Global Partners LP 2026 Q2 Earnings Call
Review the key takeaways and the transcript of this earnings call.
- Global Partners reported strong second quarter 2026 financial results with net income of $71 million, up from $25.2 million in Q2 2025.
- EBITDA increased to $146 million from $95.7 million, and adjusted EBITDA rose to $148.2 million from $98.2 million year over year.
- Distributable cash flow was $92.6 million compared to $52 million in the prior year quarter, with distribution coverage at 2.25 times.
- Segment profit margin increased by $37.3 million to $245.2 million, driven by higher fuel margins in gasoline distribution and growth in wholesale and commercial segments.
- Fuel margin per gallon increased by $0.14 to $0.50 in Q2 2026 from $0.36 in Q2 2025.
- The company operated 1,505 fueling stations and stores, excluding 69 sites under a retail joint venture.
- Operating expenses rose by $1.1 million to $136.8 million, with increases in discretionary incentive compensation and wages partially offset by lower professional fees.
- Interest expense decreased by $1.4 million to $33.1 million due to lower average credit facility balances.
- Capital expenditures totaled $35 million in Q2, including $15.9 million for maintenance and $19.1 million for expansion, primarily in gasoline stations.
- Leverage ratio was 2.85 times funded debt to EBITDA as of June 30, with ample credit facility capacity.
- On July 30, the company redeemed all outstanding Series B fixed rate preferred units, simplifying capital structure and enhancing financial flexibility.
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Transcript
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Good day everyone, and welcome to the Global Partners second quarter 2026 financial results conference call. Today's call is being recorded. 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, Ms. Kristin Seabrook. At this time, I would like to turn the call over to Ms. Seabrook for opening remarks.
Please go ahead. 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, including supply and demand, 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's my pleasure to turn the call over to our President and Chief Executive Officer, Eric Slifka.
Eric? Thank you, Kristin, and good morning, everyone.
We delivered a strong second quarter with each of our operating segments contributing meaningfully and our teams executing at a high level across business. These results underscore the strength of Global's integrated liquid energy platform and the advantage of operating across products, markets, and customers. That diversification is a competitive strength and allows us to capture value across changing market conditions and generate attractive returns. During the quarter, our gasoline distribution station operations segment benefited from improved fuel margins, while our wholesale and commercial segment also delivered positive year-over-year growth. These results reinforce the resiliency of our model and the value of maintaining a portfolio of assets that can perform across a variety of operating environments. The core of our business is predictable, delivering steady cash flow regardless of the market.
On top of that foundation is our ability to capture additional value when markets are dynamic, and we pursue that upside within a disciplined framework that manages our exposure as conditions shift. Against that backdrop, refined product markets remain volatile with geopolitical developments contributing to elevated price swings, increased inventory risk, and tight inventory levels. Turning briefly to our distribution, last month, our board approved a quarterly cash distribution of $0.78 per common unit, or $3.12 on an annualized basis. The distribution will be paid on August 14th to unit holders of record as of August 12th. Now let me turn the call over to Gregg for the financial review.
Gregg? Thank you, Eric. Good morning, everyone.
As we review the numbers, unless otherwise noted, all comparisons will be with the second quarter of 2025. Net income in the second quarter of 2026 was $71 million versus $25.2 million in the prior year period. EBITDA was $146 million in the second quarter versus $95.7 million in 2025. Adjusted EBITDA was $148.2 million compared with $98.2 million. Distributed cash flow was $92.6 million in the second quarter of 2026 compared with $52 million, and adjusted DCF was $92.5 million versus $52.3 million. We continue to maintain healthy distribution coverage at quarter end, 2.25 times or 2.19 times after including distributions to our preferred unit holders. Moving to our segment details, GDSO segment product margin increased $37.3 million in the quarter to $245.2 million.
Product margin from gasoline distribution increased $37.1 million to $175 million, primarily reflecting higher fuel margins year-over-year. On a cents per gallon basis, fuel margin increased by $0.14 to $0.50 in Q2 2026 from $0.36 in Q2 2025. Station operations product margin, which includes convenience store and prepared food sales, sundries and rental income, increased $0.2 million to $70.2 million in the second quarter of 2026. Quarter end, our GDSO portfolio of fueling stations and C-stores consisted of 1,505 sites, exclusive of the 69 sites under our Spring Partners Retail joint venture. Turning to our wholesale segment, second quarter product margin increased $14.8 million to $106.5 million. Product margin from gasoline and gasoline blend stocks increased $19.6 million to $78.4 million, primarily reflecting more favorable market conditions in gasoline.
Product margin from distillates and other oils decreased $4.8 million to $28.1 million, primarily due to less favorable market conditions in residual oil. In our commercial segment, product margin increased $4.4 million to $10.5 million, primarily reflecting more favorable market conditions in our bunkering group. As Eric mentioned, we are pleased with the results across our segments and our team's ability to capture value in a dynamic market environment. We continue to expect the current steep backwardation in the forward product pricing curve to increase the cost of carrying our hedged inventory in the future periods. We remain focused on disciplined inventory management, driving growth across our segments, and efficient operations. Operating expenses increased $1.1 million in the second quarter to $136.8 million, reflecting higher expenses associated with our GDSO operations, offset by lower expenses related to our terminal operations.
SG&A increased $8.3 million to $83 million, primarily due to increase in discretionary incentive comp, wages and benefits, and other expenses, partially offset by a decrease in professional fees. Interest expense decreased $1.4 million to $33.1 million, probably due to lower average balances on our credit facilities. CapEx in the second quarter was $35 million, consisting of maintenance CapEx of $15.9 million and expansion CapEx of $19.1 million, primarily related to investments in our gasoline station business. For the full year of 2026, we continue to expect maintenance CapEx in the range of $60 million-$70 million and expansion CapEx, excluding acquisitions, in the range of $75 million-$85 million. Our current CapEx estimates depend in part on the timing of project completions, availability of equipment and labor, weather, and any unforeseen events or opportunities that require additional maintenance or investment. Our balance sheet remains strong.
As of June 30th, leverage as defined in our credit agreement as funded debt to EBITDA stood at 2.85 times, and we had ample excess capacity in our credit facility. We had $174.6 million outstanding on our working capital revolving credit facility and $103.5 million outstanding on our revolving credit facility. I'd also like to highlight on July 30th, we redeemed all the outstanding Series B fixed-rate preferred units. This accretive act transaction further simplifies our capital structure and enhances our financial flexibility going forward. Let me turn the call back to Eric for closing comments.
Eric? Thanks, Gregg. Looking ahead, we remain focused on executing our strategy, investing thoughtfully in the business, and allocating capital to the highest return opportunities.
We believe the quality of our asset base, the dedication of our team, and the strength of our balance sheet position Global well for the remainder of 2026 and beyond. We are committed to delivering attractive returns for our unit holders and building value that endures over time. With that, Gregg, Mark, and I will be happy to take your questions. Operator, please open the line for Q&A.
Thank you. We will now be conducting a question and answer session. If you would 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. Press star two if you would 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. One moment please while we poll for questions. Thank you. Our first question comes from the line of Gregg Brody with Bank of America. Please proceed with your question.
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