Hess Midstream (HESM) Q3 2024 earnings summary

Executive summary

• Delivered strong Q3 2024 operating and financial performance, with net income of $164.7 million and Adjusted EBITDA of $286.9 million, supported by stable throughput volumes and robust growth in gas and water gathering.

• Integrated midstream platform with strategic assets serving Hess and third parties, underpinned by long-term, fee-based contracts extending through 2033.

• Public ownership increased to 47.3% as of September 30, 2024, following secondary equity offerings and Class B unit repurchases.

• Quarterly cash distribution per Class A share increased to $0.6846, reflecting strong free cash flow and a focus on shareholder returns.

• Continued focus on supporting Hess and third-party development in the Bakken, with a visible trajectory of growth in operational and financial metrics.

Financial highlights

• Q3 2024 net income was $164.7 million; Adjusted EBITDA reached $286.9 million; revenues were $378.5 million, up year-over-year, with operating cash flow of $224.9 million.

• Adjusted Free Cash Flow for Q3 was $141.4 million.

• Gross Adjusted EBITDA margin was 81% in Q3 2024, above the 75% target.

• Quarterly distribution per Class A share increased each quarter in 2024, reaching $0.6846 for Q3.

• Capital expenditures for Q3 2024 totaled $96.3 million, with full-year 2024 CapEx expected at ~$275 million.

Outlook and guidance

• Reaffirmed 2024 throughput guidance: gas processing 405–415 MMcf/d, crude terminaling 120,000–130,000 barrels/day, water gathering 115,000–125,000 barrels/day.

• Full-year 2024 Adjusted EBITDA guidance is $1,135–$1,150 million; net income guidance is $655–$670 million.

• Q4 2024 net income expected at $170–$185 million; Adjusted EBITDA at $295–$310 million, a 5% increase at midpoint over Q3.

• Projected 10% annualized growth in oil and gas volumes and adjusted EBITDA through 2026, with annualized distribution growth targeted at least 5% through 2026.

• Over $1.25 billion in financial flexibility expected through 2026 for shareholder returns, including unit repurchases.