Executive Summary

Q3 2025 delivered a clean beat: adjusted EPS $3.66 vs $3.05 consensus (+20%), revenue $30.34B vs $29.25B consensus (+$1.1B), and EBITDA $2.31B vs $2.11B consensus; refining utilization hit 97% with record throughput in Gulf Coast and North Atlantic regions . EPS/Revenue/EBITDA estimates from S&P Global.*
Refining drove results: adjusted refining operating income rose to $1.67B (vs $0.57B y/y), refining margin/throughput were strong ($13.14/bbl and 3,087 kbpd), while Renewable Diesel posted a loss amid weaker margins; Ethanol delivered record production and solid earnings .
Capital returns accelerated: $1.3B returned in Q3 (dividends $351M; buybacks $931M, ~5.7M shares), a 78% payout of adjusted operating cash flow; YTD returns >$2.6B; net debt remained conservative with 18% net debt-to-capitalization .
2025 capex trimmed to ~$1.9B (from ~$2.0B) and Q4 modeling implies stable throughput and cost discipline (refining OpEx ~$4.80/bbl; D&A ~$815M); management expects crude quality diffs to widen into Q4, supportive for complex refiners .
Potential stock catalysts: strong distillate fundamentals, widening sour diffs, and higher capital return run-rate; offsets include Renewable Diesel headwinds and elevated West Coast depreciation tied to Benicia wind-down .

What Went Well and What Went Wrong

What Went Well
- Record operational execution: 97% refining utilization; Gulf Coast and North Atlantic throughput hit all-time highs. “Our refinery throughput utilization was 97 percent, with the Gulf Coast and North Atlantic regions setting new all-time highs for throughput” .
- Margin/throughput leverage: refining margin per barrel rose to $13.14 (vs $9.09 y/y) and adjusted refining OpInc/bbl to $5.86 (vs $2.14 y/y); throughput increased to 3,087 kbpd (vs 2,884 kbpd y/y) .
- Cash returns discipline: $1.3B returned in Q3 with 78% payout of adjusted operating cash flow; management reiterated excess FCF goes to repurchases .
What Went Wrong
- Renewable Diesel (DGD) underperformance: segment loss of $28M (vs $35M income y/y); margin/gallon fell to $0.50 ($0.60 y/y) and sales volumes decreased to 2.7M gpd (3.5M gpd y/y) .
- West Coast pressures: U.S. West Coast refining delivered $0 adjusted operating income in Q3 (vs $(99)M y/y) but continues to absorb elevated D&A tied to Benicia wind-down (incremental ~$100M/quarter) .
- Incremental overhead and depreciation: G&A rose to $246M (vs $234M y/y); total D&A was ~$836M with ~$100M incremental from Benicia plan .

Financial Results

Headline performance vs consensus (S&P Global)*

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Adjusted/Primary EPS – Estimate	$0.98	$0.48	$1.77	$3.05
Adjusted/Primary EPS – Actual	$1.16	$0.89	$2.28	$3.66
Revenue – Estimate ($B)	$30.50	$28.60	$27.16	$29.25
Revenue – Actual ($B)	$31.34	$28.75	$28.23	$30.34
EBITDA – Estimate ($B)	$1.18	$0.93	$1.54	$2.11
EBITDA – Actual ($B)	$1.21	$0.94	$1.93	$2.31

Note: S&P revenue reflects external customer revenue. Valero’s 8‑K “total revenues” for Q3’25 were $32.17B . Values retrieved from S&P Global.*

GAAP and segment highlights

Metric	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Total Revenues ($B)	$32.88	$30.26	$29.89	$32.17
Diluted EPS (GAAP)	$1.14	$(1.90)	$2.28	$3.53
Adjusted EPS	$1.16	$0.89	$2.28	$3.66
Operating Income ($B)	$0.51	$(0.90)	$1.00	$1.51
Effective Tax Rate	—	—	30%	27%
Net Cash from Ops ($B)	$1.30	$0.95	$0.94	$1.88
Adjusted Net CFFO ($B)	$1.08	$0.86	$1.35	$1.64

Refining KPIs and unit economics

KPI	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Throughput (kbpd)	2,884	2,828	2,922	3,087
Refining Margin ($/bbl)	$9.09	$9.78	$12.35	$13.14
Adj. Refining OpEx ($/bbl)	$4.73	$5.07	$4.91	$4.71
D&A ($/bbl)	$2.22	$2.33	$2.66	$2.57
Adj. Refining OpInc ($/bbl)	$2.14	$2.38	$4.78	$5.86

Segment breakdown (Q3 2025 vs Q3 2024)

Segment	Revenue ex. Interco ($B)	Operating Income ($M)
Refining	$30.41 vs $31.33	$1,610 vs $565
Renewable Diesel	$0.72 vs $0.63	$(28) vs $35
Ethanol	$1.04 vs $0.91	$183 vs $153
Corporate & Elims	—	$(256) vs $(246)

Renewables KPIs

KPI	Q3 2024	Q1 2025	Q2 2025	Q3 2025
Renewable Diesel margin ($/gal)	$0.60	$0.02	$0.22	$0.50
RD operating income ($/gal)	$0.11	$(0.64)	$(0.32)	$(0.11)
RD sales (k gpd)	3,544	2,435	2,732	2,717
Ethanol margin ($/gal)	$0.72	$0.48	$0.52	$0.83
Ethanol Adj. OpInc ($/gal)	$0.36	$0.05	$0.13	$0.43
Ethanol production (k gpd)	4,584	4,466	4,583	4,635

Balance sheet and returns

Net debt and liquidity: Total debt $8.4B; cash $4.8B; net debt-to-capitalization 18%; available liquidity (ex-cash) $5.3B .
Capital deployment: Q3 capex $409M (Valero-attrib $382M); dividends $1.13/share; buybacks ~$931M; payout 78% of adjusted CFFO .

Guidance Changes

Metric	Period	Previous Guidance (as of Q2 call)	Current Guidance (Q3 call)	Change
2025 Capex (attrib to Valero)	FY 2025	~$2.0B	~$1.9B	Lowered
Refining throughput – Gulf Coast	Q3 vs Q4	Q3: 1.76–1.81 mbpd	Q4: 1.78–1.83 mbpd	Maintained/flat
Refining throughput – Mid-Continent	Q3 vs Q4	Q3: 430–450 kbpd	Q4: 420–440 kbpd	Slightly Lower
Refining throughput – West Coast	Q3 vs Q4	Q3: 240–260 kbpd	Q4: 240–260 kbpd	Maintained
Refining throughput – North Atlantic	Q3 vs Q4	Q3: 465–485 kbpd	Q4: 485–505 kbpd	Raised
Refining cash OpEx	Q3 vs Q4	~$4.80/bbl (Q3)	~$4.80/bbl (Q4)	Maintained
Net interest expense	Q3 vs Q4	~$135M (Q3)	~$135M (Q4)	Maintained
Total D&A	Q3 vs Q4	~$810M (Q3)	~$815M (Q4)	Slightly Higher
G&A	FY 2025	~$985M	~$985M	Maintained
Renewable Diesel sales	FY vs Q4	FY 2025 ~1.1B gal	Q4 ~258M gal (lower production due to economics)	N/A (periods differ)
RD OpEx ($/gal)	FY vs Q4	~$0.53 (incl. $0.24 D&A)	~$0.52 (incl. $0.24 D&A)	Slightly Lower

Dividend: Board declared $1.13/share payable Dec 18, 2025 (record Nov 20) .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2 2025)	Current Period (Q3 2025)	Trend
Refining utilization/throughput	Q2: Gulf Coast record throughput; low inventories supporting margins . Q1: heavy maintenance weighed on results .	97% utilization; Gulf Coast & North Atlantic throughput records; strong demand; tight supply persists .	Improving utilization; tight balances persist
Diesel vs gasoline fundamentals	Q2: Diesel demand strong; export ARBs open; gasoline flat y/y .	Diesel demand strong; year-over-year sales up; gasoline flat-to-down; export ARBs volatile, marginally open .	Diesel constructive; gasoline seasonal
Crude diffs (medium/heavy sour)	Q2: Expected widening in 4Q as OPEC/Canada add barrels .	Differentials widened (e.g., WCS ~12% and Maya ~14% discounts to Brent); Iraqi barrels to US; further widening expected .	Widening underway; tailwind to complex refiners
Renewable Diesel (DGD)	Q1/Q2: Losses; PTC capture ramping; policy/tariff uncertainty; SAF ramp positive .	RD loss, but indicator improving with lower feedstock costs; expect positive EBITDA in Q4; 2026 policy shifts (PTC) a challenge .	Stabilizing near term; policy risk into 2026
Technology/AI in ops	Limited commentary prior.	Evaluating AI/ML for reliability; data quality foundation enables use; robotics/drones for inspections .	Incremental adoption; cautious optimism
California/Benicia	Q1: Announced $1.1B impairment; plan to cease refining by Apr 2026 .	Plans unchanged; in discussions with state; incremental D&A ~$100M/Q for next two quarters .	Execution on wind-down; regulatory dialogue ongoing

Management Commentary

“We’re pleased to report strong financial results… Our refinery throughput utilization was 97 percent, with the Gulf Coast and North Atlantic regions setting new all-time highs for throughput” (Lane Riggs) .
“Effectively all excess free cash flow goes towards share buybacks” (IR) .
“As medium sour discounts widen, you’ll see heavy sours react to remain competitive… We anticipate that to continue… as we move through the fourth quarter” (COO) .
“Ethanol continues to look positive… record corn crop… demand strong domestically and export… outlook is good” .
On AI/ML: “You really have to have good quality data… we’ve embarked… to gather that data… starting from a good place” .

Q&A Highlights

Crude differentials: Medium/heavy sour discounts widened vs earlier in year; more Iraqi barrels to U.S.; expect continued widening in Q4; potential sanctions impacts could be bullish for product cracks .
Capital returns: Excess FCF directed to buybacks; payout framework intact; small cash build driven by working capital .
Renewable Diesel/SAF: Lower feedstock prices improving RD indicator; expect positive EBITDA in Q4; 2026 PTC/foreign feedstock changes a challenge; SAF premiums remain supportive in U.S./EU/UK .
Market demand/export dynamics: Gasoline flat to slightly down; diesel strong with export pull; freight volatility gating ARBs to Europe .
Benicia closure: Plans unchanged despite discussions with California; company intends to meet wholesale obligations post-shutdown via waterborne optionality .

Estimates Context

Q3 2025 beat: EPS $3.66 vs $3.05; revenue $30.34B vs $29.25B; EBITDA $2.31B vs $2.11B. Prior quarters also beat consensus (Q2 EPS $2.28 vs $1.77; Q1 $0.89 vs $0.48). Values retrieved from S&P Global.*
Implications: Consistent estimate beats in 2025 driven by high utilization, distillate strength, and improving crude diffs. Consensus may need to reflect higher margin capture and throughput, offset by Renewable Diesel volatility and elevated West Coast D&A.

Key Takeaways for Investors

Operating leverage is back: record utilization and widening sour diffs support above-mid-cycle refining margins near term; distillate fundamentals remain constructive .
Capital returns accelerating: $1.3B returned in Q3; management reiterated excess FCF to buybacks; dividend maintained ($1.13/share) .
RD volatility but stabilizing: near-term indicator improved on softening feedstocks; policy shifts in 2026 are the key overhang for DGD/SAF economics .
West Coast headwind contained: incremental ~$0.25 EPS/Q from Benicia-related D&A for next two quarters; plans to cease refining by Apr 2026 remain in place .
2025 capex trimmed to ~$1.9B, signaling discipline; Q4 guidance implies stable costs and robust throughput, particularly North Atlantic .
Trading implications: Favor upside to near-term earnings on distillate/export strength and widening quality diffs; watch freight and sanctions headlines for crack volatility .

Footnote: Items marked with an asterisk are based on S&P Global consensus/actuals from GetEstimates. Values retrieved from S&P Global.*

VALERO ENERGY CORP/TX (VLO)·Q3 2025 Earnings Summary