Superior Plus Earnings Call: Growth Slows, Cash Shines

Superior Plus ((TSE:SPB)) has held its Q4 earnings call. Read on for the main highlights of the call.

Superior Plus’ latest earnings call painted a mixed picture for investors, combining modest EBITDA growth and strong per‑share gains with mounting headwinds in its CNG business and delayed execution on key transformation initiatives. Management stressed confidence in the long‑term plan, yet acknowledged that revenue and EBITDA growth will be slower and lumpier than previously promised.

Moderate EBITDA Growth Amid a Challenging Backdrop

Full‑year adjusted EBITDA rose about 2% to $463.5 million, with Q4 adjusted EBITDA also up 2% year over year to $161.9 million. The growth signals resilience but underscores that Superior Plus is no longer in a high‑growth phase, especially against the backdrop of pricing pressures and operational challenges.

Propane Segment Strength and Superior Delivers Progress

North American propane remained a bright spot, with adjusted EBITDA up roughly 4% to $346.7 million, led by 5% growth in U.S. Propane and 2% in Canada. The Superior Delivers efficiency program contributed $16.2 million for the year, including $11.2 million in Q4, and is expected to ramp toward about $50 million in 2026 as implementation scales.

Per‑Share Metrics Surge Despite Modest Growth

Per‑share performance was the highlight, with adjusted EBITDA per share up 15% to $1.46 and adjusted net earnings per share jumping 94% to $0.31. Free cash flow per share nearly doubled to $0.87, while Q4 also saw double‑digit gains, reflecting the power of buybacks and capital discipline even in a low‑growth environment.

Buybacks Drive Capital Efficiency and Share Base Shrink

Superior Plus leaned heavily on repurchases, retiring 19.6 million shares, or about 8% of its float, in the year. Since November 2024, the company has bought back roughly 32 million shares, or 13% of shares outstanding, sharply boosting per‑share metrics and giving remaining shareholders a larger claim on future earnings.

Certarus: Record Volumes but Tightened Costs

Certarus delivered record volumes in 2025 and cut operating costs per MMBtu by 6%, while slashing capital spending by about 50%, or $50 million. Those actions helped drive record free cash flow at the unit, showing that the CNG business can still generate cash even as it battles intense pricing pressure.

CapEx Pullback Supports Deleveraging Effort

Consolidated capital expenditures dropped to about $140 million, a roughly 26% decline from 2024, reflecting tighter capital discipline. Leverage improved modestly, ending 2025 at 4.0x, down about 0.1 turn, as management balanced investment, buybacks and debt reduction.

Operational Expansion and Digital Fleet Upgrades

The company continued to invest selectively, opening its 21st hub in Florida to support further growth. It also signed two new data center contracts expected to scale to roughly 30–40 trailers and deployed “smart trailers” across about half the fleet, enhancing visibility and operational control.

CNG Pricing Hit Sparks Gross Margin Pressure

Wellsite pricing deterioration in CNG created a roughly $40 million gross margin headwind in 2025, a major drag on results. Certarus full‑year adjusted EBITDA fell about 4% to $142.5 million, with Q4 CNG EBITDA down 13% year over year to $34.3 million, underscoring how vulnerable margins are to market pricing.

Growth Outlook Cut Back Sharply

Management reset expectations, trimming its 3‑year EBITDA CAGR outlook for 2024–2027 to about 2% from around 8%. The downgrade reflects lower CNG pricing assumptions and recognition that the benefits from Superior Delivers will arrive more slowly than previously hoped.

Superior Delivers Benefits Pushed Further Out

The Superior Delivers program still targets $75 million in annual benefits, but the timeline has been pushed to a three‑year horizon. The first full year at the $75 million run‑rate is now expected in 2028, rather than earlier guidance, delaying the point at which investors see the full earnings uplift.

Winter Execution Missteps Expose Operational Risk

New delivery optimization tools underperformed during peak winter, leaving customer tanks at lower‑than‑ideal levels before extreme weather hit. That misstep led to localized service challenges in Q4 and showed that execution risk remains as the company transitions to new systems and processes.

Weak Near‑Term Outlook for Certarus EBITDA

For 2026, management expects Certarus adjusted EBITDA to decline 4%–9%, with the entire hit concentrated in Q1. First‑quarter 2026 EBITDA is forecast to be flat versus Q4 2025 but down roughly 30%–35% versus a strong Q1 2025, with growth expected to resume over the remaining three quarters.

Ancillary Revenue Drop Adds to CNG Softness

The company highlighted lower ancillary revenue from a Northeast utility contract, driven by fewer sites, as an additional drag on near‑term CNG performance. This contract normalization is largely baked into the 2026 guidance, limiting upside from this source in the coming year.

Capital Allocation Tension Around Preferred Shares

Superior Plus flagged potential shifts in capital allocation as it weighs buybacks against debt and preferred redemption. With a $260 million convertible preferred issue facing a mid‑2027 decision point and a possible step‑up in cost, management sees some risk around dilution and may redirect $50–$100 million of 2026 capital toward balance‑sheet protection.

Guidance and Outlook: Slow Growth, Cash Focus

For 2026, management expects consolidated adjusted EBITDA to grow about 2%, driven by 3%–8% propane EBITDA growth and a step‑up in Superior Delivers benefits to around $50 million, partly offset by a 4%–9% decline in Certarus EBITDA. Capex is guided to roughly $160 million, leverage is targeted to trend toward 3.5x–3.8x by 2027, and buybacks may ease as the company prepares for the 2027 preferred decision.

Superior Plus’ call leaves investors with a story of cautious progress rather than rapid expansion, as disciplined capital use and propane strength offset CNG weakness and execution delays. The stock narrative from here will hinge on management’s ability to deliver on the pushed‑out efficiency gains while navigating pricing pressure and capital allocation around its preferred securities.