Filing update · Delek Logistics Partners (DKL)

Delek Logistics keeps raising its payout as leverage edges up and its sponsor stays its biggest customer

Delek Logistics grew second-quarter 2026 adjusted EBITDA 12.6% to $143.5 million on gas gathering and processing, reaffirmed $520 million to $560 million of 2026 EBITDA and raised its distribution again to $1.14 a unit. Leverage rose to about 4.23 times, contracted future revenue fell, and the sponsor Delek Holdings both owns 63% of the units and supplies about half of revenue.

Published
October 24, 2026
Data through
June 30, 2026
Latest filing used
October 23, 2026
Key numbers
Adjusted EBITDA, Q2 2026
$143.5M
From $127.4 million a year earlier [3]
Distribution, Q3 2026
$1.14
Per unit, $4.56 annualized [1]
Leverage ratio
4.23x
From 4.05x a quarter earlier [3] [5]
Sponsor ownership
63.0%
Delek Holdings' interest in the partnership [2]
What changed

Delek Logistics, the pipeline and gathering partnership controlled by refiner Delek US, had a solid second quarter driven by its Permian gas business, and kept its run of distribution increases going. The balance sheet and the sponsor relationship are where the questions are.

  • Adjusted EBITDA rose to $143.5 million from $127.4 million [3].
  • Gathering and processing adjusted EBITDA jumped to $104.1 million from $78.0 million [3].
  • Distributable cash flow, as adjusted, was $80.5 million against $72.5 million [3].
  • Guidance for 2026 EBITDA of $520 million to $560 million was reaffirmed [3].
  • Leverage rose to about 4.23 times on roughly $2.4 billion of debt [3].
  • Since then: the third-quarter distribution was set at $1.14 a unit [1].
The trajectory

Adjusted EBITDA has hovered between about $132 million [5] and $144 million [3] a quarter, with the first quarter dented by a winter storm [7]. Distributable cash flow stepped up in the second quarter.

Charts: adjusted ebitda, distributable cash flow
Adjusted EBITDA
$0M$50M$100M$150MQ3 2025: $136M$136MQ3 '25Q4 2025: $142MQ4 '25Q1 2026: $132MQ1 '26Q2 2026: $144M$144MQ2 '26
Distributable cash flow
$0M$50M$100M$150MQ3 2025: $74M$74MQ3 '25Q4 2025: $73MQ4 '25Q1 2026: $72MQ1 '26Q2 2026: $81M$81MQ2 '26

Four quarters as Delek Logistics reported them. Adjusted EBITDA and distributable cash flow (as adjusted) are non-GAAP measures as the partnership defines them. Hover over or tab to a column for its value.

The numbers and their sources
Quarter Adjusted EBITDA Distributable cash flow, as adjusted
Q3 2025 $136.0M [9] $74.1M [9]
Q4 2025 $142.3M [7] $73.3M [7]
Q1 2026 $132.3M [5] $72.4M [5]
Q2 2026 $143.5M [3] $80.5M [3]
Gathering carries the growth

Gas gathering and processing and the pipeline joint ventures grew; the refinery-linked segments did not.

Chart: Adjusted EBITDA by segment, second quarter
Adjusted EBITDA by segment, second quarter
$0M$50M$100M$150MGathering & processing: Q2 2025 $78M, Q2 2026 $104M$104MGathering & processingEquity investments: Q2 2025 $17M, Q2 2026 $21M$21MEquity investmentsStorage & transport: Q2 2025 $17M, Q2 2026 $16M$16MStorage & transportWholesale marketing: Q2 2025 $23M, Q2 2026 $13M$13MWholesale marketing
As Delek Logistics reported them [3]. Corporate costs, a loss of $10.1 million against $7.9 million, are not shown [3].
Show the numbers
ItemQ2 2025Q2 2026
Gathering & processing$78M$104M
Equity investments$17M$21M
Storage & transport$17M$16M
Wholesale marketing$23M$13M
Contracted revenue is running off

The revenue still owed under minimum-volume contracts fell sharply in the second quarter.

Chart: Revenue still to be earned under minimum-volume contracts
Revenue still to be earned under minimum-volume contracts
$0M$200M$400M$600MMar 2026: $507M$507MMar 2026Jun 2026: $461M$461MJun 2026
Expected service revenue on unfulfilled performance obligations, as reported [4] [2].
Show the numbers
ItemQuarter end
Mar 2026$507M
Jun 2026$461M
Anomalies worth a closer look

Five things in the filings that change how the headline numbers should be read.

Anomalies (5)
Two ways to read it

The same filings support two different conclusions. We set out both; this is not a view on whether to buy or sell the units.

The two readings

The case that the gas gathering build-out is paying off

On this reading Delek Logistics is turning into a growing Permian gathering and processing business with a dependable payout.

  1. 01
    Gathering is growing fast
    Gathering and processing adjusted EBITDA rose to $104.1 million from $78.0 million [3].
  2. 02
    Guidance is intact
    Management reaffirmed 2026 EBITDA guidance of $520 million to $560 million [3]; the first half delivered $275.8 million of adjusted EBITDA (calculated from [5] and [3]).
  3. 03
    Distributable cash is rising
    Distributable cash flow, as adjusted, was $80.5 million against $72.5 million [3].
  4. 04
    Liquidity was extended
    A new revolving facility added $150 million of capacity and runs to 2031 [5], with $1.1 billion available [3].
  5. 05
    A long payout record
    The second-quarter increase was the 54th in a row [3].

The case that the payout is being stretched on a sponsor-dependent base

On this reading growth is concentrated, leverage is climbing and too much depends on one related party.

  1. 01
    Sponsor dependence
    Delek Holdings supplied 49.3% of 2025 revenue [6], and losing it as a customer would be materially adverse [6].
  2. 02
    Higher leverage
    Leverage rose to about 4.23 times [3].
  3. 03
    Shrinking contracted revenue
    Remaining contracted revenue fell to $461.1 million [2].
  4. 04
    Legacy segments are fading
    Wholesale marketing EBITDA fell 46% (calculated from [3]).
  5. 05
    Commodity exposure
    Where it takes ownership of products, Delek Logistics is exposed to commodity and refined product price volatility [6].
Hypotheses: short, medium and long term

Testable statements, each with what would support or contradict it and when the next evidence arrives. Thresholds marked "our marker" are ours, not the partnership's.

Hypotheses (3)
  1. Short termH1
    Next quarter: Q3 2026 results

    Adjusted EBITDA stays on track for the guide

    The guide needs about $244 million to $284 million in the second half (calculated from [3], [5]).
    What would support it
    Third-quarter adjusted EBITDA of at least $135 million (our marker) with distributable cash flow above $75 million (our marker).
    What would contradict it
    Adjusted EBITDA below $130 million (our marker), or leverage above 4.5 times (our marker).
    Next check: Q3 2026 results, likely early November 2026 (last year's came on November 7 [9]).
  2. Medium termH2
    Next 12 months

    Third-party volumes replace sponsor run-off

    Delek Holdings' share of revenue was 49.3% in 2025 [6], down from 55.0% in 2024 [6].
    What would support it
    The sponsor share falling further and contracted revenue stabilising as new commitments are signed.
    What would contradict it
    Remaining performance obligations falling again, or new asset transfers with the sponsor on unclear terms.
    Next check: The 2026 annual report (early 2027).
  3. Long termH3
    Three years and more

    The distribution keeps growing without leverage rising further

    The distribution has risen for 54 straight quarters [3] while leverage rose to about 4.23 times [3].
    What would support it
    Leverage falling back toward 4 times (our marker) with distributions still rising.
    What would contradict it
    A pause in distribution growth, or leverage drifting toward 5 times (our marker).
    Next check: Each annual report.
Risks and contrary evidence
  • Sponsor dependence. Many assets are integral to and dependent on Delek Holdings' refineries [6], and the partnership is exposed to its nonpayment or underperformance [6].
  • Throughput. Delek Holdings or third parties could reduce throughput below minimum commitments [6].
  • Environmental. An oil spill into navigable waters could bring substantial liabilities [6].
  • Lease commitment. Delek Logistics has committed to lease sour gas gathering equipment near its Libby plant, a project of about $60.0 million [4].
What would change the view
  • Leverage falling back toward 4 times (our marker) while distributions keep rising.
  • New third-party contracts that lift remaining performance obligations again.
  • Any new asset transaction with Delek Holdings, and the terms it carries.
Next check

Third-quarter 2026 results. Last year's came on November 7, 2025 [9], so expect the next update in early November 2026.

How this report was made

Every figure comes from Delek Logistics' own SEC filings, listed below; no market prices or third-party data were used. Statements were extracted from the filings with the help of an AI model, each quoted passage was matched against the filing text, and this report was written by Claude (Anthropic) from that evidence. Every figure was checked against the quoted filing text before publication. Figures marked "calculated" are simple arithmetic on reported numbers.

AI-Inflect screen

The deterministic screen's current reading for this company, market data through October 23, 2026. It is separate from the filing analysis above and can change daily; it is not a view on the stock. Open in AI-Inflect

Stage and setup
Stage
Early Inflection
Fundamentals
Improving
Inflection type
FCF inflection
Technical setup
Breakout attempt
Sector
Industrials materials
Condition matrix · 7 true, 10 false, 0 unknown
  • Revenue growth positiveTrue
  • Revenue growth improvingTrue
  • Revenue growth acceleratingFalse
  • Revenue zero-crossing (loss→growth)True
  • Revenue improved 2 straight qtrsFalse
  • Revenue improved 3 straight qtrsFalse
  • Revenue improved 4 straight qtrsFalse
  • EPS improvingFalse
  • EPS loss→profit crossingFalse
  • Earnings acceleratingFalse
  • Gross margin expandingFalse
  • Operating margin expandingFalse
  • Operating leverageFalse
  • FCF improvingTrue
  • FCF negative→positive crossingTrue
  • FCF margin expandingTrue
  • Cash conversion improvingTrue
Sources

Company filings with the U.S. Securities and Exchange Commission (SEC).

  1. [1]Current report: third-quarter 2026 distribution · Form 8-K, filed October 23, 2026 · accession 0001628280-26-067064
  2. [2]Quarterly report, quarter ended June 30, 2026 · Form 10-Q, filed August 5, 2026 · accession 0001628280-26-053097
  3. [3]Second-quarter 2026 earnings release · Form 8-K, filed August 5, 2026 · accession 0001628280-26-052893
  4. [4]Quarterly report, quarter ended March 31, 2026 · Form 10-Q, filed April 29, 2026 · accession 0001628280-26-028277
  5. [5]First-quarter 2026 earnings release · Form 8-K, filed April 29, 2026 · accession 0001628280-26-028090
  6. [6]Annual report for 2025 · Form 10-K, filed February 27, 2026 · accession 0001628280-26-012666
  7. [7]Fourth-quarter 2025 earnings release · Form 8-K, filed February 27, 2026 · accession 0001628280-26-012560
  8. [8]Quarterly report, quarter ended September 30, 2025 · Form 10-Q, filed November 7, 2025 · accession 0001628280-25-050542
  9. [9]Third-quarter 2025 earnings release · Form 8-K, filed November 7, 2025 · accession 0001628280-25-050410

This report is general information and education, not a recommendation to buy or sell any security and not personalised financial advice. It follows our editorial principles: every figure traces to the sources above, and figures we calculated are marked as such.

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