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CVR ENERGY INC (CVI)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 headline results were negatively skewed by a $89 million unfavorable mark-to-market on the Renewable Fuel Standard (RFS) obligation and inventory valuation impacts, driving GAAP EPS to $(1.14) and EBITDA to $(24) million, while adjusted EPS was $(0.23) and adjusted EBITDA was $99 million .
  • Versus Wall Street consensus, revenue beat ($1.761B vs $1.689B*) and adjusted EBITDA was roughly in line ($99M vs $101M*), but adjusted EPS missed (($(0.23)) vs ($(0.13))*) as RIN costs and lower throughput compressed capture rates; GAAP EBITDA/EPS were well below consensus due to mark-to-market .
  • Segment performance: Petroleum posted adjusted EBITDA of $38M on lower throughput, Renewables logged adjusted EBITDA loss of $4M amid loss of the BTC and awaiting PTC rules, while Nitrogen Fertilizer delivered strong EBITDA of $67M on higher ammonia/UAN pricing .
  • Balance sheet actions and capital allocation: $90M of term loan principal prepaid ($70M in Q2, $20M post-quarter), no CVI cash dividend for Q2; CVR Partners declared $3.89 per unit for Q2 .
  • Near-term setup: Coffeyville returned to full rates in July; Q3 2025 throughput guided to 200–215 kbpd with no further planned refining turnarounds until 2027—supporting a sequential recovery in volumes and capture .

Note: *Values retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Fertilizer pricing strength: Average realized gate prices rose YoY for ammonia (+14% to $593/ton) and UAN (+18% to $317/ton), supporting Nitrogen Fertilizer EBITDA of $67M and net sales of $169M .
  • Throughput normalization and improved cracks: Group 3 2-1-1 averaged $24.02/bbl vs $18.83 last year, and Coffeyville resumed full rates in July; adjusted refining margin per barrel increased YoY to $9.95 vs $9.81 .
  • Leverage reduction and leadership clarity: $90M term loan repayment across Q2/Q3 and announced CEO transition (Mark Pytosh to assume role Jan 1, 2026), adding visibility on strategy and governance .
    • “We resumed full operating rates at Coffeyville in July, and we do not currently have any additional turnarounds planned…until 2027” — CEO Dave Lamp .

What Went Wrong

  • RFS mark-to-market and RIN cost headwinds: Unfavorable $89M mark-to-market plus net RIN expense of $62M (~$3.93/bbl) and ~$6.08/bbl RIN burden (~25% of Group 3 crack), materially dampening capture rate (41%) .
  • Lower throughput and timing effects: Combined throughput fell to ~172 kbpd as CVI ran down intermediate inventory post-turnaround; sales timing (more volumes in June when cracks were weaker) reduced capture by ~7–9 percentage points .
  • Renewables EBITDA declined (adjusted loss of $4M) amid loss of BTC, weaker HOBO spread (higher soy, lower diesel), and no PTC recognition yet pending IRS final rules .

Financial Results

MetricQ4 2024Q1 2025Q2 2025
Net Sales ($USD Billions)$1.947 $1.646 $1.761
GAAP EPS ($)$0.28 $(1.22) $(1.14)
Adjusted EPS ($)$(0.13) $(0.58) $(0.23)
EBITDA ($USD Millions)$122 $(61) $(24)
Adjusted EBITDA ($USD Millions)$67 $24 $99
EBITDA Margin %4.83%*(3.77%)*(1.48%)*
Net Income Margin %1.49%*(7.47%)*(6.47%)*

Note: *Values retrieved from S&P Global.

Actual vs S&P Global consensus (Q2 2025):

MetricActualConsensus*Result vs Consensus
Revenue ($USD Billions)$1.761 $1.689*Beat
Adjusted EPS ($)$(0.23) $(0.13)*Miss
EBITDA ($USD Millions, reported)$(24) $100.8*Miss
Adjusted EBITDA ($USD Millions)$99 $100.8*In line

Note: *Values retrieved from S&P Global.

Segment breakdown — Net Sales and EBITDA:

SegmentQ4 2024 Net Sales ($MM)Q1 2025 Net Sales ($MM)Q2 2025 Net Sales ($MM)Q4 2024 EBITDA ($MM)Q1 2025 EBITDA ($MM)Q2 2025 EBITDA ($MM)
Petroleum$1,755 $1,477 $1,561 $72 $(119) $(84)
Renewables$93 $66 $76 $3 $6 $(5)
Nitrogen Fertilizer$140 $143 $169 $50 $53 $67
Consolidated$1,947 $1,646 $1,761 $122 $(61) $(24)

Key operating KPIs:

KPIQ4 2024Q1 2025Q2 2025
Total Throughput (bpd)213,703 120,377 172,149
Refining Margin ($/bbl)$8.37 $(0.42) $2.21
Adjusted Refining Margin ($/bbl)$6.45 $7.72 $9.95
Direct Operating Expense ($/bbl)$5.13 $8.58 $6.45
Light Product Yield (% of crude throughput)102.7% 95.4% 99.2%
Veg. Oil Throughput (gpd)186,970 155,943 154,716
Renewables Margin ($/gallon)$0.79 $1.13 $0.38
Adjusted Renewables Margin ($/gallon)$1.16 $0.94 $0.44
Ammonia Utilization Rate (%)96% 101% 91%
Gate Prices — Ammonia ($/ton)$479 $554 $593
Gate Prices — UAN ($/ton)$248 $256 $317

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Petroleum Throughput (bpd)Q3 2025—200,000–215,000 New
Petroleum DOpEx ($MM)Q3 2025—$105–$115 New
Renewables Throughput (MM gal)Q3 2025—16–20 New
Renewables DOpEx ($MM)Q3 2025—$8–$10 New
Fertilizer Ammonia Utilization (%)Q3 2025—93%–98% New
Fertilizer DOpEx ($MM)Q3 2025—$60–$65 New
Total Capex ($MM)Q3 2025—$47–$60 New
Dividend (CVI)Q2 2025No dividend No dividend Maintained
Petroleum Throughput (bpd)Q2 2025 Outlook160,000–180,000 Actual: 172,149 bpd In range (mid)
Petroleum DOpEx ($MM)Q2 2025 Outlook$105–$115 Actual: $102 DOpEx in segment reconciliation context Slightly below range

Note: DOpEx references are exclusive of D&A, turnaround and inventory impacts per company definitions.

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
RFS/RINs and SRENoted impact of RFS costs and revaluation in forward-looking disclosures RFS mark-to-market unfavorable in Q1; adjusted margins discussed $89M unfavorable RFS mark-to-market; $62M net RIN expense; Supreme Court venue ruling; 2025 SRE filed; potential litigation if necessary Persistent headwind; regulatory uncertainty
Turnarounds/OperationsEarly Coffeyville turnaround set up for summer cracks Coffeyville turnaround drove lower Q1 throughput; positioned for driving season Coffeyville complete; full rates resumed in July; no planned refining turnarounds until 2027 Operational tailwind
Market fundamentals (cracks, inventories)Lower cracks YoY Group 3 2-1-1 down YoY Inventories tight; Group 3 2-1-1 higher; premium gasoline pricing supportive; cautious optimism Improving
Renewables policy/creditsHOBO improved in Q4; margins benefited Strong margin per gallon; LCFS and D4 RIN support Loss of BTC; awaiting PTC regulations; near break-even YTD; evaluating strategy Policy-dependent, uncertain
Fertilizer demand/pricingStable utilization; gate prices mixed Higher production/utilization; pricing mixed Strong spring demand; corn acres up; pricing support for UAN/ammonia Strengthening
Balance sheet & dividendsEnhanced liquidity via term loan and asset sale No dividend $90M term loan repayment; board aims for sustainable dividend reinstatement when feasible Deleveraging; dividend optionality

Management Commentary

  • Prepared remarks emphasized the RFS mark-to-market and throughput normalization: “Our results were impacted by an unfavorable mark-to-market impact of our outstanding RIN obligation and reduced throughputs… We resumed full operating rates at Coffeyville in July, and…no additional turnarounds…until 2027.” — Dave Lamp .
  • On market setup: “Refined product inventories…particularly diesel…are nearly 15% below 2021–2024 averages… We are cautiously optimistic about the near and medium-term outlook for the refining sector.” — Dave Lamp .
  • On renewables credit regime: “Adjusted EBITDA was a loss of $4 million…driven by…loss of the BTC and nothing booked for the PTC while we await final regulations.” — Dane Neumann .
  • Capital priorities: “We were pleased to begin making progress on our deleveraging strategy by paying $90 million… Returning our balance sheet to target leverage levels is key… we will continue to look for ways to improve capture, reduce costs, and grow profitably.” — Dave Lamp .
  • Strategic posture: “We’d love to return [to dividends]…our goal is to get back to a dividend…that we can support long term.” — Dave Lamp .

Q&A Highlights

  • Capture rate and inventory timing: Management quantified that sales timing and inventory draw reduced capture by ~7–9 percentage points, which would have moved capture closer to ~50% absent timing effects .
  • 2026 capital/turnarounds: No major refining turnarounds planned in 2026; Wynnewood turnaround expected in 2027, with minimal pre-spend expected depending on timing .
  • Strategy and portfolio diversification: CEO sees value in diversifying beyond a single market exposure, open to M&A paths that broaden footprint; fertilizer remains strategically valuable given tight global supplies .
  • Dividend outlook: Board monitors reinstatement; deleveraging is near-term priority, target is a sustainable dividend level when feasible .
  • SRE pathway and reallocation: Management prepared to litigate if EPA denies; reiterated Wynnewood’s “poster child” case for SRE; believes law does not require reallocation of waived volumes .

Estimates Context

  • For Q2 2025, revenue beat consensus while adjusted EBITDA was essentially in line; adjusted EPS missed due to elevated RIN burden and adverse mark-to-market. GAAP EBITDA/EPS were far below consensus given the $89M RFS mark-to-market and $32M inventory impacts .
  • Model implications: Street models should continue to focus on adjusted metrics and normalize RFS mark-to-market volatility; sequential recovery in throughput to 200–215 kbpd and stable DOpEx ranges suggest upward revisions to Q3 revenue and capture assumptions .
  • Fertilizer segment strength (pricing/volumes) may warrant modest upward adjustments to segment EBITDA run-rate; Renewables remains policy-driven pending PTC clarity .

Note: Values retrieved from S&P Global.

Key Takeaways for Investors

  • Focus on adjusted metrics: Adjusted EBITDA ($99M) and adjusted refining margin per barrel ($9.95) better reflect operating performance amid RFS mark-to-market noise; headline GAAP figures understate run-rate fundamentals .
  • Sequential volume tailwind: Coffeyville back at full rates and no near-term turnarounds—Q3 throughput guided 200–215 kbpd should lift capture and revenue sequentially .
  • RFS risk remains the swing factor: Elevated RIN prices and regulatory uncertainty (SRE outcomes, potential reallocation) can materially move quarterly earnings; monitor EPA timelines and litigation posture .
  • Fertilizer provides ballast: Strong realized pricing and solid utilization underpin segment EBITDA resilience amid refining volatility .
  • Deleveraging progressing; dividend optionality: $90M term loan prepayment and board’s stated desire to reinstate dividends when sustainable; watch cash generation and RFS dynamics for timing .
  • Renewables sensitivity to credits: Loss of BTC and pending PTC depress near-term EBITDA; policy clarity could unlock upside (management estimates ~+$6M YTD adjusted if PTC booked) .
  • Trading setup: Near-term upside biased to Q3 volumes/capture and fertilizer pricing; downside risk from RIN spikes or adverse EPA actions; catalysts include SRE decisions, PTC rules, and confirmation of throughput/capture improvement in Q3 print .