Global Partners (GLP) Q3 2026 Earnings Call: Adjusted EBITDA Reaches $122.9M

Key Takeaways

• Q3 2026 net income increased to $52.4 million from $29.0 million a year earlier. Adjusted EBITDA rose to $122.9 million from $98.8 million.
• Wholesale product margin increased $33.4 million to $111.4 million, supported by more favorable market conditions in gasoline and distillates. This more than offset weaker GDSO results.
• GDSO product margin declined $8.3 million to $210.6 million as higher pump prices weighed on fuel demand. Gasoline distribution margin fell $8.0 million to $136.8 million.
• Adjusted distributable cash flow reached $70.3 million, compared with $53.3 million in Q3 2025. Distribution coverage remained healthy at 2.3x.
• Global Partners raised its quarterly cash distribution for the 20th consecutive quarter to $0.7850 per common unit, equivalent to $3.14 annualized.
• Management increased its full-year 2026 maintenance capital expenditure range by $5 million to $65 million-$75 million. Expansion CapEx guidance remained $75 million-$85 million, excluding acquisitions.

Key Financial Data

Business and Operating Performance

The Wholesale segment was the main earnings driver. Product margin rose to $111.4 million from $78.0 million. Gasoline and gasoline blendstocks margin increased $14.3 million to $75.8 million, while distillates and other oils margin increased $19.1 million to $35.6 million.

GDSO product margin decreased to $210.6 million. Gasoline distribution margin fell to $136.8 million, primarily because of lower volumes. Station operations margin, including convenience stores, prepared food, sundries and rental income, was broadly stable at $73.8 million, down $0.3 million.

Management said higher retail fuel prices led consumers to conserve on fuel purchases. Convenience-store transactions declined, but average basket size increased, leaving c-store performance approximately flat. Global Partners ended the quarter with 1,489 fueling stations and convenience stores, excluding 69 sites held through the Spring Partners Retail joint venture.

Commercial segment product margin increased $0.1 million to $71.0 million, partly reflecting more favorable bunkering market conditions.

Operating expenses declined as lower terminal maintenance and repair costs offset higher GDSO expenses, mainly credit card fees. SG&A increased due to higher wages and benefits, discretionary incentive compensation and other expenses.

At September 30, leverage under the company’s credit agreement was approximately 2.8x funded debt to EBITDA. Global Partners had $99.0 million outstanding on its working capital revolver and $144.5 million on its revolving credit facility.

During Q3, the company redeemed all outstanding 9.5% Series B fixed-rate preferred units, removing $75 million of preferred equity from its capital structure. After quarter-end, it extended the maturity of its credit agreement by more than three years to October 2031 while retaining a $1 billion working capital revolver and a $500 million revolving credit facility.

Management Guidance

Global Partners now expects full-year 2026 maintenance CapEx of $65 million-$75 million, $5 million above its previous range. Expansion CapEx guidance remains $75 million-$85 million, excluding acquisitions.

Management said these estimates depend partly on project completion timing, equipment and labor availability, weather, and unforeseen events or opportunities requiring additional maintenance or investment.

Risks and Watch Items

• Management expects steep backwardation in the forward product pricing curve to increase the cost of carrying hedged inventory in future periods.
• Higher pump prices reduced retail fuel demand during the quarter, creating continued volume sensitivity if elevated prices persist.
• CapEx timing remains subject to equipment and labor availability, weather and project execution.
• Management described retail M&A as active but competitive. The company said it will remain focused on accretive transactions with attractive returns.

Analyst Q&A Highlights

Asked about consumer behavior, Gregory Hanson said higher retail prices affected fuel volumes as customers conserved. Inside the stores, transactions were lower but basket sizes increased, keeping c-store performance approximately flat.

On whether higher prices could create acquisition opportunities among financially strained independent operators, Eric Slifka said current M&A activity did not appear to be driven primarily by credit or pricing pressure. He characterized retail as fragmented, with numerous potential opportunities, but emphasized deal discipline and attractive returns. Terminal acquisitions are less frequent but generally larger, while the company continues to invest in its existing network.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Good day, everyone, and welcome to the Global Partners Third 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.

Kristin Seabrook

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?

Eric Slifka

Thank you, Kristin, and good morning, everyone. Our third quarter results underscore the strength of Global's integrated liquid energy model. Our presence across the supply chain provides multiple sources of earnings and the flexibility to adapt to changing market conditions. We saw the benefit of that model this quarter. Solid execution across our terminal network and wholesale business more than offset lower retail fuel volumes as higher price pump -- higher pump prices weighed on demand and our station operations held steady.

We do not rely on any single segment or market dynamic to drive performance. It's that balance that helps us manage through different market environments and gives Global the ability to capture opportunities across the business.

We are also in a strong position to invest in the future. We remain disciplined in how we deploy capital, whether we are investing in our existing assets or pursuing opportunities that strengthen our platform and generate attractive long-term returns for unitholders.

Turning to our distribution. Last month, our Board approved our 20th consecutive quarterly distribution increase, raising the quarterly cash distribution to $0.7850 per common unit or $3.14 on an annualized basis. The distribution will be paid on November 13 to unitholders of record as of November 9. We believe that track record reflects the strength and consistency of the business and our priority of returning capital to unitholders.

Our commitment to the communities we serve remains an important part of who we are. We have committed more than $200,000 to community action agencies and nonprofits to assist with home heating oil efforts in New England this winter. This builds on our long-standing efforts to help families meet their heating needs with direct contributions that allow these organizations to put the funds where they can have the greatest impact.

Now let me turn the call over to Greg for the financial review. Greg?

Gregory Hanson

Thank you, Eric, and good morning, everyone. As we review the numbers, unless otherwise noted, all comparisons will be with the third quarter of 2025. Net income in the third quarter of 2026 was $52.4 million versus $29 million in the prior year period. EBITDA was $120.8 million in the third quarter versus $97.1 million in '25, and adjusted EBITDA was $122.9 million compared with $98.8 million.

Distributable cash flow was $70.1 million in the third quarter of '26 compared with $53 million and adjusted DCF was $70.3 million versus $53.3 million. We continue to maintain a healthy distribution coverage at quarter end of 2.3x.

Moving to our segment details. GDSO segment product margin decreased $8.3 million to $210.6 million in the quarter. Product margin from gasoline distribution was down $8 million to $136.8 million, primarily due to a decrease in volumes sold.

Station operations product margin, which includes convenience store and prepared food sales, sundries and rental income, decreased $300,000 to $73.8 million in the third quarter of 2026.

At quarter end, our GDSO portfolio of fueling stations and c-stores consisted of 1,489 sites, exclusive of the 69 sites under our Spring Partners Retail joint venture.

Turning to our Wholesale segment. Third quarter product margin increased $33.4 million to $111.4 million, primarily reflecting more favorable market conditions in gasoline and distillates, with product margin from gasoline and gasoline blendstocks increasing $14.3 million to $75.8 million and product margin from distillates and other oils increasing $19.1 million to $35.6 million.

In our Commercial segment, product margin increased $0.1 million to $71 million due in part to more favorable market conditions in bunkering.

We are pleased with our results in the quarter. Our integrated system provides us with multiple sources of revenue generation, and our team has demonstrated strong execution in capturing 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 future periods, and we remain focused on disciplined inventory management, driving growth across our segments and efficient operations.

Turning to the expense side. Operating expenses decreased $1.4 million in the third quarter to $131.1 million, reflecting lower expenses associated with our terminal operations, largely in maintenance and repair expenses, offset by higher expenses related to our GDSO operations, mostly in credit card fees.

SG&A increased $3.1 million to $79.4 million, consisting of increases in wages and benefits, discretionary incentive comp and various other expenses, offset by a decrease in maintenance and repair expenses.

Interest expense decreased $1.9 million to $31.4 million, partially due to lower average balances on our working capital revolving credit facility.

CapEx in the third quarter was $41.9 million, consisting of maintenance CapEx of $19.3 million and expansion CapEx of $22.6 million, primarily related to investments in our gasoline station business.

For full year 2026, we now expect maintenance CapEx in the range of $65 million to $75 million, up $5 million from our previous range, with expansion CapEx, excluding acquisitions, unchanged at $75 million to $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 September 30, leverage as defined in our credit agreement as funded debt to EBITDA was approximately 2.8x, and we maintained ample excess capacity under our credit facilities. We had $99 million outstanding on our working capital revolver and $144.5 million outstanding on our revolving credit facility.

During the third quarter, we redeemed all of our outstanding 9.5% Series B fixed rate preferred units, eliminating $75 million of preferred equity from our capital structure. And subsequent to quarter end, we amended our credit agreement, extending its maturity by more than 3 years to October 2031, while maintaining our $1 billion working capital revolving credit facility and our $500 million revolving credit facility.

Let me turn the call back to Eric for his closing comments. Eric?

Eric Slifka

Thanks, Greg. As we look forward, our focus is straightforward: execute well, build on the strengths of our integrated platform and continue positioning Global for long-term growth. We have a strong foundation, a proven operating model and a team that knows how to navigate a dynamic market. We're excited about the opportunities ahead and remain focused on creating lasting value for our unitholders.

With that, Greg, Mark and I will be happy to take your questions. Operator, please open the line for Q&A.

Operator

[Operator Instructions] Our first question comes from the line of Gregg Brody with Bank of America.

Question-and-Answer Session

Gregg Brody

Can you talk a little bit about what you're seeing from the -- on the customer side in terms of their behavior with consumption and how that compares to what data you're seeing across the U.S.?

Gregory Hanson

Gregg, it's Greg Hanson. Yes. I mean, I think overall, we definitely saw an impact from [indiscernible]

Sorry about that. We have a little interference there. Yes, I think overall, we definitely saw an impact on the consumer from higher retail prices on the fuel volume side. I think we were pleasantly surprised how well our -- the consumer did inside our c-stores, basically being flat on the c-store, and we did see some higher transaction baskets in the quarter. Our transactions were down, but the basket size actually increased a little bit overall. So we definitely saw people conserving on the fuel side with the high prices overall. But I think on the c-store side, it was pretty steady overall, which we think is quarter-to-quarter, which was sort of a win in our book overall.

Gregg Brody

Okay. And just I would think -- is this volatility in -- maybe -- are these higher prices potentially creating more opportunities for you to acquire mom-and-pops that are feeling a little strained on the working capital needs here? Or is that a factor?

Eric Slifka

Yes. Greg, it's Eric Slifka. I don't think that that's the opportunity. I just think there is certainly a lot going on. M&A has been very busy. I think there's a lot of opportunity out there. I'm not sure it's being driven by credit issues or pricing per se. It still is at the retail level, it's still a very fragmented business, and there's lots of opportunities there. We continue to look at everything that we can find, but we also want to make sure that we're doing deals that are accretive and have good returns, and we're trying to maintain our discipline. It's still competitive. And then when you look at the terminaling business, there are opportunities there are fewer, but the deals are bigger, and we'll continue to make sure that we're investing through our own network to drive higher returns.

Operator

Thank you. We have reached the end of the question-and-answer session. I would like to turn the floor back over to Mr. Slifka for closing comments.

Eric Slifka

Thank you again for your time today and for your continued interest in Global. We look forward to speaking with you next quarter and wish everybody a great weekend. Thank you all.

Operator

Ladies and gentlemen, this does conclude today's teleconference. You may disconnect your lines at this time. Thank you for your participation, and have a wonderful day.