TC Energy Corporation (TRP) | The Buildout — AI Infrastructure

The Verdict

TC Energy moves natural gas. It owns the pipelines that gather gas in Appalachia and Western Canada, carry it into the U.S. Midwest and Northeast, and ship it to Mexico, LNG terminals and power plants. It also owns power and storage assets, including nuclear generation in Ontario. The AI build-out matters to it indirectly: data centers need large amounts of firm electricity, much of the incremental North American generation is expected to be gas-fired, and that pulls demand for pipeline capacity, laterals and storage. Management says AI also runs inside the company, optimizing its own pipeline network. TC Energy does not sell chips or servers; it sells the transportation and power that sit upstream of them.

Earnings Beat

For the quarter ended June 30, 2026, TC Energy reported revenue of $2.81B and a gross margin of 50.4%, with EBITDA of $1.78B, both above the year-ago quarter on the same basis. Management said comparable EBITDA rose 12% year over year with every business unit higher, and that daily average natural gas pipeline flows were up 3% across the three-country network. Bruce Power availability was 99% in the quarter following Unit 3's return in June.

Management tone: Management's commentary on the Q2 2026 call was confident and more expansionary than the prior reporting cycle. Language on investment pace moved from "we could go there if we choose to" to "visibility to increasing" to a stated expectation for 2029, 2030 and beyond. The 2026 comparable EBITDA guide was tilted to the upper end of the range, a new three-bucket backlog was disclosed, and management said it "felt compelled" to show the origination backlog figure. The call was also candid on open items: the NGTL return framework is "still to be determined," and management said the AI pilot gains cannot be linearly extrapolated.

Management Guidance

Management is targeting the upper end of its 2026 comparable EBITDA range of $11.6B–$11.8B and reaffirmed 2028 comparable EBITDA of $12.6B–$13.1B, which it describes as an approximate 6% annualized midpoint growth from 2025 results. It expects to place approximately $3.5B of assets into service by the end of 2026 after about $2B in the first half. On sanctions, management says there is "a very good chance" 2026 sanctioned capital lands in the $6B–$8B range against a typical $3B–$4B a year. Leverage is committed at 4.75x or better, called a firm commitment. The 2026 AI-related incremental EBITDA target is $100M, with the company about halfway there.

Trajectory

Revenue was $2.81B in the June 2026 quarter, down from $3.05B in the March quarter, and the code-computed signal labels the revenue trajectory decelerating. EBITDA as reported was $1.78B in the June quarter versus $1.69B a year earlier. On a trailing-twelve-month basis, revenue was $11.49B and EBITDA $7.36B, a 64.1% margin. Margins are expanding: gross +190bps, operating +200bps and EBITDA +150bps in the latest read. Management attributed its tilt to the upper end of the 2026 comparable EBITDA range to operational performance year-to-date rather than to new capital, which is still earning in. The pattern across the two periods in evidence is hold-and-tilt, with nothing cut.

The Model

The model projects FY+1 revenue of $11,814M with EBITDA of $7,655M, a 64.8% margin, and FY+2 revenue of $12,463M with EBITDA of $8,163M, a 65.5% margin. The near term is anchored on assets already placed into service and on the 2026 comparable EBITDA range management is tilting toward its upper end, with about $3.5B of assets due into service by year-end 2026. The FY+2 step-up depends on projects sanctioned now earning in later, on rate-case outcomes, and on the continued operating leverage management describes across its pipeline and storage footprint.

Projections are the median of 5 independent model runs.

Management is targeting the upper end of its 2026 comparable EBITDA range of $11.6B–$11.8B and reaffirmed 2028 comparable EBITDA of $12.6B–$13.1B, which it describes as an approximate 6% annualized midpoint growth from 2025 results. It expects to place approximately $3.5B of assets into service by the end of 2026 after about $2B in the first half. On sanctions, management says there is "a very good chance" 2026 sanctioned capital lands in the $6B–$8B range against a typical $3B–$4B a year. Leverage is committed at 4.75x or better, called a firm commitment. The 2026 AI-related incremental EBITDA target is $100M, with the company about halfway there.

What Could Go Right — and Wrong

Looking Ahead

The next 12 months are largely set by management's own calendar. An update in early November 2026 is the stated venue for AI detail out to 2030, and plausibly for NGTL framework progress and a Crossroads status check. Crossroads FID is expected in Q4 2026, the 2026 sanction tally lands against a $6B–$8B stretch range, the year-end in-service target remains on the calendar, and management hopes to report progress on the NGTL framework by end of 2026. Beyond that, Bruce C technology selection is expected likely next year, funding actions are pointed at 2028, and the final two Bruce refurbishment units complete in 2031–2032.

Financials

Annual Summary

Key Ratios (Trailing)

The Company

TC Energy describes two core businesses — Natural Gas Pipelines and Power and Energy Solutions — reported through four operating segments plus a Corporate segment. It gathers and moves natural gas, sells transportation and storage capacity, and owns power generation. Its lines feed gas-fired power plants, LNG export terminals and utilities, which is the channel through which data-center electricity demand reaches it: management says the quarter's project announcements reflect growing demand from gas-fired power generation and data-center development.

It operates its systems under different regulators: the Canada Energy Regulator for interprovincial pipelines and provincial regulators within provinces, FERC for the U.S. interstate business, and long-term contracts in Mexico where CFE is the primary counterparty on all existing pipelines. The network spans 94,000 kilometers of pipe and 650 bays of storage across three countries. Bruce Power's eight nuclear units, about 6,580 MW, sit near Tiverton, Ontario. Management says that in less than 18 months since spinning off its Liquids business, it has replaced nearly all of that EBITDA with natural gas and power projects.

Business Segments

Competitive Landscape

Management describes TC Energy as the incumbent in the majority of the premium markets it serves, "often the largest provider," which it says allows it to develop cost-competitive expansions; Tina Faraca adds that "incumbency and integration really matter in this market." The one documented competitor quote in the evidence comes from Pembina, which states that the natural gas transportation industry from western Canada to eastern markets "has historically been serviced by companies affiliated with TC Energy." The rest of the competitive set is inferred from the relationship wiring, and those peers are spending into the same demand pool — the sector theme cites Enbridge's backlog at $39B and Williams at five behind-the-meter data center projects.

Supply Chain

TC Energy sells transportation capacity and power rather than equipment, so its supply side is thin: a small set of named equipment and construction suppliers, and a customer base running from state utilities and Mexico's CFE to LNG terminals and, increasingly, data-center developers.