Star Group (SGU) Q2 2025 earnings summary

Executive summary

• Net income for Q2 2025 rose to $85.9 million, up $17.5 million year-over-year, driven by higher adjusted EBITDA and a 22.9% increase in home heating oil and propane volumes due to colder weather and acquisitions.

• Adjusted EBITDA for Q2 2025 increased by $31.9 million to $128.2 million, reflecting improved margins, higher volumes, and better service/installation profitability.

• Recent acquisitions totaling $126.5 million since February 2024 contributed to growth, with some not yet fully reflected in results.

• Annual dividend raised by $0.05 to $0.74 per unit, reflecting a focus on maximizing shareholder returns.

• For the six months ended March 31, 2025, net income was $118.8 million, up $37.4 million year-over-year, with adjusted EBITDA up $34.7 million to $180.0 million.

Financial highlights

• Q2 2025 revenue was $743.0 million, up 11.6% year-over-year, with home heating oil and propane volumes up 22.9% to 143.9 million gallons.

• Product gross profit for Q2 2025 increased by $52.3 million (25.4%) to $258.2 million, with higher per-gallon margins and increased volume.

• Q2 2025 EPS was $2.01, up from $1.56 in Q2 2024; six-month EPS was $2.80, up from $1.88.

• Six-month revenue up 3.1% year-over-year to $1.23 billion, with home heating oil and propane volumes up 14.7% to 226.3 million gallons.

• Six-month net income increased by $37.4 million to $118.8 million; adjusted EBITDA up $34.7 million to $180.0 million.

Outlook and guidance

• Weather hedge contracts for fiscal 2026 are in place, with a $15 million maximum annual payout and a $5 million payment obligation if degree days exceed thresholds.

• Management expects maintenance capital expenditures of $6.0 million–$7.0 million for the remainder of fiscal 2025, plus $0.4 million–$0.5 million for propane operations.

• Recent acquisitions will contribute losses in the non-heating season, tempering winter profits.

• Active acquisition pipeline with additional opportunities expected post-heating season.

• Management remains focused on operational execution, efficiency, and expanding the HVAC business as the heating season ends.