Executive Summary

Strong winter-driven quarter: revenue $587.7M, net income $137.1M, diluted EPS $2.10, and Adjusted EBITDA $175.0M (+19.1% YoY), with propane volumes up 15.5% YoY on sustained colder January–February temperatures .
Versus Wall Street consensus: revenue beat ($587.7M vs $548.0M*), while EPS missed ($2.10 vs $2.18*) and EBITDA was slightly below ($175.0M vs $180.0M*) — driven by expense increases to meet demand and RNG headwinds; low estimate coverage (1 estimate) *.
Balance sheet improved: leverage ratio fell to 4.54x; $8.8M raised via ATM used to repay revolver borrowings; $10.1M debt repaid in Q2; quarterly distribution maintained at $0.325 ($1.30 annualized) with 2.17x coverage (TTM) .
RNG update and regulatory overhang: cold weather impeded Stanfield output, LCFS/D3 RIN pricing remained weak, and the company did not recognize IRA production tax credit income in Q2 pending final rules — a notable change from Q1 expectations; Columbus (OH) and Adirondack (NY) projects progressing toward late-2025/early-2026 operations .

Note: Values marked with * are retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

Robust demand and execution: “propane volumes for the quarter increased 15.5%... In fact, during the month of January 2025, we delivered the highest propane volumes since 2018,” supported by effective margin management and disciplined expenses .
EBITDA growth: Adjusted EBITDA rose 19.1% to $175.0M on volume strength and pricing discipline during rising commodity costs .
Strategic initiatives: Successful integration of the ~$53M Southwest propane acquisition with performance exceeding expectations; ATM program launched to support growth while maintaining balance sheet flexibility .

What Went Wrong

RNG headwinds: Average daily injection down slightly YoY at Stanfield due to extremely cold ambient temperatures and planned downtime; LCFS/D3 RIN pricing pressure persisted .
Cost inflation with surge ops: Operating and G&A rose 9.7% YoY to $169.3M due to payroll, benefits, overtime, and variable compensation tied to earnings .
Regulatory uncertainty: Despite Q1 commentary about PTC monetization starting Jan 1, the company did not recognize PTC income in Q2 pending final IRS rules — introducing near-term RNG cash flow uncertainty .

Financial Results

Headline Financials – sequential trend (oldest → newest)

Metric	Q4 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$208.641	$373.329	$587.663
Net Income ($USD Millions)	$(44.589)	$19.420	$137.121
Diluted EPS ($USD)	$(0.69)	$0.30	$2.10
EBITDA ($USD Millions)	$(8.851)	$56.694	$175.284
Adjusted EBITDA ($USD Millions)	$0.754	$75.301	$175.044
Operating Income ($USD Millions)	$(22.548)	$59.062	$158.413

Year-over-Year comparison

Metric	Q2 2024	Q2 2025
Revenue ($USD Millions)	$498.087	$587.663
Net Income ($USD Millions)	$111.500	$137.121
Diluted EPS ($USD)	$1.72	$2.10
EBITDA ($USD Millions)	$148.176	$175.284
Adjusted EBITDA ($USD Millions)	$147.022	$175.044
Operating Income ($USD Millions)	$136.860	$158.413
Gross Margin ($USD Millions)	$307.967	$345.300

Note: Q2 gross margin is revenues minus cost of products sold; Q2 2024 computed from .

Segment Revenue Breakdown

Segment	Q2 2024 ($USD Millions)	Q2 2025 ($USD Millions)
Propane	$437.564	$525.256
Fuel oil & refined fuels	$31.595	$33.364
Natural gas & electricity	$8.713	$9.025
All other	$20.215	$20.018
Total	$498.087	$587.663

KPIs

KPI	Q2 2024	Q2 2025
Retail propane gallons sold (MM gallons)	140.243	162.027
Refined fuels gallons sold (MM gallons)	6.992	7.760
Avg wholesale propane price (Mont Belvieu, $/gal)	—	$0.90
Total gross margin ex mark-to-market ($USD Millions)	$302.100 (computed: $344.6 − $42.5)	$344.600
Consolidated Leverage Ratio (x)	—	4.54x
Total capital spending ($USD Millions)	—	$19.3
Quarterly distribution per unit ($)	—	$0.325
Distribution coverage (TTM, x)	—	2.17x

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Propane Capex	FY2025	$40–$45M	No update provided in Q2 call	Maintained / no update
RNG Projects Capex	FY2025	$35–$45M	No update provided in Q2 call	Maintained / no update
RNG project timing (Columbus, Adirondack)	CY2025	“Completed toward end of calendar 2025”	“Tail end of this calendar year, maybe into early next year”	Window slightly widened
RNG PTC recognition	FY2025	Expected to earn effective Jan 1, 2025	No PTC income recognized in Q2; awaiting final IRS regs	Lowered/paused
Quarterly distribution	Q2 2025	$0.325 declared Apr 24	$0.325 reiterated on call	Maintained

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Weather-driven demand & operations	Warm winter constrained FY2024; strong ops discipline and cost control	Sustained cold in Jan–Feb drove 15.5% volume growth; highest Jan volumes since 2018	Improving demand backdrop
Commodity pricing & supply	Wholesale prices range-bound; inventory context provided	Avg wholesale ~$0.90/gal; prices trending down to ~$0.70 post-Q2; supply team well-positioned	Volatile, turning lower
M&A landscape	Added ~$53M Southwest acquisition in Q1; expanding footprint	Fewer buyers; Suburban sees disciplined multiples and a building pipeline	Opportunity increasing
RNG platform performance	Stanfield improved in FY2024; upgrades completed; Q1 maintenance dampened injection	Q2 injection improved sequentially but slightly down YoY; cold temps and downtime; LCFS/D3 RIN pressure	Operationally steady; market prices weak
Regulation (IRA PTC/LCFS)	Q1 expected PTC monetization starting Jan 1	No PTC recognized; awaiting IRS; optimistic on CARB LCFS amendments boosting credit values	Uncertain near term
Balance sheet & leverage	FY2024 leverage 4.76x; focus on strengthening balance sheet	Leverage down to 4.54x; ATM proceeds repaid revolver; excess cash expected post seasonal peak	Improving
Investor returns	Distribution maintained; strong coverage (1.87x TTM in Q1)	Distribution $0.325; coverage 2.17x TTM	Strengthening coverage

Management Commentary

“The fiscal 2025 second quarter was an outstanding quarter... propane volumes for the quarter increased 15.5%... highest propane volumes since 2018” — Michael A. Stivala .
“Adjusted EBITDA for the quarter was $175 million, an increase of $28 million or 19.1% compared to the prior year second quarter” — Mike Kuglin .
“Launched an at-the-market... to sell up to $100 million... raised net proceeds of $8.8 million... used to repay outstanding debt” — Michael A. Stivala .
“Our consolidated leverage ratio... improved to 4.54x compared to 4.99x at the end of the first quarter” — Mike Kuglin .
“We are substantially insulated from the impact of tariffs... propane prices have come down” — Michael A. Stivala .

Q&A Highlights

Commodity volatility and sourcing: Management expects more propane trapped domestically, with prices falling from ~$0.90 to ~$0.70/gal; supply planning unchanged ahead of next heating season .
Propane M&A: Fewer active buyers and more disciplined multiples; SPH positioned to acquire quality assets in attractive markets; pipeline building post-season .
RNG regulatory and economics: No Q2 PTC recognition due to ambiguity; seeking IRS clarification; expects CARB LCFS amendments to lift credit values; Columbus/Adirondack timing targeted for late-2025/early-2026 .
Balance sheet priorities: Use excess cash flows and ATM proceeds to strengthen leverage while funding strategic growth, including RNG .

Estimates Context

Metric	Actual (Q2 2025)	Consensus (Q2 2025)*	Surprise
Revenue ($USD Millions)	$587.663	$548.000*	Beat
Primary EPS ($USD)	$2.10	$2.18*	Miss
EBITDA ($USD Millions)	$175.284	$180.000*	Miss

Note: Low estimate coverage (1 estimate for EPS and revenue). Values marked with * retrieved from S&P Global.

Where estimates may need to adjust:

Revenue upward revisions likely given a sizable beat driven by weather and volume; EPS/EBITDA may see modest trims if RNG credit monetization remains delayed and expense intensity persists into Q3 .

Key Takeaways for Investors

Weather tailwind plus disciplined pricing delivered a high-quality beat on revenue and strong EBITDA growth; diluted EPS missed consensus amid higher variable costs to meet demand .
Balance sheet trajectory improving (4.54x leverage), supported by ATM proceeds and seasonal cash generation; expect continued debt reduction in shoulder quarters .
RNG platform execution continues, but near-term earnings leverage is gated by LCFS/RIN pricing and IRA PTC rulemaking; monitor CARB amendments and IRS final rules as catalysts .
M&A backdrop favorable with fewer competitors and more rational multiples; SPH’s integration track record and footprint expansion support medium-term growth .
Distribution held at $0.325 with strong 2.17x coverage — reinforcing income appeal while pursuing growth investments .
Commodity prices trending lower post-quarter may compress unit margins, but could support consumer demand and volumes; company indicates sourcing plan remains steady .
Watch Q3 commentary for sustainability of demand normalization after a strong winter, RNG project milestones, and any update on PTC monetization timing .

Appendix: Additional Q2 2025 Press Releases

Quarterly distribution declaration: $0.325 per common unit, payable May 13, 2025 (record date May 6, 2025) .
Q2 2025 earnings call scheduling notice (May 8, 2025, 9:00 AM ET) .

SUBURBAN PROPANE PARTNERS LP (SPH)·Q2 2025 Earnings Summary