TC Energy Corporation (TRP) Income Statement

The 2024Q4 revenue figure of $1.4B is an outlier, likely due to a divestiture or accounting reclassification, as subsequent quarters show a return to the $3.6-4.2B range. Excluding that quarter, revenue growth has been modest, with 2026Q1 showing 17.1% year-over-year growth, but 2026Q2 decelerating to 6.7%. This suggests the company is not in a sustained high-growth phase but rather stabilizing after a portfolio adjustment.

The gross margin stability, ranging from 45.1% to 56.7%, suggests that TC Energy's fee-based contracts or regulated assets provide a buffer against volume fluctuations. However, the 2026Q2 gross margin of 50.4% is below the 56.7% in 2026Q1, which may indicate some cost pressure or mix shift. Compared to peers, TC Energy's margin profile is superior, but investors should monitor whether this premium is sustainable as the company integrates new projects.

The absence of R&D and SG&A line items implies that TC Energy's operating expenses are largely embedded in COGS or other categories, which may understate the true operating leverage. In 2026Q1, revenue grew 17.1% while operating income grew at a similar pace, but in 2026Q2, revenue growth slowed to 6.7% and operating income grew 18.8% year-over-year, indicating that fixed costs are being spread over a larger base. This leverage is a positive sign, but it also means that any revenue decline could disproportionately impact operating income.

The lack of detailed cost breakdown makes it difficult to assess where TC Energy is investing for growth. However, the stable gross margin suggests that the company has control over its direct costs, likely due to long-term contracts or regulated tariffs. The absence of R&D is typical for midstream companies, but the missing SG&A could hide overhead inefficiencies. Given the capital-intensive nature of the business, investors should monitor whether cost discipline continues as the company expands its pipeline network.

The 67.9% year-over-year revenue decline in 2024Q4 is not indicative of operational deterioration but rather a strategic divestiture, as evidenced by the immediate rebound in 2025Q1. This inflection suggests that TC Energy is streamlining its asset base, potentially to reduce debt or focus on core pipelines. The lasting impact is a more predictable revenue stream, but it also means that historical growth rates are not comparable. Investors should adjust their models to account for this structural change.