About -19% |
| Gas processing | 433 MMcf/d | 449 MMcf/d | About -4% |
| Crude oil terminaling | 117 MBbl/d | 137 MBbl/d | About -15% |
| NGL loading | 17 MBbl/d | 17 MBbl/d | Flat |
| Water gathering | 121 MBbl/d | 138 MBbl/d | About -12% |
Third-party service revenue more than doubled to $17.9 million from $8.2 million, helping offset part of the decline in affiliate service revenue, which fell to $379.8 million from $405.3 million.
Lower capital spending lifted free cash flow despite softer volumes
Adjusted Free Cash Flow increased by $37.8 million even though Adjusted EBITDA declined by $2.3 million. The principal support was capital spending, which fell 56% to $30.6 million from $70.0 million following completion of the company’s gas-compression capacity expansion. Operating cash flow also edged higher to $278.6 million.
Hess Midstream had $256.0 million drawn on its revolving credit facility at June 30, 2026. The board declared a Q2 distribution of $0.7888 per Class A share, up $0.0096 sequentially, payable on August 14 to holders of record on August 6.
2026 guidance
Hess Midstream reaffirmed rather than raised or lowered its full-year 2026 financial and throughput outlook. The ranges continue to call for $910 million to $960 million of Adjusted Free Cash Flow on $105 million of capital spending.
| Metric | FY 2026 guidance | Status |
|---|---|---|
| Net income | $650 million-$700 million | Reaffirmed |
| Adjusted EBITDA | $1.225 billion-$1.275 billion | Reaffirmed |
| Capital expenditures | $105 million | Reaffirmed |
| Adjusted Free Cash Flow | $910 million-$960 million | Reaffirmed |
| Gas gathering | 450-460 MMcf/d | Reaffirmed |
| Crude oil gathering | 115-125 MBbl/d | Reaffirmed |
| Gas processing | 435-445 MMcf/d | Reaffirmed |
| Crude oil terminaling | 125-135 MBbl/d | Reaffirmed |
| Water gathering | 125-135 MBbl/d | Reaffirmed |
First-half averages were below the lower bounds of all five guided throughput ranges, making second-half operating performance important to the reaffirmed outlook. At the Adjusted Free Cash Flow guidance midpoint, the company’s reconciliation shows approximately $280 million remaining after targeted 2026 distributions. Management also continues to expect approximately $1 billion of Adjusted Free Cash Flow after distributions through 2028 for potential incremental shareholder returns and debt repayment.
Management commentary
CEO Jonathan Stein said the company continued executing its maintenance program while advancing its financial strategy. Management’s stated priorities for the second half are operational execution, continued Adjusted Free Cash Flow generation, shareholder returns and balance-sheet strength.
Recent insider transactions
The supplied insider data show no reported insider purchases or sales during the latest six-month period. The most recent records with a clearly identified transaction direction were sales in 2025; newer March 2026 entries lacked transaction type and value and are therefore excluded below.
| Date | Insider or holder | Transaction | Price | Reported value |
|---|---|---|---|---|
| Aug. 12, 2025 | John A. Gatling, President | Direct sale | $41.59 per share | $2,597,593 |
| June 9, 2025 | Geurt G. Schoonman, Director | Direct sale | $39.10 per share | $127,055 |
| May 30, 2025 | BlackRock Portfolio Management LLC, greater-than-10% beneficial owner | Indirect sale | $36.86 per share | $553,729,977 |
These disclosures identify the transactions but do not establish the sellers’ reasons or views regarding Hess Midstream’s outlook.
Risks investors should monitor
- Lower drilling and new-well activity: Reduced production has already lowered oil, water and gathering throughput. Continued weakness could pressure affiliate service revenue and Adjusted EBITDA.
- Execution against throughput guidance: First-half average volumes were below the full-year ranges across all five guided categories, increasing the importance of second-half operating performance.
- Maintenance-related interruptions: Planned maintenance at the Tioga Gas Plant reduced Q2 gas processing volumes, illustrating how operational work can temporarily constrain throughput.
- Dependence on Chevron’s activity: Hess Midstream’s results depend materially on Chevron’s drilling plans, nominated volumes and ability to meet its obligations to the partnership.
- Cash allocation and leverage: Free cash flow supports distributions, incremental shareholder returns and debt repayment. Weaker cash generation could limit flexibility among those uses while the revolving credit facility remains drawn.
Summary
Hess Midstream’s Q2 2026 results reflected lower throughput and revenue, partly offset by higher tariffs, growing third-party services and reduced operating costs. The most important financial change was the increase in Adjusted Free Cash Flow, driven mainly by the completion-related decline in capital spending rather than EBITDA growth. With full-year guidance unchanged despite first-half volumes running below the guided ranges, throughput execution and cash generation are the central items to monitor in the second half.
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