Hess Midstream (HESM) Q2 2024 earnings summary

Executive summary

• Second quarter 2024 net income was $160.3 million, up $12.4 million year-over-year, with net income attributable to Hess Midstream LP at $49.5 million, or $0.59 per Class A share.

• Revenues for Q2 2024 were $365.5 million, up $41.5 million from Q2 2023, driven by higher throughput volumes across all systems.

• Adjusted EBITDA for Q2 2024 was $276.5 million, an increase of $29.7 million year-over-year.

• Throughput volumes saw double-digit growth across all segments, with gas gathering up 19%, gas processing up 17%, crude oil gathering up 23%, and water gathering up 43% year-over-year.

• Ongoing multi-year infrastructure projects and a focus on operational execution are expected to support continued growth and cash flow generation.

Financial highlights

• Q2 2024 revenues: $365.5 million (Q2 2023: $324.0 million); six months ended June 30, 2024: $721.1 million (2023: $629.0 million).

• Q2 2024 net income: $160.3 million (Q2 2023: $147.9 million); six months: $322.2 million (2023: $290.1 million).

• Adjusted EBITDA for Q2 2024: $276.5 million (Q2 2023: $246.8 million); six months: $551.0 million (2023: $484.5 million).

• Adjusted free cash flow for Q2 was $156.4 million.

• Distribution per Class A share increased to $0.6677, above the targeted 5% annual growth.

Outlook and guidance

• Full-year 2024 net income guidance updated to $650–$700 million; Adjusted EBITDA maintained at $1,125–$1,175 million, and Adjusted Free Cash Flow at $675–$725 million.

• Gas gathering and processing throughput guidance for 2024 increased, with organic growth expected across all systems in 2025 and 2026.

• Q3 net income expected at $160–$170 million; Adjusted EBITDA at $280–$290 million.

• At least 5% annual distribution growth per Class A share targeted through 2026, with long-term leverage target of 3x Adjusted EBITDA.

• Guidance for 2025 and 2026 includes at least 10% annual growth in net income, Adjusted EBITDA, and Adjusted Free Cash Flow.