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WK

WORLD KINECT CORP (WKC)·Q2 2025 Earnings Summary

Executive Summary

  • Adjusted diluted EPS of $0.59 beat Wall Street consensus $0.48*; revenue of $9.04B missed $9.32B*; Adjusted EBITDA of $87.3M was essentially in line with $86.6M*. The miss was driven by an unfavorable transaction tax settlement in Marine and softer Land performance, while Aviation strength offset part of the shortfall .
  • GAAP net loss of $339M ($6.06 per share) reflected $398.6M of goodwill and asset impairments, an $81.9M loss on the U.K. land sale, and $6M restructuring charges; Land goodwill impairment totaled $359M and Marine asset impairment $32M .
  • Segment performance: Aviation gross profit rose 8% YoY to $138M; Land fell 17% to $67M on divestitures and North American demand softness; Marine declined 26% to $27M due to the tax settlement and weaker physical locations .
  • Q3 2025 guidance: consolidated gross profit $252–$262M, operating expenses $185–$189M, interest expense $25–$28M; FY adjusted tax rate lowered to 20–22% from prior 22–24% .
  • Capital return: dividend raised 18% and $35M in Q2 buybacks; YTD cash returned totals ~$64M ($45M repurchases, $19M dividends) .

What Went Well and What Went Wrong

What Went Well

  • Aviation outperformed: “our global commercial business and general aviation fuel and services platform continues to perform very well…particularly in Europe” with Aviation gross profit up 8% YoY to $138M .
  • Operating discipline: Adjusted operating expenses of $173M declined 10% YoY and came in below guidance, aided by a finance back-office optimization program; Q3 OpEx guided lower YoY again to $185–$189M .
  • Cash and balance sheet: Q2 operating cash flow $28M, free cash flow $13M; net debt ~$415M and >$1B liquidity provide capacity for disciplined capital allocation and selective M&A; dividend increased 18% and $35M of buybacks executed .

What Went Wrong

  • Marine headwind: an unexpected transaction tax settlement drove Marine gross profit below expectations; absent this item, Q2 would have landed mid-guidance on consolidated gross profit .
  • Land underperformance: gross profit down 17% YoY to $67M due to the U.K. sale, prior North American exits, and demand softness in parts of North American liquid fuels; macro impacted European power and sustainability offerings .
  • Large non-cash impairments: $398.6M of impairments (including $359M Land goodwill and $32M Marine asset) plus an $81.9M loss on the U.K. sale led to GAAP net loss of $339M .

Financial Results

Key Metrics vs Prior Year, Prior Quarter, and Estimates

MetricQ2 2024Q4 2024Q1 2025Q2 2025 ActualQ2 2025 Consensus
Revenue ($USD Billions)$10.965 $9.761 $9.453 $9.043 $9.325*
Gross Profit ($USD Millions)$245.2 $258.9 $230.4 $232.4 —
Adjusted EBITDA ($USD Millions)$80.9 $94.5 $80.3 $87.3 $86.6*
GAAP Diluted EPS ($USD)$1.81 $(1.77) $(0.37) $(6.06) —
Adjusted Diluted EPS ($USD)$0.48 $0.62 $0.48 $0.59 $0.48*

Values with asterisk are Wall Street consensus estimates. Values retrieved from S&P Global.

Bold result highlights:

  • Adjusted EPS: $0.59 vs $0.48* — beat .
  • Revenue: $9.04B vs $9.32B* — miss .
  • Adjusted EBITDA: $87.3M vs $86.6M* — in line .

Segment Breakdown (Q2 2025 vs Q2 2024)

SegmentRevenue Q2 2024 ($MM)Revenue Q2 2025 ($MM)Gross Profit Q2 2024 ($MM)Gross Profit Q2 2025 ($MM)YoY GP Change
Aviation$5,368.7 $4,725.1 $127.7 $138.0 +8%
Land$3,292.4 $2,425.0 $80.8 $67.4 −17%
Marine$2,304.1 $1,893.2 $36.7 $27.0 −26%
Total$10,965.2 $9,043.3 $245.2 $232.4 −5%

KPIs and Operating Metrics

KPIQ2 2024Q2 2025
Consolidated Volume (Billions of gallons)4.373 4.220
Aviation Volume (Billions of gallons)1.825 1.856
Land Volume (Billions of gallons)1.449 1.343
Marine Volume (Billions of gallons)1.098 1.021
Operating Expenses (GAAP, $MM)$200.0 $577.5
Adjusted Operating Expenses ($MM)$191.6 $172.8
Operating Cash Flow ($MM)$67.9 $28.3
Free Cash Flow ($MM)$53.3 $13.3
Interest Expense ($MM)$27.5 $25.7
Share Repurchases ($MM)$29.1 $35.0
Dividend Change—+18% in Q2
Net Debt ($MM)—~$415
Available Liquidity ($MM)—>$1,000

Non-GAAP Adjustments (Q2 2025)

ItemAmount ($MM)Notes
Goodwill & Other Asset Impairments$398.6 Includes Land goodwill/intangibles ($367) and Marine asset impairment ($32) .
Loss on U.K. Land Sale$81.9 Includes ~$55 cumulative translation losses .
Restructuring Charges$6.0 Q2 charges from finance back-office program
Adjusted EPS Reconciliation — Income Tax Impacts$(113.9) EPS adjustment line item; see reconciliation .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Gross Profit ($MM)Q2 2025$235–$244 Actual $232.4 Miss vs guidance
Adjusted Operating Expenses ($MM)Q2 2025$175–$179 Actual $172.8 Beat (lower)
Interest Expense ($MM)Q2 2025$24–$27 Actual $25.7 In line
Consolidated Gross Profit ($MM)Q3 2025—$252–$262 New
Operating Expenses ($MM)Q3 2025—$185–$189 New
Interest Expense ($MM)Q3 2025—$25–$28 New
Adjusted Effective Tax RateFY 202522–24% 20–22% Lowered

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
Portfolio transformation (Land exits)Brazil sale (Q4’24); U.K. sale announced (Q1’25) U.K. sale completed; Land goodwill impairment; continued portfolio sharpening Continuing; intensifying focus
Cost structure/back-office optimization$15M restructuring in Q1’25; ~$30M annualized savings targeted Finance operations optimization launched; Q2 restructuring $6M; OpEx below guidance Improving
Aviation performance (Europe; B&GA)Strong Q1; Europe on-airport assets; B&GA strength GP +8% YoY; strength in Europe airports and general aviation; gov’t activity tailwind Stronger
Marine market and discrete itemsCompetitive market; uncertainty in trade policy (Q1) Unfavorable transaction tax settlement; physical locations weaker; guidance cautious Worsened by discrete settlement
Land (North America liquid fuels)Demand/margin softness; exits in NA; supply dynamics in CA GP −17% YoY; macro/power/sustainability headwinds; further portfolio pruning Mixed; still under pressure
Capital allocationStrong cash flow; buybacks/dividends (Q4/Q1) Dividend +18%; $35M buybacks; YTD ~$64M returned Ongoing
M&A pipeline/valuationStable pipeline; disciplined on pricing (Q1) More opportunities with improved valuations; focus on Aviation/Land Improving

Management Commentary

  • “Our global commercial business and general aviation fuel and services platform continues to perform very well…particularly in Europe” – Michael J. Kasbar, CEO .
  • “We expect consolidated gross profit to be in the range of $252 million–$262 million [for Q3], and operating expenses to be in the range of $185 million–$189 million” – Ira M. Birns, CFO .
  • “We raised our quarterly dividend by 18% and…returned approximately $64 million to shareholders…With only $415 million of net debt and more than $1 billion of available liquidity, our balance sheet remains strong” – Ira M. Birns, CFO .

Q&A Highlights

  • Land portfolio pruning: Management is evaluating additional underperforming activities; objective is a “hyper-focused” portfolio emphasizing scalable, ratable businesses with operating leverage .
  • Segment outlook Q3: Aviation expected meaningfully up YoY (Europe on-airport, government activity); Marine GP down YoY; Land seasonal sequential improvement but YoY lower due to exits .
  • Marine discrete item: CFO confirmed that absent the transaction tax settlement, Q2 would have been mid-guidance on consolidated gross profit .
  • Investment/M&A pipeline: Focused on Aviation and Land; valuations more sensible; interest rates easing; looking for leverageable opportunities over coming quarters .
  • U.K. land sale mechanics (from Q1 call): ~$50M cash proceeds, ~375M annual gallons removed; accretive to operating margin; reduces capex needs .

Estimates Context

  • Adjusted EPS beat: $0.59 vs $0.48*; revenue miss: $9.04B vs $9.32B*; Adjusted EBITDA in line: $87.3M vs $86.6M*. Consensus depth: EPS (3 est.), revenue (2 est.) for Q2 . Values retrieved from S&P Global.
  • Prior quarters: Q1’25 actual adjusted EPS $0.48 vs $0.45*; revenue $9.45B vs $10.47B*; Q4’24 adjusted EPS $0.62 vs $0.50*; revenue $9.76B vs $10.33B* . Values retrieved from S&P Global.

Key Takeaways for Investors

  • Aviation is the earnings anchor; expect continued strength in Q3 from Europe on-airport operations and government activity; focus near term on Aviation-driven upside .
  • Land remains under transformation; expect near-term GP pressure YoY but operating margin stability as exits remove unprofitable activities; watch for portfolio pruning updates .
  • One-off Marine tax settlement masked otherwise stable resale profitability; monitor physical site remediation and Marine GP trajectory into Q3 .
  • Cost actions are visible in OpEx beats; Q3 guide implies further operating leverage as finance/back-office optimization scales; support for margin and cash flow .
  • Capital deployment is balanced: dividend hike (+18%) and buybacks ($35M in Q2) supported by low net debt and ample liquidity; consider shareholder return continuity .
  • Near-term trading setup: EPS beat vs softer revenue, heavy non-cash GAAP charges; narrative should center on Aviation strength and OpEx discipline vs Land/Marine headwinds.
  • Medium-term thesis: Sharper portfolio, disciplined M&A at better valuations, and operating efficiency initiatives targeting improved returns and lower volatility .
Notes:
- Consensus figures marked with * are Wall Street estimates. Values retrieved from S&P Global.

Appendix: Detailed Financial Statements and Reconciliations

  • Q2 2025 Statements and segment detail (revenue, GP, OpEx, EPS) .
  • Q1 2025 comparative statements and segment detail .
  • Q4 2024 comparative statements and segment detail .