The Williams Companies, Inc. Q2 FY26 Earnings Analysis

- Company targets a long-term EBITDA and EPS CAGR of 10%+ from 2025 through 2030. - Current contracted business supports around a 9% CAGR, up from about 8% previously. - Robust project backlog (~6 gigawatts) indicates strong opportunities for sales and volume growth. - Expansion projects like Neo, Atlas, Silver Spur, and Power Express are expected to contribute significantly to growth with combined multi-billion-dollar investments. - First quarter 2026 shows 13% adjusted EBITDA growth year-over-year, signaling strong momentum. - Growth CapEx increased to $7.3 billion for 2026, reflecting aggressive growth investments. - Haynesville and other supply basins expected to ramp due to strong natural gas demand, supporting volume growth. - Anticipated commissioning of new pipeline infrastructure will enable access to expanding markets and customers. - Expectation of continued strong demand for natural gas, especially for data centers and power generation.

- Williams targets a 10%+ CAGR for EBITDA and EPS from 2025 through 2030, reflecting strong long-term growth ambitions. - Current contracted business supports around a 9% CAGR, up from the previous 8%, driven by new project additions. - The company expects "enormous earnings growth" in 2028, which will reset leverage capacity and support further growth. - First quarter 2026 adjusted EBITDA grew 13% year-over-year to a record $2.25 billion. - Adjusted earnings per share increased 22% year-over-year, indicating strong profitability gains. - Based on strong performance so far, the full-year 2026 EBITDA guidance is now expected in the upper half of the original guidance range. - Growth is fueled by continued commercialization of new projects, disciplined project execution, and expansion in key business segments.

- Growth CapEx midpoint for 2026 increased by $26 million to $7.3 billion, driven by adding another power innovation project (Neo). - Neo project: $2.3 billion investment, 12.5-year contract, in-service mid-2028, executed at an attractive 5x build multiple. - Atlas project: Modest CapEx, providing up to 164 million cubic feet/day pipeline capacity for a data center backup, switching from diesel to natural gas; expected in-service by end of 2026. - Silver Spur project: Expansion of Northwest Pipeline with compression and 90-mile pipeline, adding 275 million cubic feet/day capacity; early 2030 in-service target. - Upsizing of Transco Power Express to 750 million cubic feet/day capacity, serving Virginia data centers, online in 2030. - Capital recycling considered via bringing in equity partners for power innovation, enhancing financing flexibility. - Multiple financing options remain flexible; aiming for efficient CapEx financing with focus on shareholder value. ###

- The company is actively evaluating financing options to support its growth, particularly for power innovation projects. - Leverage has temporarily moved modestly above the target range (3.5 to 4x), reaching 4.1x due to recent project executions. - There is strong interest from potential partners to invest alongside the company, providing opportunities to enhance economics and recycle capital. - They are preserving multiple financing options, including partnerships, asset sales, and possibly debt or equity, without locking into a single path. - The company plans to firm up specific financing plans over the next couple of months. - Despite higher leverage in the near term (2026-27), significant earnings growth expected in 2027-28 will naturally reduce leverage. - Dividend growth remains a priority alongside maintaining financial flexibility for CapEx funding.

- The company currently has a robust backlog of approximately 6 gigawatts of power projects, considered an order of magnitude estimation. - This backlog remains strong and is being actively "high-graded" to prioritize projects where the company has competitive advantages and capacity for steady, predictable growth. - There is significant opportunity in new projects, with ongoing additions to the backlog supporting future growth. - The team focuses on balancing project execution, supply chain availability, and financing discipline. - Financing solutions under consideration include partnerships to recycle capital while maintaining strategic control. - The company expects strong earnings growth from project executions in 2027-2028 to improve leverage capacity. - They plan to provide more financing details in the next couple of months.