Williams Companies Q2 Earnings Call Highlights

Key Points

• Strong Q2 performance: Williams’ second-quarter EBITDA rose 6% year over year to $1.92 billion, prompting the company to raise full-year adjusted EBITDA guidance to $8.3 billion–$8.5 billion.
• Power growth accelerates: Phase 1 of the Socrates Power Innovation project entered service, delivering 200 megawatts, while a Blackstone joint venture provides $5.34 billion in committed capital to expand behind-the-meter power projects for data centers and other customers.
• Haynesville expansion: The $5.5 billion Momentum Midstream acquisition adds major gathering and pipeline capacity, while the Shelby Connector and Delta Access projects support future growth. Williams also raised its long-term EBITDA growth target to more than 11% annually through 2030.

Williams Companies NYSE: WMB reported higher second-quarter earnings before interest, taxes, depreciation and amortization as growth in its transmission, Gulf Coast, Northeast gathering and processing, and Haynesville-related businesses offset a decline in its upstream segment.

Second-quarter 2026 EBITDA rose 6% year over year to $1.92 billion from $1.8 billion, Chief Financial Officer John Porter said. Year-to-date EBITDA was up 10%. The company also raised its full-year adjusted EBITDA guidance to a range of $8.3 billion to $8.5 billion, reflecting stronger base-business performance and the expected contribution from its acquisition of Momentum Midstream.

Power Innovation Project Reaches Initial Service

President and Chief Executive Officer Chad Zamarin said Williams placed Phase 1 of its Socrates Power Innovation project into service last week, delivering 200 megawatts of utility-scale power to a customer. The phase was completed on time and within budget in less than 18 months from commercialization, according to Zamarin.

Williams expects to deliver the next Socrates phase before year-end. Chief Operating Officer Larry Larsen said the first phase’s commissioning and load testing proceeded smoothly, with the facility delivering initial power and expected to ramp toward full capacity during the month.

The company is using Socrates as a proof point for its behind-the-meter power strategy, which is aimed at serving data-center and other power demand. Zamarin said Williams remains in discussions with multiple customers and expects to commercialize additional Power Innovation projects before the end of 2026.

Management said its future projects could incorporate a combination of rapid deployment, greater scale and hybrid structures designed to support grid expansion. Williams is focusing on locations within its footprint and in areas where infrastructure development can be advanced more readily, Zamarin said.

Blackstone Partnership Provides Capital Capacity

Williams established a Power Innovation financing joint venture with Blackstone that provides $5.34 billion of committed capital. The arrangement includes $4.4 billion for 49% of expected total growth capital expenditures and more than $900 million of additional consideration to Williams, Porter said.

Porter said the capital carries a capped 6.35% cost of equity while allowing Williams to retain operatorship, key decision-making authority and upside participation in the platform. The partnership also includes a buyout option beginning in 2033 at the remaining partner investment balance.

According to Porter, the additional consideration improves the ratio of cash flow Williams expects from its five current Power Innovation projects to invested capital by about 56% over the primary contract terms. The calculation excludes potential additional upside during and after those terms.

Williams expects year-end leverage of about 3.9 times debt to EBITDA, based on an assumed three months of Momentum contribution. On a full-year run-rate basis, Porter said leverage would be about 3.75 times, leaving more than $2 billion of incremental capacity under the company’s internal 4-times leverage ceiling for additional near-term Power Innovation projects.

Momentum Acquisition Expands Haynesville Position

Williams announced the $5.5 billion acquisition of Momentum Midstream, funded with $3.5 billion in cash and debt and $2 billion of equity. Zamarin described the transaction as an accretive bolt-on acquisition with an approximate 8.5-times multiple based on consolidated EBITDA. He said the multiple is about nine times when considering the effect of noncontrolling interests.

The deal adds roughly 6 billion cubic feet per day of gathering capacity and more than 4 Bcf per day of take-or-pay pipeline capacity in East Texas and Louisiana, including the growing Shelby Trough area of the western Haynesville. Williams said the acquisition complements its Haynesville Gathering operations, Louisiana Energy Gateway pipeline and Transco Gulf Coast system.

Management did not quantify anticipated operating or cost synergies, but Zamarin said the overlapping asset footprints should create operational benefits. He also pointed to growth opportunities from existing dedicated customers, new customers and expansion projects.

Williams announced two projects alongside the acquisition:

• Shelby Connector: An expansion linking Momentum’s gathering footprint to the Louisiana Energy Gateway system. The project has initial customer commitments of up to 750 million cubic feet per day, is targeted for first-half 2028 service, and could be expanded to 1.5 Bcf per day.
• Delta Access: A fully contracted pipeline project running from the combined Momentum and Williams systems toward LNG and power customers along the Transco corridor. It is planned with initial capacity of 2.25 Bcf per day, targeted for early 2029 service, and could expand to 3.5 Bcf per day.

Zamarin said the projects fit within Williams’ targeted build-return range and are expected to further improve the acquisition multiple over time.

Transmission and Gulf Coast Operations Lead Quarterly Growth

Transmission and Gulf EBITDA increased $56 million, or about 6%, from the prior-year quarter, led by 23% growth in the company’s Gulf businesses. Porter attributed that performance to recent Gulf expansion projects, while natural gas storage EBITDA also rose 23%.

Williams also reported growth from Transco and MountainWest Pipeline expansion projects. Northeast gathering and processing EBITDA increased $39 million, or 8%, mainly due to rich-gas areas. The West segment grew $18 million, or about 5%, driven by Haynesville investments including Louisiana Energy Gateway.

Sequent marketing performed modestly better than a year earlier, although Porter noted that the second quarter typically presents lower seasonal opportunities. The company’s other segment declined about $14 million, largely due to the January 2026 divestiture of upstream Haynesville assets.

Williams raised its long-term EBITDA growth target to more than 11% compounded annually through 2030, from its prior target of more than 10%. Porter said the updated target reflects Momentum and newly announced projects, while excluding commercialization of additional power and pipeline opportunities. Management said it remains conservative regarding growth assumptions in certain legacy businesses, including the Northeast segment.

About Williams Companies (NYSE:WMB)

Williams Companies, Inc NYSE: WMB is a U.S.-based energy infrastructure company focused on the midstream segment of the natural gas value chain. The company develops, owns and operates assets that gather, process, transport and store natural gas and natural gas liquids (NGLs). Its operations support the movement of gas from production areas to end users including utilities, power generators, industrial customers and export facilities.

Williams’s product and service offering includes interstate and intrastate pipeline transmission, gas-gathering systems, processing facilities that remove impurities and separate NGLs, storage services and fractionation and transportation of NGL products.

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