Delek US Holdings, Inc.

What they do

Delek operates petroleum refineries and a logistics business that transports, stores, and wholesales crude oil, intermediate, and refined products. The company also engages in wastewater processing, disposal, and recycling. Its refining operations are concentrated in the Gulf Coast region (PADD III), and it owns a controlling interest in Delek Logistics Partners, LP (DKL).

Revenue drivers

• Refining segment — Generates revenue from refining crude oil into petroleum products, with results driven by crack spreads, crude differentials, and refinery reliability. Benefited in Q2 2026 from crack spreads up an average of 136.0% year-over-year.
• Logistics segment (Delek Logistics Partners, LP) — Revenues come from fee-based transportation, storage, and wholesale distribution, plus interest income from sales-type leases. Adjusted EBITDA was $143.5 million in Q2 2026, its best quarter, with annual guidance of $520–560 million.
• Crude differentials and product yields — Favorable WTI-Brent differentials and a high distillate yield support refining margins; the WTI Midland-to-Cushing spread widened in Q2 2026, impacting costs.

Recent performance

In Q2 2026, Delek reported net income of $169.5 million ($2.71 diluted EPS), adjusted net income of $343.9 million ($5.48 adjusted EPS), and adjusted EBITDA of $638.7 million, versus a net loss of $106.4 million in Q2 2025. Excluding the RVO adjustment, adjusted EPS was $3.64 and adjusted EBITDA was $490.1 million. Revenue for the quarter ended June 30, 2026 was $4.09 billion, up from $2.65 billion in the prior quarter. As of June 30, 2026, cash was $628.6 million, long-term debt was $3.19 billion, and shareholder equity was $422.7 million.

Strategy

Management is executing an Enterprise Optimization Plan (EOP) focused on cost reductions, lower G&A, operating expenses, and interest expense. They completed the Big Spring refinery turnaround on time and on budget in early 2026, with no more planned turnarounds this year. They are pursuing 'sum of the parts' value creation, including economic separation between DK and DKL through intercompany agreements. Capital allocation balances shareholder returns (dividends and buybacks) with balance sheet improvement; in 2026 they returned $51.2 million to shareholders. They also refinanced debt, issuing 6.875% Notes due 2034 and redeeming higher-cost notes.

Risks

• Refining margin volatility — Changes in crude oil and refined product prices can compress margins; crack spreads were up 136% year-over-year in Q2 2026 but remain volatile.
• Geopolitical disruptions — The Middle East conflict involving Iran has disrupted maritime transit through the Strait of Hormuz, causing commodity price volatility and supply chain risks.
• Regulatory compliance — Obligations under the Renewable Fuel Standard (RFS-2) and EPA small refinery exemption decisions (e.g., Krotz Springs for 2024 compliance) could impose costs or legal challenges.
• Debt and leverage — With long-term debt of $3.19 billion and shareholder equity of $422.7 million, the company faces high leverage, and refinancing or covenant compliance are ongoing risks.

Outlook

Management is optimistic about Q3 and the rest of 2026, citing a constructive margin environment, full system availability after the Big Spring turnaround, and no further planned turnarounds. They expect continued EOP benefits and progress on cost and cash flow improvements. The logistics segment is on track to meet its annual EBITDA guidance of $520–560 million. The company remains focused on disciplined execution, operational reliability, and 'sum of the parts' value creation, though near-term economic uncertainty persists due to geopolitical instability and commodity volatility.