Antero Midstream (NYSE:AM) used its fourth-quarter 2025 earnings call to highlight a recently completed acquisition, continued year-over-year growth, and its expectations for another year of expanding cash flow in 2026. Management also discussed how the company plans to fund shareholder returns while maintaining leverage targets.
HG Midstream acquisition adds dedicated inventory
CEO and President Michael Kennedy said the company recently closed the acquisition of HG Midstream for $1.1 billion, describing it as a bolt-on asset in the core of the Marcellus Shale. Kennedy said the transaction adds more than 400 “highly economic, undeveloped locations” dedicated to Antero Midstream that will “immediately compete for development, capital, and infrastructure projects in 2026.”
2025 performance: EBITDA growth and higher free cash flow after dividends
Kennedy said Antero Midstream generated 7% EBITDA growth in 2025 compared to the prior year, which he said marked the company’s eleventh consecutive year of EBITDA growth since its 2014 IPO. He also said free cash flow after dividends increased 30% in 2025, driven by capital-efficient organic growth and throughput from Antero Resources.
CFO Justin Agnew provided fourth-quarter and full-year detail. Agnew said adjusted EBITDA totaled $285 million in the fourth quarter, a 4% year-over-year increase driven by higher gathering and compression volumes. During the quarter, he said the company generated $85 million of free cash flow after dividends, which was used to reduce leverage to 2.7x and repurchase approximately $48 million of Antero Midstream shares.
For the full year, Agnew said Antero Midstream generated a record $325 million of free cash flow after dividends, up 30% from 2024. He attributed the increase to capital efficiencies from leveraging existing assets and said the performance generated 20% return on invested capital (ROIC) in 2025.
2026 capital budget outlines integration and dry gas expansion
Agnew said Antero Midstream’s 2026 capital investment budget is $190 million to $220 million. He described the budget as including a mix of routine and growth-oriented projects, as well as spending tied to integrating the acquired assets.
- Well connections and water-related capital
- Construction and relocation of compression assets
- High-pressure gathering trunk lines
- Capital to integrate water systems
- Expansion capital on the dry gas portion of the acreage to improve downstream deliverability to multiple long-haul pipelines
Agnew said the dry-gas expansion projects are intended to “unlock significant optionality” and improve reliability in the dry-gas regime. Kennedy later reinforced that the company expects minimal incremental capital needs beyond what was outlined, noting that much of the acreage is in the “heart of our field” with trunk lines and water infrastructure already in place, and that a significant portion is dry gas that “doesn’t need further processing.”
2026 guidance calls for EBITDA above $1.2 billion and 11% free cash flow growth
Agnew said the company’s 2026 guidance includes impacts from acquisition and divestiture activity, with contributions based on the closing dates of each transaction. For 2026, he said Antero Midstream is forecasting adjusted EBITDA of over $1.2 billion, representing an 8% year-over-year increase.
After interest expense, the planned capital budget, and the company’s $0.90 per share dividend, Agnew said management expects $360 million of free cash flow after dividends in 2026—an 11% increase from 2025.
Agnew said Antero Midstream expects a “balanced” return of capital program in 2026 through a combination of debt reduction and share repurchases, with the goal of maintaining leverage in the “low 3x range.” He added that the company’s lower leverage and debt reduction helped it “flex the balance sheet” to fund the HG acquisition, which he said was fully financed without equity issuance.
Longer-term outlook: mid- to high-single-digit growth expectations
In the Q&A session, Kennedy was asked about the longer-term growth trajectory once acquired assets are fully integrated. He said the “3-rig, 2-rig” development program is expected to provide continued growth beyond 2027 and described it as roughly 200 million a day of throughput volume growth. Based on that, he said it was “pretty fair” to expect Antero Midstream to continue generating mid- to high-single-digit EBITDA growth in 2027 and beyond, consistent with what the company has produced historically.
Addressing Antero Resources’ positioning, Kennedy said the producer is “well positioned” due in part to Antero Midstream’s infrastructure and also due to firm transportation, dry gas optionality, and the ability to transport gas to the Gulf Coast for LNG. He said these factors provide multiple demand centers and suggested Antero Resources is positioned to meet growing demand over the next five to 10 years.
About Antero Midstream (NYSE:AM)
Antero Midstream Corporation is a publicly traded midstream service provider that was established in 2014 as a spin-off from Antero Resources. Headquartered in Denver, Colorado, the company owns, operates and develops midstream infrastructure to support the gathering, compression, processing, transportation and storage of natural gas, natural gas liquids (NGLs) and crude oil. Antero Midstream plays a critical role in connecting upstream production in the Appalachian Basin to end-market pipelines and processing facilities.
The company’s core operations include a network of gathering pipelines and compression stations that serve the Marcellus and Utica shale formations across West Virginia, Pennsylvania and Ohio.
