Hess Midstream (HESM) Q2 2025 earnings summary

Executive summary

• Leadership transition with Jonathan Stein as CEO and Mike Chadwick as CFO, emphasizing continuity and experience.

• Operates a high-quality, integrated midstream platform with strategic infrastructure serving Chevron and third parties, focused on oil, gas, and water services.

• Net income for Q2 2025 was $179.7 million, up year-over-year, with Adjusted EBITDA reaching $316.0 million, driven by higher volumes and tariff rates.

• Chevron completed its merger with Hess in July 2025, now indirectly holding a 37.8% interest, with new board members and governance updates.

• Commitment to sector-leading growth and shareholder returns, supported by operational excellence, disciplined financial management, and long-term contracts through 2033.

Financial highlights

• Q2 2025 net income was $180 million, up from $161 million in Q1; Adjusted EBITDA for Q2 was $316 million, up from $276.5 million in Q2 2024.

• Revenues for Q2 2025 were $414.2 million, a $48.7 million increase from the prior-year quarter, driven by higher volumes and tariff rates.

• Gross adjusted EBITDA margin held at 80% in Q2 2025, above the 75% target.

• Q2 capital expenditures were $70 million; adjusted free cash flow was $194 million.

• S&P upgraded senior unsecured debt to BBB- investment grade in July 2025, improving credit terms.

Outlook and guidance

• Full-year 2025 adjusted EBITDA guidance maintained at $1.235–$1.285 billion, with net income guidance of $685–$735 million and capex of $300 million.

• Adjusted free cash flow for 2025 expected at $725–$775 million, with $125 million excess after distributions.

• Expects >10% Adjusted EBITDA growth in 2026 and >5% in 2027, with throughput growth of 10% in 2026 and 5% in 2027.

• Targeting at least 5% annual distribution growth per Class A share through 2027 and maintaining leverage below 3x EBITDA.

• Over $1.25 billion in financial flexibility through 2027 for incremental shareholder returns, including repurchases.