Despite an OCF/NI ratio of 2.89 in 2026Q1, the company's free cash flow remains volatile due to lumpy capital expenditures, which reached 52.0% of revenue in 2025Q4.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 |
|---|
| Cash from Operations | 1.03B | 983.8M | 940.3M | 866.4M | 861.1M | 795.5M | 641.7M | 470.7M | 466.9M | 399.9M | 387.7M | 434.8M | 29.6M | -135.4M | -53.3M |
| Operating CF Margin % | - | 60.68% | 63.03% | 64.36% | 67.63% | 66.08% | 58.79% | 55.53% | 65.58% | 69.01% | 76.05% | 76.94% | 11.62% | -50.2% | -31.41% |
| Operating CF Growth % | 37.23% | 4.63% | 8.53% | 0.62% | 8.25% | 23.97% | 36.33% | 0.81% | 16.75% | 3.15% | -10.83% | 1368.92% | 121.86% | -154.03% | - |
| Net Income | 368.9M | 352.9M | 659M | 118.6M | 620.6M | 617.8M | 484.9M | 317.7M | 325.5M | 284.8M | 206.3M | 193.4M | 32.9M | -163.8M | -73.9M |
| Depreciation & Amortization | 221.1M | 214.1M | 203.1M | 192.5M | 181.3M | 165.6M | 156.9M | 142.5M | 126.9M | 113.1M | 99.7M | 86.1M | 44.4M | 12.5M | 14.3M |
| Stock-Based Compensation | 1.1M | 0 | 1.8M | 1.7M | 1.6M | 1.4M | 1.5M | 1.5M | 900K | 200K | 0 | 0 | 2.2M | 3.6M | 3.1M |
| Deferred Taxes | 119M | 113.7M | 71.6M | 37.9M | 26.6M | 14.6M | 7.3M | -100K | -1M | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Non-Cash Items | 162.9M | 352.9M | 12.8M | 501.2M | 16.5M | 14.1M | 5.4M | -3.2M | 5M | 600K | 119.3M | 169.4M | -8.9M | 9M | 6.3M |
| Working Capital Changes | -5.5M | -49.8M | -8M | 14.5M | 14.5M | -18M | -14.3M | 12.3M | 9.6M | 1.2M | 81.7M | 155.3M | -47.7M | 15.9M | 6.3M |
| Change in Receivables | -15.5M | -11.1M | -14.4M | -1M | -2.6M | -27M | -5M | -19.5M | -6.3M | -15.2M | 5.9M | -8.2M | -33.4M | -8.2M | 131.6M |
| Change in Inventory | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 19.5M | -38.4M | 500K | 191.5M | -100K | 200K | 700K |
| Change in Payables | 3.3M | -40.4M | 11.5M | 13.6M | 2.3M | 6.6M | -500K | 15.2M | -2.4M | 17.8M | 74.8M | 169.4M | -6.7M | 12.6M | 3.8M |
| Cash from Investing | -238.9M | -255.6M | -306.1M | -223.5M | -238.2M | -163.2M | -301M | -497.5M | -307.6M | -136.4M | -263.6M | -361.8M | -187.8M | -473.2M | -347.5M |
| Capital Expenditures | -382.3M | -255.6M | -306.1M | -223.5M | -238.2M | -163.2M | -301.1M | -306.4M | -241.9M | -136.4M | -263.6M | -361.8M | -187.8M | -473.2M | -347.5M |
| CapEx % of Revenue | 23.47% | 15.77% | 20.52% | 16.6% | 18.71% | 13.56% | 27.58% | 36.15% | 33.97% | 23.54% | 51.71% | 64.02% | 73.7% | 175.45% | 204.77% |
| Acquisitions | 0 | 0 | 0 | 0 | 0 | 0 | 100K | -191.1M | -67.3M | 78.5M | 0 | 0 | 0 | 0 | 0 |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 143.4M | 0 | 0 | 0 | 0 | 0 | 0 | -101.9M | 1.6M | 12.8M | 0 | 0 | 0 | 0 | 0 |
| Cash from Financing | -797.3M | -730.6M | -635.3M | -640.6M | -622M | -632.7M | -341.4M | -79.2M | -405.7M | -216.6M | -124.1M | -73M | 158.2M | 608.6M | 400.8M |
| Debt Issued (Net) | 190M | 288M | 262.5M | 319.5M | 324M | 660M | 150.7M | 784.5M | -2.5M | 262M | 0 | -397.6M | 185.8M | 410.3M | 308.6M |
| Equity Issued (Net) | -360M | -400M | -300M | -400M | -400M | -750M | 0 | -156.1M | 0 | 365.5M | 0 | 0 | 0 | 0 | 0 |
| Dividends Paid | -376.1M | -350.2M | -235.3M | -127.5M | -91M | -49.4M | -31.6M | -85.4M | -396.1M | -477.1M | -306.9M | -339.1M | -27.6M | 0 | 0 |
| Share Repurchases | -360M | -400M | -300M | -400M | -400M | -750M | 0 | -156.1M | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Other Financing | -251.2M | -268.4M | -362.5M | -432.6M | -455M | -493.3M | -460.5M | -622.2M | -329.1M | -441.4M | 183.2M | 663.7M | 0 | 198.3M | 92.2M |
| Net Change in Cash | -1.5M | -2.4M | -1.1M | 2.3M | 900K | -400K | -700K | -106M | -246.4M | 46.9M | 0 | 0 | 0 | 0 | 0 |
| Free Cash Flow | 652.4M | 728.2M | 634.2M | 642.9M | 622.9M | 632.3M | 340.6M | 164.3M | 225M | 263.5M | 124.1M | 73M | -158.2M | -608.6M | -400.8M |
| FCF Margin % | 40.06% | 44.91% | 42.51% | 47.76% | 48.92% | 52.53% | 31.2% | 19.38% | 31.6% | 45.47% | 24.34% | 12.92% | -62.09% | -225.66% | -236.18% |
| FCF Growth % | -1.24% | 14.82% | -1.35% | 3.21% | -1.49% | 85.64% | 107.3% | -26.98% | -14.61% | 112.33% | 70% | 146.14% | 74.01% | -51.85% | - |
| FCF per Share | 5.05 | 5.92 | 7.13 | 11.42 | 15.05 | 24.60 | 18.82 | 3.00 | 4.11 | 4.90 | 2.27 | 1.34 | -2.90 | -11.15 | -7.35 |
| FCF Conversion (FCF/Net Income) | 1.77x | 2.79x | 4.21x | 7.31x | 10.26x | 17.14x | 26.74x | 6.71x | 6.76x | 9.71x | 1.89x | 2.25x | 0.90x | 0.83x | 0.72x |
| Interest Paid | 0 | 0 | 0 | 170.6M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Taxes Paid | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Sponsor volume dependency
As reported in financial statements, HESM consistently generates operating cash flow significantly exceeding net income, with the OCF/NI ratio reaching 2.89 in 2026Q1, which suggests that non-cash charges and contractual shortfall payments are the primary drivers of the company's reported cash generation profile.
The persistent gap between net income and operating cash flow indicates that accounting earnings are a poor proxy for the actual cash-generating capacity of the business. Investors should monitor whether this divergence reflects high depreciation levels or an increasing reliance on non-physical shortfall payments that may not be sustainable in the long term.
Based on HESM's reported figures, free cash flow margins have exhibited significant volatility, ranging from a low of 8.8% in 2025Q4 to a high of 57.5% in 2026Q1, reflecting the lumpy nature of capital expenditures relative to the company's recurring fee-based revenue streams.
The sharp contraction in FCF margin during late 2025 highlights the sensitivity of cash flow to periodic infrastructure investment cycles. While the company maintains a strong cash-generating core, the inconsistency in FCF suggests that capital allocation decisions remain a primary determinant of shareholder value rather than organic operational growth.
According to recent SEC filings, HESM's capital intensity, measured by CapEx as a percentage of revenue, spiked to 52.0% in 2025Q4, indicating that periodic expansion projects can temporarily overwhelm the company's ability to self-fund operations without impacting distributable cash flow.
The wide variance in capital spending suggests that management retains significant discretion over growth projects, which may be used to manage the timing of cash outflows. Analysts should scrutinize whether these expenditures are truly growth-oriented or if they represent necessary maintenance to sustain the aging gathering footprint in the Bakken.
As evidenced by the company's financial data, HESM consistently prioritizes shareholder returns, with combined dividends and buybacks frequently exceeding quarterly free cash flow, a trend that warrants investigation into the sustainability of such aggressive capital deployment given the company's limited cash reserves.
The practice of returning capital at levels that occasionally outpace FCF suggests a reliance on external financing or a commitment to sponsor-driven payout targets. This strategy may limit the company's financial flexibility to pursue inorganic growth or respond to unexpected operational disruptions in the Williston Basin.
Quick answers to the most common questions about buying HESM stock.
Hess Midstream LP (HESM) generated $983.8M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Hess Midstream LP (HESM) generated $728.2M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Hess Midstream LP (HESM) spent $255.6M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Hess Midstream LP (HESM) returned $350.2M to shareholders via cash dividends and spent $400.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.