Executive Summary

Q1 FY2025 Adjusted EBITDA was $75.3M, essentially flat YoY, while GAAP EPS declined to $0.30 from $0.38 on higher interest expense and other non-cash items; reported gross margin rose with a favorable hedge mark, but underlying (ex-MtM) gross margin was modestly lower on slightly lower propane volumes .
Weather was the main headwind (7% warmer than normal; November one of the top five warmest on record), partially offset by storm-related demand in the Southeast and a Southwest acquisition completed in November; propane unit margins improved by $0.02/gal (1.3%) YoY .
RNG operations were temporarily lower due to planned maintenance in Arizona, but SPH began earning Inflation Reduction Act Production Tax Credits on January 1, 2025 and is preparing to monetize them—an incremental cash flow lever for 2H FY2025 and beyond .
Balance sheet leverage ticked up (Consolidated Leverage Ratio 4.99x) after funding growth capex and a $53M propane acquisition; quarterly distribution of $0.325/unit was maintained (trailing-12M coverage 1.87x) .

What Went Well and What Went Wrong

What Went Well
- Improved pricing discipline: “Our field operations have done an excellent job managing selling prices in a higher commodity price environment,” supporting a $0.02/gal (~1.3%) uplift in propane unit margins YoY .
- Strategic M&A and storm response: Closed a $53.0M propane acquisition in NM/AZ (Nov) and benefited from storm-driven demand in the Southeast following Hurricanes Helene/Milton .
- RNG platform positioning: Completed upgrades at Stanfield, restarted mid-Nov, and began earning PTCs on Jan 1; monetization expected to support cash flows as NY/OH projects complete toward end of calendar 2025 .
What Went Wrong
- Unseasonably warm weather: Average temps 7% warmer than normal in Q1; November was 15% warmer than normal and 17% warmer YoY, reducing heat-related demand and crop drying volumes; propane gallons -0.8% YoY to 105.7M .
- RNG contribution lower: Stanfield planned maintenance and compliance upgrades reduced RNG injection in the quarter; management cited lower RNG margin contribution YoY .
- Higher costs below the line and modest opex pressure: Net interest expense +7.8% YoY on higher revolver borrowings; combined operating and G&A +1.6% on payroll/benefits and legal accruals (partially offset by lower vehicle fuel) .

Financial Results

Overall and segment revenue, profitability, and volume comparisons; columns ordered oldest→newest.

Metric	Q1 2024	Q3 2024	Q4 2024	Q1 2025	YoY vs Q1 2024	QoQ vs Q4 2024	Vs Estimates
Total Revenue ($M)	365.8	254.6	208.6	373.3	+2.0% (derived from )	+79.0% (derived from )	N/A
Net Income ($M)	24.5	(17.2)	(44.6)	19.4	-20.7% (derived from )	n.m. (derived from )	N/A
Diluted EPS ($/unit)	0.38	(0.27)	(0.69)	0.30	-21.1% (derived from )	n.m. (derived from )	N/A
EBITDA ($M)	59.3	17.9	(8.9)	56.7	-4.4% (derived from )	n.m. (derived from )	N/A
Adjusted EBITDA ($M)	75.2	27.0	0.8	75.3	+0.1% (derived from )	n.m. (derived from )	N/A
Gross Margin (reported) ($M)	212.8 (derived from rev–COGS )	160.2	124.0 (derived from rev–COGS )	226.2	+6.3% (derived from )	+82.4% (derived from )	N/A

Notes: “n.m.” = not meaningful given seasonality and sign changes. Gross margin ex-MtM Q1 2025: $222.5M (Mgmt calc) .

Segment/Category revenue (Q1 2025 vs Q1 2024)

Revenue Category ($M)	Q1 2024	Q1 2025	YoY
Propane	313.4	330.3	+5.4% (derived from )
Fuel oil & refined fuels	23.9	17.7	-26.1% (derived from )
Natural gas & electricity	6.5	6.1	-6.8% (derived from )
All other	22.1	19.3	-12.5% (derived from )
Total	365.8	373.3	+2.0% (derived from )

Key KPIs and operating drivers

KPI	Q1 2024	Q1 2025	Comment
Propane gallons (MM gal)	106.545	105.739	-0.8% YoY; weather/crop drying headwinds, offset by Southeast storm demand and M&A
Refined fuels gallons (MM gal)	5.256	4.367	Softer YoY
Avg wholesale propane price (Mont Belvieu)	—	+14.9% YoY	Price tailwind to unit margins
Unit margin change	—	+$0.02/gal (+1.3%)	Pricing discipline supported margins
Gross margin (reported) ($M)	212.8 (derived from )	226.2	Ex-MtM $222.5M (Mgmt calc)
Operating + G&A ($M)	147.6 (sum of $122.1+$25.6)	150.0	+1.6% YoY; payroll/benefits, legal accruals; lower vehicle fuel
Net interest expense ($M)	18.2	19.6	+7.8% YoY on higher revolver borrowings
“Other, net” ($M)	5.9	19.5	Includes $3.0M contingent consideration income; equity losses/impairments excluded from Adj EBITDA
Distribution ($/unit)	0.325 (Jan 2024 paid)	0.325 (declared Jan 23, 2025)	Annualized $1.30; TTM coverage 1.87x
Consolidated Leverage Ratio	4.76x (FY2024)	4.99x (TTM to 12/28/24)	Within 5.75x covenant

Non-GAAP note: Management also cited “non-cash adjusted” net income of $38.0M or $0.59/unit excluding MtM and equity losses/impairments .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Propane capex	FY2025	$40–$45M (Q4 FY2024)	$40–$45M (Q1 FY2025)	Maintained
RNG capex	FY2025	$35–$45M (Q3/Q4 FY2024)	$35–$45M (Q1 FY2025)	Maintained
RNG project timing (NY digester; OH upgrade)	Calendar 2025	Complete in 2H 2025 (Q4 FY2024)	“Toward end of calendar 2025” (Q1 FY2025)	Maintained
RNG PTCs (IRA)	From Jan 1, 2025	Expected eligibility starting Jan 2025 (Q4 FY2024)	Now earning PTCs from Jan 1; working to monetize (Q1 FY2025)	Updated (active)
Quarterly distribution	Ongoing	$0.325/unit (Q4 FY2024)	$0.325/unit declared (Jan 23, 2025)	Maintained
Revenue/margins/EPS	FY2025	Not provided	Not provided	—

Earnings Call Themes & Trends

Topic	Q-2: Q3 FY2024 (Aug 2024)	Q-1: Q4 FY2024 (Nov 2024)	Current: Q1 FY2025 (Feb 2025)	Trend
Weather & demand	Warm weather reduced volumes; Adj. EBITDA $27M	Warmth persisted; volumes down YoY; 4.76x leverage	Q1 was 7% warmer than normal; Nov exceptionally warm; momentum from January cold snap	Improving into Q2 (weather)
Pricing & margins	Unit margins +$0.07/gal YoY; pricing discipline	Continued pricing management; opex tightly controlled	Unit margins +$0.02/gal YoY; “excellent job managing prices”	Stable/positive
RNG operations	Enhancements increased injection; LCFS weakness	Peak daily injection cited; projects tracking to 2H’25	Planned maintenance reduced Q1; restart; begin earning PTCs; monetize PTCs	Positioning improving
Capital allocation	Small M&A (FL/NV); revolver repayments	Larger NM/AZ acquisition ($53M) post-fiscal year	Closed $53M NM/AZ acquisition in Nov; revolver funding	Active, targeted
Leverage/liquidity	Leverage 4.68x TTM; ample revolver capacity	4.76x; focus on balance sheet	4.99x TTM; expect PTCs/projects to aid deleveraging; “plenty of liquidity”	Elevated near term; expected to improve
Distribution coverage	—	Coverage healthy; $0.325/unit	TTM coverage 1.87x; $0.325/unit declared	Stable

Management Commentary

“Adjusted EBITDA for our first quarter of fiscal 2025 was $75.3 million, essentially flat to the prior year first quarter.”
“Propane volumes… were marginally lower… as… unseasonably warm weather… and a less active crop drying season negatively impacted demand,” partly offset by hurricane-related demand and the Southwest acquisition .
RNG: “Completed an extended and planned shutdown… for routine maintenance… Since the restart… we have continued to experience enhanced conversion… We… expect to be able to monetize PTCs…”
Balance sheet & leverage: “We have plenty of liquidity… as RNG assets come online… leverage [should] naturally bring down.”
Distribution: “Our Board… declared our quarterly distribution of $0.325 per common unit… coverage… 1.87x for the trailing 12 months.”

Q&A Highlights

Weather/operations and pricing: Management emphasized the platform is “built for this kind of weather,” with field teams actively managing selling prices amid commodity volatility (Belvieu range ~$0.85–$0.90/gal recently) .
Leverage and PTC monetization: Elevated leverage reflects prior warm season and pre-earnings RNG capex; PTCs are being earned as of Jan 1 and will be monetized to bring in cash, supporting deleveraging as projects come online .
Capital structure: “Plenty of liquidity” and continued focus on strengthening the balance sheet while investing strategically in growth .

Estimates Context

We attempted to retrieve S&P Global consensus for Q1 FY2025 EPS and revenue, but the request could not be completed due to an SPGI daily request limit. As a result, consensus comparisons are unavailable for this recap. If you’d like, we can refresh this section once SPGI access resets.
Without consensus, we cannot characterize beats/misses vs Street; directionally, underlying performance was resilient given weather headwinds, with adjusted EBITDA flat YoY and GAAP EPS down YoY .

Key Takeaways for Investors

Resilient quarter in a warm start to heating season: Adjusted EBITDA held flat YoY; pricing discipline and storm-related demand offset volume softness; underlying gross margin modestly lower ex-MtM .
Near-term catalysts: January’s widespread cold (post-quarter) should lift Q2 volumes/margins; PTC monetization provides incremental cash flow; new NM/AZ footprint expands growth runway .
Watch RNG execution: Stanfield is back online with improvements; NY and OH projects targeted for completion toward end of calendar 2025; policy support (PTCs) active from Jan 1 .
Balance sheet: Leverage at 4.99x remains within covenants; management expects deleveraging as RNG earnings/credits ramp—monitor pace of PTC monetization and unit margins .
Income profile maintained: $0.325 quarterly distribution affirmed; TTM coverage 1.87x underscores current cash flow support despite weather variability .
Trading setup: Seasonality and January cold can aid near-term numbers; medium-term hinges on RNG ramp/credit monetization and continued pricing discipline amid commodity volatility .

Additional Relevant Press Releases (Q1 FY2025 timeframe)

Declared $0.325 quarterly distribution (Jan 23, 2025) .
Announced multi-year partnership as Official Propane of NASCAR & Speedway Motorsports (Jan 14, 2025) .
Post-quarter: Unveiled propane-powered track dryer at DAYTONA 500 (Feb 14, 2025) .

SUBURBAN PROPANE PARTNERS LP (SPH)·Q1 2025 Earnings Summary