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PAR PACIFIC HOLDINGS, INC. (PARR)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 2025 delivered a sharp rebound: Adjusted EPS of $1.54 and Adjusted EBITDA of $137.8M on $1.89B revenue, supported by record Hawaii throughput and strong distillate margins; GAAP diluted EPS was $1.17 .
  • Against Wall Street consensus, PARR posted major beats: EPS +71% and revenue +25% above estimates; EBITDA also exceeded expectations (see Estimates Context) [Values retrieved from S&P Global].
  • Strategic catalysts advanced: completed Montana turnaround, announced Hawaii Renewables JV with Mitsubishi/ENEOS for $100M cash proceeds; repurchased $28M of stock (3% reduction in shares outstanding) .
  • Liquidity strengthened to $647M (+23% q/q) and net cash from operations was $133.6M (or $83.0M excluding WC and deferred turnaround effects), setting up strong H2 cash generation with declining capex .

What Went Well and What Went Wrong

What Went Well

  • Record operational performance: “We set a quarterly operational throughput record in Hawaii” (88 mbpd; production costs $4.18/bbl) and strong capture rates helped margins .
  • Strategic JV to monetize renewables: “Together, Mitsubishi and ENEOS will contribute $100,000,000 for a 36.5% equity interest” bringing commercial capabilities and expanded market access .
  • Retail and Logistics resilience: Retail Adjusted EBITDA rose to $23.3M with same-store fuel +1.8% and inside sales +3.0%; Logistics Adjusted EBITDA increased to $29.8M .

What Went Wrong

  • Wyoming outage impact: Q2 Wyoming production costs jumped to $14.50/bbl and margin capture lagged due to FIFO expensing of higher-cost purchased product (~$8M gross margin headwind); OpEx expected to normalize in Q3 .
  • Price-lag and hedging headwinds in Hawaii: Q2 included a net price lag impact of approximately $(3.7)M (–$0.46/bbl) and combined hedging/price lag headwinds of ~$4M .
  • Elevated interest expense: Net interest of $22.1M weighed on GAAP earnings despite stronger operating income; diluted EPS of $1.17 vs Adjusted $1.54 reflects non-GAAP adjustments and tax valuation impacts .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD Billions)$2.017 $1.745 $1.893
Net Income ($USD Millions)$18.6 $(30.4) $59.5
GAAP Diluted EPS ($)$0.32 $(0.57) $1.17
Adjusted Net Income ($USD Millions)$28.5 $(50.3) $78.3
Adjusted Diluted EPS ($)$0.49 $(0.94) $1.54
Adjusted EBITDA ($USD Millions)$81.6 $10.1 $137.8

Segment Adjusted EBITDA ($USD Millions)

SegmentQ2 2024Q1 2025Q2 2025
Refining$60.1 $(14.3) $108.4
Logistics$26.1 $29.7 $29.8
Retail$18.7 $18.6 $23.3
Corporate & Other$(23.3) $(23.9) $(23.7)

Operational KPIs

KPIQ2 2024Q1 2025Q2 2025
Total Refining Feedstocks Throughput (mbpd)179.8 176.0 186.6
Combined Index ($/bbl)$10.95 $7.38 $13.76
Production Costs per bbl (Total)$7.04 $7.41 $7.20
Hawaii Throughput (mbpd)81.0 79.4 88.1
Washington Throughput (mbpd)41.2 38.6 40.8
Montana Throughput (mbpd)37.7 51.7 44.2
Wyoming Throughput (mbpd)19.9 6.3 13.5
Retail Sales Volumes (thousand gallons)30,523 29,431 30,848

Estimate Comparison (Consensus vs Actual)

MetricQ2 2025 ConsensusQ2 2025 ActualBeat/Miss
Primary EPS$0.90*$1.54 Bold beat
Revenue ($USD Billions)$1.518*$1.893 Bold beat
EBITDA ($USD Millions)$107.0*$137.8 Bold beat

Values marked with * retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total Capex & Turnaround Outlays ($M)FY 2025$210–$240 “Trending toward the upper end” (H2 decline expected) Maintained; trending high end
Hawaii Crude Differential ($/bbl)Q3 2025—$5.75–$6.25 New detail
Washington Margin Capture (%)Ongoing85–95% framework Q2 came in ~75% due to mix; indicator supported in July Execution below guide in Q2; recovery expected
Montana Margin Capture (%)Q3 202590–100% framework 90–100% reiterated Maintained
System Throughput (mbpd)Q3 2025—190–205 expected; Hawaii 78–81, Washington 39–41, Montana 54–56, Wyoming ~20 New detail
Corporate OpEx Savings ($M)FY 2025$30–$40 target vs 2024 “On track”; YTD OpEx down $24M incl. Wyoming repair costs Maintained
Minimum Liquidity Target ($M)Ongoing$250–$300 Reaffirmed; Q2 liquidity $647M Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q1 2025)Current Period (Q2 2025)Trend
Hawaii operations & captureQ2’24 Hawaii index $7.41/bbl; throughput 81 mbpd Record 88 mbpd; capture 119% reported, 125% ex-price lag/hedging Strengthening throughput and capture
SAF/renewables JVQ1’25 noted SAF project near completion; capital reduction in H2 JV signed with Mitsubishi/ENEOS for $100M; targeting H2 startup; contributions more visible in 2026 De-risked funding; strategic scale
Rockies/Washington distillate tightnessQ1’25 Washington index $4.15/bbl; weaker cracks Tight distillate markets driving strong indices (Washington $15.37/bbl; Montana $20.29/bbl) Improving margins
Small Refinery Exemptions (SRE)n/aManagement expects rigorous EPA DOE scoring; timing uncertain; balanced RIN position; gross exposure 140M units Potential cash upside
Capital allocationQ1’25 buybacks $51M; authorization refreshed Q2 buybacks $28M; nimble approach balancing growth vs repurchases Ongoing repurchases

Management Commentary

  • “Strong operations combined with improving market conditions enabled us to generate solid profits… We set a quarterly operational throughput record in Hawaii” .
  • “Together, Mitsubishi and INEOS will contribute $100,000,000 for a 36.5% equity interest in the joint venture… expands flexibility and market access” .
  • “Our balance sheet is in good shape with ending liquidity of nearly $650,000,000… position us to drive strong cash generation” .
  • CFO: “Hawaii margin capture was 119%… excluding price lag and hedging, 125%… expect crude differential 5.75–$6.25/bbl in Q3” .

Q&A Highlights

  • Hawaii capture drivers: Elevated clean product freight and near-nameplate throughput improved yield expense; capture sustained above guidance .
  • SAF JV benefits/timing: Cost and logistics advantages; local sales in Hawaii; partners add California access; pretreatment commissioning first; financial contributions expected to ramp in 2026 .
  • Rockies/Washington margins: Excess inventory drawdowns boosted capture to ~110% in Montana; distillate tightness across PADDs IV/V, reduced renewable imports post-BTC change .
  • Capital allocation: Opportunistic buybacks when below intrinsic value; maintain optionality vs internal growth/M&A; minimum liquidity $250–$300M reaffirmed .
  • Regulatory/macro: EPA SRE process expected to follow law; balanced RIN position implies any retroactive SREs are direct cash upside; Singapore market outlook steady; Chinese exports contained .

Estimates Context

  • Q2 2025 results significantly exceeded consensus: Adjusted EPS $1.54 vs $0.90*, Revenue $1.893B vs $1.518B*, EBITDA $137.8M vs $107.0M*; magnitude of beats suggests upward revisions to H2 run-rate expectations and segment margin assumptions .
  • Prior quarter Q1 2025 misses (EPS −$0.94 vs −$0.79*, EBITDA $10.1M vs $10.4M*) reflected seasonal weakness, Wyoming outage and lower indices; the Q2 snapback likely prompts positive estimate momentum .
  • Consensus details: EPS estimates based on Primary EPS; 8 estimates for Q2’25; revenue 5 estimates; target price consensus $46.63* [Values retrieved from S&P Global].

Key Takeaways for Investors

  • Q2 reset higher: Broad-based operating strength and distillate-led margin recovery turned Q1 losses into Q2 profitability; segment EBITDA expansion underscores leverage to indices and execution .
  • Strategic de-risking: $100M renewables JV cash and record LTM retail/logistics EBITDA ($211M cited on call) buttress liquidity and support continued buybacks and growth .
  • Hawaii advantage persists: Sustained high capture and record throughput, with Q3 crude differential guided at $5.75–$6.25/bbl, point to durable profitability into H2 .
  • Rockies/Washington momentum: Tight distillate markets and improving indices (Washington $15.37/bbl; Montana $20.29/bbl) support continued margin strength; monitor asphalt mix’s impact on capture .
  • Cash generation inflection: Q2 cash from ops of $133.6M (or $83.0M ex-WC/deferred turnarounds) plus declining capex set up robust FCF in H2; liquidity rose 23% q/q to $647M .
  • Regulatory optionality: EPA SRE decisions could provide additional non-operating cash inflows; management highlights balanced RINs position and prior eligibility of mainland refineries .
  • Capital allocation discipline: Continued opportunistic buybacks ($28M in Q2) alongside internal projects and bolt-ons; minimum liquidity target reaffirmed .