Delek Logistics Partners LP
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +2.54%.
Did DKL Beat Earnings? Q2 2025 Results
Delek Logistics Partners delivered a mixed second quarter for 2025, posting earnings and revenue that fell short of Wall Street expectations even as the partnership celebrated record Adjusted EBITDA internally. Earnings per unit came in at $0.83, missing the $1.19 consensus estimate by 30.25%, with the gap largely reflecting a significantly expanded unit count following recent acquisitions rather than deteriorating profitability. Revenue declined 6.9% year over year to $246.35 million, trailing the $275.76 million consensus by 10.66%, partly due to a sales-type lease accounting reclassification that shifted certain minimum volume commitment payments away from reported revenue. The more encouraging story lived inside the segments: Adjusted EBITDA rose 18% to a record $120.89 million, driven by the Gathering and Processing segment where contributions from the H2O Midstream and Gravity Water Midstream acquisitions fueled growth. The partnership also declared its 50th consecutive quarterly distribution increase, lifting the payout to $1.11 per unit, consistent with its 12-year track record of growing distributions. Management reaffirmed full-year Adjusted EBITDA guidance of $480 million to $520 million, expressing increasing confidence in execution as the Libby Complex expansion advances.
- Incremental EBITDA from Gravity and H2O Midstream acquisitions driving Gathering and Processing growth
- Increase in wholesale margins partially offsetting Big Spring marketing agreement assignment
- W2W dropdown contributing to Investments in Pipeline Joint Ventures income growth
- Completion of Libby 2 gas processing plant expanding processing capacity
- Water Disposal and Recycling volumes of 600,891 average bpd from Midland Water Gathering System (new operations)
“During the second quarter Delek Logistics continued its strong execution by completing the construction of new Libby 2 plant and several crude & water gathering projects. Along with providing the highest yield compared to its peers in the AMZI, DKL also continues to provide a long runway of growth driven by its advantageous position in the Midland and the Delaware basins. We are proud of the 50th consecutive increase in our distribution and we expect to continue to increase our distribution in the future. Due to our strong execution we are increasingly confident in our full year Adjusted EBITDA guidance of $480mm to $520mm.”
Delek Logistics Partners CEO, on the earnings call
Forward Guidance & Outlook
Management reaffirmed full-year 2025 Adjusted EBITDA guidance of $480 million to $520 million and expressed increasing confidence in achieving this target. The partnership expects to continue increasing distributions in the future. Growth will be driven by the advantageous position in the Midland and Delaware basins, ongoing expansion at the Libby Complex including AGI and sour gas treating capabilities, and further processing capacity expansion. Management intends to strengthen and grow the partnership through prudent management of liquidity and leverage, with enhanced liquidity from the $700 million debt offering reinforcing growth efforts as an independent company.
DKL YoY Financials
DKL Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.