TC Energy Corporation (TRP) | The Buildout — AI Infrastructure
The Verdict
TC Energy is a pure-play natural gas and power infrastructure company operating across Canada, the U.S., and Mexico. It moves gas from supply basins to downstream demand centers, including power plants, LNG facilities, and increasingly data-center loads, and it owns power generation and storage through its Power and Energy Solutions segment. The company's AI-infrastructure role is indirect but central to its growth case: rising electricity demand pulls more natural gas onto its pipelines and creates demand for firm transportation capacity.
| Market Cap | — |
| Revenue (TTM) | $11.5B |
| Revenue Growth | +24.4% |
| EBITDA Margin (TTM) | 64.1% |
| Net Debt | $43.5B |
| Earnings Beats | 5 of 7 |
| P/E (TTM) | — |
| EV/EBITDA (TTM) | — |
What We Like
- Origination backlog exceeds $20 billion, with nearly two-thirds tied to power generation.
- Management's latest demand outlook sees 51 Bcf/d of incremental North American natural gas demand by 2035, up 11 Bcf/d from the original outlook.
- 2026 comparable EBITDA guidance moved to the upper end of the $11.6–$11.8 billion range.
- Bruce Power Unit 3 returned more than 7 months ahead of the ISO schedule and approximately 15% below Unit 6 cost.
- 2025 projects placed in service reached $8.3 billion, more than 15% under budget.
What We’re Watching
- Canadian NGTL investment framework remains “to be determined” as of Q2 2026, with progress hoped for by end 2026.
- 2026 in-service expectation moved from about $4 billion to about $3.5 billion without an explicit reconciliation.
- Industry compression equipment lead times exceed 180 weeks.
- Mexico monetization update previously signaled by mid-fall 2026 was not addressed in the material.
The thesis is strengthening on disclosed demand and backlog evidence, but is gated by conversion. Management raised the demand outlook, moved 2026 EBITDA guidance to the upper end, and showed a materially larger origination backlog; execution on delivered projects has been strong. The unresolved Canadian regulatory framework and the unfunded late-decade capital ramp are the main offsets. The open question is whether Crossroads FID and the Canadian framework update convert the backlog into contracted returns at the promised build multiples.
Earnings Beat
TC Energy's latest quarter was Q2 FY2026. Revenue was $2,813.5 million, gross margin was 50.4%, and EBITDA was $1,778.2 million, or 63.2% of revenue. Management reported comparable EBITDA grew 12% year over year, with Bruce Power availability at 99% and daily average flows up 3%.
| Metric | Q2 FY2026 | Q1 FY2026 | Q2 FY2025 | YoY |
|---|---|---|---|---|
| Revenue | $2.8B | $3.0B | $2.8B | +2.2% |
| Gross margin | 50.4% | 56.7% | 49.2% | +120bps |
| EBITDA | $1.8B | $2.1B | $1.7B | +5.4% |
| EPS | $0.69 | $0.64 | $0.61 | +12.9% |
| Bruce Power availability | 99% | n/a | n/a | — |
Our latest outlook now points to an approximately 51 Bcf per day of incremental North American natural gas demand by 2035, and that’s a 40% increase over 2025 levels and represents an 11 Bcf a day increase from our original outlook. Accelerating power demand accounts for more than half of this increase and now represents approximately 16 Bcf per day of incremental growth through 2035.— Francois Poirier, CEO, 2026-07-30
Management tone: Management's tone shifted from optionality in February to concrete capital-deployment expectations by July. The Q4 2025 call described readiness to upsize the capital program; the Q2 2026 call framed a “very good chance” of $6–$8 billion in 2026 sanctions and moved 2026 EBITDA guidance to the upper end. Management remained explicit about the unresolved Canadian framework and cautioned against linear extrapolation of AI EBITDA.
Management Guidance
Management is targeting the upper end of the 2026 comparable EBITDA range of $11.6–$11.8 billion. The 2028 comparable EBITDA range was held at $12.6–$13.1 billion. For 2026 project activity, management guided to about $3.5 billion of projects placed in service by year-end after about $2 billion in H1, and said there is a “very good chance” 2026 sanctions reach $6–$8 billion.
Trajectory
Reported revenue in Q2 FY2026 was $2,813.5 million, down 7.8% from Q1 FY2026, while gross margin was 50.4% and EBITDA margin was 63.2%. Management reported comparable EBITDA grew 12% year over year, supported by U.S. contract sales, Southeast Gateway in-service, and Bruce Power availability. The financial signals show decelerating reported revenue at the latest quarter with expanding gross and EBITDA margins.
The Model
No projection published for this company. No model projection is available for this company.
The model publishes revenue and EBITDA projections only where the evidence supports them. Where it does not, nothing is shown rather than an estimate.
Looking Ahead
The next twelve months turn on project conversion and regulatory clarity. Management expects Crossroads FID in Q4 2026, a 2026 sanction total potentially reaching $6–$8 billion, and progress on the Canadian NGTL investment framework by end of 2026. A longer-term AI EBITDA disclosure is targeted for November 2026, with Bruce C technology selection likely carrying into 2027.
- Q4 2026Crossroads expansion FID — Tests final scope and Midwest power-demand conversion.
- November 2026Long-term AI EBITDA disclosure — Tests ability to scale AI-related EBITDA beyond the 2026 target.
- End 2026Canadian NGTL framework update — Tests return construct for Canadian expansion backlog.
- End 20262026 in-service total — Tests whether approximately $3.5 billion is completed on time and budget.
- Year-end 20262026 sanctioned capital total — Tests whether sanctions reach $6–$8 billion.
- 2027Bruce C technology selection — Tests technology direction and future optionality.
Financials
Annual Summary
| Metric | FY2024 | FY2025 | TTM | YoY |
|---|---|---|---|---|
| Revenue | $9.0B | $10.9B | $11.5B | +21.2% |
| Gross Margin | 50.2% | 49.9% | 51.5% | 35bps |
| EBITDA | $5.9B | $6.8B | $55.6B | +15.9% |
| EBITDA Margin | 65.1% | 62.3% | 64.1% | 282bps |
| Net Income | $3.4B | $2.5B | $2.6B | -26.1% |
| Free Cash Flow | $1.1B | $1.5B | $742M | — |
| Net Cash | — | — | — | — |
Key Ratios (Trailing)
- P/E TTM—
- EV/EBITDA TTM—
- EV/Revenue TTM—
- Price/FCF TTM—
- Gross Margin (TTM)51.5%
- EBITDA Margin (TTM)64.1%
- Net Margin (TTM)22.5%
- ROIC6.6%
- FCF Conversion35.3%
- SBC / Revenue0.0%
The Company
TC Energy owns and operates natural gas pipelines across Canada, the U.S., and Mexico, plus power generation, natural gas storage, and emerging lower-carbon assets. Its systems connect supply basins to demand centers, including power plants, LNG facilities, and increasingly data-center loads. Management describes the company as the only major energy infrastructure company focused solely on natural gas and power across Canada, the U.S. and Mexico.
It runs four operating segments: Canadian Natural Gas Pipelines, U.S. Natural Gas Pipelines, Mexico Natural Gas Pipelines, and Power and Energy Solutions. Canadian interprovincial pipelines are regulated by the CER, U.S. interstate pipelines by FERC, and Mexico has been shifting from fuel oil and diesel to natural gas for power generation. The Power segment includes Bruce Power, an eight-unit Ontario nuclear facility with about 6,580 MW of capacity.
Business Segments
Competitive Landscape
Management positions TC Energy as an incumbent owner of brownfield pipeline corridors in premium demand regions, and describes it as the only major energy infrastructure company focused solely on natural gas and power across Canada, the U.S., and Mexico. The source set documents Pembina as a competitor and an inferred customer/partner via the Alberta Carbon Grid; no other competitor names are documented.
- Pembina Pipeline (PBA)Documented competitor; inferred customer/partner via the Alberta Carbon Grid.
Supply Chain
TC Energy sits between natural gas supply basins and downstream buyers: utilities, power plants, LNG terminals, and increasingly data-center developers. Documented counterparties include CFE and the LNG Canada joint-venture participants.
More on TRP: Earnings recap