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DT Midstream (DTM) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Energy· Jul 30, 2026

Source: earnings call transcript

Executive summary

DT Midstream Q2 FY26 — Strong Organic Growth and Backlog Commercialization

DT Midstream delivered strong Q2 FY26 results, driven by robust organic growth and significant commercialization of its project backlog, particularly in pipeline infrastructure. The company is capitalizing on increasing demand from LNG, power generation, and data centers, reinforcing its confidence in the full-year outlook. Management highlighted the strategic positioning of its assets to serve growing natural gas demand across North America, with a focus on disciplined execution and customer needs.

Highlights

5

  • Commercialized 60% of the $3.4 billion organic project backlog, with over 80% committed to pipeline projects.

  • Reached Final Investment Decision (FID) on approximately $300 million of new organic growth projects.

  • Haynesville gathering volumes averaged 2.2 Bcf per day, an all-time record throughput for the system.

  • Balance sheet remains healthy with Moody's raising leverage downgrade threshold from 4.0x to 4.25x and Fitch from 4.0x to 4.5x.

  • Secured a 25-year renewal contract for capacity on the Midwestern pipeline, indicating strong asset value.

Concerns

3

  • Adjusted EBITDA for Q2 was $305 million, a $3 million decrease from the prior quarter.

  • Pipeline segment results were $14 million lower than the prior quarter.

  • Northeast gathering volumes are expected to be lower in Q3 due to timing of producer activity and maintenance across the gathering network.

Guidance & targets

CategoryTargetConfidence
Full-year 2026 Adjusted EBITDA
Reaffirmed guidance range
high materiality
High
Full-year 2027 Adjusted EBITDA
Reaffirmed early outlook
high materiality
High
Dividend growth
In line with adjusted EBITDA
medium materiality
High
Haynesville volumes Q3
In line with Q2
medium materiality
High
Northeast volumes Q3
Lower than Q2
medium materiality
High

Segment performance

SegmentRevenueYoYQoQMargin
Pipeline
Segment results were $14 million lower than the prior quarter, driven by seasonally lower revenues from joint venture pipelines and higher revenue on Stonewall.
——-$14M—
Gathering
Segment results were $11 million greater than the prior quarter, reflecting higher volumes on Blue Union.
——+$11M—

DTM operating KPIs by quarter

DTM operating KPIs stated on its earnings calls, by fiscal quarter
KPI Mar 2026 Q1 FY26This call Jun 2026 Q2 FY26Change vs prior quarter
Project backlog
$3.4B We continue to advance organic opportunities from our $3.4 billion project backlog in a very strong market environment that supports our future growth. Source: earnings call transcript
$3.4B With today's announcements, we have now commercialized 60% of our $3.4 billion organic project backlog with more than 80% of this being committed to pipeline projects. Source: earnings call transcript
0%
Capital expenditures Growth
$72M Growth capital investment for the first quarter was $72 million, which is in line with our plan, and we expect a ramp in growth capital weighted towards the second half of this year. Source: earnings call transcript
$86M Growth capital investment for the second quarter was $86 million, which is in line with our plan and we expect a ramp in growth capital over the balance of this year. Source: earnings call transcript
+19.4%

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Deals & partnerships

2 producer customers Long-term agreements supporting Haynesville system expansion long-term

New long-term agreements with two producer customers supporting the Haynesville system expansion, increasing LEAP capacity to 2.3 Bcf per day.

Unnamed utility New interconnect on NEXUS for natural gas-fired power generation facility

Commercialized a new interconnect on NEXUS to provide supply for a natural gas-fired power generation facility powering a new data center in Ohio.

Capital programs

Haynesville System Expansion (LEAP) underway ~$300M
Start: Q2 FY26 (FID)

Benefit:200 MMcf per day incremental capacity, 2.3 Bcf per day total

Expansion of the Haynesville system, increasing LEAP pipeline capacity, supported by new long-term agreements with 2 producer customers.

Viking Modernization (Phase 1) underway ~$300M
Start: Q2 FY26 (FID)

Benefit:Improved reliability for critical capacity serving Twin Cities, Minnesota

First phase of modernization on the Viking pipeline, part of the $300M new organic growth projects.

Appalachia Gathering System Expansion underway
Start: Q2 FY26 (agreement)

Benefit:100 MMcf per day expansion, delivering supply into NEXUS and Texas Eastern

Expansion supported by a new long-term gathering agreement, reflecting growing producer activity.

Risks & headwinds

Seasonally lower revenues from joint venture pipelines Q2 FY26

$14M decrease in Pipeline segment results QoQ

Mitigation:Not explicitly stated, but part of normal seasonal fluctuations.

Lower Northeast gathering volumes Q3 FY26

Expected to be lower in Q3 FY26

Mitigation:Due to timing of producer activity and maintenance across the gathering network; management expects Haynesville volumes to offset by being in line with Q2.

Regulatory process for new projects Ongoing, 3-4 years for earliest in-service of large projects (early 2030s)

Multi-year journey for large FERC projects (e.g., NEXUS took 7-8 years from concept to in-service)

Mitigation:Company monitors and observes regulatory processes closely, as they are a derivative of this activity. Focus on strategic and patient approach.

What to watch in Q3 FY26

Mist expansion commercialization progress

Next quarter
Current Binding precedent agreements advancing, first phase in-service as early as end of 2029
Target More specific details on size, scope, and binding agreements

Why it matters

Mist is expected to be comparable to G3 in size and scale, representing a significant organic growth opportunity.

I think we said in the past, and maybe I'll just reiterate it here is that from a size and scale perspective, I think we've always compared this to G3 is something similar in size and scale as G3.

Find out whether DTM delivers this. Inve re-checks your case every morning.

Q&A highlights

Can you elaborate on the commercialization process for Mist, its size and phasing, and how the competitive landscape is evolving?

Management stated it's early to disclose specific size and scope but expects the first phase to be in service as early as end of 2029, driven by customer needs. They are advancing binding precedent agreements and are encouraged by ongoing customer discussions. The project is expected to be comparable to G3 in size and capital investment.

“I think we said in the past, and maybe I'll just reiterate it here is that from a size and scale perspective, I think we've always compared this to G3 is something similar in size and scale as G3.”

asked by Theresa Chen · answered by David Slater

2 min read 5 chapters

Detailed narrative

Organic Growth and Project Backlog Commercialization

DT Midstream has commercialized 60% of its $3.4 billion organic project backlog, with over 80% of this committed to pipeline projects. The company reached FID on approximately $300 million of new organic growth projects this quarter, including a 200 MMcf per day expansion of the Haynesville system and the first phase of modernization on Viking. These projects are supported by long-term contracts and durable customer demand, reinforcing confidence in future growth.

Haynesville System Expansion and Performance

The Haynesville system expansion will increase LEAP pipeline capacity by 200 MMcf per day to a total of 2.3 Bcf per day, supported by new long-term agreements with two producer customers, with an expected in-service date in H2 2028. This project enhances connectivity to East Texas supply and direct LNG market access. Operationally, Haynesville gathering volumes averaged an all-time record of 2.2 Bcf per day in Q2, demonstrating strong throughput.

Midwestern Pipeline and Data Center Demand

The Midwestern pipeline is seeing significant demand, particularly from data centers and power generation. The company commercialized a new interconnect on NEXUS with 380 MMcf per day capacity to supply a natural gas-fired power generation facility for a new data center in Ohio. Management views Midwestern as the 'last mile' to load centers, benefiting from diverse supply sources like Vector, Alliance, REX, Texas Gas, and Tennessee Gas, making it attractive for customers seeking supply optionality.

Balance Sheet Strength and Capital Allocation

DT Midstream maintains a healthy balance sheet, with Moody's raising its leverage downgrade threshold from 4.0x to 4.25x and Fitch from 4.0x to 4.5x. Growth capital investment for Q2 was $86 million, in line with plans, with an expected ramp in the second half of the year. The company's committed capital for 2026 and 2027 has increased to approximately $425 million and $560 million, respectively, following new project FIDs. The Q2 dividend was approved at $0.88 per share, unchanged, with a commitment to grow it in line with adjusted EBITDA.

Long-Term Market Fundamentals and Infrastructure Needs

The long-term outlook for natural gas infrastructure in North America remains highly constructive, driven by growing LNG and power demand, and the increasing need for reliable, affordable, and secure energy. An Inga Foundation study highlighted the need for over $1 trillion in new pipeline infrastructure investment over the next 25 years. Management anticipates significant incremental investments, including potential new pipelines, to connect future production from basins like Appalachia, Haynesville, and Permian to demand centers, with earliest in-service dates for large projects in the early 2030s.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.