Hess Midstream achieved an adjusted EBITDA margin of approximately 83% in the quarter ended March 2026, well above its long-term target of 75%. Severe winter weather in January and February weighed on volumes, but a March recovery and capture of third-party gas through system optionality helped offset the impact.

The company reduced its 2026 capital spending guidance by one-third to about $105 million, reflecting completion of major infrastructure projects and upstream efficiency gains. This right-sizing of expenditures underscores confidence in sustaining operations with lower ongoing investment.

Management raised full-year 2026 adjusted free cash flow guidance to a range of $910 million to $960 million, marking a 20% year-over-year increase at the midpoint. Key drivers include the significant CapEx reduction, deferred cash taxes under new IRS alternative minimum tax guidance, and strong operational cash conversion.

Hess Midstream’s fixed-fee contracts with minimum volume commitments through 2028 provide substantial downside protection, while continued strategic alignment with Chevron’s longer lateral drilling enhances capital efficiency. Management anticipates second-half EBITDA growth of roughly 8% over H1 as new well completions come online.