What Williams Companies (WMB) Said on Its Q3 Earnings Call

Key Points

• Williams posted record Q3 results: Adjusted EBITDA rose 6% year over year to more than $2 billion, and the company remains on track for the upper half of its $8.3 billion–$8.5 billion 2026 guidance range. It reaffirmed its target of at least 11% annual EBITDA growth through 2030.
• Expansion is advancing: Williams completed its Momentum Midstream acquisition ahead of schedule and said integration is progressing well, with synergies emerging sooner than expected. Four pipeline expansions added more than 400 million cubic feet per day of contracted capacity.
• Power projects offer another growth avenue: The second phase of the Socrates project is expected to enter service ahead of schedule and within budget, and Williams anticipates announcing one or two more power projects by year-end. Management expects leverage of about 3.75x at year-end, within its 3.5x–4x target range.

Williams Companies NYSE: WMB reported record third-quarter results as the pipeline operator advanced expansion projects, completed its Momentum Midstream acquisition ahead of schedule and prepared to bring the second phase of its Socrates power project online.

President and CEO Chad Zamarin said third-quarter adjusted EBITDA increased 6% from the prior-year period to more than $2 billion, marking an all-time record for third-quarter earnings. Adjusted EBITDA rose 9% year to date, while CFO John Porter said adjusted earnings per share and adjusted funds from operations each increased 10% during the quarter.

The company said it remains on track to finish 2026 in the upper half of its $8.3 billion to $8.5 billion adjusted EBITDA guidance range. Williams also reaffirmed its longer-term target of at least 11% compound annual EBITDA growth through 2030.

Momentum Integration and Pipeline Expansions

Williams closed its acquisition of Momentum Midstream on Sept. 3, about one month ahead of schedule. Zamarin said the acquired assets complement Williams’ existing Haynesville basin operations and connect with its Transco system along the Gulf Coast.

Rob Wingo, executive vice president of corporate strategic development, said the integration has started strongly, with no surprises in the first two months of ownership. He said the acquired business has performed in line with expectations and that Williams is beginning to capture synergies sooner than modeled.

Williams expects the combination to support growth projects including the Shelby Trough Connector and Delta Access pipelines, which are designed to move additional Haynesville natural gas into Transco for delivery to Gulf Coast power and liquefied natural gas customers.

During the quarter, the company placed four expansion projects into service:

• Gillis West
• Wharton West
• Huntingdon Connector
• Ryckman Creek Lateral

Together, those projects added more than 400 million cubic feet per day of fully contracted, take-or-pay pipeline capacity, according to Zamarin.

Williams also announced SESE 2, a follow-on expansion to its Southeast Supply Enhancement project on Transco. The project currently includes more than 150 million cubic feet per day of contracted capacity, though COO Larry Larsen said its scope could reach approximately 390 million cubic feet per day if the company finalizes an additional customer agreement. Larsen said Williams expects the project’s economics to fall within a 4x-to-6x build multiple range, depending on final scope and capital requirements.

Power Projects and Equipment Commitments

Williams said it will place the second and final phase of its Socrates project into service later in the week, ahead of schedule and within budget. The first phase entered full service during the prior quarter, less than 18 months after commercialization.

Zamarin said Socrates demonstrates Williams’ ability to provide “speed to power” solutions for customers, particularly high-quality hyperscale customers. The company expects to announce one or two additional power projects before year-end, with anticipated contracts featuring longer terms and a more diversified customer base.

Management said future projects could be larger and developed in phases, rather than consisting only of the initial speed-to-power capacity. Zamarin said Williams expects to maintain its targeted returns through greater equipment and design efficiency while continuing to build projects around predictable fee-based, take-or-pay cash flows.

Porter addressed a disclosure in the company’s 10-Q concerning approximately $5.9 billion of commitments related to equipment for potential projects. He said the amount includes aggregate commitments and backstop arrangements, some of which carry cancellation provisions, and should not be viewed as a direct measure of the company’s 6-gigawatt-plus power opportunity set.

According to Zamarin, Williams has secured or ordered enough equipment with customers to support its identified backlog and additional opportunities. Deliveries are expected to extend from the present through the early 2030s.

Storage, LNG and Financial Flexibility

Williams commercialized a 9.4 billion cubic feet expansion at its Clay Basin storage facility during the quarter. Larsen said the company sees additional storage opportunities, including projects in the Gulf region, as demand grows from LNG and power customers. He said contracted storage rates have continued to rise following Williams’ acquisitions of Gulf storage assets and NorTex.

The company also discussed its 1.5 million metric tons per annum of LNG capacity associated with Woodside’s Louisiana LNG facility. Wingo said the capacity can support additional volumes through Williams’ midstream network and enable the company to offer producer customers exposure to international pricing.

Zamarin said Williams intends to be patient and disciplined in marketing that LNG capacity, with a strategy focused on securing fixed margins rather than building a large international commodity-price exposure. Larsen said the related Line 200 project has completed permitting and remains on track for an end-of-2028 target.

For leverage, Porter said Williams expects year-end leverage of about 3.75x, excluding any additional power projects announced before year-end and reflecting Momentum on a full-year run-rate basis. The company continues to target a leverage range of 3.5x to 4x.

Porter said leverage could be relatively tight during 2026 and 2027 before expected earnings growth accelerates in 2028 and beyond. Williams has about $2 billion of capacity below its internal 4x leverage ceiling for initial spending on new power projects, he said, and could also consider partnerships or joint ventures if needed.

The company said it sees potential for EBITDA growth of 10% to 16% through 2030 under its compensation framework. Porter said the higher end could include bolt-on acquisitions, but that management is primarily focused on expanding its pipeline and power backlog while preserving returns on invested capital.

NESE Permit and Permitting Reform

Williams General Counsel Lane Wilson said the U.S. Court of Appeals for the Third Circuit remanded the company’s New Jersey certificate for the Northeast Supply Enhancement, or NESE, project. Wilson said the court’s decision did not jeopardize the project, though the company is evaluating next steps and working with New Jersey officials.

Zamarin said the remand could threaten the project’s ability to enter service by next winter, although he does not expect a material effect on Williams’ financial outlook. He said the outcome reinforces the need for permitting reform and cited proposed federal legislation that the company believes would have addressed the issues involved in the court decision.

About Williams Companies (NYSE:WMB)

The Williams Companies, Inc is an energy infrastructure company headquartered in Tulsa, Oklahoma. Founded in 1908 as Williams Brothers, the company has evolved from an early pipeline contractor into a major operator of natural gas infrastructure in the United States.

Williams primarily gathers, processes, transports and stores natural gas and natural gas liquids. Its assets include interstate and regional pipelines, gas processing and fractionation facilities, storage operations, and gathering systems that connect producers with utilities, industrial customers, power generators and other energy markets.

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