Delek Logistics Partners (DKL) Q1 2026 earnings summary

Executive summary

• Achieved adjusted EBITDA of $132.3 million for Q1 2026, with strong execution across crude, gas, and water segments despite Winter Storm Fern headwinds.

• Net revenues rose 19% year-over-year to $297.5 million, driven by higher West Texas marketing sales and increased gathering and processing activity.

• Net income declined to $32.4 million, mainly due to higher depreciation, interest expense, and Winter Storm Fern impacts.

• 53rd consecutive quarterly distribution increase approved, raising distribution to $1.130 per unit.

• Strategic focus on expanding third-party revenue, organic growth, and Permian Basin infrastructure, including sour gas capabilities.

Financial highlights

• Adjusted EBITDA for the quarter was $132.3 million, up from $123.2 million year-over-year.

• Net income for Q1 2026 was $32.4 million, down from $39.0 million in Q1 2025.

• Distributable cash flow, as adjusted, totaled $72.4 million; DCF coverage ratio stable at 1.20x.

• Net cash from operating activities surged to $170.4 million from $31.6 million year-over-year.

• Quarterly distribution per unit increased to $1.130, a 1.8% rise over Q1 2025.

Outlook and guidance

• Reaffirmed full-year 2026 EBITDA guidance of $520 million-$560 million, supported by robust segment performance and third-party cash flow growth.

• Management expects continued cash flow growth in 2026, with gas utilization nearing capacity and further processing expansion under review.

• Water and crude businesses expected to continue outperforming, with gas ramping up in the second half of the year.

• Strategic priorities include expanding third-party business, optimizing assets, and maintaining strong safety and financial flexibility.

• Positioned to withstand economic downturns due to fee-based contracts and minimum volume commitments.