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Delek US Holdings, Inc. (DK)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 revenue was $2.7646B, up 4.6% sequentially and down 16.5% year over year; revenue beat Wall Street consensus by ~$80M (+3.0%)* .
  • Adjusted EPS of -$0.56 beat consensus (-$0.83) by ~$0.27; diluted GAAP EPS was -$1.76* .
  • Adjusted EBITDA improved to $170.2M, driven by stronger refining margins and record system throughput; logistics posted another record quarter at $120.2M .
  • Management raised Enterprise Optimization Plan (EOP) run-rate cash flow improvement target to $130–$170M (from $80–$120M) and highlighted ~$30M flowing through Q2 results; quarterly dividend of $0.255/share maintained .
  • Narrative catalysts: increased EOP target and operational execution (record throughput), progress on midstream economic separation (DKL commissioning Libby 2 gas plant and $700M debt offering), and reiterated DKL 2025 EBITDA guidance ($480–$520M) .

What Went Well and What Went Wrong

What Went Well

  • EOP progress: “we have increased our run-rate cash flow improvement target to $130 to 170 million... we recognized ~$30 million of improvements in 2Q'25” .
  • Operational execution: record throughput across the system; Big Spring and Krotz Springs strong quarter; El Dorado showing EOP benefits (gross margin uplift ~$1.45/bbl) .
  • Logistics strength: Adjusted EBITDA reached $120.2M; Libby 2 gas plant commissioned; DKL successfully executed $700M high yield offering; 50 consecutive distribution increases .

What Went Wrong

  • Year-over-year revenue decline (-16.5%) amid weaker YOY pricing; WTI/Brent and crack spreads materially below 2024 levels .
  • GAAP net loss widened to -$106.4M (vs -$37.2M LY), driven by interest expense and other items; adjusted net loss remained -$33.1M .
  • Corporate costs and restructuring charges persisted (Q2 restructuring $25.5M pre-tax), and EOP gains still ramping to full run-rate .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Net Revenues ($USD Billions)$3.3081 $2.6419 $2.7646
Diluted EPS (GAAP) ($)-0.58 -2.78 -1.76
Adjusted EPS ($)-0.92 -2.32 -0.56
Gross Margin ($USD Millions)$16.8 -$63.7 $52.2
Adjusted EBITDA ($USD Millions)$107.5 $26.5 $170.2

Segment Adjusted EBITDA

Segment Adjusted EBITDA ($USD Millions)Q2 2024Q1 2025Q2 2025
Refining$42.1 -$27.4 $113.6
Logistics$100.6 $116.5 $120.2
Corporate, Other & Eliminations-$47.8 -$62.2 -$62.6
Consolidated$94.9 $26.9 $171.2

Refining System KPIs

KPIQ2 2024Q1 2025Q2 2025
Total Throughput (avg bpd)316,054 289,203 316,325
Production Margin per bbl ($)7.07 5.75 8.03
Operating Expenses per bbl ($)5.02 6.00 5.17

Selected Refinery Production Margin per bbl (Q2 2025)

RefineryQ2 2025 ($/bbl)
Tyler$9.95
El Dorado$5.21
Big Spring$9.65
Krotz Springs$7.59

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Operating Expenses ($USD Millions)Q3 2025 vs Q2 2025$215–$225 $210–$225 Lowered (low end)
G&A ($USD Millions)Q3 2025 vs Q2 2025$52–$57 $52–$57 Maintained
D&A ($USD Millions)Q3 2025 vs Q2 2025$95–$105 $100–$110 Raised
Net Interest Expense ($USD Millions)Q3 2025 vs Q2 2025$80–$90 $85–$95 Raised
Total Crude Throughput (bpd)Q3 2025 vs Q2 2025292,000–308,000 291,000–306,000 Slightly Lowered
Total Throughput (bpd)Q3 2025 vs Q2 2025302,000–318,000 302,000–317,000 Maintained
Per-Refinery Throughput (bpd)Q3 2025 vs Q2 2025Tyler 73–77; El Dorado 80–84; Big Spring 67–71; Krotz 82–86 Tyler 73–77; El Dorado 79–83; Big Spring 69–72; Krotz 81–85 Mixed (minor range tweaks)
Quarterly DividendQ2 2025$0.255/share$0.255/shareMaintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Previous Mentions (Q1 2025)Current Period (Q2 2025)Trend
EOP (cash flow uplift)Target $80–$120M; near upper end; foundational ZBB savings ~$100M Expect ≥$120M run-rate; ~$0.80/bbl El Dorado uplift tracked Target raised to $130–$170M; ~$30M flowed in Q2; El Dorado ~$1.45/bbl gross margin uplift Strengthening
Midstream deconsolidation (SOTP)DKL third-party cash flows rising; ownership down to ~63.6%; Libby 2 and AGI progressing Intercompany agreements raised liquidity by ~$250M; pro-forma ~80% third-party cash flows Libby 2 commissioned; $700M debt deal; reiterate DKL 2025 EBITDA $480–$520M Advancing
Supply & marketingQ4 seasonal weakness; loss ~$34.6M Seasonal weakness easing; sequential improvement; strong rack demand outlook Q2 contribution positive ($25.7M); wholesale margin strength Improving seasonally + EOP
Reliability/throughputKSR turnaround completed; set up for 2025 Planned maintenance in Q1; set up for summer driving season Record system throughput; refinery margin capture up vs LY Improving
SRE (regulatory)Optimistic post D.C. Circuit ruling; Chevron deference context Pursuing retroactive and forward SREs; costs exceed market cap “Worth more than our market cap”; confidence in favorable outcome Ongoing regulatory tailwind potential

Management Commentary

  • CEO on EOP: “we have increased our run-rate cash flow improvement target to $130 to 170 million... we recognized ~$30 million of improvements in 2Q'25” .
  • Operations: “record throughput results were set in Big Spring, Krotz Springs and for the entire system... our realized refining margins increased by $0.96 per barrel compared to 2024” .
  • Midstream separation: “we are making great progress in making DK and DKL economically independent... [DKL] completed our intercompany agreement... very successful high yield offering” .
  • SREs: “our pending petitions are worth more than our current market cap... we are confident in a favorable outcome” .
  • Capital allocation: “balanced approach between balance sheet and buyback... ~$150mm (buybacks & dividends) over the last 12 months” .

Q&A Highlights

  • SRE confidence and magnitude: Management reiterated optimism and highlighted the petitions’ value relative to DK’s market cap; seeking both retroactive and forward relief .
  • EOP upside and sustainability: EOP described as “a lifestyle”; management sees increasing confidence, with margin capture the primary driver of higher target range .
  • Supply & marketing trajectory: Seasonal tailwinds plus structural contract/logistics improvements; Q3 expected to remain constructive .
  • OpEx guidance bridge: Higher throughput, Libby 2 ramp, natural gas costs, and planned maintenance explain near-term OpEx ranges; improving into 2H .
  • Midstream SOTP timing/options: Continued steps to unlock value in DKL; economic separation progressing; multiple avenues considered .

Estimates Context

Metric vs ConsensusQ2 2024Q1 2025Q2 2025
Revenue ($USD Billions) Actual vs Consensus$3.308 vs $3.309 (in-line)*$2.642 vs $2.628 (+$0.014)*$2.765 vs $2.684 (+$0.080)*
Primary EPS ($) Actual vs Consensus-0.92 vs -1.33 (beat)*-2.32 vs -2.43 (beat)*-0.56 vs -0.83 (beat)*
EBITDA ($USD Millions) Company Adjusted vs Consensus$107.5 vs $77.5 (definitions differ)* $26.5 vs $4.0 (definitions differ)* $170.2 vs $126.8 (definitions differ)*

Notes:

  • Consensus figures marked with asterisks are from S&P Global; values retrieved from S&P Global.
  • DK reports “Adjusted EBITDA”; S&P Global consensus “EBITDA” definitions may differ from company-reported “Adjusted EBITDA,” which can impact comparability .

Key Takeaways for Investors

  • EOP execution is accelerating; raised target to $130–$170M suggests incremental margin capture and cost discipline continuing into 2H, supporting estimate revisions higher for EPS and cash flow .
  • Operational momentum (record throughput, higher production margins per bbl) coupled with improved per-bbl OpEx positions refining earnings to outperform in a constructive demand backdrop .
  • Logistics remains a dependable growth/return pillar (Libby 2 online, $700M debt successfully placed, 50 consecutive distribution hikes); DKL guidance ($480–$520M) underpins DK’s SOTP strategy .
  • SRE resolution is a material optionality; management confidence and magnitude (retroactive + forward) could catalyze re-rating if favorable outcomes are realized .
  • Near-term model updates: raise Q3 D&A and net interest per guidance, lower OpEx low-end; throughput ranges largely maintained; maintain dividend .
  • Watch for continued midstream economic separation and potential valuation unlocking via transactions at DKL; private market multiples provide supportive comps .
  • Trading lens: Positive estimate beat momentum (revenue and EPS), plus EOP target increase are near-term catalysts; monitor crack spreads and PAD II inventories/demand into Q3 .