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GP

GLOBAL PARTNERS LP (GLP)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 was weaker on reported metrics versus a very strong prior-year comp: Sales $4.63B, EBITDA $95.7M, Adjusted EBITDA $98.2M, and diluted EPS $0.55; all trailed S&P Global consensus (EPS $0.60*, Revenue $5.98B*, EBITDA $104.0M*) . Values retrieved from S&P Global.
  • YoY softness stemmed from lower GDSO site count and unusually adverse Northeast weekend weather, and less favorable gasoline market conditions; distillates strength and 2024 terminal acquisitions partially offset .
  • Balance sheet actions extended maturities: GLP issued $450M 2033 senior notes (press release coupon 7.125%) and tendered/redemed 7.00% 2027 notes; CFO referenced 7.8% on the call—an apparent discrepancy to flag for follow-up .
  • Distribution increased to $0.7500 for Q2 (15th consecutive increase) with TTM distribution coverage of 1.81x (1.75x after preferreds), sustaining income appeal .

What Went Well and What Went Wrong

What Went Well

  • Distillates and other oils product margin rose to $32.9M (+$11.4M YoY), supported by favorable market conditions, offsetting gasoline weakness in Wholesale .
  • Continued network optimization and terminal acquisitions (Gulf Oil, ExxonMobil) bolstered Wholesale capabilities and helped mitigate gasoline margin pressures .
  • Balance sheet terming-out: $450M 2033 senior notes issuance used to retire/tender $400M 2027 notes and reduce revolver borrowings, extending maturities and enhancing flexibility .
    “This transaction strengthens our balance sheet, extends our debt maturity profile, enhances our financial flexibility…” — CFO .

What Went Wrong

  • GDSO product margin fell to $207.9M (-$13.6M YoY) on lower site count and exceptionally rainy weekends impacting both fuel and merchandising .
  • Gasoline/gasoline blendstocks product margin decreased to $58.8M (-$11.6M YoY) due to less favorable market conditions, driving YoY EBITDA and EPS declines .
  • Reported results missed consensus on EPS ($0.55 vs $0.60*), revenue ($4.63B vs $5.98B*), and EBITDA ($95.7M vs $104.0M*), reflecting tough comp and market conditions in gasoline; loss on early extinguishment of debt ($2.8M) also weighed on reported profitability . Values retrieved from S&P Global.

Financial Results

Consolidated metrics vs prior periods

MetricQ4 2024Q1 2025Q2 2025
Sales ($USD Billions)$4.186 $4.592 $4.627
Gross Profit ($USD Millions)$268.8 $255.2 $272.4
EBITDA ($USD Millions)$94.6 $91.9 $95.7
Adjusted EBITDA ($USD Millions)$97.8 $91.1 $98.2
Diluted EPS ($USD)$0.52 $0.36 $0.55
Net Income ($USD Millions)$23.9 $18.7 $25.2

Q2 2025 Actuals vs S&P Global Consensus

MetricActualConsensusBeat/Miss
Diluted EPS ($USD)$0.55 $0.60*Miss
Sales ($USD Billions)$4.627 $5.984*Miss
EBITDA ($USD Millions)$95.7 $104.0*Miss

Note: Values retrieved from S&P Global.

Segment product margin breakdown (trend)

Segment Product Margin ($USD Millions)Q4 2024Q1 2025Q2 2025
Wholesale – Gasoline & Blendstocks$38.6 $57.1 $58.8
Wholesale – Distillates & Other Oils$41.2 $36.5 $32.9
Wholesale – Total$79.8 $93.6 $91.7
GDSO – Gasoline Distribution$145.7 $125.8 $137.9
GDSO – Station Operations$67.9 $62.1 $70.0
GDSO – Total$213.6 $187.9 $207.9
Commercial$8.6 $7.1 $6.1
Combined Product Margin$302.0 $288.6 $305.7

KPIs

KPIQ4 2024Q1 2025Q2 2025
Total Volume (Billion Gallons)1.8 1.9 2.0
Volume – Wholesale (Billion Gallons)1.3 1.4 1.5
Volume – GDSO (Million Gallons)400.3 357.6 382.4
Volume – Commercial (Million Gallons)106.9 124.8 141.9
Fuel Margin (¢/gal, GDSO)n/a$0.35 $0.36; flat YoY
Site Count (GDSO)n/a1,561 1,553; 42 fewer YoY
TTM Distribution Coverage (x)n/a2.03x / 1.96x post preferreds 1.81x / 1.75x post preferreds
Leverage (Funded Debt/EBITDA, x)n/a3.28x 3.5x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Distribution per Common UnitQ2 2025$0.7450 (Q1) $0.7500 Raised
Maintenance CapExFY 2025n/a$60–70M Maintained range (explicitly stated)
Expansion CapEx (ex acquisitions)FY 2025Prior midpoint higher; exact prior range not disclosed in Q2 materials $65–75M; midpoint $70M Lowered (midpoint −$10M vs prior commentary)

Other financial policy actions: Issued $450M 2033 senior notes (press release coupon 7.125%) with proceeds used to tender/redem 7.00% 2027 notes and reduce revolver; CFO described 7.8% rate on call (discrepancy noted) .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024, Q1 2025)Current Period (Q2 2025)Trend
Terminal acquisitions & integrationExpanded to 22M barrels capacity; Motiva take-or-pay; East Providence terminal added Gulf Oil and ExxonMobil terminals supported Wholesale margins; terminal ops increased OpEx Integration benefits ongoing
Weather impact (Retail)n/aRecord 13 consecutive rainy weekends depressed fuel and merchandising (material, not quantified) Transitory headwind
Gasoline vs Distillates market conditionsQ1: favorable gasoline/distillates, cold winter aided distillates Gasoline less favorable; distillates favorable; Wholesale net flat YoY Mixed; normalization
Tariffs/macroQ1: brief Canadian tariff volatility; potential consumer effect on store sales No new tariff impacts citedStable
Portfolio optimization/site rationalizationQ1: fewer company-operated sites; lower station ops margin 42 fewer sites YoY; nearing completion of rationalization Progressing
Balance sheet/maturitiesQ1: higher interest expense from 2024 acquisitions; leverage 3.28x Issued 2033 notes; tendered 2027s; leverage 3.5x De-risking maturities

Management Commentary

  • CEO: “For the first half of 2025, we delivered solid year-over-year growth in earnings and cash flow… The strategic acquisition of key terminals has expanded our reach…” .
  • CFO: “Adjusting for [the $2.8M] loss on early extinguishment of debt, our adjusted EBITDA for 2Q 2025 was $101,000,000… TTM distribution coverage as of 06/30/2025 was 1.81x (1.75x post preferreds)” .
  • CFO on retail headwinds: “It… really impacted May and into the first couple of weeks of June… it was material… it rained every Saturday for those thirteen weeks” .
  • CFO on Wholesale mix: “Gasoline… decreased… primarily due to less favorable market conditions… partially offset by terminal acquisitions… Distillates and other oils increased… due to more favorable market conditions” .

Q&A Highlights

  • Weather quantification: Management affirmed material adverse impact from record rainy weekends but did not quantify; May was most affected .
  • Site rationalization: Portfolio review is ongoing; “not much more to go,” with a handful of conversions/divestitures contemplated .
  • Margin backdrop: Q2 seen as “more normalized” overall; gasoline margins had episodic strength/weakness tied to price moves and geopolitical news .
  • M&A environment: Bid-ask spreads remain wide on terminaling; retail remains active with selective opportunities .

Estimates Context

  • Q2 2025 comparisons: EPS $0.55 vs $0.60*, Sales $4.627B vs $5.984B*, EBITDA $95.7M vs $104.0M* — consensus misses across key metrics . Values retrieved from S&P Global.
  • Near-term S&P Global consensus (directional context): Q3 2025 EPS 1.09*, Revenue $7.211B*, EBITDA $115.8M*; Q4 2025 EPS 0.60*, Revenue $6.938B*, EBITDA $92.7M* [functions.GetEstimates]. Values retrieved from S&P Global.
  • Setup: Given weather normalization and wholesale support from terminals, Street may temper gasoline expectations but retain confidence in distillates and terminal-driven Wholesale; watch for any revisions in EPS/EBITDA following Q2 misses.

Key Takeaways for Investors

  • Q2 miss vs consensus largely reflects an unusually tough YoY comp (2024 mark-to-market timing benefits) and transitory weather headwinds; core platform remains resilient with distillates strength and terminal integration .
  • Wholesale durability supported by 2024 terminal acquisitions; expect continued contribution even if gasoline markets are less favorable .
  • Balance sheet maturity extension (2033 notes, 2027 notes retired/tendered) reduces near-term refinancing risk; monitor coupon discrepancy (7.125% press vs 7.8% call) for clarity and impact on interest expense trajectory .
  • Income thesis intact: Distribution increased to $0.7500 with TTM coverage 1.81x (1.75x post preferreds); coverage remains healthy despite Q2 softness .
  • Retail optimization nearing completion; site count decline should stabilize, improving operating focus and capital allocation efficiency .
  • Watch gasoline margin volatility and consumer merchandising sensitivity if tariffs or macro slowdowns emerge; distillates remain a ballast .
  • Near-term trading: Q2 miss may pressure shares short-term; catalysts include clearer rate on new notes, potential margin normalization into Q3, and continued terminal-driven Wholesale contributions .

Additional Q2 2025 relevant press releases:

  • Declared Q2 cash distribution of $0.7500 on common units .
  • Announced $450M 7.125% senior notes due 2033; priced on June 10; tender offer pricing and results indicated ~90% of 2027 notes tendered, with redemption of the remainder planned .

Non-GAAP adjustments and impact:

  • Loss on early extinguishment of debt ($2.8M) reduced EBITDA, Adjusted EBITDA, DCF; adjusted EBITDA excluding this loss was cited at $101M by CFO, consistent with reconciliation dynamics .