Hess Midstream (HESM) Q4 2024 earnings summary

Executive summary

• Achieved strong operational and financial performance in 2024, with significant volume growth and execution on multi-year infrastructure projects.

• Fourth quarter 2024 net income rose to $172.1 million, up from $152.8 million year-over-year, with net income attributable to Hess Midstream LP at $70.4 million, or $0.68 per Class A share, compared to $0.55 per share in Q4 2023.

• Revenues increased to $395.9 million from $356.5 million in the prior-year quarter, driven by higher physical volumes.

• Extended growth outlook through 2027, underpinned by Hess's development activity and increasing third-party volumes.

• Focused on disciplined, low-cost investments and maintaining reliable operations while prioritizing shareholder returns.

Financial highlights

• Full-year 2024 net income was $659 million and Adjusted EBITDA reached $1.136 billion, up 12% year-over-year.

• Fourth quarter 2024 net income was $172 million and Adjusted EBITDA was $298 million, both sequentially higher than Q3.

• Gross Adjusted EBITDA margin for Q4 was 81%, above the 75% target.

• Returned $1.95 billion to shareholders since 2021 through repurchases, with distribution per Class A Share up 55% since 2021 and over 10% in 2024.

• Year-end cash and cash equivalents were $4.3 million; total debt was approximately $3.5 billion, with leverage at 3.1x Adjusted EBITDA.

Outlook and guidance

• 2025 guidance: Net income of $715–$765 million, Adjusted EBITDA of $1.235–$1.285 billion (11% growth at midpoint), and Adjusted Free Cash Flow of $735–$785 million.

• Projected 10% volume growth in 2025 across oil and gas systems, with gas processing volumes expected to average 455–465 million cu ft/day.

• Anticipates >10% growth in net income, Adjusted EBITDA, and Adjusted Free Cash Flow in 2025 and 2026, and >5% in 2027.

• Annual distribution per Class A Share growth target of at least 5% extended through 2027.

• Expects leverage to fall below 3x Adjusted EBITDA in 2025 and below 2.5x by end of 2026.