Delek Logistics Partners (DKL) Q3 2025 earnings summary

Executive summary

• Achieved record Q3 2025 results with net income of $45.6 million and adjusted EBITDA of $136 million, driven by strong performance in crude, gas, and water segments and successful integration of Gravity and H2O Midstream acquisitions.

• Raised full-year adjusted EBITDA guidance to $500–$520 million, reflecting robust year-to-date progress and operational momentum.

• Completed commissioning of the Libby 2 gas plant, enhancing sour gas handling and acid gas injection capabilities, supporting further capacity expansion.

• Board approved the 51st consecutive quarterly distribution increase to $1.120 per unit, underscoring commitment to capital returns.

• Liquidity exceeded $1 billion following a $700 million debt issuance, supporting financial flexibility.

Financial highlights

• Adjusted EBITDA for Q3 2025 was $136 million, up from $106.8 million year-over-year.

• Net income for Q3 2025 was $45.6 million ($0.85 per unit), up from $33.7 million ($0.71 per unit) in Q3 2024.

• Distributable cash flow (as adjusted) totaled $74.1 million; DCF coverage ratio was 1.24x.

• Gathering and processing segment adjusted EBITDA rose to $83 million from $55 million year-over-year, mainly due to acquisitions.

• Pipeline joint venture segment contributed $21.9 million, up from $15.6 million year-over-year, driven by the W2W dropdown and improved JV performance.

Outlook and guidance

• Full-year adjusted EBITDA guidance raised to $500–$520 million, reflecting confidence in continued earnings growth.

• Management expects continued growth in the Permian Basin, leveraging expanded crude and water offerings and new gas processing capacity.

• Focus remains on organic growth, bolt-on acquisitions, and increasing third-party cash flows.

• Built-in recessionary protections include minimum volume commitments and dedicated acreage agreements.

• Further guidance on 2026 capital allocation and expansion plans to be provided in the next earnings call.