DT Midstream, Inc. (DTM) | The Buildout — AI Infrastructure
The Verdict
DT Midstream owns, operates and develops natural gas midstream assets — interstate and intrastate pipelines, storage systems, and gathering systems with related treatment plants and compression. It moves gas from where it is produced in Appalachia and the Haynesville to where it is consumed in the Midwest, Northeast, Eastern Canada and the Gulf Coast. It does not sell anything into AI. The AI connection runs through a chain: data centers create electricity demand, utilities increasingly meet it with gas-fired generation, and that generation needs firm pipeline capacity and a physical delivery point. DTM supplies that capacity and builds the interconnects, mostly on NEXUS in Ohio and Midwestern across the Midwest. Its larger disclosed growth lever is LNG exports, not AI.
| Market Cap | — |
| Revenue (TTM) | $1.3B |
| Revenue Growth | +18.1% |
| EBITDA Margin (TTM) | 71.1% |
| Net Debt | $3.2B |
| Earnings Beats | 4 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Organic project backlog of $3.4 billion, with 60% commercialized and more than 80% of that committed to pipeline projects, as of the Q2 2026 call.
- Two Ohio data-center interconnects commercialized on NEXUS — 250 MMcf/d and 380 MMcf/d — which management says add over 0.5 Bcf/d of demand pull to the mainline.
- Record Haynesville gathering throughput of 2.2 Bcf/d in Q2 2026, with LEAP running full at its 2.1 Bcf/d design capacity and a disclosed path to 4 Bcf/d.
- Two oversubscribed non-binding open seasons — Midwestern for up to 1.5 Bcf/d and Vector 2030 for 300 to 500 MMcf/d — evidence of demand depth beyond the existing backlog.
- Balance sheet room: disclosed net leverage of 2.7 to 1, $172 million of cash against $3,373 million of total debt as of June 30, 2026, and raised downgrade thresholds from Moody's (to 4.25x) and Fitch (to 4.5x).
What We’re Watching
- Q3 2026 adjusted EBITDA is guided in line with full-year guidance but below the second quarter, on gathering maintenance and Northeast producer timing.
- Expand Energy was approximately 45% of FY2025 operating revenue, and its volumes sit in the Haynesville gathering systems where the company flags Q3 price-related curtailment risk.
- Midwestern's MIST expansion is not yet FID. Capacity and capital are undisclosed — management says it is 'a bit early' to disclose size and scope — and a binding open season is the named next milestone.
- Guardian G4 and the Wisconsin/Iowa corridor depend on state utility regulatory proceedings the company does not control; management calls the growth a derivative of that process.
The thesis is strengthening on the commercial plane and flat on the reported one. In one quarter the company converted two contingent projects to FID, announced roughly $300 million of new FIDs, raised 2027 committed capital about 27% to roughly $560 million, and quantified backlog conversion at 60%. Against that, 2026 and 2027 adjusted EBITDA guidance were reaffirmed twice without a raise, and sequential EBITDA slipped $3 million. The open question is whether the commercial momentum reaches the numbers — the nearest test being the MIST binding open season and Q3 Haynesville volumes.
Earnings Beat
DT Midstream reported second-quarter 2026 net income of $112 million, or $1.09 per diluted share, and adjusted EBITDA of $305 million, a $3 million decline from the prior quarter. Haynesville gathering volumes averaged 2.2 Bcf/d, an all-time record quarterly throughput for the company. Pipeline segment results fell $14 million sequentially on seasonally lower joint-venture revenues and higher Stonewall revenue, while Gathering rose $11 million on higher Blue Union volumes.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $343M | $336M | $309M | +11.0% |
| Gross margin | 73.8% | 54.2% | 53.7% | +2010bps |
| EBITDA | $245M | $240M | $223M | +9.9% |
| EPS | $1.09 | $1.27 | $1.04 | +4.6% |
| Adjusted EBITDA | $305M | $308M | n/a | — |
When I look at Slide 8 in our deck, our entire asset footprint is kind of lit up like a Christmas tree right now. And we've never seen that before while we've owned these assets.— David Slater, CEO, 2026-07-30
Management tone: Management's language escalated between the two calls. On the Q1 2026 call, CEO David Slater described all-time-high daily flows across almost every asset as unprecedented in his career. On the Q2 2026 call he said the organization was 'firing on all cylinders,' that the footprint was 'lit up like a Christmas tree,' and that the organic opportunity set was as robust as he has seen it. The escalation is qualitative: MIST's capacity and capital remain undisclosed. In Q&A management was direct on most topics, but it declined to disclose the size and scope of MIST.
Management Guidance
Management reaffirmed 2026 adjusted EBITDA of $1.155 billion to $1.225 billion and its 2027 early outlook of $1.225 billion to $1.295 billion on both 2026 calls, without a raise. It guides Q3 2026 in line with full-year guidance but below the strong second quarter, on maintenance across the gathering network and lower Northeast volumes from producer timing. Committed capital rose twice, to about $425 million for 2026 and about $560 million for 2027. The quarterly dividend held at $0.88 per share, with a stated policy to grow it in line with adjusted EBITDA.
Trajectory
Revenue has risen four quarters in a row, from $314 million in Q3 2025 to $343 million in Q2 2026, but the sequential pace is uneven — 1.0% in Q4 2025, 6.0% in Q1 2026, then 2.1% in Q2 2026. Computed margin trends show gross, operating and EBITDA margins all stable. The company reports on adjusted EBITDA, and that measure slipped $3 million sequentially to $305 million in Q2 2026, with Q3 guided lower again on gathering maintenance and Northeast producer timing. Management ties the revenue growth to volumes and contracts: LEAP expansion contracts, higher Blue Union Gathering volumes, and the Stonewall inter-segment ramp from the Mountain Valley Pipeline expansion.
The Model
The model's locked median projects FY+1 revenue of $1,359.5 million and EBITDA of $969 million, a 71.25% margin, rising to FY+2 revenue of $1,439.5 million and EBITDA of $1,028 million, a 71.4% margin. The near term leans on already-FID'd projects with in-service dates inside the period — Millennium R2R in Q1 2027 and the Appalachia Gathering expansion in Q4 2027. FY+2 leans on the 2028 in-service dates: Vector 2028, the Midwestern Indiana lateral, the Viking Phase 1 modernization and the Haynesville/LEAP expansion. The largest potential projects, MIST and Guardian G4, are not yet FID.
| Metric | FY2025 | Next FY (E) | Following FY (E) |
|---|---|---|---|
| Revenue | $1.2B | $1.4B | $1.4B |
| YoY Growth | — | +9.4% | +5.9% |
| EBITDA | $885M | $969M | $1.0B |
| EBITDA Margin | 71.2% | 71.2% | 71.4% |
Projections are the median of 4 independent model runs. The model’s revenue sits 3.4% above analyst consensus.
Management reaffirmed 2026 adjusted EBITDA of $1.155 billion to $1.225 billion and its 2027 early outlook of $1.225 billion to $1.295 billion on both 2026 calls, without a raise. It guides Q3 2026 in line with full-year guidance but below the strong second quarter, on maintenance across the gathering network and lower Northeast volumes from producer timing. Committed capital rose twice, to about $425 million for 2026 and about $560 million for 2027. The quarterly dividend held at $0.88 per share, with a stated policy to grow it in line with adjusted EBITDA.
What Could Go Right — and Wrong
- MIST advances to a binding open season and then FID at or above the 'north of G3' size anchor, adding the largest single project to the $3.4 billion backlog.
- A guidance raise, which would break two calls of reaffirmation and show commercial momentum reaching the numbers.
- The developer of the 900 MW Indiana power development reaches FID in 2026, unlocking the roughly 265 MMcf/d Midwestern lateral for a first-half 2028 in-service.
- Guardian G3 wins FERC approval and Wisconsin/Iowa utility proceedings support G4, opening the next expansion leg.
- Backlog conversion moves beyond 60% of the $3.4 billion, or the company begins disclosing data-center-linked contracted capacity.
- A Haynesville volume event — sustained curtailments or an Expand Energy production cut — pressures the largest revenue pool, which overlaps the approximately 45% customer concentration.
- MIST slips, comes in smaller than hinted, or loses its 'last mile' advantage to a competing supply project.
- Capital cost inflation outpaces contracted rates, compressing returns on the large future projects.
- A guidance cut would break the two-call pattern of reaffirmation.
- Permian supply displaces Haynesville-to-LNG flows more than management expects, undercutting the LEAP path toward 4 Bcf/d.
Looking Ahead
Over the next 12 months the test is whether the commercial pipeline converts into contracted projects. The named next milestone is a MIST binding open season, with commercial discussions described as advanced and a first phase that could be in service as early as the end of 2029. The customer for the 900 MW Indiana power development is expected to reach FID in 2026, which would unlock a roughly 265 MMcf/d Midwestern lateral for a first-half 2028 in-service; the separate AES Indiana lateral is already in service. Guardian G3's FERC application was filed in June 2026. Millennium R2R comes fully in service in Q1 2027, and management says growth capital ramps over the balance of 2026.
- Next few monthsMIST binding open season — Tests scale and phasing of the largest potential backlog addition.
- Q3 2026Haynesville volume print — Tests the guided flat line against the flagged Q3 price-disruption window.
- 2026900 MW Indiana power-plant FID — Unlocks a ~265 MMcf/d Midwestern lateral for a first-half 2028 in-service.
- After June 2026 filingGuardian G3 FERC approval — Advances G3 construction and gates the G4 next leg.
- Q1 2027Millennium R2R in service — 70 MMcf/d under existing authorization; already FID'd.
- 20262026 EBITDA landing — Tests the reaffirmed $1.155B–$1.225B range.
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 | $932M | +23.6% |
| EBITDA Margin | 73.0% | 71.2% | 71.1% | 179bps |
| Net Income | $354M | $441M | $468M | +24.6% |
| Free Cash Flow | $413M | $441M | $480M | — |
| 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)71.1%
- Net Margin (TTM)35.7%
- ROIC6.4%
- FCF Conversion51.5%
- SBC / Revenue2.0%
The Company
DT Midstream owns, operates and develops an integrated portfolio of natural gas midstream assets. Its 10-K lists 19 named assets — interstate and intrastate pipelines, storage systems, and gathering systems with related treatment plants and compression. The company connects production in two basins, the Marcellus/Utica in Appalachia and the Haynesville in Louisiana and Texas, to demand centers in the Midwest, Northeast, Eastern Canada and Gulf Coast LNG terminals. It does not produce or sell gas; it sells firm transportation, gathering, treatment and storage.
Part of the portfolio is held through joint ventures — Vector at 40%, Millennium at 52.5% and NEXUS at 50% — so a meaningful share of earnings arrives as equity method earnings rather than consolidated revenue. In Q1 2026 the three JV pipelines contributed $43 million of equity-method earnings and $78 million of EBITDA, roughly a quarter of consolidated adjusted EBITDA. DTM reports in two segments, Pipeline and Gathering.
Business Segments
Competitive Landscape
Management describes DTM's position as owning the 'last mile' infrastructure into demand centers. On NEXUS, management describes the pipeline as effectively fully contracted and sitting in an enviable position with limited available capacity out of the Appalachia Basin. The competitive set below is carried from the supply-chain wiring file as inferred ecosystem neighbors; none of the four is named in DTM's filings or earnings calls.
- Inferred competitor in the wiring file; also a JV partner on NEXUS and Vector.
- Inferred competitor in the wiring file; Haynesville-to-Gulf Coast and Midwest corridors.
- Inferred competitor in the wiring file; gas storage and data-center-driven demand.
- Inferred competitor in the wiring file; pure-play gas midstream and data-center pipelines.
Supply Chain
DT Midstream sits downstream of gas producers and upstream of end markets. It gathers and transports molecules from Appalachia and the Haynesville to utilities, power plants and LNG terminals. No supply-chain neighbor transcript in the source set mentions DTM by name.
More on DTM: Earnings recap