South Bow (SOBO) Q3 2026 earnings summary

Executive summary

• Q3 revenue was $503 million and net income was $99 million; normalized EBITDA was $248 million, down 11% QoQ as U.S. Gulf Coast capacity demand moderated.

• Q3 distributable cash flow was $187 million, up 7% QoQ, including a one-time favorable tax adjustment; 2026 DCF guidance rose 4% to $690 million.

• Prairie Connector and Liberty Bridge remain targeted for a mid-2027 FID, subject to permit durability, regulatory certainty, and completion of development work.

Financial highlights

• Q3 revenue was $503 million versus $461 million YoY; net income was $99 million ($0.47/share) versus $93 million ($0.45/share).

• Q3 normalized EBITDA was $248 million versus $254 million YoY; nine-month normalized EBITDA was $785 million versus $770 million.

• Q3 DCF was $187 million versus $236 million YoY; nine-month DCF was $530 million versus $560 million, mainly due to current tax and equity-investment distribution differences.

• Q3 operating cash flow was $273 million versus $196 million YoY; nine-month operating cash flow was $714 million versus $515 million.

Outlook and guidance

• 2026 normalized EBITDA guidance remains $1,040 million (+2%/-1%); DCF guidance increased 4% to $690 million (+/-2%), mainly reflecting lower current income taxes.

• 2027 normalized EBITDA is projected at $1,070 million (+/-2%), financial charges at $300 million (+/-2%), effective tax rate at 22%-23%, and DCF at $630 million (+/-4%).

• 2027 capital spending includes $40 million (+/-$10 million) maintenance and $65 million for Prairie Connector and Liberty Bridge pre-FID development.

• 2027 DCF is expected to decline mainly due to higher current income taxes following 2026 tax savings; net debt-to-normalized EBITDA is expected to decline modestly.

• Blackrod contributions are expected to increase in 2027; 2027 guidance reflects higher Blackrod contributions.