DT Midstream, Inc. (DTM) | The Buildout — AI Infrastructure
The Verdict
DT Midstream is a pure-play natural gas midstream operator. It does not produce gas, generate power, or sell data center capacity. Instead, it owns the pipelines, storage, and gathering systems that move gas from Appalachian and Haynesville supply toward utilities, power plants, and LNG terminals. The AI buildout reaches the company indirectly: data center electricity demand pulls on gas-fired generation, which then needs firm transport capacity.
| Market Cap | — |
| Revenue (TTM) | $1.3B |
| Revenue Growth | +18.1% |
| EBITDA Margin (TTM) | 70.8% |
| Net Debt | $47M |
| Earnings Beats | 4 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Organic project backlog of $3.4 billion over five years, raised by about 50%, with about 75% in pipeline projects.
- Midwestern nonbinding open season for up to 1.5 Bcf/d was oversubscribed at a size roughly equal to the existing system.
- 565 MMcf/d of power-generation load was attached to Midwestern in the last 12 months.
- Vector 2028 expansion approved: about 400 MMcf/d, DTM investment $80–100 million, in service Q4 2028, backed by 20-year utility contracts.
- About 95% of portfolio is demand-based agreements with average contract tenure of eight years; Midwestern recontracted about 30% of capacity at maximum tariff with 5–25 year terms.
What We’re Watching
- Expand Energy represents about 45% of FY2025 operating revenues, the largest single-customer concentration in the record.
- Midwestern and Vector 2030 open seasons are nonbinding; conversion to binding commitments has not yet occurred.
- The 900 MW Indiana power plant lateral is subject to customer FID, expected in 2026.
- Management flagged Q3 gas-price-related producer curtailment risk in Haynesville and Appalachia.
The business direction is strengthening: the backlog increased about 50%, two prior near-FID projects converted to approved investment, and both major open seasons closed oversubscribed. Management held full-year guidance despite the strong seasonal Q1, and the Q2 result validated that caution. The thesis is intact but conditional on converting nonbinding open seasons and customer FIDs into contracted backlog; the open question is how much of the oversubscribed interest becomes real capacity commitments.
Earnings Beat
Q2 2026 revenue was $343 million with a 73.8% gross margin. The company reported adjusted EBITDA of $305 million, down modestly from $308 million in Q1 and consistent with management's seasonal warning.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $343M | $336M | $309M | +11.0% |
| Gross margin | 73.8% | 54.2% | 53.7% | +2010bps |
| EBITDA | $241M | $240M | $223M | +8.1% |
| EPS | $1.13 | $1.27 | $1.04 | +8.3% |
If we think we were going north of the high end of our guidance, we would tell you that. So let’s start there. The winter was very strong.. Some of the results of Q1 are a derivative of that phenomenon that played out across the network. So that’s very seasonal, and you shouldn’t expect that to repeat.— David Slater, CEO, 2026-04-30
Management tone: Management was upbeat on demand and commercial momentum but disciplined on guidance. They repeatedly cautioned that Q1's strength was seasonal and should not be annualized, and they did not lift full-year guidance despite oversubscribed open seasons and new FIDs.
Management Guidance
Management reaffirmed 2026 adjusted EBITDA guidance of $1.155B–$1.225B and the 2027 early outlook of $1.225B–$1.295B. 2026 growth capital guidance was reaffirmed at $420M–$480M, with committed 2026 capital raised to about $400 million and committed 2027 capital raised to about $440 million. Management expects growth capital spending tilted to the second half of 2026 and anticipates customer FID on the 900 MW Indiana power plant in 2026.
Trajectory
Trailing revenue rose 18.1% year over year, but quarterly growth stepped down from +6.0% QoQ in Q1 FY2026 to +2.1% in Q2, a decelerating trajectory. Reported gross margin moved from 54.2% in Q1 to 73.8% in Q2. The revenue gains are driven by recently placed projects such as Stonewall MVP and LEAP, while management tied Q1 strength partly to cold weather and warned it would not repeat. The main near-term risk is Q3 producer curtailment in gathering.
The Model
The model projects FY+1 revenue of $1.318 billion and EBITDA of $938 million, a 71.2% margin. FY+2 revenue is projected at $1.400 billion with EBITDA of $1,002 million, a 71.6% margin. Near-term revenue is anchored by the existing demand-based contract portfolio and recently placed in-service projects; FY+2 growth depends on conversion of the open seasons and new project FIDs.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $1.2B | $1.3B | $1.4B |
| YoY Growth | — | +6.0% | +6.2% |
| EBITDA | $885M | $938M | $1.0B |
| EBITDA Margin | 71.2% | 71.2% | 71.6% |
Projections are the median of 5 independent model runs. The model’s revenue sits 0.2% below analyst consensus.
Management reaffirmed 2026 adjusted EBITDA guidance of $1.155B–$1.225B and the 2027 early outlook of $1.225B–$1.295B. 2026 growth capital guidance was reaffirmed at $420M–$480M, with committed 2026 capital raised to about $400 million and committed 2027 capital raised to about $440 million. Management expects growth capital spending tilted to the second half of 2026 and anticipates customer FID on the 900 MW Indiana power plant in 2026.
What Could Go Right — and Wrong
- Midwestern open season (MIST) converts to binding agreements at or above 1.5 Bcf/d.
- Vector 2030 open season converts to binding commitments, confirming a second expansion wave into Chicago.
- The 900 MW Indiana power plant customer reaches FID in 2026, locking the ~265 MMcf/d lateral.
- NEXUS mainline spare capacity gets contracted, potentially triggering a compression expansion.
- LEAP expansion FIDs toward the 4 Bcf/d capacity pathway.
- MIST or Vector 2030 binding commitments come in well below the oversubscribed open-season interest.
- The 900 MW power plant customer does not reach FID.
- Expand Energy changes drilling, completion, or contract posture given its 45% revenue share.
- A summer/fall gas-price slump triggers producer curtailment in Haynesville or Appalachia.
- Steel, labor, or electrical equipment bottlenecks delay the back-half 2026 growth capital ramp.
Looking Ahead
The next twelve months turn on converting oversubscribed open seasons into binding agreements. Management expects MIST and Vector 2030 commercial work to progress over the next few months, NEXUS data center interconnect to go commercial very shortly, and the 900 MW Indiana power plant customer to reach FID in 2026. Project in-service dates then begin in 2027 with Millennium R2R and Viking, extending into 2028 with Vector and the Indiana lateral.
- Next few monthsMIST binding commitment negotiations — Tests how much of the up to 1.5 Bcf/d oversubscribed open season becomes contracted capacity.
- Very shortlyNEXUS data center interconnect commercial operation — 250 MMcf/d behind-the-meter project; next step is NEXUS mainline capacity contracting.
- 2026900 MW Indiana power plant FID — Would lock ~265 MMcf/d lateral, 20-year demand-based contract, 1H 2028 in-service.
- 2H 2026Growth capital ramp — Management expects back-half weighted spending against $420M–$480M growth capital guidance.
- Q3 2026Producer curtailment window — Management flagged gas-price-related recalibration risk in Haynesville and Appalachia.
- Q1 2027Millennium R2R full in-service — 70 MMcf/d capacity under existing regulatory authorization.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $981M | $1.2B | $1.3B | +26.7% |
| Gross Margin | 53.9% | 58.0% | 63.2% | +408bps |
| EBITDA | $716M | $885M | $4.5B | +23.6% |
| EBITDA Margin | 73.0% | 71.2% | 70.8% | 179bps |
| Net Income | $354M | $441M | $472M | +24.6% |
| Free Cash Flow | $413M | $441M | $2.1B | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)63.2%
- EBITDA Margin (TTM)70.8%
- Net Margin (TTM)36.0%
- ROIC10.7%
- FCF Conversion51.7%
- SBC / Revenue2.0%
The Company
DT Midstream is an owner, operator, and developer of an integrated natural gas midstream portfolio. Its 10-K describes multiple integrated services through interstate and intrastate pipelines, storage systems, gathering laterals, compression and surface facilities, and gathering systems including treatment plants. The system connects Upper Midwest, Eastern Canada, and Northeast demand centers to Marcellus/Utica supply, and Gulf Coast demand centers and LNG terminals to Haynesville supply.
The company operates two segments. Management says the Pipeline segment has grown from about 50% of the business at spin-off to roughly 70% today. The asset base includes wholly owned pipelines such as Midwestern (402 miles), Guardian (263 miles), and Viking (674 miles), plus joint ventures including Vector (40% ownership), NEXUS (50%), and Millennium (52.5%), and the 91%-owned Washington 10 Storage Complex with 94 Bcf of capacity.
Business Segments
Competitive Landscape
Management's disclosed competitive comments are limited. In Haynesville gathering, management acknowledged competition but cited outlet connectivity and pricing advantages.
Supply Chain
DTM occupies the midstream link between natural gas producers and downstream demand centers, utilities, and LNG terminals. The supplied sources do not provide direct supplier relationships.