Delek Logistics Partners LP
Q1 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +6.87%.
Did DKL Beat Earnings? Q1 2025 Results
Delek Logistics Partners delivered a mixed first quarter for 2025, posting earnings that fell short of Wall Street expectations even as revenue cleared the bar by a wide margin. The partnership reported earnings per unit of $0.73, missing the $0.92 consensus estimate by 20.65%, while revenue of $249.93 million topped the $211.62 million forecast by 18.10%, though sales edged down 0.8% from the year-ago period. The headline EPS shortfall largely reflected a higher unit count following recent acquisitions, most notably the Gravity Water Midstream deal that closed January 2 and is already performing above expectations. That transaction helped push Adjusted EBITDA to a record $116.54 million, up 15% year-over-year, with the Gathering and Processing segment driving much of the strength on higher throughput and expanded water infrastructure in the Permian Basin. Looking ahead, management reaffirmed full-year 2025 Adjusted EBITDA guidance of $480 million to $520 million, signaling confidence in continued acquisition integration and the commissioning of the new Libby 2 gas processing plant in New Mexico.
- Gravity Water Midstream acquisition closed January 2, performing above expectations
- H2O Midstream acquisition contribution to Gathering and Processing segment
- Higher throughput from Midland Gathering system (246,090 vs 213,458 average bpd year-over-year)
- W2W dropdown driving higher income from equity method investments
- Third-party EBITDA contribution increased to approximately 80%
“Delek Logistics started 2025 on a strong note enhancing our position as a premier midstream provider in the Permian basin. We provide the best combination of yield and growth in the midstream sector with a long runway of growth driven by its advantageous position in the Midland and Delaware basins. We are proud of the 49th consecutive increase in our distribution and we expect to continue to increase our distribution in the future. The completion of the acquisition of Gravity in January and today's announcement of intercompany transactions push third party cash flow contribution at Delek Logistics to ~80%, further increasing our economic separation from our sponsor Delek US.”
Delek Logistics Partners CEO, on the earnings call
Forward Guidance & Outlook
Delek Logistics reaffirmed its full-year 2025 Adjusted EBITDA guidance of $480 million to $520 million. Management expects to continue increasing distributions and growing the business through the commissioning of the new Libby 2 plant with planned AGI and sour gas treating capabilities, expansion of crude and water offerings in the Midland basin, and prudent management of liquidity and leverage. The Gravity acquisition is already performing above expectations.
DKL YoY Financials
DKL Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.