Global Partners Q1 2025 Earnings Report

Global Partners EPS Results

• Actual EPS: $0.36
• Consensus EPS: -$0.03
• Beat/Miss: Beat by +$0.39
• One Year Ago EPS: N/A

Global Partners Revenue Results

• Actual Revenue: $4.59 billion
• Expected Revenue: $5.64 billion
• Beat/Miss: Missed by -$1.05 billion
• YoY Revenue Growth: N/A

Global Partners Announcement Details

• Quarter: Q1 2025
• Date: 5/8/2025
• Time: Before Market Opens
• Conference Call Date: Thursday, May 8, 2025
• Conference Call Time: 10:00AM ET

Global Partners (NYSE:GLP) is a publicly traded master limited partnership engaged in the wholesale distribution and retail marketing of petroleum products. The company sources refined petroleum products from major refineries and suppliers and transports them through an integrated network of pipelines, terminals and storage facilities. Global Partners focuses on delivering fuel and related services to commercial, industrial and residential customers, positioning itself as a key midstream and downstream energy operator in its core markets.

Through its extensive terminal network in the northeastern United States and eastern Canada, Global Partners supplies gasoline, diesel, home heating oil, kerosene, propane and biofuels to a broad customer base. The partnership also owns and operates a chain of branded gasoline stations and convenience stores, serving consumers under various regional banners. In addition, Global Partners’ marine division provides bunkering and marine fueling services in the Caribbean and along the East Coast, leveraging dedicated deepwater terminals and storage facilities.

Headquartered in Waltham, Massachusetts, Global Partners LP has grown its asset footprint over multiple decades to support a diverse set of customers, including municipalities, utilities, commercial fleets and end-use consumers. The partnership’s integrated model combines midstream logistics with retail marketing, enabling it to optimize supply, distribution and pricing across its operations. Global Partners continues to pursue strategic acquisitions and infrastructure investments to strengthen its presence in core markets and enhance service offerings.

Global Partners Q1 2025 Earnings Call Transcript

Key Takeaways

• Net income turned positive at $18.7 M in Q1 from a $5.6 M loss last year, with adjusted EBITDA up to $91.1 M and distributable cash flow more than doubling to $46.4 M.
• Wholesale segment product margin increased by $44.2 M to $93.6 M, fueled by favorable market conditions and the integration of Gulf Oil and ExxonMobil terminals.
• Gasoline distribution fuel margins rose 2¢ per gallon to $0.35, while station operations margin declined by $4 M due to the sale and conversion of 40 sites in the ongoing portfolio optimization.
• The Board increased the quarterly cash distribution to $0.0745 per unit ($2.98 annualized), payable May 15 to unitholders of record on May 9.
• Operating expenses grew by $6.6 M and SG&A by $3.9 M, with interest expense up $6.3 M, reflecting higher costs from new terminal operations, incentive compensation and increased credit facility balances.

Presentation

[Christopher Byrnes, Head of Investor Relations at Global Partners]

Good day, everyone, and welcome to the Global Partners Christopher Byrnes 2025 Financial Results Conference Call. Today's call is being recorded. All lines have been placed in listen-only mode. If anyone requires operator assistance during the call, please press star zero. With us from Global Partners are President and Chief Executive Officer Mr. Eric Slifka, Chief Financial Officer Mr. Gregory Hanson, Chief Operating Officer Mr. Mark Romaine, and Chief Legal Officer and Secretary Mr. Sean Geary. At this time, I'd like to turn the call over to Mr. Geary for opening remarks. Please go ahead, sir.

[Sean Geary, Chief Legal Officer and Secretary at Global Partners]

Good morning, everyone, and thank you for joining us. Today's call will include forward-looking statements within the meaning of federal securities laws, including projections and expectations concerning the future financial and operational performance of Global Partners. No assurances can be given that these projections will be attained or that these expectations will be met. Our assumptions and future performance are subject to a wide range of business risks, uncertainties, and factors which could cause actual results to differ materially, as described in our filings with the Securities and Exchange Commission. Global Partners undertakes no obligation to revise or update any forward-looking statements. Now, it is my pleasure to turn the call over to our President and Chief Executive Officer Eric Slifka.

[Eric Slifka, President CEO at Global Partners]

Thank you, Sean. Good morning, everyone. We had a strong first quarter across the company, generating healthy year-over-year growth across our key profitability metrics. Product margin in our wholesale segment was up from the prior year, reflecting strong execution by our teams, a favorable market environment, and the successful integration of additional terminal assets. Since the end of 2023, we've continued to invest in and optimize our terminal assets, expanding our midstream footprint to more efficiently serve our throughput and wholesale customers. These enhancements strengthen our ability to link refined liquid energy products with downstream markets, supporting the evolving needs of suppliers and customers in today's dynamic energy landscape. Our gasoline distribution business benefited from healthy fuel margins, supporting strong overall performance. Ongoing portfolio optimization resulted in a decrease in company-operated sites, reducing our station operations product margin year-on-year in the quarter.

[Eric Slifka, President CEO at Global Partners]

By maintaining financial discipline and carefully directing our capital, we are able to invest in accretive organic growth and selective acquisition opportunities while continuing to consistently return cash to unit holders. In April, our board increased our quarterly cash distribution on common units to $0.745 per unit, equating to $2.98 on an annualized basis. The distribution will be paid May 15th to unit holders as of the close of business on May 9th. With that, now let me turn the call over to Greg for the financial review. Greg?

[Gregory Hanson, CFO at Global Partners]

Thank you, Eric. Good morning, everyone. As I review the numbers, please note that all comparisons will be with the first quarter of 2024 unless otherwise noted. Looking at our key profitability metrics, net income for the first quarter was $18.7 million versus a net loss of $5.6 million last year. EBITDA for the first quarter increased to $91.9 million from $56.9 million, and adjusted EBITDA increased to $91.1 million from $56 million in the prior year period. Distributable cash flow was $45.7 million in the first quarter, compared with $15.8 million in the prior year period, and adjusted DCF was $46.4 million compared with $16 million last year. The primary growth driver behind these results was the strong performance of our wholesale segment. It's important to provide some context for the year-over-year comparison.

[Gregory Hanson, CFO at Global Partners]

As a reminder, in Q1 of 2024, certain products in our wholesale segment were negatively impacted by the timing of mark-to-market valuations, which were then fully recovered in what was a very strong second quarter last year. In contrast, the timing and magnitude of mark-to-market impacts were minimal in Q1 this year, meaning our reported results more closely align with the strong performance of our core operations. TTM distribution coverage as of March 31, 2025, was 2.03x, or 1.96x after factoring in distribution to our preferred unit holders. Turning to our segment details, GDSO product margin increased $0.2 million to $187.9 million in the quarter. Product margin from gasoline distribution increased $4.2 million to $125.8 million, primarily reflecting higher fuel margins year-over-year. On a cents per gallon basis, fuel margins increased 2 cents to 35 cents in Q1 2025, from 33 cents in Q1 2024.

[Gregory Hanson, CFO at Global Partners]

Station operations product margin, which includes convenience store and prepared food sales, sundries, and rental income, decreased $4 million to $62.1 million in the first quarter of 2025. The decrease was due in part to the sales and conversions of certain company-operated sites, consistent with our ongoing strategy of portfolio optimization. At quarter end, we had a portfolio of 1,561 sites, a decrease of 40 sites year-over-year. In addition, we operated or supplied 66 sites under our Spring Partners retail joint venture. Looking at the wholesale segment, first quarter 2025 product margin increased $44.2 million to $93.6 million. Product margin from gasoline and gasoline blend stocks increased $27.4 million to $57.1 million, primarily due to more favorable market conditions in gasoline. Product margin also benefited from the 2024 acquisitions of terminals from Gulf Oil and ExxonMobil, which were acquired in the second and fourth quarters of 2024.

[Gregory Hanson, CFO at Global Partners]

Product margin from distillates and other oils increased $16.8 million to $36.5 million, primarily due to more favorable market conditions in distillates and winter weather that was on average 9% colder than the prior year period. Commercial segment product margin increased $0.1 million to $7.1 million. Looking at expenses, operating expenses increased $6.6 million to $126.7 million in the first quarter of 2025, primarily related to our terminal operations and the addition of the Gulf and ExxonMobil terminals in 2024. SG&A expense increased $3.9 million in Q1 2025 to $73.7 million, reflecting in part increases in long-term incentive comp wages and benefits and various other SG&A expenses and a decrease in acquisition costs. Interest expense was $36 million in the first quarter of 2025, up $6.3 million from last year, primarily due to higher average balances on our credit facilities related to our terminal acquisitions in 2024.

[Gregory Hanson, CFO at Global Partners]

Capex in the first quarter was $17.9 million, consisting of $9.6 million of maintenance capex and $8.3 million of expansion capex, primarily related to investments in our gasoline stations and terminals. Our balance sheet remained strong at March 31, with leverage as defined in our credit agreement as funded debt to EBITDA at 3.28x, and ample excess capacity in our credit facilities. We had $354.7 million outstanding on the working capital revolving facility and $167 million outstanding on the revolving credit facility. Before I turn the call back to Eric for closing comments, let me review our upcoming investor relations calendar. This month, we'll be participating in EIC's 22nd annual Energy Infrastructure Investor Conference, and in June, we'll be participating at the Stifel Cross Sector Insight Conference and the Bank of America Energy Credit Conference.

[Gregory Hanson, CFO at Global Partners]

If you're attending one or more of these events, we look forward to meeting you there. Now, let me turn the call back to Eric for closing comments. Eric?

[Eric Slifka, President CEO at Global Partners]

Thank you, Greg. As we look ahead, the power of our scale, the resiliency of our integrated model, and the creativity of our people position us to not just weather disruption, but to find opportunity within it. We are confident in our strategy, focused on disciplined execution, and committed to delivering long-term growth for our unit holders. Now, Greg, Mark, and I would be happy to take your questions. Operator, please open the line for Q&A.

[Operator]

Thank you. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Selman Akyol with Stifel. Please proceed with your question.

[Selman Akyol, Managing Director at Stifel]

Thank you. Good morning. Congratulations on a very nice quarter.

[Gregory Hanson, CFO at Global Partners]

Thanks, Selman.

[Selman Akyol, Managing Director at Stifel]

Just wanted to start off with, and I understand the GDSO, the high grading of it, and sort of repositioning the capital, I guess, into the terminals. Can you just maybe talk about, and I know it's a continuous thing that goes on, but can you just talk about the opportunity you're seeing for continuing that, as well as potential acquisitions or what you're just seeing out there on the terminal side as well?

[Eric Slifka, President CEO at Global Partners]

Yeah. I mean, I think basically we're always reviewing our retail business, and we're looking at our assets, and we're looking at the most efficient or best way to operate or supply those assets. It's not a static environment, and we continue to look at them. As we acquire assets and operate them, we may take decisions later on that optimize the value that we can generate from those assets. I wouldn't look at it as repositioning capital per se to terminals. The way I really think of it is we're trying to be opportunistic and do what is best at that moment in time. If there are—look, M&A is busy. It's busy at every level, whether that's terminal or whether that's retail.

[Eric Slifka, President CEO at Global Partners]

It is really about finding the right deal that fits the company that we think competitively advantages us and allows us to make a somewhat higher return. Those are the places we are going to continue to focus on and try to be competitive.

[Selman Akyol, Managing Director at Stifel]

Got it. Thank you for that. Could you just talk a little bit about the market conditions that allowed wholesale to do so well, and then currently what you're seeing in the marketplace?

[Gregory Hanson, CFO at Global Partners]

Yeah. I can start, and Mark can fill in anything I miss, Selman. It's Greg. A couple of things. One, it was a nice cold winter up here in the Northeast, which definitely helped our wholesale distillate business. We've had two back-to-back warm winters. It was 9% colder. It was really the integration of our terminaling assets, the Exxon Mobil terminal in East Providence and the Gulf terminals that really added to our additional capacity on the wholesale side and allowed us to take advantage of market opportunities that were out there. I think it was a nice normalized quarter for us. I mentioned in my speaking points that last year there was definitely some mark-to-market that impacted us in the first quarter of last year, so it's a tougher comparison. We didn't do as bad as it looks like last quarter.

[Gregory Hanson, CFO at Global Partners]

In the first quarter of 2024, we just got that back in 2025. I think really it was a nice quarter that was optimized around the integrated assets we've had on the terminaling side. Mark, if you had anything to add there, cool.

[Selman Akyol, Managing Director at Stifel]

Let me just ask, in terms of just sort of timing and tariffs and all that, was there any dislocation up there in the Northeast markets where you were able to take advantage of?

[Gregory Hanson, CFO at Global Partners]

Yeah. Selman, it's Mark. The tariff, there was a very brief period of time. It was probably two days when the tariffs applied to Canadian oil and oil from Mexico. Canadian oil specifically more relevant to us, but very brief, created some volatility, which often benefits us, but it was very short-lived. Right now, there's really no impact from a supply or a market condition standpoint. The only thing we're thinking about relative to how tariffs may impact us is perhaps as it starts to affect the consumer, it may have some impact on our store sales, but that's yet to be determined. I think if it's going to impact us, it'll impact us there. From a supply and a margin and optimizing the business, not a real impact.

[Selman Akyol, Managing Director at Stifel]

Got it. Okay. Appreciate the color. Thank you so much.

[Gregory Hanson, CFO at Global Partners]

Thanks, Selman.

[Operator]

Thank you. Mr. Slifka, there are no further questions in the queue. I'll turn the floor back to you for any final comments.

[Eric Slifka, President CEO at Global Partners]

Thank you for joining us this morning. We look forward to keeping you updated on our progress. Enjoy the rest of your spring, everyone.

[Operator]

Thank you. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.

Participants

Executives

• Gregory Hanson, CFO
• Christopher Byrnes, Head of Investor Relations
• Sean Geary, Chief Legal Officer and Secretary
• Eric Slifka, President CEO

Analysts

• Selman Akyol, Managing Director at Stifel