Is the decision to pay down the Series B preferred units a permanent decision, driven by cost of capital, or a change in credit profile view, given historical refinancing?

The redemption was accretive due to the 9.5% fixed rate and current cost of capital. It simplifies the capital structure and was enabled by significant excess cash flow. While it doesn't preclude using preferred equity for future acquisitions, the current strong balance sheet and excess bank facility capacity made it a sensible, accretive move. “Yes, I mean, I guess it's a couple things. One, it's a very accretive. Obviously, it was at a fixed rate at 9.5%. You know, it's a nice piece of paper. We had it for, we used it for acquisitions, as an equity component on acquisitions in the previous, but like the Series A, you know, after five years, when you're callable, given where our cost of capital is right now And we also produced significant amount of excess cash flow year to date. And so it made a lot of sense to simplify our capital structure and take it out on a very accretive basis overall.”

Can management discuss the current M&A environment, opportunities, and the company's potential for activity?

The M&A environment has been busy with many opportunities. The company's strategy is to pursue assets that fit and complement its existing base, aiming to be the high bidder on suitable deals. They are in a position to execute on some deals. “Yes, I think it's been busy, and there's a lot that's out there, and as I've sort of always said, you know, we're going to look for the right assets. We should be the high bidder on assets that fit us and complement our existing asset base. in a position to try and execute on some deals.”

GLP

Global Partners (GLP) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Energy· Aug 7, 2026

Source: earnings call transcript

Executive summary

Global Partners Q2 FY26 — Strong Segment Contributions Drive Robust Financials

Global Partners delivered a strong second quarter, leveraging its diversified and integrated liquid energy platform to capture value across dynamic market conditions. The company's core business provides predictable cash flow, complemented by its ability to capitalize on market volatility. Management remains focused on disciplined capital allocation and enhancing shareholder returns, as evidenced by the recent redemption of Series B preferred units.

Highlights

Net income increased to $71 million in Q2 FY26 from $25.2 million in Q2 FY25.
Adjusted EBITDA rose to $148.2 million, up from $98.2 million in the prior year period.
Adjusted Distributable Cash Flow (DCF) reached $92.5 million, compared to $52.3 million in Q2 FY25.
Gasoline Distribution Station Operations (GDSO) fuel margin increased by 14 cents to 50 cents per gallon.
Healthy distribution coverage maintained at 2.25 times, or 2.19 times including preferred unit holders.

Concerns

Refined product markets remain volatile due to geopolitical developments, contributing to elevated price swings, increased inventory risk, and tight inventory levels.
Steep backwardation in the forward product pricing curve is expected to increase the cost of carrying hedged inventory in future periods.
Consumer behavior shows a slight decrease in average fill-up size and a trend towards lower octane gasoline due to inflation and higher prices, though not materially impacting overall sales.

Guidance & targets

Category	Target	Timeline	Confidence
Full-year 2026 Maintenance Capital Expenditure	$60 million to $70 million medium materiality	FY26	High
Full-year 2026 Expansion Capital Expenditure (excluding acquisitions)	$75 million to $85 million medium materiality	FY26	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Gasoline Distribution Station Operations (GDSO) Benefited from improved fuel margins, primarily reflecting higher fuel margins year over year. Station operations product margin, including convenience store and prepared food sales, sundries, and rental income, also saw a slight increase. Product margin increase: $37.3 millionGasoline distribution product margin: $175 millionGasoline distribution product margin increase: $37.1 millionFuel margin: 50 cents/gallonFuel margin increase: 14 cents/gallonStation operations product margin: $70.2 millionStation operations product margin increase: $0.2 millionNumber of sites: 1,505	—	—	—	$245.2 million
Wholesale Product margin increased primarily due to more favorable market conditions in gasoline. This was partially offset by less favorable market conditions in residual oil, impacting distillates and other oils product margin. Product margin increase: $14.8 millionGasoline and gasoline blend stocks product margin: $78.4 millionGasoline and gasoline blend stocks product margin increase: $19.6 millionDistillates and other oils product margin: $28.1 millionDistillates and other oils product margin decrease: $4.8 million	—	—	—	$106.5 million
Commercial Product margin increased, primarily reflecting more favorable market conditions in the bunkering group. Product margin increase: $4.4 million	—	—	—	$10.5 million

Risks & headwinds

Refined product market volatility Ongoing

Elevated price swings, increased inventory risk, tight inventory levels

Mitigation:Diversified integrated liquid energy platform, disciplined framework for managing exposures.

Increased cost of carrying hedged inventory Future periods

Steep backwardation in forward product pricing curve

Mitigation:Focused on disciplined inventory management.

Consumer behavior shift due to inflation Q2 FY26, continuing into Q3 FY26

Average fill-up size down a little, trading down from I 93 octane to 87 octane

Mitigation:Not considered material, but company monitors trends.

What to watch in Q3 FY26

Consumer behavior impact on fuel sales

next quarter

Current Slight decrease in fill-up size, shift to lower octane

Target Stabilization or improvement in average fill-up size and octane mix

Why it matters

Indicates consumer discretionary spending and potential for margin pressure or volume changes in the GDSO segment.

I don't think you're seeing anything that's real different here as we enter into, or as we sit in the middle of Q3, I don't think we see anything different than we've seen for the better part of the year.

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Q&A highlights

Are higher prices affecting consumer purchases at gas stations, specifically average fill-up size and octane choice, and has this trend continued into Q3?

Management noted a slight impact from inflation, with average fill-up sizes down a bit and some customers trading down to lower octane. C-store sales are good, though transactions may be slightly down. This trend has continued into Q3.

“I think we're seeing a little bit of that we're seeing a little bit of impact from from you know inflation higher prices I think weeds with that shows up is- the you know the average size of the fill up is probably down a little bit I'm but I wouldn't say you know in a material fashion and that's trading you know that could be trading also trading down from I 93 octane to 87 octane from a store standpoint.”

asked by Gregg Brody · answered by Mark Romaine

2 min read 5 chapters

Detailed narrative

Integrated Liquid Energy Platform Strength

Global Partners highlighted the strength of its integrated liquid energy platform, which allows the company to capture value across diverse products, markets, and customers. This diversification is a competitive advantage, enabling strong performance even in changing market conditions. The core business provides predictable cash flow, while the company actively pursues additional value from dynamic markets within a disciplined framework.

Robust Segment Performance

All operating segments contributed meaningfully to the strong second-quarter results. The Gasoline Distribution Station Operations (GDSO) segment benefited from improved fuel margins, with a 14 cents per gallon increase to 50 cents. The Wholesale and Commercial segments also delivered positive year-over-year growth, reinforcing the resiliency of the company's model and the value of its diversified asset portfolio.

Capital Allocation and Balance Sheet Management

The company maintains a strong balance sheet, with leverage (funded debt to EBITDA) at 2.85 times as of June 30th, 2026, and ample excess capacity in its credit facility. Management emphasized its focus on investing thoughtfully in the business and allocating capital to the highest return opportunities.

A significant capital structure simplification occurred with the redemption of all outstanding Series B fixed rate preferred units on July 30th, an accretive transaction given the 9.5% fixed rate.

Market Dynamics and Inventory Management

Refined product markets continue to experience volatility, driven by geopolitical developments leading to elevated price swings, increased inventory risk, and tight inventory levels. The company noted that the current steep backwardation in the forward product pricing curve is expected to increase the cost of carrying its hedged inventory in future periods. Global Partners remains focused on disciplined inventory management to navigate these conditions.

Consumer Behavior Observations

While not materially impacting overall sales, the company observed some shifts in consumer behavior due to inflation and higher prices. This includes a slight decrease in the average size of fill-ups and a trend of customers trading down from higher-octane (I 93) to lower-octane (87) gasoline. Convenience store sales remain strong, though transaction volumes may be slightly down.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.