Record Q1 Adjusted EBITDA and EPS Growth
Reported record adjusted EBITDA of $2.25 billion in Q1 2026, up 13% year-over-year (from $1.99 billion in Q1 2025). Adjusted earnings per share increased 22% year-over-year.
Williams Co
· WMB
May 4th, 2026
Summary
- Earnings Call Date:
- 2026-05-04
- Change Since:
- +1.35%
- Next Earnings Date:
- 2026-08-10
Earnings Call Sentiment
PositiveThe call conveyed strong operational and commercial momentum—record Q1 adjusted EBITDA ($2.25B, +13%) and EPS (+22%), multiple large project wins (Neo, Atlas, Silver Spur), robust backlog and clear execution milestones—supporting the company’s long-term growth targets. Near-term risks include raised growth CapEx ($7.3B midpoint) that pushed leverage to ~4.1x, a seasonal Q2 EBITDA dip, permitting and litigation risks on certain projects, and the need to finalize financing partners or other capital solutions. Overall, the positives (record results, project commercialization, expanding backlog and confirmed long-term growth trajectory) materially outweigh the near-term financing and execution risks.
Company Guidance
On the call, management said the company is now guiding to the upper half of its original 2026 adjusted EBITDA range after a record Q1 (adjusted EBITDA $2.25 billion, +13% YoY from $1.99 billion; adjusted EPS +22%), but expects seasonally lower EBITDA in 2Q before sequential growth in H2 including partial Socrates startup beginning in 3Q; they raised 2026 growth CapEx midpoint to $7.3 billion (driven in part by Neo), noted leverage will move modestly above the 3.5–4.0x target to about 4.1x in 2026–27 (with historic earnings growth expected to delever in 2028+), and said financing plans (including partner equity, asset sales or other options) will be firmed up over the next couple months; other published metrics cited on the call included Transmission & Gulf contributing roughly +$150 million (~17%), Transco +10%, Deepwater Gulf >60%, storage +35%, Northeast G&P +$10 million (2%), West +$56 million (~16%), Sequent adjusted EBITDA $227 million (with a $72 million increase including ~$15 million from Cogentrix), exclusion of a ~$180 million book gain on the Haynesville divestiture, ~700 MMcf/d of G&P expansions sanctioned in Q1, and new/project-specific metrics — Neo: 682 MW, 12.5-year contract, ~5x build multiple, ~ $2.3 billion investment, in‑service H2 2028; Atlas: up to 164 MMcf/d, 13‑year term, in‑service by YE26, ~<$50M CapEx; Silver Spur: 275 MMcf/d, 90‑mile pipeline, targeted early 2030 in‑service; and Transco Power Express upsized to 750 MMcf/d (online 2030) — all of which management says support their 2025–30 target of 10%+ EBITDA/EPS CAGR (the current contracted book now supporting roughly 9%).
Broad-Based Segment Strength
Transmission and Gulf businesses improved nearly $150 million (~17%). Transco grew ~10% year-over-year (driven by higher tariff rates and expansions). Deepwater Gulf businesses grew >60%. Natural gas storage EBITDA rose 35%. West segment grew ~$56 million (~16%) led by Haynesville investments. Northeast G&P grew $10 million (~2%).
Commercialization and Major Project Wins
Commercialized three new major projects and upsized a fourth: Neo (682 MW, 12.5-year contract, ~5x build multiple, ~ $2.3 billion expected investment; in‑service H2 2028), Atlas (up to 164 MMcf/d, 13-year term, in‑service by end of 2026, modest capex ~<$50M), and Silver Spur (adds 275 MMcf/d via a 90-mile transmission pipeline; in‑service targeted early 2030). Transco Power Express upsized to 750 MMcf/d scheduled for 2030.
Strong Project Execution and Operational Milestones
Placed Naughton Coal Conversion into service; began construction on NESE and SESE pipeline projects; placed all turbines on foundation at Socrates Plato South; completed construction on first phase of the Aristotle pipeline to serve Ohio power innovation projects.
Robust Backlog and Commercial Momentum
Sanctioned ~700 MMcf/d of new expansion projects in the gathering & processing portfolio in Q1 alone. Management reiterated visibility to achieve the 10%+ earnings CAGR target and noted contracted backlog is growing; John Porter indicated the contracted base growth rate moved to ~9% after recent announcements.
Sequent Marketing and Other Business Highlights
Sequent Marketing delivered $227 million of adjusted EBITDA in Q1 2026, contributing materially to segment results (approximately $72 million YoY increase, with ~$15 million of that related to the Cogentrix acquisition). Management expects to divest the Cogentrix investment later in 2026.
Guidance and Capital Allocation Update
Based on the strong start, management is pointing to the upper half of full-year adjusted EBITDA guidance and reiterated dividend growth and multiple financing options to fund growth, including potential partners for power innovation projects.
Operator
Good day, everyone, and welcome to the Williams First Quarter 2026 Earnings Conference Call. Today's conference is being recorded. At this time, for opening remarks and introductions, I would now like to turn the call over to Danilo Juvane, Vice President of Investor Relations. Please go ahead.
Danilo Juvane
Thank you, [ Antoine, ] and good morning, everyone. Thank you for joining us and for your interest in The Williams Company. Yesterday afternoon, we released our earnings press release and the presentation that our President and CEO, Chad Zamarin; and our Chief Financial Officer, John Porter, will speak to this morning. Also joining us on the call today are Larry Larsen, our Chief Operating Officer; and Rob Wingo, our Executive Vice President of Corporate Strategic Development. In our presentation materials, you'll find a disclaimer related to forward-looking statements. This disclaimer is important and integral to our remarks, and you should review it. Also included in the presentation materials are non-GAAP measures that we reconcile to generally accepted accounting principles, and these reconciliation schedules appear at the back of today's presentation materials. So with that, I'll turn it over to Chad.
Chad Zamarin
Thanks, Danilo, and thank you all for joining us today. We're off to a great start in 2026. Our teams delivered another quarter of growth. We advanced our critical pipe and power projects in execution, and we commercialized 3 new major projects and upsized a fourth. First quarter earnings per share grew by 22% and adjusted EBITDA grew 13% to a record $2.25 billion. Our momentum cont...
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