Executive Summary

Q3 2025 delivered outsized non-GAAP results driven by EPA Small Refinery Exemptions (SREs) and EOP execution: adjusted EPS $7.13 (ex-SRE $1.52) and adjusted EBITDA $759.6M; GAAP diluted EPS was $2.93 .
Revenue was $2.887B, modestly above S&P Global consensus ($2.835B*) and adjusted EPS far exceeded consensus ($0.18*); ex-SRE adjusted EPS of $1.52 still beat notably as EOP contributed ~$60M and crack spreads strengthened .
Guidance raised: EOP run-rate increased to at least $180M (from $130–$170M) and DKL FY EBITDA lifted to $500–$520M (from $480–$520M) .
Near-term catalysts: clarity and monetization of historical SREs (~$400M in 6–9 months), strong distillate cracks into Q4, and increasing economic separation/value realization at DKL .

What Went Well and What Went Wrong

What Went Well

Material regulatory tailwind: EPA granted Delek full/partial SREs across 2019–2024; valid RINs reduced cost of materials by ~$280.8M in Q3 and DK expects ~$400M cash proceeds from monetizing granted RINs over 6–9 months .
Enterprise Optimization Plan exceeding targets: run-rate cash flow improvement raised to at least $180M; ~$60M recognized in Q3, with wholesale and supply/marketing delivering structural uplift .
Strong operational execution and margin capture: benchmark Gulf Coast crack spreads up 46.8% YoY; record throughput at Krotz Springs; distillate yields and refinery margin per bbl strengthened across assets .

Quote: “Our EOP efforts, which are exceeding previous guidance, and clarity on SREs, significantly improve DK's free cash flow generation in the short and the long term.” — Avigal Soreq, CEO .

What Went Wrong

Working capital drag and cash conversion timing: cash flow from operations was $44M with a ~$106M working capital outflow tied to SRE grants, though CFO ex-WC was ~$150M .
Non-recurring costs and restructuring: recorded $34.1M in restructuring costs and $16.3M impairment (software development) in Q3 .
Corporate costs edged up: Corporate & Other adjusted EBITDA more negative vs prior period (−$68.4M in Q3), reflecting ramp costs and ongoing transformation expenses .

Financial Results

Consolidated Performance vs. Prior Periods

Metric	Q3 2024	Q2 2025	Q3 2025
Net Revenues ($USD Billions)	$3.042	$2.765	$2.887
GAAP Diluted EPS ($USD)	$(1.20)	$(1.76)	$2.93
Adjusted EPS ($USD)	$(1.45)	$(0.56)	$7.13; ex-SRE $1.52
Adjusted EBITDA ($USD Millions)	$70.6	$170.2	$759.6

Notes: Q3 2025 adjusted figures include (1) ~$280.8M historical SRE benefit, (2) recognition of 50% 2025 RVO exemption ($160.2M) in non-GAAP metrics, and (3) other inventory impacts ($67.5M) .

Actual vs Wall Street Consensus (S&P Global)

Metric	Q3 2024	Q2 2025	Q3 2025
Revenue ($USD Billions) Actual vs Consensus	$3.042 vs $2.850*	$2.765 vs $2.684*	$2.887 vs $2.835*
Adjusted/Primary EPS ($USD) Actual vs Consensus	$(1.45) vs $(1.70)*	$(0.56) vs $(0.83)*	$7.13 (ex-SRE $1.52) vs $0.18*

Values with asterisks retrieved from S&P Global.

Segment Adjusted EBITDA Breakdown

Segment ($USD Millions)	Q3 2024	Q2 2025	Q3 2025
Refining	$10.2	$113.6	$696.9
Logistics	$106.1	$120.2	$131.5
Corporate, Other & Eliminations	$(53.9)	$(62.6)	$(68.4)
Discontinued Operations (Retail)	$8.2	$(1.0)	$(0.4)
Consolidated Adjusted EBITDA	$62.4	$171.2	$760.0

KPIs: Throughput and Margin per bbl

Refinery KPI	Q3 2024	Q2 2025	Q3 2025
Total System Throughput (avg bpd)	307,595	316,325	314,161
Tyler: Margin per bbl ($)	$11.03 FY ref.; Q3 2024 $7.48	$9.95	$11.32
El Dorado: Margin per bbl ($)	$0.66	$5.21	$7.43
Big Spring: Margin per bbl ($)	$6.82	$9.65	$10.99
Krotz Springs: Margin per bbl ($)	$4.80	$7.59	$9.01

Drivers: Gulf Coast crack spreads rose sharply YoY (+46.8%), improving margin capture across the system; record throughput at Krotz Springs .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
EOP Run-Rate Cash Flow Improvement	Ongoing	$130–$170M	≥$180M	Raised
DKL Adjusted EBITDA	FY 2025	$480–$520M	$500–$520M	Raised (low end)
Operating Expenses ($M)	Q4 2025	NA	$205–$220	New
G&A ($M)	Q4 2025	NA	$52–$57	New
Depreciation & Amortization ($M)	Q4 2025	NA	$100–$110	New
Net Interest Expense ($M)	Q4 2025	NA	$85–$95	New
Total Crude Throughput (bpd)	Q4 2025	NA	252,000–284,000	New
Total Throughput (bpd)	Q4 2025	NA	271,000–303,000	New
Throughput by Refinery (bpd)	Q4 2025	NA	Tyler 70–78k; El Dorado 67–75k; Big Spring 62–70k; Krotz 72–80k	New
Regular Dividend	Q4 2025	$0.255/share	$0.255/share; paid Nov 17, 2025	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3)	Trend
EOP execution and targets	EOP run-rate ≥$120M targeted for 2H’25; structural wholesale improvements underway	Raised to ≥$180M; ~$60M contribution in Q3 with strong wholesale/supply	Accelerating
SRE policy/benefit	No monetization detail; framework updates; non-GAAP inclusion begins in 2025	Majority of 2019–2024 SREs granted; ~$280.8M Q3 cost reduction; ~$400M cash expected in 6–9 months	Clarified; monetization imminent
DKL strategy and separation	LIBI II commissioning; economic separation rising; 80% third-party pro forma	DKL 2025 EBITDA raised to $500–$520M; sour gas solution ramp; stronger Permian position	Strengthening
Distillate/cracks outlook	Lower cracks in Q1; improving into Q2	Distillate strength into Q4; strong capture expected	Improving
Capital returns	~12–20% LTM yield; buybacks/dividends ongoing	~$30M Q3 returns; dividend maintained; DKL distribution $1.12/unit	Consistent

Management Commentary

Strategic focus: “Our EOP efforts... and clarity on SREs, significantly improve DK's free cash flow generation in the short and the long term.” — CEO Avigal Soreq .
Midstream value unlock: “DKL... guidance raise to $500–$520 million. The new processing plant, ongoing AGI initiatives, and DKL's increasing economic separation from DK are getting us closer to unlocking the full value of our midstream assets.” — CEO .
Operational update: “Record throughput at KSR... Distillate outlook for the fourth quarter is strong.” — EVP Operations .
Financial clarity: CFO quantified Q3 drivers, highlighting ~$281M historical SRE recognition, ~$160M RVO exemption impact, and EOP improvements; CFO ex-WC was ~$150M .

Q&A Highlights

SRE outlook and magnitude: Management expects 100% of refining capacity to qualify for 2025 SREs and believes legal precedent supports durability beyond current administration .
SRE monetization timing: ~$400M cash proceeds expected over 6–9 months; capital allocation to remain disciplined .
Wholesale and supply structural gains: Structural renegotiation and market optionality reduced reliance on specific regional spreads, supporting sustained uplift .
Throughput and compliance: Throughput guidance reflects seasonality; management reiterated full compliance with 2025 RVO obligations .

Estimates Context

Q3 2025 results beat consensus: Revenue $2.887B vs $2.835B*, and adjusted EPS $7.13 (ex-SRE $1.52) vs $0.18* .
Prior periods: Q2 2025 revenue $2.765B vs $2.684B* and adjusted EPS $(0.56) vs $(0.83); Q3 2024 revenue $3.042B vs $2.850B and adjusted EPS $(1.45) vs $(1.70)* .

Values marked with asterisks retrieved from S&P Global.

Key Takeaways for Investors

The quarter’s outsized non-GAAP beat was driven by SRE-related benefits and EOP execution; ex-SRE results still show material improvement from structural initiatives .
Near-term cash inflow (~$400M) from SRE monetization is a tangible catalyst for capital returns and balance sheet flexibility; working capital timing effects should normalize as proceeds arrive .
EOP trajectory is accelerating (≥$180M run-rate), with wholesale/supply and margin capture providing durable earnings uplift into Q4 despite seasonal shifts .
DKL’s raised guidance and sour gas program ramp support DK’s sum-of-the-parts narrative and growing economic separation, improving optionality to unlock midstream value .
Watch distillate cracks and Krotz Springs throughput consistency as key operational levers for Q4 capture rates .
Non-GAAP adjustments (SRE, RVO and inventory impacts) were significant; investors should track underlying operational metrics (ex-SRE EPS/EBITDA) to assess core earnings quality .
Tactical: Results suggest positive estimate revisions and potential multiple support; monitor regulatory/legal developments on SREs and execution against Q4 cost/throughput guidance .

Delek US Holdings, Inc. (DK)·Q3 2025 Earnings Summary