Transportadora de Gas del Sur S.A. (TGS) Income Statement

The 64.1% YoY growth in 2026Q2 follows a 50.8% increase in 2026Q1, indicating an accelerating trend. This appears driven by a combination of regulated tariff hikes under the Milei administration and expanding NGL volumes from Vaca Muerta. The sequential dip from 2025Q4's $567.1B to 2026Q2's $562.8B suggests some quarter-to-quarter volatility, but the overall trajectory remains robust.

The gross margin compression in 2026Q2 likely reflects higher operating costs, possibly due to inflation and maintenance expenses. However, the 50.4% margin remains strong compared to peers like KMI (43.7%) and WMB (42.9%), underscoring TGS's pricing power in its regulated and midstream segments. The variability suggests sensitivity to cost inflation and tariff timing, which investors should monitor.

The operating margin improvement from 35.7% in 2025Q2 to 40.2% in 2026Q2 indicates that revenue growth is outpacing cost increases, a sign of positive operating leverage. SG&A expenses rose only 36% YoY while revenue grew 64%, suggesting disciplined overhead control. This leverage is particularly notable given the high fixed-cost nature of pipeline operations.

The faster growth in COGS relative to revenue in 2026Q2 suggests that input costs, particularly labor and maintenance, are inflating faster than tariff adjustments. This is a key risk for margin sustainability. However, the company's ability to maintain a 50%+ gross margin indicates some offsetting pricing power, but the trend warrants monitoring.