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WK

WORLD KINECT CORP (WKC)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $9.392B, essentially in line with consensus ($9.379B*), while adjusted EPS of $0.54 missed the Street ($0.607*); adjusted EBITDA of $94M also came in below consensus ($97.8M*) . Values retrieved from S&P Global.
  • Aviation continued to outperform with gross profit up 11% to $143M on strong European airport locations, business aviation and government activity, while Land and Marine declined 20% and 32% respectively .
  • Cash generation remained robust: operating cash flow $116M and free cash flow $102M; management cut variable costs, bringing operating expenses below expectations and keeping operating income within guidance .
  • Q4 guidance: consolidated gross profit $237–$245M, operating expenses $181–$187M, interest expense $25–$27M, adjusted tax rate 26–28%; leadership succession announced (Ira Birns to CEO on Jan 1, 2026) and Trip Support acquisition expected to be ~7% adjusted EPS accretive in first 12 months .
  • Liquidity strengthened post-quarter with the $2B senior unsecured credit facility extended to 2030, improving pricing and covenant flexibility, supporting capital allocation and growth .

What Went Well and What Went Wrong

What Went Well

  • Aviation delivered double-digit earnings growth; gross profit rose 11% to $143M on improved European operations, government sales, and business aviation activities .
  • Strong free cash flow: operating cash flow $116M and free cash flow $102M driven by disciplined working capital; management highlighted variable cost flexibility and expense control .
  • Acquisition of Universal Trip Support Services expected to be ~7% accretive to adjusted EPS in the first 12 months, with ~$15M annual cost synergies within two years; expected to close in early November .

“Although our gross profit did fall below guidance for the quarter, we were able to offset most of this impact by effectively reducing variable costs. This brought our operating expenses below expectations...” .

What Went Wrong

  • Consolidated gross profit fell 7% YoY to $249.6M and below guidance; adjusted EBITDA declined 6% YoY to $94.0M .
  • Land segment gross profit decreased 20% to $81.4M due to unfavorable North American liquid fuel markets, exits in the U.K., Brazil and certain North American operations, and transportation inefficiencies .
  • Marine gross profit fell 32% to $25.5M on lower bunker prices, reduced volatility, and weaker contributions from some physical locations; management expects YoY decline to persist in Q4 given low price/volatility backdrop .

Financial Results

Quarterly progression (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$9.453 $9.043 $9.392
Gross Profit ($USD Millions)$230.4 $232.4 $249.6
GAAP Diluted EPS ($)$(0.37) $(6.06) $0.46
Adjusted Diluted EPS ($)$0.48 $0.59 $0.54
Operating Expenses ($USD Millions)$237.0 $577.5 $186.8
Adjusted Operating Expenses ($USD Millions)$177.5 $172.8 $181.0
Income from Operations ($USD Millions)$(6.6) $(345.1) $62.9
Adjusted Income from Operations ($USD Millions)$52.9 $59.6 $68.6
Adjusted EBITDA ($USD Millions)$80.3 $87.3 $94.0

Q3 2025 Actual vs S&P Global Consensus

MetricActualConsensusSurprise
Adjusted EPS ($)$0.54 $0.607*Miss: $(0.067)
Revenue ($USD Billions)$9.392 $9.379*Beat: $0.013B
EBITDA ($USD Millions)$94.0 $97.8*Miss: $(3.8)M

Values retrieved from S&P Global.

Segment breakdown (Q3 2024 vs Q3 2025)

| Segment | Revenue ($USD Billions) Q3 2024 | Revenue ($USD Billions) Q3 2025 | Gross Profit ($USD Millions) Q3 2024 | Gross Profit ($USD Millions) Q3 2025 | |---|---|---:|---:|---:|---:| | Aviation | $5.218 | $4.868 | $129.0 | $142.8 | | Land | $3.152 | $2.536 | $101.9 | $81.4 | | Marine | $2.121 | $1.988 | $37.2 | $25.5 | | Total | $10.491 | $9.392 | $268.1 | $249.6 |

KPIs (Volumes)

KPIQ3 2024Q3 2025
Aviation Volume (Billions of gallons)1.905 1.829
Land Volume (Billions of gallons)1.496 1.383
Marine Volume (Billions of gallons)1.043 1.071
Consolidated Volume (Billions of gallons)4.443 4.283

Non-GAAP measures and adjustments are defined and reconciled in the press release (adjusted EPS, adjusted EBITDA, adjusted operating expenses, Finnish bid error, restructuring charges, and tax impacts) .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Consolidated Gross Profit ($USD Millions)Q4 2025N/A$237–$245 New
Operating Expenses ($USD Millions)Q4 2025N/A$181–$187 New
Interest Expense ($USD Millions)Q4 2025N/A$25–$27 New
Adjusted Effective Tax Rate (%)Q4 2025N/A26–28% New
Adjusted Effective Tax Rate (%)FY 2025N/A20–22% New
Acquisition impactQ4 2025N/APartial-quarter OpEx impact from Trip Support closing New

Note: Prior guidance ranges were not disclosed in the referenced materials; current ranges were introduced on the Q3 call .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 and Q2)Current Period (Q3)Trend
Portfolio reshaping (Land exits)U.K. land divestiture announced; restructuring actions in Q1; non-cash impairments and U.K. sale loss recognized in Q2 Focus narrowing to core, profitable activities; further streamlining to improve returns in 2026 Accelerating exit/optimization
Aviation performance (Europe, biz aviation)Aviation outperformed on European airport locations (Q1), strong again in Q2 Double-digit GP growth; Trip Support acquisition to expand services and be ~7% accretive Sustained strength; inorganic boost
Marine cyclicalityWeaker performance at physical locations and spot exposure highlighted (Q2) GP down 32% YoY on low prices/volatility; expect YoY decline in Q4 Trough conditions; modest sequential improvement
Variable cost disciplineCost management actions (Q1); OpEx well-controlled (Q2) OpEx below guidance; flexible variable cost structure Ongoing efficiency
Finance/IT transformationFinance transformation program launched (Q2) Finance transformation underway; outsourcing initiatives to yield multi-million savings by 2026–2027; similar moves in IT Execution phase
Leadership transitionN/ACEO succession (Ira Birns), President (John Rau), CFO (Mike Tejada) announced Governance stability

Management Commentary

  • “Aviation delivered another solid quarter of double-digit earnings growth… Our recent announcement to acquire Universal Trip Support Services… will add momentum and significantly expand our service offering” — Michael Kasbar, CEO .
  • “This transaction is expected to be approximately 7% accretive to adjusted EPS in the first 12 months, with ~$15 million of annual cost synergies within two years…” — Ira Birns, President & CFO .
  • “We expect consolidated gross profit to be in the range of $237 to $245 million… operating expenses $181 to $187 million… interest expense $25 to $27 million… adjusted effective tax rate approximately 26% to 28%” — Ira Birns .
  • “Our ability to generate strong operating cash flow is a testament to our level of excellence in working capital management… lowered our net debt to adjusted EBITDA ratio to under one times” — Ira Birns .

Q&A Highlights

  • Land segment remediation: Management is reevaluating delivery strategies in North America to reduce transportation inefficiencies and may exit certain markets; more details expected in Q4 .
  • Acquisition cadence: Accretion expected to be fairly ratable over 12 months post-close, with synergies realized over ~two years; minimal seasonality beyond summer private jet demand .
  • M&A pipeline: With rates declining, the pipeline is widening; focus on core areas with clear synergies; no near-term deals expected, but 2026 could see activity .
  • Variable cost efficiencies: Finance transformation and selective IT outsourcing to drive savings and operational support, with benefits accruing in 2026–2027 .

Estimates Context

  • Q3 2025 adjusted EPS missed consensus ($0.54 vs $0.607*), primarily due to gross profit below guidance and segment pressure in Land/Marine; operating expenses came in below expectations, partially offsetting the shortfall . Values retrieved from S&P Global.
  • Revenue was roughly in line ($9.392B vs $9.379B*), suggesting volume/mix effects and price environment rather than top-line demand drove the profit miss . Values retrieved from S&P Global.
  • EBITDA came in below the S&P consensus ($94.0M vs $97.8M*); note that S&P’s “EBITDA” definition may differ from the company’s adjusted EBITDA reconciliation, which excludes specific items (Finnish bid error, restructuring, impairments, sale losses, integration costs, etc.) . Values retrieved from S&P Global.
  • Near-term estimate revisions likely: Aviation estimates may drift higher (ongoing strength and Trip Support contribution), while Land and Marine estimates may be revised lower given continued headwinds and management’s Q4 outlook .

Values retrieved from S&P Global.

Key Takeaways for Investors

  • Aviation strength plus the Trip Support acquisition should underpin gross profit resilience and expand service-led margin opportunities into 2026; watch for integration updates and synergy realization milestones .
  • Land remains the swing factor: expect portfolio streamlining and delivery strategy changes to be announced in Q4; risk to near-term estimates persists until actions translate to improved unit economics .
  • Marine profitability likely remains constrained while bunker prices/volatility are low; management expects YoY GP decline in Q4 despite sequential improvement — maintain conservative assumptions .
  • Q4 guidance implies a modest step down in gross profit with disciplined OpEx; model ranges of GP $237–$245M and OpEx $181–$187M, interest $25–$27M, tax 26–28% .
  • Liquidity is robust: extension of the $2B credit facility to 2030 (option to 2031) with improved terms supports continued buybacks/dividends and opportunistic M&A in core areas .
  • Governance transition is orderly: CEO succession (Ira Birns), President (John Rau), and CFO (Mike Tejada) should sustain strategic focus on core businesses and efficiency initiatives; minimal execution risk indicated by internal promotions .
  • Trading setup: In the near term, stock reaction hinges on confidence in Land remediation and confirmation of Trip Support close/accretion. Medium term, the story is cash generation, aviation service expansion, and disciplined capital allocation amid improving rate environment .