TC Energy Corporation Earnings - Q4 2025 Analysis & Highlights
TC Energy reported strong Q4 2025 results driven by operational excellence, successful project execution, and a robust pipeline of growth opportunities across natural gas and power infrastructure in North America, with confidence in sustaining 5-7% EBITDA growth through disciplined capital allocation and strategic positioning in high-demand markets.
Key Financial Results
Comparable EBITDA growth of 9% year-over-year for the full year 2025, with Q4 showing 13% year-over-year growth in comparable EBITDA.
Q4 2025 EBITDA of approximately CAD 3 billion, driven by strong contributions across all business segments.
CAD 8.3 billion of projects placed into service on schedule and over 15% under budget during 2025, demonstrating exceptional execution capability.
Safety performance at best levels in five years, directly enabling strong operational and financial results.
Pipeline businesses set new all-time high delivery records in Q4 2025.
Business Segment Results
Canada Gas EBITDA increased by CAD 110 million due to higher incentive earnings and flow-through depreciation on both the NGTL and mainline systems.
US EBITDA increased by CAD 188 million, primarily from the Columbia Gas settlement, additional contract sales, and higher realized earnings from the US natural gas marketing business.
Mexico EBITDA increased by CAD 163 million, representing a 70% increase relative to the prior year due to the completion of Southeast Gateway, partially offset by currency and tax items.
Bruce Power achieved 86% availability in Q4 2025, which includes planned outage on Unit 2 and is in line with expected annual availability in the low 90% range for full year 2025.
Equity income from Bruce Power was lower quarter-over-quarter primarily due to Unit 4 being offline for its major component replacement (MCR) program at the same time Unit 3 is offline for its MCR program.
Capital Allocation
CAD 6 billion annual net capital expenditure target through 2030, with expectations to fully allocate this target by end of 2026 and potentially surpass it in the latter part of the decade.
CAD 4 billion of projects expected to be placed into service in 2026, including Bruce Unit 3's return to service.
CAD 2 billion of assets placed into service in Q4 2025 on time and under budget.
CAD 500 million of capital optimization achieved by shifting maintenance capital forward into 2026 to capture in-year EBITDA while creating capacity for higher return growth in outer years.
CAD 600 million of new projects added in Q4 2025, including additional NGTL expansion facilities and a brownfield US compression expansion project at a five times build multiple.
First quarter 2026 dividend declared at CAD 0.8775 per common share, equivalent to CAD 3.51 per share on an annualized basis, representing a 3.2% year-over-year increase and the 26th consecutive year of dividend growth.
Industry Trends and Dynamics
North American natural gas demand expected to increase by 45 Bcf per day from 2025 to 2035, equivalent to adding the entirety of the European gas market over the next 10 years.
Wide scale electrification, ongoing coal retirements, and rapidly growing energy needs of AI and data centers are driving significant and sustained increase in North American electricity demand.
Majority of the 10 Bcf per day of expected growth in power demand concentrated in markets that directly overlap TC Energy's footprint.
LNG exports, rising power generation, and increasing reliability needs for local distribution companies are key demand drivers for natural gas.
Electricity demand in Ontario expected to grow by 65% through 2050, creating opportunities for nuclear power expansion.
Competitive Landscape
TC Energy is the only major energy infrastructure company focused solely on natural gas and power across Canada, the US, and Mexico.
Company serves seven LNG facilities representing 30% of North American LNG feed gas across three countries.
Company serves 170 power plants positioned near high growth markets like PJM and MISO, and is proximate to 60% of projected US data center growth.
TC Energy is the only midstream company with a stake in the world-class nuclear facility, Bruce Power, in a market where electricity demand is expected to grow significantly.
Value of incumbency and existing footprint allows TC Energy to continue earning premium rates of return relative to history through strategic joint ventures with OEMs and contractors.
Macroeconomic Environment
Contractor capacity was looser than anticipated during planning, providing tailwinds for project cost management in recent years.
Recent political push to keep utility rates flat has influenced conversations with utility customers regarding power and data center supply arrangements.
Jurisdictions such as Wisconsin are tailoring regulatory frameworks to better balance system reliability with cost recovery.
Growth Opportunities and Strategies
CAD 8 billion of high conviction pending approval projects at various stages of development, requiring only management or board level approvals to sanction.
CAD 12 billion of additional projects in origination, representing a relatively conservative view and not including potential developments like Bruce C.
Recent non-binding open season on Columbia Gas was three times oversubscribed with 1.5 Bcf of bids received against 0.5 Bcf advertised.
Crossroads expansion project driven primarily by power generation requirements, with capacity expansion of approximately 1.5 billion cubic feet per day from current 250 million cubic feet per day.
Primary focus on brownfield and corridor expansions that leverage existing footprint to primarily serve investment-grade utility customers in regions where TC Energy holds longstanding incumbent positions.
Strategic projects like TCO Connecter, Northwoods, Pulaski, and Maysville exemplify the strategy of brownfield expansion in high-growth markets.
Long-term take-or-pay contracts further benefit from diverse and durable set of demand drivers, positioning the company for sustained value delivery.
Bruce Power's focus on delivering highest level of reliability, availability, and safety performance across all eight units, with major component replacement program and proactive initiatives to strengthen critical equipment reliability.
Every day a unit at Bruce Power remains available generates roughly CAD 1 million per day of incremental revenue for TC Energy.
Bruce Power's availability has steadily improved, with expected availability in the low 90s-percent range for 2026.
Leveraging commercial and technological innovation, including artificial intelligence, to maximize value of assets through safety and operational excellence.
Pilot projects using AI and complex algorithms have allowed monetization of capacity in different parts of the system that were previously unknown.
Financial Guidance and Outlook
2026 comparable EBITDA guidance of CAD 11.6 billion to CAD 11.8 billion, reaffirmed from prior guidance.
2028 comparable EBITDA guidance of CAD 12.6 billion to CAD 13.1 billion, reaffirmed from prior guidance.
Expectation to sanction CAD 6 billion of net annual capital expenditures through 2030 with visibility to increasing that level of investment for the latter part of the decade.
Targeted build multiples in the range of 5 to 7 times EBITDA for new projects, with return profiles continuing to stick at these levels.
Potential to surpass CAD 6 billion annual capital investment starting in 2029 or possibly 2028, with opportunity set giving optionality to exceed this level.
Capital investment expected to approach and potentially surpass CAD 6 billion target towards the latter part of the decade, consistent with prior messaging.
Sustained 5% to 7% compound annual growth of EBITDA expected to continue based on visibility and duration of capital program extending several years into the early 2030s.
Debt to EBITDA target of 4.75 times as the long pole in the tent for credit metrics, with commitment to maintain investment grade credit rating in BBB+ or equivalent range.
Balance sheet capacity expected to improve over next couple of years to support potential step-up in capital spending profile.
Operational Performance and Execution
Projects placed into service consistently on time and on budget or better, demonstrating strong execution discipline.
Human capital plan and execution readiness assessed and approved by board to support potential ramp-up in capital program.
Optimization of short cycle maintenance capital into 2026 plan earning immediate return on invested capital.
NKY gate enhancement in-service date pulled forward to late 2027 with several other optimization opportunities under evaluation.
