Antero Midstream Q3 Net Income Reaches $393 Million on Litigation Gain

Antero Midstream Corporation (AM ) reported third quarter 2026 net income of $393 million, or $0.82 per diluted share, on October 28, 2026, a 242% per share increase from the prior year quarter, according to the company’s earnings release. The results included a $377 million gain on the Clearwater litigation, and the Denver-based midstream company raised its full-year 2026 Adjusted Free Cash Flow guidance by $370 million to reflect receipt of those proceeds.

Net income for the three months ended September 30, 2026, was $392,657 thousand, compared with $115,984 thousand, or $0.24 per diluted share, in the third quarter of 2025. Adjusted Net Income, a non-GAAP measure, was $134 million, or $0.28 per diluted share, a 4% per share increase. Adjusted EBITDA was $291 million, a 3% increase from the prior year quarter, and Adjusted Free Cash Flow before dividends was $555 million and after dividends was $449 million, both non-GAAP measures that include the $377 million litigation gain. The consolidated financial statements are included in the company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2026.

Total revenue was $327 million ($327,022 thousand), up from $294,821 thousand a year earlier, comprised of $257 million from the Gathering and Processing segment and $70 million from the Water Handling segment, net of $23 million of amortization of customer relationships. Water Handling revenues include $43 million from other water handling and high rate water transfer services. Direct operating expenses totaled $83 million, split between $38 million for Gathering and Processing and $45 million for Water Handling, with the Water Handling figure including $38 million from other water handling and high rate water transfer services. General and administrative expenses excluding equity-based compensation were $10 million. Total operating expenses included $11 million of equity-based compensation, $38 million of depreciation, a $3 million impairment and the $377 million litigation gain. Interest expense was $51 million, an 8% increase from the prior year quarter, and current income tax expense was $11 million as a result of the gain on litigation.

Gathering volumes averaged 4,067 MMcf/d, up 19% from the prior year quarter, and compression volumes averaged 3,992 MMcf/d, up 17%. Fresh water delivery volumes averaged 89 MBbl/d, a 3% decrease, while other water handling volumes averaged 123 MBbl/d, a 128% increase. Joint venture processing volumes averaged 1.6 Bcf/d and fractionation volumes averaged 40 MBbl/d, with processing and fractionation capacity both 100% utilized during the quarter. Average realized fees were $0.37 per Mcf for gathering, up 3%, $0.22 per Mcf for centralized compression, $0.23 per Mcf for high pressure gathering and $4.43 per barrel for fresh water delivery, up 1%; the fees include annual CPI-based adjustments of approximately 1.5%.

Capital expenditures totaled $51 million, in line with the prior year quarter, with $37 million invested in gathering and compression and approximately $14 million in water infrastructure. The company connected 22 wells to its gathering system and serviced 22 wells with its fresh water delivery system during the quarter. Curtailments reduced throughput by approximately 10 Bcf during the quarter, and the company expects approximately 15 to 20 Bcf of curtailments in the fourth quarter of 2026.

2026 Guidance Raised on Clearwater Proceeds

Antero Midstream updated its 2026 guidance to reflect receipt of the Clearwater litigation proceeds, increasing Adjusted Free Cash Flow guidance before and after dividends by $370 million based on the $377 million of proceeds net of the impact of interest expense and current income tax expense. Full-year net income guidance moved to $765 million to $815 million, a $280 million increase at the midpoint. Interest expense guidance moved to $200 million to $220 million, a $10 million decrease at the midpoint, and current income tax expense guidance moved to $10 million to $20 million, a $15 million increase at the midpoint. Adjusted Free Cash Flow before dividends is now guided at $1,125 million to $1,185 million, and Adjusted Free Cash Flow after dividends at $700 million to $760 million. All other guidance ranges remain unchanged, the company said.

Debt Reduction and Capital Returns

Chief Financial Officer Justin Agnew said the company continued to increase its assets while maintaining a strong balance sheet and returning capital to shareholders, including “reducing absolute debt by over $400 million during the quarter, calling our nearest maturity senior notes, and accelerating share repurchases once our leverage target was achieved.” Agnew said that, including the internally financed HG acquisition earlier this year, the company’s leverage is flat and its share count has declined by 4 million shares compared with a year earlier.

Consolidated net debt was $3,176,800 thousand as of September 30, 2026, consisting of $576,800 thousand drawn on the bank credit facility and senior notes of $750 million at 5.375% due 2029, $600 million at 6.625% due 2032, $650 million at 5.75% due 2033 and $600 million at 5.75% due 2034. The company’s $650 million of 5.75% senior notes due 2028 were no longer outstanding. Leverage, a non-GAAP measure the company defines as net debt divided by Adjusted EBITDA for the last twelve months, declined to 2.8x as of September 30, 2026; last-twelve-months Adjusted EBITDA was $1,152,639 thousand.

During the quarter, Antero Midstream repurchased 1.3 million shares for approximately $27 million, leaving approximately $283 million of remaining capacity under its share repurchase program as of September 30, 2026. Total assets were $6,341,080 thousand and long-term debt was $3,153,695 thousand at quarter-end. The company’s nine-month cash flow statement shows $377,433 thousand of proceeds from asset sales and the $1,103,032 thousand acquisition of HG Midstream during the nine months ended September 30, 2026.

Chief Executive Officer and President Michael Kennedy said the company is currently servicing two drilled but uncompleted Antero Resources (AR ) growth pads using its legacy water system and remains on track to complete its HG water system integration by year-end. “These growth pads and integration efforts are expected to drive visible EBITDA growth in the fourth quarter of 2026 and 2027,” Kennedy said. The company also expects to place in service 80 MMcf/d of additional compression capacity in the liquids-rich corridor in the fourth quarter of 2026, and it continued initial construction on East Side Express, its first regional connectivity expansion project.

A conference call to discuss the financial and operational results is scheduled for Thursday, October 29, 2026, at 10:00 am MT, with a telephone replay available until November 5, 2026.