A midstream energy company that gathers, treats, and processes natural gas and crude oil across major U.S. basins including the Permian, Eagle Ford, and Williston, and transports, fractionates, stores, and markets natural gas liquids (NGLs) — the building blocks for propane and butane — centered on the Mont Belvieu hub in Texas. Its Galena Park Marine Terminal on the Gulf Coast exports LPG worldwide, and it has expanded its Permian footprint through acquisitions of Targa Badlands and Stakeholder Midstream.
Targa's Q2 net income rose 22% to $765M as record Permian volumes and new plants drove adjusted EBITDA up 38% to $1.6B.
Targa's rose 38% — the fastest pace in at least five years — as new processing plants and the Stakeholder Midstream acquisition amplified Permian volume growth. rose 4% to $4.4 billion and widened 5.3 points to 48.2%, driven by a 44% increase in Logistics and Transportation margin and a 21% increase in Gathering and Processing margin. The company is now funding a $2 billion first-half program and a 25% increase with $19.6 billion in .
Key takeaways
rose 38% to $1.6 billion, as a 14% increase in total Permian plant natural gas inlet volumes and the January 2026 Stakeholder Midstream acquisition lifted Gathering and Processing adjusted 21% to $973.5 million.
Logistics and Transportation adjusted rose 44% to $1.06 billion, benefiting from higher marketing margins, a 24% increase in volumes, and the start-up of Train 11.
rose 22% to $764.6 million, while widened 5.3 percentage points to 48.2% as fee-based midstream services rose 36% to $847.2 million, more than offsetting an 8% decline in commodity sales.
Section summaries
Management's Discussion and Analysis
Targa's Q2 2026 net income rose 22% to $765M, driven by record Permian volumes and higher midstream fees from new plants and acquisitions.
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attributable to Targa Resources Corp. increased 22% to $764.6 million for Q2 2026, driven by a 38% jump in to $1.6 billion.
reached $2.03 billion in the first half of 2026, funding multiple new Permian processing plants and the $1.25 billion Stakeholder Midstream acquisition, which was initially funded with short-term borrowings and later refinanced through a $1.5 billion senior notes offering.
The quarterly was raised 25% to $1.25 per share, and rose to $19.6 billion, up 16% .
The net derivative liability position stood at $125.6 million at quarter-end, with a 10% rise in commodity prices potentially decreasing the portfolio's fair value by $306.2 million.
What changed
The Q1 2026 watch item on turning positive has materialized: free cash flow swung from negative $160.0 million in Q1 to positive $431.2 million in Q2, as nearly doubled to $1.44 billion.
The Q1 2026 watch item on the net derivative liability has improved: the liability fell from $341.8 million at March 31 to $125.6 million at June 30, and the sensitivity to a 10% commodity price rise decreased from $524.1 million to $306.2 million.
The Q1 2026 watch item on Permian Delaware volume growth sustainability remains open: total Permian plant natural gas inlet volumes rose 14% in Q2, down from the 18% Delaware-specific growth rate reported in Q1, though the Stakeholder acquisition added new volumes.
continued to climb, reaching $19.6 billion from $19.1 billion at Q1-end, as the company issued $1.5 billion in senior notes to refinance the Stakeholder acquisition borrowings and fund ongoing .
What to watch
Whether remains positive in the second half of 2026 as the $2.03 billion in first-half net growth begins to decline and new plants like Train 11 and Train 12 contribute a full period of cash flow.
The trajectory of , now at $19.6 billion, against the newly raised $1.25 quarterly and the pace of share repurchases as the heavy cycle continues.
Whether the 14% Permian volume growth rate can be sustained as the Stakeholder Midstream acquisition is fully integrated and new plants come online.
The $125.6 million net derivative liability position and the $306.2 million sensitivity to a 10% commodity price rise, which could generate material non-cash fair-value charges if natural gas forward basis prices move unfavorably.
Gathering and Processing grew 21% to $973.5 million, fueled by a 14% increase in total Permian plant natural gas inlet volumes and the Stakeholder Midstream acquisition.
Logistics and Transportation surged 44% to $1.06 billion, benefiting from higher marketing margins, a 24% rise in volumes, and the start-up of Train 11.
Total revenues rose 4% to $4.44 billion as a 36% increase in fee-based midstream services to $847.2 million more than offset an 8% decline in commodity sales.
accelerated sharply, with net growth capital expenditures of $2.03 billion for the first half of 2026 funding multiple new Permian processing plants and the $1.25 billion Stakeholder Acquisition.
The company funded the acquisition with $1.25 billion in short-term borrowings, later refinanced by a $1.5 billion senior notes offering, and increased its quarterly by 25% to $1.25 per share.
Quantitative and Qualitative Disclosures About Market Risk
Commodity price risk, especially natural gas, NGLs, and crude oil, is the primary market exposure, managed through hedges extending to 2029.
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The company hedges a portion of expected natural gas, NGL, and condensate equity volumes, future commodity purchases/sales, and transportation through 2029, primarily using swaps.
A 10% decline in underlying commodity prices would increase the of the derivative portfolio by $55.0 million, while a 10% increase would decrease it by $306.2 million as of June 30, 2026.
The net liability position on derivative contracts grew from $66.9 million at year-end 2025 to $125.6 million at June 30, 2026, mainly due to unfavorable movements in natural gas forward basis prices.
Interest rate risk arises from $1,051.3 million in variable-rate borrowings; a hypothetical 100-basis-point rate increase would raise annual by $10.5 million, with no interest rate hedges currently in place.
Counterparty credit risk is mitigated by dealing with investment-grade financial institutions and energy companies, using ISDA master netting agreements that reduce maximum loss exposure by $24.8 million.
Customer credit risk is managed through credit analyses, limits, and enhancements; two Logistics and Transportation customers each accounted for approximately 10% of consolidated revenues in Q2 2026.
The information required for this item is provided in “Note 13 – Contingencies,” under the heading “Legal Proceedings” included in the Notes to Consolidated Financial Statements included under Part I, Item 1 of this Quarterly Report, which is incorporated by reference into this…
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The information required for this item is provided in “Note 13 – Contingencies,” under the heading “Legal Proceedings” included in the Notes to Consolidated Financial Statements included under Part I, Item 1 of this Quarterly Report, which is incorporated by reference into this item.
For an in-depth discussion of our risk factors, see “Part I—Item 1A. Risk Factors” of our Annual Report. All of these risks and uncertainties could adversely affect our business, financial condition and/or results of operations.
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For an in-depth discussion of our risk factors, see “Part I—Item 1A. Risk Factors” of our Annual Report. All of these risks and uncertainties could adversely affect our business, financial condition and/or results of operations.