Hess Midstream (HESM) Q4 2025 earnings summary

Executive summary

• Achieved strong operational execution in 2025, completing multi-year projects on time and on budget, including a new compressor station placed in service in January 2026.

• Capital spending is set to decrease significantly, with 2026 guidance at $150 million (down 40% from 2025) and further reductions to less than $75 million annually in 2027 and 2028.

• Free cash flow generation is expected to support both shareholder returns and debt repayment, targeting 5% annual distribution growth through 2028.

• Chevron became the indirect parent, holding a 37.9% interest following the July 2025 merger.

Financial highlights

• Full-year 2025 net income was approximately $685 million and Adjusted EBITDA reached $1,238 million, a 9% increase from 2024.

• Fourth quarter 2025 net income was $168 million, with Adjusted EBITDA of $309 million and Adjusted Free Cash Flow of $208 million.

• Q4 2025 revenues were $404.2 million, up $8.3 million year-over-year, driven by higher tariff rates and third-party services.

• Gross Adjusted EBITDA margin for Q4 was about 83%, above the 75% target.

• Q4 2025 basic EPS was $0.72 per Class A share, up from $0.68 in Q4 2024.

Outlook and guidance

• 2026 net income is expected between $650 million and $700 million, and Adjusted EBITDA between $1,225 million and $1,275 million, roughly flat compared to 2025.

• Adjusted free cash flow for 2026 is projected at $850 million–$900 million, with annualized growth of about 10% through 2028.

• Capital expenditures are expected to be $150 million in 2026, dropping to $75 million or lower in 2027 and 2028.

• 95% of 2026 revenues are protected by minimum volume commitments (MVCs), decreasing to 90% in 2027 and 80% in 2028.

• Distribution growth of 5% per share annually is targeted and fully funded by free cash flow.